As you know, we use several non-GAAP measures when presenting our financial results. Adjusted OIBDA, adjusted EPS and free cash flow before acquisitions and investments, among others, are metrics we speak to frequently and ones we believe to be important in evaluating our overall financial performance. We provide additional information and a reconciliation of these non-GAAP measures to their appropriate GAAP measures as required by Reg G at the Investor Relations page of our website, as well as in today's press release.Before turning the call over to Richard, I would like to make a quick housekeeping announcement. As announced in this morning's press release, we have made a decision to sell our Italian business. As a result, the financial position, results of operations and cash flows of the Italian business have been reclassified as discontinued operations. For your convenience, we have included the restated statements of operations for the four quarters and full years of both 2010 and 2011 in the appendix of today's presentation. Additional restated information will be posted to the Investor Relations page of our website. With that, I'd like to introduce our Chairman and CEO, Richard Reese. C. Richard Reese Thank you, Stephen. Good morning, everybody, and thanks for joining us this morning. It's always been my prior custom on these Q4 calls. I'm going to focus today on the full year mostly of 2011 and reflect a bit on all the changes and, for that matter, the progress we've made since I've returned as CEO this last April. It's been a lot of change in the company, and it's important that our shareholders understand these changes and, as I said, the progress we've made against them as we've set forth the new strategy and focus in our business. So I'll let Brian cover the details on the quarter, except to say that Q4 was a good operating performance. We had consistent storage growth and great cost controls. I'll also speak a little bit about our outlook for next year. But again, I'll let Brian take care of the details, and he'll go through everything thoroughly. So with that said, let me get started.
Looking at the whole year on a performance basis, it was good performance for Iron Mountain. The key themes on an operating basis last year were, first and foremost, solid storage growth of 5% reported or 4% on constant currency. North America storage grew as we expected on a consistent 3% reported, 2% on a current basis -- or current constant currency basis, while International was strong at 14% reported or 9% on constant currency. And sometimes, people ask me, and particularly, people haven't been around the company so long, why do we talk about storage so much? Why is it so important? Well, first is it is the major component of our revenue. It is the major driver of margin, and it frankly is the major consumer of capital as we grow. It is where we drive almost everything in the business. But it's also an indication of our relationship with our customers. Once they store items with us, it opens up the door for us to deliver other services on a routine basis related to those stored items, as well as sell them additional services or things we call complementary services and so forth. So we watch our storage foundation or annuity like a hawk. It is the flywheel that really drives the business. And 2011 was the 23rd consecutive year that we've grown our storage revenues, and through good times and bad, storage keeps chugging along with the business, and it's continued do that.Now we are continuing to see the same trends we did throughout the year, headwinds, the weakening service revenues as customers use less of their information. They're becoming less active, in certain cases, change the way they use and, in many cases, continue defer buying decisions for projects that really are designed to improve their records programs. The trend towards less activity of information was felt broadly across all industries and all media types, not just in paper but our computer tape rotation services. The activity levels are down. We see it down, as I said, across the board.
A key driver of this, as we've talked a lot about, is our healthcare, which is not a major factor in the storage side of our business, but it's also the most active part. It's really not an archival business. It's an active part. And this is the case where the healthcare industry is reengineering their workflow processes. This is a trend that's different than the last activity trend. This is a trend in which healthcare is changing modalities. They're changing how they operate, so digitizing images, going to MRIs and CAT scan modalities, replacing physical x-rays, which is one of our most active media. And of course, the adoption and broader adoption of electronic patient record systems will cause them to access their physical patient records less often. And we're seeing that trend. They don't destroy those records, and they actually do access them for different reasons, mostly around audit compliance and also a lot around research, where they really want to go back to the history of the record.But those trends, we've been seeing for quite a while now, and they continued and they continued. That was one of the themes of 2011. Another key theme of 2011 was the move of recycled paper prices. We spent very high recycled paper prices, in fact, hit an all-time high during the year. Those prices have come down sharply most recently and hit bottom and, frankly, we believe, just beginning to stabilize. This trend was helpful to us in 2011 but does present a challenge in 2012, and we'll talk more about that later. Read the rest of this transcript for free on seekingalpha.com