Quest Diagnostics 2007 Annual Report Download - page 92

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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.
Intangible assets at December 31, 2007 and 2006 consisted of the following:
Cost
Accumulated
Amortization Net Cost
Accumulated
Amortization Net
Weighted
Average
Amortization
Period December 31, 2007 December 31, 2006
Amortizing intangible assets:
Customer-related
intangibles . . . . . 19 years $ 589,418 $ (70,036) $519,382 $206,880 $(48,010) $158,870
Non-compete
agreements . . . . . 5 years 53,832 (46,476) 7,356 47,165 (45,261) 1,904
Other . ........... 12 years 64,214 (8,394) 55,820 15,372 (3,500) 11,872
Total .......... 18 years 707,464 (124,906) 582,558 269,417 (96,771) 172,646
Intangible assets not subject to
amortization:
Tradenames . . ................... 304,175 - 304,175 20,700 - 20,700
Total intangible assets ......... $1,011,639 $(124,906) $886,733 $290,117 $(96,771) $193,346
Amortization expense related to intangible assets was $27.9 million, $10.8 million and $4.6 million for the
years ended December 31, 2007, 2006 and 2005, respectively.
The estimated amortization expense related to amortizable intangible assets for each of the five succeeding
fiscal years and thereafter as of December 31, 2007 is as follows:
Fiscal Year Ending
December 31,
2008.............................................................. $ 36,015
2009.............................................................. 35,601
2010.............................................................. 35,343
2011.............................................................. 35,121
2012.............................................................. 33,880
Thereafter. . . ...................................................... 406,598
Total ........................................................... $582,558
For the year ended December 31, 2007, the increase in intangible assets not subject to amortization was due
to tradenames resulting from the acquisitions of AmeriPath, $226 million, and HemoCue, $53.8 million (see
Note 3).
For the year ended December 31, 2006, the increase in intangible assets not subject to amortization was due
to tradenames resulting from the acquisitions of Focus Diagnostics, $9.1 million, and Enterix, $2.2 million (see
Note 3).
9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses at December 31, 2007 and 2006 consisted of the following:
2007 2006
Trade accounts payable...................................................... $ 205,067 $215,721
Accrued wages and benefits . . ............................................... 318,285 321,539
Accrued expenses . . ......................................................... 359,355 295,476
Accrued settlement reserves. . . ............................................... 242,009 1,260
Total . . . .................................................................. $1,124,716 $833,996
F-22
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)