QUEST DIAGNOSTICS INC
For the period ended Jun 30, 2024. Filed Jul 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 24, 2024
DGX$255.63+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-24.
0001022079-24-000099
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-24.
0001022079-24-000156
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 138 current paragraphs.
62 unchanged; 35 reworded; 32 added; 9 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
Second Quarter Highlights
Current report
•pre-tax charges of $9 million recorded in equity in earnings of equity method investees, net of taxes, or $0.05 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; and
Current report
•excess tax benefits associated with stock-based compensation arrangements of $1 million recorded in income tax expense, or $0.01 per diluted share.
Current report
Results for the six months ended June 30, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $0.64 as follows:
Current report
•pre-tax amortization expense of $58 million recorded in amortization of intangible assets, or $0.39 per diluted share;
Current report
•pre-tax charges of $27 million ($14 million recorded in cost of services and $13 million recorded in selling, general and administrative expenses), or $0.17 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Current report
•pre-tax charges of $7 million ($1 million recorded in selling, general and administrative expenses and $6 million recorded in other operating expense, net), or $0.06 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and
Current report
•pre-tax charges of $9 million recorded in equity in earnings of equity method investees, net of taxes, or $0.05 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; partially offset by
Current report
Results for the three months ended June 30, 2023 were affected by certain items that on a net basis decreased diluted earnings per share by $0.25 as follows:
Current report
•pre-tax amortization expense of $28 million recorded in amortization of intangible assets, or $0.18 per diluted share;
Current report
•pre-tax charges of $7 million recorded in selling, general and administrative expenses, or $0.05 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; and
Current report
•pre-tax charges of $6 million recorded in selling, general and administrative expenses, or $0.04 per diluted share, primarily representing the impairment of a corporate facility that was held for sale; partially offset by
Current report
Results for the six months ended June 30, 2023 were affected by certain items that on a net basis decreased diluted earnings per share by $0.51 as follows:
Current report
•pre-tax amortization expense of $54 million recorded in amortization of intangible assets, or $0.35 per diluted share;
Current report
•pre-tax charges of $6 million recorded in selling, general and administrative expenses, or $0.04 per diluted share, primarily representing the impairment of a corporate facility that was held for sale, and
Current report
•excess tax benefits associated with stock-based compensation arrangements of $7 million recorded in income tax expense, or $0.07 per diluted share.
Current report
Net revenues for the three months ended June 30, 2024 increased by 2.5% compared to the prior year period.
Current report
DIS revenues for the three months ended June 30, 2024 increased by 2.8% compared to the prior year period.
Current report
•Revenue per requisition increased by 1.6% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix, partially offset by the impact of the decrease in COVID-19 testing and lower revenues associated with certain value-based arrangements.
Current report
•Revenue per requisition in the base business increased by 2.4% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix, partially offset by lower revenues associated with certain value-based arrangements.
Current report
Net revenues for the six months ended June 30, 2024 increased by 2.0% compared to the prior year period.
Current report
DIS revenues for the six months ended June 30, 2024 increased by 2.3% compared to the prior year period.
Current report
For the six months ended June 30, 2024:
Current report
SG&A for the six months ended June 30, 2024 was principally consistent with the prior year period. Increased depreciation expense and the impact of recent acquisitions was principally offset by lower marketing expenses and decreased benefit costs.
Current report
Other Operating Expense, Net
Current report
Other operating expense, net includes miscellaneous income and expense items and other charges related to operating activities.
Current report
For both thethree andsix months ended June 30, 2024, other operating expense, net primarily represents a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.
Current report
Income tax expense for the six months ended June 30, 2024 and 2023 was $140 million for both periods.
Current report
The effective income tax rate for the six months ended June 30, 2024 and 2023 was 24.2% and 23.5%, respectively. The effective income tax rate benefited from $3 million and $7 million of excess tax benefits associated with stock-based compensation arrangements for the six months ended June 30, 2024 and 2023, respectively.
Current report
Equity in earnings of equity method investees, net of taxes, decreased by $4 million for the six months ended June 30, 2024 compared to the prior year period primarily due to the six months ended June 30, 2024 including $9 million of net losses associated with changes in the carrying value of our strategic investments, partially offset by increased demand for testing services at our diagnostic information services joint venture.
Current report
Net cash (used in) provided by financing activities for the six months ended June 30, 2024 and 2023 was $(516) million and $113 million, respectively. This $629 million change in net cash (used in) provided by financing activities for the six months ended June 30, 2024, compared to the prior year period, was primarily a result of the six months ended June 30, 2023 including $320 million of net borrowings under our secured receivables credit facility and the six months ended June 30, 2024 including the repayment in full of the outstanding indebtedness under our $300 million of 4.25% senior notes at maturity.
Current report
Additionally, we have entered into definitive agreements to acquire LifeLabs, select assets of the laboratory services business of Allina Health, and select assets of the laboratory services business of OhioHealth. The acquisitions are expected to close during the second half of 2024. For further details, see Notes 5 and 14 to the interim unaudited consolidated financial statements.
Removed paragraphs (9)
Previous report
First Quarter Highlights
Previous report
•pre-tax charges of $17 million ($13 million in cost of services and $4 million in selling, general and administrative expenses), or $0.12 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; and
Previous report
Results for the three months ended March 31, 2023 were affected by certain items that on a net basis decreased diluted earnings per share by $0.26 as follows:
Previous report
•excess tax benefits associated with stock-based compensation arrangements of $5 million, or $0.05 per diluted share, recorded in income tax expense.
Previous report
Net revenues for the three months ended March 31, 2024 increased by 1.5% compared to the prior year period.
Previous report
DIS revenues for the three months ended March 31, 2024 increased by 1.7% compared to the prior year period.
Previous report
•lower performance-based compensation payments in 2024; and
Previous report
•the timing of income tax payments.
Previous report
Net cash used in financing activities for the three months ended March 31, 2024 and 2023 was $153 million and $76 million, respectively. This $77 million increase in net cash used in financing activities for the three months ended March 31, 2024, compared to the prior year period, was primarily a result of a change in bank overdrafts, which are generally settled in cash in the short term.
Reworded paragraphs (35)
Previous wording
For the three months ended March 31, 2024, we incurred $17 million of pre-tax charges in connection with restructuring and integration activities, including $6 million of employee separation costs, with the remainder primarily consisting of integration costs related to facility closures. Most of the charges will result in cash expenditures. Additional restructuring and integration charges may be incurred in future periods, including as we identify additional opportunities to achieve further savings and productivity improvements.
Current wording
For the six months ended June 30, 2024, we incurred $27 million of pre-tax charges in connection with restructuring and integration activities, including $14 million of employee separation costs, with the remainder primarily consisting of integration costs. Most of the charges will result in cash expenditures. Additional restructuring and integration charges may be incurred in future periods, including as we identify additional opportunities to achieve further savings and productivity improvements.
Previous wording
•pre-tax charges of $19 million ($10 million in cost of services and $9 million in selling, general and administrative expenses), or $0.12 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business, and
Current wording
•pre-tax charges of $10 million ($1 million recorded in cost of services and $9 million recorded in selling, general and administrative expenses), or $0.06 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Previous wording
•pre-tax charges of $3 million, or $0.03 per diluted share, representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions, recorded in other operating expense, net; partially offset by
Current wording
•pre-tax charges of $4 million ($1 million recorded in selling, general and administrative expenses and $3 million recorded in other operating expense, net), or $0.03 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; partially offset by
Previous wording
•excess tax benefits associated with stock-based compensation arrangements of $2 million, or $0.02 per diluted share, recorded in income tax expense.
Current wording
•excess tax benefits associated with stock-based compensation arrangements of $2 million recorded in income tax expense, or $0.02 per diluted share.
Previous wording
•pre-tax amortization expense of $26 million recorded in amortization of intangible assets or $0.17 per diluted share;
Current wording
•pre-tax charges of $26 million ($10 million recorded in cost of services and $16 million recorded in selling, general and administrative expenses), or $0.17 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Previous wording
•pre-tax charges of $3 million, or $0.02 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments, recorded in equity in earnings of equity method investees, net of taxes; partially offset by
Current wording
•pre-tax charges of $3 million recorded in equity in earnings of equity method investees, net of taxes, or $0.02 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; partially offset by
Previous wording
•The increase in DIS revenues compared to the prior year period was driven primarily by growth in the base business (which excludes COVID-19 testing) and, to a lesser extent, the impact of recent acquisitions, largely offset by a decrease in COVID-19 testing. For the three months ended March 31, 2024, recent acquisitions contributed approximately 0.7% to DIS revenues.
Current wording
•The increase in DIS revenues compared to the prior year period was driven primarily by growth in the base business (which excludes COVID-19 testing) and, to a lesser extent, the impact of recent acquisitions, partially offset by a decrease in COVID-19 testing. For the three months ended June 30, 2024, recent acquisitions contributed approximately 0.7% to DIS revenues.
Previous wording
•DIS volume increased by 1.6% compared to the prior year period driven primarily by growth in the base business and the impact of recent acquisitions, which contributed approximately 0.6% to DIS volume, largely offset by a decrease in COVID-19 testing.
Current wording
•DIS volume increased by 1.1% compared to the prior year period driven primarily by growth in the base business and the impact of recent acquisitions, which contributed approximately 0.4% to DIS volume, partially offset by a decrease in COVID-19 testing.
Previous wording
•DIS revenues in the base business (including the impact of recent acquisitions) increased by 6.1% compared to the prior year period.
Current wording
•DIS revenues in the base business (including the impact of recent acquisitions) increased by 4.2% compared to the prior year period.
Previous wording
•Testing volume in the base business (including the impact of recent acquisitions) was up 3.3% compared to the prior year period.
Current wording
•Testing volume in the base business (including the impact of recent acquisitions) was up 1.7% compared to the prior year period.
Previous wording
DS revenues for the three months ended March 31, 2024 decreased by 5.0% compared to the prior year period due to lower revenues associated with both our risk assessment services offered to insurers and our healthcare information technology businesses.
Current wording
DS revenues for the three months ended June 30, 2024 decreased by 8.8% compared to the prior year period due to lower revenues associated with both our risk assessment services offered to insurers and our healthcare information technology businesses.
Previous wording
•Revenue per requisition increased by 0.1% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix, largely offset by the impact of the decrease in COVID-19 testing.
Current wording
•Revenue per requisition increased by 0.9% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix, partially offset by the impact of the decrease in COVID-19 testing.
Previous wording
•Revenue per requisition in the base business increased by 2.6% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix.
Current wording
•Revenue per requisition in the base business increased by 2.5% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix.
Previous wording
For the three months ended March 31, 2024, cost of services increased by $35 million compared to the prior year period. The increase was primarily driven by higher supplies expenses (principally due to the increased volumes), wage increases and higher benefit costs, partially offset by cost savings and productivity improvements from our Invigorate program.
Current wording
For the six months ended June 30, 2024, cost of services increased by $82 million compared to the prior year period. The increase was primarily driven by higher supplies expenses, wage increases, higher benefit costs and the impact of recent acquisitions, partially offset by cost savings and productivity improvements from our Invigorate program.
Previous wording
SG&A for the three months ended March 31, 2024 was principally consistent with the prior year period. Year-over-year wage increases were principally offset by the impact of year-over-year reductions in headcount.
Current wording
SG&A for the three months ended June 30, 2024 was consistent with the prior year period. The impact of recent acquisitions was offset by lower benefit costs.
Previous wording
For the three months ended March 31, 2024, amortization expense increased by$3 million compared to the prior year period as a result of recent acquisitions.
Current wording
For the three andsix months ended June 30, 2024, amortization expense increased by $1 million and $4 million, respectively, compared to the prior year periods, as a result of recent acquisitions.
Previous wording
For the three months ended March 31, 2024, interest expense, net increased by $8 million compared to the prior year period primarily due to increased borrowings associated with the issuance, during November 2023, of $750 million aggregate principal amount of 6.40% senior notes due 2033.
Current wording
For the three and six months ended June 30, 2024, interest expense, net increased by $7 million and $15 million, respectively, compared to the prior year periods primarily due to the issuance, during November 2023, of $750 million aggregate principal amount of 6.40% senior notes due 2033, partially offset by the repayment at maturity of our $300 million aggregate principal amount of 4.25% senior notes on April 1, 2024, and lower borrowings under our secured receivables credit facility.
Previous wording
For the three months ended March 31, 2024, other income, net included $9 million of gains associated with investments in our deferred compensation plans.
Current wording
For the three and six months ended June 30, 2024, other income, net included $3 million and $12 million, respectively, of gains associated with investments in our deferred compensation plans.
Previous wording
For the three months ended March 31, 2023, other income, net included $7 million of gains associated with investments in our deferred compensation plans.
Current wording
For the three and six months ended June 30, 2023, other income, net included $6 million and $13 million, respectively, of gains associated with investments in our deferred compensation plans.
Previous wording
Income tax expense for the three months ended March 31, 2024 and 2023 was $66 million and $65 million, respectively.
Current wording
Income tax expense for the three months ended June 30, 2024 and 2023 was $74 million and $75 million, respectively.
Previous wording
The effective income tax rates for the three months ended March 31, 2024 and 2023 were 25.0% and 23.6%, respectively. The effective income tax rates benefited from $2 million and $5 million of excess tax benefits associated with stock-based compensation arrangements for the three months ended March 31, 2024 and 2023, respectively.
Current wording
The effective income tax rate for the three months ended June 30, 2024 and 2023 was 23.4% and 23.5%, respectively. The effective income tax rate benefited from $1 million and $2 million of excess tax benefits associated with stock-based compensation arrangements for the three months ended June 30, 2024 and 2023, respectively.
Previous wording
Equity in earnings of equity method investees, net of taxes, increased by $3 million for the three months ended March 31, 2024 compared to the prior year period primarily due to the three months ended March 31, 2023 including losses associated with changes in the carrying value of our strategic investments.
Current wording
Equity in earnings of equity method investees, net of taxes, decreased by $7 million for the three months ended June 30, 2024 compared to the prior year period primarily due to the three months ended June 30, 2024 including $9 million of net losses associated with changes in the carrying value of our strategic investments, partially offset by increased demand for testing services at our diagnostic information services joint venture.
Previous wording
As of both March 31, 2024 and December 31, 2023, the fair value of our debt was estimated at approximately $4.6 billion, principally using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. As of March 31, 2024 and December 31, 2023, the estimated fair value was less than the carrying value of the debt by $159 million and $127 million, respectively. A hypothetical 10% increase in interest rates (representing 50 basis points as of both March 31, 2024 and December 31, 2023) would potentially reduce the estimated fair value of our debt by approximately $139 million as of both March 31, 2024 and December 31, 2023.
Current wording
As of June 30, 2024 and December 31, 2023, the fair value of our debt was estimated at approximately $4.3 billion and $4.6 billion, respectively, principally using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. As of June 30, 2024 and December 31, 2023, the estimated fair value was less than the carrying value of the debt by $147 million and $127 million, respectively. A hypothetical 10% increase in interest rates (representing 51 basis points and 50 basis points as of June 30, 2024 and December 31, 2023, respectively) would potentially reduce the estimated fair value of our debt by approximately $136 million and $139 million, respectively, as of June 30, 2024 and December 31, 2023.
Previous wording
We regularly evaluate equity investments that do not have readily determinable fair values to determine if there are any indicators that the investments are impaired. The carrying value of our equity investments that do not have readily determinable fair values was $26 million as of March 31, 2024. In conjunction with the preparation of our March 31, 2024 financial statements, we considered whether the carrying values of our investments were impaired and concluded that no such impairment existed.
Current wording
We regularly evaluate equity investments that do not have readily determinable fair values to determine if there are any indicators that the investments are impaired. The carrying value of our equity investments that do not have readily determinable fair values was $36 million as of June 30, 2024. In conjunction with the preparation of our June 30, 2024 financial statements, we considered whether the carrying values of our investments were impaired and concluded that no such impairment existed.
Previous wording
Cash and cash equivalents consist of cash and highly-liquid short-term investments with original maturities, at the time of acquisition, of three months or less. Cash and cash equivalents as of March 31, 2024 totaled $474 million, compared to $686 million as of December 31, 2023.
Current wording
Cash and cash equivalents consist of cash and highly-liquid short-term investments with original maturities, at the time of acquisition, of three months or less. Cash and cash equivalents as of June 30, 2024 totaled $271 million, compared to $686 million as of December 31, 2023.
Previous wording
As of March 31, 2024, approximately 8% of our $474 million of consolidated cash and cash equivalents were held outside of the United States.
Current wording
As of June 30, 2024, approximately 14% of our $271 million of consolidated cash and cash equivalents were held outside of the United States.
Previous wording
Net cash provided by operating activities for the three months ended March 31, 2024 and 2023 was $154 million and $94 million, respectively. The $60 million increase in net cash provided by operating activities for the three months ended March 31, 2024, compared to the prior year period, was primarily a result of:
Current wording
Net cash provided by operating activities for the six months ended June 30, 2024 and 2023 was $514 million and $538 million, respectively. The $24 million decrease in net cash provided by operating activities for the six months ended June 30, 2024, compared to the prior year period, was primarily a result of the timing of cash collections, partially offset by the timing of cash payments.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2024 and 2023 was $213 million and $158 million, respectively. This $55 million increase in net cash used in investing activities for the three months ended March 31, 2024, compared to the prior year period, was primarily a result of increased cash used for business acquisitions (see above for further discussion), partially offset by decreased capital expenditures.
Current wording
Net cash used in investing activities for the six months ended June 30, 2024 and 2023 was $413 million and $840 million, respectively. This $427 million decrease in net cash used in investing activities for the six months ended June 30, 2024, compared to the prior year period, was primarily a result of decreased cash used for business acquisitions and, to a lesser extent, lower capital expenditures.
Previous wording
During the three months ended March 31, 2024, there were no borrowings or repayments under our secured receivables credit facility and our senior unsecured revolving credit facility.
Current wording
During the six months ended June 30, 2024, there were no borrowings or repayments under our secured receivables credit facility and our senior unsecured revolving credit facility.
Previous wording
During the three months ended March 31, 2023, we borrowed $140 million under our secured receivables credit facility, which was repaid prior to March 31, 2023, and there were no borrowings or repayments under our senior unsecured revolving credit facility.
Current wording
During the six months ended June 30, 2023, we borrowed $1.0 billion under our secured receivables credit facility, $0.7 billion of which was repaid prior to June 30, 2023. Additionally, during the six months ended June 30, 2023, we borrowed $125 million under our senior unsecured revolving credit facility, which was repaid prior to June 30, 2023.
Previous wording
During the first quarter of 2024, our Board of Directors declared a quarterly cash dividend of $0.75 per common share. During each of the four quarters of 2023, our Board of Directors declared a quarterly cash dividend of $0.71 per common share.
Current wording
During each of the first and second quarters of 2024, our Board of Directors declared a quarterly cash dividend of $0.75 per common share. During each of the four quarters of 2023, our Board of Directors declared a quarterly cash dividend of $0.71 per common share.
Previous wording
For both the three months ended March 31, 2024 and 2023, we repurchased no shares of our common stock.
Current wording
For both the six months ended June 30, 2024 and 2023, we repurchased no shares of our common stock.
Previous wording
During April 2024, we repaid in full the outstanding indebtedness under our $300 million of 4.25% senior notes which matured on April 1, 2024. Additionally, we have $600 million of 3.50% senior notes due March 2025.
Current wording
We have $600 million of 3.50% senior notes due March 2025.
Previous wording
We believe that our cash and cash equivalents and cash from operations, together with our borrowing capacity under our credit facilities, will provide sufficient financial flexibility to fund seasonal and other working capital requirements, capital expenditures, debt service requirements and other obligations, cash dividends on common shares, share repurchases and additional growth opportunities, including acquisitions, for the foreseeable future. However, should it become necessary, we believe that our credit profile should provide us with access to additional financing in order to fund normal business operations, make interest payments, fund growth opportunities and satisfy upcoming debt maturities.
Current wording
We believe that our cash and cash equivalents and cash from operations, together with our borrowing capacity under our credit facilities, will provide sufficient financial flexibility to fund seasonal and other working capital requirements, capital expenditures, debt service requirements and other obligations, cash dividends on common shares, share repurchases and additional growth opportunities, including acquisitions, for the foreseeable future. However, should it become necessary, we believe that our credit profile should provide us with access to additional financing in order to fund normal business operations, make interest payments, fund additional growth opportunities, including acquisitions, and satisfy upcoming debt maturities.
Previous wording
Some statements and disclosures in this document are forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan”, "aim", or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of risks and uncertainties that could cause our plans and expectations, including actual results, to differ materially from the forward-looking statements. Risks and uncertainties that may affect our future results include, but are not limited to, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government regulations, changing relationships with customers, payers, suppliers and strategic partners and other factors discussed in our most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk Factors,” “Cautionary Factors that May Affect Future Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.
Current wording
Some statements and disclosures in this document are forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan”, "aim", or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of risks and uncertainties that could cause our plans and expectations, including actual results, to differ materially from the forward-looking statements. Risks and uncertainties that may affect our future results include, but are not limited to, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government regulations, changing relationships with customers, payers, suppliers and strategic partners, acquisitions and other factors discussed in our most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk Factors,” “Cautionary Factors that May Affect Future Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Acquisition of select assets of PathAI Diagnostics
Current report — wording carried from elsewhere
On June 10, 2024, we acquired select assets of PathAI Diagnostics, a business that provides anatomic and digital pathology laboratory services, in an all-cash transaction for $100 million. The acquired business is included in our DIS business.
Current report — wording carried from elsewhere
•excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense, or $0.03 per diluted share.
Current report — wording carried from elsewhere
•The increase in DIS revenues compared to the prior year period was driven primarily by growth in the base business (which excludes COVID-19 testing) and, to a lesser extent, the impact of recent acquisitions, largely offset by a decrease in COVID-19 testing. For the six months ended June 30, 2024, recent acquisitions contributed approximately 0.8% to DIS revenues.
Current report — wording carried from elsewhere
•DIS volume increased by 1.4% compared to the prior year period driven primarily by growth in the base business and the impact of recent acquisitions, which contributed approximately 0.5% to DIS volume, partially offset by a decrease in COVID-19 testing.
Current report — wording carried from elsewhere
•DIS revenues in the base business (including the impact of recent acquisitions) increased by 5.1% compared to the prior year period.
Current report — wording carried from elsewhere
•Testing volume in the base business (including the impact of recent acquisitions) was up 2.5% compared to the prior year period.
Current report — wording carried from elsewhere
DS revenues for the six months ended June 30, 2024 decreased by 6.9% compared to the prior year period due to lower revenues associated with both our risk assessment services offered to insurers and our healthcare information technology businesses.
Current report — wording carried from elsewhere
For the three months ended June 30, 2024, cost of services increased by $47 million compared to the prior year period. The increase was primarily driven by wage increases, higher supplies expenses and, to a lesser extent, the impact of recent acquisitions, partially offset by cost savings and productivity improvements from our Invigorate program.