Quest Diagnostics 2013 Annual Report Download - page 84

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F- 12
Based upon the Company’s most recent annual impairment test completed during the fourth quarter of the fiscal year
ended December 31, 2013, the Company concluded goodwill was not impaired.
Recoverability and Impairment of Intangible Assets and Other Long-Lived Assets
The Company reviews indefinite-lived intangible assets periodically for impairment and an impairment charge is
recorded in the periods in which the recorded carrying value of indefinite-lived intangibles is more than its estimated fair
value. The indefinite-lived intangible asset impairment test is performed at least annually, or more frequently in the case of
other events that indicate a potential impairment.
Based upon the Company’s most recent annual impairment test completed during the fourth quarter of the fiscal year
ended December 31, 2013, the Company concluded that indefinite-lived intangible assets were not impaired.
The Company reviews the recoverability of its long-lived assets (including amortizable intangible assets), other than
goodwill and indefinite-lived intangible assets, when events or changes in circumstances occur that indicate that the carrying
value of the asset may not be recoverable. Evaluation of possible impairment is based on the Company's ability to recover the
asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If the
expected undiscounted pre-tax cash flows are less than the carrying amount of such asset, an impairment loss is recognized for
the difference between the estimated fair value and carrying amount of the asset.
Investments
The Company accounts for investments in trading and available-for-sale equity securities, which are included in other
assets in the consolidated balance sheets, at fair value. Both realized and unrealized gains and losses for trading securities are
recorded currently in earnings as a component of non-operating expenses within other income, net in the consolidated
statements of operations. Unrealized gains and losses, net of tax, for available-for-sale securities are recorded as a component
of accumulated other comprehensive (loss) income within stockholders' equity. Recognized gains and losses for available-for-
sale securities are recorded in other income, net in the consolidated statements of operations. Gains and losses on securities
sold are based on the average cost method.
The Company periodically reviews its investments to determine whether a decline in fair value below the cost basis is
other than temporary. The primary factors considered in the determination are: the length of time that the fair value of the
investment is below carrying value; the financial condition, operating performance and near term prospects of the investee; and
the Company's intent and ability to hold the investment for a period of time sufficient to allow for a recovery in fair value. If
the decline in fair value is deemed to be other than temporary, the cost basis of the security is written down to fair value.
Investments at December 31, 2013 and 2012 consisted of the following:
2013 2012
Available-for-sale equity securities $ — $ 1
Trading equity securities 50 52
Cash surrender value of life insurance policies 29 25
Other investments 13 12
Total $92$90
Investments in available-for-sale equity securities consist of equity securities in public corporations. Investments in
trading equity securities represent participant-directed investments of deferred employee compensation and related Company
matching contributions held in trusts pursuant to the Company's supplemental deferred compensation plans (see Note 16). The
Company purchases life insurance policies, with the Company named as beneficiary of the policies, for the purpose of funding
a non-qualified deferred compensation program. Changes in the cash surrender value of the life insurance policies are based
upon earnings and changes in the value of the underlying investments. Other investments do not have readily determinable fair
values and consist of investments in preferred and common shares of privately held companies and are accounted for under the
cost method.
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)