Quest Diagnostics 2006 Annual Report Download - page 127

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(c) In the third quarter of 2006, the Company recorded $13.5 million of stock-based compensation expense in
accordance with SFAS 123R, an additional $2.7 million in charges as a result of discontinuing NID’s
operations and a $4.0 million charge associated with the write-down of an investment.
(d) In the fourth quarter of 2006, the Company recorded $2.5 million of stock-based compensation expense in
accordance with SFAS 123R, an additional $1.0 million in charges as a result of discontinuing NID’s
operations and a $10.0 million charge associated with the write-down of an investment. During the fourth
quarter of 2006, the Company revised its estimate of the number of the performance share units expected to
be earned at the end of the performance periods as a result of revising its estimates of projected performance
and reduced stock-based compensation expense associated with performance share units by approximately
$8 million.
(e) On November 1, 2005, Quest Diagnostics completed the acquisition of LabOne. The quarterly operating
results include the results of operations of LabOne subsequent to the closing of the acquisition (see Note 3).
(f) During the third quarter of 2005, the Company recorded a $6.2 million charge primarily related to
forgiveness of amounts owed by patients and physicians, and related property damage as a result of
hurricanes in the Gulf Coast. In addition, the Company recorded a $7.1 million charge associated with the
write-down of an investment.
(g) During the fourth quarter of 2005, the Company recorded a $16 million charge to write-off certain assets in
connection with a product hold at NID.
(h) Previously reported basic and diluted earnings per share have been restated to give retroactive effect of the
Company’s two-for-one stock split effected on June 20, 2005.
(i) During the third quarter of 2006, the Company completed its wind down of NID and classified the operations
of NID as discontinued operations. Previously reported results of operations have been restated to report the
results of NID as discontinued operations.
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