SENSIENT TECHNOLOGIES CORPORATION FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements that reflect management's current assumptions and estimates of future economic circumstances, industry conditions, Company performance, and financial results. Forward-looking statements include statements in the future tense, statements referring to any period afterJune 30, 2020 , and statements including the terms "expect," "believe," "anticipate," and other similar terms that express expectations as to future events or conditions. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that could cause actual events to differ materially from those expressed in those statements. A variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results. These factors and assumptions include the impact and uncertainty created by the ongoing COVID-19 pandemic, including, but not limited to, its effects on our employees, facilities, customers and suppliers, the availability and cost of raw materials and other supplies, the availability of logistics and transportation, governmental regulations and restrictions, and general economic conditions; 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 and changing technologies; the Company's ability to successfully implement its growth strategies; the outcome of the Company's various productivity-improvement and cost-reduction efforts and acquisition and divestiture activities; the success of the Company's efforts to explore strategic alternatives for certain non-core product lines; the effectiveness of the Company's past restructuring activities; changes in costs of raw materials, including energy; industry, regulatory, legal, and economic factors related to the Company's domestic and international business; the effects of tariffs, trade barriers, and disputes; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors; currency exchange rate fluctuations; the matters discussed under Item 1A of the Company's Annual Report on Form 10-K for the year endedDecember 31, 2019 , as updated below under Part II, Item 1A; and the matters discussed below under Item 2 including the critical accounting policies referenced therein. Except to the extent required by applicable law, 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 therein will not be realized. OVERVIEW Revenue Revenue was$323.1 million and$339.2 million for the three months endedJune 30, 2020 and 2019, respectively. Revenue was$673.8 million and$686.7 million for the six months endedJune 30, 2020 and 2019, respectively. For the three and six months endedJune 30, 2020 , the impact of foreign exchange rates decreased consolidated revenue by approximately 3% and 2%, respectively. Gross Margin The Company's gross margin was 31.6% and 33.0% for the three months endedJune 30, 2020 and 2019, respectively. The decrease in gross margin was primarily a result of lower Color segment volumes and the impact of a$1.7 million inventory adjustment related to the divesting of the yogurt fruit preparations product line. See Divestitures below for further information on the inventory adjustment.
Gross margin was 31.8% and 33.1% for the six months ended
Selling and Administrative Expense Selling and administrative expense as a percent of revenue was 18.6% and 19.0% for the three months endedJune 30, 2020 and 2019, respectively. Selling and administrative expense as a percent of revenue was 20.4% and 19.0% for the six months endedJune 30, 2020 and 2019, respectively. Selling and administrative expenses included divestiture and other related income of$3.3 million and divestiture and other related expense of$8.4 million for the three and six months endedJune 30, 2020 , respectively. The changes in selling and administrative expense as a percent of revenue is primarily due to the divestiture and other related costs recorded in 2020 and an increase in performance-based compensation. The divestiture and other related activity decreased selling and administrative expense as a percent of revenue by 100 basis points for the three months endedJune 30, 2020 , and the divestiture and other related costs increased selling and administrative expense as a percent of revenue by 120 basis points for the six months endedJune 30, 2020 . 17
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Operating Income Operating income was$42.1 million and$47.4 million for the three months endedJune 30, 2020 and 2019, respectively. Operating margins were 13.0% and 14.0% for the three months endedJune 30, 2020 and 2019, respectively. The decrease in operating margins is primarily due to the lower volumes in the Color segment and higher performance-based compensation, partially offset by the divestiture and other related income recorded in 2020, which increased operating margins by 40 basis points for the three months endedJune 30, 2020 . The divestiture and other related income was primarily a result of the non-cash net gain of$8.2 million recorded in connection with the completion of the inks sale, partially offset by other divestiture and related costs. Operating income was$76.7 million and$96.8 million for the six months endedJune 30, 2020 and 2019, respectively. Operating margins were 11.4% and 14.1% for the six months endedJune 30, 2020 and 2019, respectively. The decrease in operating margins is primarily due to the lower volumes in the Color segment, higher raw material costs, higher performance-based compensation, and the divestiture and other related costs incurred in 2020. The divestiture and other related costs decreased operating margins by 150 basis points for the six months endedJune 30, 2020 . Interest Expense Interest expense was$3.6 million and$5.2 million for the three months endedJune 30, 2020 and 2019, respectively, and$7.9 million and$10.6 million for the six months endedJune 30, 2020 and 2019, respectively. The decrease in expense was due to the decrease in the average debt outstanding and lower average interest rates. Income Taxes The effective income tax rates for the three months endedJune 30, 2020 and 2019, were 20.5% and 18.6%, respectively. For the six months endedJune 30, 2020 and 2019, the effective income tax rates were 25.3% and 22.1%, respectively. The effective tax rates for the three and six months endedJune 30, 2020 and 2019 were both impacted by changes in estimates associated with the finalization of prior year foreign tax items, audit settlements, a change in valuation allowances, and the mix of foreign earnings. OnMarch 27, 2020 ,President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act allows for the deferral of income and social security tax payments, a five-year carryback for net operating losses, changes to interest expense and business loss limitation rules, certain new tax credits, and certain new loans and grants to businesses. The Company has reviewed its income tax assumptions and projections in light of the CARES Act and has determined the CARES Act does not materially impact the Company's income tax expense or projections. During the three months endedJune 30, 2020 , the Company deferred certain income and payroll tax payments of$6.1 million as permitted by the CARES Act.
Divestitures
In
OnJune 30, 2020 , the Company completed the sale of its inks product line. The Company estimates it will realize an enterprise value of approximately$14.5 million . At closing, the Company received$10.3 million of net cash, subject to post-closing working capital and net debt adjustments, and estimates it will realize additional value for the sale of certain assets post-closing and the collection of retained accounts receivables. The Company recorded a non-cash net gain of$8.2 million related to the reclassification of accumulated foreign currency translation and related items from Accumulated Other Comprehensive Loss to Selling and Administrative Expenses in the Consolidated Condensed Statements of Earnings. 18
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In the three and six months endedJune 30, 2020 , the Company recorded non-cash impairment charges of$2.4 million and$12.1 million , respectively, primarily related to property, plant, and equipment, intangibles and allocated goodwill, in Selling and Administrative Expenses related to the disposal group as described in Note 2, Divestitures, to the Consolidated Condensed Financial Statements included in this report. The charge reduced the carrying value of certain long-lived assets to their estimated fair value. An estimate of the fair value of these product lines less cost to sell was determined to be lower than its carrying value. These estimates will be finalized and adjusted as necessary upon the closing of the sales or as assumptions change. In addition, in the three and six months endedJune 30, 2020 , the Company recorded non-cash charges of$1.7 million and$1.9 million , respectively, related to inventory, in Cost of Products Sold. In the three and six months endedJune 30, 2020 , the Company also incurred$2.6 million and$4.5 million , respectively, of additional costs, primarily for severance, environmental, and legal expenses, related to the divestitures and other related activities. See Note 2, Divestitures, to the Consolidated Condensed Financial Statements included in this report for additional detail and estimated additional charges and expenses associated with these divestitures.
COVID-19
COVID-19 continues to affect most of the world, including through widespread illness, quarantines, factory shutdowns, and travel and transportation restrictions. While the Company's financial position remains strong, the Company has seen several financial and operational impacts from the pandemic as of this filing. For the three and six months endedJune 30, 2020 , demand for the Company's products remained strong, especially in product lines that serve the food, beverage, and pharmaceutical markets. There has been softer demand in other product lines the Company serves, particularly in the cosmetics product line and some product lines that supply the quick service restaurant segment due to widespread restaurant shutdowns and quarantine orders. While COVID-19 appears to have initially contributed to demand for food-related products and dampened demand for personal care related products, it is difficult to quantify the continuing and future impact of COVID-19 on demand for the Company's products. The Company continues to believe that it will achieve its projected earnings guidance despite the headwinds created by COVID-19. During the first quarter of 2020, the Company had a production facility inChina and a production facility inIndia that were required to temporarily suspend operations. All of the Company's production facilities are open and operating as of this filing, but the Company continues to monitor developments and regulations in regions where its production facilities are located. The Company also continues to monitor supply chains and has increased inventory in certain key raw materials, although the Company did not experience any significant supply disruptions during the three or six months endedJune 30, 2020 . As ofJune 30, 2020 , the Company continues to be in compliance with its financial loan covenants and does not anticipate any non-compliance in the future. COVID-19 has not adversely impacted the Company's capital or financial resources. Furthermore, the Company expects its forecasted cash flows from operations and its available debt capacity will be able to meet future cash requirements for operations, capital expenditures, contractual maturities on long-term debt, and dividend payments. The Company reviewed its goodwill, intangible assets, and long-lived assets for potential impairment indicators as ofJune 30, 2020 , and except for the impairments associated with the product lines divested or to be divested noted above, no indicators of impairment were identified. The Company also reviewed its trade accounts receivables for potential collection issues and did not identify any significant concerns. The Company will continue to monitor cash collections and review trade receivable aging to identify any deterioration in quality. For the six months endedJune 30, 2020 , the Company estimates that the incremental expenses related to its COVID-19 response are less than$2 million . These incremental expenses are in addition to any profit impact related to lower sales in certain product lines where consumer demand has been negatively impacted by COVID-19. All of the Company's manufacturing plants are currently in operation and have been designated as part of the critical infrastructure in the countries in which they operate. InOctober 2019 , the Company announced its intent to divest its inks, fragrances (excluding its essential oils product line), and yogurt fruit preparations product lines. InJune 2020 , the Company completed the sale of its inks product line. While the sales and exit activities of the fragrances and yogurt fruit preparations product lines are still anticipated to be completed, travel and transportation restrictions have slowed down various activities related to the divestitures. 19
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The Company continues to believe its internal controls over financial reporting and its disclosure controls and procedures are effective to ensure their design and operation continue to be effective as some employees perform tasks from alternative work locations. Internal audit continues to perform their audit procedures as planned, remotely in many cases.
NON-GAAP FINANCIAL MEASURES
Within the following tables, the Company reports certain non-GAAP financial measures, including: (1) adjusted revenue, adjusted operating income, adjusted net earnings, and adjusted diluted earnings per share, which exclude the results of the product lines divested or to be divested and the divestiture and other related costs or income, and (2) percentage changes in revenue, operating income, and diluted earnings per share on an adjusted local currency basis, which eliminate the effects that result from translating its international operations intoU.S. dollars, the results of product lines divested or to be divested, and the divestiture and other related costs or income. The Company has included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable year-over-year 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 report. 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 the Company believes 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. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except 2020 2019 % Change 2020 2019 % Change per share amounts) Revenue (GAAP)$ 323,090 $ 339,186 (4.7 %)$ 673,767 $ 686,699 (1.9 %) Revenue of the product lines divested or to be divested (28,217 ) (36,356 ) (64,802 ) (75,377 ) Adjusted revenue$ 294,873 $ 302,830 (2.6 %)$ 608,965 $ 611,322 (0.4 %) Operating Income (GAAP)$ 42,125 $ 47,368 (11.1 %)$ 76,686 $ 96,788 (20.8 %) Divestiture & other related costs - Cost of products sold 1,749 - 1,939 - Divestiture & other related costs (income) - Selling and administrative expenses (3,276 ) - 8,377 - Operating income of the product lines divested or to be divested (331 ) (345 ) (1,716 ) (377 ) Adjusted operating income$ 40,267 $ 47,023 (14.4 %)$ 85,286 $ 96,411 (11.5 %) Net Earnings (GAAP)$ 30,620 $ 34,331 (10.8 %)$ 51,393 $ 67,138 (23.5 %) Divestiture & other related costs (income), before tax (1,527 ) - 10,316 - Tax impact of divestiture & other related costs 509 - (425 ) - Net earnings of the product lines divested or to be divested, before tax (331 ) (345 ) (1,716 ) (377 ) Tax impact of the product lines divested or to be divested 203 105 500 116 Adjusted net earnings$ 29,474 $ 34,091 (13.5 %)$ 60,068 $ 66,877 (10.2 %) Diluted earnings per share (GAAP)$ 0.72 $ 0.81 (11.1 %)$ 1.21 $ 1.59 (23.9 %) Divestiture & other related costs (income), net of tax (0.02 ) - 0.23 - Results of operations of the product lines divested or to be divested, net of tax - (0.01 ) (0.03 ) (0.01 ) Adjusted diluted earnings per share$ 0.70 $ 0.81 (13.6 %)$ 1.42 $ 1.58 (10.1 %) 20
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The following table summarizes the percentage change for the results of the
three and six months ended
Three Months Ended June 30, 2020 Six Months Ended June 30, 2020
Product Product
Lines Lines
Foreign Divested Adjusted Foreign Divested Adjusted
Exchange or to be Local Exchange or to be Local
Revenue Total Rates Divested Currency Total Rates Divested Currency
Flavors & Fragrances 1.9 % (2.0 %) (1.8 %) 5.7 % 1.8 % (1.5 %) (1.3 %) 4.6 %
Color (12.7 %) (4.4 %) (3.2 %) (5.1 %) (6.4 %) (3.3 %) (2.0 %) (1.1 %)
Asia Pacific (3.9 %) (2.5 %) 0.0 % (1.4 %) 1.4 % (2.1 %) 0.0 % 3.5 %
Total Revenue (4.7 %) (2.9 %) (1.8 %) 0.0 % (1.9 %) (2.3 %) (1.2 %) 1.6 %
Operating Income
Flavors & Fragrances 13.5 % (1.3 %) 6.8 % 8.0 % 1.0 % (1.1 %) 6.2 % (4.1 %)
Color (20.1 %) (3.7 %) (4.5 %) (11.9 %) (10.6 %) (3.0 %) (2.1 %) (5.5 %)
Asia Pacific 15.4 % (0.9 %) (0.1 %) 16.4 % 17.7 % 0.0 % (0.1 %) 17.8 %
Corporate & Other 62.6 % 0.0 % (32.1 %) 94.7 % 123.4 % 0.0 % 80.1 % 43.3 %
Total Operating Income (11.1 %) (2.9 %) 3.6 % (11.8 %) (20.8 %) (2.3 %) (9.1 %) (9.4 %)
Diluted Earnings per Share (11.1 %) (2.5 %) 1.3 % (9.9 %) (23.9 %) (2.5 %) (13.8 %) (7.6 %)
SEGMENT INFORMATION
The Company determines its operating segments based on information utilized by
its chief operating decision maker to allocate resources and assess performance.
The Company evaluates performance based on operating income before divestiture
and other related costs and income, restructuring and other charges, interest
expense, and income taxes (segment operating income). There were no
restructuring and other charges incurred in either of the first three or six
months of 2020 or 2019.
Flavors & Fragrances
Flavors & Fragrances segment revenue was $183.6 million and $180.1 million for
the three months ended June 30, 2020 and 2019, respectively, an increase of
approximately 2%. Foreign exchange rates decreased segment revenue by
approximately 2%. The increase was a result of higher revenue in Natural
Ingredients and Flavors, Extracts & Flavor Ingredients, partially offset by
lower revenue in Yogurt Fruit Preparations. The higher revenue in Natural
Ingredients was primarily due to higher volumes and selling prices. The higher
revenue in Flavors, Extracts & Flavor Ingredients was primarily due to higher
volumes and selling prices, partially offset by the unfavorable impact of
exchange rates. The lower revenue in Yogurt Fruit Preparations was primarily due
to lower volumes.
Flavors & Fragrances segment revenue was $370.1 million and $363.7 million for
the six months ended June 30, 2020 and 2019, respectively, an increase of
approximately 2%. Foreign exchange rates decreased segment revenue by
approximately 2%. The increase was a result of higher revenue in Natural
Ingredients, partially offset by lower revenue in Yogurt Fruit Preparations and
Fragrances. The higher revenue in Natural Ingredients was primarily due to
higher volumes and selling prices. The lower revenue in Yogurt Fruit
Preparations was primarily due to lower volumes. The lower revenue in Fragrances
was primarily due to lower selling prices and the unfavorable impact of exchange
rates, partially offset by higher volumes.
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Flavors & Fragrances segment operating income was$22.8 million and$20.1 million for the three months endedJune 30, 2020 and 2019, respectively, an increase of approximately 14%. Foreign exchange rates decreased segment operating income by approximately 1%. The higher segment operating income was primarily a result of higher operating income in Flavors, Extracts & Flavor Ingredients and Fragrances, partially offset by lower operating profit in Natural Ingredients. The higher segment operating income in Flavors, Extracts & Flavor Ingredients was primarily due to lower manufacturing and other costs and higher selling prices. The higher segment operating income in Fragrances was primarily due to favorable volumes and product mix and lower raw material costs, partially offset by lower selling prices. The lower segment operating income in Natural Ingredients was primarily due to higher raw material costs. Segment operating income as a percent of revenue was 12.4% in the current quarter compared to 11.1% in the prior year's comparable quarter. Flavors & Fragrances segment operating income was$43.6 million and$43.2 million for the six months endedJune 30, 2020 and 2019, respectively, an increase of approximately 1%. Foreign exchange rates decreased segment operating income by approximately 1%. The higher segment operating income was primarily a result of higher operating income in Fragrances, partially offset by lower operating profit in Natural Ingredients. The higher segment operating income in Fragrances was primarily due to favorable volumes and product mix and lower raw material costs, partially offset by higher manufacturing and other costs and lower selling prices. The lower segment operating income in Natural Ingredients was primarily due to higher raw material costs. Segment operating income as a percent of revenue was 11.8% in the current six month period compared to 11.9% in the prior year's comparable six month period.
Color
Segment revenue for the Color segment was$121.3 million and$138.9 million for the three months endedJune 30, 2020 and 2019, respectively. Foreign exchange rates decreased segment revenue by approximately 4%. The decrease was a result of lower segment revenue across Food & Beverage Colors, Personal Care, and Inks. The lower revenue in Food & Beverage Colors was due to the unfavorable impact of exchange rates, partially offset by higher volumes and higher selling prices. The lower revenue in Personal Care was due to lower volumes due to lower demand for makeup products primarily due to COVID-19 and the unfavorable impact of exchange rates. The lower revenue in Inks was due to lower volumes primarily due to COVID-19 and the unfavorable impact of exchange rates. Segment revenue for the Color segment was$264.8 million and$282.8 million for the six months endedJune 30, 2020 and 2019, respectively. The decrease was a result of lower segment revenue in Personal Care and Inks. Foreign exchange rates also decreased segment revenue by approximately 3%. The lower revenue in Personal Care was due to lower volumes due to lower demand for makeup products primarily due to COVID-19 and the unfavorable impact of exchange rates. The lower revenue in Inks was due to lower volumes primarily due to COVID-19 and the unfavorable impact of exchange rates. Segment operating income for the Color segment was$22.3 million and$27.9 million for the three months endedJune 30, 2020 and 2019, respectively. Foreign exchange rates decreased segment operating income by approximately 4%. The lower segment operating income was primarily a result of lower operating income in Personal Care and Inks. The lower segment operating income in Personal Care was primarily a result of lower volumes due to lower demand for makeup products primarily due to COVID-19. The lower segment operating income in Inks was a result of unfavorable volumes primarily due to COVID-19. Segment operating income as a percent of revenue was 18.4% in the current quarter and 20.1% in the prior year's comparable quarter. Segment operating income for the Color segment was$51.9 million and$58.1 million for the six months endedJune 30, 2020 and 2019, respectively. Foreign exchange rates decreased segment operating income by approximately 3%. The lower segment operating income was primarily a result of lower operating income in Personal Care and Inks, partially offset by higher operating income in Food & Beverage Colors. The lower segment operating income in Personal Care was a result of lower volumes due to lower demand for makeup products primarily due to COVID-19 and the unfavorable impact of exchange rates. The lower segment operating income in Inks was a result of unfavorable volumes primarily due to COVID-19. The higher segment operating income in Food & Beverage Colors was due to favorable volumes and product mix, higher selling prices, and lower raw material costs, partially offset by the unfavorable impact of exchange rates. Segment operating income as a percent of revenue was 19.6% in the current six month period and 20.5% in the prior year's comparable six month period. 22
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Asia Pacific Segment revenue for theAsia Pacific segment was$27.9 million and$29.0 million for the three months endedJune 30, 2020 and 2019, respectively. Foreign exchange rates decreased segment revenue by approximately 3%. The lower segment revenue was primarily due to lower volumes as a result of COVID-19 and the unfavorable impact of exchange rates. Segment revenue for theAsia Pacific segment was$58.3 million and$57.5 million for the six months endedJune 30, 2020 and 2019, respectively. Foreign exchange rates decreased segment revenue by approximately 2%. Segment operating income for theAsia Pacific segment was$4.8 million and$4.2 million for the three months endedJune 30, 2020 and 2019, respectively, an increase of approximately 15%. Foreign exchange rates decreased segment operating income by approximately 1%. Segment operating income as a percent of revenue was 17.4% in the current quarter and 14.5% in the prior year's comparable quarter. Segment operating income for theAsia Pacific segment was$9.9 million and$8.4 million for the six months endedJune 30, 2020 and 2019, respectively, an increase of approximately 18%. Foreign exchange rates had no significant impact on segment operating income. The higher segment operating income was primarily due to favorable volumes and product mix. Segment operating income as a percent of revenue was 17.0% and 14.6% in the six months endedJune 30, 2020 and 2019, respectively. Corporate & Other The Corporate & Other operating expense was$7.7 million and$4.8 million for the three months endedJune 30, 2020 and 2019, respectively. The higher operating expense for the three months endedJune 30, 2020 was primarily due to an increase in performance-based compensation, partially offset by$1.5 million of net gains from the divestiture and other related activity. There were no divestiture and other related costs or income in the prior year comparable period. The Corporate & Other operating expense was$28.8 million and$12.9 million for the six months endedJune 30, 2020 and 2019, respectively. The higher operating expense for the six months endedJune 30, 2020 was primarily due to an increase in performance-based compensation and divestiture and other related costs of$10.3 million . There were no divestiture and other related costs in the prior year comparable period.
LIQUIDITY AND FINANCIAL CONDITION
Financial Condition The Company's financial position remains strong. The Company is in compliance with its financial loan covenants calculated in accordance with applicable agreements as ofJune 30, 2020 . See Note 5, Debt, to the Consolidated Condensed Financial Statements included in this report for detail regarding a technical default of its Second Amended and Restated Credit Agreement and each of its private placement notes. The Company expects its cash flow from operations and its available debt capacity can be used to meet future cash requirements for operations, capital expenditures, dividend payments, acquisitions, and stock repurchases. Cash Flows from Operating Activities Net cash provided by operating activities was$107.6 million and$76.2 million for the six months endedJune 30, 2020 and 2019, respectively. The increase in net cash provided by operating activities was due to a$37.8 million increase in cash provided from changes in working capital, primarily accounts payable and other accrued expenses, during the six months endedJune 30, 2020 , compared to the six months endedJune 30, 2019 . Cash Flows from Investing Activities Net cash used in investing activities was$5.8 million and$17.0 million during the six months endedJune 30, 2020 and 2019, respectively. During the six months endedJune 30, 2020 , the Company received cash proceeds of$11.3 million related to the Company's divestiture activities. In addition, during the six months endedJune 30, 2020 , the Company received$4.6 million related to the redemption of miscellaneous investments. Capital expenditures were$21.4 million and$16.6 million during the six months endedJune 30, 2020 and 2019, respectively. 23
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Cash Flows from Financing Activities Net cash used in financing activities was$93.6 million and$61.7 million for the six months endedJune 30, 2020 and 2019, respectively. Net debt decreased by$60.2 million and$30.2 million for the six months endedJune 30, 2020 and 2019, respectively. For purposes of the cash flow statement, net changes in debt exclude the impact of foreign exchange rates. Dividends of$33.0 million and$30.5 million were paid during the six months endedJune 30, 2020 and 2019, respectively. Dividends paid were$0.78 per share and$0.72 per share for the first six months of 2020 and 2019, respectively.
CONTRACTUAL OBLIGATIONS
There have been no material changes in the Company's contractual obligations during the quarter endedJune 30, 2020 . For additional information about contractual obligations, refer to "Contractual Obligations" under Item 7 of the Company's Annual Report on Form 10-K for the year endedDecember 31, 2019 .
OFF-BALANCE SHEET ARRANGEMENTS
As of
CRITICAL ACCOUNTING POLICIES
There have been no material changes in the Company's critical accounting
policies during the quarter ended
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