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I will now turn the call over to Joe.Joe Pyne Okay, thank you Steve. On Friday afternoon, we publicly revised and lowered our second quarter guidance to $0.80 to $0.85 per share from the previous guidance of $0.97 to $1.02 per share. For the year, we revised our guidance to $3.45 to $3.70 per share, again from the previous guidance of $3.85 to $4.05 per share. Let me start with some comments on our inland tank barge and marine diesel engine service businesses, both of which are performing well and above 2011 second quarter levels. Our inland tank barge market remains strong with equipment utilization levels in the 90 to 95% range, leading to continued favorable pricing trends. During the second quarter, we did see some temporary lower petrochemical volumes than anticipated from one of our major customers due to both unscheduled and scheduled plant maintenance issues. We also experienced some low water levels on the Mississippi River system which has led us to light load equipment going upriver and resulted again in some lower revenue. Looking forward, we anticipate our inland market to remain positive based on the high utilization levels in the industry’s tank barge fleet. We are currently hearing a lot about inventory destocking caused by the collapse in crude oil pricing and the global economic weakness, but this has not translated into reducing utilization and the industry capacity additions are all being absorbed. With respect to our marine diesel engine service market, it continues to improve due to the overall health of its inland marine transportation customers, improving Gulf of Mexico oil service markets, and the power generation market which we participate in is also stable. We anticipate these businesses to remain positive for the second half of 2012. Our challenges for the second quarter and for the year are principally in our newly acquired businesses. With respect to United Holdings and K-Sea Transportation, now Kirby Offshore Marine, I want to emphasize that although we’re disappointed with this year’s performance, we’re not disappointed in the land-based diesel engine service business opportunity and the offshore tank business as investments for Kirby long-term. When we purchased United Holdings last April, we recognized that it had some cyclical exposure to manufacturing. We said that we intended to reduce this exposure by focusing on the overhaul and maintenance of this equipment versus manufacturing the equipment. What we did not predict was the unprecedented and sudden collapse of natural gas prices, which has essentially halted new orders for frac spreads and reduced the window to make the transition to re-man. Frankly, we didn’t predict the strength of this business last year. Although painful, it has forced us to expedite the implementation of our remanufacturing plan.
With respect to K-Sea, now Kirby Offshore Marine, their market will improve and as it does, rates and earnings will get better. Yes, we’re disappointed in the additional maintenance we will be incurring to bring this equipment up to our standards, but we will get this behind us. When we bought K-Sea, it was a public company and the need to maintain strict confidentiality than we have experienced with other, non-public acquisitions, and the equipment inspection window was much shorter. We relied on maintenance records and discussion with K-Sea management to determine the condition of the fleet and the assessment of the adequacy of its maintenance program. Based on post-acquisition shipyards and performance issues with the equipment, we concluded that we needed to invest more in the equipment.This is what happened. I’m not offering it as an excuse. We made a business judgment error which turned out to be wrong. The tank barge business is about servicing customers reliably and safely with equipment which can consistently meet the customer’s vetting requirements. Well-maintained equipment pays for itself through higher utilization rates because equipment is out of service less for unplanned maintenance events and the customer wants to use it more because it’s reliable and safe. This is the model which we have successfully employed in our inland business. This is the model we will employ in the offshore business going forward. Read the rest of this transcript for free on seekingalpha.com