US-based Graphic Packaging has reported a rise in the net income of the fourth quarter in 2011 to $265.6m from $19.6m year-on-year. For the full year, the net income increased to $276.9m in 2011 compared to $10.7m in 2010.

The net income growth was mainly attributable to the release of a $265.2m tax valuation allowance by the company in the current year, based on the assessment over likely realisation of its US federal and state deferred tax assets.

During the quarter ended 31 December 2011, Graphic Packaging’s net sales increased by 4% to $1.05bn compared to $1.01bn in the corresponding period a year ago and full year net sales stood at $4.2bn, or $111.3m higher than 2010.

Paperboard packaging segment sales, which comprised 83.4% of fourth quarter net sales, rose year-over-year by 4% while net sales in the flexible packaging segment increased by 3.7% against 2010 net sales.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter increased to $135.8m compared to $131.7m in the same period last year. Full year EBITDA stood at $480.5m compared to 2010 EBITDA of $510.4m and full year adjusted EBITDA increased to $591.3m over $573.9m in 2010, Graphic Packaging said.

Capital expenditures for the quarter were $51.7m against $48.9m in the fourth quarter of 2010, while the full year stood at $160.1m compared to $122.8m in 2010.

In December, Graphic Packaging combined its multi-wall bag and specialty plastics packaging businesses with the kraft paper and multi-wall bag businesses of Capital Five Investments’ wholly-owned subsidiaries Delta Natural Kraft and Mid-America Packaging.

According to the terms of the transaction, the company formed a new limited liability company, Graphic Flexible Packaging. Graphic Packaging CEO David Scheible said the combination is expected to yield over $20m of annualised synergies.