Please also note that during this presentation, we will be discussing adjusted and pro forma results. We believe these adjusted and pro forma results enhance understanding of our performance by more accurately reflecting our ongoing business.
In addition, we are providing ISP's historical financial contribution, representing Ashland's best estimate of the appropriate cost allocation and shared resource costs. Reporting results in this manner has inherent limitations, and we do not represent that these financial results were calculated using the same methodology used by ISP.
Please turn to Slide 3 for our third quarter highlights. Reporting earnings per share from continuing operations were $2 in the June 2012 quarter. When adjusted for key items, which I'll cover shortly, EPS was $2.04, as compared with $1 in the year ago quarter. Let me note that the $1 in the prior year does not include the results of ISP or the related financing costs. This is the only time this morning that we will present data in this manner. For the rest of the presentation and to aid in your analysis, we will present results on a pro forma basis, which includes the results of ISP in prior periods.
While on a pro forma basis, sales declined slightly to $2.1 billion, Ashland achieved large increases in operating margin and EBITDA. Operating income as a percent of sales was 12.8% during the quarter, a roughly 400-basis-point increase over the prior year.EBITDA margins were up a similar amount to nearly 18% during the quarter. These improved margins were primarily driven by strong pricing discipline, with Specialty Ingredients, Ashland Performance Materials and Ashland Consumer Markets all generating significant year-over-year increases in profitability. We are making substantial progress toward our long-term financial goals, and this quarter's margin performance was slightly above the implied 2014 margin expectations that we set out last November.