Quest Diagnostics 2008 Annual Report Download - page 94

Download and view the complete annual report

Please find page 94 of the 2008 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 128

  • 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
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

5. SUPPLEMENTAL CASH FLOW AND OTHER DATA
2008 2007 2006
Depreciation expense . ............................................... $ 227,300 $ 209,975 $184,844
Interest expense ..................................................... (185,476) (186,329) (96,454)
Interest income ...................................................... 5,712 8,015 5,029
Interest, net ......................................................... (179,764) (178,314) (91,425)
Interest paid ......................................................... 189,294 157,502 102,055
Income taxes paid ................................................... 359,336 315,745 381,348
Businesses acquired:
Fair value of assets acquired . . . ...................................... $ - $2,954,728 $278,078
Fair value of liabilities assumed ...................................... - 1,395,867 28,453
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, 2008 and 2007 consisted of the following:
2008 2007
Land . . .................................................................. $ 35,786 $ 36,272
Buildings and improvements.............................................. 365,481 360,442
Laboratory equipment, furniture and fixtures .............................. 1,182,376 1,042,890
Leasehold improvements . ................................................ 348,821 318,552
Computer software developed or obtained for internal use.................. 259,851 255,408
Construction-in-progress . . ................................................ 57,478 92,918
2,249,793 2,106,482
Less: accumulated depreciation and amortization........................... (1,370,106) (1,194,484)
Total.................................................................. $ 879,687 $ 911,998
7. GOODWILL AND INTANGIBLE ASSETS
The changes in goodwill, net for the years ended December 31, 2008 and 2007 are as follows:
2008 2007
Balance as of January 1 . . ................................................. $5,220,104 $3,391,046
Goodwill acquired during the year . ........................................ 9,260 1,799,101
Other purchase accounting adjustments ..................................... (120,105) 5,955
(Decrease) increase related to foreign currency translation ................... (54,333) 24,002
Balance as of December 31 ................................................ $5,054,926 $5,220,104
For the year ended December 31, 2008, goodwill acquired during the year was associated with several
immaterial acquisitions. Other purchase accounting adjustments were primarily due to changes in estimates
regarding the realization of certain pre-acquisition net operating loss carryforwards, the reduction in certain
acquired pre-acquisition tax loss contingencies, and a payment received from an escrow fund established at the
time of the HemoCue acquisition (see Note 3 for further discussion). Approximately 90% of the Company’s
goodwill as of December 31, 2008 and December 31, 2007 was associated with its clinical testing business.
For the year ended December 31, 2007, goodwill acquired during the year was primarily related to the
acquisitions of AmeriPath and HemoCue, and other purchase accounting adjustments were primarily due to the
impact on goodwill as a result of the adoption of FIN 48. (See Notes 3 and 4 for further discussions).
F-22
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)