“Our customers continue to realize the benefits that our breadth of product and service offerings brings to them. This is reflected in our strong second-quarter results, as well as in the many long-term customer contracts we have been awarded already this year,” said Thomas J. Quinlan III, RR Donnelley's President and Chief Executive Officer.Quinlan added, “We begin the back half of the year with the same tempered enthusiasm that we had coming out of the first quarter. Our unique platform positions us well to continue to see positive year-over-year revenue growth for the balance of the year.” Business Review The Company reports its results in two reportable segments: 1) U.S. Print and Related Services and 2) International. The Company reports as Corporate its unallocated expenses associated with general and administrative activities. Summary Net sales in the quarter were $2.4 billion, up 2.2% from the second quarter of 2009, due to increased volume, partially offset by continued price pressure and a reduction in paper sales. Gross margin decreased to 24.5% in the second quarter of 2010 from 25.4% in the second quarter of 2009 due to continued price pressure and higher pension and other benefits-related expenses as well as higher incentive compensation expense, partially offset by increased volume and a higher recovery on print-related by-products. SG&A expense as a percentage of net sales in the second quarter of 2010 decreased to 11.1% from 11.6% in the second quarter of 2009 primarily due to a lower provision for bad debt expense and continued productivity efforts, partially offset by higher incentive compensation expense. Operating earnings were negatively impacted by charges for restructuring and impairment of $10.7 million in the second quarter of 2010 and $48.2 million in the second quarter of 2009 and acquisition expenses of $3.3 million in the second quarter of 2010 and $1.4 million in the second quarter of 2009, resulting in operating income of $175.3 million in 2010 and $135.0 million in 2009.