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 for 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 SEC.David, I'll turn it over to you. David W. Scheible Thanks, Kevin. Good morning, everyone. We're pleased with our first quarter results and the way in which we position the business for continued growth in what continues to be a sluggish operating environment. What seems to be increasingly important in our market is capitalizing on strong secular trends within the food and beverage product categories that create pockets of opportunity for growth. We are investing capital, people and fixed resources to change our end-use share positions in some of these growing areas while protecting our core business at the same time. A really good example of this effort revolves around our Carol Stream, Illinois carton plant where, during this quarter, we invested to reconfigure the focus of the plant towards our growing pasta-packaging sector. This facility is well situated near our Midwest CRB mills and many pasta producers. Pasta has not been a large category for us in the past, but it continues to grow in a very difficult economy while other categories like frozen pizza and cereal have yet to show significant recovery. We significantly increased our position in this market based on our investments we have made, and we will continue to do so going forward.
We'll focus on our performance improvements. We had a good quarter. We achieved $17 million of additional benefits in Q1. We are also investing in new product development to help our customers differentiate their products, lower their distribution cost and improve their sustainability metrics throughout their entire supply chain. By doing these things, we are expanding our addressable market and gaining end-use market share to drive sales growth.Net sales in the quarter increased 7% to $1.1 billion and adjusted EBITDA increased 5% to $150 million. Strong operating performance and cost reductions, along with higher pricing and favorable volume mix, more than offset higher input costs during the quarter. You should also note that because we released our NOL valuation allowance in Q4 of last year, during -- beginning this quarter, we began to use a higher tax rate which impacted our reported earnings per share. We still have over $1 billion of net operating losses that limits our actual cash income taxes. But for reporting purposes, we are now using a more normalized tax rate. For full year 2012, we expect this rate to be approximately 39%. Applying this rate to the first quarter of last year, adjusted net income would have been $18 million or roughly $0.05 per diluted share. This EPS compares to $0.06 per share we generated this year. Strength in our balance sheet and capital structure continues to be top priorities. We generated $33 million of operating cash flow in the quarter and reduced our total net debt by $349 million over the past year. We also entered into a $2 billion amended and restated senior secured credit facility. We used the new facility, plus cash on hand, to repay approximately $1.7 billion of B and C term loans that were due in May 2014. Read the rest of this transcript for free on seekingalpha.com