In addition to historical facts, thisThis Annual Report on Form 10-K (this "Report"), including any documents incorporated by reference herein, includes “forward-looking statements”"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These forward-looking statements also relate to our future prospects, developments, and business strategies. These forward-looking statements may be identified by terminology such as “may,” “will,” “could,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “forecast,” “continue,” “intend,” “plan,”"may," "will," "could," "should," "expect," "anticipate," "believe," "estimate," "predict," "project," "forecast," "continue," "intend," "plan," and similar terms or phrases, or the negative of such terminology, including references to assumptions. However, these terms are not the exclusive means of identifying such statements.

On September 28, 2017, the Board of Directors of Sensata Technologies Holding isN.V. unanimously approved a plan to change our location of incorporation from the Netherlands to the United Kingdom (the "U.K."). To effect this change, on February 16, 2018 the shareholders of Sensata N.V. approved a cross-border merger between Sensata N.V. and Sensata plc, a newly formed, public limited company incorporated under the laws of England and Wales, with Sensata plc being the Netherlandssurviving entity (the "Merger").

We received approval of the Merger by the U.K. High Court of Justice, and the Merger was completed, on March 28, 2018. As a result thereof, Sensata plc became the publicly-traded parent of the subsidiary companies that were previously controlled by Sensata N.V., with no changes made to the business being conducted by us prior to the Merger. Due to the fact that the Merger was a business combination between entities under common control, the assets and liabilities exchanged were accounted for at their carrying values.

We organize our operations into two businesses, Performance Sensing and Sensing Solutions.

Our sensors are customized devices that translate a physical phenomenon, such as pressure, temperature, or position, into electronic signals that microprocessors or computer-based control systems can act upon. Our controls are customized devices embedded within systems to protect them from excessive heat or current. Underlying these sensors and controls are core technology platforms—thermal and magnetic-hydraulic circuit protection, micro electromechanical systems, ceramic capacitance, Microfused Silicon Strain Gage, and monosilicon strain gage—wireless communication protocol—that we leverage across multiple products and applications, enabling us to optimize our substantial research, development, and engineering investments and achieve economies of scale.

We are a global business, with significant operations around the world. As of December 31, 2016, 37%, 36%, and 27% of our fixed assets were located in the Americas, Asia, and Europe, respectively. We have a diverse revenue mix by geography, customer, and end-market.end market. We generated 43%, 25%,organize the sales and 32%marketing function within our business into regions—the Americas, Asia, and Europe—but also globally across all geographies according to market segments, so as to facilitate knowledge sharing and coordinate activities involving our larger customers through global account managers.

Refer to Note 20, "Segment Reporting," of our audited consolidated financial statements and accompanying notes thereto (our "Financial Statements") included elsewhere in this Annual Report on Form 10-K (this "Report") for details of our net revenue in the Americas, Asia, and Europe, respectively,property, plant and equipment, net by region. Refer to Note 3, "Revenue Recognition," of our Financial Statements for details of our net revenue by end market.

We organize our business into two segments: Performance Sensing and Sensing Solutions. Performance Sensing designs and manufactures sensors for the year ended December 31, 2016.automotive and HVOR markets, including low-, medium-, and high-pressure sensors, speed and position sensors, and temperature sensors, and markets them to leading global automotive and HVOR original equipment manufacturers ("OEMs") and their Tier 1 suppliers. Sensing Solutions designs and manufactures various sensors and control products, including bimetal electromechanical controls, thermal and magnetic-hydraulic circuit breakers, solid state relays, power inverters, interconnection products, and temperature, pressure, and position sensors, selling them to a wide range of industrial and commercial manufacturers and suppliers across multiple end markets. The acquisition of GIGAVAC, portions of which will be integrated into each of our operating segments, expands our product offerings to include high voltage contactors and fuses.

We have long-standing relationships with a geographically diverse base of leading OEMs and other multinational companies. In geographic and product markets where we lack an established base of customers, we rely on third-party distributors to sell our sensors and control products. We have had relationships with our top ten customers for an average of 29 years. Our largest customer accounted for approximately 9%8% of our net revenue for the year ended December 31, 2016. Our net revenue for the year ended December 31, 2016 was derived from the following end-markets: 25.2% from European automotive, 20.1% from North American automotive, 17.8% from Asia and rest of world automotive, 12.8% from HVOR, 9.0% from industrial, 5.9% from appliance and HVAC, 4.7% from aerospace, and 4.5% from all other end-markets. Within many of our end-markets, we are a significant supplier to multiple OEMs, reducing our exposure to fluctuations in market share within individual end-markets.2018.

Performance Sensing Business

In August 2018 we completed the sale of the capital stock of Schrader Bridgeport International, Inc. and August France Holding Company SAS (collectively, the "Valves Business") to Pacific Industrial Co. Ltd. The Valves Business, which we acquired in connection with the acquisition of Schrader in 2014, manufactures mechanical valves for pressure applications in tires and fluid control and assembles tire hardware aftermarket products with manufacturing locations in the U.S. and Europe. Refer to Note 18, "Segment Reporting,17, "Acquisitions and Divestitures," of our audited consolidated financial statements included elsewhereFinancial Statements for additional details on this divestiture.

In October 2018 we acquired GIGAVAC, an industry-leading producer of high voltage contactors and fuses that are mission-critical components for electric vehicles and equipment, for $233.0 million of cash consideration, subject to working capital and other adjustments. The acquisition of GIGAVAC extends our capabilities on battery electric vehicles, with significant potential for additional growth, and will enable us to tap into a broad market opportunity for high-voltage contactors required in mission-critical sensing and electrical protection applications across electrified vehicles and industrial equipment such as cars, delivery trucks, busses, material handling equipment, and charging stations. It will immediately augment our ongoing investments in electrification for many complex and challenging applications in the automotive, battery storage, industrial, and HVOR markets. Refer to Note 17, "Acquisitions and Divestitures," of our Financial Statements for additional details on this Annual Report on Form 10-K for detailsacquisition.

Performance Sensing, Business which accounted for approximately 75% of our net revenue in fiscal year 2018, is a developer and manufacturer of a broad portfolio of application-specific sensors, including pressure sensors, speed and position sensors, and temperature sensors, that are used in a wide variety of automotive and HVOR applications. The acquisition of GIGAVAC, portions of which will be integrated into each of our operating segments, expands our product offerings to include high voltage contactors and fuses.

The global sensor market is characterized by a broad range of products and applications across a diverse set of end-markets.market segments. We believe large OEMs and other multinational companies are increasingly demanding a global presence to supply sensors for their key global platforms.

The automotive and HVOR sensor markets are characterized by high switching costs and barriers to entry, benefiting incumbent market leaders. Sensors are critical components that enable a wide variety of applications, and many of whichare critical components that are essential to the proper functioning of the productproducts in which they are incorporated. Sensor application-specific products require close engineering collaboration between the sensor supplier and the OEM or the Tier 1 supplier. As a result, OEMs and Tier 1 suppliers make significant investments in selecting, integrating, and testing sensors as part of their product development. Switching to a different sensor results in considerable additional work, both in terms of sensor customization and extensive platform/product retesting.retesting and certification. This results in high switching costs for automotive and HVOR manufacturers once a sensor is designed-in, and wedesigned in. We believe this is one of the reasons that sensors are rarely changed during a platform life-cycle, which in the case of the automotive end-marketindustry typically lasts five to seven years. Given the importance of reliability and the fact that the sensors have tomust be supported through the length of a product life, our experience has been that OEMs and Tier 1 suppliers tend to work with suppliers that have a long track record of quality and on-time delivery and the scale and resources to meet their needs as the carautomobile platform evolves and grows. In addition, the automotive segment isindustry provides one of the largest markets for sensors, giving participants with a presence in this end-marketmarket significant scale advantages over those participating only in smaller, more niche industrial and medical markets.

According to an October 2016 report preparedNet revenue growth from the automotive and HVOR markets served by Strategy Analytics, Inc.,Performance Sensing has historically been driven, we believe, by three principal trends, including (1) growth in the global automotive sensor market was $21.2 billion in 2016, compared to $20.1 billion in 2015. We believe the increasenumber of vehicles produced globally, (2) expansion in the number of sensors per vehicle, and (3) a shift towards higher value sensors. We are also investing in new technologies that we believe will shape future revenue growth by increasing content per vehicle. In addition, our presence in emerging markets positions us to take advantage of future growth opportunities in these regions.

The demand for bimetal electromechanical controls and thermal and magnetic-hydraulic circuit breakers tend to follow the general economic environment and is affected by the increasing significance of new electronically-controlled applications. Demand for our sensor products used in industrial and commercial applications is driven by many of the same factors as in the automotive sensor market: regulation of emissions, greater energy efficiency, and safety, as well as consumer demand for new features. For example, many HVAC/Refrigeration ("HVAC/R") and industrial systems are converting to more efficient variable speed control, which inherently requires more sensor feedback than traditional fixed speed control systems. Global trends towards environmentally friendly refrigerants also require more sensors to deliver the desired system performance. Demand for power inverters and charge controllers is driven by economic development, the need to meet new energy efficiency standards, electrification of auxiliary loads on work trucks, emerging opportunities for residential energy storage and off-grid power systems, and a growing interest in clean energy to replace generators, which increases demand for both mobile and stationary power. Demand in the semiconductor market is driven by consumer and business computational, entertainment, transportation, and communication needs. These needs are driven by the desire to have smaller, lighter, faster, more functional, and energy conscious devices that make users more productive and interconnected to society.

We continue to focus our efforts on expanding our presence in all global geographies, both emerging and mature. Our customers include established multinationals, as well as local producers in emerging markets such as China, India, Eastern Europe, and Turkey. China continues to remain a priority for us because of its export focus and the increasing domestic consumption of products that utilizeuse our devices. WeIn addition, we continue to focus on managing our costs and increasing our productivity in these lower-cost manufacturing regions.

Prior to Note 18, "Segment Reporting," of our audited consolidated financial statements included elsewherefiscal year 2018, we presented five significant product categories in this Annual Report on Form 10-K for details of the Sensing Solutions segment operating income for the years ended December 31, 2016, 2015, and 2014 and total assets as of December 31, 2016 and 2015.

We develop products that address increasingly complex engineering requirements. We believe that continued focused investment in research and development ("R&D") is critical to our future growth and maintaining our leadership positions in the markets we serve. Our R&D efforts are directly related to timely development of new and enhanced products that are central to our core business strategy. We continuously develop our technologies to meet an evolving set of customer requirements and new product introductions. In addition, we constantly consider new technologies where we may have expertise for potential investment or acquisition. We incurred R&D expense of $147.3 million, $130.1 million, and $126.7 million for the years ended December 31, 2018, 2017, and 2016, respectively.

We rely primarily on patents, and trade secret laws,secrets, manufacturing know-how, confidentiality procedures, and licensing arrangements to maintain and protect our intellectual property rights. While we consider our patents to be valuable assets, we do not believe that our overall competitive position is dependent on patent protection or that our overall operations arebusiness is dependent upon any single patent or group of related patents. Many of our patents protect specific functionality in our products, and others consist of processes or techniques

Our patents have expiration dates ranging from 20172019 to 2036.2042. We incurred Researchalso own a portfolio of trademarks and Development expense of $126.7 million, $123.7 million,license various patents and $82.2 million for the years ended December 31, 2016, 2015,trademarks. "Sensata" and 2014, respectively.our logo are trademarks.

We utilizeuse licensing arrangements with respect to certain technology that we useprovided in our sensor products and, to a lesser extent, our control products. In 2006, we entered into a perpetual, royalty-free cross-license agreement with our former owner, Texas Instruments Incorporated, ("TI"), which permits each party to use specified technology owned by the other party in its business. No license may be terminated under the agreement, even in the event of a material breach.

We purchase sense element assemblies, which are components used primarily in our monosilicon strain gage pressure sensors, from Measurement Specialties, Inc. and its affiliates ("MEAS") and also manufacture them internally as a second source. In March 2013, we entered into an intellectual property licensing arrangement (the "License Agreement") with MEAS whichthat provides for an indefinite duration license and which is subject to royalties through 2019 and thereafter is royalty-free. Pursuant to the terms of the License Agreement, we are authorized to produce our entire need for these sense elements within the passenger vehicle and heavy dutyheavy-duty truck fields of use. The License Agreement can be terminated by either party in the event of an uncured material breach. As of December 31, 2018, we only purchase sense element assemblies from MEAS that relate to limited industrial applications. We manufacture the rest internally.

Much of our business depends on, and is directly affected by, the global automobile industry. Sales in our automotive end markets accounted for $397.7 million inapproximately 60% of our total net revenue in fiscal year 2018. Adverse developments like those we have seen in past years in the automotive industry, including but not limited to declines in demand, customer bankruptcies, and increased demands on us for lower prices, could have adverse effects on our results of operations and could impact our liquidity and our ability to meet restrictive debt covenants. In addition, these same conditions could adversely impact certain of our vendors’ financial solvency, resulting in potential liabilities or additional costs to us to ensure uninterrupted supply to our customers.

Our ability to generate revenue from products pending customer awards is subject to a number of important risks and uncertainties, many of which are beyond our control, including the number of products our customers will actually produce, as well as the timing of such production. Many of our customer agreements provide for the year ended December 31, 2016,supply of a certain share of the customer’s requirements for a particular application or platform, rather than for a specific quantity of products. In some cases, we have no remedy if a customer chooses to purchase less than we expect. In cases where customers do make minimum volume commitments to us, our remedy for their failure to meet those minimum volumes may be limited to increased pricing on those products that the customer does purchase from us or renegotiating other contract terms. There is no assurance that such price increases or new terms will offset a shortfall in expected revenue. In addition, some of our customers may have the right to discontinue a program or replace us with another supplier under certain circumstances. As a result, products for which $150.6 million waswe are currently incurring development expenses may not be manufactured by our customers at all, or may be manufactured in smaller amounts than currently anticipated. Therefore, our anticipated future revenue from products relating to existing customer awards or product development relationships may not result in firm orders from customers for the originally contracted amount. We also incur capital expenditures and other costs, and price our products, based on estimated production volumes. If actual production volumes were significantly lower than estimated, our anticipated revenue and gross margin from those new products would be adversely affected. We cannot predict the ultimate demand for our customers’ products, nor can we predict the extent to which we would be able to pass through unanticipated per-unit cost increases to our customers.

In pursuing our corporate strategy, we often acquire other businesses or dispose of or exit businesses we currently own. The success of this strategy is dependent upon our ability to identify appropriate acquisition and disposition targets, negotiate transactions on favorable terms, complete transactions and, in the case of acquisitions, successfully integrate them into our existing businesses. If a proposed transaction is not consummated, the time and resources spent pursuing it could adversely result in missed opportunities to locate and acquire other businesses. If acquisitions are made, there can be no assurance that we will realize the anticipated benefits of such acquisitions, including, but not limited to, revenue growth, operational efficiencies, or expected synergies. If we dispose of or otherwise exit certain businesses, we may incur significant write-offs, including those related to goodwill and other intangible assets, and face other risks, including difficulties in the separation of operations, services, products, and personnel; the diversion of management's attention from other business concerns; the disruption of our business; and the potential loss of key employees. There can be no assurance that we will be successful in addressing these or any other significant risks encountered.

We continue to evaluate the strategic fit of specific businesses and products that were manufactured by MEAS, and $247.1 million wasmay result in additional divestitures. Any divestitures may result in significant write-offs, including those related to goodwill and other intangible assets, which could have a material adverse effect on our results of operations and financial position. Divestitures could involve additional risks, including difficulties in the separation of operations, services, products, and personnel; the diversion of management's attention from other business concerns; the disruption of our business; and the potential loss of key employees. There can be no assurance that were manufacturedwe will be successful in addressing these or any other significant risks encountered.

We also may seek to restructure our business in the future by us.disposing of certain assets or by consolidating operations. There can be no assurance that any restructuring of our business will not adversely affect our financial position, leverage, or results of operations. In addition, any significant restructuring of our business will require significant managerial attention, which may be diverted from our other operations.

Because of the diverse nature of theSubstantially all markets in which we compete,operate are impacted by technological change or change in consumer tastes and preferences, which are rapid in certain markets. Our operating results depend substantially upon our ability to continually design, develop, introduce, and sell new and innovative products; to modify existing products; and to customize products to meet customer requirements driven by such change. There are numerous risks inherent in these processes, including the risk that we will be unable to anticipate the direction of technological change or that we will be unable to develop and market profitable new products and applications before our competitors or in time to satisfy customer demands.

In July 2018, the Office of the U.S. Trade Representative announced a list of thousands of categories of goods that currently face tariffs of 10%. These tariffs may increase to 25% in March 2019 if the U.S. and China cannot reach an agreement on various related matters. These tariffs currently affect some of the products we import from China, and we may raise our prices on those products due to the tariffs or share the cost of such tariffs with our customers, which could harm our operating performance or cause our customers to seek alternative suppliers. It is only moderatelypossible that further tariffs may be imposed on other imports of our products, or that our business will be impacted by seasonality. However,retaliatory trade measures taken by China or other countries in response to existing or future tariffs, causing us to raise prices or make changes to our Sensing Solutionsoperations, any of which could materially harm our revenue or operating results. In addition, we may seek to shift some of our China manufacturing to other countries, which could result in additional costs and disruption to our operations.

In addition, other risks are inherent in our non-U.S. operations, including the potential for changes in socio-economic conditions and/or monetary and fiscal policies, intellectual property protection difficulties and disputes, the settlement of legal disputes through certain foreign legal systems, the collection of receivables, exposure to possible expropriation or other government actions, unsettled political conditions, and possible terrorist attacks. These and other factors may have a material adverse effect on our non-U.S. operations and, therefore, on our business hasand results of operations.

The U.S. FCPA, the U.K.'s Bribery Act, and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that have experienced governmental corruption to some seasonal elements, specificallydegree, and in its air conditioningcertain circumstances, strict compliance with anti-bribery laws may conflict with local customs and refrigerationpractices. Despite our training and compliance program, we cannot provide assurance that our internal control policies and procedures will protect us from reckless or criminal acts committed by our employees or agents. Violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our results of operations, financial position, and/or cash flows.

On August 31, 2018 we completed the sale of the capital stock of Schrader Bridgeport International, Inc. and August France Holding Company SAS (collectively, the "Valves Business") to Pacific Industrial Co. Ltd. Facilities in Pontarlier, France and Alta Vista, Virginia that were previously considered principal were sold as part of the Valves Business. Refer to facilitate knowledge sharingNote 17, "Acquisitions and coordinate activities involvingDivestitures," of our larger customersFinancial Statements for additional details on this divestiture.

We consider our manufacturing facilities sufficient to meet our current operational requirements. An increase in demand for our products may require us to expand our production capacity, which could require us to identify and acquire or lease additional manufacturing facilities. We believe that suitable additional or substitute facilities will be available as required; however, if we are unable to acquire, integrate, and move into production the facilities, equipment, and personnel necessary to meet such an increase in demand, our customer relationships, results of operations, and/or financial condition may suffer materially. Leases covering our currently occupied principal leased facilities expire at varying dates within the next 18 years. We do not anticipate difficulty in retaining occupancy through global account managers.lease renewals, month-to-month occupancy, or by replacing the leased facilities with equivalent facilities.

Our customer baseordinary shares trade on the New York Stock Exchange under the symbol "ST."

The information in the Performance Sensinggraph and table above is not "soliciting material," is not deemed "filed" with the United States Securities and Exchange Commission, and is not to be incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K (this "Report"), except to the extent that we specifically incorporate such information by reference. The total shareholder return shown on the graph represents past performance and should not be considered an indication of future price performance.

We organize our business into two segments: Performance Sensing and Sensing Solutions. Performance Sensing designs and manufactures sensors for the automotive and HVOR end-markets. Our customers in themarkets, including low-, medium-, and high-pressure sensors, speed and position sensors, and temperature sensors, and markets them to leading global automotive and HVOR original equipment manufacturers ("OEMs") and their Tier 1 suppliers. Sensing Solutions business includedesigns and manufactures various sensors and control products, including bimetal electromechanical controls, thermal and magnetic-hydraulic circuit breakers, solid state relays, power inverters, interconnection products, and temperature, pressure, and position sensors, selling them to a wide range of industrial and commercial manufacturers and suppliers across multiple end-markets, primarily OEMsend markets. The acquisition of GIGAVAC, portions of which will be integrated into each of our operating segments, expands our product offerings to include high voltage contactors and fuses.

In August 2018 we completed the sale of the capital stock of Schrader Bridgeport International, Inc. and August France Holding Company SAS (collectively, the "Valves Business") to Pacific Industrial Co. Ltd. ("Pacific"). The Valves Business, which was acquired as part of Sensata’s acquisition of the Schrader group of companies in 2014 and had been integrated into Performance Sensing, generated approximately $117 million in revenue in fiscal year 2017. It manufactures mechanical valves for pressure applications in tires and fluid control and assembles tire hardware aftermarket products with manufacturing locations in the climate control, appliance, semiconductor, medical, energyUnited States (the "U.S.") and infrastructure, data/telecom,Europe. The sale did not include our tire pressure monitoring system ("TPMS") business and aerospace industries,the Global TPMS Aftermarket business. Refer to Note 17, "Acquisitions and Divestitures," of our Financial Statements for additional details on this divestiture.

In October 2018 we acquired GIGAVAC, an industry-leading producer of high voltage contactors and fuses that are mission-critical components for electric vehicles and equipment, for $233.0 million of cash consideration, subject to working capital and other adjustments. The acquisition of GIGAVAC extends our capabilities on battery electric vehicles, with significant potential for additional growth, and will enable us to tap into a broad market opportunity for high-voltage contactors required in mission-critical sensing and electrical protection applications across electrified vehicles and industrial equipment such as wellcars, delivery trucks, busses, material handling equipment, and charging stations. It will immediately augment our ongoing investments in electrification for many complex and challenging applications in the automotive, battery storage, industrial, and HVOR markets. Refer to Note 17, "Acquisitions and Divestitures," of our Financial Statements for additional details on this acquisition.

We manage Performance Sensing and Sensing Solutions separately and report their results of operations as Tier 1 motortwo segments. Set forth below is selected information for each of these segments for the periods presented. Amounts in the tables below have been calculated based on unrounded numbers. Accordingly, certain amounts may not sum due to the effect of rounding.

We develop products that address increasingly complex engineering requirements. We believe that continued focused investment in research and development ("R&D") activities is critical to our future growth and maintaining our leadership

In August 2018 we completed the sale of the current litigation matters that are pending against us will not have a material effect on our financial condition or resultscapital stock of operations.

Refer to Item 1, "Business," included elsewhere in this Annual Report on Form 10-K for additional information on our dividend restrictions.

We manage Performance Sensing and Sensing Solutions separately and report their results of operations as two segments. Set forth below is selected information for each of these segments for the periods presented. Amounts in the tables below have been calculated based on unrounded numbers. Accordingly, certain amounts may only pay dividends or make other distributionsnot sum due to the extent thateffect of rounding.

For a reconciliation of such subsidiary exceeds the reserves requiredtotal segment profit to be maintained by law or under its articles of association.