Before we get started, let me remind you that this presentation contains forward-looking information. Actual results may differ materially. The risks, uncertainties and other factors that could influence actual results are described on Slide 2 and 3 in the press release and in the MD&A filed with the Canadian and U.S. securities regulators. Please read carefully, as these assumptions could change throughout the year. All dollars quoted in the presentation are Canadian, unless otherwise stated. This presentation also contains non-GAAP measures. Please read Slide 4.Finally, when we do go to Q&A, in the interest of time and in fairness to your peers, I'd ask you to limit your questions to two. If we have time, we will allow requeueing, and the time permitting, we'll circle back. Here then is our President and CEO, Fred Green. Frederic Green Good morning, and thanks for joining us. This quarter, CP reported adjusted earnings per share of $1.12, a 51% increase over Q4 of last year, and our operating ratio improved by 360 basis points. The higher-than-projected volumes to the West Coast and the early November cold tested the capabilities of CP and the entire supply chain in Q4. Overall, we posted some solid results, with operating metrics in line with 2009 on a much busier network. As importantly, we continue to take steps targeted at delivering sustainable improvements in productivity and asset velocity. Before turning it over to the team, let me take a few minutes to reflect on 2010 and our progress. For the year, adjusted EPS came in at $3.87, up 54%; and our full year operating ratio came in at 77.6%, a 410 basis point improvement. In many ways, 2010 was as extraordinary as 2009, with volatility and limited market transparency creating a very difficult environment for resource planning, service execution and efficiency.
We went from a market expecting moderate recovery to full year growth of almost 17% in terms of revenue ton-miles. From a Canadian grain production forecast that shifted from a 15% reduction in acres planted to Vancouver export volumes that were 13% above the five-year average for the new crop year, and from declines in port traffic of more than 10% last year to Vancouver volumes that suggest 2010 record years for coal, grain and containers. And while we're managing demand surges, we successfully recovered from the largest mainline outage in CP memory, with significant washouts in Southern Alberta just as the demand was taking another step up.Last January, I spoke to some key objectives that included staying nimble and adjusting quickly to volume shifts, whether they were up or down. We delivered on this objective, having unexpected double-digit growth, albeit with some impact to our service metrics. Improving the consistency of our service offering is a key objective for 2011. The hard-fought productivity improvements we achieved in 2009 were not only sustained but in fact improved with average yard dwell, fuel efficiency, car velocity, train productivity, all better on a much busier network. For the fifth consecutive years, CP was the safest railroad in North America for train accidents, with a remarkable 10% improvement. Personal safety also improved 16%. We spoke about growth in pricing for value, and we delivered with positive price in excess of inflation. Growth in new energy markets and the new long-term agreement with Teck that sets the stage for volume growth over the next decade. Finally, we focused on the balance sheet to ensure we have the financial flexibility to exercise strategies at the time of our choosing. Our pension prepayments and debt efforts now allow us to move forward more aggressively with plans to pursue our service and productivity initiatives, and our recently announced capital plan speaks directly to that confidence.
I'll turn it over to Kathryn, Ed and Jane to provide the details on the fourth quarter and our current thoughts on 2011. Then I'll come back and wrap up. Over to you, Kathryn.Kathryn McQuade Thank you, Fred, and good morning, everyone. 2010 was a strong year for CP. We made solid progress in strengthening the balance sheet, took meaningful steps in our structural cost reductions and ran a more efficient Railroad. In Q4, we sustained productivity and efficiency, moving 9% more carload volume and improved our operating ratio 360 basis points compared to Q4 last year. So let's get into the numbers and begin with our GAAP, non-GAAP conciliation to adjusted earnings. For the quarter, reported earnings per share were $1.09. When you exclude FX on long-term debt and other specified items, our adjusted earnings per share were $1.12. We had similar adjustments in 2009 and a large one-time loss from an early lease termination with our short line, offset by a tax rate gain, which decreased earnings per share by $0.13. For the full year 2010 reported and adjusted earnings per share were essentially the same at $3.85 and $3.87, respectively. We had larger adjustments in 2009, decreasing adjusted earnings by $0.79 from $3.30 to $2.51. The remainder of my presentation will speak to adjusted earnings for comparison purposes. And in 2011, you should no longer see the need for this reconciliation. Turning to Slide 9 and the FX adjusted column on the right side. Total revenues were up 15% due to higher volume, fuel surcharge revenues and price. Jane will give you the details on our freight revenues. Adjusted operating expense increased 10%, and operating income was up 37%. Our operating ratio improved by 360 basis points to 77%. Read the rest of this transcript for free on seekingalpha.com