*WIC = United States Department of Agriculture Special Supplemental Nutrition Program for Women, Infants, and Children
Fourth Quarter Results
Sales for the fourth quarter of 2012 totaled $981.1 million, up eight percent from $911.3 million a year ago. Sales benefited five percent from price, two percent from volume, and one percent from foreign exchange. Earnings before interest and income taxes (EBIT) for the fourth quarter totaled $189.7 million, up 30 percent from $146.1 million in the prior-year period. This was primarily driven by higher sales, the earlier recognition of pension settlement expense in 2012, and lower IT and other IPO-related separation expenses. These benefits were partially offset by higher demand-generation investments.
Net earnings attributable to shareholders totaled $134.2 million, or $0.66 per diluted share, compared to $85.6 million, or $0.42 per diluted share in the prior-year quarter. In addition to the increase in EBIT, the effective tax rate (ETR) decreased for the fourth quarter to 23.8 percent, compared to 32.5 percent a year ago, primarily due to favorable adjustments associated with prior years' tax filings and lower required tax accruals. Net earnings in the fourth quarter of 2012 also benefited by $0.01 per diluted share from favorable prior years' tax items.
On a non-GAAP basis, which excludes specified items, net earnings attributable to shareholders totaled $146.7 million, or $0.72 per diluted share, for the fourth quarter of 2012, compared to $106.5 million, or $0.52 per diluted share, for the same quarter a year ago.
Fourth Quarter Segment Results
The Asia/Latin America segment had sales of $663.5 million for the fourth quarter of 2012, up 10 percent from $604.8 million in 2011. Sales increased six percent from price, three percent from volume, and one percent from foreign exchange. The China business continued to recover market share, and distributors' inventory was restored to normal levels by year-end. Excluding China/Hong Kong, the other markets of the Asia/Latin America segment had organic constant dollar sales growth in the mid teens, and including the favorable contribution from our Argentine acquisition, grew over 20 percent. EBIT for the Asia/Latin America segment totaled $187.4 million, up four percent compared to $179.7 million for the year-ago quarter. The EBIT increase was driven by strong sales growth, partially offset by higher advertising and promotion investments and lower gross margins from an unfavorable country mix.