Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good morning, my name is [LaJuana] and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter earnings release conference call.
[OPERATOR INSTRUCTIONS] Mr. Butters, you may begin your conference.
DAVID BUTTERS, CHAIRMAN, GULFMARK OFFSHORE: Thank you, LaJuana, and good morning everyone, and thank you all for joining the second quarter earnings report and coverage. The process today will be our usual, with Ed Guthrie covering our earnings report and followed by Bruce covering our operational outlook and results for the second quarter. After that, we'll open up the conference for a Q&A period. Ed, why don't you begin with the earnings report?
ED GUTHRIE, CFO, GULFMARK OFFSHORE: Thank you, David. Before we begin, let me dispense with the formalities.
The fact that this conference call will include comments which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve unknown risks, uncertainties and other factors. These risks are more fully disclosed in our filings with the SEC, and the forward-looking statements on this conference call should not therefore be regarded as representations that the projected outcomes can or will be achieved.
Having said that, we are very pleased to announce the first -- second quarter results setting new records and revenue, operating income, and net income. We exceeded the high marks that we set in the third quarter of 2005. Our net income of $0.63 a share is more than double last quarter and 58% above a year ago's quarter.
Let me go through the comparison as I normally do, comparing this quarter to the previous quarter. Our revenue of $58.7 million was up some $10.8 million, or 22.4%. It included roughly $1.8 million benefit from the strengthened dollar against currencies that we deal in normally. But the real improvement came from the very strong market that we had in the North Sea in the quarter, which contributed almost 60% of that increase. We had increased utilization in all three of our regions, the Americas, Brazil -- the southeast Asia as well as the North Sea. And we had one additional operating day in the quarter, this quarter versus the first quarter.
Southeast Asia day rate is up and continues to increase the reason for it in this quarter primarily was the delivery of our new vessel, the Sea Guardian, which came in and contributed basically for two-thirds of the second quarter and came on at a very good rate and we would expect that we'll continue to see the rates in that region remain at very strong levels.
Our operating costs for the quarter were $22.5 million. Basically, they were up as a result of the FX change in the quarter. Had excluding the foreign exchange factor, they would have been right on -- basically on par with what we had indicated they would be for the quarter. We would expect going forward that they will still be in that $22 million range depending upon what happens with foreign exchange, which we unfortunately can't accurately predict going forward.
Drydock expense in the quarter was $3.6 million. It was about $700,000 less than we had indicated that we thought it would be during the quarter. There were two drydocks that were not done in the quarter. They were basically -- will be delayed until the second half of the year. One of them was on one of our anchor handlers in the North Sea and you can certainly understand why we delayed that during the quarter.
We completed eight drydocks in the quarter, six in the North Sea, two in Southeast Asia. We've completed 15 to date. We have, as I indicated before, five more that are planned for the balance of this year. One of which is already completed in the North Sea. So therefore we have three more to go in the North Sea and one in Southeast Asia. We're expecting the cost will be somewhere in the range of $2.5 million, so the total for the year will be right around $9 million or a little short of $9 million. We'll take the opportunity to complete some of the work on the anchor handlers if, as and when the market conditions allow.
Our G&A of $6.2 million in the quarter was also a little bit up. We had some increases in our reserves for bad debts, some write-offs some inventory, there were a little unusual items in the quarter. We would expect that that level will be back down to around a $5.5 million run rate between 5.5 and $5.8 million on a go-forward basis. Depreciation expense is $7.4 million, essentially was pretty much on track for what we've indicated. The level will continue at -- depending again on what happens with currency. But we would expect it to be between, 1.72 and 75 through the end of the year. We have one of the new vessels, The Sovereign, which will deliver in the fourth quarter and that will increase depreciation slightly in the fourth quarter.
So operating income of $18.8 million was the highest ever in the company's history. I think a reflection, obviously, of the strong market we had in the North Sea, as well as, I think, not to be overlooked is the strengthening of our Southeast Asia market and the steady market we have in the Americas. Our interest expense in the quarter was down to $3.9 million due to the repayment that we made during the quarter as we refinanced all of our outstanding bank facilities into one new facility, which carries a lower interest rate. At the end of the average interest rate -- average weighted interest rate that we have on the outstanding debt is about 5.3%, so it's a very favorable rate going forward.
Other expense in the quarter was primarily related to foreign currency, currency loss, that should be minimized in the future and only be related to transactional gains and losses, most of that loss had come from a previous two months in the quarter before we refinanced our debt and have our debt in the currencies and the entities in which it resides. Taxes are $1.1 million, gives us an effective year-to-date rate of about 6.5%. We had, obviously, higher earnings from our low tax jurisdictions in the North Sea. We would expect that the range will be some place between 6 and 8% for the balance of the year. And that will depend, obviously, on how earnings from each one of the jurisdictions impacts the overall rate. But I would use that going forward.
As we look out into the future, we've always talked about our forward contract cover. As we look out for the …