Quest Diagnostics 2011 Annual Report Download - page 88

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The acquired amortizable intangible assets are being amortized over their estimated useful lives as follows:
Fair Values
Weighted
Average
Useful Life
Outlicensed technology ......................... $46,450 6 years
Technology .................................... 21,730 8 years
Customer relationships.......................... 6,750 9 years
Tradename..................................... 5,400 5 years
$80,330
In addition to the amortizable intangible assets noted above, $5.5 million was allocated to in-process
research and development, which is currently not subject to amortization.
Of the amount allocated to goodwill and intangible assets, approximately $28 million is deductible for tax
purposes. Of the total goodwill acquired in connection with the Celera acquisition, approximately $104 million
has been allocated to the Company’s clinical testing business, with the remainder allocated to the Company’s
diagnostics products business. As of the acquisition date, the fair value of accounts receivable approximated its
book value.
The goodwill recorded as part of the Athena and Celera acquisitions includes: the expected synergies
resulting from combining the operations of the acquired businesses with those of the Company; and the value
associated with an assembled workforce that has a historical track record of identifying opportunities, developing
services and products, and commercializing them.
Pro Forma Combined Financial Information
Supplemental pro forma combined financial information has not been presented as the combined impact of
the Athena and Celera acquisitions is not material to the Company’s consolidated financial statements.
5. FAIR VALUE MEASUREMENTS
The following tables provide summaries of the recognized assets and liabilities that are measured at fair
value on a recurring basis:
Level 1 Level 2 Level 3
Quoted Prices
in Active
Markets for
Identical
Assets/
Liabilities
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
Basis of Fair Value Measurements
December 31, 2011
Assets:
Interest rate swaps ................................... $ 56,520 $ — $56,520 $ —
Trading securities .................................... 46,926 46,926 — —
Cash surrender value of life insurance policies. ........ 20,936 — 20,936 —
Available-for-sale equity securities . . . ................. 646 — — 646
Foreign currency forward contracts. . . ................. 180 — 180 —
Total . ............................................. $125,208 $46,926 $77,636 $ 646
Liabilities:
Deferred compensation liabilities ...................... $ 71,688 $ — $71,688 $ —
Foreign currency forward contracts. . . ................. 1,648 — 1,648 —
Total . ............................................. $ 73,336 $ — $73,336 $ —
F-16
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)