Net sales for our market pulp segment decreased 6.6% to $37.8 million in the fourth quarter of 2011 from $40.5 million for the same period in 2010, reflecting an 11.0% decrease in the average sales price per ton compared to the fourth quarter of 2010. This decrease was partially offset by a 5.0% increase in sales volume in the fourth quarter of 2011.
Net sales for our other segment increased 31.9% to $40.6 million in the fourth quarter of 2011 from $30.7 million in the fourth quarter of 2010. The improvement in 2011 was due to a 19.3% increase in sales volume combined with a 10.6% increase in the average sales price per ton compared to the fourth quarter of 2010.
Cost of sales. Cost of sales, including depreciation, amortization, and depletion, was $424.9 million in the fourth quarter of 2011 compared to $368.5 million in 2010. Our gross margin, excluding depreciation, amortization, and depletion, was 12.6% for the fourth quarter of 2011 compared to 17.2% for the fourth quarter of 2010. Adjusted for the negative impact of de-designating certain hedges in the fourth quarter of 2011, our gross margin would have been 14.2%. Depreciation, amortization, and depletion expenses were $31.1 million in the fourth quarter of 2011 compared to $30.8 million in the fourth quarter of 2010.
Selling, general, and administrative. Selling, general, and administrative expenses were $18.2 million in the fourth quarter of 2011 compared to $21.8 million for the same period in 2010, mainly due to lower personnel related costs.Goodwill impairment. Results for the fourth quarter of 2011 included a goodwill impairment charge of $18.7 million, which represents a write-off of the full balance of goodwill. Restructuring and other charges. Restructuring and other charges of $24.5 million in the fourth quarter of 2011 reflect the permanent shut down of the No. 2 coated groundwood paper machine at our mill in Bucksport, Maine, and two supercalendered paper machines at our mill in Sartell, Minnesota. These charges include $15.0 million of severance and benefit costs, $7.1 million of accelerated depreciation, and $2.3 million due to write-off of spare parts and inventory. Interest expense. Interest expense for the fourth quarter of 2011 was $31.8 million compared to $31.7 million for the same period in 2010. Results of Operations – Comparison of 2011 to 2010
|Year Ended December 31,|
|(Dollars in thousands)||2011||2010|
|Costs and expenses:|
|Cost of products sold - (exclusive of depreciation,|
|amortization, and depletion)||1,460,290||1,410,770|
|Depreciation, amortization, and depletion||125,295||127,367|
|Selling, general, and administrative expenses||78,059||71,043|
|Restructuring and other charges||24,464||-|
|Total operating expenses||1,706,803||1,609,180|
|Operating income (loss)||15,686||(3,864||)|
|Other loss (income), net||26,042||(884||)|
|Loss before income taxes||(136,864||)||(130,937||)|
|Income tax expense||197||145|
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