SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                             ----------------------

                                    FORM 10-Q

                      QUARTERLY REPORT UNDER SECTION 13 OF

                       THE SECURITIES EXCHANGE ACT OF 1934

                    For Quarterly Period Ended June 30, 2006
                    ----------------------------------------

                          Commission file number 1-4858
                          -----------------------------

                     INTERNATIONAL FLAVORS & FRAGRANCES INC.
                     ---------------------------------------

             (Exact name of registrant as specified in its charter)


              New York                                    13-1432060
  -----------------------------------        ---------------------------------
    (State or other jurisdiction of                    (IRS Employer
     incorporation or organization)                 Identification No.)


                 521 West 57th Street, New York, N.Y. 10019-2960
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code (212) 765-5500



Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during  the  preceding  twelve  months  (or for  such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [|X|] No [ ]

Indicate by check mark whether the Registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

Large accelerated filer [X ] Accelerated filer [  ]  Non-accelerated filer [  ]

Indicate by check mark whether the  Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes [  ]  No [X]

Number of shares outstanding as of August 3, 2006:  90,670,305




                          PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
                     INTERNATIONAL FLAVORS & FRAGRANCES INC.
                           CONSOLIDATED BALANCE SHEET
                             (DOLLARS IN THOUSANDS)
                                   (Unaudited)



 ASSETS                                                                                        6/30/06      12/31/05
----------------------------------------------------------------------------------------   -------------  -------------
                                                                                                          
Current Assets:
     Cash and cash equivalents                                                             $     29,833    $   272,545
     Short-term investments                                                                         319            352
     Trade receivables                                                                          389,638        319,644
     Allowance for doubtful accounts                                                            (14,013)       (14,821)

     Inventories:      Raw materials                                                            203,649        197,268
                       Work in process                                                           12,075         11,866
                       Finished goods                                                           227,615        221,660
                                                                                           -------------  -------------
                       Total Inventories                                                        443,339        430,794
     Deferred income taxes                                                                       61,335         75,366
     Other current assets                                                                        85,083        107,394
                                                                                           -------------  -------------
     Total Current Assets                                                                       995,534      1,191,274
                                                                                           -------------  -------------

Property, Plant and Equipment, at cost                                                        1,038,542      1,025,707
Accumulated depreciation                                                                       (550,911)      (526,562)
                                                                                           -------------  -------------
                                                                                                487,631        499,145
                                                                                           -------------  -------------
Goodwill                                                                                        665,582        665,582
Intangible Assets, net                                                                           99,648        107,069
Other Assets                                                                                    204,185        175,126
                                                                                           -------------  -------------
Total Assets                                                                               $  2,452,580    $ 2,638,196
                                                                                           =============  =============



LIABILITIES AND SHAREHOLDERS' EQUITY                                                           6/30/06      12/31/05
----------------------------------------------------------------------------------------   -------------  -------------
                                                                                                         
Current Liabilities:
     Bank borrowings, overdrafts and current portion of long-term debt                     $    308,936    $   819,392
     Accounts payable                                                                           107,633         98,588
     Accrued payrolls and bonuses                                                                27,554         23,260
     Dividends payable                                                                           16,826         17,189
     Income taxes                                                                                55,842         41,089
     Restructuring and other charges                                                             22,646         30,099
     Other current liabilities                                                                  165,024        173,079
                                                                                           -------------  -------------
     Total Current Liabilities                                                                  704,461      1,202,696
                                                                                           -------------  -------------
Other Liabilities:
     Long-term borrowings                                                                       415,791        131,281
     Deferred gains                                                                              66,199         67,713
     Retirement liabilities                                                                     212,016        207,452
     Other liabilities                                                                          108,115        113,707
                                                                                           -------------  -------------
     Total Other Liabilities                                                                    802,121        520,153
                                                                                           -------------  -------------
Commitments and Contingencies (Note 9)

Shareholders' Equity:
     Common stock 12 1/2(cent) par value; authorized 500,000,000 shares;
           issued 115,761,840 shares                                                             14,470         14,470
     Restricted Stock                                                                            (3,148)             -
     Capital in excess of par value                                                              93,377         71,894
     Retained earnings                                                                        1,833,300      1,752,055
     Accumulated other comprehensive income:
          Cumulative translation adjustment                                                     (33,015)       (47,369)
          Accumulated losses on derivatives qualifying as hedges (net of tax)                   (20,353)        (2,606)
          Minimum pension liability adjustment (net of tax)                                    (100,380)      (100,380)
                                                                                           -------------  -------------
                                                                                              1,784,251      1,688,064
     Treasury stock, at cost - 24,820,919 shares in 2006 and 23,047,349 shares in 2005         (838,253)      (772,717)
                                                                                           -------------  -------------
     Total Shareholders' Equity                                                                 945,998        915,347
                                                                                           -------------  -------------
Total Liabilities and Shareholders' Equity                                                 $  2,452,580    $ 2,638,196
                                                                                           =============  =============


See Notes to Consolidated Financial Statements

                     INTERNATIONAL FLAVORS & FRAGRANCES INC.
                        CONSOLIDATED STATEMENT OF INCOME
                 (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                   (Unaudited)



                                                                                             3 Months Ended 6/30
                                                                                        -------------------------------
                                                                                              2006             2005
                                                                                        --------------  ---------------
                                                                                                          
Net sales                                                                                   $ 530,505        $ 515,578
                                                                                        --------------  ---------------

Cost of goods sold                                                                            302,889          299,065
Research and development expenses                                                              45,588           44,380
Selling and administrative expenses                                                            87,684           82,866
Amortization of intangibles                                                                     3,711            3,767
Restructuring and other charges (income)                                                         (304)               -
Interest expense                                                                                6,300            6,062
Other (income) expense, net                                                                      (286)          (2,558)
                                                                                        --------------  ---------------
                                                                                              445,582          433,582
                                                                                        --------------  ---------------
Income before taxes on income                                                                  84,923           81,996
Taxes on income                                                                                23,741           25,283
                                                                                        --------------  ---------------
Net income                                                                                     61,182           56,713

Other comprehensive income:
     Foreign currency translation adjustments                                                   9,517          (28,636)
     Accumulated gains (losses) on derivatives qualifying as hedges (net of tax)              (18,553)           2,211
                                                                                        --------------  ---------------
Comprehensive income                                                                         $ 52,146         $ 30,288
                                                                                        ==============  ===============

Net Income per share - basic                                                                    $0.67            $0.60
Net Income per share - diluted                                                                  $0.67            $0.60
Average number of shares outstanding - basic                                                   90,869           93,876
Average number of shares outstanding - diluted                                                 91,787           95,255
Dividends declared per share                                                                   $0.185           $0.185

                                                                                               6 Months Ended 6/30
                                                                                        -------------------------------
                                                                                              2006             2005
                                                                                        --------------  ---------------
Net sales                                                                                  $1,041,937      $ 1,038,630
                                                                                        --------------  ---------------

Cost of goods sold                                                                            597,707          607,462
Research and development expenses                                                              91,190           89,133
Selling and administrative expenses                                                           173,272          167,610
Amortization of intangibles                                                                     7,421            7,535
Restructuring and other charges                                                                   357                -
Interest expense                                                                               11,673           11,638
Other (income) expense, net                                                                       153           (3,114)
                                                                                        --------------  ---------------
                                                                                              881,773          880,264
                                                                                        --------------  ---------------
Income before taxes on income                                                                 160,164          158,366
Taxes on income                                                                                45,292           49,110
                                                                                        --------------  ---------------
Net income                                                                                    114,872          109,256
Other comprehensive income:
     Foreign currency translation adjustments                                                  14,354          (55,499)
     Accumulated gains (losses) on derivatives qualifying as hedges (net of tax)              (17,747)           1,369
                                                                                        --------------  ---------------
Comprehensive income                                                                        $ 111,479         $ 55,126
                                                                                        ==============  ===============
Net Income per share - basic                                                                    $1.26            $1.16
Net Income per share - diluted                                                                  $1.25            $1.14
Average number of shares outstanding - basic                                                   91,202           94,100
Average number of shares outstanding - diluted                                                 91,997           95,640
Dividends declared per share                                                                   $0.370           $0.360

See Notes to Consolidated Financial Statements

                     INTERNATIONAL FLAVORS & FRAGRANCES INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                  (Unaudited)



                                                                                       6 Months Ended June 30,
                                                                                     ----------------------------
                                                                                         2006            2005
                                                                                     ------------    ------------
                                                                                                    
Cash flows from operating activities:
Net income                                                                           $   114,872    $    109,256
Adjustments to reconcile to net cash provided by operations:
     Depreciation and amortization                                                        44,602          46,429
     Deferred income taxes                                                                   329          17,488
     Gain on disposal of assets                                                           (3,881)         (1,520)
     Changes in assets and liabilities:
          Current receivables                                                            (60,327)        (50,426)
          Inventories                                                                      1,163           1,192
          Current payables                                                                (2,336)        (40,524)
          Changes in other assets, net                                                    16,358         (38,253)
          Changes in other liabilities, net                                               10,185          13,899
                                                                                     ------------    ------------
Net cash provided by operations                                                          120,965          57,541
                                                                                     ------------    ------------
Cash flows from investing activities:
     Net change in short-term investments                                                     25              35
     Additions to property, plant and equipment                                          (19,806)        (38,149)
     Proceeds from disposal of assets                                                      6,504             433
                                                                                     ------------    ------------
Net cash used in investing activities                                                    (13,277)        (37,681)
                                                                                     ------------    ------------
Cash flows from financing activities:
     Cash dividends paid to shareholders                                                 (33,990)        (33,104)
     Net change in bank borrowings and overdrafts                                        (32,508)          7,852
     Net change in commercial paper outstanding                                          281,521          91,891
     Repayments of long-term debt                                                       (499,306)        (11,655)
     Proceeds from issuance of stock under equity compensation plans                      23,146          17,764
     Purchase of treasury stock                                                          (91,315)        (60,988)
                                                                                     ------------    ------------
Net cash (used in) provided by financing activities                                     (352,452)         11,760
                                                                                     ------------    ------------
Effect of exchange rate changes on cash and cash equivalents                               2,052          (4,352)
                                                                                     ------------    ------------
Net change in cash and cash equivalents                                                 (242,712)         27,268
Cash and cash equivalents at beginning of year                                           272,545          32,596
                                                                                     ------------    ------------
Cash and cash equivalents at end of period                                           $    29,833    $     59,864
                                                                                     ============    ============

Interest paid                                                                        $    24,051    $     17,777

Income taxes paid                                                                    $    19,594    $     25,548


See Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements
------------------------------------------

These interim statements and management's related discussion and analysis should
be read in  conjunction  with the  consolidated  financial  statements and their
related notes and management's  discussion and analysis of results of operations
and financial  condition  included in the  Company's  2005 Annual Report on Form
10-K.  These interim  statements are unaudited.  In the opinion of the Company's
management, all adjustments,  including normal recurring accruals, necessary for
a fair presentation of the results for the interim periods have been made.

Note 1. New Accounting Pronouncements:

In June 2006, the FASB issued  Interpretation No. 48 ("FIN 48"),  Accounting for
Uncertainty in Income Taxes, an  interpretation of FASB Statement No. 109 ("SFAS
No. 109").  FIN 48 clarifies the  application  of SFAS No. 109 to the accounting
for income taxes by prescribing  the minimum  threshold a tax position must meet
before being recognized in the financial statements. Under FIN 48, the financial
statement  effects of a tax position are  initially  recognized  when it is more
likely than not, based on its technical  merits,  the position will be sustained
upon examination. A tax position that meets the more likely than not recognition
threshold  is  initially  and  subsequently  measured as the  largest  amount of
benefit,  determined on a cumulative  probability basis that is more likely than
not to be realized  upon ultimate  settlement  with the taxing  authority.  This
interpretation  is effective for fiscal years beginning after December 15, 2006.
The Company is currently  assessing the potential impact of this  interpretation
on its financial position and results of operations.

Note 2.  Net Income Per Share:

Net  income  per  share  is based  on the  weighted  average  number  of  shares
outstanding. A reconciliation of the shares used in the computation of basic and
diluted net income per share is as follows:



                                             Three Months Ended June 30,                 Six Months Ended June 30,
                                       ----------------------------------------   ---------------------------------------
(Shares in thousands)                           2006               2005                 2006                 2005
                                       -------------------    ----------------    ----------------     ------------------
                                                                                                    
Basic                                         90,869              93,876                91,202               94,100
Assumed conversion under stock plans             918               1,379                   795                1,540
Diluted                                       91,787              95,255                91,997               95,640


Stock options to purchase  1,014,897 and 1,445,136  shares were  outstanding for
the second quarter and the first six months of 2006,  respectively,  and 819,500
and 686,181 for the second  quarter and first six months of 2005,  respectively,
but were not included in the computation of diluted net income per share for the
respective periods since the impact was anti-dilutive.

Note 3. Restructuring and Other Charges:

As described in Note 2 to the Consolidated Financial Statements in the Company's
2005 Annual  Report,  the Company has  undertaken a significant  reorganization,
including management changes, consolidation of production facilities and related
actions.

The  Company  undertook  a plan to  eliminate  approximately  300  positions  in
manufacturing,  selling, research and administration  functions,  principally in
its  European and North  American  operating  regions.  The majority of affected
positions  involve  employee  separation  while  the  balance  relates  to  open
positions  that will not be filled.  As a result of these  actions,  the Company
recognized  pre-tax  charges of $23.3  million  in 2005 and $0.4  million in the
first six  months of 2006.  A net gain of $0.3  million  was  recognized  in the
second  quarter of 2006  primarily as the result of a $1.6 million gain recorded
on disposition of the Dijon, France land and building,  partially offset by $1.3
million of charges incurred in connection with the restructuring plan. The Dijon
assets were written down to their  estimated  net value in  connection  with the
closure of that  facility;  the amount  realized on  disposition  exceeded  that
estimated at the time the original charge was recorded.

Movements in the liabilities related to the restructuring  charges,  included in
Restructuring and other charges or Other liabilities,  as appropriate,  were (in
millions):



                                                         Asset-
                                        Employee-        Related
                                         Related        and Other        Total
                                     -------------- ----------------- -------------
                                                                  
Balance December 31, 2005                   $ 29.5          $ 4.9          $ 34.4
Additional charges                             1.4           (1.0)            0.4
Cash and other costs                         (14.0)           1.8           (12.2)
                                     --------------  ---------------- -------------
Balance June 30, 2006                       $ 16.9          $ 5.7          $ 22.6
                                     ==============  ================ =============
 

Consistent  with the original plan the balance of  employee-related  liabilities
are  expected  to  be  utilized  by  2008  as  obligations  are  satisfied;  the
asset-related  charges  will be  utilized in 2007 on final  decommissioning  and
disposal of the affected equipment.

Note 4.  Goodwill and Other Intangible Assets, Net

Goodwill  by  operating  segment at June 30,  2006 and  December  31, 2005 is as
follows:



(DOLLARS IN THOUSANDS)                                      Amount
--------------------------------                     ------------------
                                                           
North America                                         $        218,575
Europe                                                         258,607
India                                                           29,209
Latin America                                                   49,046
Asia Pacific                                                   110,145
                                                     ------------------
     Total                                            $        665,582
                                                     ==================


Trademark and other intangible assets consist of the following amounts:


                                              June 30,           December 31,
(DOLLARS IN THOUSANDS)                          2006                2005
--------------------------                ---------------     ---------------
                                                               
Gross carrying value                         $  177,498         $  177,498
Accumulated amortization                         77,850             70,429
                                          ---------------     ---------------
   Total                                     $   99,648         $  107,069
                                          ===============     ===============

Amortization  expense  for the  period  ended  June 30,  2006 was $7.4  million;
estimated  annual  amortization is $14.8 million in 2006,  $13.5 million in 2007
and $6.8 million in 2008 through 2011.

Note 5. Comprehensive Income:

Changes in the accumulated other comprehensive income component of shareholders'
equity were as follows:




-----------------------------------------------------------------------------------------------------------------------
                                                               Accumulated
                                                                losses on               Minimum
                                                               derivatives              Pension
                                       Translation            qualifying as           Obligation,
2006 (Dollars in thousands)            adjustments          hedges, net of tax         net of tax            Total
-----------------------------------------------------------------------------------------------------------------------
                                                                                                   
Balance December 31, 2005               $ (47,369)             $   (2,606)            $ (100,380)          $ (150,355)
Change                                     14,354                 (17,747)                    -                (3,393)
                                 --------------------------------------------------------------------------------------
Balance June 30, 2006                   $ (33,015)             $  (20,353)            $ (100,380)          $ (153,748)
-----------------------------------------------------------------------------------------------------------------------



                                                               Accumulated
                                                                losses on               Minimum
                                                               derivatives              Pension
                                       Translation            qualifying as           Obligation,
2005 (Dollars in thousands)            adjustments          hedges, net of tax         net of tax            Total
------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Balance December 31, 2004              $    8,227              $   (5,694)            $ (110,705)          $ (108,172)
Change                                    (55,499)                  1,369                     -               (54,130)
                                 ---------------------------------------------------------------------------------------
Balance June 30, 2005                  $  (47,272)             $   (4,325)            $ (110,705)          $ (162,302)
------------------------------------------------------------------------------------------------------------------------


Note 6. Borrowings:

Debt consists of the following:



(Dollars in thousands)                               Rate       Maturities     June 30, 2006      December 31, 2005
------------------------------------------------ -------------  ------------ ----------------     -----------------
                                                                                       
Bank borrowings and overdrafts                                                    $ 308,936            $ 314,622
Current portion of long-term debt                    6.45%        2006                    -              499,208
Current portion of deferred realized gains on
   interest rate swaps                                                                    -                5,562
                                                                             ----------------     -----------------
Total current debt                                                                  308,936              819,392
                                                                             ----------------     -----------------

Commercial Paper classified as long-term                                            281,521                   -
Japanese Yen notes                                   2.45%      2008-11             132,623             128,945
Other                                                           2011                     42                  40
Deferred realized gains on interest rate swaps                                        1,605               2,296
                                                                             ----------------     -----------------
Total long-term debt                                                                415,791             131,281
                                                                             ----------------     -----------------
Total debt                                                                        $ 724,727           $ 950,673
                                                                             ================     =================


The 6.45% Notes matured on May 15, 2006. On July 12, 2006, the Company issued an
aggregate of $375.0 million of Senior  Unsecured Notes ("the Notes").  The Notes
were issued in four series:  (i) $50.0 million in aggregate  principal amount of
5.89% Series A Senior Notes due July 12, 2009,  (ii) $100.0 million in aggregate
principal amount of 5.96% Series B Notes due July 12, 2011, (iii) $100.0 million
in aggregate principal amount of 6.05% Series C Notes due July 12, 2013 and (iv)
$125.0  million in aggregate  principal  amount of 6.14% Series D Notes due July
12,  2016.  Commercial  paper  outstanding  at June 30,  2006 is  classified  as
long-term  because  proceeds from the Notes issued on July 12, 2006 were used to
retire this borrowing.

Note 7. Equity Compensation Plans:

Effective January 1, 2006, the Company adopted the provisions of SFAS No. 123(R)
"Share-Based  Payment"  ("SFAS  No.  123 (R)")  using the  modified  prospective
method,  which requires  measurement  of  compensation  cost of all  stock-based
awards  at fair  value on the  date of grant  and  recognition  of  compensation
expense  over the  service  periods  for  awards  expected  to vest.  Under this
transition method, compensation cost in 2006 includes the portion vesting in the
period for (1) all share-based  payments granted prior to, but not vested, as of
January 1, 2006, based on the grant date fair value estimated in accordance with

the original  provisions of FASB Statement No. 123,  "Accounting for Stock-Based
Compensation"  ("SFAS  No.  123"),  and (2)  all  share-based  payments  granted
subsequent to January 1, 2006,  based on the grant date fair value  estimated in
accordance  with the provisions of SFAS No.  123(R).  The Company will recognize
the cost of all employee stock options on a straight-line attribution basis over
their respective  vesting  periods,  net of estimated  forfeitures.  Results for
prior periods have not been restated.

The Company  previously  applied the recognition  and measurement  principles of
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees," ("APB 25") and provided the pro forma  disclosures  required by SFAS
No. 123. No  compensation  expense for  employee  stock  options was  previously
reflected in net earnings.

The Company  changed its valuation  model used for  estimating the fair value of
options granted after January 1, 2006, from a Black-Scholes option-pricing model
to a Binomial  lattice-pricing model. This change was made in order to provide a
better estimate of fair value since the Binomial model is a more flexible method
for valuing employee stock options than the Black-Scholes model. The flexibility
of the simulated  Binomial  model stems from the ability to  incorporate  inputs
that change over time, such as volatility and interest  rates,  and to allow for
actual exercise  behavior of option holders.  The Company is using an average of
implied  and  historical  volatility  while the  expected  term  assumption  was
determined based on historical patterns.

The Company has various equity plans under which the Company's officers,  senior
management, directors and other key employees may be granted options to purchase
the Company's common stock or other forms of equity-based awards. Prior to 2004,
stock options were the primary form of equity  compensation.  Beginning in 2004,
the Company granted  Restricted Stock Unit's ("RSU's") as the principal  element
of its equity  compensation  plan for all eligible U.S. - based  employees and a
majority of eligible overseas employees.  Vesting of the RSU's for the Company's
officers and senior  management has been performance and time based, and for the
remainder of eligible  employees,  vesting is time based;  the vesting period is
primarily three years from date of grant, however vesting can be adjusted within
certain  parameters.  For a small group of  primarily  overseas  employees,  the
Company continues to grant stock options.

In 2006, the Board of Directors  approved a Long Term  Incentive  Choice program
(the  "Program") for the Company's  senior  management  under the Company's 2000
Stock  Award and  Incentive  Plan ("2000  SAIP").  Under the  Program,  eligible
employees  can choose from among three equity  alternatives  and will be granted
such equity awards under the 2000 SAIP up to certain dollar awards  depending on
the  participant's  grade  level.  A  participant  may choose among (1) Purchase
Restricted Stock ("PRS"),  (2) Stock Settled  Appreciation  Rights ("SSAR's") or
(3) RSU's.  The  balance of  employees  who are not  eligible  under the Program
receive RSU's or, as noted above, options.

Purchase Restricted Stock
-------------------------

PRS provides for the  participant to purchase  restricted  shares of the Company
stock at 50% of the fair market value on the grant date of the award. The shares
vest on the third  anniversary  of the grant date, are subject to employment and
other specified  conditions,  and pay dividends if and when paid by the Company.
The  Company  issued  183,183  shares of PRS in the  second  quarter  2006 for a
purchase price of $3.3 million.

Stock Options and SSAR's
------------------------

Stock options generally become exercisable on the first anniversary of the grant
date and have a maximum  term of ten years.  SSAR's  become  exercisable  on the
third  anniversary of the grant date and have a maximum term of seven years. The
Company  awarded stock options and SSAR's of 212,000 and 141,374,  respectively,
in the second quarter 2006.

Compensation  cost and the related tax benefit for unvested  stock option awards
issued  prior to  adoption  of SFAS No.  123(R)  totaled  $0.6  million and $0.1
million for the second  quarter  2006,  respectively,  and $1.9 million and $0.6
million for the six-month period ended June 30, 2006, respectively.

The  following  table  illustrates  the  effect on net income and net income per
share if the Company had applied the fair value  recognition  provisions of SFAS
No. 123 to measure  stock-based  compensation  expense  for  outstanding  option
awards for the quarter and six-month periods ended June 30, 2005. Net income, as
reported,  includes pre-tax compensation expense related to restricted stock and
restricted  stock units ("RSU's") of $2.2 million and $4.7 million in the second
quarter and six-month period ended June 30, 2005. Using the Black-Scholes option
valuation  model,  the estimated fair values of options granted during 2005 were
$10.57 per share.



                                                                  Three Months Ended     Six Months Ended
(Dollars in thousands except per share amounts)                      June 30, 2005         June 30, 2005
----------------------------------------------------------------  --------------------  --------------------
                                                                                          
Net income, as reported                                                    $56,713               $109,256
Deduct: Total stock-based employee compensation
expense determined under fair value method for all
stock option awards, net of related tax effects                              1,913                  3,797
                                                                  --------------------  --------------------
Pro-forma net income                                                       $54,800               $105,459
                                                                  ====================  ====================
Net income per share:
     Basic - as reported                                                     $0.60                  $1.16
     Basic - pro-forma                                                       $0.58                  $1.12
     Diluted - as reported                                                   $0.60                  $1.14
     Diluted - pro-forma                                                     $0.58                  $1.10


Principal  assumptions used in applying the Black-Scholes  model in 2005 and the
binomial model in 2006 were:


                                                         2005          2006
                                                     -----------  -------------
                                                                  
Risk-free interest rate                                  4.2%           5.0%
Expected life, in years                                     5              5
Expected volatility                                     26.9%          21.3%
Expected dividend yield                                  1.7%           2.1%


The  Company  utilizes  historical  information  to estimate  expected  life and
forfeitures  within the valuation model. The expected term of an option is based
on historical  employee exercise behavior,  vesting terms and a contractual life
of nine and one half years to ten years for  options and seven years for SSAR's.
The risk-free rate for periods within the expected life of the award is based on
the  U.S.  Treasury  yield  curve  in  effect  at the  time of  grant.  Expected
volatility  is based on an average of implied and  historical  volatility of the
price of our common  shares  over the  calculated  expected  life.  The  Company
anticipates  paying cash  dividends in the future and therefore uses an expected
dividend yield in the valuation  model using current cash dividends of $.185 per
share each quarter for options  granted  during  2006.  The adoption of SFAS No.
123(R) did not change the way that the Company has  accounted  for stock options
in prior periods.

Stock option and SSAR activity was as follows:


                                                             Weighted        Average
                                                              Average        Remaining          Aggregate
                                     Shares Subject to       Exercise      Contractual       Intrinsic Value
                                       Options/SSAR's         Price            Term          (in millions)
                                     ----------------------------------------------------------------------------
                                                                                       
Balance at January 1, 2006               6,698,428           $32.52
     Granted                                     -                -
     Exercised                             187,535           $29.80
     Cancelled                              54,126           $30.55
                                     -------------------------------
Balance at March 31, 2006                6,456,767           $32.61            5.7              $210.5
     Granted                               353,374           $35.66
     Exercised                             552,168           $30.13
     Cancelled                             160,784           $46.09
                                     -------------------------------
Balance at June 30, 2006                 6,097,189           $32.70            5.8              $199.5
                                     ===============================
Exercisable at March 31, 2006            6,144,512           $32.34            5.6              $198.7
                                     ===============================
Exercisable at June 30, 2006             5,505,544           $32.24            5.5              $177.5
                                     ===============================

The total  intrinsic  value of options  exercised  during the second quarter and
six-month  period  ended  June  30,  2006  was $2.5  million  and $3.4  million,
respectively.

The Company stock option and SSAR activity for non-vested awards was as follows:


                                                                      Weighted
                                                                      Average
                                                 Shares           Exercise Price
                                         -------------------    ------------------
                                                                  
Non-vested at January 1, 2006                   1,074,140             $33.05
     Options/SSAR's granted                            -
     Options/SSAR's vested                       701,056
     Options/SSAR's cancelled                     60,829
                                         -------------------
Non-vested at March 31, 2006                     312,255              $37.88
     Options/SSAR's granted                      353,374
     Options/SSAR's vested                        50,990
     Options/SSAR's cancelled                      1,668
                                         -------------------
Non-vested at June 30, 2006                       612,971             $37.12
                                         ===================


As of June 30, 2006, there was $4.8 million of total  unrecognized  compensation
cost related to non-vested stock option and SSAR awards granted under the equity
incentive  plans  relating  to  future  periods.  The  cost  is  expected  to be
recognized over a weighted average period of 2.2 years.

Restricted Stock and Units
--------------------------

The Company may grant restricted shares and RSU's to eligible employees,  giving
them in most instances all of the rights of  stockholders,  except that they may
not sell,  assign,  pledge or otherwise  encumber  such shares.  Such shares and
RSU's are subject to forfeiture if certain  employment  conditions  are not met.
RSU's generally vest 100% at the end of three years;  however,  RSU's granted to
all officers and senior  management have a performance  restriction which if not
attained  terminates the RSU's prior to vesting.  The fair value of the RSU's is
equal to the  market  price  of the  Company's  stock  at date of  grant  and is
amortized  to expense  ratably  over the vesting  period.  The Company  recorded
compensation  expense related to restricted  stock and RSU's of $4.0 million and
$5.5  million  for  the  three  and six  month  periods  ended  June  30,  2006,
respectively.

Restricted stock and RSU activity was as follows:


                                                            Weighted-
                                                         Average Grant
                                                         Date Fair Value
                                       Shares               Per Share
                                  ---------------     -------------------
                                                        
Balance at January 1, 2006            909,385               $38.84
     Granted                                -
     Vested                            45,281
     Forfeited                         98,398
                                  ------------
Balance at March 31, 2006             765,706               $38.49
     Granted                          535,276
     Vested                                 -
     Forfeited                         13,157
                                  ------------
Balance at June 30, 2006            1,287,825               $37.12
                                  ============


The total value of RSU's which vested during the first quarter was $1.6 million.
The adoption of SFAS No.  123(R)  resulted in a  cumulative  effect gain of $0.5
million  which  reflects  the  net  cumulative   impact  of  estimating   future
forfeitures in the  determination  of periodic  expense for unvested RSU awards,
rather than recording  forfeitures only when they occur.  The cumulative  effect
was recorded in operating expenses and not as a cumulative effect of a change in
accounting principle because the amount was not material.


Note 8. Segment Information:

The Company  manages its operations by major  geographical  region.  Flavors and
fragrances  have similar  economic  and  operational  characteristics  including
research and development,  the nature of the creative and production  processes,
the type of  customers,  and the  methods  by which  products  are  distributed.
Accounting  policies used for segment reporting are identical to those described
in Note 1 of the Notes to the Consolidated  Financial Statements included in the
Company's 2005 Annual Report.

The Company evaluates the performance of its geographic regions based on segment
profit which is income before taxes on income, excluding interest expense, other
income and  expense  and the  effects of  restructuring  and other  charges  and
accounting  changes.  The Company is divided  into five  geographic  regions for
management  purposes:  North  America,  Europe,  India,  Latin  America and Asia
Pacific.    The   Global    Expenses    caption    represents    corporate   and
headquarters-related expenses including legal, finance, human resource and other
administrative  expenses not allocable to individual regions.  Transfers between
geographic  regions are  accounted for at prices that  approximate  arm's-length
market prices. The Company's  reportable segment information follows:



                                                                       Three Months Ended June 30, 2006
                               ----------------------------------------------------------------------------------------------------
                                 North                               Latin        Asia         Global      Elimina-      Consolid-
(Dollars in thousands)          America     Europe     India        America      Pacific      Expenses       tions          ated
----------------------------  ----------- ---------- ----------  -------------  ----------  -----------   -----------   -----------
                                                                                                     
Sales to unaffiliated customers $164,018    $199,173   $ 16,288      $ 66,283     $ 84,743    $       -    $       -      $ 530,505
Transfers between areas           16,449      46,170         28           153       12,014            -      (74,814)             -
                               ----------------------------------------------------------------------------------------------------
Total sales                     $180,467    $245,343   $ 16,316      $ 66,436     $ 96,757    $       -    $ (74,814)     $ 530,505
                               ========================================================================================
Segment profit                  $ 16,995    $ 59,935   $  4,117      $  8,976     $ 15,761    $ (14,474)   $    (677)     $  90,633
Restructuring and other charges     (721)      1,176         22            (3)        (170)           -            -            304
                               ----------------------------------------------------------------------------------------------------
Operating profit                $ 16,274    $ 61,111   $  4,139      $  8,973     $ 15,591    $ (14,474)   $    (677)     $  90,937
                               ========================================================================================
Interest expense                                                                                                             (6,300)
Other income (expense), net                                                                                                     286
                                                                                                                        ------------
Income before taxes on income                                                                                             $  84,923
                                                                                                                        ============



                                                                       Three Months Ended June 30, 2005
                               ----------------------------------------------------------------------------------------------------
                                 North                               Latin        Asia         Global      Elimina-      Consolid-
(Dollars in thousands)          America     Europe     India        America      Pacific      Expenses       tions          ated
----------------------------  ----------- ---------- ----------  -------------  ----------  -----------   -----------   -----------
                                                                                                     
Sales to unaffiliated customers $157,075     199,144   $ 15,779      $ 62,477     $ 81,103    $       -    $       -      $ 515,578
Transfers between areas           19,058      51,879          3           120       11,305            -      (82,365)             -
                               -----------------------------------------------------------------------------------------------------
Total sales                     $176,133     251,023   $ 15,782      $ 62,597     $ 92,408    $       -    $ (82,365)     $ 515,578
                               ========================================================================================
Segment profit                  $ 15,927    $ 57,285   $  3,938      $  6,474     $ 14,926    $ (12,378)   $    (672)     $  85,500
Restructuring and other charges        -           -          -             -            -            -            -              -
                               -----------------------------------------------------------------------------------------------------
Operating profit                $ 15,927    $ 57,285   $  3,938      $  6,474     $ 14,926    $ (12,378)   $    (672)     $  85,500
                               ========================================================================================
Interest expense                                                                                                             (6,062)
Other income (expense), net                                                                                                   2,558
                                                                                                                       -------------
Income before taxes on income                                                                                             $  81,996
                                                                                                                       =============



                                                                    Six Months Ended June 30, 2006
                                ----------------------------------------------------------------------------------------------------
                                 North                               Latin        Asia         Global      Elimina-      Consolid-
(Dollars in thousands)          America     Europe     India        America      Pacific      Expenses       tions          ated
----------------------------  ----------- ---------- ----------  -------------  ----------  -----------   -----------   -----------
                                                                                                     
Sales to unaffiliated customers $324,722    $389,890   $ 34,168     $ 129,929     $163,228    $       -    $       -     $1,041,937
Transfers between areas           31,627      91,319        298           252       23,036            -     (146,532)             -
                                ----------------------------------------------------------------------------------------------------
Total sales                     $356,349    $481,209   $ 34,466     $ 130,181     $186,264    $       -    $(146,532)    $1,041,937
                                =======================================================================================
Segment profit                  $ 31,653    $118,813   $  8,646     $  16,610     $ 27,539    $ (30,180)   $    (734)      $172,347
Restructuring and other charges     (721)      1,170       (363)           (3)        (440)           -            -           (357)
                                ----------------------------------------------------------------------------------------------------
Operating profit                $ 30,932    $119,983   $  8,283     $  16,607     $ 27,099    $ (30,180)   $    (734)      $171,990
                                =======================================================================================
Interest expense                                                                                                            (11,673)
Other income (expense), net                                                                                                    (153)
                                                                                                                       -------------
Income before taxes on income                                                                                              $160,164
                                                                                                                       =============



                                                                    Six Months Ended June 30, 2005
                                ----------------------------------------------------------------------------------------------------
                                 North                               Latin        Asia         Global      Elimina-      Consolid-
(Dollars in thousands)          America     Europe     India        America      Pacific      Expenses       tions          ated
----------------------------  ----------- ---------- ----------  -------------  ----------  -----------   -----------   -----------
                                                                                                     
Sales to unaffiliated customers $312,170    $410,940   $ 31,954      $120,440     $163,126    $       -    $       -     $1,038,630
Transfers between areas           40,361      98,762          4           438       21,238            -     (160,803)             -
                                ----------------------------------------------------------------------------------------------------
Total sales                     $352,531    $509,702   $ 31,958      $120,878     $184,364    $       -    $(160,803)    $1,038,630
                                =======================================================================================
Segment profit                  $ 30,554    $112,659   $  8,016      $ 12,038     $ 29,193    $ (24,410)   $  (1,160)      $166,890
Restructuring and other charges        -           -          -             -            -            -            -              -
                                ----------------------------------------------------------------------------------------------------
Operating profit                $ 30,554    $112,659   $  8,016      $ 12,038     $ 29,193    $ (24,410)   $  (1,160)      $166,890
                                =======================================================================================
Interest expense                                                                                                            (11,638)
Other income (expense), net                                                                                                   3,114
                                                                                                                       -------------
Income before taxes on income                                                                                              $158,366
                                                                                                                        ============


Note 9. Retirement Benefits:

As described in Note 14 of the Notes to the  Consolidated  Financial  Statements
included  in the  Company's  2005  Annual  Report,  the  Company and most of its
subsidiaries  have  pension  and/or  other  retirement  benefit  plans  covering
substantially  all  employees.  For the second quarter and six months ended June
30, 2006 and 2005,  pension  expense for the U.S. and non - U.S.  plans included
the following components:


U.S. Plans                                                    Three Months Ended June 30,           Six Months Ended June 30,
                                                            -------------------------------      ------------------------------
(Dollars in thousands)                                          2006             2005                2006            2005
--------------------------------------------------------    --------------   --------------      -------------   --------------
                                                                                                           
Service cost for benefits earned                                  $ 2,636          $ 2,390            $ 5,272          $ 4,780
Interest cost on projected benefit obligation                       5,465            5,200             10,930           10,400
Expected return on plan assets                                     (5,493)          (5,243)           (10,986)         (10,486)
Net amortization and deferrals                                      2,015            1,191              4,030            2,382
                                                            --------------   --------------      -------------   --------------
Defined benefit plans                                               4,623            3,538              9,246            7,076
Defined contribution and other retirement plans                       731              714              1,545            1,504
                                                            --------------   --------------      -------------   --------------
Total pension expense                                             $ 5,354          $ 4,252           $ 10,791          $ 8,580
                                                            ==============   ==============      =============   ==============



Non - U.S. Plans                                              Three Months Ended June 30,           Six Months Ended June 30,
                                                            -------------------------------      ------------------------------
(Dollars in thousands)                                          2006             2005                2006            2005
--------------------------------------------------------    --------------   --------------      -------------   --------------
                                                                                                           
Service cost for benefits earned                                  $ 3,189          $ 2,663            $ 6,378          $ 5,325
Interest cost on projected benefit obligation                       7,007            7,431             14,014           14,862
Expected return on plan assets                                     (9,459)          (8,419)           (18,918)         (16,838)
Net amortization and deferrals                                      2,103            2,190              4,206            4,380
                                                            --------------   --------------      -------------   --------------
Defined benefit plans                                               2,840            3,865              5,680            7,729
Defined contribution and other retirement plans                       812              827              1,615            1,644
                                                            --------------   --------------      -------------   --------------
Total pension expense                                             $ 3,652          $ 4,692            $ 7,295          $ 9,373
                                                            ==============   ==============      =============   ==============


The Company  expects to contribute $5.0 million  to its qualified  U.S.  pension
plans in the second half of 2006. No  contributions  were made to these plans in
the first six months of 2006. In the quarter and six months ended June 30, 2006,
$1.4 million and $2.1 million of benefit payments were made, respectively,  with
respect to the  non-qualified  plan.  The Company  expects to  contribute  $22.1
million to its  non-U.S.  pension  plans in 2006.  In the quarter and six months
ended June 30, 2006, $1.7 million and $5.9 million of  contributions  were made,
respectively, to these plans.

For the quarter  and six month  periods  ended June 30,  2006 and 2005,  expense
recognized  for  postretirement   benefits  other  than  pensions  included  the
following components:


                                           Three Months Ended June 30,              Six Months Ended June 30,
                                       -----------------------------------      -----------------------------------
(Dollars in thousands)                         2006             2005                   2006              2005
------------------------                  -------------    --------------         --------------    --------------
                                                                                               
Service cost for benefits earned                $   856           $   622               $  1,712          $  1,244
Interest on benefit obligation                    1,575             1,226                  3,150             2,452
Net amortization and deferrals                      191             (107)                    382             (214)
                                           -------------    --------------         --------------    --------------
Total postretirement benefit expense           $  2,622          $  1,741               $  5,244          $  3,482
                                           =============    ==============         ==============    ==============



The Company  expects to contribute  $3.9 million to its  postretirement  benefit
plans in 2006.  In the quarter and six months ended June 30, 2006,  $1.2 million
and $2.2 million of contributions were made, respectively.

Note 10. Commitments and Contingencies:

The Company is party to a number of lawsuits  and claims  related  primarily  to
flavoring supplied by the Company to manufacturers of butter flavor popcorn.  At
each balance sheet date, or more frequently as conditions  warrant,  the Company
reviews the status of each pending claim, as well as its insurance  coverage for
such claims with due consideration given to potentially applicable  deductibles,

retentions  and  reservation  of rights under its  insurance  policies,  and the
advice of its  outside  legal  counsel  and a third  party  expert  in  modeling
insurance  deductible  amounts  with  respect  to all these  matters.  While the
ultimate outcome of any litigation cannot be predicted, management believes that
adequate provision has been made with respect to all known claims.  There can be
no  assurance  that future  events will not require the Company to increase  the
amount it has  accrued  for any matter or accrue for a matter  that has not been
previously accrued. Based on information presently available and in light of the
merits of its defenses and the  availability of insurance,  the Company does not
expect the outcome of the above  cases,  singly or in the  aggregate,  to have a
material  adverse  effect  on the  Company's  financial  condition,  results  of
operation or liquidity.

The Company  recorded  its  expected  liability  with respect to these claims in
Other  liabilities and expected  recoveries from its insurance  carrier group in
Other Assets. The Company believes that realization of the insurance  receivable
is probable due to the terms of the insurance  policies,  the financial strength
of the  insurance  carrier  group  and  the  payment  experience  to date of the
insurance carrier group as it relates to these claims.

Note 11. Reclassifications:

Certain   reclassifications  have  been  made  to  the  prior  year's  financial
statements to conform to 2006 classifications.


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

Overview
--------

The  Company is a leading  creator  and  manufacturer  of flavor  and  fragrance
compounds used to impart or improve the flavor or fragrance in a wide variety of
consumer products.

Fragrance  compounds  are used in  perfumes,  cosmetics,  toiletries,  hair care
products,  deodorants,  soaps,  detergents  and  softeners  as well as air  care
products.  Flavor products are sold to the food and beverage  industries for use
in  consumer  products  such as  prepared  foods,  beverages,  dairy,  food  and
confectionery  products. The Company is also a leading manufacturer of synthetic
ingredients used in making fragrances.

Changing  social  habits  resulting  from such  factors as increases in personal
income and dual-earner households,  leisure time, health concerns,  urbanization
and population growth stimulate demand for consumer  products  utilizing flavors
and  fragrances.  These  developments  expand the market for products with finer
fragrance  quality,  as well as the market for  colognes  and  toiletries.  Such
developments  also  stimulate  demand for  convenience  foods,  soft  drinks and
low-fat food products that must conform to expected tastes.  These  developments
necessitate   the  creation  and  development  of  flavors  and  fragrances  and
ingredients that are compatible with newly  introduced  materials and methods of
application used in consumer products.

Flavors and fragrances are generally:

-    created for the exclusive use of a specific customer;
-    sold in solid or liquid form,  in amounts  ranging from a few  kilograms to
     many tons  depending  on the  nature of the end  product  in which they are
     used;
-    a small  percentage  of the volume and cost of the end product  sold to the
     consumer; and
-    a major factor in consumer selection and acceptance of the product.

Flavors and fragrances have similar  economic and  operational  characteristics,
including  research and  development,  the nature of the creative and production
processes,  the  manner  in  which  products  are  distributed  and the  type of
customer; many of the Company's customers purchase both flavors and fragrances.

The flavor and fragrance  industry is impacted by  macroeconomic  factors in all
product categories and geographic regions. In addition,  pricing pressure placed
on the Company's  customers by large and powerful  retailers and distributors is
inevitably  passed  along to the Company,  and its  competitors.  Leadership  in
innovation and creativity mitigates the impact of pricing pressure.  Success and
growth in the industry is dependent  upon  creativity  and innovation in meeting
the many and varied needs of the  customers'  products in a  cost-efficient  and
effective  manner,  and with a  consistently  high level of timely  service  and
delivery.

The Company's strategic focus is:

-    To  improve  customer  service,  in terms of both  on-time  deliveries  and
     responsiveness to new product development  initiatives,  and to improve the
     win rate for new business with the Company's customers.
-    To  critically  evaluate  the  profitability  and growth  potential  of the
     Company's product portfolio, and to focus on those categories and customers
     considered to be the best opportunities for long-term profitable growth.
-    To align resources of the Company with those of its major international key
     customers  using the global  reach of the  Company to provide  and  enhance
     strategic partnerships.
-    To focus research and development  initiatives on those areas considered to
     be most  likely,  in the  long-term,  to yield  the  greatest  value to the
     Company's customers and shareholders.

The Company has made strides to implement a number of these initiatives. On time
delivery and  continuous  improvement  in operations are supported by the global
implementation of the enterprise requirements planning software package ("SAP"),
and related initiatives,  implementation of which are substantially completed at
June 30,  2006.  Product and  category  growth and  strategic  analysis of these
objectives is a continual  focus for management and a number of new  ingredients
are employed in flavor and fragrance compounds.

Operations
----------

Second Quarter 2006
-------------------

Second  quarter 2006 sales  totaled $531  million,  increasing 3% over the prior
year  quarter;  fragrance  and flavor sales  increased 3% and 2%,  respectively.
Reported  sales for the 2006  period were  affected by the  strength of the U.S.
dollar;  had  exchange  rates  remained  constant,  sales  would  have  been one
percentage point higher.

Fragrance  sales were led by fine  fragrance,  which  increased  9%; much of the
growth resulted from new product  introductions.  Sales of functional fragrances
increased 1% while fragrance ingredient sales declined 3%.

The flavor  sales  performance  benefited  from new wins as well as from ease of
comparison  with the prior year  quarter,  when flavor sales were  affected by a
vendor-supplied   raw  material   contamination   issue,  the  impact  of  which
approximated $5 million in the 2005 quarter.

Sales performance by region and product category in comparison to the prior year
quarter follows:



                                                                  Second Quarter 2006 vs. 2005
                                                         % Change in Sales by Region of Destination
                                            -------------------------------------------------------------------------
                                               Fine       Func'l.      Ingr.    Total Frag.   Flavors      Total
                                            -------------------------------------------------------------------------
                                                                                         
North America         Reported                 18%           1%          13%         10%          4%          7%

Europe                Reported                  3%           3%         -13%         -1%         -3%         -2%
                      Local Currency            5%           5%         -11%          1%         -1%          -

Latin America         Reported                 17%          -4%          -2%          1%         15%          5%

Asia Pacific          Reported                  2%          10%          -4%          5%          1%          2%
                      Local Currency            2%          10%          -1%          6%          3%          4%

India                 Reported                  8%          -8%          18%         -1%          9%          4%
                      Local Currency            8%          -8%          20%          -           9%          5%

Total                 Reported                  9%           1%          -3%          3%          2%          3%
                      Local Currency           10%           2%          -2%          4%          3%          4%
                                            -------------------------------------------------------------------------

-    North  America fine  fragrance  and flavor  growth was driven mainly by new
     product  introductions  of  approximately  $10 million  while  increases in
     ingredients and functional fragrances were primarily volume related.
-    European  growth was  strongest  in Eastern  Europe,  Africa and the Middle
     East,  collectively  increasing 15% over the 2005 quarter;  a 2% decline in
     Western Europe offset this growth. Fine and functional fragrance growth was
     mainly the result of new product  introductions  approximating  $12 million
     while the  decline  in  ingredients  and  flavor  sales was  mainly  volume
     related.
 -   Latin  America  fine  fragrance  sales  growth  resulted  from new  product
     introductions  of $2 million  while  declines in  functional  fragrance and
     ingredients  were  primarily  volume  related.  Flavor  sales  were  strong
     throughout  the  region  mainly  as a result of new  product  introductions
     approximating $2 million.
-    Asia Pacific fine and functional  fragrance  sales growth  resulted  mainly
     from new product introductions of approximately $2.5 million,  while volume
     declines  negatively  impacted  ingredient  sales.  Flavor sales growth was
     mainly the result of new product introductions in excess of $2 million.
-    India  fragrance  sales  performance  in all  product  categories  resulted
     primarily from volume  fluctuations while flavor sales increased due to the
     combined benefit of new product introductions and volume growth.


The percentage  relationship of cost of goods sold and other operating  expenses
to sales for the second quarter 2006 and 2005 are detailed below.


                                              Second Quarter
                                         -------------------------
                                            2006          2005
                                         -----------   -----------
                                                     
Costs of Goods Sold                           57.1%         58.0%
Research and Development Expenses              8.6%          8.6%
Selling and Adminstrative Expenses            16.5%         16.1%

-    Gross profit, as a percentage of sales,  improved nearly 1% compared to the
     prior year quarter.  The  improvement  resulted  from a combination  of the
     local currency sales performance leading to improved  manufacturing expense
     absorption  and favorable  product mix. The second  quarter 2005 margin was
     unfavorably   impacted   by  costs   attributable   to  the  raw   material
     contamination matter.
-    Research and Development ("R&D") expenses totaled 8.6% of sales, consistent
     with the prior year quarter.
-    Selling,  General and Administrative  ("SG&A") expenses, as a percentage of
     sales,  increased  to  16.5%  from  16.1%,  mainly  as a result  of  higher
     incentive plan accruals and an additional $2 million in equity compensation
     expense recorded in the 2006 second quarter.
-    Interest  expense  increased 4% from the prior year  quarter  mainly due to
     slightly  higher  average  rates on  borrowing  compared  to the prior year
     quarter and higher debt levels  prior to the  maturity of $500 million of 5
     year notes on May 15, 2006.
-    The  effective  tax rate was  28.0%  compared  to 30.8% in the  prior  year
     quarter;  variations  in the  effective  rate are  mainly  attributable  to
     fluctuations in earnings in the countries in which the Company operates.

Net income for the 2006 second quarter increased 8% compared with the prior year
quarter, primarily as a result of the above factors.

First Six Months 2006
---------------------

For the  six-month  period ended June 30, 2006,  sales totaled  $1,042  million,
essentially  flat with the 2005 period.  Reported sales for the 2006 period were
affected  by the  strength  of the U.S.  dollar;  had  exchange  rates  remained
constant, sales would have been three percentage points higher.

Fragrance  sales were led by fine  fragrance,  which  increased  6%; much of the
growth resulted from new product  introductions.  Sales of functional fragrances
declined 1% and fragrance ingredient sales declined 4%.

The flavor  sales  performance  benefited  from new wins as well as from ease of
comparison  with the prior year  period,  when flavor  sales were  affected by a
vendor-supplied   raw  material   contamination   issue,  the  impact  of  which
approximated $5 million in the 2005 second quarter.

Sales performance by region and product category in comparison to the prior year
period follows:





                                                                    Six Months 2006 vs. 2005
                                                           % Change in Sales by Region of Destination
                                              ------------------------------------------------------------------------
                                                 Fine       Func'l.      Ingr.    Total Frag.   Flavors      Total
                                              ------------------------------------------------------------------------
                                                                                         
North America           Reported                 20%        -3%           13%          8%          4%          6%

Europe                  Reported                 -2%        -2%          -16%         -6%         -5%         -6%
                        Local Currency            4%         4%          -12%         -1%          -           -

Latin America           Reported                 13%         1%            4%          4%         17%          8%

Asia Pacific            Reported                  2%        -1%           -5%         -1%         -1%         -1%
                        Local Currency            2%         -            -1%          -           2%          1%

India                   Reported                 14%         4%           16%          8%         10%          9%
                        Local Currency           15%         5%           20%         10%         11%         10%

Total                   Reported                  6%        -1%           -4%          -           1%          -
                        Local Currency            9%         1%           -1%          3%          4%          3%
                                              ------------------------------------------------------------------------


-    North America fine  fragrance and flavor  growth  resulted  mainly from new
     product introductions of nearly $15 million while the decline in functional
     fragrances  was  volume  related.  Ingredients  sales  growth  was due to a
     combination of volume and price.
-    European  growth was  strongest  in Eastern  Europe,  Africa and the Middle
     East, which was offset by an overall sales decline in Western Europe.  Fine
     and functional fragrance growth resulted from new product  introductions of
     approximately  $24  million  while the  decline in  ingredients  was volume
     related, as was the decline in flavor sales.
-    Latin  America  fine  fragrance  sales  growth  resulted  from new  product
     introductions  of  approximately  $3 million while  increases in functional
     fragrance and ingredients were primarily volume related.  Flavor sales were
     strong   throughout  the  region,   mainly   benefiting  from  new  product
     introductions of approximately $4 million.
-    Asia Pacific fine fragrance  sales growth  resulted mainly from new product
     introductions totaling nearly $3 million, while volume declines unfavorably
     impacted  functional  fragrance  and  ingredients.  Flavor sales growth was
     mainly the result of new product introductions greater than $3 million.
-    India  fragrance  sales  performance  in all  product  categories  resulted
     primarily  from volume  growth  while  flavor  sales  increased  due to the
     combined benefit of new product introductions and volume growth.

The percentage  relationship of cost of goods sold and other operating  expenses
to sales  for the  first  six-month  period  ended  June  30,  2006 and 2005 are
detailed below.


                                                             First Six Months
                                                         -------------------------
                                                            2006          2005
                                                         -----------   -----------
                                                                     
Costs of Goods Sold                                         57.4%         58.5%
Research and Development Expenses                            8.8%          8.6%
Selling and Adminstrative Expenses                          16.6%         16.1%

-    Gross profit,  as a percentage of sales,  improved greater than 1% compared
     to the prior year period.  The  improvement  resulted mainly from the local
     currency sales performance,  improved  manufacturing expense absorption and
     favorable  product mix. The 2005  six-month  period margin was  unfavorably
     impacted by costs attributable to the raw material contamination matter.
-    R&D  expenses  totaled 8.8% of sales,  slightly  higher than the prior year
     period.
-    SG&A  expenses,  as a percentage  of sales,  increased to 16.6% from 16.1%,
     mainly as a result of higher  incentive  plan  accruals  and $3  million in
     additional  equity  compensation  expense  than the 2005  first six  months
     partially offset by the Company's ongoing cost control initiatives.
-    Interest  expense was essentially  unchanged from the prior year period.

-    The  effective  tax rate was  28.3%  compared  to 31.0% in the  prior  year
     period;  variations  in the  effective  rate  are  mainly  attributable  to
     fluctuations in earnings in the countries in which the Company operates and
     realizing  benefits of tax planning  strategies  put in place.  The Company
     expects the effective tax rate to approximate 28.5% for 2006.

Net income for the first six months of 2006 increased 5% compared with the prior
year  period,  primarily  as a result of the improved  sales  performance,  cost
control initiatives and the above factors.

Restructuring and Other Charges
-------------------------------

As described in Note 2 to the Consolidated Financial Statements in the Company's
2005 Annual  Report,  the Company has  undertaken a significant  reorganization,
including management changes, consolidation of production facilities and related
actions.

As a result of these actions,  the Company  recognized  pre-tax charges of $23.3
million in 2005 and $0.4  million in the first six months of 2006. A net gain of
$0.3 million was  recognized in the second  quarter 2006 primarily as the result
of a $1.6 million gain recorded on the disposition of the Dijon, France land and
building,  the  carrying  value  of  which  was  reduced  to its  estimated  net
realizable  value in  connection  with the closure of the facility in 2005;  the
amount realized on disposition  exceeded the original  estimate.  The Dijon gain
was offset by $1.3 million in restructuring  expense incurred in the 2006 second
quarter. The remaining charges are expected to be recognized over the balance of
2006.  Annual  savings  from these  actions are  expected to  approximate  $16.0
million to $18.0 million.

Movements in the liabilities related to the restructuring  charges,  included in
Restructuring  and other charges or Other  liabilities as appropriate,  were (in
millions):


                                                    Asset-
                                    Employee-       Related
                                     Related       and Other         Total
                                --------------- -------------- --------------
                                                             
Balance December 31, 2005              $ 29.5          $ 4.9          $ 34.4
Additional charges                        1.4           (1.0)            0.4
Cash and other costs                    (14.0)           1.8           (12.2)
                                --------------  -------------- --------------
Balance June 30, 2006                  $ 16.9          $ 5.7          $ 22.6
                                ==============  =============  ==============


Consistent  with  the  original  plan,  the  balance  of  the   employee-related
liabilities  are expected to be utilized by 2008 as  obligations  are satisfied;
the asset-related  charges will be utilized in 2007 on final decommissioning and
disposal of the affected equipment.

Equity Compensation Plans
-------------------------

Effective January 1, 2006, the Company adopted the provisions of SFAS No. 123(R)
"Share-Based  Payment"  ("SFAS  No.  123 (R)")  using the  modified  prospective
method,  which requires  measurement  of  compensation  cost of all  stock-based
awards  at fair  value on the  date of grant  and  recognition  of  compensation
expense  over the  service  periods  for  awards  expected  to vest.  Under this
transition method, compensation cost in 2006 includes the portion vesting in the
period for (1) all share-based  payments granted prior to, but not vested, as of
January 1, 2006, based on the grant date fair value estimated in accordance with
the original  provisions of FASB Statement No. 123,  "Accounting for Stock-Based
Compensation"  ("SFAS  No.  123"),  and (2)  all  share-based  payments  granted
subsequent to January 1, 2006,  based on the grant date fair value  estimated in
accordance  with the provisions of SFAS No.  123(R).  The Company will recognize
the cost of all employee stock options on a straight-line attribution basis over
their respective  vesting  periods,  net of estimated  forfeitures.  Results for
prior periods have not been restated. Other equity based awards will be measured
based on fair value as of the grant date,  expensed over the vesting  period and
adjusted for forfeitures.

The Company  previously  applied the recognition  and measurement  principles of
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees," ("APB 25") and provided the pro forma  disclosures  required by SFAS
No. 123. No  compensation  expense for  employee  stock  options was  previously
reflected in net earnings.

The Company  changed its valuation  model used for  estimating the fair value of
options granted after January 1, 2006, from a Black-Scholes option-pricing model
to a Binomial  lattice-pricing model. This change was made in order to provide a

better estimate of fair value since the Binomial model is a more flexible method
for valuing employee stock options than the Black-Scholes model. The flexibility
of the simulated  Binomial  model stems from the ability to  incorporate  inputs
that change over time, such as volatility and interest  rates,  and to allow for
actual exercise  behavior of option holders.  The Company is using an average of
implied  and  historical  volatility  while the  expected  term  assumption  was
determined based on historical patterns.

The Company has various equity plans under which the Company's officers,  senior
management, directors and other key employees may be granted options to purchase
the Company's common stock or other forms of equity-based awards. Prior to 2004,
stock options were the primary form of equity  compensation.  Beginning in 2004,
the  Company  granted  Restricted  Stock  Units  ("RSU's")  as an element of its
incentive  compensation  plan for all  eligible  U.S.  - based  employees  and a
majority of eligible overseas employees.  Vesting of the RSU's for the Company's
officers and senior  management has been performance and time based, and for the
remainder of eligible  employees,  vesting is time based;  the vesting period is
primarily three years from date of grant, however vesting can be adjusted within
certain  parameters.  For a small group of  primarily  overseas  employees,  the
Company continues to issue stock options.

In 2006, the Board of Directors  approved a Long-Term  Incentive  Choice program
(the  "Program") for the Company's  senior  management  under the Company's 2000
Stock  Award and  Incentive  Plan ("2000  SAIP").  Under the  Program,  eligible
employees  can choose from among  three  alternative  equity  awards and will be
granted  such  equity  awards  under the 2000 SAIP up to certain  dollar  awards
depending on the participant's  grade level. The participant may chose among (1)
Purchase  Restricted  Stock  ("PRS"),  (2)  Stock  Settled  Appreciation  Rights
("SSAR's") or (3) RSU's. The balance of employees who are not eligible under the
Program receive RSU's or, as noted above, options.

Developing  the  assumptions  used in the binomial  model  requires  significant
judgment on the part of the Company and,  generally,  may involve  analyzing all
available  historical data,  considering  whether historical data is relevant to
predicting future behavior,  making  appropriate  adjustments to historical data
for future expectations,  supplementing or replacing Company-specific historical
data with data from other supportable  sources and appropriately  weighting each
of the inputs.  These  assumptions  are evaluated at each grant date. If factors
change and the Company employs different assumptions for estimating  share-based
compensation  expense  in future  periods  or if the  Company  decides  to use a
different valuation model, the future periods may differ significantly from what
the Company  has  recorded in the  current  period and could  materially  affect
operating  income,  net income and net income per share.  In addition,  existing
valuation  models,  including  the  Black-Scholes  and binomial  lattice-pricing
model,  may not provide  reliable  measures of the fair values of the  Company's
share-based  compensation.  Consequently,  there is a significant  risk that the
Company's estimates of the fair values of share-based compensation awards on the
grant  dates may not  reflect  the  actual  values  realized  upon the  vesting,
exercise,  expiration,  early  termination  or forfeiture  of those  share-based
payments in the future.  There currently is no  market-based  mechanism or other
practical  application to verify the  reliability  and accuracy of the estimates
stemming from these valuation models.

The future  impact of the cost of  share-based  compensation  on our  results of
operations, including net income and earnings per diluted share, will depend on,
among other factors,  the level of our equity awards as well as the market price
of our shares at the time of award as well as various other  assumptions used in
valuing such awards.

See Note 7 of the Notes to the unaudited  Consolidated  Financial Statements for
additional  discussion  of the  impact of the  adoption  of,  and the  method of
determining fair values under, SFAS No. 123(R).

Financial Condition
-------------------

Cash, cash equivalents and short-term  investments totaled $30.2 million at June
30,  2006.  Working  capital at June 30,  2006 was $291.1  million  compared  to
$(11.4)  million at December 31, 2005. The change in working  capital relates to
the  long-term  refinancing  of debt  previously  classified  as current.  Gross
additions  to  property,  plant and  equipment  during the first six months were
$19.8 million. The Company expects additions to property, plant and equipment to
approximate $60.0 to $65.0 million for the full year 2006.

At June 30,  2006,  the Company had $724.7  million of debt  outstanding.  Debt,
excluding  deferred  interest swap gains,  includes $281.5 million of commercial
paper  classified  as long-term due to the Company's  refinance  intent,  $308.9
million  in bank  borrowings  and  overdrafts  and $134.2  million in  long-term
Japanese Yen denominated debt. On July 12, 2006, the Company issued an aggregate
of $375.0  million of Senior  Unsecured  Notes.  The Notes  were  issued in four
series: (i) $50.0 million in aggregate principal amount of 5.89% Series A Senior
Notes due July 12, 2009,  (ii) $100.0 million in aggregate  principal  amount of
5.96%  Series B Notes due July 12,  2011,  (iii)  $100.0  million  in  aggregate

principal  amount  of 6.05%  Series C Notes  due July 12,  2013 and (iv)  $125.0
million in aggregate principal amount of 6.14% Series D Notes due July 12, 2016.
Proceeds  of the Notes  were used to repay  the  commercial  paper and for other
general corporate purposes.

In April 2006,  the Company paid a quarterly cash dividend of $.185 per share to
shareholders unchanged from the prior quarter dividend payment.

Under the share repurchase program of $200.0 million authorized in May 2005, the
Company  repurchased  approximately  0.4 million shares in the second quarter of
2006 at a cost of $15.8  million. For  2006, the  Company  has  repurchased  2.7
million shares at a cost of $91.3 million. Repurchases will be made from time to
time on the open market or through  private  transactions as market and business
conditions  warrant.  Repurchased shares will be available for use in connection
with the Company's  employee  compensation plans and for other general corporate
purposes.  At June 30, 2006, the Company had approximately $86 million remaining
under this repurchase plan.

The Company  anticipates  that its  financing  requirements  will be funded from
internal sources and credit  facilities  currently in place. As disclosed in the
2005 Annual Report,  the Company and certain of its subsidiaries  entered into a
revolving  credit  agreement with certain banks which replaced  existing  credit
facilities to meet short and long term financing  requirements.  Cash flows from
operations and availability under its existing credit facilities are expected to
be  sufficient  to fund  the  Company's  anticipated  normal  capital  spending,
dividends  and  other  expected  requirements  for at least  the next  twelve to
eighteen months.

Non-GAAP Financial Measures
---------------------------

To supplement the Company's  financial results presented in accordance with U.S.
Generally  Accepted  Accounting  Principles  ("GAAP"),  the Company uses certain
non-GAAP  financial  measures.  These non-GAAP  financial measures should not be
considered  in  isolation,  or as a substitute  for, or superior  to,  financial
measures  calculated in accordance with GAAP. These non-GAAP  financial measures
as  disclosed  by the Company may also be  calculated  differently  from similar
measures disclosed by other companies.  To ease the use and understanding of our
supplemental non-GAAP financial measures, the Company includes the most directly
comparable GAAP financial measure.

The Company discloses, and management internally monitors, the sales performance
of international  operations on a basis that eliminates the positive or negative
effects that result from translating  foreign currency sales into U.S.  dollars.
Management uses this measure because it believes that it enhances the assessment
of the sales performance of its  international  operations and the comparability
between reporting periods.


Cautionary Statement Under The Private Securities Litigation Reform Act of 1995
--------------------------------------------------------------------------------

Statements  in  this  Quarterly  Report,  which  are  not  historical  facts  or
information,  are "forward-looking statements" within the meaning of The Private
Securities  Litigation Reform Act of 1995. Such  forward-looking  statements are
based on management's  reasonable  current  assumptions and  expectations.  Such
forward-looking  statements  which may be  identified by such words as "expect,"
"believe,"    "anticipate,"    "outlook,"   "guidance,"   "may,"   and   similar
forward-looking terminology,  involve significant risks, uncertainties and other
factors,  which may cause the  actual  results of the  Company to be  materially
different from any future results  expressed or implied by such  forward-looking
statements,  and there can be no assurance  that actual  results will not differ
materially from management's  expectations.  Such factors include, among others,
the  following:  general  economic  and  business  conditions  in the  Company's
markets,  including  economic,  population  health and political  uncertainties;
weather,  geopolitical,  civil  hostilities and region  specific  uncertainties;
interest  rates;  the price,  quality and  availability  of raw  materials;  the
Company's ability to implement its business strategy,  including the achievement
of anticipated cost savings, profitability, growth and market share targets; the
impact of currency fluctuation or devaluation in the Company's principal foreign
markets and the success of the Company's hedging and risk management strategies;
the impact of possible pension funding obligations and increased pension expense
on the Company's  cash flow and results of  operations;  and the effect of legal
and regulatory proceedings,  as well as restrictions imposed on the Company, its
operations or its representatives by foreign governments;  and the fact that the
outcome of litigation is highly uncertain and  unpredictable and there can be no
assurance  that the triers of fact or law,  at either the trial  level or at any
appellate level, will accept the factual  assertions,  factual defenses or legal
positions  of the  Company  or its  factual  or  expert  witnesses  in any  such
litigation  or  other  proceedings.  The  Company  intends  its  forward-looking
statements to speak only as of the time of such  statements and does not plan to
update  or revise  them as more  information  becomes  available  or to  reflect
changes in expectations, assumptions or results.


Item 3. Quantitative and Qualitative Disclosures about Market Risk
------------------------------------------------------------------

There are no material  changes in market risk from the  information  provided in
the Company's 2005 Annual Report on Form 10-K.

Item 4. Controls and  Procedures
-------------------------------

The Company's Chief  Executive  Officer and Chief  Financial  Officer,  with the
assistance  of other  members of the Company's  management,  have  evaluated the
effectiveness of the Company's  disclosure controls and procedures as of the end
of the period  covered  by this  Quarterly  Report on Form  10-Q.  Based on such
evaluation,  the Company's Chief Executive  Officer and Chief Financial  Officer
have  concluded  that the  Company's  disclosure  controls  and  procedures  are
effective as of the end of the reporting period covered by this report.

The Company's  Chief  Executive  Officer and Chief  Financial  Officer have also
concluded that there have not been any changes in the Company's internal control
over  financial  reporting  during the  quarter  ended  June 30,  2006 that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's internal control over financial reporting.



                           PART II. OTHER INFORMATION
                           --------------------------

Item 1.     Legal Proceedings
            -----------------

     The Company is subject to various  claims and legal actions in the ordinary
course of its business.

     In  September  2001,  the Company  was named as a defendant  in a purported
class action brought against it in the Circuit Court of Jasper County, Missouri,
on behalf of employees of a plant owned and operated by  Gilster-Mary  Lee Corp.
in  Jasper,  Missouri  ("Benavides  case").  The  plaintiffs  alleged  that they
sustained  respiratory  injuries in the workplace due to the use by Gilster-Mary
Lee of a BBA and/or IFF flavor.  For purposes of reporting  these  actions,  BBA
and/or IFF are referred to as the "Company".

     In  January  2004,  the  Court  ruled  that  class  action  status  was not
warranted.  As a result of this decision,  each of the 47 plaintiff cases was to
be tried separately.  Subsequently,  8 cases were tried to a verdict, 4 verdicts
resulted for the  plaintiffs  and 4 verdicts  resulted  for the Company,  all of
which were  appealed  by the losing  party.  Subsequently  all  plaintiff  cases
related  to the  Benavides  case  have been  settled  or are in the  process  of
settlement.

     Thirteen  other  actions  based on similar  claims of  alleged  respiratory
illness due to workplace  exposure to flavor  ingredients are currently  pending
against the Company and other flavor suppliers and related companies.

     Trial has been  scheduled  in the action  brought  against  the Company and
another  flavor  supplier  by 23 former and  current  workers at a Marion,  Ohio
factory. This case was filed in March 2003 and is pending in the Court of Common
Pleas of Hamilton  County,  Ohio.  The Plaintiffs in this case have been divided
into 7 trial groups.  The first trial group  consists of 2 workers and 1 spouse,
and their case will be tried on August 29, 2006.  No other trial dates have been
set (Arthur case).  In May 2004,  the Company and another  flavor  supplier were
named  defendants  in a lawsuit  by 4 former  workers  at a  Ridgeway,  Illinois
factory  in an action  brought  in the  Circuit  Court for the  Second  Judicial
Circuit,  Gallatin County, Illinois (Barker case) and another concerning 8 other
workers  at this same  plant was filed in July 2004 and is  pending in this same
Court against the Company and another flavor  supplier  (Batteese  case).  In an
action filed in June 2004, the Company,  three other flavor suppliers,  a flavor
trade  association  and a  consulting  agency are  defendants  in a lawsuit by 1
worker at a Sioux City,  Iowa facility  which is pending in U.S.  District Court
for the Northern  District of Iowa.  Plaintiff  voluntarily  dismissed his claim
against Bush Boake Allen,  Inc. Trial is set for December 4, 2006 (Remmes case).
Another  case  concerning 1 other worker at this same plant was filed in January
2006 and is pending in this same court against the same parties. The trial ready
date is November 5, 2007 (Kuiper  case).  In June 2004,  the Company and 3 other
flavor  suppliers were named  defendants in a lawsuit by 1 plaintiff  brought in
the Court of Common Pleas,  Hamilton County,  Ohio. Trial is set for January 16,
2007 (Mitchell  case).  In June 2004,  the Company and 2 other flavor  suppliers
were named  defendants in a lawsuit by 1 former worker at a Northlake,  Illinois
facility in an action  brought in the  Circuit  Court of Cook  County,  Illinois
(Lopez case). In August 2004, the Company and another flavor supplier were named
defendants  in a lawsuit by 15 former  workers at a Marion,  Ohio  factory in an
action brought in the Court of Common Pleas, Marion County, Ohio. The Plaintiffs
will be divided into 9 trial groups,  the trials will be held consecutively from
May through  October,  2007 (Williams  case).  In March 2005, the Company and 10
other companies were named  defendants in a lawsuit by 1 former employee of Bell
Flavors and  Fragrances,  Inc. in an action brought in the Circuit Court of Cook
County,  Illinois.  On June 29, 2006,  Plaintiffs  voluntarily  dismissed  their
claims against one of the defendants,  EMCO Chemical  Distributors.  There is no
trial date pending (Robinson case). In July 2005, the Company and 9 other flavor
and chemical  suppliers were named defendants in a lawsuit by 1 former worker of
Brach's  Confections,  Inc. in an action  brought in the  Circuit  Court of Cook
County,  Illinois.  There is no trial date pending  (Campbell  case).  In August
2005, the Company and 8 other  companies,  including a flavor trade  association
and consulting agency,  were named defendants in a lawsuit by 3 former employees
of the  Gilster-Mary  Lee facility in McBride,  Missouri in the Missouri Circuit
Court,  22nd Judicial  Circuit.  Trial is set for May 7, 2007 (Fults  case).  In
September  2005, the Company and 9 other  companies  were named  defendants in a
lawsuit by 2 former  employees  of the  Gilster-Mary  Lee  facility  in McBride,
Missouri in the Circuit  Court of St. Louis  County.  Trial is set for September
24,  2007  (Bowling  case).  In  November  2005,  the  Company,  a flavor  trade
association,  and a consulting  agency were named  defendants  in a lawsuit by 1
former  employee of the Snappy  Popcorn  Company in Breda,  Iowa brought in U.S.
District Court for the Northern District of Iowa,  Western  Division.  The trial
ready  date is June 30,  2007  (Weimer  case).  All  these  cases  remain in the
pretrial stage.

     The Company believes that all IFF and BBA flavors at issue in these matters
meet the requirements of the U.S. Food and Drug  Administration and are safe for
handling and use by workers in food manufacturing  plants when used according to
specified safety procedures.  These procedures are detailed in instructions that

IFF and BBA  provided to all their  customers  for the safe  handling and use of
their flavors.  It is the responsibility of IFF's customers to ensure that these
instructions, which include the use of appropriate engineering controls, such as
adequate ventilation,  prior handling procedures and respiratory  protection for
workers, are followed in the workplace.

     At each balance sheet date, or more frequently as conditions  warrant,  the
Company  reviews  the status of each  pending  claim,  as well as its  insurance
coverage for such claims with due consideration given to potentially  applicable
deductibles,  retentions and reservation of rights under its insurance policies,
and the advice of its outside legal counsel and a third party expert in modeling
insurance  deductible  amounts  with  respect  to all these  matters.  While the
ultimate outcome of any litigation cannot be predicted, management believes that
adequate  provision  has been made with  respect to all known  claims.  Based on
information  presently  available and in light of the merits of its defenses and
the  availability  of insurance,  the Company does not expect the outcome of the
above cases,  singly or in the aggregate,  to have a material  adverse effect on
the Company's financial condition,  results of operation or liquidity. There can
be no assurance  that future events will not require the Company to increase the
amount it has  accrued  for any matter or accrue for a matter  that has not been
previously  accrued.  See  Note 10 of the  Notes to the  Consolidated  Financial
Statements.

     Over the past 20 years,  various federal and state  authorities and private
parties have claimed that the Company is a  potentially  responsible  party as a
generator of waste  materials  for alleged  pollution at a number of waste sites
operated by third parties located  principally in New Jersey and seek to recover
costs incurred and to be incurred to clean up the sites.

     The waste site claims and suits usually involve million dollar amounts, and
most of them are asserted against many potentially responsible parties. Remedial
activities  typically  consist of several  phases  carried  out over a period of
years.  Most site remedies begin with  investigation  and  feasibility  studies,
followed  by  physical  removal,   destruction,   treatment  or  containment  of
contaminated  soil and debris,  and  sometimes  by  groundwater  monitoring  and
treatment.  To date, the Company's  financial  responsibility for some sites has
been settled  through  agreements  granting the Company,  in exchange for one or
more cash payments made or to be made,  either complete release of liability or,
for certain  sites,  release  from  further  liability  for early  and/or  later
remediation phases,  subject to certain "re-opener" clauses for later-discovered
conditions.  Settlements in respect of some sites involve,  in part,  payment by
the Company and other parties of a percentage  of the site's future  remediation
costs over a period of years.

     The Company believes that the amounts it has paid and anticipates paying in
the future for  clean-up  costs and damages at all sites are not and will not be
material  to  the  Company's  financial  condition,  results  of  operations  or
liquidity,  because of the  involvement of other large  potentially  responsible
parties at most sites, because payment will be made over an extended time period
and  because,  pursuant to an  agreement  reached in July 1994 with three of the
Company's liability insurers, defense costs and indemnity amounts payable by the
Company in respect of the sites will be shared by the  insurers  up to an agreed
amount.


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

         (c)      Issuer Purchases of Equity Securities
                  -------------------------------------


                                                                        Total Number of Shares        Approximate Dollar Value of
                               Total Number of      Average Price        Purchased as Part of            Shares that may yet be
                             Shares Purchased(1)   Paid per Share     Publicly Announced Program(1)   purchased under the Program
                            ------------------- ------------------ ------------------------------ ---------------------------------
                                                                                                       
  April 1 - 30, 2006                  -                    -                        -                      $101,662,000
  May 1 - 31, 2006               320,000               $35.61                  320,000                     $ 90,266,000
  June 1 - 30, 2006              122,800               $35.48                  122,800                     $ 85,909,000


     (1)  An aggregate of 442,800 shares of common stock were repurchased during
          the second quarter of 2006 under a repurchase program announced in May
          2005.  Under  the  program,   the  Board  of  Directors  approved  the
          repurchase by the Company of up to $200.0 million of its common stock.

Item 4.        Submission of Matters to a Vote of Security Holders
               ---------------------------------------------------

     The following  matters were submitted to a vote of security  holders during
the Company's annual meeting of shareholders held on May 9, 2006:



                                                    Votes              Authority
1.)        Election of Directors                   Cast For            Withheld
           -------------------------------- ------------------- --------------------
                                                                    
           Margaret Hayes Adame                     74,509,355            1,956,610
           -------------------------------- ------------------- --------------------
           Gunter Blobel                            75,848,325              617,640
           -------------------------------- ------------------- --------------------
           J. Michael Cook                          75,473,676              992,289
           -------------------------------- ------------------- --------------------
           Peter A. Georgescu                       75,499,673              966,292
           -------------------------------- ------------------- --------------------
           Alexandra A. Herzan                      75,852,019              613,946
           -------------------------------- ------------------- --------------------
           Henry W. Howell, Jr.                     75,384,120            1,081,845
           -------------------------------- ------------------- --------------------
           Arthur C. Martinez                       74,175,119            2,290,846
           -------------------------------- ------------------- --------------------
           Burton M. Tansky                         75,417,093            1,048,872
           -------------------------------- ------------------- --------------------





     2.)                                             For          Against        Abstentions        Broker
                                                                                                   Non-Votes
           ------------------------------------- -------------- -------------- ----------------- --------------
                                                                                           
           Ratification of                        74,977,260     1,068,406         420,299             ---
           PricewaterhouseCoopers LLP as
           independent registered public
           accounting firm
           ------------------------------------- -------------- -------------- ----------------- --------------


Item 6.       Exhibits
              --------

  3(ii)   By-Laws  of the  Company,  as  amended  effective  as of July 1,  2006
          (incorporated  by reference to Exhibit 99.1 to the Company's  Form 8-K
          filed with the SEC on June 30, 2006).

  10.1    Retirement  Agreement  dated as of April 3, 2006  between  Richard  A.
          Goldstein,  former  Chairman  of the  Board  of  Directors  and  Chief
          Executive  Officer,  and the Company  (incorporated  by  reference  to
          Exhibit 10.1 to the Company's  Form 8-K filed with the SEC on April 3,
          2006).

  10.2    Letter Agreement dated June 28, 2006 between the Company and Robert M.
          Amen,  Chairman of the Board of Directors and Chief Executive  Officer
          (incorporated  by reference to Exhibit 10.1 to the Company's  Form 8-K
          filed with the SEC on June 29, 2006).

  10.3    Restricted  Stock  Units  Agreement  dated July 25,  2006  between the
          Company and Arthur C. Martinez  (incorporated  by reference to Exhibit
          10.1 to the Company's Form 8-K filed with the SEC on July 26, 2006).

  4.1     Note Purchase  Agreement,  dated as of July 12, 2006, by and among the
          Company and the various  purchasers  named  therein  (incorporated  by
          reference to Exhibit 4.7 to the Company's  Form 8-K filed with the SEC
          on July 13, 2006).

  4.2     Form of  Series  A,  Series  B,  Series C and  Series  D Senior  Notes
          (incorporated  by reference to Exhibit 4.8 to the  Company's  Form 8-K
          filed with the SEC on July 13, 2006).

  31.1    Certification  of  Robert  M.  Amen  pursuant  to  Section  302 of the
          Sarbanes-Oxley Act of 2002.

  31.2    Certification  of Douglas J.  Wetmore  pursuant  to Section 302 of the
          Sarbanes-Oxley Act of 2002.

  32      Certification  of Robert M. Amen and Douglas J. Wetmore pursuant to 18
          U.S.C.  Section 1350 as adopted pursuant to the  Sarbanes-Oxley Act of
          2002.

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                   INTERNATIONAL FLAVORS & FRAGRANCES INC.


 Dated: August 7, 2006       By:      /s/ DOUGLAS J. WETMORE
                             --------------------------------------------
                                  Douglas J. Wetmore, Senior Vice President
                                  and Chief Financial Officer



 Dated:  August 7, 2006      By:      /s/ DENNIS M. MEANY
                             --------------------------------------------
                                  Dennis M. Meany, Senior Vice President,
                                       General Counsel and Secretary




                                  EXHIBIT INDEX

      Number            Description
      -----             ------------

       3(ii)   By-Laws of the Company,  as amended  effective as of July 1, 2006
               (incorporated  by reference to Exhibit 99.1 to the Company's Form
               8-K filed with the SEC on June 30, 2006).

       10.1    Retirement Agreement dated as of April 3, 2006 between Richard A.
               Goldstein,  former  Chairman of the Board of Directors  and Chief
               Executive Officer, and the Company  (incorporated by reference to
               Exhibit  10.1 to the  Company's  Form 8-K  filed  with the SEC on
               April 3, 2006).

       10.2    Letter  Agreement  dated June 28,  2006  between  the Company and
               Robert M.  Amen,  Chairman  of the Board of  Directors  and Chief
               Executive  Officer  (incorporated by reference to Exhibit 10.1 to
               the Company's Form 8-K filed with the SEC on June 29, 2006).

       10.3    Restricted  Stock Units Agreement dated July 25, 2006 between the
               Company and Arthur C.  Martinez  (incorporated  by  reference  to
               Exhibit 10.1 to the Company's Form 8-K filed with the SEC on July
               26, 2006).

       4.1     Note Purchase Agreement,  dated as of July 12, 2006, by and among
               the   Company   and  the   various   purchasers   named   therein
               (incorporated  by reference to Exhibit 4.7 to the Company's  Form
               8-K filed with the SEC on July 13, 2006).

       4.2     Form of Series A,  Series B,  Series C and Series D Senior  Notes
               (incorporated  by reference to Exhibit 4.8 to the Company's  Form
               8-K filed with the SEC on July 13, 2006).

       31.1    Certification  of Robert M. Amen  pursuant  to Section 302 of the
               Sarbanes-Oxley Act of 2002.

       31.2    Certification  of Douglas J.  Wetmore  pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002.

       32      Certification  of Robert M. Amen and Douglas J. Wetmore  pursuant
               to  18  U.S.C.   Section   1350  as  adopted   pursuant   to  the
               Sarbanes-Oxley Act of 2002



                                                                 Exhibit 31.1
                                  CERTIFICATION

I, Robert M. Amen, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of International Flavors
     & Fragrances Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

          (a)  Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          (b)  Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;

          (c)  Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          (d)  Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          (b)  Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Dated: August 7, 2006                   By: /s/ Robert M. Amen
                                        -------------------------------
                                        Name:  Robert M. Amen
                                        Title: Chairman of the Board
                                               and Chief Executive Officer



                                                                  Exhibit 31.2

                                  CERTIFICATION

I, Douglas J. Wetmore, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of International Flavors
     & Fragrances Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

          (a)  Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          (b)  Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;

          (c)  Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          (d)  Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          (b)  Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Dated: August 7, 2006                   By: /s/ Douglas J. Wetmore
                                        -------------------------------
                                        Name:   Douglas J. Wetmore
                                        Title:  Senior Vice President
                                                and Chief Financial Officer



                                                                  Exhibit 32



        CERTIFICATION OF CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of International  Flavors &
Fragrances Inc. (the "Company") for the quarterly  period ended June 30, 2006 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  Robert M.  Amen,  as Chief  Executive  Officer of the  Company,  and
Douglas J. Wetmore, as Chief Financial Officer, each hereby certifies,  pursuant
to 18 U.S.C.  (section)  1350,  as  adopted  pursuant  to  (section)  906 of the
Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)  The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.



By:   /s/ Robert M. Amen
----------------------------------
Name:  Robert M. Amen
Title: Chairman of the Board
       and Chief Executive Officer

Dated: August 7, 2006



By: /s/ Douglas J. Wetmore
-------------------------------
Name:  Douglas J. Wetmore
Title: Senior Vice President
       and Chief Financial Officer

Dated: August 7, 2006