Quest Diagnostics 2003 Annual Report Download - page 68

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including: continued improvements in quality; convenience and accessibility; a broad test menu; and a broad
range of information technology products to help providers and insurers better manage their patients’ health.
We continue to invest in areas that are differentiating us from our competitors, including: Six Sigma
quality, which is benefiting margins by improving efficiencies and is beginning to attract new business by
improving service quality; state-of-the-art electronic client connectivity options that enhance customer loyalty;
and new tests and testing techniques including gene-based testing. We also pursue selective acquisitions when
they make strategic and economic sense. While there are fewer large acquisition opportunities available as a
result of industry consolidation, there remain numerous regional and local acquisition opportunities. Additionally,
we see an opportunity to use our strong customer service capabilities to expand our current position in many
markets around the country.
Our credit profile continues to improve. Our strong cash generation and balance sheet position us well to
take advantage of growth opportunities.
Inflation
We believe that inflation generally does not have a material adverse effect on our results of operations or
financial condition because the majority of our contracts are short term.
Impact of New Accounting Standards
In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities’’, as
revised in December 2003. The impact of this accounting standard is discussed in Note 2 to the Consolidated
Financial Statements.
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