Just as a reminder, remarks we make during the course of this call regarding our earnings guidance, business strategy, plans for future operations and industry conditions are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.And I'll now going to turn the call over to Kevin. M. Kevin McEvoy Good morning, and thanks for joining the call. It's a pleasure to be here with you today. We are very pleased with our record EPS for the quarter, particularly in light of the slow recovery of non-drilling activity in the U.S. Gulf of Mexico. Our overall operations performed within expectations, and we remain on track to achieve record EPS for the year. Our third quarter results were highlighted by all-time high quarterly operating income from our ROV and Subsea Products operations. Given our year-to-date earnings and fourth quarter outlook, we are raising our 2011 EPS guidance range to $2.11 to $2.15 from $1.90 to $1.98. We were initiating 2012 annual EPS guidance with a range of $2.35 to $2.55 as we expect another record earnings year. For our services and products, we anticipate continued international demand growth and a moderate rebound in overall activity in the Gulf of Mexico. The major determinant of our guidance range spread is the amount of operating income growth we generate from Subsea Projects business. For Subsea Projects, we expect to benefit from a gradual recovery in the Gulf of Mexico during 2012 and a substantial increase in revenue and operating income as a result of an anticipated international expansion for our deepwater vessel project capabilities. I'll talk more about our 2012 guidance later, but first I'd like to review our operations for the third quarter. As we had anticipated, our ROV days on hire and fleet utilization rate improved during the quarter on an increase in demand for international drill support and vessel-based services. Our days on hire increased to an all-time high of over 19,000, and our fleet utilization was 80%, up from 76% last quarter and 73% for the third quarter of 2010. Segment operating income rose sequentially and year-over-year to a record level.
During the quarter, we added 8 systems to our fleet and retired 8. Our decision to retire such a large number of systems in one quarter was based upon a comprehensive review of the future work prospects of each vehicle and our strategy of operating a modern fleet. Year-to-date, we have added 16 systems to our fleet, retired 13 and transferred the use of 1 to ADTECH for non-oilfield use for a net increase of 2 vehicles.At the end of September, we had 262 systems available for operation, up 10 from September a year ago. We now anticipate adding 4 to 6 vehicles in the fourth quarter and expect our year-end fleet size to be 266 to 268 ROVs compared to 260 at the end of 2010. We do not foresee any retirements in the fourth quarter. Our fleet mix utilization during September was 75% in drill support and 25% on vessel-based work. This compares to a 71%-29% mix a year ago and 73% and 27% mix in June of 2011. At the time of our last earnings call, in the U.S. Gulf of Mexico, we were receiving full rates for 26 ROVs on 23 rigs, a partial rate for 1 ROV and 0 rate for 1 ROV. Two of these rigs subsequently left the Gulf, one to Egypt, the other to Vietnam and we retained the ROV contract to support both of them. As of yesterday, we were on full rate for 25 ROVs on 22 rigs, all of which were working at 0 rate for 1 ROV on 1 rig which is not contracted. There are presently 25 floating rigs available for use in the Gulf of Mexico and we have ROVs on 23 of them. By the middle of next year, there are 5 known additional rigs currently scheduled to come into the Gulf, and we have the ROV contracts for all of them. One is an existing rig and 4 are new builds. So by mid 2012, we anticipate that there will be at least 30 rigs available for use in the Gulf of Mexico, and we expect to have ROVs on 28 of them. By comparison, we had ROVs on 31 of the 36 rigs in the Gulf, 3 in Macondo. Read the rest of this transcript for free on seekingalpha.com