These risks and uncertainties include, but are not limited to, the company's substantial amount of debt, inflation of and volatility in raw material and energy costs, cutbacks in consumer spending that could affect demand of the company's products, continuing pressure for lower cost products and the company's ability to implement its business strategies, including productivity initiatives and cost reduction plans. Undue reliance should not be placed on such forward-looking statements, as such statements speak only as of the date on which they are made, and the company undertakes no obligation to update such statements.Additional information regarding these and other risks is contained in the company's periodic filings with the Securities and Exchange Commission. And with that, I'll turn it over to David. David W. Scheible Great. Thanks, Brad. Good morning, everyone. We are pleased with our fourth quarter results as we delivered higher sales and expanded margins. Volumes across the industry remains somewhat constrained in the quarter. The Graphic Packaging's fourth quarter volume and mix trends were positive as a result of overseas growth, new customer wins, new product launches and substrate substitution. The quarter, compared to 2010 fourth quarter, net sales increased roughly 4% to a little over $1 billion and adjusted EBITDA increased 10% to $147 million. Higher pricing, stronger operating performance and cost reduction initiatives more than offset higher input costs. Fourth quarter pricing increased by $27 million. We generated a $20 million net benefit from our ongoing cost reduction and supply chain optimization efforts. For the full year, pricing increased $116 million and we achieved our goal of over $70 million in cost reductions. Performance improvements are a critical part of our overall strategy, and they are not solely a result of cutting cost or driving lean manufacturing principles. We continue to put money back into our business, making strategic investments to streamline the business, reduce our long-term cost structure and add top line growth. In 2011, we invested $160 million on CapEx projects to efficiently maintain our assets and drive sales, operating margins and cash flow. One of our largest capital projects was the expansion of our Perry, Georgia and West Monroe, Louisiana carton facilities. And the reallocation of volume from other higher-cost plants that were closed during the year. Through our ongoing efforts to streamline our assets, we have been able to strengthen our overall converting footprint without diminishing our total carton production capacity. A critical element of our asset optimization strategy is strategic acquisitions and partnerships. Our acquisition of Sierra Pacific last April, provided a strategic location in northern California to service our West Coast customers and allow us to leverage our Santa Clara, California recycle board mill. This acquisition has helped reduce our cycle times, it has lowered our transportation cost and is better aligned volumes with geographies. More importantly, its increased our exposure to the fast-growing craft beer and wine box markets and broaden our customer base. I could not be happier with how this acquisition has turned out and been integrated.
In December, we announced a joint venture between Delta Natural Kraft, Mid-America Packaging and our Flexible Packaging division. Neither party received cash consideration, but Graphic Packaging did repay approximately $26 million of debt as part of the transaction. The combination creates North America's only vertically integrated multi-wall bag business and allows for significant synergies of potential profit improvement. It also introduces us to new customers and growth opportunities, as Mid-America's business was slightly different. Incremental sales of the new business are expected to be around $125 million and we estimate operating synergies to be between $20 million and $25 million. This should lead to double-digit margins in this business by 2013. These types of small tuck-under acquisitions or combinations are an important part of our growth and optimization strategy going forward, and we will continue to look for similar opportunities.Read the rest of this transcript for free on seekingalpha.com