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Financial Report: Covance

January 27, 2012

Early and late-stage FY revenues up 11% and 7%, respectively


4Q Revenues: $582.4 million (+8%)

4Q Earnings: $21.1 million (-26%)

FY Revenues: $2.1 billion (+9%)

FY Earnings: $132.2 million (+94%)

Comments: Early Development revenues were $234.5 million in the quarter (+6%) and $930.6 million for the year (+11%). Revenue growth in the quarter was driven by results from the company’s new Alnwick, UK and Porcheville, France sites and clinical pharmacology, partially offset by a $5.7 million sequential decline due to lower demand in research products and European toxicology services, as well as a $2.3 million foreign exchange impact.Late-Stage Development revenues were $298.0 million in the quarter (+10%) and $1.2 billion for the year (+7%).The company recorded a $12.1 million impairment charge in the quarter for an equity investment in a supplier of research products. Backlog at December 31, 2011 was $6.1 billion compared to $6.2 billion in 2010. Foreign exchange negatively impacted backlog growth by $75 million.