EX-99.1 2 ef20052538_ex99-1.htm EXHIBIT 99.1
Exhibit 99.1

Contact:
David Plautz
(414) 347-3706
investor.relations@sensient.com

Sensient Technologies Corporation
Reports Results for the Quarter Ended June 30, 2025

MILWAUKEE— July 25, 2025 Sensient Technologies Corporation (NYSE: SXT), a leading provider of flavors and colors for the food, pharmaceutical, and personal care markets, today reported financial results for the second quarter ended June 30, 2025.

Second Quarter Consolidated Results


Reported revenue increased 2.7% to $414.2 million in the second quarter of 2025 versus last year’s second quarter results of $403.5 million. On a local currency basis(1), revenue increased 2.1%.

Reported operating income increased 16.2% to $57.7 million compared to $49.7 million recorded in the second quarter of 2024. In the second quarter of 2025, the Company recorded $3.3 million of costs related to its Portfolio Optimization Plan versus last year’s $1.8 million in the second quarter. Local currency adjusted operating income(1) and local currency adjusted EBITDA(1) increased 16.9% and 14.1%, respectively, in the second quarter.

Reported earnings per share increased 20.5% to 88 cents in the second quarter of 2025 compared to 73 cents in the second quarter of 2024. Local currency adjusted diluted EPS(1) increased 20.8% in the second quarter.

 “Sensient continued to build on a strong first quarter. Our results are a testament to our relentless focus on customer service and innovation.  I remain very confident about our performance in 2025 and beyond,” said Paul Manning, Sensient’s Chairman, President, and Chief Executive Officer.

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Sensient Technologies Corporation
Page 2
Earnings Release – Quarter Ended June 30, 2025
July 25, 2025
 
Second Quarter Group Results

   
Reported
   
Local Currency(1)
 
Revenue
 
Quarter
   
Year-to-Date
   
Quarter
   
Year-to-Date
 
Flavors & Extracts
   
-2.8
%
   
-1.3
%
   
-3.2
%
   
-0.9
%
Color
   
6.9
%
   
5.9
%
   
6.6
%
   
7.4
%
Asia Pacific
   
10.8
%
   
7.3
%
   
7.6
%
   
6.2
%
Total Revenue
   
2.7
%
   
2.3
%
   
2.1
%
   
3.1
%

   
Reported
   
Local Currency Adjusted(1)
 
Operating Income
 
Quarter
   
Year-to-Date
   
Quarter
   
Year-to-Date
 
Flavors & Extracts
   
8.8
%
   
7.2
%
   
8.6
%
   
7.5
%
Color
   
23.6
%
   
16.8
%
   
22.1
%
   
17.8
%
Asia Pacific
   
13.5
%
   
10.4
%
   
8.0
%
   
7.5
%
Total Operating Income
   
16.2
%
   
12.3
%
   
16.9
%
   
13.6
%
                                 

The Flavors & Extracts Group reported second quarter 2025 revenue of $203.3 million, a decrease of $6.0 million versus the prior year’s second quarter. The Group’s revenue was unfavorably impacted by lower volumes in natural ingredients, partially offset by higher volumes in our flavors, extracts, and flavor ingredients product lines. Segment operating income was $28.5 million in the second quarter of 2025, an increase of $2.3 million compared to the prior year’s second quarter. The segment operating income increased despite the decline in segment revenues due to strong profitability of the flavors, extracts, and flavor ingredients product lines.

The Color Group reported revenue of $179.3 million in the second quarter of 2025, an increase of $11.6 million compared to the prior year’s second quarter. The Group’s revenue increase was driven by strong growth in the food and pharmaceutical product lines. Segment operating income was $38.9 million in the second quarter of 2025, an increase of $7.4 million compared to the prior year’s second quarter results.

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Sensient Technologies Corporation
Page 3
Earnings Release – Quarter Ended June 30, 2025
July 25, 2025
 
The Asia Pacific Group reported revenue of $42.7 million in the second quarter of 2025, an increase of $4.2 million compared to the prior year’s second quarter. The Group’s revenue increased across nearly all geographies. Segment operating income was $8.9 million in the quarter, an increase of $1.1 million compared to the prior year’s second quarter.

Corporate & Other reported operating expenses of $18.7 million in the second quarter of 2025, compared to $15.9 million of operating expenses reported in the prior year’s second quarter. The higher operating expenses were primarily due to higher Portfolio Optimization Plan costs in the quarter. Local currency adjusted operating expenses(1) for Corporate & Other increased $1.1 million compared to the prior year’s second quarter, primarily due to higher performance-based compensation costs recorded in 2025.

2025 OUTLOOK

         
Metric
 
Current Guidance
 
Prior Guidance
         
Local Currency Revenue(1)
 
Mid-Single-Digit Growth
 
Mid-Single-Digit Growth
         
Local Currency Adjusted EBITDA(1)
 
High Single-Digit Growth
 
Mid-Single-Digit to High Single-Digit Growth
         
Diluted EPS (GAAP)
 
Between $3.13 and $3.23*
 
Between $3.13 and $3.23
         
Local Currency Adjusted Diluted EPS(1)
 
High Single-Digit to Double-Digit Growth
 
High Single-Digit to Double-Digit Growth
         

*Includes approximately 20 cents of Portfolio Optimization Plan costs. Based on current exchange rates, foreign currency impact is expected to be a slight tailwind for the year.


The Company’s guidance is based on current conditions and economic and market trends in the markets in which the Company operates and is subject to various risks and uncertainties as described below. 

  (1)
Please refer to “Reconciliation of Non-GAAP Amounts” at the end of this release for more information regarding our non-GAAP financial measures.

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Sensient Technologies Corporation
Page 4
Earnings Release – Quarter Ended June 30, 2025
July 25, 2025
 
USE OF NON-GAAP FINANCIAL MEASURES

The Company’s non-GAAP financial measures eliminate the impact of certain items, which, depending on the measure, include: currency movements, depreciation and amortization, Portfolio Optimization Plan costs, and non-cash share-based compensation. These measures are provided to enhance the overall understanding of the Company’s performance when viewed together with the GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” at the end of this release.

CONFERENCE CALL

The Company will host a conference call to discuss its 2025 second quarter financial results at 8:30 a.m. CDT on Friday, July 25, 2025. To participate in the conference call, contact Chorus Call Inc. at (844) 492-3726 or (412) 317-1078, and ask to join the Sensient Technologies Corporation conference call. Alternatively, the call can be accessed by using the webcast link that is available on the Investor Information section of the Company’s web site at www.sensient.com.

A replay of the call will be available one hour after the end of the conference call through August 1, 2025, by calling (877) 344-7529 and using access code 2167989. An audio replay and written transcript of the call will also be posted on the Investor Information section of the Company’s web site at www.sensient.com on or after July 29, 2025.

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Sensient Technologies Corporation
Page 5
Earnings Release – Quarter Ended June 30, 2025
July 25, 2025
 
This release contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including in the quote from our Chairman, President, and Chief Executive Office and under “2025 Outlook” above. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors concerning the Company’s operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following: the Company’s ability to manage general business, economic, and capital market conditions, including actions taken by customers in response to such market conditions, and the impact of recessions and economic downturns; the impact of macroeconomic and geopolitical volatility, including inflation and shortages impacting the availability and cost of raw materials, energy, and other supplies, disruptions and delays in the Company’s supply chain, and the conflicts between Russia and Ukraine and in the Middle East; industry, regulatory, legal, and economic factors related to the Company’s domestic and international business; the effects of tariffs, trade barriers, and disputes; the availability and cost of labor, logistics, and transportation; the pace and nature of new product introductions by the Company and the Company’s customers; the Company’s ability to anticipate and respond to changing consumer preferences, changing technologies, and changing regulations; the Company’s ability to successfully implement its growth strategies; the outcome of the Company’s various productivity-improvement and cost-reduction efforts, acquisition and divestiture activities, and Portfolio Optimization Plan; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors; the Company’s ability to enhance its innovation efforts and drive cost efficiencies; currency exchange rate fluctuations; and other factors included in “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and in other documents that the Company files with the SEC. The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition, and results of operations. This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. Except to the extent required by applicable laws, the Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.

ABOUT SENSIENT TECHNOLOGIES

Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients.  Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, and personal care industries. Sensient’s customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world’s best-known brands.  Sensient is headquartered in Milwaukee, Wisconsin.
www.sensient.com

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Sensient Technologies Corporation
Page 6
(In thousands, except percentages and per share amounts)
(Unaudited)
 
Consolidated Statements of Earnings
 
Three Months Ended June 30,
   
Six Months Ended June 30,
 
                                     
   
2025
   
2024
   
% Change
   
2025
   
2024
   
% Change
 
                                     
Revenue
 
$
414,230
   
$
403,525
   
2.7
%
 
$
806,555
   
$
788,195
   
2.3
%
                                             
Cost of products sold
   
271,398
     
272,803
   
(0.5
%)
   
531,946
     
530,924
   
0.2
%
Selling and administrative expenses
   
85,126
     
81,065
   
5.0
%
   
163,373
     
158,208
   
3.3
%
                                             
Operating income
   
57,706
     
49,657
   
16.2
%
   
111,236
     
99,063
   
12.3
%
Interest expense
   
7,391
     
7,653
           
14,732
     
14,698
       
                                             
Earnings before income taxes
   
50,315
     
42,004
           
96,504
     
84,365
       
Income taxes
   
12,728
     
11,072
           
24,455
     
22,493
       
                                             
Net earnings
 
$
37,587
   
$
30,932
   
21.5
%
 
$
72,049
   
$
61,872
   
16.4
%
                                             
Earnings per share of common stock:
                                           
Basic
 
$
0.89
   
$
0.73
         
$
1.71
   
$
1.47
       
 
                                           
Diluted
 
$
0.88
   
$
0.73
         
$
1.69
   
$
1.46
       
                                             
Average common shares outstanding:
                                           
Basic
   
42,246
     
42,154
           
42,221
     
42,129
       
 
                                           
Diluted
   
42,575
     
42,398
           
42,522
     
42,351
       

Results by Segment
 
Three Months Ended June 30,
   
Six Months Ended June 30,
 
                                     
Revenue
 
2025
   
2024
   
% Change
   
2025
   
2024
   
% Change
 
                                     
Flavors & Extracts
 
$
203,251
   
$
209,213
   
(2.8
%)
 
$
396,932
   
$
402,305
   
(1.3
%)
Color
   
179,282
     
167,700
   
6.9
%
   
347,032
     
327,725
   
5.9
%
Asia Pacific
   
42,744
     
38,580
   
10.8
%
   
84,645
     
78,886
   
7.3
%
Intersegment elimination
   
(11,047
)
   
(11,968
)
         
(22,054
)
   
(20,721
)
     
                                             
Consolidated
 
$
414,230
   
$
403,525
   
2.7
%
 
$
806,555
   
$
788,195
   
2.3
%
                                             
Operating Income
                                           
                                             
Flavors & Extracts
 
$
28,506
   
$
26,209
   
8.8
%
 
$
53,495
   
$
49,887
   
7.2
%
Color
   
38,922
     
31,502
   
23.6
%
   
73,774
     
63,181
   
16.8
%
Asia Pacific
   
8,943
     
7,880
   
13.5
%
   
18,385
     
16,656
   
10.4
%
Corporate & Other
   
(18,665
)
   
(15,934
)
         
(34,418
)
   
(30,661
)
     
                                             
Consolidated
 
$
57,706
   
$
49,657
   
16.2
%
 
$
111,236
   
$
99,063
   
12.3
%

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Sensient Technologies Corporation
Page 7
(In thousands)
(Unaudited)
 
Consolidated Condensed Balance Sheets
 
June 30,
2025
   
December 31,
2024
 
             
Cash and cash equivalents
 
$
56,686
   
$
26,626
 
Trade accounts receivable
   
333,951
     
290,087
 
Inventories
   
619,595
     
600,302
 
Prepaid expenses and other current assets
   
54,221
     
44,871
 
Fixed assets held for sale
   
1,629
     
-
 
Total Current Assets
   
1,066,082
     
961,886
 
                 
Goodwill & intangible assets (net)
   
451,942
     
423,658
 
Property, plant, and equipment (net)
   
515,469
     
491,587
 
Other assets
   
171,068
     
146,663
 
                 
Total Assets
 
$
2,204,561
   
$
2,023,794
 
                 
Trade accounts payable
 
$
121,442
   
$
139,052
 
Short-term borrowings
   
26,280
     
19,848
 
Other current liabilities
   
103,402
     
111,739
 
Total Current Liabilities
   
251,124
     
270,639
 
                 
Long-term debt
   
710,119
     
613,523
 
Accrued employee and retiree benefits
   
26,865
     
24,499
 
Other liabilities
   
59,332
     
54,147
 
Shareholders' Equity
   
1,157,121
     
1,060,986
 
                 
Total Liabilities and Shareholders' Equity
 
$
2,204,561
   
$
2,023,794
 

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Sensient Technologies Corporation
Page 8
(In thousands, except per share amounts)
(Unaudited)
 
Consolidated Statements of Cash Flows
Six Months Ended June 30,
 
2025
   
2024
 
Cash flows from operating activities:
           
Net earnings
 
$
72,049
   
$
61,872
 
Adjustments to arrive at net cash provided by operating activities:
               
Depreciation and amortization
   
30,334
     
29,725
 
Share-based compensation expense
   
6,639
     
4,911
 
Net loss (gain) on assets
   
76
     
(195
)
Portfolio Optimization Plan costs
   
1,274
     
1,495
 
Deferred income taxes
   
2,711
     
529
 
Changes in operating assets and liabilities:
               
Trade accounts receivable
   
(30,293
)
   
(49,449
)
Inventories
   
(548
)
   
36,730
 
Prepaid expenses and other assets
   
(11,028
)
   
(6,612
)
Trade accounts payable and other accrued expenses
   
(17,578
)
   
(22,722
)
Accrued salaries, wages, and withholdings
   
(15,129
)
   
7,824
 
Income taxes
   
(937
)
   
(6,591
)
Other liabilities
   
1,734
     
1,429
 
                 
Net cash provided by operating activities
   
39,304
     
58,946
 
                 
Cash flows from investing activities:
               
Acquisition of property, plant, and equipment
   
(38,035
)
   
(22,850
)
Proceeds from sale of assets
   
56
     
296
 
Acquisition of new business
   
(4,867
)
   
-
 
Other investing activities
   
1,354
     
(336
)
                 
Net cash used in investing activities
   
(41,492
)
   
(22,890
)
                 
Cash flows from financing activities:
               
Proceeds from additional borrowings
   
106,484
     
132,189
 
Debt payments
   
(43,148
)
   
(120,571
)
Dividends paid
   
(34,700
)
   
(34,685
)
Other financing activities
   
(2,648
)
   
(3,016
)
                 
Net cash provided by (used in) financing activities
   
25,988
     
(26,083
)
                 
Effect of exchange rate changes on cash and cash equivalents
   
6,260
     
(8,568
)
                 
Net increase in cash and cash equivalents
   
30,060
     
1,405
 
Cash and cash equivalents at beginning of period
   
26,626
     
28,934
 
Cash and cash equivalents at end of period
 
$
56,686
   
$
30,339
 

Supplemental Information
Six Months Ended June 30,
 
2025
   
2024
 
             
Dividends paid per share
 
$
0.82
   
$
0.82
 

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Sensient Technologies Corporation Page 9
(In thousands, except percentages and per share amounts)  
(Unaudited)
 
Reconciliation of Non-GAAP Amounts

The Company's results for the three and six months ended June 30, 2025 and 2024 include adjusted operating income, adjusted net earnings, and adjusted diluted earnings per share, which, in each case, exclude Portfolio Optimization Plan costs.

   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2025
   
2024
   
% Change
   
2025
   
2024
   
% Change
 
Operating income (GAAP)
 
$
57,706
   
$
49,657
     
16.2
%
 
$
111,236
   
$
99,063
     
12.3
%
Portfolio Optimization Plan costs  – Cost of products sold
   
1,789
     
207
             
3,603
     
314
         
Portfolio Optimization Plan costs – Selling and administrative
                                               
expenses
   
1,550
     
1,545
             
2,600
     
4,250
         
Adjusted operating income
 
$
61,045
   
$
51,409
     
18.7
%
 
$
117,439
   
$
103,627
     
13.3
%
                                                 
Net earnings (GAAP)
 
$
37,587
   
$
30,932
     
21.5
%
 
$
72,049
   
$
61,872
     
16.4
%
Portfolio Optimization Plan costs, before tax
   
3,339
     
1,752
             
6,203
     
4,564
         
Tax impact of Portfolio Optimization Plan costs(1)
   
(815
)
   
(214
)
           
(1,517
)
   
(569
)
       
Adjusted net earnings
 
$
40,111
   
$
32,470
     
23.5
%
 
$
76,735
   
$
65,867
     
16.5
%
                                                 
Diluted earnings per share (GAAP)
 
$
0.88
   
$
0.73
     
20.5
%
 
$
1.69
   
$
1.46
     
15.8
%
Portfolio Optimization Plan costs, net of tax
   
0.06
     
0.04
             
0.11
     
0.09
         
Adjusted diluted earnings per share
 
$
0.94
   
$
0.77
     
22.1
%
 
$
1.80
   
$
1.56
     
15.4
%

Note: Earnings per share calculations may not foot due to rounding differences.

(1) Tax impact adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates.

Results by Segment
 
Three Months Ended June 30,
 
Operating Income
 
2025
   
Adjustments(2)
   
Adjusted
2025
   
2024
   
Adjustments(2)
   
Adjusted
2024
 
                                     
Flavors & Extracts
 
$
28,506
   
$
-
   
$
28,506
   
$
26,209
   
$
-
   
$
26,209
 
Color
   
38,922
     
-
     
38,922
     
31,502
     
-
     
31,502
 
Asia Pacific
   
8,943
     
-
     
8,943
     
7,880
     
-
     
7,880
 
Corporate & Other
   
(18,665
)
   
3,339
     
(15,326
)
   
(15,934
)
   
1,752
     
(14,182
)
                                                 
Consolidated
 
$
57,706
   
$
3,339
   
$
61,045
   
$
49,657
   
$
1,752
   
$
51,409
 

Results by Segment
 
Six Months Ended June 30,
 
                   
Adjusted
                   
Adjusted
 
Operating Income
   
2025
   
Adjustments(2)
     
2025
     
2024
   
Adjustments(2)
     
2024
 
                                                 
Flavors & Extracts
 
$
53,495
   
$
-
   
$
53,495
   
$
49,887
   
$
-
   
$
49,887
 
Color
   
73,774
     
-
     
73,774
     
63,181
     
-
     
63,181
 
Asia Pacific
   
18,385
     
-
     
18,385
     
16,656
     
-
     
16,656
 
Corporate & Other
   
(34,418
)
   
6,203
     
(28,215
)
   
(30,661
)
   
4,564
     
(26,097
)
                                                 
Consolidated
 
$
111,236
   
$
6,203
   
$
117,439
   
$
99,063
   
$
4,564
   
$
103,627
 

(2) Adjustments consist of Portfolio Optimization Plan costs. 

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Sensient Technologies Corporation
Page 10
(Unaudited)
 
Reconciliation of Non-GAAP Amounts - Continued            
The following table summarizes the percentage change in the 2025 results compared to the 2024 results for the corresponding periods.

   
Three Months Ended June 30, 2025
 
Revenue
 
Total
   
Foreign
Exchange
Rates
   
Adjustments(3)
   
Local
Currency
Adjusted
 
Flavors & Extracts
   
(2.8
%)
   
0.4
%
   
N/A
     
(3.2
%)
Color
   
6.9
%
   
0.3
%
   
N/A
     
6.6
%
Asia Pacific
   
10.8
%
   
3.2
%
   
N/A
     
7.6
%
Total Revenue
   
2.7
%
   
0.6
%
   
N/A
     
2.1
%
 
                               
Operating Income
                               
Flavors & Extracts
   
8.8
%
   
0.2
%
   
0.0
%
   
8.6
%
Color
   
23.6
%
   
1.5
%
   
0.0
%
   
22.1
%
Asia Pacific
   
13.5
%
   
5.5
%
   
0.0
%
   
8.0
%
Corporate & Other
   
17.1
%
   
0.0
%
   
9.0
%
   
8.1
%
Total Operating Income
   
16.2
%
   
1.9
%
   
(2.6
%)
   
16.9
%
Diluted Earnings Per Share
   
20.5
%
   
1.3
%
   
(1.6
%)
   
20.8
%
Adjusted EBITDA
   
15.4
%
   
1.3
%
   
N/A
     
14.1
%

   
Six Months Ended June 30, 2025
 
Revenue
 
Total
   
Foreign
Exchange
Rates
   
Adjustments(3)
   
Local
Currency
Adjusted
 
Flavors & Extracts
   
(1.3
%)
   
(0.4
%)
   
N/A
     
(0.9
%)
Color
   
5.9
%
   
(1.5
%)
   
N/A
     
7.4
%
Asia Pacific
   
7.3
%
   
1.1
%
   
N/A
     
6.2
%
Total Revenue
   
2.3
%
   
(0.8
%)
   
N/A
     
3.1
%
 
                               
Operating Income
                               
Flavors & Extracts
   
7.2
%
   
(0.3
%)
   
0.0
%
   
7.5
%
Color
   
16.8
%
   
(1.0
%)
   
0.0
%
   
17.8
%
Asia Pacific
   
10.4
%
   
2.9
%
   
0.0
%
   
7.5
%
Corporate & Other
   
12.3
%
   
0.0
%
   
4.2
%
   
8.1
%
Total Operating Income
   
12.3
%
   
(0.3
%)
   
(1.0
%)
   
13.6
%
Diluted Earnings Per Share
   
15.8
%
   
0.0
%
   
(0.2
%)
   
16.0
%
Adjusted EBITDA
   
11.7
%
   
(0.4
%)
   
N/A
     
12.1
%

(3) Adjustments consist of Portfolio Optimization Plan costs.

- MORE -

Sensient Technologies Corporation
 Page 11
(In thousands, except percentages)
(Unaudited)
 
Reconciliation of Non-GAAP Amounts - Continued

The following table summarizes the reconciliation between Operating Income (GAAP) and Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024.           

   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
                                     
   
2025
   
2024
   
% Change
   
2025
   
2024
   
% Change
 
Operating income (GAAP)
 
$
57,706
   
$
49,657
     
16.2
%
 
$
111,236
   
$
99,063
     
12.3
%
Depreciation and amortization
   
15,260
     
15,016
             
30,334
     
29,725
         
Share-based compensation expense
   
3,739
     
2,916
             
6,639
     
4,911
         
Portfolio Optimization Plan costs, before tax
   
3,339
     
1,752
             
6,203
     
4,564
         
Adjusted EBITDA
 
$
80,044
   
$
69,341
     
15.4
%
 
$
154,412
   
$
138,263
     
11.7
%

The following table summarizes the reconciliation between Debt (GAAP) and Net Debt, and Operating Income (GAAP) and Credit Adjusted EBITDA for the trailing twelve months ended June 30, 2025 and 2024.

   
June 30,
 
Debt
 
2025
   
2024
 
Short-term borrowings
 
$
26,280
   
$
26,995
 
Long-term debt
   
710,119
     
634,663
 
Credit Agreement adjustments(4)
   
(43,393
)
   
(18,034
)
Net Debt
 
$
693,006
   
$
643,624
 
                 
Operating income (GAAP)
 
$
203,752
   
$
151,657
 
Depreciation and amortization
   
60,938
     
58,955
 
Share-based compensation expense
   
11,812
     
9,078
 
Portfolio Optimization Plan costs, before tax
   
8,270
     
32,405
 
Other non-operating gains(5)
   
(816
)
   
(872
)
Credit Adjusted EBITDA
 
$
283,956
   
$
251,223
 
                 
Net Debt to Credit Adjusted EBITDA
   
2.4x

   
2.6x


(4) Adjustments include cash and cash equivalents, as described in the Company's Fourth Amended and Restated Credit Agreement (Credit Agreement), and certain letters of credit and hedge contracts.
(5) Adjustments consist of certain financing transaction costs, certain non-financing interest items, and gains and losses related to certain non-cash, non-operating, and/or non-recurring items as described in the Credit Agreement.

We have included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable period-over-period performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. These non-GAAP measures should not be considered in isolation. Rather, they should be considered together with GAAP measures and the rest of the information included in this release and our SEC filings. Management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis and to gain additional insight into underlying operating and performance trends, and we believe the information can be beneficial to investors for the same purposes. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.