Operating Income

Operating income for the three months ended June 30, 2012, was $3.5 million as compared to $6.7 million for the comparable 2011 period. The Company’s gross voyage profit representing the operating results of its five reporting segments was $13.3 million compared to $18.2 million in the 2011 three month period. The comparable results by reporting segment are shown below:
           

International
           

Rail Ferry
           

U.S. Flag
     

Flag
     

COA
     

Service
     

Other
     

Totals

   (all amounts in millions)

Second Quarter 2012
Gross Voyage Profit $ 6.630 $ 4.679 $ .126 $ 1.448 $ .411 $ 13.294
 
Depreciation (2.310) (2.702) -- (.701) (.010) (5.723)
Gross Profit $ 4.320 $ 1.977 $ .126 $ .747 $ .401 $ 7.571

(After Depreciation)

 
 

Second Quarter 2011
Gross Voyage Profit $ 9.335 $ 7.524 $ (.101) $ 1.056 $ .333 $ 18.147
 
Depreciation (2.495) (2.699) -- (.899) (.002) (6.095)
Gross Profit $

6.840
$ 4.825 $ (.101) $ .157 $ .331 $ 12.052

(After Depreciation)

 
 

Gross voyage profit for the U.S. Flag Time Charter segment was lower due to the expiration of the three operating contracts with the Military Sealift Command (MSC) which occurred near the end of the first quarter of 2012. This was partially offset by higher supplemental cargo volumes and the operation of the ice strengthened vessel on charter to the MSC. The International Flag Time Charter segment reported lower results reflecting the divestiture of two of its Pure Car Truck Carriers in the first quarter of 2012. This segment was also impacted by the dry bulk market which continues to experience depressed rate levels. The Contract of Affreightment and Rail Ferry segments reported slightly higher results reflecting lower operating costs during the quarter. The Company’s Other Segment, consisting mainly of chartering brokerage and agency services, reported comparable quarterly results.

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