Now I would like to turn the call over to Eric Kirchner. Eric?Eric Kirchner Thank you, Jeff, and good morning everyone. Second quarter results reflect solid performance in both our freight forwarding and contract logistics and distribution segments. Yield expansion and improved control over costs drove most of the freight forwarding improvement, while increased activity in contract logistics and margin improvement in our U.S. distribution business led to stronger performance in this segment. Air freight volumes declined against challenging comparisons from a year ago, but the decrease was less than the contraction in the overall market. A general swiveling in the overall economy and freight environment also contributed to weaker volumes for the entire industry. This is unlikely to change much in the third quarter given the macroeconomic climate. So preliminary volumes for us in August were relatively consistent with the prior year. Ocean freight TEUs were ahead of last year, performing a little better than expected and in line with the market. Preliminary volumes in August were up slightly compared to August of last year, which was our best volume month of fiscal year 2011. So far we're seeing mixed signs of a peak season. Yields and net revenue per unit increased over the prior year due to process improvements that include better buying and our gateway initiatives as well as movement in carrier rates. The rate environment remained supporting of the yield development, but comparisons in the second half of the year become more challenging, particularly in the fourth quarter. Our contract logistics and distribution segment continued to see volume gains from existing clients and new business wins, especially in our Africa and Asia-Pacific regions. We were particularly pleased to see our U.S. distribution business improve in the second quarter, consistent with the market, but also reflective of our efforts to develop better margins. While these improvements are encouraging, we continue to review our operations as part of our ongoing plan to fix underperforming businesses and contracts.
At this point, I'll ask Lawrence to walk through the financial results. Lawrence?Lawrence Samuels Thank you, Eric. Net income attributable to common shareholders in the fiscal 2012 second quarter was $0.22 per diluted share compared to $0.19 per diluted share recorded in the same period last year. When adjusted for severance costs, net income attributable to common shareholders was $0.24 per diluted share. Revenue and net revenue increased 12.7% and 17% respectively in the fiscal 2012 second quarter compared to the same period last year. The increase in revenues reflects the translation of foreign currencies into the weaker U.S. dollar for reporting purposes, increased net revenue per unit of cargo, greater activity in contract logistics and distribution and higher fuel surcharges which we passed through to clients. On an organic basis, net revenue increased 8.4% in the second quarter. We incurred severance cost of $3.5 million in the second quarter, primarily related to our transformation activities and proactive efforts to keep overall costs in line. These costs are reported separately in our statement of operations. We have also included reconciliations of GAAP to non-GAAP results in the tables in today's press release and posted more details on our website. The rest of my remarks will refer to our results as adjusted to exclude these costs. Adjusted operating expenses less purchased transportation costs were 15.9% higher than the same period last year. On an organic basis, adjusted operating expenses increased by 7.4% based on the comparable increase in net revenue. Our adjusted operating margin in the fiscal 2012 second quarter was 9.7%, an increase over the 8.9% margin in the second quarter last year. The improvement was primarily due to increased activity and higher net revenue per unit, partially offset by increased expenses. Read the rest of this transcript for free on seekingalpha.com