Along those lines, recall two adjustments during 2020, including a non-cash charge in the first quarter of 2020 related to the sale of 703 locomotives for $385 million and a $99 million impairment charge in the third quarter of 2020 related to an equity method investment.
2021 serves as the pinnacle of the plan and is marked by the achievement of our 60% full year operating ratio and record productivity levels across our operation.
We've grown earnings per share by 27%, reduced our operating ratio by 530 basis points and returned nearly $10 billion back to our shareholders in the form of share repurchases and dividends.
Revenue growth of 11% outpaced our expense increase of 8%, producing an 18% improvement in earnings per share and a fourth-quarter record operating ratio of 60.4%.
For the full year, revenues improved 14%, which more than offset the 6% increase in operating expenses.
We delivered the hallmark 60% operating ratio for the full year, an improvement of 430 basis points over the adjusted full year 2020 results and our sixth consecutive year of improvement.
Pronounced changes in business mix were evidenced by the unit volume decline of 4% while GTMs were up 1%.
Productivity gains were key to handling volumes in the quarter as the transportation workforce contracted by 8%.
The reduction in crew starts of 4%, growth in train weight of 10%, and growth in train length of 8% were critical elements of this productivity formula as well.
Where active locomotive count increased by 5% as the network slowed, we kept focus on efficiently deploying those locomotives on the larger trains, which helped drive the 3% improvement in fuel efficiency.
We've improved average train weight and length 21% and 20%, respectively, since mid-2019 when TOP21 was launched.
We have efforts in the pipeline to continue this trend: first, on the infrastructure front, in 2021, we launched work on 9 siding extensions, one of which was quickly completed and in service by the fourth quarter.
In 2021, we improved our fleet composition to nearly 60% AC power and 65% of our road fleet is capable of distributed power.
Total revenue improved 11% year over year to $2.9 billion as strong demand and favorable price conditions more than offset the 4% volume decline in the fourth quarter.
Pricing and strength across all markets contributed to the 15% increase in revenue per unit, and we reached record revenue per unit less fuel across all of our markets.
Gains in our metals business also contributed to growth with volume in these markets up 6% year over year on sustained high demand from the strengthening manufacturing sector.
Partially offsetting merchandise growth was a decline in automotive shipments, which were down 9% year over year due to slower velocity coupled with strong comps in the fourth quarter of 2020 when the industry was boosted by pent-up demand.
Merchandise revenue per unit increased 6% year over year, driving total revenue growth of 8% to $1.7 billion for the quarter.
We've demonstrated year-over-year growth in this metric for 26 of the last 27 quarters, which further demonstrates our ability to drive sustainable revenue growth.
Our intermodal franchise continued to face pressure from supply chain volatility, resulting in a volume decline of 7% year over year.
But despite these headwinds, we achieved record intermodal revenue in the quarter, up 14% year over year, and that was driven by increased fuel revenue, storage revenue, and price gains.
Revenue increased 21% year over year in the fourth quarter, which was driven by price gains and higher demand in a tightly supplied market.
Coal revenue per unit reached near-record levels and increased 16% year over year.
Full year 2021 revenue grew 14% to $11.1 billion on 5% volume growth.
In addition, industrial production is projected to grow 4% in 2022, which will drive demand for most of our markets, particularly for our steel markets.
Residential construction spending is forecasted to grow more than 6% this year, following the sharp increase in 2021, supporting continued gains in several of our industrial markets.
U.S. light vehicle production is expected to reach 10.3 million units this year, which is approaching pre-pandemic levels of 2019.
Durable goods consumption is expected to improve 3% and that's on top of the near-record 19% growth in 2021.
As Ed noted, revenue was up 11% despite a 4% volume decline.
This more than offset an 8% increase in operating expense, which led to 140 basis points of operating ratio improvement to a fourth-quarter record of 60.4%.
Improvements in RPU, coupled with strong productivity led to a record Q4 operating income with growth of 15% or $145 million.
And we set another record for free cash flow, up 30% or $642 million for the full year.
While operating expense grew $134 million or 8%, it is up less than 3% or $44 million, apart from fuel cost increases.
The $90 million headwind for fuel is driven almost entirely by price.
You'll see purchase services and rents of $46 million with the majority of the year-over-year increase driven by the same drivers we talked about on the Q3 call, higher expenses associated with Conrail, higher technology spend associated with our technology strategy, higher drayage expense associated with more hourly drivers used to alleviate terminal congestion primarily in Chicago, and we continue to see inflationary pressure on lift expenses going forward as it relates to contractor labor availability.
It is up 2%, but you'll note the $33 million in savings from 6% lower headcount and that more than offset increases in pay rates and overtime.
Meanwhile, incentive compensation comparisons in the quarter are a headwind of $24 million.
Taking a look at the rest of the P&L below op income, you will see that other income of $21 million is unfavorable year over year by $22 million, due in part to lower net returns from company-owned life insurance, but also fewer gains on the dispositions of nonoperating properties.
Our effective tax rate in the quarter was in our expected range at 23% and similar to last year.
Net income increased 13%, while earnings per share grew by 18%, supported by 3.3 million shares we repurchased in the quarter.
Increased demand across all markets and strong results through yield-up resulted in 14% year-over-year revenue improvement.
Expenses increased at less than half that rate, up 6% compared to 2020 as we continued our operational transformation while responding to market changes.
We produced record operating income of over $4.4 billion, up 28% or $961 million versus the adjusted 2020 results.
That is 430 basis points of year-over-year improvement in line with the guidance we provided.
Rounding out the results, net income increased 27%, while diluted earnings per share increased 31%, augmented by our strong share repurchase program, enabled a record-free cash flow that we will wrap with on Slide 22.
Free cash flow is a record $2.8 billion for 2021, up 30% year over year and we reported a strong 93% free cash flow conversion for the year.
Property additions were about $100 million lower than our $1.6 billion guidance due to timing issues related to the continued supply chain disruptions.
The sharply higher profitability in the company in '21 allowed for an over $2 billion increase in shareholder distributions for the year.
And I'll point out, we just increased our dividend again by $0.15 or 14% rolled in 2022.
With this positive momentum in revenue, productivity, and efficiency and based on our current expense projections, we expect to achieve greater than 50 basis points of OR improvement in 2022 and we won't stop there.
In addition, we expect a dividend payout ratio range of 35% to 40% and capital expenditures in the range of $1.8 billion to $1.9 billion.

Summary:
Revenue growth of 11% outpaced our expense increase of 8%, producing an 18% improvement in earnings per share and a fourth-quarter record operating ratio of 60.4%.
This more than offset an 8% increase in operating expense, which led to 140 basis points of operating ratio improvement to a fourth-quarter record of 60.4%.