benefited from lower SG&A in connection with the fiscal 2017 closure of an unprofitable European manufacturing facility. During the current quarter, recent acquisitions increased SG&A expense in this segment by approximately $0.7 million.
SG&A expenses in our corporate/other category of $19.5 million during the first quarter of fiscal 2018 decreased by $4.6 million from $24.1 million recorded during last year’s first quarter, resulting primarily from lower compensation and pension expense, as well as lower legal and acquisition-related professional fees.
We recorded total net periodic pension and postretirement benefit costs of $10.8 million and $14.7 million for the first quarter of fiscal 2018 and 2017, respectively. The $3.9 million decrease in pension expense resulted from a $2.0 million decline in net actuarial losses recognized during the current quarter versus last year’s first quarter, principally from a change in estimate for lump sum valuations, which were updated to incorporate future expectations of interest rates. There was also a higher expected return on increased plan assets during the current quarter versus the same period last year for approximately $1.9 million. We expect that pension expense will fluctuate on a year-to-year basis, depending upon the investment performance of plan assets and potential changes in interest rates, but such changes are not expected to be material to our consolidated financial results.
Interest Expense Interest expense was $26.8 million for the first quarter of fiscal 2018 versus $22.8 million for the same period a year ago. Higher average borrowings, related to recent acquisitions, increased interest expense during this year’s first quarter by approximately $1.1 million versus the same period a year ago. Excluding acquisition-related borrowings, higher average borrowings year-over-year increased interest expense by approximately $0.6 million. Lastly, higher interest rates, which averaged 4.31% overall for the first quarter of fiscal 2018 compared with 4.21% for the same period of fiscal 2017, increased interest expense by approximately $2.3 million during the current quarter versus the same period last year.
Investment (Income), Net Net investment income of approximately $4.5 million for the first quarter of fiscal 2018 compares to net investment income of $3.8 million during the same period last year. Dividend and interest income totaled $1.6 million and $1.4 million for the first quarter of fiscal 2018 and 2017, respectively. Net realized gains on the sales of investments totaled $2.9 million during the first quarter of fiscal 2018, while those gains were $2.6 million during the same period a year ago. Impairments recognized on securities that management has determined are other-than-temporary declines in value approximated $0.2 million during the first quarter of fiscal 2017, while such losses were not significant for the first quarter of the current fiscal year.
Income Before Income Taxes (“IBT”) Our consolidated pretax income for the first quarter of fiscal 2018 of $155.3 million compares with pretax income of $148.5 million for the same period a year ago.
Our industrial segment had IBT of $88.9 million, or 12.2% of net sales, for the quarter ended August 31, 2017, versus IBT of $89.3 million, or 13.2% of net sales, for the same period a year ago. Our industrial segment results reflect the impact of 8.0% growth in organic sales during the current quarter, offset primarily by the impact from higher raw material costs, distribution expense and disappointing results in Latin America. Our consumer segment IBT approximated $72.4 million, or 16.9% of net sales, for the first quarter of fiscal 2018, versus the prior year first quarter IBT of $70.1 million, or 17.5% of net sales. This improvement in consumer segment IBT resulted from overall tighter controls over spending during the current quarter. Our specialty segment had pretax income of $33.2 million, or 17.6% of net sales for the quarter ended August 31, 2017, versus pretax income of $30.5 million, or 17.3% of net sales, for the same period a year ago, reflecting leverage on 6.9% growth in net sales during the quarter, combined with the benefit from the closure of an unprofitable European manufacturing facility and severance actions taken during fiscal 2017. As previously reported, an edible coatings patent expired in the U.S. during the month of August 2017, and as a result, we anticipate the impact of the patent expiration on fiscal 2018 IBT to approximate at least $10.0 million.
Income Tax Rate The effective income tax rate was 24.7% for the three months ended August 31, 2017 compared to an effective income tax rate of 23.6% for the three months ended August 31, 2016. The increase in the current quarter effective income tax rate as compared to the prior quarter rate is primarily due to unfavorable variances in the jurisdictional mix of foreign earnings and an increase in the forecasted impact of foreign net operating losses that may be subject to a valuation allowance.
We recorded favorable discrete tax adjustments for excess tax benefits related to equity compensation of $1.5 million and $10.4 million, respectively, for the three month periods ended August 31, 2017 and 2016. Additionally, we recorded a net $9.0 million favorable discrete tax item in the current quarter for the combined impact of a foreign inter-company dividend deemed taxable in the U.S. and a corresponding reduction to the deferred tax liability recorded for our estimate of the U.S. tax cost associated with unremitted foreign earnings that may be repatriated in the foreseeable future.
RPM International Inc. (NYSE: RPM) owns subsidiaries that are world leaders in coatings, sealants, building materials and related services. From homes to precious landmarks worldwide, their brands are trusted by consumers and professionals alike to protect, improve and beautify. Among its leading consumer brands are Rust-Oleum, DAP and Zinsser. Learn more about RPM brands >>
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