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.
Our team produced solid results in what proved to be a record quarter in CN's history. We moved more traffic than we ever have before in handling on average over 1 billion GTMs per day. Intermodal, Automotive, Coal, Petroleum and Chemicals, and our Metals and minerals business units all registered double-digit gains in revenue 10 miles driven by economic growth, market share gains and a labor disruption of the key competitor.And I'd be remiss not to point out that we handled this record volume while continuing to gain traction in our service and operational excellence agenda. So let's spend a few moments reviewing the highlights of the key productivity metrics we speak to each quarter. As you can see, the team produced year-over-year improvements in virtually every productivity category. We're moving bigger trains, handling increased volumes to our terminals, 7% faster. We're using less yard resources per car handled. These improvements in productivity, again, I'll remind you are being done at the same time we're absolutely focused on improving the reliability of our first-mile/last-mile performance. Locomotive productivity improved in car velocity, I'll note, is at record levels. And again, this is being accomplished against a backdrop of our improved customer service in terms of car supply performance, which is helping drive a lot of our revenue growth. In the second quarter, we achieved 96% corridor fulfillment performance and provided empty cars by the requested date and times of our customers, with an 86% reliability level. The only metric we didn't see improve is our industry train speed, which as we all know is a standard AAR metric that measures train speed performance and, emphasis added, terminal-to-terminal. As you can see, while observing over 8% [ph] GTM growth, second quarter this year versus last, we were down slightly. This is driven more specifically by line segments where we've experienced concentrated significant growth in 2011 and, again, in 2012, which has created a strain on our long train line capacity, which impacted this metric. One meaningful example of this is our BC North territory running the Port of Prince Rupert, where in large part, coal, grain and intermodal growth is driven 13% volume growth in 2011 and an additional 17% in 2012. So effectively, 30% volume growth in a 2-year time span.
To manage this growth, we're in year 2 of a 4-year capacity improvement plan. We've got 7 additional long sidings that will come online late third quarter, early fourth quarter this year that will increase our long train capacity, which, obviously, will help us drive our industry train speed back up and add capacity for continued growth in this key corridor.So with that said, we have and we'll continue to report industry train speed externally to allow an apples-to-apples comparison to other roads. But in line with our supply chain, end-to-end mindset at CN, we've also established a network train speed measure 2 years ago that is an all-inclusive train speed measure which is meaningful to speak to. So whereas the industry train speed excludes time spent in terminals or accrued change points, network train speed does not. It captures both road and yard time for our trains. What is meaningful about this at CN is during the same time we were slightly down on our industry train speed, we've made gains on network train speed in spite of this GTM growth that we've experienced across our network. Our network train speed actually improved just under 3% quarter-to-quarter despite this growth. Read the rest of this transcript for free on seekingalpha.com