As a result of the aforementioned factors, fourth-quarter 2012 adjusted income (2) was $3.5 billion, a decrease of 7% compared with $3.8 billion in the year-ago quarter, and adjusted diluted EPS (2) was $0.47, a decrease of 4% compared with $0.49 in fourth-quarter 2011. Full-year 2012 adjusted income (2) was $16.5 billion, a decrease of 8% compared with $17.8 billion in full-year 2011, and adjusted diluted EPS (2) was $2.19, a decrease of 4% compared with $2.27 in full-year 2011.Reported Net Income (3) and Reported Diluted EPS (3) Highlights In addition to the aforementioned factors, fourth-quarter and full-year 2012 reported earnings in comparison with the same periods in 2011 were favorably impacted by the gain on the sale of the Nutrition (1) business, lower purchase accounting adjustments, lower acquisition-related costs and lower costs related to cost-reduction and productivity initiatives, while unfavorably impacted by higher costs associated with the potential separation of Zoetis (4). Full-year 2012 reported earnings in comparison with full-year 2011 were also unfavorably impacted by certain legal charges, primarily associated with hormone-replacement therapy, Rapamune, Celebrex and Chantix, and the non-recurrence of the gain on the sale of Capsugel (5) recorded in third-quarter 2011. The fourth-quarter 2012 effective tax rate on reported results was 31.3%, compared with 34.4% in fourth-quarter 2011. The full-year 2012 effective tax rate on reported results was 21.2%, compared with 31.8% for full-year 2011. The lower rates for 2012 compared with the prior-year rates reflect the impact of the change in the jurisdictional mix of earnings and the expiration of the U.S. research and development tax credit. The full-year 2012 effective tax rate was also favorably impacted by a settlement with the U.S. Internal Revenue Service related to audits for multiple tax years and the aforementioned resolution of foreign audits, partially offset by the unfavorable impact of the non-deductibility of the aforementioned legal charge related to Rapamune, all recorded in third-quarter 2012.