Form 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2010
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 001 04858
A. |
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Full title of the plan and the address of the plan, if different from that of the issuer
named below: |
International Flavors & Fragrances Inc.
Retirement Investment Fund Plan
B. |
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Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office: |
International Flavors & Fragrances Inc.
521 West 57th Street
New York, NY 10019
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
TABLE OF CONTENTS TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2010 AND 2009
Table of Contents
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(*) |
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Other supplemental schedules required by 29
CFR2520.103-10 of the Department of Labors Rule and
Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974, as
amended have been omitted as they are not applicable. |
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The Administrative Committee and Participants
International Flavors & Fragrances Inc.
Retirement Investment Fund Plan
521 West 57th Street
New York, NY 10019
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying statements of net assets available for benefits of the
International Flavors & Fragrances Inc. Retirement Investment Fund Plan (the Plan) as of December
31, 2010 and 2009, and the related statement of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the Plans management.
Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. The
Plan is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plans internal control
over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31, 2010 and 2009, and
the changes in net assets available for benefits for the years ended December 31, 2010 and 2009 in
conformity with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming opinions on the basic financial statements
taken as a whole. The accompanying supplemental schedule of assets (held at year end) as of
December 31, 2010 is presented for the purpose of additional analysis and is not a required part of
the basic financial statements, but is supplementary information required by the Department of
Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974.
3
International Flavors & Fragrances Inc.
Retirement Investment Fund Plan
New York, NY 10019
This supplemental schedule is the responsibility of the Plans management. The supplemental
schedule has been subjected to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
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/s/ Smolin, Lupin & Co., P.A.
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Fairfield, New Jersey |
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June 28, 2011 |
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4
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2010 AND 2009
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Assets |
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2010 |
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2009 |
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Investments at fair value: |
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International Flavors & Fragrances Inc. |
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Common Stock Fund |
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$ |
8,693,990 |
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$ |
7,330,160 |
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Vanguard 500 Index Fund |
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41,326,002 |
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36,347,805 |
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Vanguard Asset Allocation Fund |
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3,592,224 |
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3,422,055 |
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Vanguard Equity Income Fund |
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4,709,858 |
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3,585,811 |
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Vanguard Explorer Fund |
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7,452,596 |
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5,687,805 |
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Vanguard International Growth Fund |
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20,348,554 |
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17,473,240 |
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Vanguard Long-Term Investment Grade Fund |
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9,756,545 |
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8,345,939 |
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Vanguard Mid-Cap Index Fund |
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12,737,908 |
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9,348,872 |
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Vanguard Prime Money Market Fund |
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30,237,490 |
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34,772,404 |
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Vanguard PRIMECAP Fund |
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12,430,192 |
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10,870,274 |
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Vanguard Retirement Savings Trust |
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9,870,862 |
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9,221,393 |
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Vanguard Total Bond Market Index Fund |
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15,826,493 |
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14,840,128 |
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Vanguard U.S. Growth Fund |
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10,103,087 |
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9,324,288 |
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Vanguard Target Retirement Income Fund |
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542,683 |
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283,059 |
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Vanguard Target Retirement Funds: |
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2005 Fund |
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1,165,385 |
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1,282,149 |
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2010 Fund |
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679,870 |
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612,476 |
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2015 Fund |
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7,499,449 |
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6,621,759 |
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2020 Fund |
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2,133,541 |
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1,090,631 |
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2025 Fund |
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7,030,674 |
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5,106,024 |
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2030 Fund |
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1,375,388 |
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640,082 |
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2035 Fund |
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4,906,045 |
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3,366,877 |
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2040 Fund |
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1,149,314 |
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443,588 |
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2045 Fund |
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2,158,783 |
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1,408,047 |
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2050 Fund |
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369,237 |
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170,271 |
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Total investments |
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216,096,170 |
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191,595,137 |
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Notes receivable from participants |
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5,142,082 |
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4,986,809 |
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Net assets available for benefits |
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$ |
221,238,252 |
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$ |
196,581,946 |
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The accompanying notes are an integral part of these financial statements.
5
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
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2010 |
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2009 |
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Contributions: |
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Company contributions |
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$ |
5,474,033 |
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$ |
5,383,335 |
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Participant contributions |
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11,125,899 |
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10,102,429 |
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TOTAL CONTRIBUTIONS |
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16,599,932 |
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15,485,764 |
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Investment income: |
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Dividends |
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3,649,738 |
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3,322,742 |
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Interest |
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280,200 |
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270,033 |
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Net appreciation of investments |
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19,796,798 |
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27,097,229 |
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TOTAL INVESTMENT INCOME |
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23,726,736 |
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30,690,004 |
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Interest income on notes receivable from participants |
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243,924 |
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275,408 |
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Other asset transfers |
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8,196 |
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TOTAL ADDITIONS |
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40,578,788 |
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46,451,176 |
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Benefits distributed |
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(15,889,744 |
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(11,203,271 |
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Administrative fees |
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(32,738 |
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(17,312 |
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TOTAL DISBURSEMENTS |
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(15,922,482 |
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(11,220,583 |
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Net increase in participants balances during the year |
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24,656,306 |
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35,230,593 |
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Net assets available for benefits: |
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Beginning of year |
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196,581,946 |
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161,351,353 |
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END OF YEAR |
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$ |
221,238,252 |
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$ |
196,581,946 |
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The
accompanying notes are an integral part of these financial statements.
6
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
NOTE 1. DESCRIPTION OF THE PLAN
The following description of the International Flavors & Fragrances Inc. Retirement
Investment Fund Plan (the Plan) is provided for general information purposes only.
Participants should refer to the Plan document for complete information.
A. General/Eligibility:
The Plan is a defined contribution plan covering all U.S. based employees of International
Flavors & Fragrances Inc. (IFF) and its domestic subsidiaries (the Company), with the
exception of the unionized employees located in Jacksonville, Florida (the Union Plan). The
Plan also covers certain employees who are U.S. citizens temporarily assigned to subsidiaries
abroad. Employees hired between January 1, 2006 and August 31, 2006 participated under a
separate plan that was merged into the Plan effective September 1, 2006. Employees become
eligible to participate in the Plan on their first day of employment and are automatically
enrolled at a contribution rate of 4% of pre-tax eligible earnings in the Target Retirement
Income Fund closest to the participants 65th birthday. In July 2006 the Plan was
amended to provide a different matching contribution formula, as described in Note 1E below, for
employees who are hired by the Company or whose plan assets were merged into the Plan on or
after September 1, 2006. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended, (ERISA). The Plan has been amended to reflect the
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, the Pension
Protection Act of 2006 and the Heroes Earnings and Assistance Relief Tax Act (HEART) of 2008.
B. Administration of the Plan:
The Vanguard Fiduciary Trust Company is the Trustee of the Plan (Vanguard or the
Trustee) and has custody of the assets. The Administrative Committee, whose appointment is
overseen by the Companys Board of Directors, is responsible for administration of the Plan; the
Administrative Committee oversees the Trustee in carrying out the day-to-day activities of
administration. The Investment Committee, whose appointment is also seen by the Companys Board
of Directors, oversees the Plans investment options and management of Plan assets.
C. Investments:
The Plan currently offers participants 23 investment funds and a common collective trust.
Participants have the option to invest in, and direct any matching contribution towards any of
the following funds:
IFF Common Stock Fund: This fund consists of common stock of the Company and investments
in the Vanguard Prime Money Market fund as deemed necessary for orderly investment in such
Company stock and for anticipated cash requirements.
Vanguard Long-Term Investment Grade Fund: This fund seeks a high and sustainable level
of current income by investing in a variety of high-quality and, to a lesser extent,
medium-quality fixed income securities, at least 80% of which will be intermediate and
long-term, investment-grade fixed income securities.
Vanguard Prime Money Market Fund: This fund invests in high-quality, short-term money
market instruments, including certificates of deposit, bankers acceptances, commercial paper
and other money market securities which maintain a dollar-weighted average maturity of 60 days
or less. The fund will invest more than 25% of its assets in securities issued by companies in
the financial services industry. The portfolio is designed to maintain a constant $1.00 share
value. An investment in the money market fund is neither insured nor guaranteed by the U.S.
Government, and there is no assurance that the fund will be able to maintain a stable net asset
value of $1.00 per share.
7
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
Vanguard 500 Index Fund: This fund seeks investment results that parallel the
performance of the Standard & Poors 500 Composite Stock Index by investing all, or
substantially all, of its assets in the stocks that make up the index, holding each stock in
approximately the same proportion as its weighting in the index. The level of current income
produced generally ranges from moderate to very low.
Vanguard U.S. Growth Fund: This fund seeks long-term capital appreciation by investing
in common stocks of companies with above average growth potential and reasonable stock prices in
comparison with expected earnings. The level of current income produced by this fund ranges
from moderate to very low.
Vanguard International Growth Fund: This fund seeks long-term capital growth by
investing in common stocks of seasoned companies based outside the United States that have above
average growth potential. A 2% redemption fee is charged for any shares transferred out of this
fund prior to the end of the two-month holding period.
Vanguard Total Bond Market Index Fund: This fund seeks investment results that parallel
the performance of the Barclays Capital U.S. Aggregate Float Adjusted Bond Index. The fund
maintains a dollar-weighted average maturity consistent with that of the index, which currently
ranges between 5 and 10 years.
Vanguard Explorer Fund: This fund seeks to provide long-term capital growth by investing
in a diversified portfolio of small company stocks with prospects for superior growth potential.
These companies tend to be unseasoned.
Vanguard PRIMECAP Fund: This fund seeks to provide long-term capital growth by investing
in stocks of companies with above average prospects for continued earnings growth that is not
reflected in their current market price. A 1% redemption fee is charged for any shares
transferred out of this fund prior to the end of the one year holding period.
Vanguard Asset Allocation Fund: This fund seeks to maximize long-term growth of capital
and income by investing in common stocks, bonds and money market instruments. The mix, or
allocation, of the three types of assets changes from time to time depending on which mix
appears to offer the best combination of expected returns and risk. This fund may invest up to
100% of its assets in any one of the three asset classes.
Vanguard Mid-Cap Index Fund: This fund seeks to parallel the performance of the Morgan
Stanley Capital International (MSCI) US Mid Cap 450 Index, which comprises a market-weighted
group of medium-sized U.S. companies. The fund attempts to replicate the target index by
investing all, or substantially all, of its assets in the stocks that make up the index, holding
each stock in approximately the same proportion as its weighting in the index.
Vanguard Equity Income Fund: This fund seeks to provide an above average level of
current income and reasonable long-term capital appreciation by mainly investing in
dividend-paying common stocks of established medium-size and large U.S. companies.
Vanguard Target Retirement Funds: These consist of 10 separate funds seeking capital
appreciation and current income growth by investing in other Vanguard funds according to an
asset allocation strategy designed for investors planning to retire in or within the target
years of 2005, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045 and 2050.
Vanguard Target Retirement Income Fund: This fund seeks current income and some capital
appreciation by investing in other Vanguard mutual funds according to an asset allocation
strategy designed for investors currently in retirement.
8
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
Vanguard Retirement Savings Trust: This common collective trust seeks a stable share
value of $1.00 and a high level of current income consistent with a 2-3 year average maturity by
investing primarily in investment contracts issued by insurance companies and commercial banks,
and similar types of fixed-principal investments.
D. Cash or Deferred Wage and Salary Conversion Agreements:
Each participant enters into a Cash or Deferred Wage and Salary Conversion Agreement
(CODA) with the Company, pursuant to which participant contributions to the Plan are made.
Such agreement specifies the portion of the participants compensation, as defined in the Plan,
during each Plan year that the participant elects to forego such compensation portion and to
have such amount contributed by the Company to the participants account with the Plan. Any
such election remains in effect until changed by the participant. The Administrative Committee
may limit the amounts specified in such agreement to ensure compliance with the
antidiscrimination standards of Section 401(k) of the Internal Revenue Code (the Code).
Subject to these limitations, participants may contribute up to 30% of their annual base wages,
before bonuses and overtime, up to the maximum amount permitted under the Code. Under the Code,
the maximum amount permitted per participant was limited to $16,500 in each of 2010 and 2009.
Participants who will be age 50 or older by the end of the Plan year are eligible to make
before-tax catch-up contributions. Catch-up contributions are limited to $5,500 for eligible
employees for each of 2010 and 2009. Amounts in excess of Code limits may, at the election of
the participant, either be contributed to the Plan on an after-tax basis or treated as
contributions to the Companys Deferred Compensation Plan (DCP) if an employee is eligible to
participate in the DCP. If no election is made, the excess above Code limits, plus any income
less any loss allocable thereto, shall be distributed to the participant.
E. Company Contributions:
The Company matches 100% of the first 4% of the participants base compensation contributed
and 75% of contributions over 4% and up to 8% of the participants base compensation for (a)
employees hired, re-hired or whose plan assets were transferred into the Plan on or after
January 1, 2006 or (b) participants in which the sum of their age plus the number of service
years was less than 70 as of December 31, 2007. For employees that were participants of the
Plan before December 31, 2005, and who do not meet the criteria set forth in (a) and (b) above,
the Company matches 50% of the first 6% of the participants compensation, as defined, that a
participant contributes to the Plan, whether on a deferred or after-tax basis.
F. Vested Benefits/Forfeitures:
All participants vest immediately in their contributions to the Plan plus earnings thereon.
Participants vest in the Companys matching contribution after three years of continuous
credited service. Forfeitures are applied towards employer matching contributions. For the
year ended December 31, 2010 there were participant forfeitures of approximately $95,000 and
forfeitures applied against employer contributions of approximately $245,000. For the year
ended December 31, 2009 there were participant forfeitures of approximately $250,000 and
forfeitures applied against employer contributions of $236,000. At December 31, 2010 and 2009,
forfeited non-vested amounts not yet applied to employer matching contributions approximated
$77,000 and $227,000, respectively.
9
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
G. Individual Accounts:
A separate account is established and maintained for each active and former participant.
Former participants are those who have terminated employment and have not yet received final
payment of their account. The participants contributions and the Companys matching
contribution are credited to the specific participants account. The participants
contributions and the Companys matching contributions are invested in one or more of the Plans
funds as directed by the participant.
Participants accounts are maintained on a unit basis for all funds.
Interest earned and dividends paid are credited to each participants account based on
accumulated daily account balances and reinvested in the respective fund.
H. Transfers Between Funds:
Participants may transfer all or a portion of their balance in any fund of the Plan to an
alternative fund of the Plan. Exchanges must be in increments of 1%. Participants may make
these transfers as frequently as on a daily basis by contacting Vanguard. However, participants
will not be able to move money back into the same fund within 60 days. The 60-day limitation
does not apply to the Vanguard Prime Money Market Fund and the Vanguard Retirement Savings
Trust. The Vanguard Retirement Savings Trust has an equity wash provision which prohibits
participants from making direct exchanges from this trust to a competing option, such as the
Vanguard Prime Money Market Fund. Instead, participants must first exchange assets to a
non-competing fund (typically an equity fund) and remain in that fund for 90 days before
exchanging into a competing fund.
I. Notes Receivable from Participants and In-service Withdrawals:
Participants may borrow from the Plan as described in Note 5. A participant may withdraw
all or a portion of his or her balances if bona fide financial necessity can be demonstrated in
accordance with guidelines set forth in the Code (hardship withdrawal). A participant who
makes a hardship withdrawal is limited by the Code as to the amount of CODA contribution a
participant may make for the taxable year following the year of the withdrawal. The amounts of
in-service withdrawals are limited by government regulation to amounts contributed under CODA
agreements and earnings on such contributions.
J. Rollover Contributions:
Participants who receive eligible rollover distributions from another ERISA qualified plan
may roll that distribution into the Plan. Eligible rollover distributions are those that come
directly from either another qualified retirement plan or an Individual Retirement Account
(IRA) which was set up to hold a distribution from another qualified retirement plan on a
temporary basis. Rollover amounts can only include pretax contributions, plus any untaxed
earnings thereon. All rollovers from such an IRA must be made within one year of original
distribution from the qualified retirement plan. Rollovers included in participant contributions
were approximately $900,000 and $322,000 for 2010 and 2009, respectively.
K. Benefit Payments:
On termination of service due to death, disability or retirement, a participant or
beneficiary may elect to receive benefits based on one of the following options:
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A lump-sum payment; |
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Periodic payments. |
10
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
Lump sum or installment payments may be made in cash or securities at the direction of the
Plans Administrative Committee that directs the Trustee. When periodic payments are elected, a
participants interest remains in the Plan and continues to receive allocations of earnings and
losses until fully distributed.
L. Termination of Plan:
The Company may terminate the Plan at any time. In such event, the total amounts in
participants accounts shall continue in the trust for their benefit and become 100% vested in
their account, and shall be distributed to their designated beneficiaries or them, as described
in Note 1K above, upon retirement, death, disability or termination of employment. At the
present time, the Company has no intention of terminating the Plan.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by the Plan:
A. Method of Accounting:
The Plans financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of America.
B. Valuation of Investments:
Investments are reported at fair value (see Note 3) in accordance with accounting guidance
on fair value measurements and disclosures. Fair value is the price that would be recorded to
sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
C. Notes Receivable from Participants:
Notes receivable from participants are measured at their unpaid principal balance plus any
accrued, but unpaid interest. Delinquent participant loans are reclassified as distributions
based upon the terms of the plan document.
D. Security Transactions and Related Investment Income:
Security transactions are recorded on the trade date; interest income is recorded on the
accrual basis and dividend income is recorded on the ex-dividend date. Capital gain
distributions from mutual funds are recorded as dividend income.
The Statement of Changes in Net Assets Available for Benefits presents the net appreciation
(depreciation) in the fair value of the Plans investments, which consists of the realized gains
and losses and the unrealized appreciation (depreciation) on those investments.
E. Administrative Expenses:
All expenses that arise in connection with the administration of the Plan are paid by the
Company except for loan administration fees (see Note 5) and discretionary portfolio management
fees associated with the Vanguard Managed Account Program. Brokerage fees are included in the
cost of investments when purchased and are deducted from proceeds received in determining
realized gains and losses on investments sold. Investment advisory fees for the management of
the Vanguard funds are expenses of the funds in which participants participate.
11
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
F. Contribution Income:
Contributions made in accordance with participants CODA agreements (see Note 1D) are
recognized during the period in which the Company makes payroll deductions from the
participants compensation. Company contributions are recognized during the same period in
which the Company makes payroll deductions from the participants compensation for the
participant contributions.
G. Benefit Obligations:
Benefits are recorded when paid.
H. Risks and Uncertainties:
The Plan provides for various investment options in any combination of investment funds
described in Note 1C. Investment securities are exposed to various risks, such as interest
rate, market and credit. Due to the level of risk associated with certain investment securities
and the level of uncertainty related to changes in the value of investment securities, it is at
least reasonably possible that changes in market value could materially affect participants
account balances and the amounts reported in the financial statements.
I. Use of Estimates:
The preparation of financial statements in accordance with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying disclosures.
Actual results could differ from those estimates.
J. Reclassifications:
In September 2010, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Update (ASU) No. 2010-25 that requires loans to participants to be classified as notes
receivable from participants rather than as investments, as previously required, effective for
plan years ending on or after December 15, 2010. As a result, loans to participants (and
applicable interest income) have been reclassified from investments (and net investment income)
in the prior year financial statements to conform to the current year presentation.
NOTE 3. FAIR VALUE MEASUREMENTS
Accounting guidance on fair value measurements specifies a hierarchy of valuation
techniques based on whether the inputs to those valuation techniques are observable or
unobservable. Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect our market assumptions. These two types of inputs create the
following fair value hierarchy:
|
|
|
Level 1: Quoted prices for identical instruments in active markets; |
|
|
|
|
Level 2: Quoted prices for similar instruments in active markets; quoted
prices for identical or similar instruments in markets that are not
active; and model-derived valuations in which all significant inputs and
significant value drivers are observable in active markets. |
|
|
|
|
Level 3: Valuations derived from valuation techniques in which one or
more significant inputs or significant value drivers are unobservable. |
12
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
The IFF Common Stock Fund is valued based on the closing price of the underlying IFF common
stock at the valuation date, plus any uninvested cash position. Mutual funds, which include
money market funds, are registered investment companies and are valued at quoted market prices
which represent the net asset value of the underlying shares held by the Plan at the valuation
date. The Vanguard Retirement Savings Trust is a common collective trust that holds fully
benefit responsive investment contracts that are valued at contract value which is the same as
fair value in all material respects. There were no investments classified as Level 3 for the
periods ending December 31, 2010 and 2009.
While the Plan believes its valuation methods are appropriate and consistent with other
market participants, the use of different methodologies or assumptions to determine the fair
value of certain financial instruments could result in a different fair value measurement at the
reporting date.
Investments Measured at Fair Value on a Recurring Basis
Investments measured at fair value on a recurring basis consisted of the following types of
instruments as of December 31, 2010 and 2009 (Level 1 and 2 inputs are defined above):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of |
|
|
|
|
|
|
December 31, 2010 |
|
|
|
|
|
|
Using Input Type |
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Total |
|
Mutual funds: |
|
|
|
|
|
|
|
|
|
|
|
|
Balanced |
|
$ |
3,592,224 |
|
|
$ |
|
|
|
$ |
3,592,224 |
|
Bond |
|
|
25,583,038 |
|
|
|
|
|
|
|
25,583,038 |
|
Domestic equity |
|
|
88,759,643 |
|
|
|
|
|
|
|
88,759,643 |
|
International equity |
|
|
20,348,554 |
|
|
|
|
|
|
|
20,348,554 |
|
Money market |
|
|
30,237,490 |
|
|
|
|
|
|
|
30,237,490 |
|
Retirement income |
|
|
29,010,369 |
|
|
|
|
|
|
|
29,010,369 |
|
Common stock fund |
|
|
|
|
|
|
8,693,990 |
|
|
|
8,693,990 |
|
Common/collective trust funds |
|
|
|
|
|
|
9,870,862 |
|
|
|
9,870,862 |
|
|
|
|
|
|
|
|
|
|
|
Total investments measured at fair value |
|
$ |
197,531,318 |
|
|
$ |
18,564,852 |
|
|
$ |
216,096,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of |
|
|
|
|
|
|
December 31, 2009 |
|
|
|
|
|
|
Using Input Type |
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Total |
|
Mutual funds: |
|
|
|
|
|
|
|
|
|
|
|
|
Balanced |
|
$ |
3,422,055 |
|
|
$ |
|
|
|
$ |
3,422,055 |
|
Bond |
|
|
23,186,067 |
|
|
|
|
|
|
|
23,186,067 |
|
Domestic equity |
|
|
75,164,855 |
|
|
|
|
|
|
|
75,164,855 |
|
International equity |
|
|
17,473,240 |
|
|
|
|
|
|
|
17,473,240 |
|
Money market |
|
|
34,772,404 |
|
|
|
|
|
|
|
34,772,404 |
|
Retirement income |
|
|
21,024,963 |
|
|
|
|
|
|
|
21,024,963 |
|
Common stock fund |
|
|
|
|
|
|
7,330,160 |
|
|
|
7,330,160 |
|
Common/collective trust funds |
|
|
|
|
|
|
9,221,393 |
|
|
|
9,221,393 |
|
|
|
|
|
|
|
|
|
|
|
Total investments measured at fair value |
|
$ |
175,043,584 |
|
|
$ |
16,551,553 |
|
|
$ |
191,595,137 |
|
|
|
|
|
|
|
|
|
|
|
13
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
NOTE 4. TAX STATUS
The Internal Revenue Service has determined and informed Vanguard via a favorable
determination letter dated March 31, 2008 that the prototype plan on which the Plan is based is
designed in accordance with applicable sections of the Code. Since the date of the most recent
request for determination to the Internal Revenue Service, the Company has made certain
amendments to the Plan. However, the Company believes the Plan is designed to be and is
currently being operated in compliance with the applicable requirements of the Code. Therefore,
no provision for income taxes has been included in the Plans financial statements.
Participants will not be subject to income tax for contributions made on their behalf by the
Company, nor on money earned by the Plan and credited to their account until such time as they
withdraw their balance.
The Plan does not have any uncertain tax positions that would result in the recording of a
liability (or asset) for unrecognized tax benefits as of December 31, 2010 and 2009. The Plan
is subject to routine audits by taxing jurisdictions and has open tax years of 2007 to 2009.
There are currently no audits in progress.
NOTE 5. NOTES RECEIVABLE FROM PARTICIPANTS
Upon application by a participant and validation as appropriate per the participant loan
policy, the Trustee may make a loan to a participant in an amount not exceeding the lesser of
50% of the balance in the participants account, or $50,000, with a minimum loan of $1,000.
Loan withdrawals are allocated, as applicable, to the participants balance in each of his or
her selected investment funds. The loans are collateralized by the balance in the participants
accounts and bear interest at a fixed rate equal to the Citibank, N.A. prime rate, plus 1/2
percent, but in no case in excess of the legal rate of interest. Interest rates are determined
on the first business day of the calendar quarter. The Plan limits the total number loans
outstanding at any time for each participant to three loans. Loans are subject to a loan
origination fee of $30 if they are requested on-line or $80 if they are requested through a
participant services representative. Loan origination fees are deducted from the loan proceeds.
In addition, participants with outstanding loans are subject to an annual administrative fee of
$10, which is deducted from their respective accounts each July, except for the first year of
the loan. Interest rates on outstanding participant loans at December 31, 2010 and 2009 ranged
from approximately 3.75% to approximately 10%.
14
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
NOTE 6. RELATED PARTY TRANSACTIONS
The IFF Common Stock Fund invests in shares of the Companys common stock. The fund is
designed as a means for employees to participate in the potential long-term growth of the
Company. Investments in the IFF Company Stock Fund qualify as party-in-interest transactions.
Most Plan investments consist of units in investment funds managed by Vanguard. Vanguard
is a party-in-interest as defined by ERISA.
In the opinion of the Investment Committee, fees paid during the year for services rendered
by parties-in-interest were based on customary and reasonable rates for such services.
NOTE 7. TRANSFER OF ASSETS
Other asset transfers, net in 2010 include $8,196 of asset transfer-ins from an affiliated
plan. There were no asset transfers, net in 2009.
NOTE 8. NET APPRECIATION/(DEPRECIATION) ON INVESTMENTS
The net appreciation/(depreciation) in the fair value of investments (including gains and
losses on investments sold during the year) was as follows:
15
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
YEAR ENDED DECEMBER 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
Flavors & |
|
|
|
|
|
|
Net |
|
|
|
Fragrances Inc. |
|
|
|
|
|
|
Appreciation/ |
|
|
|
Common Stock Fund |
|
|
Mutual Funds |
|
|
(Depreciation) |
|
|
IFF Common Stock Fund |
|
$ |
2,363,803 |
|
|
$ |
|
|
|
$ |
2,363,803 |
|
Vanguard 500 Index Fund |
|
|
|
|
|
|
4,653,049 |
|
|
|
4,653,049 |
|
Vanguard Asset Allocation Fund |
|
|
|
|
|
|
426,644 |
|
|
|
426,644 |
|
Vanguard Equity Income Fund |
|
|
|
|
|
|
464,078 |
|
|
|
464,078 |
|
Vanguard Explorer Fund |
|
|
|
|
|
|
1,579,180 |
|
|
|
1,579,180 |
|
Vanguard International Growth Fund |
|
|
|
|
|
|
2,415,506 |
|
|
|
2,415,506 |
|
Vanguard Long-Term Investment Grade Fund |
|
|
|
|
|
|
405,896 |
|
|
|
405,896 |
|
Vanguard Mid-Cap Index Fund |
|
|
|
|
|
|
2,379,463 |
|
|
|
2,379,463 |
|
Vanguard PRIMECAP Fund |
|
|
|
|
|
|
1,154,493 |
|
|
|
1,154,493 |
|
Vanguard Total Bond Market Index Fund |
|
|
|
|
|
|
371,574 |
|
|
|
371,574 |
|
Vanguard U.S. Growth Fund |
|
|
|
|
|
|
972,373 |
|
|
|
972,373 |
|
Vanguard Target Retirement 2005 Fund |
|
|
|
|
|
|
86,557 |
|
|
|
86,557 |
|
Vanguard Target Retirement 2010 Fund |
|
|
|
|
|
|
46,680 |
|
|
|
46,680 |
|
Vanguard Target Retirement 2015 Fund |
|
|
|
|
|
|
642,816 |
|
|
|
642,816 |
|
Vanguard Target Retirement 2020 Fund |
|
|
|
|
|
|
160,050 |
|
|
|
160,050 |
|
Vanguard Target Retirement 2025 Fund |
|
|
|
|
|
|
656,813 |
|
|
|
656,813 |
|
Vanguard Target Retirement 2030 Fund |
|
|
|
|
|
|
135,533 |
|
|
|
135,533 |
|
Vanguard Target Retirement 2035 Fund |
|
|
|
|
|
|
501,946 |
|
|
|
501,946 |
|
Vanguard Target Retirement 2040 Fund |
|
|
|
|
|
|
86,897 |
|
|
|
86,897 |
|
Vanguard Target Retirement 2045 Fund |
|
|
|
|
|
|
221,712 |
|
|
|
221,712 |
|
Vanguard Target Retirement 2050 Fund |
|
|
|
|
|
|
33,581 |
|
|
|
33,581 |
|
Vanguard Target Retirement Income Fund |
|
|
|
|
|
|
38,154 |
|
|
|
38,154 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
2,363,803 |
|
|
$ |
17,432,995 |
|
|
$ |
19,796,798 |
|
|
|
|
|
|
|
|
|
|
|
16
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
YEAR ENDED DECEMBER 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
Flavors & |
|
|
|
|
|
|
Net |
|
|
|
Fragrances Inc. |
|
|
|
|
|
|
Appreciation/ |
|
|
|
Common Stock Fund |
|
|
Mutual Funds |
|
|
(Depreciation) |
|
|
IFF Common Stock Fund |
|
$ |
2,059,169 |
|
|
$ |
|
|
|
$ |
2,059,169 |
|
Vanguard 500 Index Fund |
|
|
|
|
|
|
6,850,179 |
|
|
|
6,850,179 |
|
Vanguard Asset Allocation Fund |
|
|
|
|
|
|
464,335 |
|
|
|
464,335 |
|
Vanguard Equity Income Fund |
|
|
|
|
|
|
429,524 |
|
|
|
429,524 |
|
Vanguard Explorer Fund |
|
|
|
|
|
|
1,467,187 |
|
|
|
1,467,187 |
|
Vanguard International Growth Fund |
|
|
|
|
|
|
4,758,681 |
|
|
|
4,758,681 |
|
Vanguard Long-Term Investment Grade Fund |
|
|
|
|
|
|
211,171 |
|
|
|
211,171 |
|
Vanguard Mid-Cap Index Fund |
|
|
|
|
|
|
2,507,690 |
|
|
|
2,507,690 |
|
Vanguard PRIMECAP Fund |
|
|
|
|
|
|
2,665,414 |
|
|
|
2,665,414 |
|
Vanguard Total Bond Market Index Fund |
|
|
|
|
|
|
228,244 |
|
|
|
228,244 |
|
Vanguard U.S. Growth Fund |
|
|
|
|
|
|
2,316,556 |
|
|
|
2,316,556 |
|
Vanguard Target Retirement 2005 Fund |
|
|
|
|
|
|
119,594 |
|
|
|
119,594 |
|
Vanguard Target Retirement 2010 Fund |
|
|
|
|
|
|
127,134 |
|
|
|
127,134 |
|
Vanguard Target Retirement 2015 Fund |
|
|
|
|
|
|
766,378 |
|
|
|
766,378 |
|
Vanguard Target Retirement 2020 Fund |
|
|
|
|
|
|
166,062 |
|
|
|
166,062 |
|
Vanguard Target Retirement 2025 Fund |
|
|
|
|
|
|
781,093 |
|
|
|
781,093 |
|
Vanguard Target Retirement 2030 Fund |
|
|
|
|
|
|
113,798 |
|
|
|
113,798 |
|
Vanguard Target Retirement 2035 Fund |
|
|
|
|
|
|
662,018 |
|
|
|
662,018 |
|
Vanguard Target Retirement 2040 Fund |
|
|
|
|
|
|
73,978 |
|
|
|
73,978 |
|
Vanguard Target Retirement 2045 Fund |
|
|
|
|
|
|
263,566 |
|
|
|
263,566 |
|
Vanguard Target Retirement 2050 Fund |
|
|
|
|
|
|
33,782 |
|
|
|
33,782 |
|
Vanguard Target Retirement Income Fund |
|
|
|
|
|
|
31,676 |
|
|
|
31,676 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
2,059,169 |
|
|
$ |
25,038,060 |
|
|
$ |
27,097,229 |
|
|
|
|
|
|
|
|
|
|
|
17
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
NOTE 9. PLAN INVESTMENTS REPRESENTING 5% OR MORE OF THE PLANS NET ASSETS
Investments at fair value that represent 5% or more of the Plans net assets at December
31, 2010 and 2009 were as follows:
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
Mutual Funds: |
|
|
|
|
|
|
|
|
Vanguard 500 Index Fund |
|
$ |
41,326,002 |
|
|
$ |
36,347,805 |
|
Vanguard Prime Money Market Fund |
|
|
30,237,490 |
|
|
|
34,772,404 |
|
Vanguard International Growth Fund |
|
|
20,348,554 |
|
|
|
17,473,240 |
|
Vanguard Total Bond Market Index Fund |
|
|
15,826,493 |
|
|
|
14,840,128 |
|
Vanguard Mid-Cap Index Fund |
|
|
12,737,908 |
|
|
|
* |
|
Vanguard PRIMECAP Fund |
|
|
12,430,192 |
|
|
|
10,870,274 |
|
|
|
|
* |
|
Fair value of funds did not represent 5% or more of Plan assets at each respective year-end. |
18
SUPPLEMENTAL SCHEDULE
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
EIN No. 13-432060
PLAN No. 001
FORM 5500
SCHEDULE H, LINE 4i SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
|
(c) |
|
|
|
(e) |
|
|
|
Identity of Issue, Borrower, Lessor, or |
|
Description of Investment, including Maturity Date, |
|
(d) |
|
Current |
|
(a) |
|
Similar Party |
|
Rate of Interest, Collateral, Par or Maturity Value |
|
Cost |
|
Value |
|
* |
|
International Flavors & Fragrances Inc. Comon Stock Fund |
|
Company Stock Fund |
|
a |
|
$ |
8,693,990 |
|
* |
|
Vanguard Retirement Savings Trust |
|
Common/Collective Trust |
|
a |
|
|
9,870,862 |
|
* |
|
Vanguard Long-Term Investment Grade Fund |
|
Mutual Fund |
|
a |
|
|
9,756,545 |
|
* |
|
Vanguard Prime Money Market Fund |
|
Mutual Fund |
|
a |
|
|
30,237,490 |
|
* |
|
Vanguard 500 Index Fund |
|
Mutual Fund |
|
a |
|
|
41,326,002 |
|
* |
|
Vanguard U.S. Growth Fund |
|
Mutual Fund |
|
a |
|
|
10,103,087 |
|
* |
|
Vanguard International Growth Fund |
|
Mutual Fund |
|
a |
|
|
20,348,554 |
|
* |
|
Vanguard Total Bond Market Index Fund |
|
Mutual Fund |
|
a |
|
|
15,826,493 |
|
* |
|
Vanguard Explorer Fund |
|
Mutual Fund |
|
a |
|
|
7,452,596 |
|
* |
|
Vanguard PRIMECAP Fund |
|
Mutual Fund |
|
a |
|
|
12,430,192 |
|
* |
|
Vanguard Asset Allocation Fund |
|
Mutual Fund |
|
a |
|
|
3,592,224 |
|
* |
|
Vanguard Mid-Cap Index Fund |
|
Mutual Fund |
|
a |
|
|
12,737,908 |
|
* |
|
Vanguard Equity Income Fund |
|
Mutual Fund |
|
a |
|
|
4,709,858 |
|
* |
|
Vanguard Target Retirement 2005 Fund |
|
Mutual Fund |
|
a |
|
|
1,165,385 |
|
* |
|
Vanguard Target Retirement 2010 Fund |
|
Mutual Fund |
|
a |
|
|
679,870 |
|
* |
|
Vanguard Target Retirement 2015 Fund |
|
Mutual Fund |
|
a |
|
|
7,499,449 |
|
* |
|
Vanguard Target Retirement 2020 Fund |
|
Mutual Fund |
|
a |
|
|
2,133,541 |
|
* |
|
Vanguard Target Retirement 2025 Fund |
|
Mutual Fund |
|
a |
|
|
7,030,674 |
|
* |
|
Vanguard Target Retirement 2030 Fund |
|
Mutual Fund |
|
a |
|
|
1,375,388 |
|
* |
|
Vanguard Target Retirement 2035 Fund |
|
Mutual Fund |
|
a |
|
|
4,906,045 |
|
* |
|
Vanguard Target Retirement 2040 Fund |
|
Mutual Fund |
|
a |
|
|
1,149,314 |
|
* |
|
Vanguard Target Retirement 2045 Fund |
|
Mutual Fund |
|
a |
|
|
2,158,783 |
|
* |
|
Vanguard Target Retirement 2050 Fund |
|
Mutual Fund |
|
a |
|
|
369,237 |
|
* |
|
Vanguard Target Retirement Income Fund |
|
Mutual Fund |
|
a |
|
|
542,683 |
|
* |
|
Participant Loans |
|
Varying maturity dates through 12/11/2020,
interest ranging from 3.75% to 10.00%, per annum |
|
|
|
|
5,142,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS |
|
|
|
$ |
221,238,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Indicates party-in-interest to the plan. |
|
a |
|
The cost of participant-directed investments is not required to be disclosed. |
See independent auditors report.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other
persons who administer the employee benefit plan) have duly caused this annual report to be signed
on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
|
|
Date: June 28, 2011 |
|
|
|
|
|
|
|
|
By: |
/s/ Shelley Bellisle
|
|
|
|
Shelley Bellisle |
|
|
|
Chairman, Administrative Committee |
|
20