Zebra Technologies Announces Third-Quarter 2025 Results

LINCOLNSHIRE, Ill.--( BUSINESS WIRE)-- Zebra Technologies Corporation (NASDAQ: ZBRA), a global leader in digitizing and automating workflows to deliver intelligent operations, today announced results for the third quarter ended September 27, 2025.

“Our strong third quarter results were driven by solid demand, lower-than-expected tariffs, operating expense leverage and continued excellent execution by our teams,” said Bill Burns, Chief Executive Officer of Zebra Technologies. “We continue to advance our industry leadership with solutions that digitize and automate our customers’ workflows, and are excited about the opportunity to accelerate our connected frontline vision through our recent acquisition of Elo Touch Solutions. We are also building on our track record of value creation for shareholders, committing to $500 million of share repurchases over the next twelve months, supported by our strong balance sheet and cash flow.”

$ in millions, except per share amounts

3Q25

3Q24

Change

Select reported measures:

Net sales

1,320

1,255

5.2

Gross profit

634

613

3.4

Gross margin

48.0

48.8

(80) bps

Net income

101

137

(26.3

Net income margin

7.7

10.9

(320) bps

Net income per diluted share

1.97

2.64

(25.4

Select Non-GAAP measures:

Adjusted net sales

1,320

1,255

5.2

Organic net sales growth

4.8

Adjusted gross profit

636

616

3.2

Adjusted gross margin

48.2

49.1

(90) bps

Adjusted EBITDA

285

268

6.3

Adjusted EBITDA margin

21.6

21.4

20 bps

Non-GAAP net income

198

181

9.4

Non-GAAP diluted earnings per share

3.88

3.49

11.2

Net sales were $1,320 million in the third quarter of 2025 compared to $1,255 million in the prior year. Net sales in the Enterprise Visibility & Mobility ("EVM") segment were $865 million in the third quarter of 2025 compared to $845 million in the prior year. Asset Intelligence & Tracking ("AIT") segment net sales were $455 million in the third quarter of 2025 compared to $410 million in the prior year. Consolidated organic net sales for the third quarter of 2025 increased 4.8% year-over-year, with a 2.0% increase in the EVM segment and a 10.6% increase in the AIT segment (1).

Third quarter 2025 gross profit was $634 million compared to $613 million in the prior year. Gross margin decreased to 48.0% for the third quarter of 2025 compared to 48.8% in the prior year primarily due to approximately $6 million of U.S. import tariff expense net of mitigating actions. Adjusted gross margin was 48.2% in the third quarter of 2025 compared to 49.1% in the prior year.

Operating expenses increased to $451 million in the third quarter of 2025 from $422 million in the prior year primarily due to increased stock based compensation expense. Adjusted operating expenses increased to $368 million in the third quarter of 2025 from $364 million in the prior year.

Net income for the third quarter of 2025 was $101 million, or $1.97 per diluted share, compared to net income of $137 million, or $2.64 per diluted share, in the prior year. Non-GAAP net income increased to $198 million for the third quarter of 2025, or $3.88 per diluted share, compared to $181 million, or $3.49 per diluted share, for the prior year.

Adjusted EBITDA for the third quarter of 2025 increased to $285 million, or 21.6% of adjusted net sales, compared to $268 million, or 21.4% of adjusted net sales in the prior year due to lower adjusted operating expense as a percentage of sales, partially offset by lower gross margin.

(1) Effective with the fourth quarter of 2025, the Company’s reportable segments will be changed to Connected Frontline and Asset Visibility & Automation. Reference the appendix of this press release for additional information, including recast financial performance.

Balance Sheet and Cash Flow

As of September 27, 2025, the Company had cash and cash equivalents of $1,053 million and total debt of $2,183 million.

For the first nine months of 2025, net cash provided by operating activities was $560 million and the Company invested $56 million in capital expenditures, resulting in free cash flow of $504 million. The Company also made share repurchases of $284 million and acquired Photoneo for $62 million.

Outlook

The Company expects fourth quarter sales growth between 8% and 11% compared to the prior year. This expectation includes approximately 850 basis points of favorable impact from acquisitions and foreign currency translation.

Adjusted EBITDA margin for the fourth quarter is expected to be approximately 22% which includes the impact of approximately $6 million U.S. import tariff expense, net of mitigating actions, assuming current rates and exemptions. Non-GAAP diluted earnings per share are expected to be in the range of $4.20 to $4.40. This assumes an adjusted effective tax rate of approximately 18%.

Free Cash Flow for the full year 2025 is expected to be greater than $800 million.

Beginning in the fourth quarter of 2025 and continuing through the next 12 months, the Company expects to repurchase $500 million of its common stock.

The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of the most directly comparable forward-looking GAAP financial measure as discussed under the "Forward-Looking Statements" caption below. This would include items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted, and that would impact diluted net earnings per share. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Conference Call Notification

Investors are invited to listen to a live webcast of Zebra’s conference call regarding the Company’s financial results. The conference call will be held today at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). To view the webcast, visit the investor relations section of the Company’s website at investors.zebra.com.

About Zebra

Zebra (NASDAQ: ZBRA) provides the foundation for intelligent operations with an award-winning portfolio of connected frontline, asset visibility and automation solutions. Organizations globally across retail, manufacturing, transportation, logistics, healthcare, and other industries rely on us to deliver outcomes today while driving innovation for what’s next. Together with our partners, we create new ways of working that improve productivity and empower organizations to be better every day. Learn more at www.zebra.com. Follow Zebra on our Blog, LinkedIn, Facebook, X, Instagram and YouTube.

Forward-Looking Statements

This press release contains forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements regarding the company’s outlook. Actual results may differ from those expressed or implied in the company’s forward-looking statements. These statements represent estimates only as of the date they were made. Zebra undertakes no obligation, other than as may be required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this release.

These forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties inherent in Zebra’s industry, market conditions, general domestic and international economic conditions, and other factors. These factors include customer acceptance of Zebra’s offerings and competitors' offerings, and the potential effects of emerging technologies and changes in customer requirements. The effect of global market conditions, and the availability of credit and capital markets volatility may have adverse effects on Zebra, its suppliers and its customers. In addition, natural disasters, man-made disasters, public health issues (including pandemics), and cybersecurity incidents may have negative effects on Zebra's business and results of operations. Zebra's ability to purchase sufficient materials, parts, and components, and ability to provide services, software and products to meet customer demand could negatively impact Zebra's results of operations and customer relationships. Profits and profitability will be affected by Zebra’s ability to control manufacturing and operating costs. Because of its debt, interest rates and financial market conditions may also have an adverse impact on results. Foreign exchange rates, customs duties and trade policies may have an adverse effect on financial results because of the global nature of Zebra's business. The impacts of changes in foreign and domestic governmental policies, regulations, or laws, as well as the outcome of litigation or tax matters in which Zebra may be involved are other factors that could adversely affect Zebra's business and results of operations. The success of integrating acquisitions could also adversely affect profitability, reported results and the company’s competitive position in its industry. These and other factors could have an adverse effect on Zebra’s sales, gross profit margins and results of operations and increase the volatility of Zebra's financial results. When used in this release and documents referenced, the words “anticipate,” “believe,” “outlook,” and “expect” and similar expressions, as they relate to the company or its management, are intended to identify such forward-looking statements, but are not the exclusive means of identifying these statements. Descriptions of certain risks, uncertainties and other factors that could adversely affect the company’s future operations and results can be found in Zebra’s filings with the Securities and Exchange Commission, including the company’s most recent Form 10-K and Form 10-Q.

Use of Non-GAAP Financial Information

This press release contains certain Non-GAAP financial measures, consisting of “Adjusted EBITDA,” “Adjusted EBITDA margin,” “adjusted gross margin,” “adjusted gross profit,” “adjusted net sales,” “adjusted operating expenses,” “EBITDA,” “free cash flow,” “non-GAAP diluted earnings per share,” “non-GAAP earnings per share,” “non-GAAP net income,” “organic net sales,” and “organic net sales growth.” Management presents these measures to focus on the on-going operations and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The company believes it is useful to present non-GAAP financial measures, which exclude certain significant items, as a means to understand the performance of its ongoing operations and how management views the business. Please see the “Reconciliation of GAAP to Non-GAAP Financial Measures” tables and accompanying disclosures at the end of this press release for more detailed information regarding non-GAAP financial measures herein, including the items reflected in adjusted net earnings calculations. These measures, however, should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.

The company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis (including the information under “Outlook” above) where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred, are out of the company’s control and/or cannot be reasonably predicted, and that would impact diluted net earnings per share, the most directly comparable forward-looking GAAP financial measure. For the same reasons, the company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

As a global company, Zebra's operating results reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which the company transacts change in value over time compared to the U.S. dollar; accordingly, the company presents certain organic growth financial information, which includes impacts of foreign currency translation, to provide a framework to assess how the company’s businesses performed excluding the impact of foreign currency exchange rate fluctuations. Foreign currency impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. dollar. This impact is calculated by translating current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods. The company believes these measures should be considered a supplement to and not in lieu of the company’s performance measures calculated in accordance with GAAP.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)

September 27,

2025

December 31,

2024

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

1,053

901

Accounts receivable, net of allowances for doubtful accounts of $1 each as of September 27, 2025 and December 31, 2024

655

692

Inventories, net

663

693

Income tax receivable

106

Prepaid expenses and other current assets

134

Total Current assets

2,576

2,440

Property, plant and equipment, net

327

305

Right-of-use lease assets

165

167

Goodwill

3,931

3,891

Other intangibles, net

376

422

Deferred income taxes

475

512

Other long-term assets

217

231

Total Assets

8,067

7,968

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of long-term debt

Accounts payable

533

633

Accrued liabilities

497

503

Deferred revenue

456

453

Income taxes payable

Total Current liabilities

1,603

1,704

Long-term debt

2,107

2,092

Long-term lease liabilities

151

155

Deferred income taxes

Long-term deferred revenue

318

304

Other long-term liabilities

Total Liabilities

4,320

4,382

Stockholders’ Equity:

Preferred stock, $.01 par value; authorized 10,000,000 shares; none issued

—

Class A common stock, $.01 par value; authorized 150,000,000 shares; issued 72,151,857 shares

Additional paid-in capital

781

669

Treasury stock at cost, 21,414,382 and 20,645,798 shares as of September 27, 2025 and December 31, 2024, respectively

(2,181

)

(1,900

)

Retained earnings

5,209

4,860

Accumulated other comprehensive loss

(63

)

(44

)

Total Stockholders’ Equity

3,747

3,586

Total Liabilities and Stockholders’ Equity

8,067

7,968

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 27,

2025

September 28,

2024

September 27,

2025

September 28,

2024

Net sales:

Tangible products

1,081

1,019

3,198

2,931

Services and software

239

236

723

716

Total Net sales

1,320

1,255

3,921

3,647

Cost of sales:

Tangible products

557

526

1,652

1,539

Services and software

129

116

374

343

Total Cost of sales

686

642

2,026

1,882

Gross profit

634

613

1,895

1,765

Operating expenses:

Selling and marketing

159

151

478

449

Research and development

146

141

441

425

General and administrative

111

324

274

Amortization of intangible assets

Acquisition and integration costs

Exit and restructuring costs

—

Total Operating expenses

451

422

1,334

1,248

Operating income

183

191

561

517

Other income (loss), net:

Foreign exchange gain (loss)

)

(15

)

Interest expense, net

(23

)

(31

)

(71

)

(71

)

Other expense, net

)

(13

)

(13

)

Total Other expense, net

(24

)

(42

)

(99

)

(90

)

Income before income tax

159

149

462

427

Income tax expense

113

Net income

101

137

349

365

Basic earnings per share

1.98

2.65

6.83

7.09

Diluted earnings per share

1.97

2.64

6.78

7.04

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Nine Months Ended

September 27,

2025

September 28,

2024

Cash flows from operating activities:

Net income

349

365

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

126

130

Share-based compensation

130

Deferred income taxes

(62

)

Unrealized gain on forward interest rate swaps

—

(31

)

Other, net

Changes in operating assets and liabilities:

Accounts receivable, net

(120

)

Inventories, net

161

Other assets

Accounts payable

(115

)

Accrued liabilities

(49

)

Deferred revenue

(34

)

Income taxes

(71

)

Settlement liability

—

(45

)

Cash receipts on forward interest rate swaps

—

Other operating activities

)

—

Net cash provided by operating activities

560

707

Cash flows from investing activities:

Acquisition of businesses

(62

)

—

Purchases of property, plant and equipment

(56

)

(41

)

Proceeds from sale of short-term investments

—

Proceeds from sale of long-term investments

—

Purchases of long-term investments

)

Net cash used in investing activities

(121

)

(42

)

Cash flows from financing activities:

Payment of debt issuance costs, extinguishment costs and discounts

—

)

Payments of debt

—

(694

)

Proceeds from issuance of debt

—

651

Payments for repurchases of common stock

(284

)

(16

)

Net payments related to share-based compensation plans

(15

)

(27

)

Change in unremitted cash collections from servicing factored receivables

(35

)

Other financing activities

Net cash used in financing activities

(286

)

(127

)

Effect of exchange rate changes on cash and cash equivalents

)

—

Net increase in cash and cash equivalents

152

538

Cash and cash equivalents at beginning of period

901

138

Cash and cash equivalents at end of period

1,053

676

Supplemental disclosures of cash flow information:

Income taxes paid

124

Interest paid, net of forward interest rate swaps

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF ORGANIC NET SALES GROWTH

(Unaudited)

Three Months Ended

September 27, 2025

AIT

EVM

Consolidated

Reported GAAP Consolidated Net sales growth

11.0

2.4

5.2

Adjustments:

Impact of foreign currency translations (1)

(0.4

(0.1

(0.2

Impact of acquisitions (2)

—

(0.3

(0.2

Consolidated Organic Net sales growth

10.6

2.0

4.8

Nine Months Ended

September 27, 2025

AIT

EVM

Consolidated

Reported GAAP Consolidated Net sales growth

11.3

5.6

7.5

Adjustments:

Impact of foreign currency translations (1)

0.3

Impact of acquisitions (2)

—

(0.3

(0.2

Consolidated Organic Net sales growth

11.6

5.6

7.6

(1)

Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.

(2)

For purposes of computing Organic Net sales growth, amounts directly attributable to business acquisitions are excluded for twelve months following their respective acquisitions.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP GROSS MARGIN

($ In millions)

(Unaudited)

Three Months Ended

September 27, 2025

September 28, 2024

AIT

EVM

Consolidated

AIT

EVM

Consolidated

GAAP

Reported Net sales

455

865

1,320

410

845

1,255

Reported Gross profit

230

404

634

199

414

613

Gross Margin

50.5

46.7

48.0

48.5

49.0

48.8

Non-GAAP

Adjusted Net sales

455

865

1,320

410

845

1,255

Adjusted Gross profit (1)

231

405

636

200

416

616

Adjusted Gross Margin

50.8

46.8

48.2

48.8

49.2

49.1

Nine Months Ended

September 27, 2025

September 28, 2024

AIT

EVM

Consolidated

AIT

EVM

Consolidated

GAAP

Reported Net sales

1,335

2,586

3,921

1,199

2,448

3,647

Reported Gross profit

669

1,226

1,895

570

1,195

1,765

Gross Margin

50.1

47.4

48.3

47.5

48.8

48.4

Non-GAAP

Adjusted Net sales

1,335

2,586

3,921

1,199

2,448

3,647

Adjusted Gross profit (1)

673

1,231

1,904

572

1,200

1,772

Adjusted Gross Margin

50.4

47.6

48.6

47.7

49.0

48.6

(1)

Adjusted Gross profit excludes share-based compensation expense.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME

($ In millions, except share data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 27,

2025

September 28,

2024

September 27,

2025

September 28,

2024

GAAP Net income

101

137

349

365

Adjustments to Cost of sales (1)

Share-based compensation

Total adjustments to Cost of sales

Adjustments to Operating expenses (1)

Amortization of intangible assets

Acquisition and integration costs

Share-based compensation

131

Exit and restructuring costs

—

Total adjustments to Operating expenses

222

178

Adjustments to Other expense, net (1)

Amortization of debt issuance costs and discounts

—

Investment loss

—

Foreign exchange (gain) loss

)

Forward interest rate swap gain

—

(31

)

Total adjustments to Other expense, net

(18

)

Income tax effect of adjustments (2)

Reported income tax expense

113

Adjusted income tax

(47

)

(38

)

(129

)

(101

)

Total adjustments to income tax

(26

)

(16

)

(39

)

Total adjustments

243

128

Non-GAAP Net income

198

181

592

493

GAAP earnings per share

Basic

1.98

2.65

6.83

7.09

Diluted

1.97

2.64

6.78

7.04

Non-GAAP earnings per share

Basic

3.90

3.52

11.59

9.58

Diluted

3.88

3.49

11.51

9.51

Basic weighted average shares outstanding

50,800,552

51,567,216

51,044,563

51,480,812

Diluted weighted average and equivalent shares outstanding

51,171,119

51,918,055

51,429,532

51,845,572

(1)

Presented on a pre-tax basis.

(2)

Represents adjustments to GAAP income tax expense commensurate with pre-tax non-GAAP adjustments (including the resulting impacts to U.S. BEAT/GILTI provisions), as well as adjustments to exclude the impacts of certain discrete income tax items and incorporate the anticipated annualized effects of current year tax planning.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

GAAP to NON-GAAP RECONCILIATION TO EBITDA

($ In millions)

(Unaudited)

Three Months Ended

Nine Months Ended

September 27,

2025

September 28,

2024

September 27,

2025

September 28,

2024

GAAP Net income

101

137

349

365

Add back:

Depreciation (excluding exit and restructuring)

Amortization of intangible assets

Total Other expense, net

Income tax expense

113

EBITDA (Non-GAAP)

225

236

687

647

Adjustments to Cost of sales

Share-based compensation

Total adjustments to Cost of sales

Adjustments to Operating expenses

Acquisition and integration costs

Share-based compensation

131

Exit and restructuring costs

—

Total adjustments to Operating expenses

148

Total adjustments to EBITDA

157

105

Adjusted EBITDA (Non-GAAP)

285

268

844

752

Adjusted EBITDA margin (Non-GAAP)

21.6

21.4

21.5

20.6

FREE CASH FLOW

Nine Months Ended

September 27,

2025

September 28,

2024

Net cash provided by operating activities

560

707

Less: Purchases of property, plant and equipment

(56

)

(41

)

Free cash flow (Non-GAAP) (1)

504

666

(1) Free cash flow, a non-GAAP measure, is defined as Net cash provided by (used in) operating activities in a period minus purchases of property, plant and equipment (capital expenditures) made in that period.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

SEGMENT INFORMATION

Effective with the fourth quarter, the Company’s reportable segments will be changed to Connected Frontline (“CF”) and Asset Visibility & Automation (“AVA”). The CF segment will consist of our mobile computing products, and related services and software-based offerings that were formerly part of our EVM segment, as well as the Elo Touch Solutions acquisition. The AVA segment will consist of our barcode and card printing products and related supplies and sensors, RFID and RTLS offerings, and related services that collectively represented our former AIT segment, as well as our data capture, machine vision, and robotics automation offerings and related services that were formerly part of our EVM segment. This change aligns with how we are operating our business to advance our strategy and the level of detailed financial information reviewed by our chief operating decision-maker going forward. Our CF and AVA results will also exclude share-based compensation expense from the measurement of segment operating income with respect to how we report our results on both a GAAP and Non-GAAP basis. The table below contains our segment results reflecting these changes in the current and historical periods on a comparable basis. These changes will not have an impact on our Consolidated Financial Statements.

QTD

Full Year

2025

2024

2023

Q1 2025

Q2 2025

Q3 2025

Q1 2024

Q2 2024

Q3 2024

Q4 2024

Net sales:

CF Tangible products

481

521

509

436

479

481

520

1,916

1,522

CF Services and software

203

196

205

193

194

206

798

758

Total CF sales

684

717

705

641

672

675

726

2,714

2,280

AVA Tangible products

581

534

572

493

504

538

565

2,100

2,143

AVA Services and software

167

161

Total AVA sales

624

576

615

534

545

580

608

2,267

2,304

Total Net sales

1,308

1,293

1,320

1,175

1,217

1,255

1,334

4,981

4,584

Gross profit:

333

339

324

314

333

331

356

1,334

1,031

AVA

316

280

312

251

258

285

294

1,088

1,098

Corporate

)

Total Gross profit

645

616

634

563

589

613

648

2,413

2,123

Gross margin

48.7

47.3

46.0

49.0

49.6

49.0

49.2

45.2

AVA

50.6

48.6

50.7

47.0

47.3

49.1

48.4

48.0

47.7

Operating expenses

CF (1)

193

197

192

189

197

191

198

775

703

AVA (1)

181

173

176

159

161

173

175

668

671

Corporate

228

268

Total Operating expenses

450

433

451

404

422

423

1,671

1,642

Operating income:

CF (2)

140

142

132

125

136

140

158

559

328

AVA (2)

135

107

136

112

119

420

427

Total segment operating income

275

249

268

217

233

252

277

979

755

Corporate (3)

(80

)

(66

)

(85

)

(58

)

(66

)

(61

)

(52

)

(237

)

(274

)

Total Operating income

195

183

159

167

191

225

742

481

(1)

CF and AVA segment operating expenses include Selling and marketing, Research and development, and General and administrative expenses, excluding the amounts classified within Corporate.

(2)

CF and AVA segment operating income includes depreciation expense proportionate to each segment’s Net sales.

(3)

To the extent applicable, amounts included in Corporate consist of Share-based Compensation, Amortization of intangible assets, Acquisition and integration costs, Exit and restructuring costs, as well as certain other non-recurring costs (impairment of goodwill and other intangibles, and business acquisition purchase accounting adjustments).