EX-99.1 2 ef20043496_ex99-1.htm EXHIBIT 99.1
Exhibit 99.1
Contact:
Amy Agallar
(414) 347-3706

Sensient Technologies Corporation
Reports Results for the Quarter Ended December 31, 2024

MILWAUKEE— February 14, 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 fourth quarter ended December 31, 2024.

Fourth Quarter Consolidated Results


 •
Reported revenue increased 7.8% to $376.4 million in the fourth quarter of 2024 versus last year’s fourth quarter results of $349.3 million. On a local currency basis(1), revenue increased 8.9%.


•
Reported operating income increased to $42.0 million compared to $8.1 million recorded in the fourth quarter of 2023. In the fourth quarter of 2024, the Company recorded $0.9 million of costs related to its Portfolio Optimization Plan versus last year’s $27.8 million in the fourth quarter. Local currency adjusted operating income(1) and local currency adjusted EBITDA(1) increased 20.8% and 18.8%, respectively, in the fourth quarter, with each increasing primarily as a result of higher sales volumes.


•
Reported earnings per share was 71 cents in the fourth quarter of 2024 compared to a loss of 14 cents in the fourth quarter of 2023. Local currency adjusted EPS(1) increased 29.4% in the fourth quarter.

“As expected, Sensient delivered strong performance in 2024, driven by solid volume growth and sales wins, particularly in natural colors. Our results demonstrate our ability to succeed in the markets we participate in and the strength of our product portfolio,” said Paul Manning, Sensient’s Chairman, President, and Chief Executive Officer.

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Sensient Technologies Corporation
Earnings Release – Quarter Ended December 31, 2024
February 14, 2025
Page 2
Fourth Quarter Group Results
   
Reported
    
Local Currency(1)
  
Revenue
  
Quarter
    
Year-to-Date
    
Quarter
    
Year-to-Date
  
Flavors & Extracts
    
2.8
%
    
7.1
%
    
3.4
%
    
7.1
%
Color
    
11.8
%
    
6.6
%
    
14.0
%
    
7.3
%
Asia Pacific
    
26.1
%
    
11.2
%
    
25.2
%
    
13.0
%
Total Revenue
    
7.8
%
    
6.9
%
    
8.9
%
    
7.4
%

   
Reported
    
Adjusted Local Currency(1)
  
Operating Income
  
Quarter
    
Year-to-Date
    
Quarter
    
Year-to-Date
  
Flavors & Extracts
    
18.2
%
    
10.6
%
    
18.4
%
    
10.8
%
Color
    
24.4
%
    
13.4
%
    
27.4
%
    
14.2
%
Asia Pacific
    
44.3
%
    
11.9
%
    
41.7
%
    
14.1
%
Total Operating Income
    
420.8
%
    
23.6
%
    
20.8
%
    
9.3
%

The Flavors & Extracts Group reported fourth quarter 2024 revenue of $188.1 million, an increase of $5.2 million versus the prior year’s fourth quarter. The Group’s revenue benefited from favorable pricing and higher volumes. Segment operating income was $21.3 million in the fourth quarter of 2024, an increase of $3.3 million compared to the prior year’s fourth quarter. The higher operating income was also driven by the favorable pricing and higher volumes.

The Color Group reported revenue of $158.1 million in the fourth quarter of 2024, an increase of $16.7 million compared to the prior year’s fourth quarter. The Group’s revenue increase was driven primarily by higher volumes in both the food and pharmaceutical and personal care product lines. Segment operating income was $26.5 million in the fourth quarter of 2024, an increase of $5.2 million compared to the prior year’s fourth quarter results. The higher operating income was primarily a result of the higher volumes, along with favorable pricing.

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Sensient Technologies Corporation
Earnings Release – Quarter Ended December 31, 2024
February 14, 2025
Page 3
The Asia Pacific Group reported revenue of $41.9 million in the fourth quarter of 2024, an increase of $8.7 million compared to the prior year’s fourth quarter. The Group’s revenue benefited primarily by higher volumes across nearly all geographies. Segment operating income was $8.5 million in the quarter, an increase of $2.6 million compared to the prior year’s fourth quarter. The higher operating income was primarily a result of the higher volumes.

Corporate & Other reported operating expenses of $14.4 million in the fourth quarter of 2024, compared to $37.2 million of operating expenses reported in the prior year’s fourth quarter. The decrease was primarily due to the Portfolio Optimization Plan costs of $27.8 million recorded in the fourth quarter of 2023, which were primarily non-cash costs. Local currency adjusted operating expenses(1) for Corporate & Other increased $4.1 million compared to the prior year’s fourth quarter, primarily due to higher performance-based compensation costs recorded in 2024.

2025 OUTLOOK

 
 
Metric
Current Guidance
 
 
Local Currency Revenue(1)
Mid-Single-Digit Growth
 
 
Local Currency Adjusted EBITDA(1)
Mid-Single-Digit to High Single-Digit Growth
 
 
Diluted EPS (GAAP)
Between $3.05 and $3.15*
 
 
Local Currency Adjusted Diluted EPS(1)
High Single-Digit to Double-Digit Growth
 
 
*Includes approximately 13 cents of Portfolio Optimization Plan costs and 10 to 15 cents of foreign currency headwinds based on current exchange rates

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
Earnings Release – Quarter Ended December 31, 2024
February 14, 2025
Page 4
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 2024 fourth quarter financial results at 8:30 a.m. CST on Friday, February 14, 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 February 21, 2025, by calling (877) 344-7529 and using access code 3864433. 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 February 18, 2025.

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Sensient Technologies Corporation
Earnings Release – Quarter Ended December 31, 2024
February 14, 2025
Page 5
This release contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including 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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Page 6
Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
(Unaudited)

Consolidated Statements of Earnings
  
Three Months Ended December 31,
    
Year Ended December 31,
  

 
2024
    
2023
    
% Change
    
2024
    
2023
    
% Change
  

                                   
Revenue
  
$
376,420
    
$
349,302
      
7.8
%
  
$
1,557,228
    
$
1,456,450
      
6.9
%
 
                                                
Cost of products sold
    
257,002
      
249,472
      
3.0
%
    
1,050,135
      
996,153
      
5.4
%
Selling and administrative expenses
    
77,422
      
91,767
      
(15.6
%)
    
315,514
      
305,274
      
3.4
%
 
                                                
Operating income
    
41,996
      
8,063
      
420.8
%
    
191,579
      
155,023
      
23.6
%
Interest expense
    
6,387
      
6,524
              
28,781
      
25,172
          
 
                                                
Earnings before income taxes
    
35,609
      
1,539
              
162,798
      
129,851
          
Income taxes
    
5,505
      
7,372
              
38,132
      
36,457
          
 
                                                
Net earnings
  
$
30,104
    
$
(5,833
)
    
616.1
%
  
$
124,666
    
$
93,394
      
33.5
%
 
                                                
Earnings per share of common stock:
                                                
Basic
  
$
0.71
    
$
(0.14
)
          
$
2.96
    
$
2.22
          
Diluted
  
$
0.71
    
$
(0.14
)
          
$
2.94
    
$
2.21
          
 
                                                
Average common shares outstanding:
                                                
Basic
    
42,163
      
42,051
              
42,145
      
42,027
          
Diluted
    
42,454
      
42,051
              
42,396
      
42,242
          

Results by Segment
  
Three Months Ended December 31,
    
Year Ended December 31,
  
Revenue
  
2024
    
2023
    
% Change
    
2024
    
2023
    
% Change
  
                                     
Flavors & Extracts
  
$
188,114
    
$
182,939
      
2.8
%
  
$
793,698
    
$
741,072
      
7.1
%
Color
    
158,134
      
141,396
      
11.8
%
    
647,939
      
607,959
      
6.6
%
Asia Pacific
    
41,861
      
33,202
      
26.1
%
    
162,525
      
146,090
      
11.2
%
Intersegment elimination
    
(11,689
)
    
(8,235
)
            
(46,934
)
    
(38,671
)
        
                                                 
Consolidated
  
$
376,420
    
$
349,302
      
7.8
%
  
$
1,557,228
    
$
1,456,450
      
6.9
%
                                                 
Operating Income
                                                
                                                 
Flavors & Extracts
  
$
21,345
    
$
18,059
      
18.2
%
  
$
97,094
    
$
87,773
      
10.6
%
Color
    
26,542
      
21,343
      
24.4
%
    
119,529
      
105,370
      
13.4
%
Asia Pacific
    
8,495
      
5,889
      
44.3
%
    
34,458
      
30,800
      
11.9
%
Corporate & Other
    
(14,386
)
    
(37,228
)
            
(59,502
)
    
(68,920
)
        
                                                 
Consolidated
  
$
41,996
    
$
8,063
      
420.8
%
  
$
191,579
    
$
155,023
      
23.6
%

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Page 7
Sensient Technologies Corporation
(In thousands)
(Unaudited)

Consolidated Condensed Balance Sheets
  
December 31,
2024
    
December 31,
2023
  

           
Cash and cash equivalents
  
$
26,626
    
$
28,934
  
Trade accounts receivable
    
290,087
      
272,164
  
Inventories
    
600,302
      
598,399
  
Prepaid expenses and other current assets
    
44,871
      
37,119
  
Total Current Assets
    
961,886
      
936,616
  
                 
Goodwill & intangible assets (net)
    
423,658
      
436,177
  
Property, plant, and equipment (net)
    
491,587
      
505,277
  
Other assets
    
146,663
      
136,437
  
                 
Total Assets
  
$
2,023,794
    
$
2,014,507
  
                 
Trade accounts payable
  
$
139,052
    
$
131,114
  
Short-term borrowings
    
19,848
      
13,460
  
Other current liabilities
    
111,739
      
91,732
  
Total Current Liabilities
    
270,639
      
236,306
  
                 
Long-term debt
    
613,523
      
645,085
  
Accrued employee and retiree benefits
    
24,499
      
27,715
  
Other liabilities
    
54,147
      
52,077
  
Shareholders' Equity
    
1,060,986
      
1,053,324
  
                 
Total Liabilities and Shareholders' Equity
  
$
2,023,794
    
$
2,014,507
  

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Page 8
Sensient Technologies Corporation
(In thousands, except per share amounts)
(Unaudited)

Consolidated Statements of Cash Flows
Year Ended December 31,


  
2024
    
2023
  
Cash flows from operating activities:
            
Net earnings
  
$
124,666
    
$
93,394
  
Adjustments to arrive at net cash provided by operating activities:
                
Depreciation and amortization
    
60,329
      
57,820
  
Share-based compensation expense
    
10,084
      
8,933
  
Net (gain) loss on assets
    
(140
)
    
541
  
Portfolio Optimization Plan costs
    
1,415
      
24,089
  
Deferred income taxes
    
(18,598
)
    
(5,100
)
Changes in operating assets and liabilities:
                
Trade accounts receivable
    
(29,638
)
    
35,801
  
Inventories
    
(18,295
)
    
(28,193
)
Prepaid expenses and other assets
    
(5,407
)
    
5,767
  
Trade accounts payable and other accrued expenses
    
8,995
      
(5,978
)
Accrued salaries, wages, and withholdings
    
22,518
      
(17,830
)
Income taxes
    
(810
)
    
(1,175
)
Other liabilities
    
2,032
      
1,628
  
                 
Net cash provided by operating activities
    
157,151
      
169,697
  
                 
Cash flows from investing activities:
                
Acquisition of property, plant, and equipment
    
(59,212
)
    
(87,868
)
Proceeds from sale of assets
    
339
      
156
  
Acquisiton of new businesses
    
-
      
(1,650
)
Other investing activities
    
(336
)
    
1,741
  
                 
Net cash used in investing activities
    
(59,209
)
    
(87,621
)
                 
Cash flows from financing activities:
                
Proceeds from additional borrowings
    
159,321
      
351,662
  
Debt payments
    
(167,073
)
    
(355,161
)
Dividends paid
    
(69,399
)
    
(69,222
)
Other financing activities
    
(4,395
)
    
(9,278
)
                 
Net cash used in financing activities
    
(81,546
)
    
(81,999
)
                 
Effect of exchange rate changes on cash and cash equivalents
    
(18,704
)
    
7,936
  
                 
Net (decrease) increase in cash and cash equivalents
    
(2,308
)
    
8,013
  
Cash and cash equivalents at beginning of period
    
28,934
      
20,921
  
Cash and cash equivalents at end of period
  
$
26,626
    
$
28,934
  

Supplemental Information
            
Year Ended December 31,
  
2024
    
2023
  
             
Dividends paid per share
  
$
1.64
    
$
1.64
  

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Page 9
Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
(Unaudited)

Reconciliation of Non-GAAP Amounts

The Company's results for the three and twelve months ended December 31, 2024 and 2023 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 December 31,
    
Year Ended December 31,
  
 
  
2024
    
2023
    
% Change
    
2024
    
2023
    
% Change
  
Operating income (GAAP)
  
$
41,996
    
$
8,063
      
420.8
%
  
$
191,579
    
$
155,023
      
23.6
%
Portfolio Optimization Plan costs  – Cost of products sold
    
839
      
3,135
              
1,362
      
3,135
          
Portfolio Optimization Plan costs – Selling and administrative expenses
    
17
      
24,706
              
5,269
      
24,706
          
Adjusted operating income
  
$
42,852
    
$
35,904
      
19.4
%
  
$
198,210
    
$
182,864
      
8.4
%
 
                                                
Net earnings (GAAP)
  
$
30,104
    
$
(5,833
)
    
616.1
%
  
$
124,666
    
$
93,394
      
33.5
%
Portfolio Optimization Plan costs, before tax
    
856
      
27,841
              
6,631
      
27,841
          
Tax impact of Portfolio Optimization Plan costs(1)
    
(3,570
)
    
(415
)
            
(4,156
)
    
(415
)
        
Adjusted net earnings
  
$
27,390
    
$
21,593
      
26.8
%
  
$
127,141
    
$
120,820
      
5.2
%
 
                                                
Diluted earnings per share (GAAP)
  
$
0.71
    
$
(0.14
)
    
607.1
%
  
$
2.94
    
$
2.21
      
33.0
%
Portfolio Optimization Plan costs, net of tax
    
(0.06
)
    
0.65
              
0.06
      
0.65
          
Adjusted diluted earnings per share
  
$
0.65
    
$
0.51
      
27.5
%
  
$
3.00
    
$
2.86
      
4.9
%

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 December 31,
  
Operating Income
2024

Adjustments(2)

Adjusted
2024

2023

Adjustments(2)

Adjusted
2023
Flavors & Extracts
  
$
21,345
    
$
-
    
$
21,345
    
$
18,059
    
$
-
    
$
18,059
  
Color
    
26,542
      
-
      
26,542
      
21,343
      
-
      
21,343
  
Asia Pacific
    
8,495
      
-
      
8,495
      
5,889
      
-
      
5,889
  
Corporate & Other
    
(14,386
)
    
856
      
(13,530
)
    
(37,228
)
    
27,841
      
(9,387
)
 
                                                
Consolidated
  
$
41,996
    
$
856
    
$
42,852
    
$
8,063
    
$
27,841
    
$
35,904
  

Results by Segment
  
Year Ended December 31,
  
Operating Income
2024

Adjustments(2)

Adjusted
2024

2023

Adjustments(2)

Adjusted
2023
Flavors & Extracts
  
$
97,094
    
$
-
    
$
97,094
    
$
87,773
    
$
-
    
$
87,773
  
Color
    
119,529
      
-
      
119,529
      
105,370
      
-
      
105,370
  
Asia Pacific
    
34,458
      
-
      
34,458
      
30,800
      
-
      
30,800
  
Corporate & Other
    
(59,502
)
    
6,631
      
(52,871
)
    
(68,920
)
    
27,841
      
(41,079
)
                                                 
Consolidated
  
$
191,579
    
$
6,631
    
$
198,210
    
$
155,023
    
$
27,841
    
$
182,864
  

(2)
Adjustments consist of Portfolio Optimization Plan costs.

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Page 10
Sensient Technologies Corporation
(In thousands, except percentages)
(Unaudited)

Reconciliation of Non-GAAP Amounts - Continued

The following table summarizes the percentage change in the 2024 results compared to the 2023 results for the corresponding periods.

   
Three Months Ended December 31, 2024
  
Revenue
  
Total
    
Foreign
Exchange
Rates
    
Adjustments(3)
    
Adjusted
Local
Currency
  
Flavors & Extracts
    
2.8
%
    
(0.6
%)
    
N/A
      
3.4
%
Color
    
11.8
%
    
(2.2
%)
    
N/A
      
14.0
%
Asia Pacific
    
26.1
%
    
0.9
%
    
N/A
      
25.2
%
Total Revenue
    
7.8
%
    
(1.1
%)
    
N/A
      
8.9
%
                                 
Operating Income
                                
Flavors & Extracts
    
18.2
%
    
(0.2
%)
    
0.0
%
    
18.4
%
Color
    
24.4
%
    
(3.0
%)
    
0.0
%
    
27.4
%
Asia Pacific
    
44.3
%
    
2.6
%
    
0.0
%
    
41.7
%
Corporate & Other
    
(61.4
%)
    
0.0
%
    
(105.5
%)
    
44.1
%
Total Operating Income
    
420.8
%
    
(6.7
%)
    
406.7
%
    
20.8
%
Diluted Earnings Per Share
    
607.1
%
    
(7.2
%)
    
584.9
%
    
29.4
%
Adjusted EBITDA
    
17.5
%
    
(1.3
%)
    
N/A
      
18.8
%

   
Year Ended December 31, 2024
  
Revenue
  
Total
    
Foreign Exchange
Rates
    
Adjustments(3)
    
Adjusted
Local
Currency
  
Flavors & Extracts
    
7.1
%
    
0.0
%
    
N/A
      
7.1
%
Color
    
6.6
%
    
(0.7
%)
    
N/A
      
7.3
%
Asia Pacific
    
11.2
%
    
(1.8
%)
    
N/A
      
13.0
%
Total Revenue
    
6.9
%
    
(0.5
%)
    
N/A
      
7.4
%
                                 
Operating Income
                                
Flavors & Extracts
    
10.6
%
    
(0.2
%)
    
0.0
%
    
10.8
%
Color
    
13.4
%
    
(0.8
%)
    
0.0
%
    
14.2
%
Asia Pacific
    
11.9
%
    
(2.2
%)
    
0.0
%
    
14.1
%
Corporate & Other
    
(13.7
%)
    
0.0
%
    
(42.4
%)
    
28.7
%
Total Operating Income
    
23.6
%
    
(1.0
%)
    
15.3
%
    
9.3
%
Diluted Earnings Per Share
    
33.0
%
    
(1.4
%)
    
28.5
%
    
5.9
%
Adjusted EBITDA
    
7.6
%
    
(0.7
%)
    
N/A
      
8.3
%

(3)
Adjustments consist of Portfolio Optimization Plan costs.

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Page 11
Sensient Technologies Corporation
(In thousands, except percentages)
(Unaudited)

Reconciliation of Non-GAAP Amounts - Continued

The following table summarizes the reconciliation between Consolidated Operating Income (GAAP) and Adjusted EBITDA for the three and twelve months ended December 31, 2024 and 2023.

   
Three Months Ended December 31,
    
Year Ended December 31,
  
                                     
 
  
2024
    
2023
    
% Change
    
2024
    
2023
    
% Change
  
Operating income (GAAP)
  
$
41,996
    
$
8,063
      
420.8
%
  
$
191,579
    
$
155,023
      
23.6
%
Depreciation and amortization
    
15,144
      
14,460
              
60,329
      
57,820
          
Share-based compensation expense
    
3,104
      
1,648
              
10,084
      
8,933
          
Portfolio Optimization Plan costs, before tax
    
856
      
27,841
              
6,631
      
27,841
          
Adjusted EBITDA
  
$
61,100
    
$
52,012
      
17.5
%
  
$
268,623
    
$
249,617
      
7.6
%
 
The following table summarizes the reconciliation between Debt (GAAP) and Net Debt, and Operating Income (GAAP) and Credit Adjusted EBITDA for the year ended December 31, 2024 and 2023.


  
Year Ended December 31,
  
Debt
  
2024
    
2023
  
Short-term borrowings
  
$
19,848
    
$
13,460
  
Long-term debt
    
613,523
      
645,085
  
Credit Agreement adjustments(4)
    
(13,129
)
    
(16,743
)
Net Debt
  
$
620,242
    
$
641,802
  
                 
Operating income (GAAP)
  
$
191,579
    
$
155,023
  
Depreciation and amortization
    
60,329
      
57,820
  
Share-based compensation expense
    
10,084
      
8,933
  
Portfolio Optimization Plan costs, before tax
    
6,631
      
27,841
  
Other non-operating gains(5)
    
(905
)
    
(762
)
Credit Adjusted EBITDA
  
$
267,718
    
$
248,855
  
                 
Net Debt to Credit Adjusted EBITDA
    
2.3
x
    
2.6
x

(4) Adjustments include cash and cash equivalents, as described in the Company's Third 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.