SENSIENT TECHNOLOGIES CORP — Annual Report 2009

Jun 12, 2009

11-K 1 c51822e11vk.htm FORM 11-K e11vk PAGEBREAK

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

þ ANNUAL REPORT PURSUANT TO 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

*For the fiscal year ended* December 31, 2008****

o TRANSITION REPORT PURSUANT TO 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

*For the transition period from to*

Commission file number: 1-7626

A. Full title of the plan and address of the plan, if different from that of the issuer named below:

Sensient Technologies Corporation Savings Plan

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Sensient Technologies Corporation 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202-5304 (414) 271-6755

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Table of Contents

Report of Independent Registered Public Accounting Firm	4
Statements of Net Assets Available for Benefits — December 31, 2008 and 2007	5
Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2008	6
Notes to Financial Statements	7 - 13
Supplemental Schedule Furnished Pursuant to Department of Labor’s Rules and Regulations	14
Supplemental Schedule — Form 5500, Schedule H, Part IV, Line 4i — Schedule of Assets (Held at End of Year)	15
Signatures	16
Exhibit Index	17

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN

FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007, SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2008 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Benefits Administrative Committee Sensient Technologies Corporation Savings Plan

We have audited the accompanying statements of net assets available for benefits of Sensient Technologies Corporation Savings Plan (the Plan) as of December 31, 2008 and 2007, and the related statement of changes in net assets available for benefits for the year ended December 31, 2008. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public 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. We were not engaged to perform an audit of the Plan’s 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 Plan’s 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, and 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 at December 31, 2008 and 2007, and the changes in its net assets available for benefits for year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2008, is presented for purposes of additional analysis and is not a required part of the financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ ERNST & YOUNG, LLP

Milwaukee, Wisconsin May 27, 2009

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2008 AND 2007

	2008	2007
ASSETS:
Investments at fair value:
Interest in Sensient Technologies Corporation
Master Trust	$ 74,408,185	$ 103,113,322
Participant loans	4,117,761	4,232,062
Total investments	78,525,946	107,345,384
Contributions receivable from Sensient Technologies
Corporation:
Employee contributions	—	130,267
Employer contributions	2,796,837	2,702,535
Total receivables	2,796,837	2,832,802
Net assets available for benefits at fair value	81,322,783	110,178,186
Adjustments from fair value to contract value for
fully benefit-responsive investment contracts	543,737	129,211
Net assets available for benefits	$ 81,866,520	$ 110,307,397

See notes to financial statements.

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2008

	2008
ADDITIONS:
Contributions:
Participants	$ 5,379,215
Sensient Technologies Corporation	2,796,837
Rollovers	102,578
Interest on Participant Loans	345,282
Total additions	8,623,912
DEDUCTIONS:
Withdrawals and distributions	(7,811,547	)
Administrative expenses	(43,605	)
Total deductions	(7,855,152	)
Investment loss — equity in net loss of Sensient
Technologies Corporation
Master Trust	(29,209,637	)
Net deductions	(28,440,877	)
Net assets available for benefits:
Beginning of year	110,307,397
End of year	$ 81,866,520

See notes to financial statements.

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

| Note A — |
| --- |
| The following description of the Sensient Technologies
Corporation Savings Plan (the Plan) provides only general
information. Participants should refer to the Plan document for
a more comprehensive description of the Plan’s provisions. |
| The Plan is a defined-contribution plan sponsored by Sensient
Technologies Corporation (the Company). Substantially all
domestic employees of the Company, except for employees covered
by collective bargaining agreements that do not expressly provide
for participation in the Plan, are eligible to participate in the
Plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA). As
of January 1, 2008, the plan will accept Roth elective deferrals
made on behalf of participants. The participant’s Roth elective
deferrals will be allocated to a separate account maintained for
such deferrals (the Roth Elective Deferral Account). Employees
can contribute up to the maximum amount of their eligible
compensation prescribed by law. Employee contributions are 100%
vested at all times. The Company intends to contribute an amount
sufficient to provide 100% matching of the first 4% of eligible
compensation contributed to the Plan by those employees who made
contributions during the Plan year. All Company contributions
made after January 1, 2003 are invested in accordance with each
participant’s investment election, regardless of age or vested
service. Company contributions made before January 1, 2003
previously were invested in common stock of the Company.
Effective January 1, 2007, these contributions can be diversified
into the employee’s choice of funds. Company contributions to
the Plan were $2,796,837 for the year ended December 31, 2008. |
| Effective January 1, 2006, the Plan was amended and restated.
The amendment provides that company matching contributions
allocable for Plan years beginning on or after January 1, 2006,
shall be fully vested at all times. Company matching
contributions, allocable for Plan years beginning before January
1, 2006, vest at 20% per year of credited service with the
Company or upon termination due to death or disability. |
| The amendment further states, 2% of the compensation of eligible
employees hired (or rehired) on or after January 1, 2006, shall
be automatically withheld and contributed to the Plan on the
employee’s behalf as a pre-tax elective deferral contribution,
unless the employee elects a different contribution amount or
elects not to participate in the Plan. |
| The administration of the Plan is the responsibility of the Benefits Administrative
Committee (the Committee) which is appointed by the Finance Committee of the Company Board
of Directors. The assets of the Plan are maintained in a trust fund that is administered
under a Master Trust agreement (as described in Note C) with Fidelity Management Trust
Company (the Trustee or Fidelity). The Trustee is responsible for maintaining the assets
of the Plan and, generally, performing all other acts deemed necessary or proper to
fulfill its responsibility as set forth in the Master Trust agreement pertaining to the
Plan. |
| Effective December 4, 2008, the Company, by action of the Finance Committee of its Board
of Directors amended the plan to clarify certain responsibilities of the Benefits
Investment Committee and the Benefits Administrative Committee. |

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

Note A —	(continued):
	Amounts that have been forfeited in accordance with provisions of the Plan serve to reduce
Company contributions. Forfeitures available to reduce the Company contribution were
$31,024 at December 31, 2008.
	Plan assets may be invested in any type of investment that is legally permitted for
employee retirement plans.
	Participants direct the investment of their account balance from both participant and
employer contributions, except certain prior Company contributions previously noted, into
various investment options offered by the Plan. The Plan currently offers nine mutual
funds, three fixed income funds, and the Sensient Technologies Common Stock Fund as
investment options for participants. Participants may revise their investment allocations
daily.
	Individual accounts are maintained by the Trustee for each Plan participant. Each
participant’s account is credited with the participant’s contribution, the Company’s
matching contribution and an allocation of Plan income and charged with withdrawals and an
allocation of Plan losses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is the benefit that
can be provided from the participant’s vested account.
	The Plan allows participants to borrow funds from their account through the loan fund, up
to 50% of their vested balance up to a maximum of $50,000 less any other outstanding loans
in the Plan. The minimum loan allowable is $1,000. Monthly payroll deductions are
required to repay the loan over one to five years, or longer if the loan is used to
acquire a principal residence. Loans bear interest at a rate of 1.5% above the prime rate
at the end of the previous quarter. Unless loans are repaid in full 90 days after the
time of retirement or termination, the amount of the loan becomes taxable income to the
participant. Interest rates on loans outstanding at December 31, 2008 and 2007, ranged
from 5.50% to 9.75%.
	Hardship withdrawals may be authorized by the Committee in the event of financial hardship
of the participant. Such distributions are made in accordance with written policies and
procedures, as set forth in accordance with the Internal Revenue Code, Treasury
regulations and applicable law.
Note B —	Accounting Policies:
	In the event of termination, participant accounts become fully
vested. The financial statements of the Plan are prepared on an
accrual basis in accordance with generally accepted accounting
principles in the United States. Assets of the Plan are stated
at fair value.
	Certain administrative expenses incurred by the Plan are paid by
the Company on behalf of the Plan or from Plan assets as
determined by the Committee.
	The preparation of financial statements in conformity with
generally accepted accounting principles in the United States
requires management to make estimates that affect the amounts
reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

Note B —	(continued):
	The Plan’s investments are stated at fair value. Shares of mutual funds are valued based
on quoted market prices which represent the net asset value of shares held by the Plan at
year-end. The fair value of the participation units in the common collective trusts is
based on quoted redemption values on the last business day of the Plan’s year-end.
Participant loans are valued at their outstanding balances, which approximate fair value.
	As described in Financial Accounting Standards Board Staff Position (FSP) AAG INV-1 and
SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain
Investment Companies Subject to the AICPA Investment Company Guide and
Defined-Contribution Health and Welfare and Pension Plans (the FSP), investment contracts
held by a defined contribution plan are required to be reported at fair value. However,
contract value is the relevant measurement attribute for that portion of the net assets
available for benefits of a defined contribution plan attributable to fully
benefit-responsive investment contracts, because contract value is the amount participants
would receive if they were to initiate permitted transactions under the terms of the Plan.
The Plan has an investment in the Managed Income Portfolio, a common collective trust fund
of the Fidelity Group Trust, which consists of benefit responsive investment contracts. As
required by the FSP, the statement of net assets available for benefits presents the fair
value of the investment in the common collective trust as well as the adjustment from fair
value to contract value for fully benefit-responsive investment contracts. The fair value
of the Plan’s interest in the common collective trust is based on information reported by
the issuer of the common collective trust at year-end. The contract value of the common
collective trust represents contributions plus earnings, less participant withdrawals and
administrative expenses.
Note C —	Sensient Technologies Corporation Master Trust:
	The Plan’s investments, except participant loans, are held by the
Master Trust, along with the investments of the Sensient
Technologies Corporation Retirement Employee Stock Ownership Plan
(ESOP). Use of the Master Trust permits the commingling of
assets of various employee benefit plans for investment and
administrative purposes. Although plan assets are commingled,
supporting records are maintained for the purpose of determining
changes in each plan’s undivided and specifically allocated
interest in the Master Trust.
	Quoted market prices are used to determine the fair value of
marketable securities. Shares of registered investment companies
or collective trusts are stated at quoted market prices or
withdrawal value. Investment income, realized gains and losses,
and unrealized appreciation and depreciation of investments in
the Master Trust are allocated to each plan participating in the
Master Trust based upon the relationship of the individual
interest of each plan to the total of the individual interests of
all plans participating in the Master Trust.
	Purchases and sales of investments are recorded on a trade-date
basis. Interest income is accrued when earned. Dividend income
is recorded on the ex-dividend date. Capital gain distributions
are included in dividend income.
	The Master Trust invests in various securities. Investment
securities, in general, are exposed to various risks, such as
interest rate, credit, and overall market volatility. Due to the
level of risk associated with certain investment securities, it
is reasonably possible that changes in the values of

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

| Note C — |
| --- |
| investment securities will occur in the near term and that such change could materially
affect the amounts reported in the financial statements. |
| The Master Trust invests in various securities. Investment securities, in general, are
exposed to various risks, such as interest rate, credit, and overall market volatility.
Due to the level of risk associated with certain investment securities, it is reasonably
possible that changes in the values of investment securities will occur in the near term
and that such change could materially affect the amounts reported in the financial
statements. |
| The fair value of the net assets of the Master Trust as of December 31, 2008 and 2007, is
as follows: |

	2008	2007
Sensient Technologies Corporation common stock*	$ 45,126,990	$ 55,532,190
Fixed income funds	22,119,291	19,477,275
Equity mutual funds	45,116,141	74,133,324
Net assets in Master Trust at fair value	112,362,422	149,142,789
Adjustments from fair value to contract value
for fully benefit-responsive investment
contracts	816,824	194,135
Net assets in Master Trust at contract value	$ 113,179,246	$ 149,336,924
Plan’s investment in Master Trust as a percent
of total	66.22 %	69.14 %

• Party-in-interest

The net loss of the Master Trust for the year ended December 31, 2008, is as follows:

Dividends on Sensient Technologies Corporation common stock*	2008 — $ 1,313,948
Interest and other dividends	2,146,114
Net depreciation of investments based on quoted market prices	(38,259,935	)
Net loss of Master Trust	$ (34,799,873	)
Plan’s equity in net loss of the Master Trust	$ (29,209,637	)

• Party-in-interest

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

| Note C — |
| --- |
| During the year ended December 31, 2008, net depreciation of the investments held by the
Master Trust (including gains and losses on investments bought and sold, as well as held,
during the year) is as follows: |

Sensient Technologies Corporation common stock*	2008 — $ (7,892,245	)
Mutual funds	(30,367,690	)
Net depreciation in fair value of investments — Master Trust	$ (38,259,935	)

• Party-in-interest

| Note D — |
| --- |
| The non-participant directed investments of the Plan held by the Master Trust are invested
in Sensient Technologies Corporation common stock. Participant account balances, which are
eligible to be diversified but remain in Sensient Technologies Corporation common stock,
cannot be separately determined and are reported as non-participant directed investments.
Information about the net assets and the significant components of the changes in net
assets relating to non-participant directed net assets of the Plan held by the Master Trust
is as follows: |

	2008
Non-participant directed net assets:
Sensient Technologies Corporation
common stock*	$ 12,708,206	$ 16,486,125
	2008
Changes in non-participant directed net assets:	$ 426,375
Dividends	(2,970,558	)
Net depreciation	(1,229,456	)
Withdrawals and distributions	(4,280	)
Other
	$ (3,777,919	)

• Party-in-interest

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

Note E —	Income Tax Status:
	The Plan has received a determination letter from the Internal Revenue Service dated
December 18, 2002, stating that the Plan is qualified under Section 401(a) of the
Internal Revenue Code (the Code) and, therefore, the related trust is exempt from
taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was
amended and restated. Once qualified, the Plan is required to operate in conformity with
the Code to maintain its qualification. The Plan administrator believes the Plan is being
operated in compliance with the applicable requirements of the Code and, therefore,
believes that the Plan, as amended and restated, is qualified and the related trust is
tax exempt.
Note F —	Benefits Payable:
	As of December 31, 2008 and 2007, the Plan had no benefits payable to persons who elected
to withdraw from participation in the earnings and operations of the Plan but had not yet
been paid.
Note G —	Parties-in-Interest:
	Certain Plan investments are managed and issued by Fidelity, the custodian of the Plan’s
investment assets, and therefore, some transactions qualify as party-in-interest
transactions. The Plan pays fees to Fidelity for investment management, recordkeeping, and
other administrative services. Fees paid by the Plan were $43,605 for the year ended December 31, 2008.
Note H —	Fair Value Measurements:
	On January, 1, 2009, the Plan adopted Statement of Financial
Accounting Standards (SFAS) No. 157, Fair Value Measurements (SFAS No.
157) . This statement defines fair value for financial assets and liabilities, establishes
a framework for measuring fair value in accordance with generally accepted accounting
principles (GAAP) and expands disclosures about fair value measurements.
	As of December 31, 2008, the Plan’s only assets and liabilities subject to this statement
are Sensient Technologies Corporation common stock and mutual fund investments held by
the Master Trust and participant loans held by the Plan. These financial instruments were
previously reported by the Plan at fair value that meets the requirements as defined by
SFAS No. 157. Accordingly, there was no impact on the Plan’s financial position as a
result of adopting this standard. The fair values of the Sensient Technologies
Corporation common stock and the mutual fund investments were based on market quotes
(Level 1 inputs per SFAS No. 157). One of the mutual funds is a Fidelity Common
Collective Trust. The fair value of the Common Collective Trust is based on information
provided by Fidelity (Level 2 inputs per SFAS No. 157) and the fair values of the
participant loans were based on the amortized value of the loans (Level 3 inputs per SFAS
No. 157).

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

Note H — Fair Value Measurements (continued):

The following table sets forth by level, within the fair value hierarchy, the Master Trust’s assets and the Plan’s participant loans at fair value as of December 31, 2008:

	Level 1	Level 2	Level 3	Total
Sensient Technologies
Corporation common stock *	$ 45,126,990	$ —	$ —	$ 45,126,990
Mutual fund investments	52,092,826	—	—	52,092,826
Fidelity Common Collective Trust	—	15,142,606		15,142,606
Participant loans	—	—	4,117,761	4,117,761
Total assets at fair value	$ 97,219,816	$ 15,142,606	$ 4,117,761	$ 116,480,183

• Party-in-interest

The following sets forth a summary of changes in the fair value of the participant loans for the year ended December 31, 2008:

Beginning Balance	2008 — $ 4,232,062
Loan repayments	(1,573,549	)
Loan disbursements	1,459,248
Ending Balance	$ 4,117,761

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SUPPLEMENTAL SCHEDULE

FURNISHED PURSUANT TO

DEPARTMENT OF LABOR’S RULES AND REGULATIONS

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SENSIENT TECHNOLOGIES CORPORATION SAVINGS PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)	Plan 006
DECEMBER 31, 2008	EIN 39-0561070

(a)	(b) — Identity of Issuer, Borrower,	(c)	(d)	(e) — Current
	Lessor or Similar Party	Description of Investment	Cost	Value
*	Participant Loans	Participant borrowings
against their individual
account balances,
interest rates from
5.50% to 9.75%, and
maturing through 2028
		(639 loans outstanding)	$ 4,117,761	$ 4,117,761
	Total		$ 4,117,761	$ 4,117,761

• Party-in-interest

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefits plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Sensient Technologies Corporation Savings Plan — By: Name:	/s/ John L. Hammond John L. Hammond
Title:	Senior Vice President, General Counsel and
	Secretary

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EXHIBIT INDEX

Exhibit No.	Description
Exhibit 23.1	Consent of Independent Registered Public Accounting Firm

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