SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June ~~30, 2019~~28, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number ~~001-11430~~1-11430

MINERALS TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

622 Third Avenue, New York, New York 10017-6707

(Address of principal executive offices, including zip code)

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

MINERALS TECHNOLOGIES INC.

Condensed Consolidated Statements of Income for the three-month and six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ (Unaudited)

Condensed Consolidated Statements of Comprehensive Income for the three-month and six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ (Unaudited)

Condensed Consolidated Balance Sheets as of June ~~30, 2019~~28, 2020 (Unaudited) and December 31, ~~2018~~2019

Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ (Unaudited)

Condensed Consolidated Statements of Changes in Shareholders' Equity for the three-month and six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ (Unaudited)

PART 1. FINANCIAL INFORMATION

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

See accompanying Notes to Condensed Consolidated Financial Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

See accompanying Notes to Condensed Consolidated Financial Statements.

~~MINERALS~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS

**	** Condensed from audited financial statements

See accompanying Notes to Condensed Consolidated Financial Statements.

~~MINERALS~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying Notes to Condensed Consolidated Financial Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

See accompanying Notes to Consolidated Financial ~~Statements, which are an integral part of these statements.~~Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The accompanying unaudited condensed consolidated financial statements have been prepared by management of Minerals Technologies Inc. (the “Company”, “MTI”, “we”, or “us”) in accordance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for a fair presentation of the financial information for the periods indicated, have been included. The results for the three-month and six-month periods ended June ~~30, 2019~~28, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2019.~~2020.

The Company is a resource- and technology-based company that develops, produces and markets worldwide a broad range of specialty mineral, mineral-based and synthetic mineral products and supporting systems and services.

The Company has ~~four~~4 reportable segments: Performance Materials, Specialty Minerals, Refractories and Energy Services.

–

The Performance Materials segment is a leading global supplier of bentonite and bentonite-related products ~~chromite~~ and leonardite. This segment also provides products for non-residential construction, environmental and infrastructure projects worldwide, serving customers engaged in a broad range of construction projects.

–	The Specialty Minerals segment produces and sells the synthetic mineral product precipitated calcium carbonate (“PCC”) and processed mineral product quicklime (“lime”), and mines mineral ores then processes and sells natural mineral products, primarily limestone and talc.

–	The Refractories segment produces and markets monolithic and shaped refractory materials and specialty products, services and application and measurement equipment, and calcium metal and metallurgical wire products.

–

The Energy Services segment provides services to improve the production, costs, compliance, and environmental impact of activities performed in the oil and gas industry. This segment offers a range of patented and unpatented technologies, products and services to the upstream and downstream oil and gas sector throughout the world.

Use of Estimates

The Company employs accounting policies that are in accordance with U.S. generally accepted accounting principles and require management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Significant estimates include those related to revenue recognition, valuation of long-lived assets, goodwill and other intangible assets, income taxes, including valuation allowances, and pension plan assumptions. Actual results could differ from those estimates.

Recently Adopted Accounting Standards

Measurement of Credit Losses on Financial Instruments

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Recently Issued Accounting Standards

Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASUs) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ~~All recently issued~~ ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations.

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Investments - Equity Securities, Investments - Equity Method and Joint Ventures, and Derivatives and Hedging

~~Recently Adopted Accounting Standards~~

OnIn January ~~1, 2019,~~2020, the ~~Company adopted the provisions of~~FASB issued ASU ~~2016-02, “Leases”~~2020-01, "Investments - Equity Securities, Investments - Equity Method and Joint Ventures, and Derivatives and Hedging", which ~~requires lessees to recognize most leases on-balance sheet.~~ ~~The Company has adopted this new standard under~~addresses the ~~modified retrospective~~accounting for the transition ~~method, using the effective date as our date of initial application. As such, financial information~~into and required disclosures will not be provided for dates prior to January 1, 2019. The new standard provides a number of optional practical expedients in transition. We have elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. On adoption, we recognized additional operating liabilities of $~~61.4~~ ~~million with corresponding right-of-use assets of $50.5~~ ~~million based on the present value~~out of the ~~remaining lease payments under existing operating leases. As of~~equity method and measuring certain purchased options and forward contracts to acquire investments. The standard is effective for interim and annual periods beginning on or after December ~~31, 2018, we had $10.9~~ ~~million in deferred charges related to some of our real estate leases that were recorded against the right of use asset as part of the transition.~~15, 2020. The adoption of this standard ~~did~~is not expected to have a material impact on the Company's financial statements.

Note 2. COVID-19

In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic. Around the world, the Company has been closely adhering to all government regulations as they are issued. Applicable governmental directives across the United States and other global locations have typically permitted the continued operation of essential critical infrastructure sectors. As the Company supplies products and services to many essential industries, including critical manufacturing and energy sectors, all of our operations have qualified as essential businesses. Accordingly, all of the Company’s production facilities are currently operational. In a few locations, however, sites were temporarily impacted by the pandemic.

The recent economic environment related to the rapidly evolving global pandemic, which has slowed business activity in several key end-markets, negatively impacted the Company’s second quarter results and will continue to impact our results in the third quarter. The extent to which our operations will continue to be impacted by the pandemic will depend largely on future developments, including the continued severity of the pandemic and future actions by government authorities to contain it or treat its impact. These conditions are highly uncertain and cannot be accurately predicted. The Company will continue to actively monitor and respond to the COVID-19 pandemic.

As we cannot predict the duration or scope of the COVID-19 pandemic and its impact on our customers and suppliers, the negative financial impact to our future results cannot be reasonably estimated, but could be material. We are actively managing the business to maintain cash flow and we have significant liquidity. We believe that these factors will allow us to meet our anticipated funding requirements.

On January 1, 2019, the Company adopted the provisions of ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting fromMarch 27, 2020, the U.S. ~~Tax Cuts~~government enacted the Coronavirus Aid, Relief, and ~~Jobs Act. As~~Economic Security Act (“CARES Act”) which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a ~~result,~~payment delay of employer payroll taxes during 2020 after the ~~Company reclassified $10.9 million from "Accumulated other comprehensive loss"~~date of enactment with 50% due by December 31, 2021 and the remaining 50% due by December 31, 2022. The CARES Act is not expected to ~~"Retained earnings"~~have a material impact on the ~~Condensed Consolidated Balance Sheets as of June 30, 2019.~~Company’s consolidated financial statements.

~~Note 2. Leases~~

We determine if an arrangement is a lease at inception. The Company has operating leases for premises, equipment, rail cars and automobiles. Our leases have remaining lease terms of 1 year to 50 years, some of which may include options to extend the leases further. The Company considers these options in determining the lease term used to establish the right-of-use assets and lease liabilities. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based upon the information available at commencement date, or as of implementation of ASC 842, in determining the present value of lease payments.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. Certain lease agreements contain both lease and non-lease components. We account for lease components together with non-lease components.

~~Operating lease cost was $4.0 million and $8.1 million for the three and six-month periods ended June 30, 2019, respectively. The components of lease costs are as follows:~~

(millions of dollars) Three Months Ended Six Months Ended
June 30, 2019 June 30, 2019

Operating lease cost $ 3.9 $ 7.9
Short-term lease cost 0.1 0.2
Total $ 4.0 $ 8.1

~~Supplemental cash flow information and non-cash activity related to our operating leases are as follows:~~

(millions of dollars) June 30, 2019

Operating cash flows information:
Cash paid for amounts included in the measurement of lease liabilities $ 8.3
Non-cash activity:
Right-of-use assets obtained in the exchange for operating lease liabilities $ 3.3

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Weighted average remaining lease term, and weighted average discount rates related to the Company’s operating leases were as follows:~~


~~Weighted-average remaining operating lease term (in years)~~	~~7.80~~
~~Weighted-average operating leases discount rate~~	~~5.0~~	%

~~The following table summarizes the Company's outstanding lease assets and liabilities and their classification on the Condensed Consolidated Balance Sheet:~~

(millions of dollars) Balance Sheet Classification June 30, 2019

Right-of-use asset Other assets and deferred charges $ 47.1
Lease liability - current Other current liabilities 12.0
Lease liability - non-current Other non-current liabilities 46.1

~~Future minimum lease payments under the Company's operating leases as of June 30, 2019 were as follows:~~

(millions of dollars) June 30, 2019

For the remainder of 2019 $ 7.7
2020 13.0
2021 9.6
2022 7.7
2023 6.2
Thereafter 26.3
Total future minimum lease payments 70.5
Less imputed interest (12.6 )
Total $ 57.9

~~As of December 31, 2018, minimum lease payments under non-cancellable operating leases were expected to be as follows:~~

(millions of dollars) Dec. 31, 2018

2019 $ 17.3
2020 13.0
2021 9.5
2022 8.2
2023 7.0
Thereafter 24.8
Total $ 79.8

~~A summary of rent expense for the fiscal years ended December 31, 2018 and December 31, 2017 was as follows:~~

(millions of dollars) Dec. 31, 2018 Dec. 31, 2017

Rent expense $ 19.5 $ 19.3

~~The Company has certain arrangements under which we are the lessor. Lease income associated with these leases is not material.~~

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Note 3. Revenue from Contracts with Customers

On a regular basis, the Company reviews its product line groupings to generate greater alignment within each product line. Accordingly, in the third quarter of 2019, the Company combined its Basic Minerals product line with its Household, Personal Care & Specialty Products product line, both within our Performance Materials segment. Prior year amounts were reclassified to conform to current presentation.

The following table disaggregates our revenue by major source (product line) for the three and six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ :

(millions of dollars)	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
Net Sales	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018		Jun. 28, 2020		Jun. 30, 2019		Jun. 28, 2020		Jun. 30, 2019

Metalcasting	$	75.8	$	88.8	$	149.0	$	168.0	$	52.8	$	75.8	$	114.5	$	149.0
Household, Personal Care and Specialty Products		69.0		58.6		143.9		107.3
Household, Personal Care & Specialty Products										87.9		91.5		184.1		186.3
Environmental Products		29.0		25.2		44.9		37.9		19.9		29.0		31.4		44.9
Building Materials		19.1		18.0		34.4		36.9		13.2		19.1		30.0		34.4
Basic Minerals		22.5		23.9		42.4		51.7
Performance Materials		215.4		214.5		414.6		401.8		173.8		215.4		360.0		414.6

Paper PCC		90.2		94.5		181.7		191.5		65.5		90.2		150.6		181.7
Specialty PCC		17.3		17.3		35.4		34.3		14.9		17.3		32.4		35.4
Ground Calcium Carbonate		24.8		25.2		47.1		47.7		20.6		24.8		43.2		47.1
Talc		12.8		13.9		25.3		27.0		8.8		12.8		20.7		25.3
Specialty Minerals		145.1		150.9		289.5		300.5		109.8		145.1		246.9		289.5

Refractory Products		61.0		66.7		123.0		129.0		47.1		61.0		102.9		123.0
Metallurgical Products		16.5		12.9		28.3		25.9		8.8		16.5		22.0		28.3
Refractories		77.5		79.6		151.3		154.9		55.9		77.5		124.9		151.3

Energy Services		25.8		19.7		46.1		38.8		17.7		25.8		42.9		46.1

Total	$	463.8	$	464.7	$	901.5	$	896.0	$	357.2	$	463.8	$	774.7	$	901.5

Note 4. ~~Business Combination~~

On April 30, 2018, the Company completed the acquisition of Sivomatic Holding B.V. (“Sivomatic”), a leading European supplier of premium pet litter products. Sivomatic is a vertically integrated manufacturer, with production facilities in the Netherlands, Austria and Turkey. With a leading position in premier clumping products, Sivomatic’s product portfolio spans the range of pet litter derived from bentonite, sourced predominantly from wholly-owned mines in Turkey. The results of Sivomatic are included in our Performance Materials segment. The acquisition was financed through a combination of cash on hand and borrowings under the Company’s credit facilities. The fair value of the total consideration transferred, net of cash acquired, was $122.5 million.

The acquisition has been accounted for using the acquisition method of accounting, which requires, among other things, that we recognize the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. As of April 30, 2019 , the purchase price allocation has been finalized.

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The following table summarizes the Company’s final amounts recognized for assets acquired and liabilities assumed for the Sivomatic acquisition as compared with the allocation previously reported on the Company's Form 10-K for the year ended December 31, 2018:

(millions of dollars) Preliminary Allocation Previously Reported on Form 10-K as of December 31, 2018
Increase/
(Decrease)
Final Allocation

Accounts receivable $ 24.4 $ — $ 24.4
Inventories 15.6 — 15.6
Other current assets 0.6 — 0.6
Mineral rights 39.7 — 39.7
Property, plant and equipment 28.3 — 28.3
Goodwill 35.0 — 35.0
Intangible assets 26.4 — 26.4
Total assets acquired 170.0 — 170.0
Current maturity of long-term debt 5.7 — 5.7
Accounts payable 9.0 — 9.0
Accrued expenses 5.6 — 5.6
Long-term debt 5.3 — 5.3
Non-current deferred tax liability 19.7 — 19.7
Other non-current liabilities 2.2 — 2.2
Total liabilities assumed 47.5 — 47.5
Net assets acquired $ 122.5 $ — $ 122.5

The Company used the income, market, or cost approach (or a combination thereof) for the valuation, and used valuation inputs and analyses that were based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. For certain items, the carrying value was determined to be a reasonable approximation of fair value based on the information available.

Goodwill was calculated as the excess of the consideration transferred over the assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The allocation was completed during the second quarter of 2019. Goodwill recognized as a result of this acquisition is not deductible for tax purposes.

In connection with the acquisition, the Company recorded an additional deferred tax liability of $18.8 million with a corresponding increase to goodwill. The increase in the deferred tax liability represents the tax effect of the difference between the estimated assigned fair value of the tangible and intangible assets and the tax basis of such assets.

~~Mineral rights were valued using discounted cash flow method. Property, plant and equipment were valued using the cost method adjusted for age and deterioration.~~

~~Intangible assets acquired mainly include tradenames and customer relationships. Both tradenames and customer relationships have an estimated useful life of approximately 20 years.~~

~~The Company did not present pro forma and other financial information for the Sivomatic acquisition, as this is not considered to be a material business combination.~~

~~Note 5.~~ Earnings per Share (EPS)

Basic earnings per share are based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share are based upon the weighted average number of common shares outstanding during the period assuming the issuance of common shares for all potentially dilutive common shares outstanding.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended				Six Months Ended
(in millions, except per share data)	Jun. 28, 2020		Jun. 30, 2019		Jun. 28, 2020		Jun. 30, 2019

Net income attributable to Minerals Technologies Inc.	$	14.4	$	26.6	$	53.0	$	65.7

Weighted average shares outstanding		34.1		35.2		34.2		35.2
Dilutive effect of stock options and stock units		—		0.1		0.1		0.1
Weighted average shares outstanding, adjusted		34.1		35.3		34.3		35.3

Basic earnings per share attributable to Minerals Technologies Inc.	$	0.42	$	0.76	$	1.55	$	1.87

Diluted earnings per share attributable to Minerals Technologies Inc.	$	0.42	$	0.75	$	1.55	$	1.86

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~The following table sets forth the computation of basic and diluted earnings per share:~~

Three Months Ended Six Months Ended
(in millions, except per share data)
June 30,
2019

July 1,
2018

June 30,
2019

July 1,
2018

Net income attributable to Minerals Technologies Inc. $ 26.6 $ 44.1 $ 65.7 $ 84.0

Weighted average shares outstanding 35.2 35.3 35.2 35.4
Dilutive effect of stock options and stock units 0.1 0.3 0.1 0.2
Weighted average shares outstanding, adjusted 35.3 35.6 35.3 35.6

Basic earnings per share attributable to Minerals Technologies Inc. $ 0.76 $ 1.25 $ 1.87 $ 2.37

Diluted earnings per share attributable to Minerals Technologies Inc. $ 0.75 $ 1.24 $ 1.86 $ 2.36

Options to purchase ~~470,304~~1,448,699 shares and ~~357,771~~470,304 shares of common stock for the three-month and six-month periods ended June 28, 2020 and June 30, 2019, ~~and July 1, 2018,~~ respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive, as the exercise prices of the options were greater than the average market price of the common shares.

Note 6.5. Restructuring and Other Items, net

During the second quarter of 2019, the Company initiated a restructuring and cost savings program to better align our costs and organizational structure with the current market environment. The Company recorded a $7.5 million non-cash impairment of assets charge related to facilities no longer operating and underutilization of certain equipment, and $5.7 million in other restructuring costs in the second quarter of 2019. ~~The~~

In June 2020, Verso Papers announced they would be idling 2 of their paper mills indefinitely. As a result, the Company ~~expects to realize annualized savings from this restructuring program~~recorded a non-cash write-down of ~~approximately $12~~assets charge of $6.0 million ~~by the first half of 2020.~~and $0.3 million in severance related costs for its Paper PCC satellite facilities at these mills.

The following table outlines the amount of restructuring charges recorded within the Consolidated Statements of Income and the segments they relate to for the three ~~months ended~~and six-months ending June 28, 2020 and June 30, 2019:

(millions of dollars) June 30, 2019

Impairment of assets
Performance Materials $ 4.2
Specialty Minerals 1.6
Energy Services 1.7
Total impairment of assets charges $ 7.5

Severance and other related costs
Performance Materials $ 2.8
Specialty Minerals 0.9
Refractories 0.8
Energy Services 0.1
Corporate 1.1
Total severance and other related costs $ 5.7

Total restructuring and other items, net $ 13.2


(millions of dollars)	Jun. 28, 2020		Jun. 30, 2019

Asset Write-Downs
Performance Materials	$	—	$	4.2
Specialty Minerals		6.0		1.6
Energy Services		—		1.7
Total charge for asset write-down	$	6.0	$	7.5

Severance and other related costs
Performance Materials	$	—	$	2.8
Specialty Minerals		0.3		0.9
Refractories		—		0.8
Energy Services		—		0.1
Corporate		—		1.1
Total severance and other related costs	$	0.3	$	5.7

Other
Corporate	$	0.2	$	—

Total restructuring and other items, net	$	6.5	$	13.2

At June ~~30, 2019,~~28, 2020, the Company had ~~$7.1~~$4.6 million included within accrued liabilities in the Condensed Consolidated Balance Sheet for cash expenditures needed to satisfy remaining obligations under workforce reduction initiatives. The Company expects to pay these amounts by the ~~first half~~end of 2020.

The following table is a reconciliation of our restructuring liability balance as of June 28, 2020:

(millions of dollars)
Restructuring liability, December 31, 2019	$	5.0
Additional provision		0.3
Cash payments		(0.7	)
Restructuring liability, June 28, 2020	$	4.6

Note 6. Income Taxes

Provision for taxes was $0.9 million and $10.6 million during the three and six-month periods ended June 28, 2020, respectively. The effective tax rate was 6.2%, as compared with 15.8% in the prior year. The lower effective tax rate was primarily due to restructuring and other charges and to the mix of earnings.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~The following table is a reconciliation of our restructuring liability balance as of June 30, 2019:~~

(millions of dollars)
Restructuring liability, December 31, 2018 $ 2.5
Additional provisions 5.7
Cash payments (1.1 )
Restructuring liability, June 30, 2019 $ 7.1

~~Note 7. Income Taxes~~

Provision for taxes was $5.1 million and $14.4 million during the three and six-month periods ended June 30, 2019, respectively. The effective tax rate was 15.8% as compared with 18.9% in the prior year. The lower effective tax rate was primarily due to discrete items related to restructuring charges and the expiration of the tax statute of limitations due to the completion of a tax audit.

As of June ~~30, 2019,~~28, 2020, the Company had approximately ~~$15.5~~$8.2 million of total unrecognized income tax benefits. Included in this amount were a total of ~~$11.9~~$5.5 million of unrecognized income tax benefits that, if recognized, would affect the Company’s effective tax rate. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, the Company does not expect the change to have a significant impact on the results of operations or the financial position of the Company.

The Company’s accounting policy is to recognize interest and penalties accrued relating to unrecognized income tax benefits as part of its provision for income taxes. The Company had a net ~~decreases~~increase of approximately $0.1 million and $0.2 million during the three and six-months ended June ~~30, 2019, respectively,~~28, 2020 and ~~had~~ an accrued balance of ~~$2.8~~$2.2 million of interest and penalties as of June ~~30, 2019.~~28, 2020.

The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to income tax examinations by tax authorities for years prior to 2010.

Note 8.7. Inventories

The following is a summary of inventories by major category:

(millions of dollars)
June 30,
2019

Dec. 31,
2018

Raw materials $ 102.8 $ 93.4
Work-in-process 10.0 11.2
Finished goods 98.7 92.2
Packaging and supplies 46.9 42.4
Total inventories $ 258.4 $ 239.2

(millions of dollars)	Jun. 28, 2020		Dec. 31, 2019

Raw materials	$	116.1	$	105.9
Work-in-process		9.7		7.2
Finished goods		98.4		95.5
Packaging and supplies		45.6		44.7
Total inventories	$	269.8	$	253.3

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Note 9.8. Goodwill and Other Intangible Assets

Goodwill and other intangible assets with indefinite lives are not amortized, but instead are assessed for impairment, at least annually. The carrying amount of goodwill was ~~$807.9~~$805.8 million and ~~$812.4~~$807.4 million as of June ~~30, 2019~~28, 2020 and December 31, ~~2018,~~2019, respectively. The change in goodwill from December 31, ~~2018~~2019 to June ~~30, 2019~~28, 2020 is attributable to the effects of foreign exchange.

Intangible assets subject to amortization as of June ~~30, 2019~~28, 2020 and December 31, ~~2018~~2019 were as follows:

			June 30, 2019				Dec. 31, 2018						June 28, 2020				December 31, 2019
(millions of dollars)	Weighted Average Useful Life (Years)		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Weighted Average Useful Life (Years)		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization

Tradenames		35	$	203.9	$	29.5	$	204.2	$	26.6		35	$	203.9	$	35.4	$	203.9	$	32.5
Technology		13		18.8		7.2		18.8		6.4		13		18.8		8.8		18.8		8.0
Patents		19		6.4		5.8		6.4		5.6
Patents and trademarks												19		6.4		6.0		6.4		5.9
Customer relationships		22		25.1		3.8		26.5		3.2		22		24.8		5.2		24.7		4.4
		32	$	254.2	$	46.3	$	255.9	$	41.8		32	$	253.9	$	55.4	$	253.8	$	50.8

The weighted average amortization period for acquired intangible assets subject to amortization is approximately 32 years. Estimated amortization expense is $4.8 million for the remainder of ~~2019, $36.7~~2020, $36.4 million for ~~2020–2023~~2021–2024 and ~~$166.4~~$157.3 million thereafter.

Note ~~10.~~9. Derivative Financial Instruments

As a multinational corporation with operations throughout the world, the Company is exposed to certain market risks. The Company uses a variety of practices to manage these market risks, including, when considered appropriate, derivative financial instruments. The Company's objective is to offset gains and losses resulting from interest rates and foreign currency exposures with gains and losses on the derivative contracts used to hedge them. The Company uses derivative financial instruments only for risk management and not for trading or speculative purposes.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

By using derivative financial instruments to hedge exposures to changes in interest rates and foreign currencies, the Company exposes itself to credit risk and market risk. Credit risk is the risk that the counterparty will fail to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty, and therefore, it does not face any credit risk. The Company minimizes the credit risk in derivative instruments by entering into transactions with major financial institutions.

Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, currency exchange rates, or commodity prices. The market risk associated with interest rate and forward exchange contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the Company records the effective portion of the gain or loss in accumulated other comprehensive income (loss) as a separate component of shareholders' equity. The Company subsequently reclassifies the effective portion of gain or loss into earnings in the period during which the hedged transaction is recognized in earnings.

The Company utilizes interest rate swaps to limit exposure to market fluctuations on floating-rate debt. In the second quarter of 2018, the Company entered into a floating to fixed interest rate swap for a notional amount of $150 million. The fair value of this swap is a liability of ~~$6.6~~$9.2 million at June ~~30, 2019~~28, 2020 and is recorded in other non-current liabilities on the Condensed Consolidated Balance Sheet. In addition, in the second quarter of 2016, the Company entered into a floating to fixed interest rate swap with an initial aggregate notional amount of $300 million. The notional amount was ~~$114~~$57 million at June ~~30, 2019.~~28, 2020. The fair value of this swap is ~~an asset~~a liability of ~~$0.9~~$0.2 million at June ~~30, 2019~~28, 2020 and is recorded in other ~~assets and deferred charges~~current liabilities on the Condensed Consolidated Balance Sheet. These interest rate swaps are designated as cash flow hedges. As a result, the gains and losses associated with these interest rate swaps are recorded in accumulated other comprehensive income (loss).

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Net Investment Hedges

For derivative instruments that are designated and qualify as net investment hedges, the Company records the effective portion of the gain or loss in accumulated other comprehensive income (loss) as a separate component of shareholders' equity.

To protect the value of our investments in our foreign operations against adverse changes in foreign currency exchange rates, the Company from time to time hedges a portion of our net investment in one or more of our foreign subsidiaries. During the second quarter of 2018, the Company entered into a cross currency rate swap with a total notional value of $150 million to exchange monthly fixed-rate interest payments in U.S. dollars for monthly fixed-rate interest rate payments in Euros. This contract matures in May 2023 and requires the exchange of Euros and U.S. dollar principal payments upon maturity. The fair value of this swap is an asset of ~~$7.0~~$15.1 million at June ~~30, 2019~~28, 2020 and is recorded in other assets and deferred charges on the Condensed Consolidated Balance Sheet. Changes in the fair value of this financial instrument are recognized in accumulated other comprehensive income (loss) to offset the change in the carrying amount of the net investment being hedged. Amounts are reclassified out of accumulated other comprehensive income (loss) into earnings when the hedged net investment is either sold or substantially liquidated.

Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The three valuation techniques are as follows:

●	Market approach - prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

●	Cost approach - amount that would be required to replace the service capacity of an asset or replacement cost.

●	Income approach - techniques to convert future amounts to a single present amount based on market expectations, including present value techniques, option-pricing and other models.

The Company primarily applies the income approach for interest rate derivatives for recurring fair value measurements and attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value of our interest rate ~~swaps~~ and cross currency rate swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets and are categorized as Level 2.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note ~~11.~~10. Long-Term Debt and Commitments

The following is a summary of long-term debt:

(millions of dollars)	June 30, 2019		Dec. 31, 2018		Jun. 28, 2020		December 31, 2019

Term Loan Facility-Variable Tranche due February 14, 2024, net of unamortized discount and deferred financing costs of $17.8 million and $19.4 million	$	640.3	$	638.6
Term Loan Facility- Fixed Tranche due May 9, 2021, net of unamortized discount and deferred financing costs of $0.3 million and $0.3 million		227.7		262.6
Term Loan Facility-Variable Tranche due February 14, 2024, net of unamortized discount and deferred financing costs of $14.2 million and $16.0 million					$	643.7	$	642.0
Term Loan Facility- Fixed Tranche due May 9, 2021, net of unamortized discount and deferred financing costs of $0.1 million and $0.2 million						147.9		177.8
Netherlands Term Loan due 2020		2.3		3.4		0.3		1.1
Netherlands Term Loan due 2022		1.1		1.4		0.7		1.0
Japan Loan Facilities		4.9		5.1		4.3		4.5
Total		876.3		911.1		796.9		826.4
Less: Current maturities		2.1		3.3		149.2		2.1
Total long-term debt	$	874.2	$	907.8	$	647.7	$	824.3

On May 9, 2014, in connection with the acquisition of AMCOL International Corporation (“AMCOL”), the Company entered into a credit agreement providing for a $1.560 billion senior secured term loan facility (the “Term Facility”) and a $200 million senior secured revolving credit ~~facility (the “Revolving Facility” and, together with the Term Facility, the “Facilities”).~~

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

facility.

On June 23, 2015, the Company entered into an amendment (the “First Amendment”) to the credit agreement to reprice the $1.378 billion then outstanding on the Term Facility. As amended, the Term Facility had a $1.078 billion floating rate tranche and a $300 million fixed rate tranche. On February 14, 2017, the Company entered into an amendment (the “Second Amendment”) to the credit agreement to reprice the $788 million floating rate tranche then outstanding, which extended the maturity and lowered the interest costs by 75 basis points. On April 18, 2018, the Company entered into an amendment (the “Third Amendment”) to the credit agreement to refinance its then existing senior secured revolving credit facility. In connection with the ~~Revolving Facility. As amended,~~Third Amendment, the ~~Revolving Facility has been increased to~~existing senior secured revolving credit facility was replaced with a new revolving credit facility with $300 million inof aggregate ~~commitments.~~commitments (the “Revolving Credit Facility” and, together with the Term Facility, the “Senior Secured Credit Facilities”). Following the amendments, the loans outstanding under the floating rate tranche of the Term Facility ~~will~~are scheduled to mature on February 14, 2024, the loans outstanding under the fixed rate tranche of the Term Facility ~~will~~are scheduled to mature on May 9, 2021 and the loans outstanding (if any) and commitments under the Revolving Facility will mature and terminate, as the case may be, on April 18, 2023. Loans under the floating rate tranche of the Term Facility bear interest at a rate equal to an adjusted LIBOR rate (subject to a floor of 0.75%) plus an applicable margin equal to 2.25% per annum. Loans under the fixed rate tranche of the Term Facility bear interest at a rate of 4.75%. Loans under the Revolving Facility bear interest at a rate equal to an adjusted LIBOR rate plus an applicable margin equal to 1.625% per annum. Such rates are subject to decrease by up to 25 basis points in the event that, and for so long as, the Company’s net leverage ratio (as defined in the credit agreement) is less than certain thresholds. The floating rate tranche of the Term Facility was issued at par and the fixed rate tranche of the Term Facility was issued at a 0.25% discount in connection with the First Amendment. The variable rate tranche of the Term Facility was issued at a 0.25% discount in connection with the Second Amendment. The variable rate tranche has a 1% required amortization per year. The Company will pay certain fees under the credit agreement, including customary annual administration fees. The obligations of the Company under the Senior Secured Credit Facilities are unconditionally guaranteed jointly and severally by, subject to certain exceptions, all material domestic subsidiaries of the Company (the “Guarantors”) and secured, subject to certain exceptions, by a security interest in substantially all of the assets of the Company and the Guarantors.

~~During the first half of 2019, the Company repaid $35.0 million on its Term Facility.~~

The credit agreement contains certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions. In addition, the credit agreement contains a financial covenant that requires the Company, if on the last day of any fiscal quarter loans or letters of credit were outstanding under the Revolving Facility (excluding up to ~~$15~~$25 million of letters of credit), to maintain a maximum net leverage ratio (as defined in the credit agreement) of ~~initially, 5.25~~3.50 to 1.00 for the ~~four~~4 fiscal quarters preceding such day. ~~Such maximum net leverage ratio requirement is subject to decrease during the duration of the facility to a minimum level (when applicable) of 3.50 to 1.00.~~ In connection with the Sivomatic acquisition, the Company incurred $113 million of short-term debt under the Revolving Facility. As of June ~~30, 2019,~~28, 2020, there were $100 million in outstanding loans and ~~$10.4~~$9.4 million in letters of credit outstanding under the Revolving Facility. The Company is in compliance with all the covenants associated with the Revolving Facility as of the end of the period covered by this report.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As part of the Sivomatic acquisition, the Company assumed $10.7 million in long-term debt, recorded at fair value, consisting of ~~two~~2 term loans, one of which matures in 2020 and the other of which matures in 2022. These loans carry an interest rate of Euribor plus 2.0% and have quarterly repayments. During the first half of ~~2019,~~2020, the Company repaid ~~$1.3~~$1.0 million on these loans.

The Company has a committed loan facility in Japan. As of June ~~30, 2019, $4.9~~28, 2020, $4.3 million was outstanding under this loan facility. Principal will be repaid in accordance with the payment schedule ending in 2021. The Company repaid $0.3 million on this facility during the first half of ~~2019.~~2020.

As of June ~~30, 2019,~~28, 2020, the Company had ~~$43.5~~$41.8 million in uncommitted short-term bank credit lines, of which approximately ~~$4.2~~$0.3 million was in use.

Note ~~12.~~11. Benefit Plans

The Company and its subsidiaries have pension plans covering the majority of eligible employees on a contributory or non-contributory basis. The Company also provides postretirement health care and life insurance benefits for the majority of its U.S. retired employees. Disclosures for the U.S. plans have been combined with those outside of the U.S. as the international plans do not have significantly different assumptions, and together represent less than ~~25%~~21% of our total benefit obligation.

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Components of Net Periodic Benefit Cost

	Pension Benefits												Pension Benefits
	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
(millions of dollars)	June 30, 2019			July 1, 2018			June 30, 2019			July 1, 2018			Jun. 28, 2020			Jun. 30, 2019			Jun. 28, 2020			Jun. 30, 2019

Service cost	$	1.8		$	2.0		$	3.6		$	3.9		$	2.0		$	1.8		$	3.9		$	3.6
Interest cost		3.6			3.0			7.1			6.1			2.9			3.6			5.9			7.1
Expected return on plan assets		(4.6	)		(4.8	)		(9.2	)		(9.6	)		(5.2	)		(4.6	)		(10.4	)		(9.2	)
Amortization:
Prior service cost		0.1			0.1			0.2			0.2			0.1			0.1			0.2			0.2
Recognized net actuarial loss		2.3			2.7			4.6			5.5			2.8			2.3			5.6			4.6
Settlement loss														4.3			—			4.3			—
Net periodic benefit cost	$	3.2		$	3.0		$	6.3		$	6.1		$	6.9		$	3.2		$	9.5		$	6.3

	Other Benefits												Other Benefits
	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
(millions of dollars)	June 30, 2019			July 1, 2018			June 30, 2019			July 1, 2018			Jun. 28, 2020			Jun. 30, 2019			Jun. 28, 2020			Jun. 30, 2019

Service cost	$	0.1		$	0.1		$	0.1		$	0.1		$	—		$	0.1		$	0.1		$	0.1
Interest cost		—			—			0.1			0.1			0.1			—			0.1			0.1
Amortization:
Prior service cost		—			(0.2	)		—			(0.4	)
Recognized net actuarial (gain) loss		(0.2	)		(0.2	)		(0.4	)		(0.4	)		(0.2	)		(0.2	)		(0.4	)		(0.4	)
Net periodic benefit cost	$	(0.1	)	$	(0.3	)	$	(0.2	)	$	(0.6	)	$	(0.1	)	$	(0.1	)	$	(0.2	)	$	(0.2	)

Amortization amounts of prior service costs and recognized net actuarial losses are recorded, net of tax, as increases to accumulated other comprehensive income.

The Company expects to contribute approximately ~~$9.7~~$9.0 million to its pension plans and $0.3 million to its other postretirement benefit plans in ~~2019.~~2020. As of June ~~30, 2019, $3.1~~28, 2020, $4.3 million has been contributed to the pension plans and ~~less than~~approximately $0.1 million has been contributed to the other postretirement benefit plans.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note ~~13.~~12. Comprehensive Income

The following table summarizes the amounts reclassified out of accumulated other comprehensive loss attributable to the Company:

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
(millions of dollars)	June 30, 2019			July 1, 2018			June 30, 2019			July 1, 2018			Jun. 28, 2020			Jun. 30, 2019			Jun. 28, 2020			Jun. 30, 2019

Amortization of pension items:
Pre-tax amount	$	2.2		$	2.4		$	4.4		$	4.9		$	7.0		$	2.2		$	9.7		$	4.4
Tax		(0.5	)		(0.5	)		(1.1	)		(1.2	)		(1.7	)		(0.5	)		(2.3	)		(1.1	)
Net of tax	$	1.7		$	1.9		$	3.3		$	3.7		$	5.3		$	1.7		$	7.4		$	3.3

The pre-tax amounts in the table above are included within the components of net periodic pension benefit cost (see Note 1211 to the Condensed Consolidated Financial Statements) and the tax amounts are included within the provision for taxes on income line within the Condensed Consolidated Statements of Income.

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The major components of accumulated other comprehensive loss, net of related tax, attributable to MTI are as follows:

(millions of dollars)
Foreign Currency
Translation Adjustment

Unrecognized
Pension Costs

Net Gain (Loss)
on Derivative Instruments
Total

Balance as of December 31, 2018 $ (170.1 ) $ (69.7 ) $ 6.1 $ (233.7 )

Other comprehensive loss before reclassifications (19.5 ) — (2.0 ) (21.5 )
Amounts reclassified from AOCI — 3.3 — 3.3
Net current period other comprehensive income (loss) (19.5 ) 3.3 (2.0 ) (18.2 )
Cumulative effect of accounting change — (10.4 ) (0.5 ) (10.9 )
Balance as of June 30, 2019 $ (189.6 ) $ (76.8 ) $ 3.6 $ (262.8 )

(millions of dollars)	Foreign Currency Translation Adjustment			Unrecognized Pension Costs			Net Gain (Loss) on Derivative Instruments		Total

Balance as of December 31, 2019	$	(200.2	)	$	(96.1	)	$	5.9	$	(290.4	)

Other comprehensive income (loss) before reclassifications		(34.9	)		—			1.1		(33.8	)
Amounts reclassified from AOCI		—			7.3			—		7.3
Net current period other comprehensive income (loss)		(34.9	)		7.3			1.1		(26.5	)
Balance as of June 28, 2020	$	(235.1	)	$	(88.8	)	$	7.0	$	(316.9	)

In January 2019, the Company adopted the provisions of ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. As a result, the Company reclassified $10.9 million from "Accumulated other comprehensive loss" to "Retained earnings" on the Condensed Consolidated Balance Sheet as of June 30, 2019.

Note ~~14.~~13. Accounting for Asset Retirement Obligations

The Company records asset retirement obligations for situations in which the Company will be required to incur costs to retire tangible long-lived assets. The fair value of the liability for an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.

The Company also records liabilities related to land reclamation as a part of asset retirement obligations. The Company mines various minerals using a surface mining process that requires the removal of overburden. In certain areas and under various governmental regulations, the Company is obligated to restore the land comprising each mining site to its original condition at the completion of the mining activity. The obligation is adjusted to reflect the passage of time, mining activities, and changes in estimated future cash outflows.

The ~~following is a reconciliation of asset retirement obligations as of June 30, 2019:~~

(millions of dollars)
Asset retirement liability, December 31, 2018 $ 23.4
Accretion expense 1.4
Other 0.5
Payments (1.5 )
Foreign currency translation (0.1 )
Asset retirement liability, June 30, 2019 $ 23.7

~~The~~ asset retirement costs are capitalized as part of the carrying amount of the associated asset. The current portion of the liability of approximately $0.4 million is included in other current liabilities and the long-term portion of the liability of approximately ~~$23.3~~$23.2 million is included in other non-current liabilities in the Condensed Consolidated Balance Sheet as of June ~~30, 2019.~~28, 2020.

Note ~~15.~~14. Contingencies

The Company is party to a number of lawsuits arising in the normal course of our business.

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Certain of the Company's subsidiaries are among numerous defendants in a number of cases seeking damages for exposure to silica or to asbestos containing materials. ~~The~~As of June 28, 2020, the Company currently has ~~three~~3 pending silica cases and 71176 pending asbestos cases. ~~To date,~~In total, 1,493 silica cases and 5983 asbestos cases ~~have been~~were dismissed as of the end of the first quarter, not including any lawsuits against AMCOL or American Colloid Company dismissed prior to our acquisition of AMCOL. ~~Thirteen and twenty~~NaN new asbestos cases were filed ~~during~~in the ~~three and six months ended June 30, 2019, respectively, and 16 additional~~second quarter of 2020. NaN asbestos cases ~~were filed subsequent to the end of the second quarter. Two asbestos cases were dismissed during the first half of 2019~~ and no0 silica cases were dismissed during the ~~period.~~second quarter of 2020. Most of these claims do not provide adequate information to assess their merits, the likelihood that the Company will be found liable, or the magnitude of such liability, if any. Additional claims of this nature may be made against the Company or its subsidiaries. At this time management anticipates that the amount of the Company's liability, if any, and the cost of defending such claims, will not have a material effect on its financial position or results of operations.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company has settled only ~~one~~1 silica lawsuit, for a nominal amount, and no0 asbestos lawsuits to date (not including any that may have been settled by AMCOL prior to completion of the acquisition). We are unable to state an amount or range of amounts claimed in any of the lawsuits because state court pleading practices do not require identifying the amount of the claimed damage. The aggregate cost to the Company for the legal defense of these cases since inception continues to be insignificant. The majority of the costs of defense for these cases, excluding cases against AMCOL or American Colloid, are reimbursed by Pfizer Inc. pursuant to the terms of certain agreements entered into in connection with the Company's initial public offering in 1992. The Company is entitled to indemnification, pursuant to agreement, for sales prior to the initial public offering. Of the 71176 pending asbestos cases 45as of the end of the second quarter, 136 of the non-AMCOL cases are subject to indemnification, in whole or in part, because the plaintiffs claim liability based on sales of products that occurred either entirely before the initial public offering, or both before and after the initial public offering. ~~In twenty~~NaN of the ~~twenty two~~NaN remaining non-AMCOL cases as of the ~~plaintiffs have not alleged~~end of the second quarter are subject to indemnity in part until dates of exposure, ~~and~~which were not alleged in the complaint, can be ascertained in discovery. In the 5 remaining ~~two~~ non-AMCOL cases, exposure is alleged to have been after the Company's initial public offering in 1992. The remaining ~~four~~2 cases involve AMCOL only, so no Pfizer indemnity is available. Our experience has been that the Company is not liable to plaintiffs in any of these lawsuits and the Company does not expect to pay any settlements or jury verdicts in these lawsuits.

The Company is also the respondent in an arbitration requested by the Plan Administrator for the Bankruptcy Estate of Novinda Corp. (“Novinda”), a start-up company which declared bankruptcy in April 2016 and with which the Company had several relationships, including an equity and debt interest and a product supply relationship. On July 30, 2018, the Plan Administrator filed a Demand for Arbitration against the Company and certain of its officers for the alleged destruction of Novinda’s business. In the second quarter of 2020, the arbitration panel rendered an award in the arbitration, finding for the Company in part and for Novinda in part. The total amount of the award has not yet been finalized. The Company has recorded a charge of $8.0 million related to this matter in the second quarter of 2020, representing its reasonable estimate of the damages, interest and costs awarded by the panel to Novinda. In addition, the Company has recorded a total of $11.8 million in litigation expense related to this matter, $ 0.9 million of which was recorded in 2020.

Environmental Matters

On April 9, 2003, the Connecticut Department of Environmental Protection issued an administrative consent order relating to our Canaan, Connecticut plant where both our Refractories segment and Specialty Minerals segment have operations. We agreed to the order, which includes provisions requiring investigation and remediation of contamination associated with historic use of polychlorinated biphenyls ("PCBs") and mercury at a portion of the site. We have completed the required investigations and submitted several reports characterizing the contamination and assessing site-specific risks. We are awaiting regulators’ approval of the risk assessment report, which will form the basis for a proposal by the Company concerning eventual remediation.

We believe that the most likely form of overall site remediation will be to leave the existing contamination in place (with some limited soil removal), encapsulate it, and monitor the effectiveness of the encapsulation. We anticipate that a substantial portion of the remediation cost will be borne by the United States based on its involvement at the site from 1942 – 1964, as historic documentation indicates that PCBs and mercury were first used at the facility at a time of U.S. government ownership for production of materials needed by the military. Pursuant to a Consent Decree entered on October 24, 2014, the United States paid the Company $2.3 million in the 4th quarter of 2014 to resolve the Company’s claim for response costs for investigation and initial remediation activities at this facility through October 24, 2014. Contribution by the United States to any future costs of investigation or additional remediation has, by agreement, been left unresolved. Though the cost of the likely remediation remains uncertain pending completion of the phased remediation decision process, we have estimated that the Company’s share of the cost of the encapsulation and limited soil removal described above would approximate $0.4 million, which has been accrued as of June ~~30, 2019.~~28, 2020.

The Company is evaluating options for upgrading the wastewater treatment facilities at its Adams, Massachusetts plant. This work has been undertaken pursuant to an administrative Consent Order originally issued by the Massachusetts Department of Environmental Protection (“DEP”) on June 18, 2002. This order was amended on June 1, 2009 and on June 2, 2010. The amended Order includes the investigation by January 1, 2022 of options for ensuring that the facility's wastewater treatment ponds will not result in unpermitted discharge to groundwater. Additional requirements of the amendment include the submittal by July 1, 2022 of a plan for closure of a historic lime solids disposal area. Preliminary engineering reviews completed in 2005 indicate that the estimated cost of wastewater treatment upgrades to operate this facility beyond 2024 may be between $6 million and $8 million. The Company estimates that the remaining remediation costs would approximate $0.4 million, which has been accrued as of June ~~30, 2019.~~28, 2020.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company and its subsidiaries are not party to any other material pending legal proceedings, other than routine litigation incidental to their businesses.

~~MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Note ~~16.~~15. Segment and Related Information

~~On a regular basis, the Company reviews its segments and the approach used by the chief operating decision maker to assess performance and allocate resources.~~ The Company has ~~four~~4 reportable segments: Performance Materials, Specialty Minerals, Refractories and Energy Services. See Note 1 to the Condensed Consolidated Financial Statements. Segment information for the three and six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ is as follows:

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
(millions of dollars)	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018		Jun. 28, 2020		Jun. 30, 2019		Jun. 28, 2020		Jun. 30, 2019

Net Sales
Performance Materials	$	215.4	$	214.5	$	414.6	$	401.8	$	173.8	$	215.4	$	360.0	$	414.6
Specialty Minerals		145.1		150.9		289.5		300.5		109.8		145.1		246.9		289.5
Refractories		77.5		79.6		151.3		154.9		55.9		77.5		124.9		151.3
Energy Services		25.8		19.7		46.1		38.8		17.7		25.8		42.9		46.1
Total	$	463.8	$	464.7	$	901.5	$	896.0	$	357.2	$	463.8	$	774.7	$	901.5

Income from Operations
Performance Materials	$	20.7	$	29.6	$	47.0	$	55.8	$	21.0	$	20.7	$	45.1	$	47.0
Specialty Minerals		20.0		25.1		42.0		49.2		9.0		20.0		29.3		42.0
Refractories		7.1		10.3		19.2		23.1		5.9		7.1		17.1		19.2
Energy Services		0.9		0.7		3.3		2.2		1.4		0.9		4.6		3.3
Total	$	48.7	$	65.7	$	111.5	$	130.3	$	37.3	$	48.7	$	96.1	$	111.5

A reconciliation of the totals reported for the operating segments to the applicable line items in the condensed consolidated financial statements is as follows:

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
(millions of dollars)	June 30, 2019			July 1, 2018			June 30, 2019			July 1, 2018			Jun. 28, 2020			Jun. 30, 2019			Jun. 28, 2020			Jun. 30, 2019

Income from operations for reportable segments	$	48.7		$	65.7		$	111.5		$	130.3		$	37.3		$	48.7		$	96.1		$	111.5
Acquisition related transaction and integration costs		—			(1.0	)		—			(1.4	)
Unallocated corporate expenses		(3.2	)		(1.9	)		(4.0	)		(3.5	)
Litigation expenses														(8.3	)		—			(8.9	)		—
Unallocated and other corporate expenses														(1.8	)		(3.2	)		(2.3	)		(4.0	)
Consolidated income from operations		45.5			62.8			107.5			125.4			27.2			45.5			84.9			107.5
Non-operating deductions, net		(13.3	)		(8.4	)		(26.1	)		(21.8	)		(12.6	)		(13.3	)		(21.3	)		(26.1	)
Income from operations before tax and equity in earnings	$	32.2		$	54.4		$	81.4		$	103.6		$	14.6		$	32.2		$	63.6		$	81.4

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company's sales by product category are as follows:

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
(millions of dollars)	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018		Jun. 28, 2020		Jun. 30, 2019		Jun. 28, 2020		Jun. 30, 2019

Metalcasting	$	75.8	$	88.8	$	149.0	$	168.0	$	52.8	$	75.8	$	114.5	$	149.0
Household, Personal Care & Specialty Products		69.0		58.6		143.9		107.3		87.9		91.5		184.1		186.3
Environmental Products		29.0		25.2		44.9		37.9		19.9		29.0		31.4		44.9
Building Materials		19.1		18.0		34.4		36.9		13.2		19.1		30.0		34.4
Basic Minerals		22.5		23.9		42.4		51.7
Performance Materials		215.4		214.5		414.6		401.8		173.8		215.4		360.0		414.6

Paper PCC		90.2		94.5		181.7		191.5		65.5		90.2		150.6		181.7
Specialty PCC		17.3		17.3		35.4		34.3		14.9		17.3		32.4		35.4
Ground Calcium Carbonate		24.8		25.2		47.1		47.7		20.6		24.8		43.2		47.1
Talc		12.8		13.9		25.3		27.0		8.8		12.8		20.7		25.3
Specialty Minerals		145.1		150.9		289.5		300.5		109.8		145.1		246.9		289.5

Refractory Products		61.0		66.7		123.0		129.0		47.1		61.0		102.9		123.0
Metallurgical Products		16.5		12.9		28.3		25.9		8.8		16.5		22.0		28.3
Refractories		77.5		79.6		151.3		154.9		55.9		77.5		124.9		151.3

Energy Services		25.8		19.7		46.1		38.8		17.7		25.8		42.9		46.1
Total	$	463.8	$	464.7	$	901.5	$	896.0	$	357.2	$	463.8	$	774.7	$	901.5

Note 16. Subsequent Event

On June 30, 2020, the Company issued $400 million aggregate principal amount of 5.0% Senior Notes due 2028 (the "Notes"). The Notes were issued pursuant to an indenture, dated as of June 30, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. The Company used the net proceeds of its offering of the Notes to repay all of its outstanding loans under the fixed rate tranche of the Term Facility, repay all of its outstanding borrowings under its Revolving Credit Facility, and the remainder for general corporate purposes

The Notes bear an interest rate of 5.0% per annum payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2021. The Notes are unconditionally guaranteed on a senior unsecured basis by each of the Company's existing and future wholly owned domestic restricted subsidiaries that is a borrower under or that guarantees the Company's obligations under its Senior Secured Credit Facilities or that guarantees the Company's or any of the Company's wholly owned domestic subsidiaries’ long-term indebtedness in an aggregate amount in excess of $50 million.

At any time and from time to time prior to July 1, 2023, the Company may redeem some or all of the Notes for cash at a redemption price equal to 100% of their principal amount, plus the “make-whole” premium described in the Indenture and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. Beginning on July 1, 2023, the Company may redeem some or all of the Notes at any time and from time to time at the applicable redemption prices listed in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time and from time to time prior to July 1, 2023, the Company may redeem up to 40% of the aggregate principal amount of the Notes with funds from one or more equity offerings at a redemption price equal to 105.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

If the Company experiences a change of control (as defined in the indenture), the Company is required to offer to repurchase the Notes at 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

The indenture contains certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions, as well as customary events of default.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

Minerals Technologies Inc.:

Results of Review of Interim Financial Information

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

~~August 2, 2019~~July 31, 2020

Our consolidated sales for the second quarter of ~~2019~~2020 were ~~$463.8~~$357.2 million, as compared with ~~$464.7~~$463.8 million in the prior year. Income from operations was ~~$45.5~~$27.2 million and represented ~~9.8%~~7.6% of sales, as compared with ~~$62.8~~$45.5 million and ~~13.5%~~9.8% of sales in the prior year. Included in income from operations for the second quarter of ~~2019~~2020 were $6.5 million of restructuring and other ~~costs of $13.2 million.~~items. In addition, we recorded ~~a $2.5~~$8.3 million ~~bad debt reserve related~~of litigation expenses associated with the bankruptcy of Novinda Corp, including an $8.0 million estimated amount of damages, interest and costs awarded to ~~a customer bankruptcy.~~Novinda. Net income was ~~$26.6~~$14.4 million, as compared to ~~$44.1~~$26.6 million in the second quarter of ~~2018.~~2019. Diluted earnings in the second quarter ended June ~~30, 2019~~28, 2020 were $0.42 per share, as compared with $0.75 per share ~~compared with $1.24 per share~~ in ~~2018.~~2019.

~~During~~In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic. We have remained focused on the health and safety of our employees, and deployed rigorous health, safety and wellness protocols for all of our facilities in order to protect our employees. We have also conducted scenario planning and developed contingency plans to ensure we are supporting our customers and adjusting to changing market dynamics. Around the world, the Company continues to closely adhere to all government regulations as they are issued. Applicable governmental directives across the United States and other global locations have typically permitted the continued operation of essential critical infrastructure sectors. As the Company supplies products and services to many essential industries, including critical manufacturing and energy sectors, all of our operations had qualified as essential businesses. Accordingly, all of the Company’s production facilities are currently operational. In a few locations, however, sites were temporarily impacted by the pandemic.

The recent economic environment related to the rapidly evolving global pandemic, which has slowed business activity in several key end-markets, negatively impacted the Company’s second quarter results. The pandemic has affected and we expect will continue to affect the demand for a number of ~~2019, we initiated a restructuring~~our Performance Materials segment’s products and ~~cost savings program~~services. We expect paper consumption to ~~better align our costs and organizational structure with the current market environment. We recorded a $7.5 million non-cash impairment of assets charge and $5.7 million in other restructuring costs~~be down in the ~~second quarter~~next quarter. Global steel production has been and will continue to be affected by volatility in the market due to the COVID-19 pandemic and we expect steel consumption to be lower due to delays in the construction and automotive industries, which will impact our Refractory segment. Oil and natural gas prices have decreased significantly as a result of ~~2019.~~ the COVID-19 pandemic, which, if sustained, will continue to cause oil and natural gas companies to reduce their capital expenditures and production and exploration activities.

We expect the impacts of the COVID-19 pandemic to ~~realize annualized savings from this restructuring program of approximately $12 million~~continue to impact our results for the third quarter. The extent to which our operations will be impacted by the ~~first half~~pandemic will depend largely on future developments, including the continued severity of ~~2020.~~the pandemic and future actions by government authorities to contain it or treat its impact. These conditions are highly uncertain and cannot be accurately predicted. We will continue to actively monitor and respond to the COVID-19 pandemic. We are actively managing the business to maintain cash flow.

Our balance sheet continues to be strong. Cash, cash equivalents and short-term investments were ~~$219.7~~$238.2 million as of June 28, 2020. On June 30, ~~2019. We repaid $37~~2020, the Company completed a $400 million private offering of senior unsecured notes due 2028. The net proceeds were used to repay $148 million of fixed rate term loans and $100 million of outstanding borrowing under its revolving credit facility and the remainder for general corporate purposes. As a result, the Company currently has more than $650 million of available liquidity, including cash on hand as well as availability under its revolving credit facility. We believe that these factors will allow us to meet our debt in the first half of 2019. Our intention continues to be to maintain a balanced approach to capital deployment, by using excess cash flow for investments in growth, debt reduction and selective share repurchases.anticipated funding requirements.

~~Looking forward,~~The COVID-19 pandemic had a material adverse effect on our reported results for our second quarter, and we ~~remain cautious about~~expect it will negatively impact our business and results of operations for our third quarter. The extent to which our operations will be impacted by the ~~state~~pandemic will depend largely on future developments, including the severity of the ~~global economy~~pandemic and actions by government authorities to contain it or treat its impact. These are highly uncertain and cannot be accurately predicted. We will continue to actively monitor and respond to the ~~impact it will have on our product lines.~~COVID-19 pandemic.

The Company will also continue to focus on innovation and new product development and other opportunities for sales growth ~~in 2019~~ from ~~its~~our existing businesses in 2020, as follows:

●

Increase our presence and gain penetration of our bentonite-based foundry customers for the Metalcasting industry in emerging markets, such as China and India.

●

Increase our presence and market share in global pet care products, particularly in emerging markets.

●

Deploy new products in pet care such as lightweight litter.

●

Increase our presence and market share in Asia and in the global powdered detergent market.

●

Continue the development of our proprietary Enersol® products for agricultural applications worldwide.

●

Pursue opportunities for our products in environmental and building and construction markets in the Middle East, Asia Pacific and South America regions.

●

Increase our presence and market share for geosynthetic clay liners within the Environmental Products product line.

●

Develop multiple high-filler technologies under the FulFill® platform of products, to increase the fill rate in freesheet paper and continue to progress with commercial discussions and full-scale paper machine trials.

●

Develop products and processes for waste management and recycling opportunities to reduce the environmental impact of the paper mill, reduce energy consumption and improve the sustainability of the papermaking process, including our NewYield^® and ENVIROFIL^® products.

●

Further penetration into the packaging segment of the paper industry.

●

Increase our sales of PCC for paper by further penetration of the markets for paper filling at both freesheet and groundwood mills, particularly in emerging markets.

●

Expand the Company's PCC coating product line using the satellite model.

●

Promote the Company's expertise in crystal engineering, especially in helping papermakers customize PCC morphologies for specific paper applications.

●

Expand PCC produced for paper filling applications by working with industry partners to develop new methods to increase the ratio of PCC for fiber substitutions.

●

Develop unique calcium carbonate and talc products used in the manufacture of novel biopolymers, a new market opportunity.

●

Deploy new talc and GCC products in paint, coating and packaging applications.

●

Deploy value-added formulations of refractory materials that not only reduce costs but improve performance.

●

Deploy our laser measurement technologies into new applications.

●

Expand our refractory maintenance model to other steel makers globally.

●

Increase our presence and market penetration in offshore produced water and offshore filtration and well testing within the Energy Services segment.

●

Deploy operational excellence principles into all aspects of the organization, including system infrastructure and lean principles.

●

Continue to explore selective acquisitions to fit our core competencies in minerals and fine particle technology.

However, there can be no assurance that we will achieve success in implementing any one or more of these opportunities.

Results of Operations

Three months ended June ~~30, 2019~~28, 2020 as compared with three months ended ~~July 1, 2018~~June 30, 2019

Consolidated Income Statement Review

Worldwide net sales decreased ~~slightly~~23% to ~~$463.8~~$357.2 million in the second quarter from ~~$464.7~~$463.8 million in the prior year. Foreign exchange had an unfavorable impact on sales of approximately 3%$9.9 million or 2%.

Net sales in the United States ~~increased~~decreased 29% to ~~$253.3~~$180.7 million from ~~$249.0~~$253.3 million in the prior year. International sales decreased 2%16% to ~~$210.5~~$176.5 million from ~~$215.7~~$210.5 million in the prior year.

Operating Costs and Expenses

Cost of sales was $268.3 million and represented 75.1% of sales for the three month period ended June 28, 2020, as compared with $351.8 million and 75.9% of sales ~~as compared with $348.8 million and 75.1%~~in the prior year. Production margin increased from 24.1% of sales in the prior ~~year.~~year to 24.9% of sales in the second quarter of 2020. This ~~increase~~improvement was primarily due ~~primarily~~ to favorable mix, higher ~~raw material, logistics~~selling prices and ~~energy costs across all segments.~~cost control.

Marketing and administrative costs were $41.8 million and 11.7% of sales for the three months ended June 28, 2020, as compared to $48.4 million and 10.4% of sales ~~compared to $45.3 million and 9.7% of sales~~ in the prior year. The decrease was primarily due to lower expenses as a result of the pandemic. Included in ~~the~~ marketing and administrative costs for the three months ended June 30, 2019 was bad debt expense of $2.5 million relating to ~~the~~a refractories customer bankruptcy ~~of a Refractories customer~~ in the U.K.

Research and development expenses were ~~$4.9~~$5.1 million and represented 1.4% of sales for the three months ended June 28, 2020, as compared with ~~$6.4~~$4.9 million and 1.1% of sales in the prior ~~year, and represented 1.1% of sales compared with 1.4% of sales.~~year.

The Company recorded a$6.5 million and $13.2 million ~~charge~~ for ~~the impairment of assets~~asset write-downs and other restructuring costs ~~during~~for the three months ended June 28, 2020 and June 30, 2019, ~~to better align our costs and organizational structure with the market environment.~~respectively.

~~The~~In addition, the Company recorded ~~charges~~$8.3 million related to litigation expenses associated with the bankruptcy of ~~$0.4 million and $1.0 million~~Novinda Corp. for ~~restructuring costs and acquisition related transaction and integration costs, respectively during~~ the three months ended ~~July 1, 2018.~~June 28, 2020. Included in this amount is an $8.0 million charge for the estimated amount of damages, interest and costs awarded to Novinda.

Income from Operations

The Company recorded income from operations of ~~$45.5~~$27.2 million as compared to ~~$62.8~~$45.5 million in the prior year. Operating income during the three months ended June 28, 2020 includes a $6.5 million charge for the impairment of assets and other restructuring costs. In addition, the Company recorded $8.3 million related to litigation expenses associated with the bankruptcy of Novinda Corp. for the three months ended June 28, 2020. Operating income during the three months ended June 30, 2019 includes a $13.2 million charge for the impairment of assets and other restructuring costs. In addition, the Company recorded a $2.5 million bad-debt reserve relating to the bankruptcy of a Refractories customer in the U.K. Operating income during the three months ended July 1, 2018 includes $0.4 million of restructuring costs and $1.0 million of acquisition related transaction and integration costs.

Other Non-Operating Income (Deductions)

In the second quarter of ~~2019,~~2020, non-operating deductions were ~~$13.3~~$12.6 million as compared with ~~$8.4~~$13.3 million in the prior year. ~~This increase~~The decrease was primarily ~~attributable~~related to ~~foreign exchange gains of $0.1 million~~lower interest expense in the ~~current year~~quarter as compared with ~~foreign exchange gains~~prior year due to lower interest rates and lower debt levels. Included in other non-operating deductions for the second quarter of ~~$4.9~~2020 is a $4.3 million non-cash pension settlement charge associated with our plans in the ~~prior year.~~U.S.

Provision for Taxes on Income

Provision for taxes on income was ~~$5.1~~$0.9 million and ~~$10.3~~$5.1 million for the three months ended June 28, 2020 and June 30, 2019, ~~and July 1, 2018,~~ respectively. The effective tax rate was ~~15.8%~~6.2% and ~~18.9%~~15.8% for the three months ended June 28, 2020 and June 30, 2019, ~~and July 1, 2018,~~ respectively. The lower effective tax rate was primarily due to discrete items related to restructuring and other charges and to the ~~expiration~~mix of ~~the tax statute of limitations resulting from the completion of a tax audit.~~earnings.

Consolidated Net Income Attributable to MTI Shareholders

Consolidated net income was ~~$26.6~~$14.4 million for the three months ended June ~~30, 2019~~28, 2020, as compared with ~~$44.1~~$26.6 million in the prior year.

The following discussions highlight the operating results for each of our four segments.

Net sales in the Performance Materials segment ~~increased slightly~~decreased 19% to ~~$215.4~~$173.8 million from ~~$214.5~~$215.4 million in the prior year. ~~Foreign exchange had an unfavorable impact on~~Sales in Metalcasting decreased 30% from prior year primarily driven by COVID-19 related automotive production slowdown in North American and parts of Asia. Metalcasting sales ~~of $7.3 million, or 3%. Sales~~ in China grew 9%, as economic activity rebounded following the COVID-19 related shutdowns, and we continued to penetrate the market with our pre-blended greensand bond formulations. Household, Personal Care & Specialty Products ~~increased 18%~~sales decreased 4% as compared with prior year. We saw continued strong performance from our global pet care business, which grew 3%, as well as fabric care, which grew 20%, and personal care, which grew 7%. The growth in these consumer-oriented businesses was offset by weakness in specialty drilling products. Environmental Products and Building Materials sales both decreased 31% primarily due to the continued growth of our pet care products in Europe and North America. Environmental Products sales increased 15% driven by an ongoing large international project. Sales of Building Materials products increased 6% primarily due to an increase in U.S. commercial construction projects. Sales growth in the segment was partially offset by decreased sales in Metalcasting and Basic Minerals. The decrease in Metalcasting sales was primarily due to weaker demand in U.S. automotive, heavy truck and agricultural equipment, as well as in the China metalcasting markets.COVID-19 related project delays.

Income from operations was ~~$20.7~~$21.0 million and ~~9.6%~~12.1% of sales as compared to ~~$29.6~~$20.7 million and ~~13.8%~~9.6% of sales in the prior year. Included in income from operations for the three month period ended June 30, 2019 were $7.0 million of restructuring and impairment costs. ~~While pricing actions more than offset higher raw materials and logistics costs,~~The impact of lower sales on operating income versus the prior year was partially mitigated by expense control, input cost reductions, and ~~margins were affected by the lower Metalcasting sales and the rail infrastructure issues impacting the Company’s operations in the Western United States.~~continued pricing actions.

Worldwide sales in the Specialty Minerals segment were ~~$145.1~~$109.8 million, as compared with ~~$150.9~~$145.1 million in the prior year, a decrease of 4%24%.

Worldwide net sales of PCC, which is primarily used in the manufacturing process of the paper industry, decreased 4%25% to ~~$107.5~~$80.4 million from ~~$111.8~~$107.5 million in the prior year. Paper PCC sales decreased 5%27% to $65.5 million from $90.2 million ~~from $94.5 million,~~in the prior year, primarily due to the ~~unfavorable impact of foreign exchange~~decline in printing and ~~reduced sales in North America driven by previously announced customer~~writing paper demand resulting from the COVID-19 pandemic and paper machine shutdowns ~~including~~in the ~~closure~~prior year. Paper PCC sales in China grew 4% on continued penetration and strong pull from our customers. Sales of ~~a U.S. paper mill~~Specialty PCC decreased 14% to $14.9 million from $17.3 million in the prior year as demand slowed late in the first quarter ~~of 2019. Sales of Specialty PCC~~and remained at lower levels in the ~~same at $17.3 million for both three months ended June 30, 2019 and July 1, 2018.~~second quarter.

Net sales of Processed Minerals products decreased 4%22% to ~~$37.6~~$29.4 million ~~primarily~~ due to ~~lower sales~~COVID-19 related slowdown in ~~the~~construction and automotive ~~and construction markets.~~activity. Ground Calcium Carbonate sales decreased 2%17% to $20.6 for the three month periods ending June 28, 2020 as compared to $24.8 ~~million from $25.2~~ million in the prior year. Talc sales decreased 8%31% to ~~$12.8~~$8.8 million as compared with ~~$13.9~~$12.8 million in the prior year.

Income from operations for Specialty Minerals was ~~$20.0~~$9.0 million as compared with ~~$25.1~~$20.0 million in the prior ~~year.~~year and represented 8.2% of sales. The impact from volume reductions as compared with prior year were partially offset by continued pricing actions and cost control. Included in income from operations for the three months ended June 28, 2020 were $6.3 million of impairment and restructuring costs. Included in income from operations for the three month period ended June 30, 2019 were $2.5 million of restructuring and impairment costs. The incremental decrease in operating income was primarily due to previously announced paper machine shutdowns in North America, lower volumes and the unfavorable impact of foreign exchange, partially offset by higher pricing.

Net sales in the Refractories segment decreased 3%28% to ~~$77.5~~$55.9 million from ~~$79.6~~$77.5 million in the prior year driven by lower ~~Refractory sales in Europe, partially offset by higher~~ sales of Refractory and Metallurgical ~~Products.~~Products globally as steel mills reduced production in response to weaker demand from construction and automotive markets. Sales of refractory products and systems to steel and other industrial applications decreased 23% to ~~$61.0 million. Sales~~$47.1 million and sales of metallurgical products ~~increased 28%~~decreased 47% to ~~$16.5~~$8.8 million.

Income from operations was $5.9 million and 10.6% of sales as compared with $7.1 million and 9.2% of sales ~~as compared with $10.3 and 12.9% of sales~~ in the prior ~~year.~~year due to lower volumes. Included in income from operations for the ~~six~~three month period ended June 30, 2019 were $0.8 million of restructuring costs and a $2.5 million bad debt reserve relating to a customer bankruptcy.

Net sales in the Energy Services segment ~~increased~~decreased 31% to ~~$25.8~~$17.7 million from ~~$19.7~~$25.8 million in the prior year, primarily driven by ~~higher well testing~~decreased activity due to COVID-19 restrictions and ~~filtration activity in the Gulf of Mexico.~~relatively low oil prices.

Operating income was ~~$0.9~~$1.4 million as compared with ~~$0.7~~$0.9 million in the prior year. Included in income from operations for the three month period ended June 30, 2019 were $1.8 million of restructuring and impairment costs.

Six months ended June ~~30, 2019~~28, 2020 as compared with six months ended ~~July 1, 2018~~June 30, 2019

Consolidated Income Statement Review

Total sales ~~increased $5.5~~decreased $126.8 million or 1%14% from the previous year to ~~$901.5~~$774.7 million. Foreign exchange had an unfavorable impact on sales of approximately ~~$25.8~~$15.9 million or 3%2%. Sales decreased in all business segments primarily due to reduced volumes related to the impacts of the COVID-19 pandemic.

Net sales in the United States increased 1% to ~~$485.0~~$407.7 million from ~~$481.3~~$485.0 million in the prior year. International sales ~~increased~~decreased to ~~$416.5~~$367.0 million from ~~$414.7~~$416.5 million in the prior ~~year, primarily related to the Sivomatic acquisition.~~

Operating Costs and Expenses

Cost of sales ~~was $679.8 million, an increase of 2%~~decreased 15% from the prior year and was ~~75.4%~~74.7% of sales, as compared with ~~74.4%~~75.4% in the prior year. ~~The decrease~~Gross margin increased to 25.3% of sales as compared with 24.6% of sales in ~~gross margin percentage~~the prior year. This improvement was primarily ~~attributable~~due to higher ~~raw material, logistics~~selling prices and ~~energy costs across all segments.~~cost control.

Marketing and administrative costs were ~~$91.3~~$85.2 million and ~~10.1%~~11.0% of sales compared to ~~$89.7~~$91.3 million and ~~10.0%~~10.1% of sales in the prior year. Included in marketing and administrative costs for the six months ended June 30, 2019 was bad debt expense of $2.5 million relating to a refractories customer bankruptcy in the U.K.

Research and development expenses were ~~$9.7~~$10.2 million and represented ~~1.1%~~1.3% of sales for the six months ended June ~~30, 2019~~28, 2020 as compared with ~~$12.5~~$9.7 million and ~~1.4%~~1.1% of sales in the prior year.

The Company recorded a$6.5 million and $13.2 million ~~charge~~ for ~~the impairment of assets~~asset write-downs and other restructuring costs ~~during~~for the six months ended June 28, 2020 and June 30, 2019, ~~due to~~respectively.

In addition, the ~~current demand environment and to improve profitability. The~~ Company recorded ~~a $0.4~~$8.9 million ~~charge~~related to litigation expenses associated with the bankruptcy of Novinda Corp. for ~~restructuring costs and $1.4 million for acquisition related transaction and integration costs during~~ the six months ended ~~July 1, 2018.~~June 28, 2020. Included in litigation expense is an $8.0 million charge for the estimated amount of damages, interest, and costs awarded to Novinda.

Income from Operations

The Company recorded income from operations of ~~$107.5~~$84.9 million as compared to ~~$125.4~~$107.5 million in the prior year. Operating income was ~~11.9%~~11.0% of sales in the first six months of ~~2019~~2020 as compared with ~~14.0%~~11.9% in the prior year. Operating income during the six months ended June ~~30, 2019~~28, 2020 includes a ~~$13.2~~$6.5 million charge for the impairment of assets and ~~severance-related costs.~~other restructuring costs and $8.9 million related to ongoing litigation associated with the bankruptcy of Novinda Corp. Operating income during the six months ended ~~July 1, 2018~~June 30, 2019 includes ~~$0.4~~$13.2 million of restructuring ~~costs and $1.4 million of acquisition related integration~~ costs.

Other Non-Operating Income (Deductions)

The Company recorded non-operating deductions of $21.3 million for the six months ended June 28, 2020, as compared with $26.1 million in the prior year. Included in non-operating deductions for the six months ended June 28, 2020 is $17.4 million of net interest expense and a $4.3 million non-cash pension settlement charge. Included in non-operating deductions for the six months ended June 30, 2019 ~~as compared with $21.8 million in the prior year. The $26.1 million in the current year is comprised primarily of~~was $22.3 ~~million of net interest expense. The $21.8 million recorded in the prior year included $22.2~~ million of net interest expense.

Provision for Taxes on Income

Provision for taxes was ~~$14.4~~$10.6 million as compared to ~~$19.6~~$14.4 million in the prior year. The effective tax rate was ~~17.7%~~16.7% as compared to ~~18.9%~~17.7% in the prior year. The lower effective tax rate was primarily due to discrete items related to restructuring and other charges and to the ~~expiration~~mix of ~~the tax statute of limitations resulting from the completion of a tax audit.~~earnings.

Consolidated Net Income Attributable to MTI Shareholders

Consolidated net income was ~~$65.7~~$53.0 million during the six months ended June ~~30, 2019~~28, 2020, as compared with ~~$84.0~~$65.7 million in the prior year.

The following discussions highlight the operating results for each of our four segments.

Net sales in the Performance Materials segment ~~increased 3%~~decreased to ~~$414.6~~$360.0 million from ~~$401.8~~$414.6 million in the prior year. Sales in Metalcasting decreased ~~11%~~23% to ~~$149.0~~$114.5 million due to COVID-19 related weaker foundry demand in U.S. ~~automotive, heavy truck~~ and ~~agricultural equipment as well as in China.~~Asia. Household, Personal Care & Specialty Products ~~increased 34%, primarily driven~~decreased slightly by ~~higher pet care revenue, including $33.7 million from the acquisition of Sivomatic.~~1%. Environmental Products sales ~~rose 18%~~decreased 30% primarily due to a large ~~international project. These sales increases were partially offset by 7% lower sales~~project completed in ~~Building Materials, primarily due to the difference in the magnitude of waterproofing projects compared to~~ the prior year and ~~a 18% reduction in Basic Minerals~~COVID-19 related project delays. Building Materials sales decreased 13% due to ~~the Company's exit from the bulk chromite business in the first quarter of 2018.~~COVID-19 related project delays.

Income from operations was ~~$47.0~~$45.1 million and ~~11.3%~~12.5% of sales as compared to ~~$55.8~~$47.0 million and ~~13.9%~~11.3% of sales in the prior year. Included in income from operations for the six month period ended June 30, 2019 were $7.0 million of restructuring and impairment costs. ~~While pricing actions more than offset higher raw material costs, operating~~Operating income and margins were primarily affected by ~~the~~ lower ~~Metalcasting sales and the rail infrastructure issues impacting the Company’s operations in the Western United States.~~volumes.

Worldwide sales in the Specialty Minerals segment were ~~$289.5~~$246.9 million, as compared with ~~$300.5~~$289.5 million in the prior year, a decrease of 4%15%.

Worldwide net sales of PCC products, which are primarily used in the manufacturing process of the paper industry, decreased 4%16% to ~~$217.1~~$183.0 million from ~~$225.8~~$217.1 million in the prior year. Paper PCC sales decreased 5%17% to ~~$181.7~~$150.6 million from ~~$191.5~~$181.7 million in the prior ~~year.~~year due to previously announced customer paper machine shutdowns in North America and lower demand in printing and writing paper resulting from the COVID-19 pandemic. Specialty PCC products decreased 8%, primarily due to lower demand.

Net sales of Processed Minerals products decreased 3%12% to ~~$72.4~~$63.9 million from ~~$74.7~~$72.4 million in the prior year. Ground Calcium Carbonate sales decreased 1%8% primarily due to lower ~~volumes~~demand in the construction ~~market.~~and automotive markets as a result of COVID-19.

Income from operations was ~~$42.0~~$29.3 million and ~~14.5%~~11.9% of net sales as compared to ~~$49.2~~$42.0 million and ~~16.4%~~14.5% of sales in the prior year. Included in income from operations for the six month period ended June 28, 2020 and June 30, 2019 were $6.3 million and $2.5 million of restructuring and impairment ~~costs.~~costs, respectively. The impact of lower volumes was partially offset by continued pricing actions and cost control.

Net sales in the Refractories segment decreased 2%17% to ~~$151.3~~$124.9 million from ~~$154.9~~$151.3 million in the prior year. Sales of refractory products and systems to steel and other industrial applications decreased 5%16% to ~~$123.0~~$102.9 million from ~~$129.0~~$123.0 million in the prior year due to lower ~~volumes. This was partially offset by higher sales in the Metallurgical Products product line, which increased 9% to $28.3 million.~~demand from steel mills.

Income from operations was ~~$19.2~~$17.1 million and ~~12.7%~~13.7% of sales as compared with ~~$23.1~~$19.2 million and ~~14.9%~~12.7% of sales. Included in income from operations for the six month period ended June 30, 2019 were $0.8 million of restructuring costs and a $2.5 million bad debt reserve relating to a customer bankruptcy.

Net sales in the Energy Services segment ~~increased 19%~~decreased 7% to ~~$46.1~~$42.9 million from ~~$38.8~~$46.1 million in the prior year, primarily driven ~~by higher filtration~~the decrease in activity ~~in the North Sea~~due to COVID-19 restrictions and ~~the Gulf of Mexico.~~relatively low oil prices.

Income from operations during the six months ended June ~~30, 2019~~28, 2020 was ~~$3.3~~$4.6 million and represented ~~7.2%~~10.7% of sales. Included in income from operations for the six month period ended June 30, 2019 were $1.8 million of restructuring and impairment costs. ~~Income from operations was $2.2 million and 5.7% of sales during the six months ended July 1, 2018, which included $0.4 million of restructuring costs.~~

Liquidity and Capital Resources

Cash provided from operations during the six months ended June ~~30, 2019,~~28, 2020, was approximately ~~$98~~$94 million. Cash flows provided from operations during the first half of ~~2019~~2020 were principally used to repay debt, fund capital expenditures, repurchase shares and to pay the Company's dividend to common shareholders. The aggregate maturities of long-term debt are as follows: remainder of ~~2019 - $1.6 million;~~ 2020 - ~~$2.2~~$1.1 million; 2021 - ~~$232.3~~$152.0 million; 2022 - $0.2 million; 2023 - $0.0 million; 2024 - $658.0 million; thereafter - ~~$658.0~~$0.0 million.

On May 9, 2014, in connection with the acquisition of AMCOL International Corporation (“AMCOL”), the Company entered into a credit agreement providing for the $1.560 billion senior secured term loan facility (the “Term Facility”) and a $200 million senior secured revolving credit ~~facility (the “Revolving Facility” and, together with the Term Facility, the “Facilities”).~~facility.

~~During the first half of 2019,~~On June 30, 2020, the Company ~~repaid $35.0~~issued $400 million aggregate principal amount of 5.0% Senior Notes due 2028 (the "Notes"). The Notes were issued pursuant to an indenture, dated as of June 30, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. The Company used the net proceeds of its offering of the Notes to repay all of its outstanding loans under the fixed rate tranche of the Term Facility, repay all of its outstanding borrowings under its Revolving Credit Facility, and the remainder for general corporate purposes

The Notes bear an interest rate of 5.0% per annum payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2021. The Notes are unconditionally guaranteed on a senior unsecured basis by each of the Company's existing and future wholly owned domestic restricted subsidiaries that is a borrower under or that guarantees the Company's obligations under its ~~Term Facility.~~Senior Secured Credit Facilities or that guarantees the Company's or any of the Company's wholly owned domestic subsidiaries’ long-term indebtedness in an aggregate amount in excess of $50 million.

The credit agreement ~~contains~~and the Notes contain certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions. In addition, the credit agreement contains a financial covenant that requires the Company, if on the last day of any fiscal quarter loans or letters of credit were outstanding under the Revolving Facility (excluding up to ~~$15~~$25 million of letters of credit), to maintain a maximum net leverage ratio (as defined in the credit agreement) of ~~initially, 5.25~~3.50 to 1.00 for the four fiscal quarter periods preceding such day. ~~Such maximum net leverage ratio requirement is subject to decrease during the duration of the facility to a minimum level (when applicable) of 3.50 to 1.00.~~ In connection with the Sivomatic acquisition, the Company incurred $113.0 million of short-term debt under the Revolving Facility. As of June ~~30, 2019,~~28, 2020, there were $100 million in outstanding loans and ~~$10.4~~$9.4 million in letters of credit outstanding under the Revolving Facility. The Company is in compliance with all the covenants associated with the Revolving Facility as of the end of the period covered by this report.

As part of the Sivomatic acquisition, the Company assumed $10.7 million in long term debt, recorded at fair value, consisting of two term loans, one of which matures in 2020 and the other of which matures in 2022. In the first ~~half~~quarter of ~~2019,~~2020, the Company repaid ~~$(1.3)~~$1.0 million on these loans.

The Company has a committed loan facility in Japan. As of June ~~30, 2019, $4.9~~28, 2020, $4.3 million was outstanding under this loan facility. Principal will be repaid in accordance with the payment schedule ending in 2021. The Company repaid ~~$(0.3)~~$0.3 million on this facility during the first half of ~~2019.~~2020.

As of June ~~30, 2019,~~28, 2020, the Company had ~~$43.5~~$41.8 million in uncommitted short-term bank credit lines, of which approximately ~~$4.2~~$0.3 million was in use. The credit lines are primarily outside the U.S. and are generally one year in term at competitive market rates at large, well-established institutions. The Company typically uses its available credit lines to fund working capital requirements or local capital spending needs. We anticipate that capital expenditures for ~~2019~~2020 should be between ~~$70~~$55 million and ~~$80~~$65 million, principally related to the construction of PCC plants and other opportunities that meet our strategic growth objectives. We expect to meet our other long-term financing requirements from internally generated funds, committed and uncommitted bank credit lines and, where appropriate, project financing of certain satellite plants.

On April 5, 2016, the Company entered into a floating to fixed interest rate swap for an initial aggregate notional amount of $300 million to limit exposure to interest rate increases related to a portion of the Company’s floating rate indebtedness. This swap agreement hedges a portion of contractual floating rate interest through its expiration in May 2021. As a result of the agreement, the Company’s effective fixed interest rate on the notional amount floating rate indebtedness will be 4.25%. The fair value of this instrument at June ~~30, 2019~~28, 2020 was ~~an asset~~a liability of ~~$0.9~~$0.2 million.

During the second quarter of 2018, the Company entered into a floating to fixed interest rate swap for a notional amount of $150 million. Additionally, the Company entered into a cross currency rate swap with a total notional value of $150 million to exchange monthly fixed-rate interest payments in U.S. dollars for monthly fixed-rate interest rate payments in Euros. These swaps mature in May 2023. As a result of these swaps, the Company’s effective fixed interest rate on the notional floating rate indebtedness will be 2.5%. The combined fair value of these instruments at June ~~30, 2019~~28, 2020 was an asset of ~~$0.4~~$5.9 million.

On ~~September 21, 2017,~~October 23, 2019, the Company's Board of Directors authorized the ~~Company’s~~Company's management to repurchase, at its discretion, up to ~~$150~~$75 million of the ~~Company’s~~Company's shares over a ~~two-year period commencing October 1, 2017.~~one-year period. As of June ~~30, 2019, 513,323~~28, 2020, 851,258 shares ~~were~~have been repurchased under this program for ~~$31.7~~$42.6 million, or an average price of approximately ~~$61.74~~$50.00 per share. There were no share repurchases in the second quarter of 2020.

The Company is required to make future payments under various contracts, including debt agreements and lease agreements. The Company also has commitments to fund its pension plans and provide payments for other postretirement benefit plans. During the six months ended June ~~30, 2019,~~28, 2020, there were no material changes in the Company’s contractual obligations. For an in-depth discussion of the ~~Company’s~~Company's contractual obligations, see ~~“Liquidity~~"Liquidity and Capital ~~Resources”~~Resources" in ~~“Management’s~~"Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

As we cannot predict the duration or scope of the COVID-19 pandemic and its impact on our customers and suppliers, the negative financial impact to our results cannot be reasonably estimated, but could be material. We are actively managing the business to maintain cash flow and we have significant liquidity. We believe that these factors will allow us to meet our anticipated funding requirements.

Cautionary Statement for “Safe Harbor” Purposes under the Private Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. This report contains statements that the Company believes may be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, particularly statements relating to the Company’s objectives, plans or goals, future actions, future performance or results of current and anticipated products, sales efforts, expenditures, and financial results. From time to time, the Company also provides forward-looking statements in other publicly-released materials, both written and oral. Forward-looking statements provide current expectations and forecasts of future events such as new products, revenues and financial performance, and are not limited to describing historical or current facts. They can be identified by the use of words such as “believes,” “expects,” “plans,” “intends,” “anticipates,” and other words and phrases of similar meaning.

Forward-looking statements are necessarily based on assumptions, estimates and limited information available at the time they are made. A broad variety of risks and uncertainties, both known and unknown, as well as the inaccuracy of assumptions and estimates, can affect the realization of the expectations or forecasts in these statements. Many of these risks and uncertainties are difficult to predict or are beyond the Company’s control. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially. Significant factors ~~affecting~~that could affect the expectations and forecasts ~~are~~include the duration and scope of the COVID-19 pandemic, and government and other third-party responses to it; worldwide general economic, business, and industry conditions, including the effects of the COVID-19 pandemic on the global economy; the cyclicality of our customers’ businesses and their changing demands; the dependence of certain of our product lines on the commercial construction and infrastructure markets, the domestic building and construction markets, and the automotive market; our ability to effectively achieve and implement our growth initiatives; our ability to service our debt; our ability to comply with the covenants in the agreements governing our debt; our ability to renew or extend long term sales contracts for our PCC satellite operations; consolidation in customer industries, principally paper, foundry and steel; compliance with or changes to regulation in the areas of environmental, health and safety, and tax; claims for legal, environmental and tax matters or product stewardship issues; our ability to successfully develop new products; our ability to ability to defend our intellectual property; the increased risks of doing business abroad; the availability of raw materials and access to ore reserves at our mining operations; increases in costs of raw materials, energy, or shipping; our ability to compete in very competitive industries; operating risks and capacity limitations affecting our production facilities; seasonality of some of our segments; cybersecurity and other threats relating to our information technology systems; and other risks set forth under “Item 1A — Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, and in Exhibit 99 to this Quarterly Report on Form 10-Q.

The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances that arise after the date hereof. Investors should refer to the Company's subsequent filings under the Securities Exchange Act of 1934 for further disclosures.

Recently Issued Accounting Standards

34Investments - Equity Securities, Investments - Equity Method and Joint Ventures, and Derivatives and Hedging

In January 2020, the FASB issued ASU 2020-01, "Investments - Equity Securities, Investments - Equity Method and Joint Ventures, and Derivatives and Hedging", which addresses the accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. The standard is effective for interim and annual periods beginning on or after December 15, 2020. The adoption of this standard is not expected to have a material impact on the Company's financial statements.

Recently Adopted Accounting Standards

OnMeasurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments", which replaces existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost. The Company adopted this guidance on January 1, ~~2019, the Company adopted the provisions of ASU 2016-02, “Leases”, which requires lessees to recognize most leases on-balance sheet.~~ ~~The Company has adopted this new standard under the~~2020 using a modified retrospective transition ~~method, using the effective date as our date~~method. The Company did not record a cumulative-effect adjustment upon adoption of initial application. As such, financial information and required disclosures will not be provided for dates prior to January 1, 2019. The new standard provides a number of optional practical expedients in transition. We have elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. On adoption, we recognized additional operating liabilities of $61.4 million with corresponding right-of-use assets of $50.5 million based on the present value of the remaining lease payments under existing operating leases. As of December 31, 2018, we had $10.9 million in deferred charges related to some of our real estate leases that were recorded against the right of use asset as part of the transition. The adoptionthis standard. Adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, valuation of long-lived assets, goodwill and other intangible assets, income taxes, including valuation allowances and pension plan assumptions. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that cannot readily be determined from other sources. There can be no assurance that actual results will not differ from those estimates.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse changes in market prices and foreign currency and interest rates. We are exposed to market risk because of changes in foreign currency exchange rates as measured against the U.S. dollar. We do not anticipate that near-term changes in exchange rates will have a material impact on our future earnings or cash flows. However, there can be no assurance that a sudden and significant decline in the value of foreign currencies would not have a material adverse effect on our financial condition and results of operations. A portion of our long-term bank debt bears interest at variable rates; therefore, our results of operations would be affected by interest rate changes to the extent of such outstanding bank debt. An immediate 10 percent change in interest rates would have a material effect on our results of operations over the next fiscal year. A one-percent change in interest rates, inclusive of the impact of our interest rate derivatives, would result in ~~$3.8~~$2.0 million in incremental interest charges on an annual basis.

We do not enter into derivatives or other financial instruments for trading or speculative purposes. When appropriate, we enter into derivative financial instruments, such as forward exchange contracts, hedges and interest rate swaps, to mitigate the impact of foreign exchange rate movements and interest rate movements on our operating results. The counterparties are major financial institutions. Such forward exchange contracts, hedges and interest rate swaps would not subject us to additional risk from exchange rate or interest rate movements because gains and losses on these contracts would offset losses and gains on the assets, liabilities, and transactions being hedged.

On April 5, 2016, the Company entered into a floating to fixed interest rate swap for an initial aggregate notional amount of $300 million to limit exposure to interest rate increases related to a portion of the Company’s floating rate indebtedness. This swap agreement hedges a portion of contractual floating rate interest through its expiration in May 2021. As a result, the Company’s effective fixed interest rate on the notional amount floating rate indebtedness will be 4.25% through May 2021. The fair value of this instrument at June ~~30, 2019~~28, 2020 was ~~an asset~~a liability of ~~$0.9~~$0.2 million.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, and under the supervision and with participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

On January 1, 2019, the Company adopted the provisions of ASU No. 2016-02, "Leases (Topic 842)." Adoption of this standard did not have a material impact on the Company's financials, however, we implemented a new lease accounting system and implemented changes to our processes related to leases and related control activities.

During 2018, we closed on the acquisition of Sivomatic and we excluded Sivomatic from the scope of management's report on internal control over financial reporting for the year ended December 31, 2018. The process of integrating Sivomatic to our overall internal control over financial reporting has been completed and we will include them in scope for the year ending December 31, 2019.

There were no ~~other~~ changes in the Company's internal controls over financial reporting during the quarter ended June ~~30, 2019~~28, 2020 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 1. Legal Proceedings

The Company and its subsidiaries are the subject of various pending legal actions in the ordinary course of their businesses. Except as described below, none of such legal proceedings are material.

Silica and Asbestos Litigation

Certain of the Company's subsidiaries are among numerous defendants in a number of cases seeking damages for exposure to silica or to asbestos containing materials. ~~The~~As of June 28, 2020, the Company currently has three pending silica cases and 71176 pending asbestos cases. ~~To date,~~In total, 1,493 silica cases and 5983 asbestos cases ~~have been~~were dismissed as of the end of the second quarter, not including any lawsuits against AMCOL or American Colloid Company dismissed prior to our acquisition of AMCOL. ~~Thirteen and twenty~~Forty-six new asbestos cases were filed ~~during the three month and six month period ended June 30, 2019, respectively, and 16 additional asbestos cases were filed subsequent to the end of~~in the second ~~quarter. Two~~quarter of 2020. Five asbestos cases ~~were dismissed during the first half of 2019,~~ and no silica cases were dismissed during the ~~period.~~second quarter of 2020. Most of these claims do not provide adequate information to assess their merits, the likelihood that the Company will be found liable, or the magnitude of such liability, if any. Additional claims of this nature may be made against the Company or its subsidiaries. At this time management anticipates that the amount of the Company's liability, if any, and the cost of defending such claims, will not have a material effect on its financial position or results of operations.

The Company has settled only one silica lawsuit, for a nominal amount, and no asbestos lawsuits to date (not including any that may have been settled by AMCOL prior to completion of the acquisition). We are unable to state an amount or range of amounts claimed in any of the lawsuits because state court pleading practices do not require identifying the amount of the claimed damage. The aggregate cost to the Company for the legal defense of these cases since inception continues to be insignificant. The majority of the costs of defense for these cases, excluding cases against AMCOL or American Colloid, are reimbursed by Pfizer Inc. pursuant to the terms of certain agreements entered into in connection with the Company's initial public offering in 1992. The Company is entitled to indemnification, pursuant to agreement, for sales prior to the initial public offering. Of the 71176 pending asbestos cases 45as of the end of the second quarter, 136 of the non-AMCOL cases are subject to indemnification, in whole or in part, because the plaintiffs claim liability based on sales of products that occurred either entirely before the initial public offering, or both before and after the initial public offering. In 2033 of the 2238 remaining non-AMCOL cases as of the ~~plaintiffs have not alleged~~end of the first quarter are subject to indemnity in part until dates of exposure, ~~and are yet to be determined through discovery or pleadings, and~~which were not alleged in the complaint, can be ascertained in discovery. In the five remaining ~~two~~ non-AMCOL cases, exposure is alleged to have been after the Company's initial public offering in 1992. The remaining ~~five~~two cases involve AMCOL only, so no Pfizer indemnity is available. Our experience has been that the Company is not liable to plaintiffs in any of these lawsuits and the Company does not expect to pay any settlements or jury verdicts in these lawsuits.

Environmental Matters

The Company and its subsidiaries are not party to any other material pending legal proceedings, other than routine litigation incidental to their businesses.

ITEM 1A. Risk Factors

For a description of Risk Factors, see Exhibit 99 attached to this report. There have been no material changes to our risk factors from those disclosed in our ~~2018~~2019 Annual Report on Form ~~10-K.~~10-K, except for the following:

We have been and expect to continue to be adversely affected by the recent COVID-19 outbreak.

The COVID-19 outbreak, declared a pandemic by the World Health Organization, has surfaced in nearly all regions around the world. Governments around the world have taken preventative measures to contain or mitigate the outbreak, including travel restrictions, border closings, restrictions on public gatherings, shelter-in-place restrictions and limitations on business. This has affected, and is continuing to affect, the global economy, the United States economy and the global financial markets. The outbreak and resulting preventative measures have disrupted our operations and affected our business, and we expect this to continue. The impacts include, but are not limited to, the following:

We cannot predict the degree to which, or the time period that, global economic conditions and our business, sales, liquidity, financial condition and results of operations will continue to be affected by the COVID-19 pandemic and the resulting preventative measures. The extent to which we are affected will depend on future developments, including the duration of the outbreak, travel restrictions, business and workforce disruptions, and the effectiveness of actions taken to contain and treat the disease. The effects on our business, sales, liquidity, financial condition and results of operations could be material.

Our customers’ businesses are cyclical or have changing regional demands. Our operations are subject to these trends and we may not be able to mitigate these risks.

Our Performance Materials segment’s sales are predominantly derived from the metalcasting market. The metalcasting market is dependent upon the demand for castings for automobile components, farm and construction equipment, oil and gas production equipment, power generation turbine castings, and rail car components. Many of these types of equipment are sensitive to fluctuations in demand during periods of recession or difficult economic conditions, including the current conditions resulting from the COVID-19 pandemic, which has affected and we expect will continue to affect the demand for our Performance Materials segment’s products and services.

In the paper industry, which is served by our Paper PCC product line, production levels for uncoated freesheet within North America and Europe, our two largest markets are projected to continue to decrease. The reduced demand for premium writing paper products has also caused recent paper mill closures. We expect paper consumption to be down in the next quarter as a result of the COVID-19 pandemic.

Our Refractories segment primarily serves the steel industry. Global steel production has been and will continue to be affected by volatility in the market due to the COVID-19 pandemic. We expect steel consumption to be lower due to delays in the construction and automotive industries.

Demand for our Energy Services segment’s products and services is affected by the level of exploration, development, and production activity of, and the corresponding capital spending by, oil and natural gas companies, which are heavily influenced by the benchmark price of these commodities. Oil and natural gas prices decreased significantly as a result of the COVID-19 pandemic with West Texas Intermediate (WTI) oil spot prices declining from a high of $63 per barrel in January 2020 to a low of $13 per barrel in April 2020. We expect the current decline, if sustained, will continue to cause oil and natural gas companies to reduce their capital expenditures and production and exploration activities. This has the effect of decreasing the demand and increasing competition for the services we provide. In addition, the performance of our Energy Services segment is affected by changes in technologies, locations of customers’ targeted reserves, and competition in various geographic markets.

Servicing the Company’s debt will require a significant amount of cash. This could reduce the Company’s flexibility to respond to changing business and economic conditions or fund capital expenditures or working capital needs. Our ability to generate cash depends on many factors beyond our control.

At June 28, 2020, on an as adjusted basis after giving effect to the transactions connected with our issuance of our 5.0% Senior Notes due 2028, the Company would have had $1,063.3 million aggregate principal amount of total indebtedness (consisting primarily of $658.0 million aggregate principal amount of loans under the fixed rate tranche of our term facility and $400.0 million aggregate principal amount of notes) and an additional $290.6 million of borrowing capacity under the revolving credit facility (after giving effect to $9.4 million of outstanding letters of credit). Our outstanding indebtedness will require a significant amount of cash to make interest payments. Further, the interest rate on a significant portion of our borrowings under our senior secured credit facility is based on LIBOR interest rates, which could result in higher interest expense in the event of an increase in interest rates. In addition, since these borrowings under our senior secured credit facility extend beyond 2021, the interest rates for these obligations might be subject to change based on the United Kingdom's Financial Conduct Authority's intention to phase out LIBOR by the end of 2021. Our ability to pay interest on our debt and to satisfy our other debt obligations will depend in part upon our future financial and operating performance and upon our ability to renew or refinance borrowings. Prevailing economic conditions and financial, business, competitive, regulatory and other factors, many of which are beyond our control, will affect our ability to make these payments. We cannot guarantee that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to fund our liquidity needs. If we are unable to generate sufficient cash flow to meet our debt service obligations, we will have to pursue one or more alternatives, such as reducing or delaying capital or other expenditures, refinancing debt, selling assets, or raising equity capital. Further, the requirement to make significant interest payments may reduce the Company’s flexibility to respond to changing business and economic conditions or fund capital expenditure or working capital needs and may increase the Company’s vulnerability to adverse economic conditions.

The agreements and instruments governing our debt contain various covenants that could significantly impact our ability to operate our business.

The agreement governing our senior secured credit facility and the indenture that governs our 5.0% Senior Notes due 2028 contain a number of significant covenants that, among other things, limit our ability to: incur or guarantee additional indebtedness, pay dividends or make other distributions or repurchase or redeem capital stock, prepay, redeem or repurchase certain debt, issue certain preferred stock or similar equity securities, make loans and investments, sell or otherwise dispose of assets, incur liens, enter into transactions with affiliates, enter into agreements restricting our subsidiaries’ ability to pay dividends and consolidate, merge or sell all or substantially all of our assets. In addition, our revolving credit facility, if used, requires us to comply with specific financial ratios, including a maximum net leverage ratio, under which we are required to achieve specific financial results. Our ability to comply with these provisions may be affected by events beyond our control. A breach of any of these covenants would result in a default under the applicable agreements. In the event of any default under our senior secured credit facility, our lenders could elect to declare all amounts borrowed under the credit agreement, together with accrued interest thereon, to be due and payable. In such an event, we cannot assure you that we would have sufficient assets to pay debt then outstanding under the credit agreement, the indenture governing our notes, and any other agreements governing our debt. Any future refinancing of the senior secured credit facility is likely to contain similar restrictive covenants. We may also incur future debt obligations that might subject us to additional restrictive covenants that could affect our financial and operational flexibility. We cannot assure you that we will be granted waivers or amendments to these agreements if for any reason we are unable to comply with these agreements or that we will be able to refinance our debt on terms acceptable to us, or at all.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 3. Default Upon Senior Securities

ITEM 4. Mine Safety Disclosures

Delaware		25-1190717
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, $0.10 par value	MTX	New York Stock Exchange LLC

Large Accelerated Filer ☒	Accelerated Filer ☐
Non-accelerated Filer ☐~~(Do not check if a smaller reporting company)~~	Smaller Reporting Company ☐
Emerging Growth Company ☐

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Condensed Consolidated Statements of Income for the three-month and six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ (Unaudited)	3

	Condensed Consolidated Statements of Comprehensive Income for the three-month and six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ (Unaudited)	4

	Condensed Consolidated Balance Sheets as of June ~~30, 2019~~28, 2020 (Unaudited) and December 31, ~~2018~~2019	5

	Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ (Unaudited)	6

	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three-month and six-month periods ended June 28, 2020 and June 30, 2019 ~~and July 1, 2018~~ (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

	Report of Independent Registered Public Accounting Firm	2320

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2421

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3534

Item 4.	Controls and Procedures	3634

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	3735

Item 1A.	Risk Factors	3836

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Default Upon Senior Securities	38

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

Signature		40

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
(millions of dollars)	June 30, 2019			July 1, 2018			June 30, 2019			July 1, 2018			Jun. 28, 2020			Jun. 30, 2019			Jun. 28, 2020			Jun. 30, 2019

Consolidated net income	$	27.6		$	45.2		$	67.6		$	86.3		$	14.9		$	27.6		$	54.5		$	67.6
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(18.7	)		(54.5	)		(19.1	)		(39.1	)		7.9			(18.7	)		(35.2	)		(19.1	)
Pension and postretirement plan adjustments		1.7			1.9			3.3			3.7			5.3			1.7			7.4			3.3
Unrealized gains (losses) on derivative instruments		(3.3	)		(1.3	)		(2.1	)		0.3			(0.8	)		(3.3	)		1.0			(2.1	)
Total other comprehensive loss, net of tax		(20.3	)		(53.9	)		(17.9	)		(35.1	)
Total comprehensive income (loss) including non-controlling interests		7.3			(8.7	)		49.7			51.2
Comprehensive income (loss) attributable to non-controlling interests		(0.8	)		0.5			(2.2	)		(1.3	)
Comprehensive income (loss) attributable to Minerals Technologies Inc.	$	6.5		$	(8.2	)	$	47.5		$	49.9
Total other comprehensive income (loss), net of tax														12.4			(20.3	)		(26.8	)		(17.9	)
Total comprehensive income including non-controlling interests														27.3			7.3			27.7			49.7
Comprehensive income attributable to non-controlling interests														(1.5	)		(0.8	)		(1.2	)		(2.2	)
Comprehensive income attributable to Minerals Technologies Inc.													$	25.8		$	6.5		$	26.5		$	47.5

(millions of dollars)	June 30, 2019*			Dec. 31, 2018 **			Jun. 28, 2020*			Dec. 31, 2019 **
ASSETS

Current assets:
Cash and cash equivalents	$	214.5		$	208.8		$	232.8		$	241.6
Short-term investments		5.2			3.8			5.4			1.6
Accounts receivable, net		411.9			387.3			336.8			376.2
Inventories		258.4			239.2			269.8			253.3
Prepaid expenses and other current assets		41.1			37.2			39.6			46.5
Total current assets		931.1			876.3			884.4			919.2

Property, plant and equipment		2,246.8			2,256.0			2,217.9			2,257.0
Less accumulated depreciation and depletion		(1,177.7	)		(1,153.1	)		(1,194.3	)		(1,204.2	)
Property, plant and equipment, net		1,069.1			1,102.9			1,023.6			1,052.8
Goodwill		807.9			812.4			805.8			807.4
Intangible assets		207.9			214.1			198.5			203.0
Deferred income taxes		25.4			26.3			23.0			23.0
Other assets and deferred charges		108.0			55.1			121.6			107.2
Total assets	$	3,149.4		$	3,087.1		$	3,056.9		$	3,112.6

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Short-term debt	$	104.2		$	105.2		$	100.3		$	101.2
Current maturities of long-term debt		2.1			3.3			149.2			2.1
Accounts payable		188.2			169.1			139.4			163.4
Other current liabilities		111.1			104.3			120.1			131.8
Total current liabilities		405.6			381.9			509.0			398.5

Long-term debt, net of unamortized discount and deferred financing costs		874.2			907.8			647.7			824.3
Deferred income taxes		194.2			196.8			181.4			180.6
Accrued pension and post-retirement benefits		123.0			124.2			145.9			148.9
Other non-current liabilities		130.8			91.1			132.1			125.7
Total liabilities		1,727.8			1,701.8			1,616.1			1,678.0

Shareholders' equity:
Common stock		4.9			4.9			4.9			4.9
Additional paid-in capital		435.3			431.9			445.5			442.2
Retained earnings		1,842.2			1,769.1			1,955.3			1,905.7
Accumulated other comprehensive loss		(262.8	)		(233.7	)		(316.9	)		(290.4	)
Less common stock held in treasury		(628.7	)		(618.7	)		(682.3	)		(659.7	)

Total Minerals Technologies Inc. shareholders' equity		1,390.9			1,353.5			1,406.5			1,402.7
Non-controlling interests		30.7			31.8			34.3			31.9
Total shareholders' equity		1,421.6			1,385.3			1,440.8			1,434.6
Total liabilities and shareholders' equity	$	3,149.4		$	3,087.1		$	3,056.9		$	3,112.6

	Equity Attributable to Minerals Technologies Inc.																			Equity Attributable to Minerals Technologies Inc.
(millions of dollars)	Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-controlling Interests			Total			Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-controlling Interests			Total
Balance as of December 31, 2018	$	4.9	$	431.9	$	1,769.1		$	(233.7	)	$	(618.7	)	$	31.8		$	1,385.3
Balance as of December 31, 2019																				$	4.9	$	442.2	$	1,905.7		$	(290.4	)	$	(659.7	)	$	31.9		$	1,434.6

Net income		—		—		39.1			—			—			0.9			40.0			—		—		38.6			—			—			1.0			39.6
Other comprehensive income		—		—		—			1.9			—			0.5			2.4
Other comprehensive loss																					—		—		—			(37.8	)		—			(1.4	)		(39.2	)
Dividends declared		—		—		(1.7	)		—			—			—			(1.7	)		—		—		(1.7	)		—			—			—			(1.7	)
Dividends paid to non-controlling interests		—		—		—			—			—			(0.1	)		(0.1	)
Cumulative effect of accounting change		—		—		10.9			(10.9	)		—			—			—
Capital contribution from non-controlling interests		—		—		—			—			—			0.8			0.8			—		—		—			—			—			0.7			0.7
Issuance of shares pursuant to employee stock compensation plans		—		0.1		—			—			—			—			0.1			—		0.5		—			—			—			—			0.5
Purchase of common stock for treasury																					—		—		—			—			(22.6	)		—			(22.6	)
Stock-based compensation		—		0.6		—			—			—			—			0.6			—		0.1		—			—			—			—			0.1
Balance as of March 31, 2019	$	4.9	$	432.6	$	1,817.4		$	(242.7	)	$	(618.7	)	$	33.9		$	1,427.4
Balance as of March 29, 2020																				$	4.9	$	442.8	$	1,942.6		$	(328.2	)	$	(682.3	)	$	32.2		$	1,412.0

Net income		—		—		26.6			—			—			1.0			27.6			—		—		14.4			—			—			0.5			14.9
Other comprehensive income		—		—		—			(20.1	)		—			(0.2	)		(20.3	)		—		—		—			11.3			—			1.1			12.4
Dividends declared		—		—		(1.8	)		—			—			—			(1.8	)		—		—		(1.7	)		—			—			—			(1.7	)
Dividends paid to non-controlling interests		—		—		—			—			—			(3.8	)		(3.8	)		—		—		—			—			—			(0.5	)		(0.5	)
Capital contribution from non-controlling interests		—		—		—			—			—			(0.2	)		(0.2	)		—		—		—			—			—			1.0			1.0
Issuance of shares pursuant to employee stock compensation plans		—		0.2		—			—			—			—			0.2			—		0.2		—			—			—			—			0.2
Stock-based compensation		—		2.5		—			—			—			—			2.5			—		2.5		—			—			—			—			2.5
Purchase of common stock for treasury		—		—		—			—			(10.0	)		—			(10.0	)
Balance as of June 30, 2019	$	4.9	$	435.3	$	1,842.2		$	(262.8	)	$	(628.7	)	$	30.7		$	1,421.6
Balance as of June 28, 2020																				$	4.9	$	445.5	$	1,955.3		$	(316.9	)	$	(682.3	)	$	34.3		$	1,440.8

(millions of dollars)	June 30, 2019

Operating cash flows information:
Cash paid for amounts included in the measurement of lease liabilities	$	8.3
Non-cash activity:
Right-of-use assets obtained in the exchange for operating lease liabilities	$	3.3

(millions of dollars)	Balance Sheet Classification	June 30, 2019

Right-of-use asset	Other assets and deferred charges	$	47.1
Lease liability - current	Other current liabilities		12.0
Lease liability - non-current	Other non-current liabilities		46.1

(millions of dollars)	June 30, 2019

For the remainder of 2019	$	7.7
2020		13.0
2021		9.6
2022		7.7
2023		6.2
Thereafter		26.3
Total future minimum lease payments		70.5
Less imputed interest		(12.6	)
Total	$	57.9

(millions of dollars)	Dec. 31, 2018

2019	$	17.3
2020		13.0
2021		9.5
2022		8.2
2023		7.0
Thereafter		24.8
Total	$	79.8

(millions of dollars)	Dec. 31, 2018		Dec. 31, 2017

Rent expense	$	19.5	$	19.3

(millions of dollars)	Preliminary Allocation Previously Reported on Form 10-K as of December 31, 2018		Increase/ (Decrease)		Final Allocation

Accounts receivable	$	24.4	$	—	$	24.4
Inventories		15.6		—		15.6
Other current assets		0.6		—		0.6
Mineral rights		39.7		—		39.7
Property, plant and equipment		28.3		—		28.3
Goodwill		35.0		—		35.0
Intangible assets		26.4		—		26.4
Total assets acquired		170.0		—		170.0
Current maturity of long-term debt		5.7		—		5.7
Accounts payable		9.0		—		9.0
Accrued expenses		5.6		—		5.6
Long-term debt		5.3		—		5.3
Non-current deferred tax liability		19.7		—		19.7
Other non-current liabilities		2.2		—		2.2
Total liabilities assumed		47.5		—		47.5
Net assets acquired	$	122.5	$	—	$	122.5

(millions of dollars)	June 30, 2019

Impairment of assets
Performance Materials	$	4.2
Specialty Minerals		1.6
Energy Services		1.7
Total impairment of assets charges	$	7.5

Severance and other related costs
Performance Materials	$	2.8
Specialty Minerals		0.9
Refractories		0.8
Energy Services		0.1
Corporate		1.1
Total severance and other related costs	$	5.7

Total restructuring and other items, net	$	13.2

(millions of dollars)
Restructuring liability, December 31, 2018	$	2.5
Additional provisions		5.7
Cash payments		(1.1	)
Restructuring liability, June 30, 2019	$	7.1

(millions of dollars)
Asset retirement liability, December 31, 2018	$	23.4
Accretion expense		1.4
Other		0.5
Payments		(1.5	)
Foreign currency translation		(0.1	)
Asset retirement liability, June 30, 2019	$	23.7

	Three Months Ended June 30, 2019								Three Months Ended July 1, 2018					Three Months Ended Jun. 28, 2020								Three Months Ended Jun. 30, 2019
(millions of dollars)	Net Sales		% of Total Sales			% Growth			Net Sales		% of Total Sales			Net Sales		% of Total Sales			% Change			Net Sales		% of Total Sales

U.S.	$	253.3		54.6	%		2	%	$	249.0		53.6	%	$	180.7		50.6	%		(29	)%	$	253.3		54.6	%
International		210.5		45.4	%		(2	)%		215.7		46.4	%		176.5		49.4	%		(16	)%		210.5		45.4	%
Total sales	$	463.8		100.0	%		0	%	$	464.7		100.0	%	$	357.2		100.0	%		(23	)%	$	463.8		100.0	%

Performance Materials Segment	$	215.4		46.4	%		0	%	$	214.5		46.2	%	$	173.8		48.7	%		(19	)%	$	215.4		46.4	%
Specialty Minerals Segment		145.1		31.3	%		(4	)%		150.9		32.5	%		109.8		30.7	%		(24	)%		145.1		31.3	%
Refractories Segment		77.5		16.7	%		(3	)%		79.6		17.1	%		55.9		15.6	%		(28	)%		77.5		16.7	%
Energy Services Segment		25.8		5.6	%		31	%		19.7		4.2	%		17.7		5.0	%		(31	)%		25.8		5.6	%
Total sales	$	463.8		100.0	%		0	%	$	464.7		100.0	%	$	357.2		100.0	%		(23	)%	$	463.8		100.0	%

	Six Months Ended June 30, 2019								Six Months Ended July 1, 2018					Six Months Ended Jun. 28, 2020								Six Months Ended Jun. 30, 2019
(millions of dollars)	Net Sales		% of Total Sales			% Growth			Net Sales		% of Total Sales			Net Sales		% of Total Sales			% Growth			Net Sales		% of Total Sales

U.S.	$	485.0		53.8	%		1	%	$	481.3		53.7	%	$	407.7		52.6	%		(16	)%	$	485.0		53.8	%
International		416.5		46.2	%		—			414.7		46.3	%		367.0		47.4	%		(12	)%		416.5		46.2	%
Total sales	$	901.5		100.0	%		1	%	$	896.0		100.0	%	$	774.7		100.0	%		(14	)%	$	901.5		100.0	%

Performance Materials Segment	$	414.6		46.0	%		3	%	$	401.8		44.8	%	$	360.0		46.5	%		(13	)%	$	414.6		46.0	%
Specialty Minerals Segment		289.5		32.1	%		(4	)%		300.5		33.5	%		246.9		31.9	%		(15	)%		289.5		32.1	%
Refractories Segment		151.3		16.8	%		(2	)%		154.9		17.3	%		124.9		16.1	%		(17	)%		151.3		16.8	%
Energy Services Segment		46.1		5.1	%		19	%		38.8		4.3	%		42.9		5.5	%		(7	)%		46.1		5.1	%
Total sales	$	901.5		100.0	%		1	%	$	896.0		100.0	%	$	774.7		100.0	%		(14	)%	$	901.5		100.0	%

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Publicly Announced Program		Dollar Value of Shares that May Yet be Purchased Under the Program

April 1 - April 28		—		—		333,184	$	128,306,742
April 29 - May 26		—		—		333,184	$	128,306,742
May 27 - June 30		180,139	$	55.50		513,323	$	118,309,499
Total		180,139	$	55.50

Exhibit No.		Exhibit Title
4.1		Indenture, dated as of June 30, 2020, by and among Minerals Technologies Inc., the subsidiary guarantors from time to time party thereto and The Bank of New York Mellon Trust Company, N.A., as a trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 30, 2020.)
10.1		Amendment to the Minerals Technologies Inc. Savings and Investment Plan
15		Letter Regarding Unaudited Interim Financial Information.
31.1		Rule 13a-14(a)/15d-14(a) Certification executed by the Company's principal executive officer.
31.2		Rule 13a-14(a)/15d-14(a) Certification executed by the Company's principal financial officer.
32		Section 1350 Certifications.
95		Information concerning Mine Safety Violations
99		Risk Factors
101.INS		XBRL Instance Document ~~– the~~(the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL ~~document~~document).
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover Page Interactive Data File (formatted as inline XBRL and contain in Exhibit 101).

		Minerals Technologies Inc.

	By:	/s/ Matthew E. Garth
		Matthew E. Garth
		Senior Vice President, Finance and Treasury,
		Chief Financial Officer

~~August 2, 2019~~July 31, 2020