Quest Diagnostics 2007 Annual Report Download - page 91

Download and view the complete annual report

Please find page 91 of the 2007 Quest Diagnostics annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

6. SUPPLEMENTAL CASH FLOW AND OTHER DATA
2007 2006 2005
Depreciation expense . . ............................................. $ 209,975 $184,844 $ 166,546
Interest expense .................................................... (186,329) (96,454) (61,443)
Interest income ..................................................... 8,015 5,029 4,089
Interest, net . . ...................................................... (178,314) (91,425) (57,354)
Interest paid . . ...................................................... 157,502 102,055 49,976
Income taxes paid .................................................. 315,745 381,348 314,534
Businesses acquired:
Fair value of assets acquired ........................................ $2,954,728 $278,078 $1,039,300
Fair value of liabilities assumed . .................................... 1,395,867 28,453 230,235
Non-cash financing activities:
Conversion of contingent convertible debentures...................... $ - $ - $ 244,338
7. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, 2007 and 2006 consisted of the following:
2007 2006
Land . . .................................................................. $ 36,272 $ 36,272
Buildings and improvements.............................................. 360,442 332,610
Laboratory equipment, furniture and fixtures .............................. 1,042,890 886,065
Leasehold improvements . ................................................ 318,552 264,096
Computer software developed or obtained for internal use.................. 255,408 189,083
Construction-in-progress . . ................................................ 92,918 58,273
2,106,482 1,766,399
Less: accumulated depreciation and amortization........................... (1,194,484) (1,014,042)
Total.................................................................. $ 911,998 $ 752,357
8. GOODWILL AND INTANGIBLE ASSETS
Goodwill at December 31, 2007 and 2006 consisted of the following:
2007 2006
Goodwill.................................................................. $5,401,216 $3,572,238
Less: accumulated amortization ............................................ (181,112) (181,192)
Goodwill, net . .......................................................... $5,220,104 $3,391,046
The changes in the gross carrying amount of goodwill for the years ended December 31, 2007 and 2006 are
as follows:
2007 2006
Balance as of January 1 . . ................................................. $3,572,238 $3,385,280
Goodwill acquired during the year . ........................................ 1,789,732 196,222
Other . . ................................................................... 39,246 (9,264)
Balance as of December 31 ................................................ $5,401,216 $3,572,238
For the year ended December 31, 2007, the increase in goodwill was primarily related to the acquisitions of
AmeriPath and HemoCue, and the impact on goodwill as a result of the adoption of FIN 48. (See Notes 3 and 5
for further discussions). Approximately 90% of the Company’s goodwill as of December 31, 2007 was included
in its clinical testing business.
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
F-21
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)