The concept of parity-time (PT)-symmetry was recently introduced in the framework of classical optics. These ideas led to the first experimental observation of PT-symmetry breaking in a system of two coupled waveguides with gain and loss. In the first part of this talk, we will present a class of non-hermitian materials that are on average lossy, even though they contain gain. The transient amplification of light in such systems is characterized by the singular values and the pseudospectra of the underlying propagator. The second part is devoted to the new concept of constant intensity waves that exist only in non-hermitian environments.