Operating income was $204 million compared with $152 million a year ago. Adjusting for a one-time benefit from the elimination of a net deferred liability resulting from an organizational restructuring, operating income was $161 million, 6% higher than the second quarter of 2011. KCS reported an adjusted second-quarter 2012 operating ratio of 70.5%, a 1.2 point improvement from second-quarter 2011.
Operating expenses in the second quarter were $341 million compared with $383 million in the corresponding 2011 period. Adjusted operating expenses in the second quarter were $384 million, comparatively flat with the same period in 2011.
Reported net income in the second quarter of 2012 totaled $120 million, or $1.09 per diluted share, compared with $71 million, or 64 cents per diluted share, in the second quarter of 2011. Adjusted diluted earnings per share for the second quarter of 2012 were $0.85, compared with adjusted diluted earnings per share of 71 cents in the second quarter of 2011.
"While lower-than-anticipated coal traffic clearly had an impact on second quarter results, KCS still reported a 4% increase in carloads, and excluding utility coal, our volumes rose 7% compared to second-quarter 2011," stated KCS President and CEO David L. Starling. "We also ended the quarter on a strong note by achieving the highest average daily carloads."