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Canadian National Railway Management Discusses Q2 2012 Results - Earnings Call Transcript

In order to be fair, as we've done with the other quarters, could you please limit your questions to one each. And with that, it's now my pleasure to turn the call over to Mr. Claude Mongeau, our President and Chief Executive Officer. Claude?

Claude Mongeau

Thank you, Bob, and thank you to all of you for joining us bright and early on this call. It's sunny in Montreal, and the leadership team here at CN is pleased to be with you to discuss our results. I think our second quarter results show a lot of strength. We are very proud that our team of railroader has been able to deliver strong operating, service and financial results throughout the quarter.

If you look at the key highlights, our revenues are up 10% on a year-over-year basis, if we look at them on a constant currency basis. We were able to accommodate that growth at very low incremental costs, and the proof of that is our operating ratio at 61.3%, which is the same as what we did last year. You bring these 2 elements together and that allowed us to show forth a -- adjusted diluted EPS of $1.50, which is up 19% over last year. And free cash flow was -- for the first 6 months was just over $700 million. So clearly, again, if you look at it from a service standpoint, if you look at it from an operating standpoint, and Keith will discuss some of those trends in a minute. And you look at it from a financial standpoint, our agenda is working. We do have momentum and we are pleased with these second quarter results at this point in time. So Keith, over to you.

Keith E. Creel

Okay. Thanks, Claude. Listen, as we close out the first half of 2012, I'm not going to hesitate saying I'm extremely proud of our operating team's performance in the second quarter.

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