As a result of the supply chain challenges revenues were approximately 9% below our expectations from the beginning of the quarter.
Even when compared to historically good end market demand environment such as Q3 2019 our bookings were up approximately 140%.
With $43 million of positive free cash flow in the quarter we posted our sixth consecutive quarter of positive free cash.
Year-to-date we have now generated more than $180 million of free cash.
This strong performance allowed us to use available cash to prepay another $150 million of debt in October.
For the full year 2021 our SG&A as a percent of sales will be substantially below our target of 12.5%.
MP has launched 28 new products in 2021.
More than 7000 units in the installed base are now fitted with telematics hardware that is enabling these offerings.
Overall revenues of almost $1 billion were up nearly 30% year-over-year with both of our operating segments revenues up more than 25%.
As a result of the higher revenues our absolute amount of gross profit in the quarter increased 22%.
Despite this quarter's revenue being 30% higher than the same quarter last year SG&A was $6 million lower than the prior year.
For the quarter we recorded an operating profit of $74 million compared to $37 million in the third quarter of last year achieving an operating margin of 7.5%.
Interest and other expenses was approximately $3 million lower than Q3 of last year resulting from lower outstanding borrowings combined with reduced rates on the debt we financed earlier this year.
Our third quarter 2021 global effective tax rate was approximately 23% driven by a mix of discrete items in the quarter.
Our tax rate estimate for the full year remains 19% consistent with our previous look.
Finally our reported earnings per share of $0.67 per share more than doubled year-over-year.
Sales of $573 million were up 29% compared to last year driven by continued strong demand in all global markets.
Third quarter bookings of $981 million were up dramatically compared to Q3 2020 while backlog at quarter end was $1.7 billion almost four times the prior year.
Approximately 70% of AWPs September 30th backlog is scheduled for delivery in 2022.
Sales of $419 million were up 35% compared to last year driven by strong customer demand across all end markets and geographies.
The MP team has been aggressively managing all elements of cost as end markets improve resulting in an operating margin of almost 14%.
MP saw its businesses strengthen through the quarter with bookings up approximately 62% year-over-year.
Backlog of $1 billion is more than 3.5 times higher than last year and was up 18% sequentially.
Finally we continue to plan the total company incremental margins for the full year 2021 which exceed our 25% target.
Our full year earnings per share outlook including charges of $0.27 per share for the refinancing of our capital structure and other year-to-date callouts has been revised to $2.75 to $2.85 per share based on sales of approximately $3.85 billion.
For the full year 2021 we are estimating free cash flow in excess of $200 million reflecting a strong year of positive cash generation.
The year free cash flow continues to include approximately $75 million from income and back tax refunds which are not expected to reoccur.
We now plan for cash capital expenditures of approximately $80 million.
The positive free cash flow of $43 million in the quarter demonstrates the focus and discipline of our team members who have tightly managed networking capital.
At the end of the quarter we had approximately $1.2 billion available to us with no near-term debt maturities so we can manage and grow the business.
Our strong liquidity position and cash generation allowed us to prepay $150 million of term loans in October which is in addition to the $279 million prepaid earlier this year all this while the company continues to pay our quarterly dividend.

Finally our reported earnings per share of $0.67 per share more than doubled year-over-year.
Our full year earnings per share outlook including charges of $0.27 per share for the refinancing of our capital structure and other year-to-date callouts has been revised to $2.75 to $2.85 per share based on sales of approximately $3.85 billion.


In the fourth quarter, we generated adjusted company funds from operations of $0.19 per diluted common share to end the year at $0.76 per diluted common share, the high end of our guidance range.
Following a robust quarter of $182 million of industrial purchases and $292 million of sales, our industrial exposure increased to 91% of our gross real estate assets excluding held for sale assets.
Portfolio operations have been very strong during the pandemic with fourth quarter cash base rent collections averaging 99.8%.
Also during the quarter, leasing volume was healthy at 1.7 million square feet, consolidated same-store NOI was up 1.6% and industrial cash renewal rents increased 3.4% with overall fourth quarter cash renewal rents down roughly 2.5%, due to office lease renewal roll downs.
We recently announced a dividend increase of 2.4%, supported by our positive results throughout the year, which equates to an annualized dividend of $0.43 per common share.
Along the way, we disposed of 127 consolidated non-industrial assets for $2.5 billion and purchased 60 industrial assets for approximately the same amount.
We had an active year on the investment side, purchasing $612 million of primarily Class A industrial assets and investing $60 million into development projects.
Moving to sales, 2020 volume totaled $433 million of predominantly non-core assets at average GAAP and cash-cap rates of 5.8% and 5% respectively.
Additionally, we sold two office properties in January for approximately $20 million, while the office sales market continues to be impacted by the pandemic, we remain committed to selling our remaining office properties in an orderly manner and we'll continue to give regular updates on our progress in the forecasted sales results.
The remaining office and other asset portfolio consists of 18 properties, which generated 2020 NOI of approximately $33.5 million.
We expect to market for sale most of this portfolio in 2021, which we currently value at around $300 million.
Turning to leasing, we leased over 5.2 million feet during 2020 and at year-end, our portfolio was 98.3% leased, representing a slight decline compared to the previous quarter, primarily as a result of a year-end lease expiration in our Statesville in North Carolina, industrial facility.
We were very pleased with industrial cash base renewal rents in 2020, which increased 17.5%.
At year-end we had 3.7 million square feet of space expiring in our single-tenant industrial portfolio in 2021, of which we expect at least a third to be renewed with the expiring rents below market, on average.
Our balance sheet remains in excellent shape, with leverage at 4.8 times net debt to adjusted EBITDA at year-end.
We had another active year on the investment front, acquiring 16 industrial properties totaling 6.6 million square feet or $612 million at average GAAP and cash cap rates of 5.4% and 5% respectively.
These assets have an average age of two years and an attractive weighted average lease term of 8.3 years, with average annual rental escalations to 2.3%.
Fourth-quarter purchase activity was consistent with these attributes end markets and comprised of four warehouse distribution properties totaling 1.4 million square feet and two Dallas-Fort Worth logistics submarkets, as well as submarket in Phoenix and Greenville, Spartanburg.
These properties all feature modern specs, good highway access and ample trailer parking, with an average lease term of 9.4 years and annual rental escalations of 2% or higher.
Subsequent to year-end, we purchased three recently constructed Class A warehouse distribution facilities for approximately $51 million, totaling 520,000 square feet, further adding to our holdings in the Indianapolis and Central Florida markets.
We are currently reviewing over $600 million of existing deals in the market.
Will mentioned earlier, that we have secured a full-building lease at our 320,000 square foot Rickenbacker project in Columbus late in the fourth quarter with a subsidiary of PepsiCo for three years.
Our expected development cost basis in the fully completed project is estimated to be about $20 million.
We were pleased that pre-lease for full building prior to completion at an attractive development yield, with anticipated stabilized GAAP and cash cap rates of 7.8% and 7.6% respectively.
Also in the fourth quarter at our ETNA West development site in Columbus, we sold the ground position under the 1.2 million square foot e-commerce distribution center leased to Kohl's department stores, which exercised its two-year purchase option for $10.6 million.
This transaction resulted in a gain on sale of $5.9 million.
Our Shugart Farms development projects, a Class A 910,000 square foot distribution center in the I-85 South submarket of Atlanta, is slated for substantial completion around the end of the first quarter of 2021 and is currently available for lease.
Adjusted company FFO for the fourth quarter was approximately $55 million or $0.19 per diluted common share.
We achieved the high-end range of our 2020 adjusted company FFO guidance at $0.76 per diluted common share.
Our 2020 adjusted company FFO payout ratio was 55.6% and continues to provide us ample retained cash flow.
We generated revenues of approximately $83.3 million in the fourth quarter, which represented a slight increase compared to the same-time period in 2019.
Overall, in 2020, gross revenues increased $4.5 million year-over-year.
However, tenant reimbursements increased to 84% for 2020, compared to 72% for 2019.
Our 2020 G&A of $30.4 million was in line with our revised target range of $30 million to $31 million, and we expect 2021 G&A to be within a range of $31 million to $33 million.
Same-store NOI increased 1.6%, primarily as a result of a 2% increase in same-store industrial NOI.
Year-over-year, our consolidated same-store leased portfolio decreased 140 basis points to 97.6%, primarily due to the year-end lease expiration of our Statesville, North Carolina property.
At year-end approximately 86% of our industrial portfolio had escalations with an average rate of 2.1%.
We collected 99.8% of cash base rents throughout the year, and as of the end of 2020, we'd only granted two rent relief requests in our consolidated portfolio, which we have discussed on previous calls.
Bad debt expense was minimal during the fourth quarter, with only $212,000 of bad debt expense incurred.
Capital markets activity during the quarter included the sale of an additional 1.1 million common shares under the forward delivery feature of our ATM program.
These shares increased our forward sales contracts to 5 million common shares for the year, with an aggregate settlement price of $55 million as of year-end 2020.
Our balance sheet remains exceptionally strong with leverage at a low 4.8 times net debt to adjusted EBITDA at year-end.
We had substantial cash of $179 million on the balance sheet at year-end and nothing outstanding on our unsecured revolving credit facility.
In connection with the sale of the Dow Chemical office building, we satisfied $178.7 million of secured debt with an interest rate of 4%.
This contributed to an increase to our unencumbered NOI to over 89% at year-end.
At year-end, our consolidated debt outstanding was approximately $1.4 billion with a weighted average interest rate of approximately 3.3% and a weighted average term of 6.9 years.

In the fourth quarter, we generated adjusted company funds from operations of $0.19 per diluted common share to end the year at $0.76 per diluted common share, the high end of our guidance range.
Adjusted company FFO for the fourth quarter was approximately $55 million or $0.19 per diluted common share.
We achieved the high-end range of our 2020 adjusted company FFO guidance at $0.76 per diluted common share.
We generated revenues of approximately $83.3 million in the fourth quarter, which represented a slight increase compared to the same-time period in 2019.


12 consecutive quarters of retail share gains in our core business lines is driven by strength of our brands, along with solid execution from our team.
Our $1 billion brands Tyson, Jimmy Dean and Hillshire Farms have driven strong share growth with consumers buying more than ever before.
We saw an uptick from outlets nationwide reflected in our sales, which we were up $1.3 billion for the quarter.
We're in the process of bringing 12 new plants online globally to address capacity constraints and growing demand.
Sales improved 25% in third quarter and 8% year-to-date, reflecting improved volumes, which were up 10% for the quarter and flat year-to-date.
We delivered strong operating earnings performance, resulting in approximately $1.4 billion in operating income for the quarter.
This represents an 81% increase compared to prior year and translates to $2.70 in earnings per share.
We continue to execute against our roadmap to bring operating income margin to at least the 5% to 7% range by mid-fiscal 2022.
Our rate of outside meat purchases has declined 25% versus last quarter and will continue to decline as hatch rates and utilization improve.
We gained share during the third quarter and the last 52 weeks.
Pricings improved nearly 16% in the quarter versus the comparable period last year.
Sales were up approximately 25% in the third quarter.
Volumes were up 9.7%, primarily due to strength in retail and the ongoing foodservice recovery.
Average sales price was also up about 17%, largely due to strong results in our Beef segment, the mix benefit from retail volume and the partial recovery of raw material inflation in net sales price.
Operating income was up 81% in the third quarter due to continued strong performance in our Beef business.
Chicken and Prepared Foods also improved their respective segment earnings, while Pork earnings were down versus the comparable period a year ago.
Year-to-date, operating income for the total Company improved by 49%.
Earnings per share grew 93% in the third quarter due largely to strength in operating income, specifically within our Beef segment.
EPS was up 61% on a year-to-date basis.
We delivered growth in the retail channel along all reporting segments, which in aggregate accounted for more than $1 billion in sales improvement over the year-to-date period and more than $300 million in the third quarter versus the respective comparable periods.
Moving to foodservice, sales improved by approximately $1.3 billion in the third quarter, leading to a year-to-date improvement for the channel of nearly $1 billion compared to the same period last year.
Exports were up over 18% versus the comparable period, led by Beef, where sales improved by more than $350 million on a year-to-date basis.
And finally, year-to-date sales grew $79 million or approximately 6% in our international business.
These investments are fully aligned to our strategic growth priorities and when complete, will enhance our international processing capacity by close to 30% versus fiscal 2020.
Operating income was partially offset by $2.2 billion and increased cost of goods sold for the period, reflecting meaningful inflation in raw material and supply chain costs.
On a comparative basis, SG&A benefited from the $56 million loss in the year-to-date fiscal 2020 period as compared to a $55 million gain in the first quarter of fiscal 2021 associated with the cattle supplier incident.
Sales were $3.5 billion for the third quarter, up 12%.
Volumes were also up in the quarter due to continued strength in retail, improving demand through foodservice and segmentwide operational improvements.
Average sales price was up 15% in the quarter due to favorable mix, sustained retail volume and strong supply and demand fundamentals.
Operating income was $27 million in the third quarter and $137 million on a fiscal year-to-date basis, both stronger than comparable periods a year ago.
This represents an operating margin of 1.3% year-to-date.
Fiscal year-to-date operating income was negatively impacted by $410 million of higher feed ingredient costs, as well as $210 million of increased grow-out expenses and outside meat purchases.
For the third quarter, feed ingredients were $270 million higher, while grow-out expenses and outside meat purchases were $110 million higher.
Segment performance also reflects net derivative gains during the third quarter of $125 million and $235 million on a year-to-date basis, both versus the respective comparable periods.
Sales were $2.3 billion for the quarter, up 14% relative to the same period last year.
Total volume was up 4.5% in the quarter with strength in the retail channel and continued recovery in foodservice.
Segment operating income was $150 million for the quarter, up over 3% versus the prior year.
Year-to-date operating income was $633 million, up 23% versus the prior year period.
Operating margins for the segment was 6.5% for the third quarter, a decline of 60 basis points versus the comparable year-ago period.
The slowdown in segment operating margins versus the same quarter last year were driven by significant increases in raw material input costs.
However, on a year-to-date basis, our operating margin of 9.6% was up 170 basis points versus last year, driven by favorable pricing and lower commercial spend.
During the third quarter, core business lines experienced volume share growth of 90 basis points, while dollar share grew 70 basis points.
Segment sales were over $4.9 billion for the quarter, up 36% versus the same period last year.
Key sales drivers included strong domestic and export demand for Beef products with average sales price up 12% for the quarter.
We delivered segment operating income of $1.1 billion for the quarter.
This improvement was driven by strong global demand for beef products and a higher cut-out, which were partially offset by higher operating costs.
Operating margins for the segment improved 520 basis points to 22.6% for the third quarter.
Segment sales were $1.7 billion for the quarter, up 54% versus the same period last year.
Average sales price increased more than 39% while volumes were also up relative to the same period last year.
Segment operating income was $67 million for the quarter, down 37% versus the comparable period.
Overall, operating margins for the segment declined by 570 basis points to 3.9% for the quarter.
At the end of this calendar year, lower projected 2021 Pork production and strong consumer demand are expected to support hog prices well above 2020 levels.
Slide 17 captures our financial outlook for fiscal 2021.
We now expect to deliver annual revenues in the range of $46 billion to $47 billion.
We're slightly revising our outlook on effective tax rate to approximately 22.5%.
While our expectations related to liquidity are also unchanged, liquidity during the third quarter improved substantially to $3.4 billion and has since benefited from $1.2 billion of pre-tax proceeds from the divestiture of our Pet Treats business in early July.
Finally, we expect our COVID-related costs, which totaled $55 million in the quarter to be approximately $325 million for the year.
Turning to Slide 18, in pursuit of our priority to build financial strength and flexibility, we have substantially delevered our business over the past 12 months, reducing leverage to 1.7 times net debt to adjusted EBITDA.

We saw an uptick from outlets nationwide reflected in our sales, which we were up $1.3 billion for the quarter.
This represents an 81% increase compared to prior year and translates to $2.70 in earnings per share.
Chicken and Prepared Foods also improved their respective segment earnings, while Pork earnings were down versus the comparable period a year ago.
Moving to foodservice, sales improved by approximately $1.3 billion in the third quarter, leading to a year-to-date improvement for the channel of nearly $1 billion compared to the same period last year.
Volumes were also up in the quarter due to continued strength in retail, improving demand through foodservice and segmentwide operational improvements.
This represents an operating margin of 1.3% year-to-date.
The slowdown in segment operating margins versus the same quarter last year were driven by significant increases in raw material input costs.
This improvement was driven by strong global demand for beef products and a higher cut-out, which were partially offset by higher operating costs.
At the end of this calendar year, lower projected 2021 Pork production and strong consumer demand are expected to support hog prices well above 2020 levels.
Slide 17 captures our financial outlook for fiscal 2021.
We now expect to deliver annual revenues in the range of $46 billion to $47 billion.
Finally, we expect our COVID-related costs, which totaled $55 million in the quarter to be approximately $325 million for the year.


As we have previously communicated, we expect to reduce overhead costs by the middle of this year on an annual basis by approximately $150 million.
Keep in mind, however, the pandemic has triggered many challenges that the world has not yet fully overcome, and therefore, any substantial increases in build rates, air passenger demand, and even consumer spending remain uncertain.
International travel is still showing little sign of recovery.
First-quarter sales of $310 million were in line with our expectations.
Adjusted first-quarter earnings per share was a negative $0.10 compared to a positive $0.64 last year.
Throughout the pandemic, we have maintained a strong focus on cash, and in the first quarter, our free cash flow was a use of $6 million compared to a use of $19 million in Q1, 2020.
Liquidity at the end of the quarter was strong and included $82 million of cash and $536 million of revolver borrowing availability.
Aerospace sales of $147 million were down more than 59% compared to the first quarter of last year, which included sales before the effects of the pandemic began to dramatically impact Commercial Aerospace.
Admittedly, Boeing 737 MAX sales continue to be at a low level as the supply chain works through channel inventory.
Sales to other Commercial Aerospace, which include regional and business aircraft, were down 48% compared to 2020.
Space and Defense sales were basically flat year-over-year at $112 million.
We have content on over 100 space and defense programs and they fluctuate by quarter.
Total Industrial sales of $51 million in the first quarter were down more than 23% and 27% in constant currency.
Wind energy sales, which is the largest submarket in Industrial, were down more than 40% compared to last year.
Specifically, in the 2014 to 2015 timeframe Hexcel sales were in the range of $1.8 billion to $1.9 billion, with operating margins in the range of 17%.
To state this succinctly, we expect to achieve strong, mid-teens plus operating margins, with sales of approximately $1.8 billion to $1.9 billion, and we are targeting to exceed prior peak margins when we return to previous peak sales levels.
Quarterly sales totaled $310.3 million.
Commercial Aerospace represented approximately 48% of the total first-quarter sales.
Commercial Aerospace sales of a $147.6 million, decreased 59.7% compared to the third quarter of 2020 as destocking continues to impact our sales.
Space and Defense represented 36% of first-quarter sales and totaled $111.7 million, basically unchanged from the same period in 2020.
Industrial comprised 16% for first quarter 2021 sales.
Industrial sales totaled $51 million, decreasing 27.1% compared to the third quarter of 2020 on weaker wins and recreation market, partially offset by stronger automotive.
Wind energy represented approximately 50% for first quarter Industrial sales.
On a consolidated basis, gross margin for the first quarter was 17.1% compared to 26% in the first quarter of 2020.
First-quarter selling, general, and administrative expenses decreased 17% or $8 million in constant currency, year-over-year, as a result of headcount reductions and continued tight controls on discretionary spending.
Research and Technology expenses decreased 19.7% in constant currency.
We continue to target approximately $150 million of annualized overhead cost savings, including indirect labor.
Adjusted operating income in the first quarter was $1.9 million, which is the first positive operating income since the destocking began in earnest during the third quarter of 2020.
The year-over-year impact of exchange rates was negative by approximately 10 basis points.
The Constant Materials segment represented 76% of total sales and generated a 3% operating margin or an adjusted operating margin of 8% compared to 19.9% adjusted operating margin in the prior-year period.
The Engineered Products segment, which is comprised of our structures and engineered core businesses represented 24% of total sales and generated a 6.4% operating margin or a 5.4% adjusted operating margin compared to 6.6% adjusted operating margin in the first quarter of 2020.
The tax benefit for the first quarter of 2021 was $7.5 million, which included a discrete tax benefit of $3.2 million from the revaluation of deferred tax liabilities related to a favorable US state tax law change.
Net cash used by operating activities was $1.2 million for the first quarter.
Working capital was a use of cash of $26.2 million in the quarter, primarily related to increased receivables as first-quarter sales were weighted toward the end of the quarter.
Capital expenditures on an accrual basis were $4 million in the first quarter of 2021 compared to $21.9 million for the prior-year period in 2020.
Free cash flow for the first quarter of 2021 was negative $6.1 million compared to negative $18.6 million in the prior-year period, which reflects tight spending control on significantly lower sales.
The minimum required liquidity is $250 million, which includes unrestricted cash, plus unutilized revolver-based [Phonetic] availability.
Additionally, the amount of the revolver is reduced to $750 million from $1 billion, previously.
Our total liquidity at the end of the first quarter of 2021 was $618 million, consisting of $82 million of cash and an undrawn revolver balance of $536 million [Phonetic].
The tax assumption is more contrary to normal, but we expect the underlying effective rate to be approximately 25% in 2021.

Keep in mind, however, the pandemic has triggered many challenges that the world has not yet fully overcome, and therefore, any substantial increases in build rates, air passenger demand, and even consumer spending remain uncertain.
International travel is still showing little sign of recovery.
First-quarter sales of $310 million were in line with our expectations.
Adjusted first-quarter earnings per share was a negative $0.10 compared to a positive $0.64 last year.
Research and Technology expenses decreased 19.7% in constant currency.


We executed operationally and exercised diligent expense management delivering a 32% increase in earnings over the same period last year.
Based on the strength of our earnings and outlook, we are increasing this year's earnings guidance to a range of $3.60 to $3.70 per share.
We're also introducing guidance for next year in the range of $3.75 to $3.95 per share, reflecting our expectation for solid growth year-over-year.
We've identified an additional $239 million of capital projects.
And that increases our total five-year forecast of $2.9 billion.
95% of that $2.9 billion will be invested in our utilities.
Not only did we announce a 5.6% increase in our dividend, we also completed 50 consecutive years of annual dividend increases, a remarkable achievement that exemplifies our legacy of sustainable growth.
As Linn noted, we delivered strong financial performance for the quarter with earnings per share as adjusted of $0.58, up $0.14 from last year, driven by strong year-over-year Q3 results at our gas utilities.
We estimate weather positively impacted Q3 earnings per share by $0.05 compared to normal and by $0.11 compared to Q3 2019.
Results for the third quarter of this year include negative COVID impacts of approximately $0.03 per share, in line with our expectations.
Net income as adjusted increased 35% quarter-over-quarter, while earnings per share as adjusted increased 32% quarter-over-quarter, the difference driven by dilution from additional common shares outstanding from our equity issuance earlier this year.
Compared to normal for agricultural loads, last year's Q3 pre-tax margins were negatively impacted by approximately $5 million, while this year's Q3 pre-tax margins were positively impacted by approximately $2 million.
So we had a $7 million pre-tax swing related to the agricultural loads comparing Q3 2019 to Q3 2020.
When looking at weather overall for this year's Q3, including the agricultural impacts, our Electric Utilities gross margin benefited by $1.6 million pre-tax compared to normal and our Gas Utilities gross margin benefited by $2.6 million pre-tax compared to normal.
The combination of COVID net load impacts and forgiven late fees impacted our Utilities gross margin by approximately $1 million pre-tax.
Total O&M increased compared to the prior year, largely driven by a $2.4 million after-tax expense from the retirement of certain assets at our Power Generation segment.
Net COVID-related O&M of $800,000 after-tax resulted from higher bad debt expense accruals and sequestration of the essential employees, partially offset by lower costs related to travel, training and outside services.
We finalized certain regulatory proceedings around the TCJA during the third quarter and we're able to release associated reserve amounts, benefiting our Electric Utility gross margins by $1.5 million and income taxes by $2.1 million.
In February, we issued $100 million of equity to help support our 2020 capital investments.
You'll note in our 2021 guidance assumptions in the appendix we expect to issue $80 million to $100 million of equity through our at-the-market equity offering program in 2021.
We've mentioned previously the need to issue up to $50 million of equity in 2021 based on our previously disclosed forecast.
And the addition of $142 million to forecasted capital investments for 2020 and 2021 drives the increased equity need.
In June, we issued $400 million of 2.5% 10-year notes to term out our short-term debt and support our ongoing capital investment program, further enhancing our liquidity position.
At quarter end, we had $84 million of borrowings on our credit facility with no material debt maturities until late 2023.
As at the end of October, we continue to have over $600 million of liquidity available from capacity on our revolving credit facility.
We completed 50 consecutive years of increasing dividends in 2020 with strong and consistent increases in the past few years.
We maintain our target for a long-term dividend payout ratio of 50% to 60% of EPS, demonstrating our confidence in our long-term earnings growth prospects.
We added $239 million to our five-year forecast for a total of $2.9 billion focused on projects and initiatives that maintain customer safety and reliability and foster customer growth over the next five years.
For this year, we are increasing our capital investment by $64 million to $733 million and for next year, we're increasing our capital investment by $78 million to $633 million.
Going forward, we fully expect to invest at least $500 million annually to support our customers.
95% of our forecasted investments are for our utilities and we anticipate 83% of our Gas Utility investments and 51% of our Electric Utility investments received timely recovery.
In other regulatory initiatives, we continue to advance our Renewable Advantage program to add up to 200 megawatts of renewable energy in Colorado.
We're currently negotiating with the winning bidder on a 200 megawatt solar project to be constructed in Pueblo, Colorado.
We're excited to complete our Renewable Ready subscription-based program for our South Dakota and Wyoming Electric Utilities, our 52.5 megawatt Corriedale wind project, we are building to support that program is nearly complete and we expect it to be in full service prior to year end.
In 2019, we provided over $5.5 million in charitable giving and we continue to support our strong commitment to the economic viability of our customers and our communities.

Based on the strength of our earnings and outlook, we are increasing this year's earnings guidance to a range of $3.60 to $3.70 per share.
We're also introducing guidance for next year in the range of $3.75 to $3.95 per share, reflecting our expectation for solid growth year-over-year.
As Linn noted, we delivered strong financial performance for the quarter with earnings per share as adjusted of $0.58, up $0.14 from last year, driven by strong year-over-year Q3 results at our gas utilities.
We added $239 million to our five-year forecast for a total of $2.9 billion focused on projects and initiatives that maintain customer safety and reliability and foster customer growth over the next five years.


Q3 revenue of $238.8 million declined 1.6% on an organic basis versus the prior year, which excludes the effects of foreign currency.
By segment, North American revenues were down 2%.
Our international segment increased approximately 2% after excluding the effects of foreign currency.
Adjusted EBITDA declined approximately 6% in the quarter versus the prior year, primarily driven by the timing of A&M spend.
EPS for the quarter was $0.81 per share, flat to the prior year as a result of lower interest expense from debt pay down, offsetting the lower revenue and A&M timing.
For the first nine months revenues were down 90 basis points.
Total company gross margin of 58.2% in the first nine months was largely flat to last year's adjusted gross margin of 57.9% and has been stable across quarters.
This was in-line with our expectations and we continue to anticipate a gross margin of about 58% for the remainder of the year.
Advertising and marketing came in at 15.9% of revenue in Q3 and 14.8% for the first nine months.
We still expect A&M for the full year to be you just under 15% as a percent of sales as we continue at a normalized rate of spend in the fourth quarter.
For the full year, we anticipate G&A expenses to approximate 9% of sales and remain below prior year in absolute dollars.
Lastly, we realized strong 15% earnings per share growth for the first nine months of Fiscal 2021 versus the prior year.
In the quarter, we generated $43.5 million in free cash flow, which, as expected, was lower than last year due to both timing of working capital and CapEx investments.
For the first nine months of Fiscal 2021, free cash flow of $159.2 million grew over 3% versus the prior year.
At the end of Q3, we had approximately $1.5 billion of net debt, which equated to a leverage ratio of 4.2x.
During the quarter, we repurchased approximately $9 million in shares opportunistically leaving the remainder of our cash generation on the balance sheet in anticipation of a potential bond refinancing event in Q4 to opportunistically capitalize on the attractive debt rate environment.
For the full year Fiscal 2021, we now anticipate revenues of approximately $935 million.
We now anticipate adjusted earnings per share of approximately $3.22 for Fiscal 2021.
These attributes to translate into free cash flow as well and we continue to anticipate free cash flow of $207 million or more, which is at or above the prior year's level.
We continue to target 2% to 3% long-term organic sales growth, which translates into mid to high single-digit earnings growth driven by our stable and solid financial profile and disciplined capital allocation strategy.

Q3 revenue of $238.8 million declined 1.6% on an organic basis versus the prior year, which excludes the effects of foreign currency.
EPS for the quarter was $0.81 per share, flat to the prior year as a result of lower interest expense from debt pay down, offsetting the lower revenue and A&M timing.
For the full year Fiscal 2021, we now anticipate revenues of approximately $935 million.
We now anticipate adjusted earnings per share of approximately $3.22 for Fiscal 2021.


The company closed the fourth quarter with record sales of $3,027 billion and GAAP and adjusted diluted earnings per share of $0.72 and $0.70, respectively.
We are very proud that the fourth quarter represents the first time in Amphenol's history that we achieved quarterly sales in excess of $3 billion.
Fourth-quarter sales were up 25% in U.S. dollars and in local currencies and up 18% organically.
dollars and organically and 8% in local currencies.
For the full year 2021, sales were a record $10,876 billion, which were up 26% in U.S. dollars, 25% in local currencies, and 18% organically compared to 2020.
Orders for the quarter were $3.278 billion, which is up 30% compared to the fourth quarter of 2020 and up 9% sequentially, resulting in a strong book-to-bill ratio of 1.08:1.
The interconnect segment, which comprise 96% of our sales, was up 25% in U.S. dollars, while the cable segment was up 22% in U.S. dollars.
The interconnect segment was up 27% in U.S. dollars and the cable segment was up 21% in U.S. dollars.
GAAP and adjusted operating income was $593 million and $608 million, respectively, in the fourth quarter of 2021, and GAAP operating margin was 19.6%, which decreased by 50 basis points compared to the Q4 of 2020 and by 70 basis points relative to the third quarter of 2021.
Fourth-quarter 2021 GAAP operating income includes $15 million of acquisition-related costs related to the Halo acquisition, which closed during the fourth quarter.
Excluding these costs, the fourth quarter 2021 adjusted operating margin was 20.1%, which decreased by 50 basis points compared to the fourth quarter of 2020 and by 20 basis points relative to the third quarter of 2021.
For the full year 2021, GAAP operating margin was 19.4% and adjusted operating margin was 20%.
The 80 basis point increase in adjusted operating margin as compared to 2020 was primarily driven by the normal operating leverage on higher sales volumes as well as the lower negative cost impacts resulting from the pandemic, and these benefits were partially offset by the more challenging commodity and supply chain environment experienced in 2021 as well as the current margin dilutive effect of the acquisitions we made during the year.
From a segment standpoint, operating margin in the interconnect segment was 22.1% in the fourth quarter of 2021, and operating margin in the cable segment was 2.4%.
The company's GAAP effective tax rate for the fourth quarter was 18.8% and the adjusted effective tax rate was 23.8%, which compared to 21.7% and 24.5% in the fourth quarter of 2020, respectively.
The slightly lower adjusted tax rate in the quarter reflected the year-to-date true-up of a full-year adjusted effective tax rate from the expected 24.5% to a slightly lower 24.3% a result -- as a result of a slightly more favorable mix of income for the full year.
For the full year 2021, the company's GAAP effective tax rate was 20.6% and the adjusted effective tax rate was 24.3%, which compared to 20.5% and 24.5% in 2020, respectively.
In 2022, we expect our adjusted effective tax rate to be approximately 24.5%.
GAAP diluted earnings per share was a record $0.72 in the fourth quarter, an increase of 26%, compared to $0.57 in the prior-year period, and adjusted diluted earnings per share was also a record $0.70, an increase of 23%, compared to $0.57 in the fourth quarter of 2020.
For the full year, GAAP diluted earnings per share was $2.51, a 28% increase from $1.96 in 2020.
And adjusted diluted earnings per share was $2.48 in 2021, an increase of 33% compared to 2020.
Operating cash flow in the fourth quarter was a record $464 million or 106% of adjusted net income.
And net of capital spending -- our free cash flow was also a record $379 million or 87% of adjusted net income.
For the full year, 2021 operating cash flow was $1.524 billion or 98% of adjusted net income.
And net of capital spending, our free cash flow for 2021 was $1.167 billion or 75% of adjusted net income.
From a working capital standpoint, inventory days, days sales outstanding and payable days were 80, 71, 56 days, respectively all of which were within our normal range, and we are especially pleased that our team's focus on all elements of working capital management, which resulted in a significant reduction of the company's inventory days from the third quarter.
During the quarter, the company repurchased 2.1 million shares of common stock at an average price of $81 bringing total repurchases during 2021 to 9.3 million shares or $662 million.
When combined with our normal quarterly dividend, total capital returned to shareholders in 2021 was more than $1 billion.
Total debt at December 31 was $4.8 billion, and net debt was $3.6 billion.
Total liquidity at the end of the quarter was $2.9 billion, which included cash and short-term investments on hand of $1.2 billion-plus availability under our existing credit facilities.
For the quarter and full-year 2021 GAAP EBITDA was $726 million and $2.6 billion, respectively.
And at the end of 2021, our net leverage ratio was 1.4 times.
With respect to the fourth quarter, we're truly proud to have finished the year with record sales and adjusted earnings per share in the fourth quarter, both of which were significantly above the guidance that we gave just 90 days ago.
dollars and in local currencies reaching a new record of $3.27 billion.
On an organic basis, our sales increased by 18%, driven in particular by robust growth in the IT datacom, mobile networks, industrial, and automotive end markets.
The company booked a record $3.278 billion in orders in the fourth quarter which represented another strong book-to-bill of 1.08:1.
Despite the many operational challenges we and others continue to face, including ongoing cost increases related to commodities, supply chain and other pressures, our adjusted operating margins in the quarter reached a very strong 20.1%.
Adjusted diluted earnings per share was a new record $0.70 and represented a robust growth of 23% from prior year, an excellent demonstration of our organization's continued strong execution.
And as Craig mentioned, we generated record operating and free cash flow in the quarter of $464 million and $379 million, respectively, both of which are clear reflection of the quality of the company's earnings.
We're also very pleased that in the quarter, we announced on December 1, the acquisition of Halo Technology Limited for a purchase price of approximately $715 million.
Halo is a leading provider of active and passive fiber optic interconnect components for the communications infrastructure markets with expected sales this year of approximately $250 million.
dollars and 18% organically reaching a new sales record of $10.876 billion.
We've grown our sales by more than 32% from our 2019 levels, which is a great confirmation of the value of the company's diversification and the agility of our management team in every environment.
Our full-year 2021 adjusted operating margins reached 20%, which was an increase of 80 basis points from last year from 2020 despite the multiple pressures on margins that we experienced around the world.
And this strong level of profitability enabled us to achieve record-adjusted diluted earnings per share of $2.48.
We generated operating and free cash flow of $1.524 billion and $1.167 billion, respectively, again, excellent confirmations of the company's superior execution and disciplined working capital management.
We also put that cash to work with our acquisition program that created great value in 2021 with 7 new companies added to the Amphenol family.
In addition, as Craig noted, in 2021, we bought back over 9.3 million shares under our share buyback program and increased our quarterly dividend by 38% representing a total return of capital to shareholders of just over $1 billion for the year.
And I would just note that we remain very pleased that the company's balanced and broad end-market diversification continues to create value for Amphenol with no single end market representing more than 25% of our sales in 2021, and that market, industrial being really one of our most diversified markets across the segments within industrial.
Military represented 10% of our sales in the fourth quarter and 11% of our sales for the full year of 2021.
Our sales grew from prior year by 6% in U.S. dollars in the fourth quarter as we benefited from acquisitions.
On an organic basis, our sales did moderate by about 4% driven by reduced sales related to airframe applications and ground vehicles.
For the full year 2021, sales to the military market grew by 13% in U.S. dollars and 4% organically, reflecting our leading market position and strong execution across virtually all segments of the military market, together with the benefits of the MTS Sensors and Positronic acquisitions completed earlier in the year.
The commercial aerospace market represented 2% of our sales in the fourth quarter and as well for the full year of 2021.
Sales in the quarter grew 27% in U.S. dollars and 6% organically as we benefited from the beginnings of a recovery in procurement to support growing aircraft production as well as from the contributions from our recent acquisitions.
Sequentially we're very pleased that our sales grew a robust 15% from the third quarter, which was in line with our expectations coming into the quarter.
For the full year, sales declined by 10% reflecting the significant impact of the ongoing pandemic on travel and aircraft production.
The industrial market represented 25% of our sales in the fourth quarter and for the full year, and sales in this market significantly exceeded our expectations coming into the quarter increasing by a very strong 42% in U.S. dollars and 25% organically from prior year.
On a sequential basis, our sales increased by 2%, which was significantly better than our expectation for a sequential moderation as we saw broad-based strength.
For the full-year 2021, sales in the industrial market grew by a very strong 46% in U.S. dollars and 27% organically as we saw again broad-based growth across virtually all market segments of the global industrial market.
The automotive market represented 19% of our sales in the fourth quarter and 20% for the full year 2021.
dollars and 16% organically versus prior year, and this was driven particularly by strength of our sales in the hybrid and electric vehicle applications as well as our sales to customers in Asia.
Sequentially, our automotive sales increased by a very strong 10%, well above our prior expectations for a high single-digit decline as we saw strong demand from customers in anticipation of improving production volumes in the first quarter.
For the full year 2021, our sales to the automotive market increased by a strong 47% in U.S. dollars and 41% organically, reflecting the continued recovery of the automotive market as well as our expanded position in next-generation electronics integrated into cars, including, in particular, electric and hybrid drivetrains.
The mobile devices market represented 14% of our sales in the fourth quarter and 12% of our sales for the full year of 2021.
Our sales to mobile device customers declined from prior year by 5% and in U.S. dollars and 6% organically as declines in products incorporated into smartphones more than offset the growth that we did realize in wearable devices, laptops, and tablets.
Sequentially, our sales increased by a better-than-expected 14%, driven by higher sales to smartphones and wearable devices.
dollars and 2% organically as we benefited from growth in our products used in laptops and wearables, offset in part by a moderation of sales related to smartphones and tablets which, as you will recall, were particularly strong during 2020 with all of the work from home and study from home dynamics that were there early on in the pandemic.
Looking into the first quarter, we anticipate a typical seasonal sequential decline of approximately 35%.
While mobile devices will always remain 1 of our most volatile markets, our outstanding and agile team is poised as always to capture any opportunities for incremental sales that may arise in 2022 and beyond.
The mobile networks market represented 5% of our sales in the quarter and for the full year.
And we're very pleased that sales in mobile networks increased from prior year by a very strong 36% in U.S. dollars and 28% organically.
Sequentially, our sales increased by a higher-than-expected 7%.
For the full-year 2021, our sales to the mobile networks market grew by 12% from prior year and 7% organically.
The information technology and data communications market represented 22% of our sales in the fourth quarter and 21% of our sales for the full year.
Sales in the fourth quarter in IT datacom were much stronger than expected, rising by 53% in U.S. dollars and 49% organically from prior year as we benefited from broad-based demand for our industry-leading high-speed power and fiber optics solutions.
Sequentially, our sales grew by 10%, which was significantly higher than our expectations, which had been coming into the quarter of a slight decline.
dollars and 24% organically as we continue to benefit from our strong technology solutions and leading position across a broad array of applications.
dollars and 2% organically from prior year as we benefited from increased spending by cable operators as well as the contributions from our recent acquisitions.
On a sequential basis, sales grew by a better-than-expected 10%.
For the full year 2021, sales to the broadband market grew by 9% in U.S. dollars and 1% organically.
For the first quarter, we expect sales in the range of $2.690 billion to $2.750 billion as well as adjusted diluted earnings per share in the range of $0.59 to $0.61.
This guidance represents very strong sales growth over prior year of 13% to 16% as well as adjusted diluted earnings per share growth of 13% to 17% compared to the first quarter of last year.
This new alignment will allow us to further scale our business beyond the $10 billion sales level that we crossed last year.
Very importantly, this alignment further strengthens our unique and strong Amphenolian culture of entrepreneurship, while reinforcing the accountability of our 130 general managers around the world.

The company closed the fourth quarter with record sales of $3,027 billion and GAAP and adjusted diluted earnings per share of $0.72 and $0.70, respectively.
GAAP diluted earnings per share was a record $0.72 in the fourth quarter, an increase of 26%, compared to $0.57 in the prior-year period, and adjusted diluted earnings per share was also a record $0.70, an increase of 23%, compared to $0.57 in the fourth quarter of 2020.
Adjusted diluted earnings per share was a new record $0.70 and represented a robust growth of 23% from prior year, an excellent demonstration of our organization's continued strong execution.
For the first quarter, we expect sales in the range of $2.690 billion to $2.750 billion as well as adjusted diluted earnings per share in the range of $0.59 to $0.61.
This guidance represents very strong sales growth over prior year of 13% to 16% as well as adjusted diluted earnings per share growth of 13% to 17% compared to the first quarter of last year.


GAAP earnings for the fourth quarter were $0.42 per share, well in excess of our $0.14 per share dividend, and our GAAP book value increased $0.50 per share from the third quarter to $9.91 in the fourth quarter.
The operating capital we allocate to these businesses is expected to generate returns on equity north of 20% post tax levels very difficult to come by when sourcing third-party investments in today's compressed yield environment.
Market observers estimate that US housing stock and a total of $2.5 trillion in value in 2020, including $2.2 trillion from appreciation and existing homes.
Nationwide home prices were up over 10% year-on-year in December.
And while the number of homes sold rose over 20%, inventory available for sale fell over 40%.
Once more mortgage rates have remained at or near record lows, even as 10-year treasury rates now stand more than 25 basis points higher than in late December.
And while the pandemic continues to impact certain segments of the labor market in different ways, the personal savings rate at year end was up 90% from the end of 2019.
Sparkling results from our residential and BPL platforms coupled with strong performance in our investment portfolio drove a 20% annualized return on equity for the quarter.
In our residential business, we recorded a record $3.8 billion of locks with over 90 discrete sellers, up 81% from the third quarter.
Loan purchase commitments, those adjusted for potential pipeline fallout during the quarter were $2.5 billion, more than double the amount in the third quarter.
Momentum has continued into 2021, as January locks totaled $1.6 billion.
Including average FICOs in the high-700s and debt ratios of 30% or lower.
During the quarter, we achieved strong execution on two securitizations backed by $669 million of loans in aggregate, including a $345 million single-investor securitization placed with an insurance company.
We also sold over $800 million of loans during the fourth quarter and entered into agreements to sell forward an additional $1 billion, expected to settle in the coming weeks.
And as of January 31st, we had funded nearly $120 million of loans through the program.
We originated $448 million in BPL loans during the quarter, up 71% from the third quarter.
Almost 80% of this production was in single-family rental loans, for which demand from the securitization markets remains a highlight.
Our broadly distributed deal was backed by $274 million of SFR loans and was particularly well received by the market.
Certificates placed with third-party investors represented 91% of the capital structure with the weighted average yield of 1.48%.
This was 20 basis point improvement upon the already strong execution of our previous issuance.
The single-investor securitization provides $200 million in financing for SFR loans, and includes a unique ramp up feature that enhances capital efficiency and reduces our reliance on traditional warehouse funding.
During the fourth quarter, we distributed $60 million in SFR loans into the structure and expect to complete the ramp up later this month.
Additionally, in the fourth quarter, we called one of our previously issued SFR securitizations, which has $75 million of outstanding loans, the majority of these loans have either been refinanced or resecuritized, and the call allowed us to recycle our capital at a significantly improved cost of funds.
During the quarter, the fair value of our securities book increased approximately 3%, supported by of our securities book increased approximately 3%, supported by continued improvement in credit spreads and strength in underlying credit performance.
Overall, 90-plus day delinquencies in our securitized portfolios across both jumbo and SFR are now below 2%.
In total, the net discount on our securities portfolio as of year-end was well in excess of $400 million.
As Chris and Dash discussed, our fourth quarter earnings and book value benefited from strong results across our operating businesses and investment portfolio, contributing to GAAP earnings of $0.42 per share for the quarter and generating a 7% economic return on book value for the quarter.
After the payment of our $0.14 dividend, our book value increased to $9.91 per share, representing a 5% increase for the quarter.
Focusing in on some of the operating results within the business, our residential mortgage banking team achieved record lock volumes while increasing gross margins relative to the prior quarter to generate $24 million of mortgage banking income.
CoreVest also saw a large sequential volume growth and improved securitization execution during the quarter, which helped to generate $33 million of mortgage banking income.
And a similar dynamic to the third quarter, though to a lesser extent, business purpose mortgage banking results included a benefit from spread tightening on the $286 million of SFR loan inventory it carried into the fourth quarter.
Shifting to the tax side, in the fourth quarter, we had REIT taxable income of $0.05 per share and $0.37 per share of taxable income at our TRS.
Our fourth quarter REIT taxable income was negatively impacted by a year-end adjustments and we expect it will shift up in the first quarter of 2021, and continue growing as we deploy capital into our investment portfolio, which is generally held at 3.
Turning to our balance sheet, we ended the fourth quarter with unrestricted cash of $461 million.
After allocating incremental working capital to our mortgage banking operations during the fourth quarter and net of other corporate and risk capital, we estimate we had approximately $200 million of capital available for investment at December 31st.
Overall, we saw non-recourse leverage decreased slightly to 1.3 times at the end of the year from 1.4 times at the end of the third quarter.
At our mortgage banking operations to support growing volumes, we increased our residential warehouse capacity from $600 million to $1.3 billion and maintain $1 billion of capacity for BPL operations, with nearly 70% of this total capacity being non-marginable.
On that note, at December 31st, we had approximately $375 million of capital allocated to our operating businesses, including $215 million for residential mortgage banking and $160 million for BPL mortgage banking.
And in 2021, we expect after-tax returns on this capital to 20%.
Shifting to our investment portfolio, at December 31st, we had approximately $1.1 billion of capital deployed here, which we expect can generate returns on capital in 2021 between 10% to 12% relative to our year-end basis.
To support our operating businesses and investment portfolio, we expect corporate operating expenses to be between $50 million and $55 million for 2021, with variable compensation commensurate with company performance.
And we expect long-term unsecured debt service costs over 2021 to remain consistent with 2020, at approximately $40 million annually.

GAAP earnings for the fourth quarter were $0.42 per share, well in excess of our $0.14 per share dividend, and our GAAP book value increased $0.50 per share from the third quarter to $9.91 in the fourth quarter.
As Chris and Dash discussed, our fourth quarter earnings and book value benefited from strong results across our operating businesses and investment portfolio, contributing to GAAP earnings of $0.42 per share for the quarter and generating a 7% economic return on book value for the quarter.
After the payment of our $0.14 dividend, our book value increased to $9.91 per share, representing a 5% increase for the quarter.


Across the La-Z-Boy enterprise, we delivered all-time record high sales of $525 million, making and selling more furniture in the quarter than we ever have in modern history, even with production running only 12 weeks in the quarter, due to our annual one week maintenance shutdown in July, versus 13 weeks in most quarters.
Written same-store sales for the La-Z-Boy Furniture Galleries network increased 10% versus the prior year quarter, and has grown at a compounded annual growth rate of 13% across the last two years since pre-pandemic, demonstrating the continued strength of demand for our La-Z-Boy branded products.
Written same-store sales for our Company-owned Retail segment increased 22% versus the prior year period, and at a compounded annual growth rate of 16% over the last two years.
And Joybird continued on its strong growth journey writing 31% more business than in last year's first quarter and growing at a compounded annual growth rate of 35% across the last two years.
And also during the quarter, we continued to return value to shareholders with a dividend payment and $36 million of share repurchases, and we've recently expanded our repurchase authorization.
On a consolidated basis, fiscal '22 first quarter sales increased 84% to a record $525 million, reflecting strong demand, capacity increases, and a comparison to the fiscal '21 first quarter when we restarted our plants at reduced capacity after a month-long shutdown and most retailers were closed for a portion of the quarter due to COVID-19.
Compared with the pre-pandemic fiscal '20 first quarter, sales increased 27% for a compounded annual growth rate of about 13%.
Consolidated GAAP operating income increased to $34 million and non-GAAP operating income increased to $35 million.
Consolidated GAAP operating margin was 6.5% and non-GAAP operating margin was 6.6% reflecting expected significant short-term pressure on wholesale margins as the realization of previously announced pricing actions trailed escalating input costs, and we continue to invest in capacity expansion.
GAAP diluted earnings per share was $0.54 for the fiscal 2022 first quarter versus $0.10 in the prior quarter.
Non-GAAP diluted earnings per share was $0.55 in the current year quarter versus $0.18 in last year's first quarter.
Starting with our wholesale segment, delivered sales for the quarter grew 76% to $393 million compared with the prior year period, compared with the pre-pandemic fiscal '20 first quarter, sales were 23% higher for a compounded annual growth rate of 11%.
Non-GAAP operating margin for the wholesale segment was 4.7%, reflecting expected gross margin pressure as raw material and freight cost increases outpaced the realization of previously announced pricing actions and we continue to invest in bringing online new capacity.
For the quarter, delivered sales doubled, increasing 100% to our first quarter record of $182 million and delivered same-store sales increased 92% versus the year ago quarter, which was impacted by COVID.
Compared with the pre-pandemic fiscal '20, first quarter, sales increased 27% for a compounded annual growth rate of 13%, reflecting strong execution at the store level.
Non-GAAP operating margin increased to 11.2%, another first quarter record, driven primarily by fixed cost leverage on the higher delivered sales volume.
Last year's first quarter margin was negative 6.8% with the period marked by a significant reduction in delivered sales due to delays in product deliveries and COVID-related manufacturing shutdowns in April as well as retail closures, with some stores closures extending into June.
We have approximately 25 project scheduled this fiscal year for the Company-owned stores, out of a total of approximately 35 projects across the network.
Sales for Joybird which was reported in corporate and other, increased 188% to $39 million, almost tripling from the prior year first quarter.
From the pre-pandemic fiscal '20 first quarter, delivered sales increased 125% for a compounded annual growth rate of about 50%, reflecting Joybird's strong positioning in the direct-to-consumer marketplace as well as excellent end-to-end execution by the team.
Pulling all this together, consolidated non-GAAP gross margin for the fiscal '22 first quarter decreased 270 basis points versus the prior year quarter, primarily driven by significant increases in commodity and freight costs, in addition to start-up costs associated with the expansion of our manufacturing capacity and labor challenges on our wholesale businesses.
Consolidated SG&A as a percentage of sales for the quarter decreased 620 basis points, primarily reflecting fixed cost leverage on the higher sales volume, mainly in our retail segment.
Our effective tax rate on a GAAP basis for the fiscal '22 first quarter was 25.9% versus 19.8% in the first quarter of fiscal 2021.
Absent discrete adjustments, our effective tax rate would have been 25.3% and 26.1% in the first quarters of fiscal 2022 and 2021 respectively.
We expect our effective tax rate for the full fiscal 2022 year to be between 25.5% and 26.5%.
Turning to cash, we generated $6 million in cash from operating activities in the quarter.
We invested $39 million in higher inventory levels to protect against supply chain disruptions and support increased production in delivered sales.
We also spent $19 million in capital, primarily related to improvements to our retail stores, upgrades at our manufacturing and distribution facilities, new upholstery manufacturing capacity in Mexico, and technology upgrades.
We ended the period with $336 million in cash and no debt compared with $337 million in cash at the end of fiscal 2021 first quarter, which included $50 million in cash proactively drawn on our credit facility.
In addition, we held $33 million in investments to enhance returns on cash, compared with $16 million last year.
Regarding cash returned to shareholders, during the quarter we continued to aggressively buy back shares, spending $36 million repurchasing more than 900,000 shares of stock in the open market under our existing, authorized share repurchase program.
Over the past two quarters, we have returned $79 million to shareholders via share repurchase.
We also paid $7 million in dividends to shareholders in the last quarter.
Earlier this week, demonstrating its confidence in the Company's ability to grow profitably and continue to generate strong cash flow from operations, the Board of Directors approved an increase of 6.5 million shares to the Company's existing share repurchase authorization, with a 2.5 million shares available for repurchase under the program as of the end of the fiscal 2022 first quarter.
This increase brings the total share repurchase authorization to $9 million, representing approximately -- I'm sorry, 9 million shares, representing approximately 20% of shares outstanding.
This equates to approximately $320 million at Monday's closing stock price.
The Company expects to execute the repurchase program over a three year to four year period, subject to market conditions, operational performance, cash flow from operations, cash balances, potential M&A activity and other business investments.
Additionally, the Board approved a dividend of $0.15 per share to shareholders of record as of September 2nd, 2021.
Finally, as we make investments in the business to strengthen the Company for the future, we expect capital expenditures to be in a range of $65 million to $75 million for fiscal 2022.

Written same-store sales for our Company-owned Retail segment increased 22% versus the prior year period, and at a compounded annual growth rate of 16% over the last two years.
Consolidated GAAP operating margin was 6.5% and non-GAAP operating margin was 6.6% reflecting expected significant short-term pressure on wholesale margins as the realization of previously announced pricing actions trailed escalating input costs, and we continue to invest in capacity expansion.
GAAP diluted earnings per share was $0.54 for the fiscal 2022 first quarter versus $0.10 in the prior quarter.
Non-GAAP diluted earnings per share was $0.55 in the current year quarter versus $0.18 in last year's first quarter.
Earlier this week, demonstrating its confidence in the Company's ability to grow profitably and continue to generate strong cash flow from operations, the Board of Directors approved an increase of 6.5 million shares to the Company's existing share repurchase authorization, with a 2.5 million shares available for repurchase under the program as of the end of the fiscal 2022 first quarter.
The Company expects to execute the repurchase program over a three year to four year period, subject to market conditions, operational performance, cash flow from operations, cash balances, potential M&A activity and other business investments.


Matt founded and led Chimera since 2007.
Under his leadership, Chimera grew to a $3.8 billion mortgage REIT and paid more than $5.2 billion in dividends to shareholders.
Chimera's book value improved nearly 4% in the fourth quarter and over 16% at the middle of the year.
This improved book value, combined with the company's dividend policy, has generated a 6% economic return for the fourth quarter and a 22% economic return since June 30, 2020.
The National Association of Realtors recently reported that in December, contract closing for existing homes increased with annualized pace of 6.76 million units.
This is the strongest pace we have seen since late 2006.
At year-end, our GAAP investment portfolio included $12.6 billion of mortgage loans and $2.5 billion of non-agency RMBS.
Over 90% of the loans in non-agency securities on our balance sheet were originated prior to 2010.
In total, Chimera sponsored $4.2 billion and 11 separate securitized deals for the calendar year 2020, and we retained $655 million in subordinate notes.
Securitization is Chimera's primary source of financing for our loan portfolio, and as of year-end, securitized debt represented more than 60% of Chimera's liabilities.
At year-end, we have $3.2 billion of credit-related secured financings, which is 37% less than we were financing at the year-end 2019.
The average maturity of our credit-related financing is 15 months and $2 billion, or roughly two-thirds are either nonmark-to-market or limited mark-to-market.
During the fourth quarter of 2020, we exercised a capped call option, and the company elected to receive a settlement of approximately 4.7 million shares for our common stock, which were then retired.
Last night, our board of directors increased the size of our outstanding common stock repurchase authorization to 250 million.
In October, we issued CIM 2020-R6, with $418 million of reperforming loans purchased in September.
The underlying loan from the deal had a weighted average coupon of 5.25% and a weighted average loan age of 164 months.
The average loan size in the R6 transaction was $102,000 and had an average LTV of 71%.
The average FICO score of the borrower was 638.
We sold 334 million senior securities from the deal and retained 84 million in subordinate notes, plus interest-only securities.
Our cost of debt for the CIM 2020-R6 was 2.19%, with an 80% advance rate.
The R7 deal consisted of $653 million reperforming loans from the called CIM 2017-8 securitization.
The underlying loans in the deal had a weighted average coupon of 6.38% and a weighted average loan age of 172 months.
The average loan size in the R7 transaction was $81,000 and had an average LTV of 60%.
The average FICO score of the borrowers was 662.
We sold $552 million senior securities from the deal and retained $91 million in subordinated notes, plus interest-only securities.
Our cost of debt for the R7 deal was 2.22%, with an 86% advance rate.
The collateral for the NR1 securitization was $132 million of non-performing loans called from CIM 2017-8 deal.
The underlying loans had a weighted average coupon of 5.76% and a weighted average loan age of 170 months.
The average loan size was $100,000, had an 86 LTV and a 589 average FICO.
We sold $84 million notes, with a 4.49% cost of debt and a 64% advance rate.
Chimera retained $48 million of subordinate notes.
The deal was rated by Moody's, Fitch and DBRS and had $327 million loans, with a weighted average coupon of 3.09% and a weighted average loan age of two months.
The average loan size was $912,000 and at an average FICO of 782 and an average LTV of 64%.
As of year-end, Chimera owns call rights from 7 billion in 16 previously issued same deals that are either currently callable or will become callable in 2021.
GAAP book value at the end of the fourth quarter was $12.36 per share, and our economic return on GAAP book value was 6% based on the quarterly change in book value and the fourth-quarter dividend per common share.
GAAP net income for the fourth quarter was $129 million or $0.49 per share and $15 million or $0.07 for the full year.
On a core basis, net income for the fourth quarter was $72 million or $0.29 per share, and it was $334 million or $1.46 per share for the full year.
Economic net interest income for the fourth quarter was $117 million, and it was $513 million for the full year.
For the fourth quarter, the yield on average interest earning assets was 5.9%, our average cost of funds was 3.6% and our net interest spread was 2.3%.
Total leverage for the fourth quarter was 3.6 to 1, while recourse leverage ended the quarter at 1.2 to 1.
For the fourth quarter, our economic net interest return on equity was 12.5%, and our GAAP return on average equity was 15.8%.
Expenses for the fourth quarter, excluding servicing fees and transaction expenses, were $18 million, up slightly from last quarter.

Last night, our board of directors increased the size of our outstanding common stock repurchase authorization to 250 million.
GAAP net income for the fourth quarter was $129 million or $0.49 per share and $15 million or $0.07 for the full year.
On a core basis, net income for the fourth quarter was $72 million or $0.29 per share, and it was $334 million or $1.46 per share for the full year.


In the quarter, our recordable incident rate was 0.69, a slight improvement compared with the second quarter of 2019.
For the second quarter, revenues were $1.6 billion, down 15%, 14% on a constant currency basis compared with the same period last year, and adjusted EBIT was $167 million.
We have focused on minimizing or postponing discretionary expenses and reduced operating expenses in the quarter by over $30 million compared with last year.
While our financial position at the beginning of the quarter was strong, in May, we took advantage of favorable capital markets and successfully completed a 10-year $300 million bond issuance.
This, along with our working capital management and opex and capex controls, led to an increase in our available liquidity to approximately $1.5 billion, including almost $600 million in cash.
During the second quarter, we paid down $210 million on our existing revolving credit facility.
Our only near-term debt maturity is the remaining $150 million from our term loan due in February 2021.
Last month, Owens Corning ranked number one on the 100 Best Corporate Citizens list for 2020, and is one of only a small number of companies that have earned this honor twice.
The list ranks companies in the Russell 1000 index for standout global environmental, social and governance performances.
Through the collective agility and resilience of our 19,000 colleagues, Owens Corning delivered solid financial performance in the second quarter in the face of a challenging environment.
For the second quarter, we reported consolidated net sales of $1.6 billion, down 14% versus 2019 on a constant currency basis.
Adjusted EBIT for the second quarter of 2020 was $167 million, down $64 million compared to the prior year, largely driven by a $61 million decline in Composites.
Net earnings attributable to Owens Corning for the second quarter of 2020 were $96 million compared to $138 million in Q2 2019.
Adjusted earnings for the second quarter were $96 million or $0.88 per diluted share compared to $141 million or $1.29 per diluted share in Q2 2019.
Depreciation and amortization expense for the quarter was $116 million, up slightly as compared to Q2 2019.
Our capital additions for the second quarter was $47 million, down $60 million versus 2019.
On slide six, you will see our adjusting items, reconciling our second quarter 2020 adjusted EBIT of $167 million to our reported EBIT of $171 million.
During the second quarter, we took actions to reduce personnel costs in our Composites segment and recorded $5 million of restructuring costs associated with these actions.
In addition, we recognized $9 million of gains on sale of precious metals used in our production tooling.
Adjusted EBIT of $167 million was down $64 million as compared to the prior year.
Roofing EBIT decreased by $3 million.
Insulation EBIT decreased by $10 million.
And Composites EBIT decreased by $61 million.
General corporate expenses of $19 million were down $10 million versus last year, primarily due to our disciplined cost controls.
Sales for the second quarter were $595 million, down $9 million from Q2 2019 on a constant currency basis.
During the quarter, our overall volumes were impacted throughout the segment by COVID-19, and selling prices were down $6 million year-over-year.
EBIT for the second quarter was $32 million, down $10 million as compared to 2019, primarily due to lower sales volumes.
Sales in Composites for the second quarter were $398 million, down 23% on a constant currency basis, primarily due to lower sales volumes.
EBIT for the quarter was $6 million, down $61 million from the same period a year ago, primarily due to lower sales and production volumes.
Roofing sales for the quarter was $677 million, down 13% compared with Q2 2019 due to lower shingle volumes, $23 million of lower selling prices and lower third-party asphalt sales.
EBIT for the quarter was $148 million, down just $3 million from the prior year, and yielding 22% EBIT margins for the quarter.
In addition, we realized a $10 million onetime gain that benefited our margins by 150 basis points related to an exclusion on certain tariffs paid over the last two years.
As a result, first half free cash flow in 2020 was $15 million higher as compared to the first half of 2019 on lower year-over-year earnings.
In May, we took advantage of favorable capital markets to reinforce our cash position and successfully completed a 10-year $300 million bond issuance with a yield below 4%.
Near the end of the first quarter, we drew $400 million on the revolver to increase our cash balance.
With our good year-to-date free cash flow and the financial actions I described a moment ago, we paid down $210 million of the revolver balance in the second quarter.
As of June 30, the company had liquidity of approximately $1.5 billion, consisting of $582 million of cash and equivalents and nearly $900 million of combined availability on our revolver and receivable securitization facility.
As a result of the proceeding, we currently expect interest expense to be between $125 million and $130 million in 2020 compared to our previous guidance of $120 million to $125 million.
We continue to evaluate the possibility of paying the remaining $150 million term loan balance in 2020.
Overall, for our Insulation business in the third quarter, we expect to realize incremental margins of approximately 50% versus the second quarter.
In Roofing, second quarter industry shingle shipments were down about 9%, with our volumes tracking relatively close to the market.
Based on all these factors, Roofing EBIT margins in the third quarter could be slightly better than our second quarter margins, normalized for the 150 basis point benefit from the tariff recovery that Prith mentioned in his remarks.
We reported a decline of $5 million in Q2 and expect a slightly higher impact in Q3 based on improving volumes.
Sequentially, from Q1 to Q2, we experienced decremental margins of about 35%.
We expect corporate expenses for the company to be in the range of $105 million to $115 million and capital investments to be in the range of $250 million to $300 million, both broadly consistent with prior guidance.
We remain committed to generating strong free cash flow and to our target of returning at least 50% to investors over time.
So far this year, we have returned $133 million through share repurchases and dividends, and we'll pay our second quarter dividend of approximately $26 million next week.

For the second quarter, we reported consolidated net sales of $1.6 billion, down 14% versus 2019 on a constant currency basis.
Adjusted earnings for the second quarter were $96 million or $0.88 per diluted share compared to $141 million or $1.29 per diluted share in Q2 2019.
We expect corporate expenses for the company to be in the range of $105 million to $115 million and capital investments to be in the range of $250 million to $300 million, both broadly consistent with prior guidance.


Our operational excellence and capacity expansion programs are on track, and as supply conditions improve, we expect to achieve our 40% gross margin target.
Excluding UTIS sales, Portable Electronics' revenue increased 5% quarter-over-quarter, reflecting the ongoing strength of the Portable Electronics market.
Moving next to the EV/HEV market, the long-term outlook continues to be very robust, with an expected annual growth rate of more than 30% over the next five years.
For example, year-to-date sales of plug-in EVs and HEVs in Europe accounted for 15% of the market.
In China, electric vehicle sales reached a new milestone in the second quarter, exceeding 10% of the market.
For instance, the latest projections from HIS, estimate that full electric vehicle production will reach close to 40 million units globally over the next four years.
This is an increase of 25% or about 8 million vehicles, compared to their forecast from only two years ago.
These markets comprise approximately 30% of Roger's total sales, and we expect these markets to grow at a high-single digit rate over time.
Year-to-date growth has been strong and the combined solar and wind market is expected to grow at a 10% CAGR over the next five years.
The higher performance and advanced features of 5G smartphones, means that our content can range from 10% to 30% higher versus the previous generation of phones.
Q2 revenue improved 2.5% sequentially to $234.9 million, which was at the midpoint of our guidance range.
Gross margin of 38.2% and adjusted earnings per share of $1.72, were below our guidance range, primarily due to the impact of raw material shortages and cost increases in the quarter.
Turning to slide 10; Rogers delivered Q2 revenues of $234.9 million, 2.5% higher than Q1.
Volume increased 2.8% and were slightly offset by unfavorable currency rates of approximately 0.3%.
AES revenue increased 6.5%, to $140.4 million, due to strong demand in power semiconductor substrate and RF solutions.
EV/HEV applications revenues accounted for 15% of the segment revenues and increased 34% sequentially.
Ceramic substrates, used in power semiconductor devices, had a very strong quarter and revenues for the business grew over 40% sequentially.
Clean energy sales accounted for 17% [Phonetic] of AES revenues and grew 11% sequentially.
Within RF Solutions, the Aerospace and Defense business was 19% of the business segment revenues, and grew 8% versus Q1.
Wireless infrastructure revenues grew mid-single digits sequentially and accounted for 16% of the segment revenues.
ADAS was 15% of AES revenues and declined modestly versus prior quarter, due to customers adjusting inventory levels.
The EMS business finished the quarter with revenues of $89.3 million, 3% lower than the first quarter.
EV/HEV sales, which represents 11% of EMS revenues, were relatively flat compared to Q1 due to order timings, Q2 general industrial sales which made up 46% of the segment revenue were also relatively unchanged versus prior quarter.
Lower use production resulted in a 7% decrease in Portable Electronics revenue.
Turning to slide 11; our gross margin for the second quarter was $89.8 million or 38.2% of revenues, 80 basis points lower than both Q1 and the midpoint of our guidance range for the quarter.
Gross margin for the quarter was negatively impacted by 130 basis points due to raw material shortages in EMS. Additionally, raw material cost increases in both AES and EMS unfavorably impacted margins by 70 basis points.
Also, on slide 11, we detail the changes to adjusted net income of $32.5 million in Q2 compared to adjusted net income for Q1, of $36 million.
The adjusted operating income for Q2 of $40.8 million or 17.4% of revenues was 150 basis points lower than Q1.
Adjusted operating expenses for Q2 of $49.1 million or 20.9% of revenues were 80 basis points higher than Q1 expenses.
Other income expenses was $1.8 million unfavorable compared to Q1.
Turning to slide 12, the company generated free cash flow of $11.9 million in the second quarter and $44.8 million June year-to-date.
We ended the quarter with a cash position of $203.9 million.
In the quarter, we generated $29.7 million from operating activities net of an increase of $13.9 million in working capital.
We repaid $4 million of our credit facility and ended the quarter with no outstanding debt.
In Q2, the company spent $17.8 million on capital expenditure.
We continue to guide our capital expenditure of $70 million to $80 million for the full year 2021.
Based on these factors, we are guiding our third quarter revenues to be in the range of $235 million to $245 million.
For these reasons, we guide third quarter gross margin be in the range of 38.5% to 39.5% to the midpoint of 39%.
Q3 operating expenses are forecasted to increase sequentially, mainly due to a $3 million one-time cost to support strategic growth initiatives.
We are guiding GAAP Q3 earnings in the range of $1.50 to $1.65 per fully diluted share, we guide fully diluted adjusted earnings in the range of $1.70 to $1.85 per share for the third quarter.
The effective tax rate for the full year is guided to 24% to 25%.

Q2 revenue improved 2.5% sequentially to $234.9 million, which was at the midpoint of our guidance range.
Gross margin of 38.2% and adjusted earnings per share of $1.72, were below our guidance range, primarily due to the impact of raw material shortages and cost increases in the quarter.
Turning to slide 10; Rogers delivered Q2 revenues of $234.9 million, 2.5% higher than Q1.
We continue to guide our capital expenditure of $70 million to $80 million for the full year 2021.
Based on these factors, we are guiding our third quarter revenues to be in the range of $235 million to $245 million.
We are guiding GAAP Q3 earnings in the range of $1.50 to $1.65 per fully diluted share, we guide fully diluted adjusted earnings in the range of $1.70 to $1.85 per share for the third quarter.


Adjusted earnings per diluted share excluding the impact of foreign exchange increased 10.8% in 2020.
In 2020, Aflac Japan generated solid overall financial results with a stable profit margin of 21.2%, an extremely strong premium persistency of 95.1%.
As a result, total sales were down 22.2% for the quarter and 36.2% for the year.
Now turning to Aflac US, we saw a stable profit margin of 19.3% amid a year of intense investments in the future of our business and the global pandemic conditions.
As expected, we saw modest sequential sales improvement in the quarter with a decrease of 27.2% for the quarter and 30.3 for the year.
We have done that for years, at the end of 2020, nearly 50% of Aflac's US employees were minorities, 66% were women, 23% of our US senior officers were minorities and 30% were women.
And then when you think of Aflac's Board of Directors, 36% were minorities and 36% were women.
Related to capital deployment, we placed significant importance on continuing to achieve strong capital ratios in the United States in Japan on behalf of our policyholders and shareholders.
Additionally, the Board approved a first quarter dividend increase of 17.9%.
At the same time, we remain tactical in our approach to share repurchase, buying back $1.5 billion of our shares in 2020.
I'll then provide an update on key initiatives in Japan and the US, Japan has experienced approximately 400,000 COVID-19 cases and 6,000 confirmed since inception of the virus.
Earlier this week, the government of Japan extended their state of emergency for Tokyo and 9 other prefectures through March 7.
Through the fourth quarter, Aflac Japan's COVID-19 impact totaled approximately 3400 unique claimants with incurred claims totaling JPY1 billion.
Finally, pandemic related expenses in the quarter totaled JPY1.8 billion which includes the rollout of virtual distribution tools, employee teller working equipment and distribution support.
Turning to the US, there are nearly 27 million COVID-19 cases and 450,000 deaths as reported by the CDC.
For Aflac US in 2020, COVID-19 claimants totaled 23,000 with incurred claims of approximately 71 million in the quarter and $128 million for all of 2020.
Executive orders are still in place in 11 states as of the end of the quarter with 5 states having open-ended expiration dates.
Excluding traditional non-face-to-face means of distributing products like worksite, direct mail and call center sales, we estimate only 2% to 3% of our sales are currently digital end-to-end.
This is a JPY10 billion investment with approximately JPY2.8 billion spent in the fourth quarter and JPY4.8 billion spent in 2020.
We are projecting another JPY4.3 billion spend planned for 2021.
This investment has a 3-year payback and will reduce the production and circulation of over 80 million pieces of paper per year.
On the operation side, we rolled out a new and upgraded enrollment platform called Everwell 2.0 in September, which requires time for full adoption and stabilizing the platform.
We estimate about 15% of our traditional individual sales are completed without some form of face-to-face interaction.
Our dental and vision products are now available in 40 states with more coming online throughout the year.
In November, we closed on our Zurich Group Benefits acquisition, the new platform managed to contribute to sales in the quarter with 5 million in production.
We offered critical illness, accident and cancer and are approved to sell all 3 products in approximately 30 states with more states and products coming online throughout the year.
As highlighted during our investor conference, we are addressing expenses over 2 horizons.
In 2020, we took actions to realize approximately $100 million of annualized run rate expense savings on a go-forward basis.
Actions included restricting hiring, rationalizing distribution expenses and a voluntary separation plan that resulted in a 9% reduction to our US workforce.
The build efforts taken together impacted our expense ratio in the fourth quarter by 160 basis points and is expected to impact the 2021 ratio by approximately 180 basis points.
We pledged to continue hitting key milestones on our important women and leadership initiative as part of a diversity and inclusion in Japan and targeting 30% of leadership positions in Japan filled by women by 2025.
Wrapping up my comments, we believe the investments made in the past 2 years and accelerated during the pandemic, positioned us for future growth and efficiency in the face of what we believe to be temporary weakness in sales and earned premium.
For the quarter, adjusted earnings per share increased 3.9% to $1.7 and a full year earnings per share was a record $4.96, up 11.7% year-over-year.
Adjusted book value per share including foreign currency translation gains and losses to 19.1% both for the quarter and full year.
The adjusted ROE excluding the foreign currency impact was 12.1% in the fourth quarter and a respectable 15.1% for the full year, a material spread to our cost of capital.
This quarter benefited from favorable marks on our alternate investment portfolio to the amount of $47 million pre-tax above our long-term return expectations, a very good outcome on our building alternatives portfolio.
In our US and corporate segments, totaling pre-tax $43 million included in adjusted earnings.
Turning to our Japan segment, total earned premium for the quarter declined 3.5%, reflecting mainly first sector policies paid-up impacts.
While earned premium for our third sector products was down 1.9%.
For the full year, total earned premium was down 2.8% while totally policies in force declined by a lesser rate at 1.2%.
Persistency has been on our positive trajectory ___[08:08]___ slightly sequentially to 95.1%, up 70 basis points year-over-year.
Japan's total benefit ratio came in at 68.9% for the quarter, down 110 basis points year-over-year.
And the third sector benefit ratio was 58.6% down 150 basis points year-over-year.
We estimate that this lower the benefit ratio by roughly 130 basis points compared to what we would deem a normal IBNR release to be.
For the full year, the reported total benefit ratio was 69.9%, up 40 basis points year-over-year.
And our third sector benefit ratio was 59.7%, also up 40 basis points year-over-year, largely due to improved persistency.
The expense ratio in Japan was 23%, up 130 basis points year-over-year.
This investment increased our quarterly expense ratio by 85 basis points.
For the quarter, adjusted net investment income increased 11.9% in Yen terms, led by strong returns in our alternatives portfolio, but also strong results from the loan book, like real estate and middle market loans.
For the full year, adjusted net investment income was 4.4%.
The pre-tax margin in the quarter was 20.9%, up 110 basis points year-over-year.
For the full year, the pre-tax margin was a respectable 21.2%.
Turning to US results, the earned premium was down 2.3% for the quarter due to weaker sales results.
Persistency improved 160 basis points to 79.3%.
For the full year, earned premium was down 0.9%.
Our total benefit ratio came in at 51.6%, which was 250 basis points higher than Q4 2019.
Due to the recent increase in infection rates, we estimate incurred claims impact of $72 million of which 58 million was an increase to IBNR, resulting in an impact to the benefit ratio of 5.1 percentage points from COVID-related claims.
This is somewhat offset by favorable non-COVID related claims activity generating an underlying benefit ratio of 46.5%.
We would expect this pattern to continue in early 2021.
Going forward, we still expect the guided range of fab of 48% to 51% to be a reasonable future benefits ratio.
Our expense ratio in the US was 43.5%, up 60 basis points year-over-year.
The severance charge for our VSP explains 220 basis points of the rise.
While the residual is primarily driven by digital investments and the reduction in revenues, the full year expense ratio landed at 38.6%.
Adjusted net investment income in the US was up 1.1% due to strong alternative investment income, while the portfolio book yield contracted 22 basis points year-over-year.
Full year adjusted net investment income declined 2.1%.
As both the benefit and expense ratio rose, profitability did come under pressure with a pre-tax margin of 11.6% in the quarter.
For the full year, we still reported a solid pre-tax margin of 19.3% in line with recent historical average.
In our corporate segment, the pre-tax loss widened to $47 million in the quarter compared to 9 million from a year ago.
Lower net investment income on our short duration hold Holdco cash position, increased retirement expenses and $8 million of DSP severance expense were the main components of the delta.
For the full year, the Corporate segment pre-tax loss was $115 million.
We ended the quarter with an SMR of north of 9% in Japan.
And an RBC of approximately 525% in Aflac Columbus.
Holding company liquidity stood at $4 billion, $2 billion above our minimum balance.
With a leverage of 23%, we continued to travel in the middle of our stated leverage range of 20% to 25% offering ample debt capacity.
In the quarter, we repurchased $500 million of our own stock and paid dividends of $196 million offering good relative IRR on these capital deployments.
For the full year, we paid $798 million of dividends and return an additional $1.5 billion to shareholders in the form of share repurchases.
A recent example is the Board's decision to increase the quarterly dividend by 17.9% to $0.33 per share.

Related to capital deployment, we placed significant importance on continuing to achieve strong capital ratios in the United States in Japan on behalf of our policyholders and shareholders.
Turning to our Japan segment, total earned premium for the quarter declined 3.5%, reflecting mainly first sector policies paid-up impacts.
We would expect this pattern to continue in early 2021.
A recent example is the Board's decision to increase the quarterly dividend by 17.9% to $0.33 per share.