Jim has been our Corporate Controller since 2009 and was recently announced as my successor.
I've worked with him for more than 10 years and look forward to Jim further enhancing our business strategies and results in his new role.
We had a very strong first[Phonetic] quarter and delivered record sales of $2.6 billion, an increase of 9% as reported, with adjusted operating earnings and earnings per share of $305 million and $3.54.
Our free cash flow for the fourth quarter was about $248 million after capital investments of $160 million.
For the year, we generated a record cash flow of more than $1.3 billion.
Through the fourth quarter, we achieved about $50 million of the projected $100 million to $110 million in anticipated savings from our restructuring initiatives.
Since the third quarter, we've acquired approximately 1 million shares of our stock for $130 million as part of our share repurchase plan.
Sales exceeded $2.6 billion for the quarter, a 9% increase as reported or 5.5% on a constant basis, with our Flooring Rest of World segment outperforming.
Across most of our businesses, Q1 has three additional days or approximately 5% more, and Q4 has four fewer days or approximately 6% less compared to prior year.
Gross margin was 27.9% as reported or 28.8% excluding charges, increasing 120 basis points from 27.6% in the prior year.
The year-over-year increase was driven primarily by higher volume of $51 million, productivity of $50 million, and lower inflation of $21 million, partially offset by price/mix of $30 million.
SG&A as reported was 17.2% or 17.3% versus 19.1% in the prior year, both excluding charges.
The lower SG&A percent was driven by improved leverage on increased volume and stronger productivity of $21 million.
Operating income as reported was 10.7%.
Restructuring charges for the quarter were $22 million and our restructuring initiatives are on track with year-to-date savings accounting for approximately $50 million of our announced $100 million to $110 million plan.
Operating margin, excluding charges, $305 million or 11.6%, improving from 8.4% last year or 320 basis points.
This increase was driven by productivity of $71 million, stronger volume of $42 million, and reduced inflation of $12 million, partially offset by the previously noted unfavorable price/mix of $30 million.
Interest expense of $16 million, including the impact of our new 2020 bond offerings, and we expect Q1 to be approximately $16 million to $16.5 million.
Other income of $7 million driven by favorable transactional FX and short-term investment returns.
Our Q4 non-tax -- non-GAAP tax rate at 14.8% versus 18.9% in the prior year, benefiting in part from the U.S. CARES Act.
We expect Q1 2021 to be approximately 21%.
Earnings per share as reported of $3.49 or excluding charges of $3.54, growing 57% year-over-year.
Global Ceramic had sales of $920 million, a 7% increase as reported with the business up 6% on a constant basis, with growth across all geographies, the largest increase being in Brazil and Russia.
Operating income, excluding charges, of $88 million, a 9.5% return.
That's up 65% or 330 basis points versus prior year.
The increase was from productivity of $28 million, volume of $16 million, and lower shutdown expense of $4 million, partially offset by unfavorable price/mix of $12 million and unfavorable FX of $4 million.
Flooring North American sales of $963 million or 3% increase as reported were flat on a constant basis, led by strength in our residential-focused products, offset by the weakness in the commercial channel.
Operating income, excluding charges, of $91 million or 9.5%.
That's an increase of 27% or 180 basis points compared to prior year.
This increase was driven by higher productivity of $26 million, lower inflation of $7 million, and increased volume of $3 million, partially offset by price/mix of $18 million.
And Flooring Rest of the World with sales of $759 million, a 20% increase as reported or 13% on a constant basis, driven by our resilient, laminate and panels businesses in Europe and our carpet business in Australia and New Zealand.
Operating income, excluding charges, of $138 million or 18.2%, up 420 basis points or 57% versus prior year.
The main drivers were the higher volume of $23 million, improved productivity of $16 million, and lower inflation of $8 million, partially offset by unfavorable FX of approximately $4 million.
Corporate and eliminations came in at $12 million and you would expect 2021 to be approximately $40 million.
Cash and short-term investments increased over $1.3 billion, driven by the Q4 free cash flow of $248 million, bringing the full-year 2020 -- full-year cash flow -- free cash flow to approximately $1.3 billion.
Receivables were just over $1.7 billion with DSO improving to 59 days versus the prior year 62 days.
Inventories just over $1.9 billion, dropped almost $400 million or 16% from prior year with a marginal sequential increase of approximately $30 million adjusting for FX from Q3.
Inventory days are at 103 days versus 134 days in the prior year.
Property, plant and equipment just under $4.6 billion with capex of $116 million for the quarter, in line with our D&A.
And full-year capex was $426 million with D&A of just over $600 million.
We estimate that 2021 annual capex to be in line with our D&A of approximately $590 million.
And lastly, the balance sheet and cash flow remained very strong with gross debt of just over $2.7 billion, total cash and short-term investments, as previously noted, over $1.3 billion, leading us to a leverage of 1 time adjusted EBITDA.
Sales for our Flooring Rest of World segment increased 20% in the period as reported or 13% on a constant basis, significantly exceeding our forecast.
Margins expanded over last year to 17.5% as reported or 18.2% excluding restructuring charges, due to higher volume and positive leverage on SG&A and operations, partially offset by currency headwinds.
For the quarter, our Global Ceramic segment sales rose 7% as reported with improved results across the world, led by growth in the residential channel from heightened remodeling and home sales.
Operating margins for the segment expanded to 8.7% as reported or 9.5% excluding restructuring costs, due to higher volume and improved productivity somewhat reduced by commercial product mix and currency.
Our customers have opened 30 exclusive Dal-Tile stores in the country, which will enhance our sales and strengthen our brand.
For the period, our Flooring North America sales increased 3% as reported, and our adjusted margins expanded 8.6% as reported or 9.5% excluding restructuring costs.
Assuming current conditions continue, we anticipate our first quarter adjusted earnings per share to be between $2.69 and $2.79, excluding restructuring charges.

Summary:
We had a very strong first[Phonetic] quarter and delivered record sales of $2.6 billion, an increase of 9% as reported, with adjusted operating earnings and earnings per share of $305 million and $3.54.
Sales exceeded $2.6 billion for the quarter, a 9% increase as reported or 5.5% on a constant basis, with our Flooring Rest of World segment outperforming.
Earnings per share as reported of $3.49 or excluding charges of $3.54, growing 57% year-over-year.
Assuming current conditions continue, we anticipate our first quarter adjusted earnings per share to be between $2.69 and $2.79, excluding restructuring charges.