Quest Diagnostics 2006 Annual Report Download - page 106

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7. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, 2006 and 2005 consisted of the following:
2006 2005
Land ..................................................................... $ 36,272 $ 36,255
Buildings and improvements . . ............................................ 332,610 329,441
Laboratory equipment, furniture and fixtures ............................... 886,065 823,799
Leasehold improvements .................................................. 264,096 190,329
Computer software developed or obtained for internal use . ................. 189,083 171,724
Construction-in-progress................................................... 58,273 98,897
1,766,399 1,650,445
Less: accumulated depreciation and amortization . .......................... (1,014,042) (896,782)
Total .................................................................. $ 752,357 $ 753,663
8. GOODWILL AND INTANGIBLE ASSETS
Goodwill at December 31, 2006 and 2005 consisted of the following:
2006 2005
Goodwill.................................................................. $3,572,238 $3,385,280
Less: accumulated amortization ............................................ (181,192) (188,053)
Goodwill, net . . . .......................................................... $3,391,046 $3,197,227
The changes in the gross carrying amount of goodwill for the years ended December 31, 2006 and 2005 are
as follows:
2006 2005
Balance as of January 1 . . ................................................. $3,385,280 $2,695,003
Goodwill acquired during the year . ........................................ 196,222 697,766
Other . . ................................................................... (9,264) (7,489)
Balance as of December 31 ................................................ $3,572,238 $3,385,280
For the year ended December 31, 2006, the increase in goodwill was primarily related to the acquisitions of
Focus Diagnostics and Enterix, and adjustments associated with the LabOne purchase price allocation and the
LabOne integration plan. These additions were $142 million, $40 million and $10 million, respectively. In
connection with the Company’s decision to discontinue the operations of NID in the second quarter of 2006, the
Company eliminated the goodwill and related accumulated amortization associated with NID, which had no
impact on goodwill, net. In addition, goodwill was reduced $2.4 million primarily related to the favorable
resolution of certain pre-acquisition tax contingencies associated with businesses acquired.
For the year ended December 31, 2005, the increase in goodwill was primarily related to the acquisition of
LabOne. During the fourth quarter of 2005, the Company recorded a $7.5 million charge, which was included in
“other operating expense, net” in the consolidated statement of operations, to write off all of the goodwill
associated with NID.
F-19
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)