Quest Diagnostics 2007 Annual Report Download - page 69

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extensive network of laboratories and patient service centers throughout the United States and the broadest menu
of diagnostic tests, we believe we are well positioned to benefit from the growth expected in our industry.
We believe our focus on delivering a superior patient experience and Six Sigma quality as well as the
investments we are continuing to make in our distribution network, our industry leading test menu and our
information technology solutions will further differentiate us over the long-term and strengthen our industry
leadership position. In addition, we plan to leverage our knowledge and expertise in diagnostic testing to further
expand into international markets and point-of-care testing.
Our strong cash generation, balance sheet and credit profile position us well to take advantage of these
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 December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial
Accounting Standards (“SFAS”) SFAS No. 141(R) “Business Combinations” and SFAS No. 160 “Noncontrolling
Interests in Consolidated Financial Statements, an amendment of ARB No. 51”. In September 2007, the FASB
ratified Emerging Issues Task Force Issue No. 07-1, “Accounting for Collaborative Agreements”. In February
2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities”. In
September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements”. In February 2008, the FASB
issued FASB Staff Position No. FAS 157-2 “Effective Date of FASB Statement No. 157”.
The impact of these accounting standards is discussed in Note 2 to the Consolidated Financial Statements.
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