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Giving prepared remarks today are, in order of speaking, Senior Vice President and CFO, Rob McNutt; and President and CEO, David Fischer. Executive Chairman, Mike Gasser, will be available to answer questions during the Q&A session as well. I'll now turn the call over to Mr. McNutt.Robert M. McNutt Thank you, Deb. Please turn to Slide 4. While we fell short of our own end market expectations for the year, driven largely by weakness in Europe in the back half of the year, I don't want to lose sight of the fact that 2011 was a good year in several dimensions. First, net sales were a record $4.2 billion, with solid contributions from all business segments. Second, operating profit before special items and asset gains was a record $382 million. Third, EBITDA before special items was $527 million, the highest in our history. And finally, earnings per Class A share before special items of $3.73 and the third highest in Greif's 134-year history. Financial summary on Slide 5 includes key performance items for the fourth quarter on a year-over-year basis. 14% increase in net sales to $1.1 billion is primarily due to increased sales volumes of 7%, including 11% from acquisitions completed during the past 12 months, partially offset a 4% decline in same structure volumes. Higher selling prices that represented 4% and positive impact from foreign currency translation of 3%. We experienced weaker market conditions and increased market pressures in the Industrial Packaging segment, especially in European markets in the second half of the year. Gross profit was $206 million for the fourth quarters of 2011 and 2010. Gross profit margin declined 2.6 percentage points at 18.2% of net sales in the fourth quarter. This was attributable to lower market demand in Rigid Industrial Packaging, increased manufacturing cost, overall product mix and higher OCC costs for Paper Packaging compared to the same quarter last year.
SG&A expenses were $119 million for the fourth quarter of 2011 compared with $98 million. This increase of approximately $21 million included $13 million of SG&A expenses related to acquired companies, nearly $3 million of negative impact from foreign currency translation, approximately $5 million of higher professional fees particularly directed towards sourcing and administrative excellence initiatives.Operating profit before special items was approximately $95 million for the fourth quarter of 2011 versus $120 million in 2010. Special items totaled $26 million compared to $13 million for the same period last year, or $18 million and $12 million net of tax, respectively, for both periods. This included $19 million of restructuring charges driven by consolidation activities in our Flexibles business, as we continue to integrate those acquisitions, as well as restructuring in our Rigids business in response to weak markets in Europe. Approximately 80% of these restructuring charges were cash. The most significant items included severance costs, which are higher in Europe than in other regions and the cost to terminate lease commitments. There were also $5 million of acquisition-related costs and a $1.5 million noncash asset impairment charge for the quarter. Net interest expense was $26 million for the fourth quarter of 2011 compared with $18 million last year. This was due to the higher level of debt related to acquisitions during the past year consistent with our growth strategy, including pack2pack on August 1 and the related working capital requirements. Read the rest of this transcript for free on seekingalpha.com