Quest Diagnostics 2012 Annual Report Download - page 89

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F- 16
speed decision-making. The new organization is designed to align around future growth opportunities, improve execution and
leverage company-wide infrastructure to maximize value and efficiency. The majority of the organizational changes began on
January 1, 2013. In connection with these changes the Company expects to eliminate three management layers, and
approximately 400 to 600 management positions, by the end of 2013.
The following table provides a summary of the Company's pre-tax restructuring and integration charges associated
with Invigorate for the year ended December 31, 2012:
2012
Employee separation costs $ 57,029
Facility-related costs 448
Asset impairment charges 1,196
Accelerated vesting of stock-based compensation 2,274
Total restructuring charges 60,947
Other integration costs 11,965
Total restructuring and integration charges $ 72,912
Of the total employee separation costs noted above, $44.5 million represent costs incurred under the Company's
voluntary retirement program for the year ended December 31, 2012.
Of the total $72.9 million in restructuring and integration charges incurred during the year ended December 31, 2012,
$47.2 million and $25.7 million was recorded in cost of services and selling, general and administrative expenses, respectively.
These charges were primarily recorded in the Company's Diagnostics Information Services ("DIS') business.
The following table summarizes the activity of the restructuring liability as of December 31, 2012:
Employee
Separation
Costs
Facility-
Related
Costs Total
Initial charges $ 57,029 $ 448 $ 57,477
Cash payments (17,565)(191)(17,756)
Other / adjustments 554 — 554
Balance, December 31, 2012 $ 40,018 $ 257 $ 40,275
In addition to the restructuring and integration charges noted above, the Company incurred approximately $33.1
million of which $28.5 million principally represent professional fees incurred in connection with further restructuring and
integration of the Company's business for the year ended December 31, 2012; with the remainder representing costs related to
the integration of recently acquired companies with the Company's operations.
5. BUSINESS ACQUISITIONS
Acquisition of Athena Diagnostics
On April 4, 2011, the Company completed its acquisition of Athena Diagnostics (“Athena”) in an all-cash transaction
valued at $740 million. Athena is the leading provider of advanced diagnostic tests related to neurological conditions and
generated revenues of approximately $110 million in 2010.
Through the acquisition, the Company acquired all of Athena's operations. The Company financed the all-cash
purchase price of $740 million and related transaction costs with a portion of the net proceeds from the Company's 2011 Senior
Notes Offering. For the year ended December 31, 2011, transaction costs of $8.2 million were recorded in selling, general and
administrative expenses. See Note 12 for further discussion of the 2011 Senior Notes Offering.
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(dollars in thousands unless otherwise indicated)