I will now turn the call over to Paul to begin the review of the fourth quarter. Paul?

Paul D. Carrico

Thanks, Martin, and good morning, ladies and gentlemen. We appreciate you joining us this morning. For the full year 2011, we reported net sales of $3.2 billion and adjusted EBITDA of $230.3 million compared to net sales of $2.8 billion and adjusted EBITDA of $208.5 million in 2010. Adjusted EBITDA increased approximately 10% over 2010, but it did come in below our most recent guidance. And I'll comment on that later.

As Greg will go through in detail, we generated about $121 million of free cash flow in 2011, and this exceeded the top end of our guidance. As you know, during the last 4 years, we've experienced the most severe recession and depressed housing and construction market in the U.S. since World War II. During these times of slow growth and poor housing, the management team has focused on debt reduction and optimizing our cost structure to react to demand that was difficult to forecast. These are things that we can't control in a top market.

For the last couple of years, this focus allowed us to generate over $250 million of free cash flow. Generating such significant cash at the bottom of the cycle gives us confidence that we should produce substantially more free cash flow during the cycle upturn. This sets the foundation for us to be in a position to exceed the levels generated in past up cycles when looking at Georgia Gulf's history.

As I previously mentioned, our fourth quarter 2011 net sales and adjusted EBITDA came in below what we have projected. The largest impact here was a $16 million inventory holding loss in Aromatics caused by a 25% decline in benzene and a 40% decline in propylene prices during the quarter. And not surprisingly, these prices have substantially recovered in the first quarter. Additionally, the concerns in the global markets during the fourth quarter that have been well-publicized reduced demand for PVC and Aromatics as customers de-stocked and the uncertainty reduced overall demand. The volumes and pricing fell more than was expected for the normal seasonal drop-off.

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