Certain information and note disclosures normally included in the balance sheet, statements of income, comprehensive income, statements of shareholder’s equity and cash flows prepared in conformity with accounting principles generally accepted in the United States of America for complete financial statements have been condensed or omitted as permitted by such rules and regulations. As such, these condensed consolidated financial statements and related notes should be read in conjunction with the audited 20182019 consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 29, 2018.28, 2019. Operating results of any interim period presented herein are not necessarily indicative of the results that may be expected for a full fiscal year.

A top priority for the Company as it navigates through the global COVID-19 pandemic is the safety of its employees and their families, sales force and consumers, and to mitigate the impact on hedge accounting, which required a cumulative-effect adjustmentits operations and financial results. The Company will continue to proactively respond to the opening balancesituation and may take further actions that alter the Company’s business operations as may be required by governmental authorities, or that the Company determines are in the best interests of retained earningsits employees, sales force and accumulated other comprehensive income of $5.0 million, net of taxes. As partconsumers. In order to ensure safety and protect the health of the adoption,employees, and to comply with applicable government directives, the Company electedhas modified its business practices to include forward points in the assessment of hedge effectiveness for net equityallow its employees to work remotely from home wherever possible, incorporate virtual meetings and cash flow hedges and exclude forward points in the assessment for fair value hedges. In addition, the Company now records the entire change in fair value of hedging instruments in the same income statement line item as the earnings effect of the hedged item. Prior to adoption, the impact from forward points was recorded as interest expense. Refer to Note 11 to the Consolidated Financial Statements for further discussion on impact from new hedge accounting guidance.restrict all employee travel.

The cost of products sold line item includes costs related to the purchase and manufacture of goods sold by the Company. Among these costs are inbound freight charges, duties, purchasing and receiving costs, inspection costs, depreciation expense, internal transfer costs and warehousing costs of raw material, work in process and packing materials. The warehousing and distribution costs of finished goods are included in delivery, sales and administrative expenses ("DS&A"). Distribution costs are comprised of outbound freight and associated labor costs. Fees billed to customers associated with the distribution of products are classified as revenue. The distribution costs included in DS&A were $32.8$29.1 million and $35.8$32.8 million for the secondfirst quarters of 2020 and 2019, and 2018, respectively, and $65.6 million and $71.3 million for the respective year-to-date periods.respectively.

The Company frequently makes promotional offers to members of its independent sales force to encourage them to fulfill specific goals or targets for other activities, ancillary to the Company's business, but considered separate and distinct services from sales, which are measured by defined group/team sales levels, party attendance, addition of new sales force members or other business-critical functions. The awards offered are in the form of product awards, special prizes or trips.

The Company accrues for the costs of these awards during the period over which the sales force qualifies for the award and reports these costs primarily as a component of DS&A expense. These accruals require estimates as to the cost of the awards, based upon estimates of achievement and actual cost to be incurred. During the qualification period, actual results are monitored, and changes to the original estimates are made when known. Promotional and other sales force compensation expenses included in DS&A expense totaled $71.6$58.5 million and $82.7$78.6 million for the secondfirst quarters of 2020 and 2019, and 2018, respectively and $150.2 million and $171.1 million for the respective year-to-date periods.respectively.

Basic per share information is calculated by dividing net income by the weighted average number of shares outstanding. Diluted per share information is calculated by also considering the impact of potential common stock on both net income and the weighted average number of shares outstanding.

Pretax amounts reclassified from accumulated other comprehensive loss that related to cash flow hedges consisted of net lossgain of $1.2$0.5 million and a gainloss of $1.9$0.5 million in the year-to-date periods ended June 29,first quarters of 2020 and 2019, and June 30, 2018, respectively. Associated with these items werewas a tax benefitprovision of $0.4$0.1 million and a provisionbenefit of $0.6$0.2 million, respectively. See Note 11 for further discussion of derivatives.

The Company leases certain equipment, vehicles, office space, and manufacturing and distribution facilities, and recognizes the associated lease expense on a straight-line basis over the lease term.

Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years, or more. The exercise of lease renewal options is at the Company's discretion and renewal options that are reasonably certain to be exercised have been included in the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain lease agreements held by the Company include rental payments adjusted periodically for inflation. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease expense in the second quarterfirst quarters of 2020 and year-to-date periods ended June 29, 2019 were as follows:

The Company manufactures and distributes a broad portfolio of products, primarily through independent direct sales consultants.force members. Certain operating segments have been aggregated based upon geography, consistency of economic substance, geography, products, production process, class of customers and distribution method.

The Company's reportable segments primarily sell design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware® brand. Europe also includes Avroy Shlain® in South Africa and Nutrimetics® in France, which sell beauty and personal care products. Some units in Asia Pacific also sell beauty and personal care products under the NaturCare®, Nutrimetics® and Fuller® brands. North America also includes the Fuller Mexico beauty and personal care products business and sells products under the Fuller Cosmetics® brand in that unit and in Central America. South America also sells beauty products under the Fuller®, Nutrimetics® and Nuvo® brands.

Worldwide sales of beauty and personal care products totaled $61.7$53.6 million and $75.5$66.1 million in the secondfirst quarters of 2020 and 2019, and 2018, respectively, and $120.7 million and $148.3 million in the respective year-to-date periods.respectively.

On March 29, 2019, the Company and its wholly owned subsidiaries Tupperware Nederland B.V., Administradora Dart, S. de R.L. de C.V., and Tupperware Brands Asia Pacific Pte. Ltd. (the “Subsidiary Borrowers”), amended and restated its multicurrency Credit Agreement, (the “Credit Agreement”amended by Amendment No. 1 dated August 28, 2019 (so as amended, the "Credit Agreement"), with JPMorgan Chase Bank, N.A. as administrative agent (the “Administrative Agent”), swingline lender, joint lead arranger and joint bookrunner, and Credit Agricole Corporate and Investment Bank, HSBC Securities (USA) Inc., Mizuho Bank, Ltd. and Wells Fargo Securities, LLC, as syndication agents, joint lead arrangers and joint bookrunners. The Credit Agreement replaces the credit agreement dated September 11, 2013 and as amended (the “Old Credit Agreement”) and, other than an increased aggregate amount that may be borrowed, an improvement in the consolidated leverage ratio covenant and a slightly more favorable commitment fee rate, has terms and conditions similar to that of the Old Credit Agreement. The Credit Agreement makes available to the Company and the Subsidiary Borrowers a committed five-year credit facility in an aggregate amount of $650$650.0 million (the “Facility Amount”). The Credit Agreement provides (i) a revolving credit facility, available up to the full amount of the Facility Amount, (ii) a letter of credit facility, available up to $50$50.0 million of the Facility Amount, and (iii) a swingline facility, available up to $100$100.0 million of the Facility Amount. Each of such facilities is fully available to the Company and the Facility Amount is available to the Subsidiary Borrowers up to an aggregate amount not to exceed $325$325.0 million. With the agreement of its lenders, the Company is permitted to increase, on up to three3 occasions, the Facility Amount by a total of up to $200$200.0 million (for a maximum aggregate Facility Amount of $850$850.0 million), subject to certain conditions. As of June 29, 2019,March 28, 2020, the Company had total borrowings of $368.9$388.1 million outstanding under theits Credit Agreement, with $194.9$245.1 million of that amount denominated in euros.Euro.

Loans made under the Credit Agreement will be composed of (i) “Eurocurrency Borrowings”, bearing interest determined in reference to the London interbank offered rate ("LIBOR") or the EURIBOR rate for the applicable currency and interest period, plus a margin, and/or (ii) “ABR Borrowings”, bearing interest at the sum of (A) the greatest of (x) the rate of interest publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate,Prime Rate, (y) the NYFRB rate plus 0.5 percent, and (z) adjusted LIBOR on such day (or if such day is not a business day, the immediately preceding business day) for a deposit in U.S. dollars with a maturity of one month plus 1 percent, and (B) a margin. The applicable margin in each case will be determined by reference to a pricing schedule and will be based upon the better for the Company of (a) the Consolidated Leverage Ratio (computed as consolidated funded indebtedness of the Company and its subsidiaries to the consolidated EBITDA (as defined in the Credit Agreement) of the Company and its subsidiaries for the four fiscal quarters then most recently ended) for the fiscal quarter referred to in the quarterly or annual financial statements most recently delivered, or (b) the Company’s then existing long-term debt securities rating by Moody’s Investor Service, Inc. or Standard and Poor’s Financial Services, Inc. Under the Credit Agreement, the applicable margin for ABR Borrowings ranges from 0.375 percent to 0.875 percent, the applicable margin for Eurocurrency Borrowings ranges from 1.375 percent to 1.875 percent, and the applicable margin for the commitment fee ranges from 0.150 percent to 0.275 percent. Loans made under the swingline facility will bear interest, if denominated in U.S. Dollars, at the same rate as an ABR Borrowing and, if denominated in another currency, at the same rate as a Eurocurrency Borrowing. As of June 29, 2019,March 28, 2020, the Credit Agreement dictatedCompany had a weighted average interest rate of 2.0 percent with a base rate spread of 150 basis points which gave the Company a weighted average interest rate of 2.6 percent on LIBOR-based borrowings under the Credit Agreement that has a final maturity date of March 29, 2024.

Similar to the Old Credit Agreement, the Credit Agreement contains customary covenants that, among other things, generally restrictlimit the ability of the Company's abilitysubsidiaries to incur subsidiary indebtedness and limit the ability of the Company and its subsidiaries to create liens on and sell assets, engage in certain liquidations or dissolutions, engage in certain mergers or consolidations, or change lines of business. These covenants are subject to significant exceptions and qualifications.

TheOn February 28, 2020, the Company amended the Credit Agreement (the “Amendment”) in order to modify certain provisions, including the financial covenants provide forcovenant. Previously, the Company had to maintain at specified measurement periods a maximum Consolidated Leverage Ratio ofthat was not greater than or equal to 3.75 to 1.01.00. Following the Amendment, the Company is required to maintain at the last day of each quarterly measurement period a Consolidated Leverage Ratio not greater than or equal to the ratio as set forth below opposite the period that includes such day (or, if such day does not end on the last day of the calendar quarter, that includes the last day of the calendar quarter that is nearest to such day):

Under the Credit Agreement and consistent with the Old Credit Agreement, Dart Industries Inc. (the “Guarantor”) unconditionally guarantees all obligations and liabilities of the Company and the Subsidiary Borrowers relating to the Credit Agreement, supported by a minimumsecurity interest coverage ratioin certain "Tupperware" trademarks and service marks. The Amendment eliminated the requirement that a Non-Investment Grade Ratings Event, as defined in the Credit Agreement, must occur before the Company is required to cause the Additional Guarantee and Collateral Requirement, as defined in the Credit Agreement, to be satisfied. Pursuant to the Amendment, the Company is required to cause certain of 3.0its domestic subsidiaries to 1.0 (defined as consolidated EBITDA divided by consolidated total interest expense)become guarantors and the Company and certain of its domestic subsidiaries are required to pledge additional collateral (the “Additional Guarantee and Collateral”).

For purposes of the Credit Agreement, consolidated EBITDA represents earnings before interest, income taxes, depreciation and amortization, as adjusted to exclude unusual, non-recurring gains as well as non-cash charges and certain other items. As of June 29, 2019,March 28, 2020, and currently, the Company had cushion under itswas in compliance with the financial covenants as well asin the necessary bond credit ratingsCredit Agreement. The Credit Agreement was amended to prevent default.the Company from exceeding the Consolidated Leverage Ratio for the four fiscal quarters ending in March 2020. If the Company had exceeded the Consolidated Leverage Ratio, this could have constituted an Event of Default, potentially resulting in a cross default under cross-default provisions with respect to other of the Company's debt obligations, giving the lenders the ability to terminate the revolving commitments, accelerate outstanding amounts under the Credit Agreement, exercise certain remedies relating to the collateral securing the Credit Agreement and require the Company to post cash collateral for all outstanding letters of credit. In addition to the relief provided in the Amendment, the Company has reduced certain operating expenses beginning in 2020 and could use available cash, including repatriating cash held outside of the United States, to make debt repayments to lower its Consolidated Leverage Ratio.

UnderWhether the Credit AgreementCompany will be able to repay or refinance the Senior Notes will depend on economic, financial, competitive and consistentother factors that may be beyond its control, including the COVID-19 pandemic, and on the Company’s financial performance at the time. The COVID-19 pandemic and measures implemented to slow the spread of COVID-19 may negatively impact the Company's ability to repay or refinance the Senior Notes. The extent to which the COVID-19 pandemic ultimately impacts the Company’s ability to repay or refinance the Senior Notes will depend on future developments, which are highly uncertain and cannot be predicted with the Old Credit Agreement, the Guarantor unconditionally guarantees all obligations and liabilitiescertainty. Any refinancing of the Senior Notes may be at a higher interest rate and may require the Company to comply with additional covenants and obligations, which could further restrict the Subsidiary BorrowersCompany's business operations. If the Company is unable to repay or refinance the Senior Notes, the holders of the Seniors Notes may pursue certain remedies relating to the Credit Agreement, supported bycollateral securing the guaranty of the Senior Notes or pursue other remedies, in each case in accordance with the Indenture and the documents relating to such collateral, all of which could have a security interest in certain "Tupperware" trademarks and service marks. The Credit Agreement includes a trigger whereby the Company would be required to provide additional collateral and subsidiary guarantees if either Moody's Investors Services, Inc. or S&P Global Ratings downgrades its existing ratings two notches or more.

The Company is exposed to fluctuations in foreign currency exchange rates on the earnings, cash flows and financial position of its international operations. Although this currency risk is partially mitigated by the natural hedge arising from the Company's local manufacturing in many markets, a strengthening U.S. dollar generally has a negative impact on the Company. In response, the Company uses financial instruments to hedge certain of its exposures and to manage the foreign exchange impact to its financial statements. At its inception, a derivative financial instrument is designated as a fair value, cash flow or net equityinvestment hedge.

Fair value hedges are entered into with financial instruments such as forward contracts, with the objective of limiting exposure to certain foreign exchange risks primarily associated with accounts payable and non-permanent intercompany transactions. For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in current earnings. In assessing hedge effectiveness, as of the beginning of 2019, the Company made the accounting policy election in accordance with ASU 2017-12 to exclude forward points and record their impact in the same income statement line item that is used to present the earnings effect of the hedged item for 2019, Other (income) expense. Prior to 2019, the forward points had been included as a component of interest expense.income, net. The forward points on fair value hedges resulted in pretax income of $4.4$5.0 million and $4.7$3.7 million in the secondfirst quarters of 2020 and 2019, and 2018, respectively, and $8.1 million and $10.7 million for the respective year-to-date periods.respectively.

The Company also uses derivative financial instruments to hedge foreign currency exposures resulting from certain forecasted purchases and classifies these as cash flow hedges. The majority of cash flow hedge contracts that the Company enters into relate to inventory purchases. At initiation, the Company's cash flow hedge contracts are generally for periods ranging from one month to fifteen months. The effective portion of the gain or loss on the open hedging instrument is recorded in other comprehensive income and is reclassified into earnings when settled through the same line item as the transaction being hedged. As such, the balance at the end of the current reporting period in other comprehensive income, related to cash flow hedges, will generally be reclassified within the next twelve months. The associated asset or liability on the open hedges is recorded in other current assets or accrued liabilities, as applicable. In assessing hedge effectiveness, the Company made an accounting policy change as of December 30, 2018the beginning of 2019 to include forward points in the assessment of effectiveness for cash flow hedges causing the impact from forward points to be recorded as part of other comprehensive income compared to interest expense as it previously had been recorded. Based on the interest expense incurred for open cash flow hedges as of December 30, 2018, the Company recorded an adjustment of $1.2 million, net of taxes, to accumulated comprehensive income and retained earnings to reflect this accounting policy change. There was an immaterial impact from forward points recorded in other comprehensive income for activity related to the second quarterfirst quarters of 2020 and year-to-date periods of 2019. The Company recognized $1.1$0.8 million and $2.1$1.0 million of manufacturing variances that will be capitalized and amortized over actual months of inventory turns related to the forward point impact from the settlement of cash flow hedges in the second quarterfirst quarters of 2020 and year-to-date periods of 2019.2019, respectively.

While the forward contracts used for net equity and fair value hedges of non-permanent intercompany balances mitigate its exposure to foreign exchange gains or losses, they result in an impact to operating cash flows as they are settled, whereas the hedged items do not generate offsetting cash flows. The net cash flow impact of these currency hedgesfrom hedging activity for the year-to-date periods ended June 29,first quarters of 2020 and 2019 and June 30, 2018 were outflowswas an outflow of $7.5$1.9 million and $7.8an inflow of $0.8 million, respectively.

The Company considers the total notional value of its forward contracts as the best measure of the volume of derivative transactions. As of June 29, 2019March 28, 2020 and December 29, 2018,28, 2019, the notional amounts of outstanding forward contracts to purchase currencies were $110.7$90.8 million and $186.8$137.7 million, respectively, and the notional amounts of outstanding forward contracts to sell currencies were $114.6$82.5 million and $184.6$143.5 million, respectively. As of June 29, 2019,March 28, 2020, the notional values of the largest positions outstanding were to purchase $56.3$69.8 million of U.S. dollars and $42.7$12.2 million of euros, and to sell $37.9$19.6 million of Swiss francs and $30.4$16.3 million of Mexican pesos.

The following table summarizes the Company's derivative positions, which are the only assets and liabilities recorded at fair value on a recurring basis, and the impact they had on the Company's financial position as of June 29, 2019March 28, 2020 and December 29, 2018.28, 2019. Fair values were determined based on third party quotations (Level 2 fair value measurement):

The following table summarizes the impact on the results of operations for the secondfirst quarters of 20192020 and 20182019 for the components included in the hedge effectiveness assessment of the Company's fair value hedging positions:

The following table summarizes the impact of the Company's hedging activities on comprehensive income for the secondfirst quarters of 20192020 and 2018:2019: