Our adjusted EBITDA was $301 million, 13% above the $266 million of pro forma adjusted EBITDA in the prior year quarter. The greatest year-over-year improvement was within Specialty Ingredients with strong results from both the heritage Ashland and ISP businesses. In total and on the same basis ISP recorded historically, ISP generated approximately $120 million of EBITDA during the December 2011 quarter.
Slide 4 details our key items. In total, two key items had a net unfavorable EPS impact on continuing operations of $0.44 in the December 2011 quarter. The first key item is a $19 million after tax charge or a negative $0.24 per share related to severance. This expense is related to the corporate cost reduction efforts we have previously described. The second key item was a $16 million after tax charge or a negative $0.20 per share through stepped-up inventory values related to the acquisition of ISP, as we noted last quarter. We have now worked through the stepped-up inventories and this will not be a key item going forward. In the year ago quarter four key items combined for a net unfavorable impact on earnings of a penny per share. I will also note that in the December 2011 quarter, Ashland’s results included $30 million of intangible amortization expense, primarily relating to the Hercules and ISP acquisitions. Without this amortization earnings per share would be roughly $0.27 higher, or $1.47 per share.
Please turn to Slide 5 for Ashland’s adjusted pro forma results. As a reminder, results are presented on a pro forma basis which includes the full quarter of ISP in all periods shown. Prior periods also include stepped-up depreciation and amortization related to purchase accounting. As such, Ashland’s December quarter sales increased 6% over the prior year quarter to $1.9 billion. Sales decreased 9% sequentially, primarily due to normal seasonal trends. As I mentioned in the highlights, gross profit as a percent of sales expanded to 28.3%, a 40 basis point improvement over the prior year and a 300 basis point improvement sequentially. This margin expansion reflects the cumulative effects of pricing implemented over the course of the past year, as well as more stable and in some cases declining raw material cost during the December quarter. Selling, general and administrative, and research and development expenses collectively referred to as SG&A were consistent with prior year at $364 million. EBITDA of $301 million grew 13% over the prior year and EBITDA as a percent of sales was 15.6%.
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