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Despite weak grain volume, Kansas City Southern set revenue and carload records in the second quarter. Revenue rose 6 percent to an all-time-high $579 million and volume increased 6 percent to a 2Q-best 534,900 units compared with second-quarter 2012. In addition, operating income climbed 12 percent to $179 million, adjusted diluted earnings per share rose 9 percent to 96 cents and the operating ratio improved 1.5 points to 69. Revenue growth was driven by a 26 percent rise in energy revenue, 20 percent gain in automotive revenue and 13 percent climb in intermodal revenue. Chemicals/petroleum and industrial/consumer revenue rose 11 percent and 4 percent, respectively, while agriculture/minerals revenue fell 18 percent due to a decrease in grain volumes resulting from severe drought conditions in the Midwest in 2012. Revenue from KCS’ five strategic growth areas, namely crude oil, cross-border intermodal, automotive, frac sand and Lázaro Cárdenas, collectively grew 28 percent in the quarter and represented 19 percent of the Class I’s second-quarter freight revenue. Operating expenses for the second quarter rose 4 percent to $400 million after an adjustment for a one-time benefit from the elimination of a net deferred statutory profit sharing liability in second-quarter 2012. “Considering the weakness in grain volumes due to the drought in 2012, KCS reported impressive second-quarter results,” said KCS President and Chief Executive Officer David Starling in a press release. “This performance speaks to the strength of KCS’ operations and the diversity of the franchise. Each subgroup within energy experienced strong growth, highlighted by revenue increases of 193 percent in crude oil and 19 percent in utility coal.”