GAAP operating income for the fourth quarter and full year 2011 was $12.5 million and $61.7 million, respectively, compared to $24.5 million and $69.0 million for the respective periods of 2010. During the fourth quarter of 2010, the Company recognized a $9.5 million gain from the settlement of a lawsuit related to its Electrochem subsidiary. Full year 2011 results reflect a $4.2 million gain from the sale of one of the Company’s cost method investments. Adjusted operating income, which excludes these gains, as well as other charges, was $15.7 million and $67.6 million for the 2011 fourth quarter and full year compared to $17.8 million and $64.9 million for the comparable 2010 periods. See Table A at the end of this release for a reconciliation of the differences between GAAP operating income and adjusted operating income and the “Use of Non-GAAP Financial Information” section below.
The 2011 fourth quarter and full year effective tax rates were 34.1% and 31.6%, respectively, compared to 32.6% and 32.8% for the same periods of 2010. For 2012, the Company currently expects the GAAP effective tax rate to approximate the statutory rate of 35% due to the expiration of the R&D tax credit at the end of 2011. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of pre-tax income and the jurisdictions to which it relates, business acquisitions, settlements with taxing authorities and foreign currency fluctuations.
GAAP diluted EPS for the fourth quarter and full year 2011 were $0.24 and $1.40 per share, respectively, compared to $0.59 and $1.40 per share for the respective 2010 periods. As indicated above the fourth quarter of 2010 and full year 2011 periods include the impact of the Electrochem litigation and cost method investment gains, respectively. Adjusted diluted EPS for the fourth quarter and full year 2011 were $0.39 and $1.68 per share, respectively, compared to $0.46 and $1.51 per share for the corresponding 2010 periods. See Table B at the end of this release for a reconciliation of GAAP net income and diluted EPS to adjusted net income and adjusted diluted EPS and the “Use of Non-GAAP Financial Information” section below.