Operating income for the second quarter of 2010 declined 16.9% year-over-year to $22.5 million, compared to $27.1 million in the second quarter of last year. Operating margin in the second quarter was 10.8%, which included facility rationalization and other cost reduction actions totaling $6.7 million. Excluding these cost actions, operating margins for the second quarter of 2010 were 14.0%, a sequential improvement of 280 basis points and up 40 basis points from the second quarter of last year. Early Development operating margins in the third quarter are expected to be in the 11% to 12% range primarily due to lower demand and profitability in toxicology.
 

The Late-Stage Development segment includes central laboratory, Phase II-III clinical development, and commercialization services (periapproval services and market access services). Late-Stage Development net revenues for the second quarter of 2010 grew 0.3% to $267.0 million compared to $266.3 million in the second quarter of 2009. Sequentially, revenues declined $9.9 million due to approximately $5.5 million in foreign exchange headwind and to the impact of the three Phase III clinical delays. Foreign exchange positively impacted year-on-year revenue growth in the quarter by 30 basis points. We now anticipate full-year 2010 Late-Stage Development revenue growth to be approximately flat year-on-year.
 

Operating income for the second quarter of 2010 declined 13.7% to $56.5 million compared to $65.5 million in the second quarter of the prior year due to lower clinical development profitability resulting from the three Phase III clinical trial delays. Operating margins of 21.2% for the second quarter of 2010 were down 270 basis points as compared to 23.9% in the first quarter of this year and versus 24.6% in the second quarter of last year. Operating margin is expected to remain in the 21% range in the third quarter due to the typical seasonal impact across the segment, the current mix of tests and kits received in central laboratory services, and the impact of the three large clinical trial delays. We expect to see margin expansion in the fourth quarter as revenue ramps.
 

Corporate Information
 

The Company's backlog at June 30, 2010 grew 3.6% year-over-year to $4.83 billion compared to $4.66 billion at June 30, 2009 and $4.79 billion at March 31, 2010. Foreign exchange negatively impacted sequential backlog growth by $31 million. Adjusted net orders (net orders adjusted for dedicated capacity contracts) were $590 million in the second quarter of 2010.