Quest Diagnostics 2007 Annual Report Download - page 98

Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) for 2007, 2006 and 2005 were as
follows:
Foreign
Currency
Translation
Adjustment
Market
Value
Adjustment
Deferred
Gain
(Loss)
Accumulated
Other
Comprehensive
Income (Loss)
Balance, December 31, 2004.................... $ 1,339 $ 2,527 $ - $ 3,866
Translation adjustment.......................... (3,287) - - (3,287)
Market value adjustment, net of tax benefit of
$6,057 ...................................... - (9,238) - (9,238)
Deferred gain, less reclassifications. . . ........... - - 2,454 2,454
Balance, December 31, 2005.................... (1,948) (6,711) 2,454 (6,205)
Translation adjustment.......................... 2,460 - - 2,460
Market value adjustment, net of tax benefit of
$2,501 ...................................... - (3,815) - (3,815)
Reversal of market value adjustment, net of tax
expense of $(5,053) .......................... - 7,707 - 7,707
Deferred gain reclassifications .................. - - (212) (212)
Balance, December 31, 2006.................... 512 (2,819) 2,242 (65)
Translation adjustment.......................... 30,820 - - 30,820
Market value adjustment, net of tax benefit of
$24 ......................................... - (36) - (36)
Reversal of market value adjustment, net of tax
expense of $(510)............................ - 802 - 802
Deferred loss, less reclassifications . . . ........... - - (6,242) (6,242)
Balance, December 31, 2007.................... $31,332 $(2,053) $(4,000) $25,279
The market value adjustments for 2007, 2006 and 2005 represented unrealized holding gains (losses), net of
taxes. The reversal of market value adjustments for 2007 and 2006 represents prior periods unrealized holding
losses for investments where the decline in fair value was deemed to be other than temporary in 2007 and 2006
and the resulting loss was recognized in the consolidated statements of operations (see Note 2). The deferred gain
for 2005 represented the $2.5 million the Company received upon the settlement of its Treasury Lock
Agreements, net of amounts reclassified as a reduction to interest expense. The deferred loss for 2007 represented
the $3.5 million the Company paid upon the settlement of its Treasury Forward Agreements, net of amounts
reclassified as an increase to interest expense, and $2.7 million in deferred losses on its Interest Rate Swap
Agreements (see Note 11). Foreign currency translation adjustments are not adjusted for income taxes since they
relate to indefinite investments in non- U.S. subsidiaries.
Dividend Program
During each of the quarters of 2007, 2006 and 2005, the Company’s Board of Directors has declared a
quarterly cash dividend of $0.10, $0.10 and $0.09 per common share, respectively.
Share Repurchase Plan
In 2003, the Company’s Board of Directors authorized a share repurchase program, which permitted the
Company to purchase up to $600 million of its common stock. In July 2004, January 2005 and January 2006, the
Company’s Board of Directors authorized the Company to purchase up to an additional $300 million, $350
million and $600 million, respectively, of its common stock. Under a separate authorization from the Board of
Directors, in December 2004 the Company repurchased 5.4 million shares of its common stock for approximately
$254 million from GlaxoSmithKline plc. For the year ended December 31, 2007, the Company repurchased 2.8
million shares of its common stock at an average price of $52.14 per share for $146 million, and reissued 2.9
million shares in connection with employee benefit plans. For the year ended December 31, 2006, the Company
repurchased 8.9 million shares of its common stock at an average price of $53.23 per share for $472 million, and
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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)