UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~_____________________________________~~_________________________________________________________________________________

FORM 10-Q

~~_____________________________________~~_________________________________________________________________________________

(Mark One)



ý☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2019~~2020



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-34652

~~_____________________________________~~_________________________________________________________________________________

SENSATA TECHNOLOGIES HOLDING PLC

(Exact name of registrant as specified in its charter)

~~_____________________________________~~_________________________________________________________________________________



~~ENGLAND AND WALES~~England and Wales		98-1386780
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~Interface House, Interface Business Park~~ ~~Bincknoll Lane~~ ~~Royal Wootton Bassett~~ ~~Swindon SN4 8SY~~ ~~United Kingdom~~	~~+1 (508) 236 3800~~
~~(Address of principal executive offices, including Zip Code)~~	~~(Registrant’s telephone number, including area code)~~

529 Pleasant Street

Attleboro, Massachusetts, 02703, United States

(Address of principal executive offices, including zip code))

+1 (508)236 3800

(Registrant's telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

_____________________________________

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



Title of each class	Trading Symbol(s)	Name of exchange on which registered
Ordinary Shares - nominal value €0.01 per share	ST	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 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. Yesý☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesý☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	ý☒	Accelerated filer	¨☐

Non-accelerated filer	¨☐	Smaller reporting company	¨☐

		Emerging growth company	¨☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No ý☒

As of April ~~17, 2019, 161,631,388~~15, 2020, 157,161,723 ordinary shares were outstanding.

~~Table of Contents~~

TABLE OF CONTENTS



PART I
	Item 1.	Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019	3
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	4
		Condensed Consolidated Statements of Comprehensive (Loss)/Income for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	5
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	6
		Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months ended March 31, ~~2019~~2020 and ~~2018~~2019	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2319
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2926
	Item 4.	Controls and Procedures	3027

PART II
	Item 1.	Legal Proceedings	3128
	Item 1A.	Risk Factors	3128
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3129
	Item 3.	Defaults Upon Senior Securities	3129
	Item 5.	Other Information	30
	Item 6.	Exhibits	3231
		Signatures	3332

~~Table of Contents~~

PART I—FINANCIAL INFORMATION


Item 1.	Financial Statements.

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

(unaudited)


	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	649,518		$	729,833		$	802,971		$	774,119
Accounts receivable, net of allowances of $15,447 and $13,762 as of March 31, 2019 and December 31, 2018, respectively	633,006			581,769
Accounts receivable, net of allowances of $15,832 and $15,129 as of March 31, 2020 and December 31, 2019, respectively							536,416			557,874
Inventories	484,136			492,319			514,274			506,678
Prepaid expenses and other current assets	118,413			113,234			115,887			126,981
Total current assets	1,885,073			1,917,155			1,969,548			1,965,652
Property, plant and equipment, net	798,001			787,178			824,553			830,998
Goodwill	3,080,395			3,081,302			3,093,598			3,093,598
Other intangible assets, net of accumulated amortization of $1,932,710 and $1,896,861 as of March 31, 2019 and December 31, 2018, respectively	861,527			897,191
Other intangible assets, net of accumulated amortization of $2,072,227 and $2,039,436 as of March 31, 2020 and December 31, 2019, respectively							738,244			770,904
Deferred income tax assets	26,185			27,971			27,293			21,150
Other assets	142,330			86,890			159,582			152,217
Total assets	$	6,793,511		$	6,797,687		$	6,812,818		$	6,834,519
Liabilities and shareholders’ equity
Current liabilities:
Current portion of long-term debt, finance lease and other financing obligations	$	13,660		$	14,561		$	7,095		$	6,918
Accounts payable	366,407			379,824			345,787			376,968
Income taxes payable	26,648			27,429			19,390			35,234
Accrued expenses and other current liabilities	229,581			218,130			248,789			215,626
Total current liabilities	636,296			639,944			621,061			634,746
Deferred income tax liabilities	230,849			225,694			247,960			251,033
Pension and other post-retirement benefit obligations	33,837			33,958			33,716			36,100
Finance lease and other financing obligations, less current portion	30,864			30,618			28,280			28,810
Long-term debt, net	3,216,729			3,219,762			3,220,359			3,219,885
Other long-term liabilities	80,565			39,277			123,645			90,190
Total liabilities	4,229,140			4,189,253			4,275,021			4,260,764
Commitments and contingencies (Note 12)
Shareholders’ equity:
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 171,987 and 171,719 shares issued, as of March 31, 2019 and December 31, 2018, respectively	2,206			2,203
Treasury shares, at cost, 10,607 and 7,571 shares as of March 31, 2019 and December 31, 2018, respectively	(550,166		)	(399,417		)
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 172,596 and 172,561 shares issued, as of March 31, 2020 and December 31, 2019, respectively							2,212			2,212
Treasury shares, at cost, 15,631 and 14,733 shares as of March 31, 2020 and December 31, 2019, respectively							(784,596		)	(749,421		)
Additional paid-in capital	1,702,940			1,691,190			1,731,884			1,725,091
Retained earnings	1,425,426			1,340,636			1,624,773			1,616,357
Accumulated other comprehensive loss	(16,035		)	(26,178		)	(36,476		)	(20,484		)
Total shareholders’ equity	2,564,371			2,608,434			2,537,797			2,573,755
Total liabilities and shareholders’ equity	$	6,793,511		$	6,797,687		$	6,812,818		$	6,834,519

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Table of Contents~~

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)


	For the three months ended						For the three months ended
	March 31, 2019			March 31, 2018			March 31, 2020			March 31, 2019
Net revenue	$	870,499		$	886,293		$	774,269		$	870,499
Operating costs and expenses:
Cost of revenue	580,806			582,457			566,406			580,806
Research and development	35,096			36,001			34,453			35,096
Selling, general and administrative	70,549			81,322			77,221			70,549
Amortization of intangible assets	36,143			35,069			33,092			36,143
Restructuring and other charges, net	5,309			3,766			4,498			5,309
Total operating costs and expenses	727,903			738,615			715,670			727,903
Operating income	142,596			147,678			58,599			142,596
Interest expense, net	(39,253		)	(38,429		)	(39,403		)	(39,253		)
Other, net	3,189			(4,633		)	(12,281		)	3,189
Income before taxes	106,532			104,616			6,915			106,532
Provision for income taxes	21,467			14,126
(Benefit from)/provision for income taxes							(1,516		)	21,467
Net income	$	85,065		$	90,490		$	8,431		$	85,065
Basic net income per share:	$	0.52		$	0.53		$	0.05		$	0.52
Diluted net income per share:	$	0.52		$	0.52		$	0.05		$	0.52

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Table of Contents~~

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Comprehensive (Loss)/Income

(In thousands)

(unaudited)


	For the three months ended				For the three months ended
	March 31, 2019		March 31, 2018		March 31, 2020			March 31, 2019
Net income	$	85,065	$	90,490	$	8,431		$	85,065
Other comprehensive income, net of tax:
Other comprehensive (loss)/income, net of tax:
Cash flow hedges	10,060		6,539		(19,334		)	10,060
Defined benefit and retiree healthcare plans	83		977		3,342			83
Other comprehensive income	10,143		7,516
Comprehensive income	$	95,208	$	98,006
Other comprehensive (loss)/income					(15,992		)	10,143
Comprehensive (loss)/income					$	(7,561	)	$	95,208

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Table of Contents~~

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)


	For the three months ended						For the three months ended
	March 31, 2019			March 31, 2018			March 31, 2020			March 31, 2019
Cash flows from operating activities:
Net income	$	85,065		$	90,490		$	8,431		$	85,065
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	27,208			27,855			34,679			27,208
Amortization of debt issuance costs	1,836			1,805			1,631			1,836
Share-based compensation	5,940			5,090			6,084			5,940
Loss on debt financing	—			2,350
Amortization of intangible assets	36,143			35,069			33,092			36,143
Deferred income taxes	5,113			636			(4,100		)	5,113
Loss on litigation judgment							29,200			—
Unrealized loss on derivative instruments and other	6,204			8,819			11,040			6,204
Changes in operating assets and liabilities, net of the effects of acquisitions and divestitures:
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net	(51,237		)	(71,208		)	21,458			(51,237		)
Inventories	8,183			(13,570		)	(7,596		)	8,183
Prepaid expenses and other current assets	3,028			(2,147		)	5,625			3,028
Accounts payable and accrued expenses	(14,917		)	47,780			(19,962		)	(14,917		)
Income taxes payable	(781		)	(9,231		)	(15,844		)	(781		)
Other	908			(483		)	(5,194		)	908
Net cash provided by operating activities	112,693			123,255			98,544			112,693
Cash flows from investing activities:
Acquisitions, net of cash received	(1,681		)	—			—			(1,681		)
Additions to property, plant and equipment and capitalized software	(41,690		)	(30,938		)	(29,547		)	(41,690		)
Other	1,000			—			(3,289		)	1,000
Net cash used in investing activities	(42,371		)	(30,938		)	(32,836		)	(42,371		)
Cash flows from financing activities:
Proceeds from exercise of stock options and issuance of ordinary shares	5,813			2,219			709			5,813
Payment of employee restricted stock tax withholdings	(275		)	—			(15		)	(275		)
Payments on debt	(4,157		)	(11,325		)	(2,375		)	(4,157		)
Payments to repurchase ordinary shares	(150,749		)	—			(35,175		)	(150,749		)
Payments of debt and equity issuance costs	(1,269		)	(8,034		)	—			(1,269		)
Net cash used in financing activities	(150,637		)	(17,140		)	(36,856		)	(150,637		)
Net change in cash and cash equivalents	(80,315		)	75,177			28,852			(80,315		)
Cash and cash equivalents, beginning of period	729,833			753,089			774,119			729,833
Cash and cash equivalents, end of period	$	649,518		$	828,266		$	802,971		$	649,518

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Table of Contents~~

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Changes in Shareholders' Equity

(In thousands)

(unaudited)


	Ordinary Shares				Treasury Shares					Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity			Ordinary Shares			Treasury Shares					Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
	Number		Amount		Number		Amount			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity			Number	Amount		Number		Amount			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance as of December 31, 2018	171,719		$	2,203	(7,571	)	$	(399,417	)	$	1,691,190	$	1,340,636		$	(26,178	)	$	2,608,434
Balance as of December 31, 2019																					172,561	$	2,212	(14,733	)	$	(749,421	)	$	1,725,091	$	1,616,357		$	(20,484	)	$	2,573,755
Surrender of shares for tax withholding	—		—		(6	)	(275		)	—		—			—			(275		)	—	—		—		(15		)	—		—			—			(15		)
Stock options exercised	248		3		—		—			5,810		—			—			5,813			34	—		—		—			709		—			—			709
Vesting of restricted securities	26		—		—		—			—		—			—			—			1	—		—		—			—		—			—			—
Repurchase of ordinary shares	—		—		(3,036	)	(150,749		)	—		—			—			(150,749		)	—	—		(898	)	(35,175		)	—		—			—			(35,175		)
Retirement of ordinary shares	(6	)	—		6		275			—		(275		)	—			—			—	—		—		15			—		(15		)	—			—
Share-based compensation	—		—		—		—			5,940		—			—			5,940			—	—		—		—			6,084		—			—			6,084
Net income	—		—		—		—			—		85,065			—			85,065			—	—		—		—			—		8,431			—			8,431
Other comprehensive income	—		—		—		—			—		—			10,143			10,143
Balance as of March 31, 2019	171,987		$	2,206	(10,607	)	$	(550,166	)	$	1,702,940	$	1,425,426		$	(16,035	)	$	2,564,371
Other comprehensive loss																					—	—		—		—			—		—			(15,992		)	(15,992		)
Balance as of March 31, 2020																					172,596	$	2,212	(15,631	)	$	(784,596	)	$	1,731,884	$	1,624,773		$	(36,476	)	$	2,537,797


Balance as of December 31, 2017	178,437		$	2,289		(7,076	)	$	(288,478	)	$	1,663,367	$	1,031,612		$	(63,164	)	$	2,345,626
																					Ordinary Shares				Treasury Shares					Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
																					Number		Amount		Number		Amount			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance as of December 31, 2018																					171,719		$	2,203	(7,571	)	$	(399,417	)	$	1,691,190	$	1,340,636		$	(26,178	)	$	2,608,434
Surrender of shares for tax withholding																					—		—		(6	)	(275		)	—		—			—			(275		)
Stock options exercised	—		—			58		2,250			126		(157		)	—			2,219		248		3		—		—			5,810		—			—			5,813
Vesting of restricted securities																					26		—		—		—			—		—			—			—
Repurchase of ordinary shares																					—		—		(3,036	)	(150,749		)	—		—			—			(150,749		)
Retirement of ordinary shares	(7,018	)	(90		)	7,018		286,228			—		(286,138		)	—			—		(6	)	—		6		275			—		(275		)	—			—
Share-based compensation	—		—			—		—			5,090		—			—			5,090		—		—		—		—			5,940		—			—			5,940
Net income	—		—			—		—			—		90,490			—			90,490		—		—		—		—			—		85,065			—			85,065
Other comprehensive income	—		—			—		—			—		—			7,516			7,516		—		—		—		—			—		—			10,143			10,143
Balance as of March 31, 2018	171,419		$	2,199		—		$	—		$	1,668,583	$	835,807		$	(55,648	)	$	2,450,941
Balance as of March 31, 2019																					171,987		$	2,206	(10,607	)	$	(550,166	)	$	1,702,940	$	1,425,426		$	(16,035	)	$	2,564,371

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Table of Contents~~

SENSATA TECHNOLOGIES HOLDING PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements reflect the financial position, results of operations, comprehensive (loss)/income, cash flows, and changes in shareholders' equity of Sensata Technologies Holding plc, ~~("Sensata plc"),~~ a public limited company incorporated under the laws of England and Wales, and its wholly-owned subsidiaries, collectively referred to as the "Company," "Sensata," "we," "our," or "us."

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q. Accordingly, these interim financial statements do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year, nor were the results of operations of the comparable period in 2018 necessarily representative of those actually experienced for the full year 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~

~~All intercompany balances and transactions have been eliminated.~~2019.

All U.S. dollar ("USD") and share amounts presented, except per share amounts, are stated in thousands, unless otherwise indicated.

~~Certain reclassifications have been made to prior periods to conform to current period presentation.~~

2. New Accounting Standards

~~Adopted~~There are no recently issued accounting standards that have been adopted in the current period

~~In February 2016 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02,~~ ~~Leases (Topic 842), which establishes new accounting and disclosure requirements for leases. FASB Accounting Standards Codification ("ASC") Topic 842 requires lessees~~ or will be adopted in future periods that have had or are expected to ~~classify most leases as either finance~~have a material impact on our consolidated financial position or ~~operating leases and to recognize a lease liability and right-of-use asset. For finance leases, the statements~~results of operations include separate recognition of interest on the lease liability and amortization of the right-of-use asset. For operating leases, the statements of operations include a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. We adopted the provisions of FASB ASU No. 2016-02 on January 1, 2019 using the modified retrospective transition method. Refer to Note 18, “Leases” for additional discussion of this adoption.operations.

3. Revenue Recognition

~~We recognize revenue in accordance with FASB ASC Topic 606,~~ ~~Revenue from Contracts with Customers~~. We are electing to apply certain practical expedients that allow for more limited disclosures than those that would otherwise be required by FASB ASC Topic 606, including (1) the disclosure of transaction price allocated to the remaining unsatisfied performance obligations at the end of the period and (2) an explanation of when we expect to recognize the related revenue.

~~Table of Contents~~

~~Disaggregation of Revenue~~

~~We believe that our end markets are the categories that best depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.~~ The following table presents net revenue disaggregated by segment and end market for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:



	For the three months ended March 31, 2020						For the three months ended March 31, 2019
	Performance Sensing		Sensing Solutions		Total		Performance Sensing		Sensing Solutions		Total
Automotive	$	437,703	$	8,236	$	445,939	$	492,015	$	11,428	$	503,443
HVOR ⁽¹⁾	130,986		—		130,986		148,013		—		148,013
Industrial	—		80,599		80,599		—		92,641		92,641
Appliance and HVAC ⁽²⁾	—		45,396		45,396		—		51,704		51,704
Aerospace	—		42,124		42,124		—		42,979		42,979
Other	—		29,225		29,225		—		31,719		31,719
Total	$	568,689	$	205,580	$	774,269	$	640,028	$	230,471	$	870,499

For the three months ended March 31, 2019 For the three months ended March 31, 2018
Performance Sensing Sensing Solutions Total Performance Sensing Sensing Solutions Total
Automotive $ 492,015
$ 11,428
$ 503,443
$ 529,793
$ 13,856
$ 543,649
HVOR ⁽¹⁾
148,013
—
148,013
133,036
—
133,036
Appliance and HVAC ⁽²⁾
—
51,704
51,704
—
54,317
54,317
Industrial —
92,641
92,641
—
82,385
82,385
Aerospace —
42,979
42,979
—
41,706
41,706
Other —
31,719
31,719
—
31,200
31,200
Total $ 640,028
$ 230,471
$ 870,499
$ 662,829
$ 223,464
$ 886,293
________________________

⁽¹⁾ Heavy vehicle and off-road

⁽²⁾ Heating, ventilation and air conditioning

4. Share-Based Payment Plans

~~Share-Based Compensation Expense~~

The following table ~~below~~ presents the components of non-cash compensation expense related to our equity awards ~~which is recognized within selling, general and administrative expense in the condensed consolidated statements of operations, during the identified periods:~~

For the three months ended
March 31, 2019 March 31, 2018
Stock options $ 1,524
$ 1,289
Restricted securities 4,416
3,801
Share-based compensation expense $ 5,940
$ 5,090

~~Option Exercises~~

~~During~~for the three months ended March 31, ~~2019, 248 thousand stock options were exercised.~~2020 and 2019.



	For the three months ended
	March 31, 2020		March 31, 2019
Stock options	$	2,489	$	1,524
Restricted securities	3,595		4,416
Share-based compensation expense	$	6,084	$	5,940

5. Restructuring and Other Charges, Net

~~Restructuring~~The following table presents the components of restructuring and other charges, net for the three months ended March 31, ~~2019~~2020 and ~~2018 were as follows:~~2019:



	For the three months ended
	March 31, 2020		March 31, 2019
Severance costs, net ⁽¹⁾	$	3,897	$	2,855
Other ⁽²⁾	601		2,454
Restructuring and other charges, net	$	4,498	$	5,309


⁽¹⁾	Severance costs, net for the three months ended March 31, 2020 were primarily related to termination benefits arising from the shutdown and relocation of an operating site in Northern Ireland. Severance costs for the three months ended March 31, 2019 were primarily related to limited workforce reductions of manufacturing, engineering, and administrative positions.


⁽²⁾	Other charges in the three months ended March 31, 2020 and 2019 were primarily related to deferred compensation incurred in connection with the acquisition of GIGAVAC, LLC.

For the three months ended
March 31, 2019 March 31, 2018
Severance costs $ 2,855
$ 3,604
Facility and other exit costs —
162
Other 2,454
—
Restructuring and other charges, net $ 5,309
$ 3,766

Severance costs for the three months ended March 31, 2019 and 2018 were primarily related to limited workforce reductions of manufacturing, engineering, and administrative positions. Other charges for the three months ended March 31, 2019 were primarily related to deferred compensation incurred in connection with the acquisition of GIGAVAC, LLC ("GIGAVAC"). Refer to Note 16, "Acquisitions and Divestitures" for further discussion.

~~Table of Contents~~

~~Changes~~The following table presents changes to the severance portion of our restructuring liability during the three months ended March 31, ~~2019 were as follows:~~2020:



	Severance
Balance at December 31, 2019	$	14,779
Charges, net of reversals	3,897
Payments	(5,356		)
Foreign currency remeasurement	(500		)
Balance at March 31, 2020	$	12,820

Severance
Balance at December 31, 2018 $ 6,591
Charges 2,855
Payments (2,210 )
Impact of changes in foreign currency exchange rates 24
Balance at March 31, 2019 $ 7,260

6. Other, Net

~~Other,~~The following table presents the components of other, net ~~consisted of the following~~ for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:



	For the three months ended
	March 31, 2020			March 31, 2019
Currency remeasurement gain on net monetary assets	$	1,553		$	1,865
(Loss)/gain on foreign currency forward contracts	(3,781		)	478
(Loss)/gain on commodity forward contracts	(5,575		)	1,123
Net periodic benefit cost, excluding service cost	(4,381		)	(287		)
Other	(97		)	10
Other, net	$	(12,281	)	$	3,189

For the three months ended
March 31, 2019 March 31, 2018
Currency remeasurement gain on net monetary assets $ 1,865
$ 6,748
Gain/(loss) on foreign currency forward contracts 478
(6,326 )
Gain/(loss) on commodity forward contracts 1,123
(3,195 )
Loss on debt financing —
(2,350 )
Net periodic benefit cost, excluding service cost (287 ) (298 )
Other 10
788
Other, net $ 3,189
$ (4,633 )

7. Income Taxes

~~Provision~~The following table presents the (benefit from)/provision for income taxes for the three months ended March 31, ~~2019~~2020 and ~~2018 totaled $21.5 million and $14.1 million, respectively.~~ 2019:



	For the three months ended
	March 31, 2020			March 31, 2019
(Benefit from)/provision for income taxes	$	(1,516	)	$	21,467

The ~~increase~~decrease in ~~our~~ total tax ~~provision relates~~from the prior period was predominantly related to the ~~utilization~~overall decrease in income before tax as impacted by the mix of profits in the various jurisdictions in which we operate.

In response to the global financial and health crisis caused by the coronavirus pandemic ("COVID-19"), the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") on March 27, 2020. Federal limitations on interest deductions were reduced in connection with this legislation, and we recorded a deferred tax benefit of

$7.5 million in the three months ended March 31, 2020, as we were able to utilize additional interest expense that was previously ~~unbenefitted net operating losses in our U.S. jurisdiction.~~ subject to a valuation allowance.

The (benefit from)/provision for income taxes consists of:

current tax expense, which relates primarily to our profitable operations in non-U.S. tax jurisdictions and withholding taxes related to ~~interest,~~management fees, royalties, and the repatriation of foreign earnings; and

deferred tax expense (or benefit), which represents adjustments in book-to-tax basis differences primarily related to (1) the step-up in fair value of fixed and intangible assets acquired in connection with business combination transactions, ~~the utilization of~~(2) changes in net operating ~~losses,~~loss carryforwards, (3) changes in tax rates, and (4) changes in our assessment of the realizability of our deferred tax assets.

8. Net Income per Share

Basic and diluted net income per share are calculated by dividing net income by the number of basic and diluted weighted-average ordinary shares outstanding during the period. For the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 the weighted-average ordinary shares outstanding ~~for~~used to calculate basic and diluted net income per share were as follows:



	For the three months ended
	March 31, 2020	March 31, 2019
Basic weighted-average ordinary shares outstanding	157,599	163,247
Dilutive effect of stock options	334	635
Dilutive effect of unvested restricted securities	452	639
Diluted weighted-average ordinary shares outstanding	158,385	164,521

For the three months ended
March 31,
2019 March 31,
2018
Basic weighted-average ordinary shares outstanding 163,247
171,404
Dilutive effect of stock options 635
926
Dilutive effect of unvested restricted securities 639
526
Diluted weighted-average ordinary shares outstanding 164,521
172,856

Net income and net income per share are presented in the condensed consolidated statements of operations.

~~Table of Contents~~

Certain potential ordinary shares were excluded from our calculation of diluted weighted-average ordinary shares outstanding because either they would have had an anti–dilutive effect on net income per share or they related to equity awards that were contingently issuable for which the contingency had not been satisfied. These potential ordinary shares ~~are~~were as follows:



	For the three months ended
	March 31, 2020	March 31, 2019
Anti-dilutive shares excluded	1,385	1,013
Contingently issuable shares excluded	596	477

For the three months ended
March 31,
2019 March 31,
2018
Anti-dilutive shares excluded 1,013
709
Contingently issuable shares excluded 477
787

9. Inventories

The following table presents the components of inventories as of March 31, ~~2019~~2020 and December 31, ~~2018 were as follows:~~2019:


	March 31, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Finished goods	$	173,246	$	187,095	$	205,819	$	197,531
Work-in-process	106,597		104,405		100,057		104,007
Raw materials	204,293		200,819		208,398		205,140
Inventories	$	484,136	$	492,319	$	514,274	$	506,678

10. Pension and Other Post-Retirement Benefits

~~We provide various pension and other post-retirement benefit plans for current and former employees, including defined benefit, defined contribution, and retiree healthcare benefit plans.~~

The components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 were as follows:



	U.S. Plans												Non-U.S. Plans
	Defined Benefit						Retiree Healthcare						Defined Benefit						Total
	2020			2019			2020			2019			2020			2019			2020			2019
Service cost	$	—		$	—		$	2		$	2		$	769		$	731		$	771		$	733
Interest cost	267			399			37			53			315			338			619			790
Expected return on plan assets	(433		)	(451		)	—			—			(174		)	(175		)	(607		)	(626		)
Amortization of net loss	295			245			10			11			236			191			541			447
Amortization of prior service (credit)/cost	—			—			(196		)	(327		)	2			3			(194		)	(324		)
Loss on settlement	4,022			—			—			—			—			—			4,022			—
Net periodic benefit cost/(credit)	$	4,151		$	193		$	(147	)	$	(261	)	$	1,148		$	1,088		$	5,152		$	1,020

U.S. Plans Non-U.S. Plans
Defined Benefit Retiree Healthcare Defined Benefit Total
2019 2018 2019 2018 2019 2018 2019 2018
Service cost $ —
$ —
$ 2
$ 19
$ 731
$ 831
$ 733
$ 850
Interest cost 399
327
53
70
338
342
790
739
Expected return on plan assets (451 ) (428 ) —
—
(175 ) (237 ) (626 ) (665 )
Amortization of net loss 245
300
11
—
191
25
447
325
Amortization of prior service (credit)/cost —
—
(327 ) (334 ) 3
(1 ) (324 ) (335 )
Loss on settlement —
530
—
—
—
—
—
530
Gain on curtailment —
—
—
—
—
(296 ) —
(296 )
Net periodic benefit cost/(credit) $ 193
$ 729
$ (261 ) $ (245 ) $ 1,088
$ 664
$ 1,020
$ 1,148

Components of net periodic benefit ~~cost~~cost/(credit) other than service cost are presented in other, net. Refer to Note 6, "Other, Net."

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11. Debt

Our long-term debt and finance lease and other financing obligations as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 consisted of the following:



	Maturity Date	March 31, 2020			December 31, 2019
Term Loan	September 20, 2026	$	459,568		$	460,725
4.875% Senior Notes	October 15, 2023	500,000			500,000
5.625% Senior Notes	November 1, 2024	400,000			400,000
5.0% Senior Notes	October 1, 2025	700,000			700,000
6.25% Senior Notes	February 15, 2026	750,000			750,000
4.375% Senior Notes	February 15, 2030	450,000			450,000
Less: discount		(11,220		)	(11,758		)
Less: deferred financing costs		(23,359		)	(24,452		)
Less: current portion		(4,630		)	(4,630		)
Long-term debt, net		$	3,220,359		$	3,219,885


Finance lease and other financing obligations		$	30,745		$	31,098
Less: current portion		(2,465		)	(2,288		)
Finance lease and other financing obligations, less current portion		$	28,280		$	28,810

Maturity Date March 31,
2019 December 31,
2018
Term Loan October 14, 2021 $ 915,516
$ 917,794
4.875% Senior Notes October 15, 2023 500,000
500,000
5.625% Senior Notes November 1, 2024 400,000
400,000
5.0% Senior Notes October 1, 2025 700,000
700,000
6.25% Senior Notes February 15, 2026 750,000
750,000
Less: discount (14,481 ) (15,169 )
Less: deferred financing costs (24,405 ) (23,159 )
Less: current portion (9,901 ) (9,704 )
Long-term debt, net $ 3,216,729
$ 3,219,762

Finance lease and other financing obligations $ 34,623
$ 35,475
Less: current portion (3,759 ) (4,857 )
Finance lease and other financing obligations, less current portion $ 30,864
$ 30,618

OnAs of March ~~27, 2019 certain indirect, wholly-owned subsidiaries of Sensata plc, including Sensata Technologies B.V., entered into the ninth amendment (the "Ninth Amendment") of the credit agreement governing~~31, 2020 there was $416.1 million available under our ~~senior secured credit facilities (the "Credit Agreement"). Among other changes to the Credit Agreement, the Ninth Amendment (i) extended the maturity date of the~~ $420.0 million revolving credit facility (the "Revolving Credit Facility") to March 27, 2024; (ii) added pounds sterling as an available currency for revolving credit loans and letters of credit under the Revolving Credit Facility; (iii) lowered certain index rate spreads related to the Revolving Credit Facility; (iv) lowered our letter of credit fees; (v) reduced our revolving credit commitment fees; and (vi) modified the senior secured net leverage ratio financial covenant to increase the Revolving Credit Facility utilization threshold above which such financial covenant is tested from 10% to 20%, and deleted the requirement that such financial covenant be tested (regardless of utilization) in determining whether a default exists for purposes of satisfying the conditions to borrowing or other utilization of the Revolving Credit Facility.

~~In connection with the entry into the Ninth Amendment, we incurred $2.4 million of creditor fees and related third-party costs. We applied the provisions of FASB ASC Subtopic 470-50,~~ ~~Modifications and Extinguishments~~ ~~in accounting for the amounts paid. As a result, we recorded $2.4 million as an adjustment to the carrying amount of long-term debt.~~

~~As of March 31, 2019 there was $416.1 million available under the Revolving Credit Facility,~~ net of $3.9 million inof obligations related to outstanding letters of ~~credit.~~credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of March 31, ~~2019 no~~2020, 0 amounts had been drawn against these outstanding letters of credit.

In order to enhance our financial flexibility in light of COVID-19, we executed a $400.0 million drawdown on the Revolving Credit Facility on April 1, 2020.

Accrued Interest

Accrued interest associated with our outstanding debt is included as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets. As of March 31, ~~2019~~2020 and December 31, ~~2018~~2019, accrued interest totaled ~~$46.1~~$47.1 million and ~~$40.6~~$42.8 million, respectively.

12. Commitments and Contingencies

We are a defendant in a lawsuit, Wasica Finance Gmbh et al v. Schrader International Inc. et al, Case No. 13-1353-CPS, U.S.D.C., Delaware, in which the claimant alleges infringement of their patent (US 5,602,524) in connection with certain of our tire pressure monitoring system products. The patent in question has expired, and as a result, the claimant ~~is seeking~~seeks damages for past alleged infringement with interest and costs. ~~Should~~The asserted patent is the ~~claimant prevail, these amounts could~~U.S. counterpart of a German patent that had been previously asserted against Schrader. Schrader succeeded in proving that German patent to be ~~material.~~invalid. On February 14, 2020, the federal jury trial related to this lawsuit concluded, and the jury found Schrader International Inc. liable for damages in the amount of $31.2 million. As a result, we recorded a loss of $29.2 million in the three months ended March 31, 2020 through cost of revenue. We continue to deny any wrongdoing, have ~~denied liability~~filed post-trial motions, and intend to appeal the jury's decision, including any final circuit court order against us. As of March 31, 2020, we have ~~been defending the litigation, which is in discovery. Trial is currently expected in February 2020. We do not believe a loss~~recorded an accrual of $31.2 million related to this matter in other long-term liabilities, based on timing of expected payment if our appeal is ~~probable. As of March 31, 2019 we have not recorded an accrual for this matter.~~

~~We are a defendant in a lawsuit,~~ ~~Metal Seal Precision, Ltd. v. Sensata Technologies Inc., Case No. 2017-0518-BCSI, MA Superior Court (Suffolk County)~~, in which the claimant ("Metal Seal"), a supplier of certain metal parts used in the manufacture of our products, alleges breach of contract and misrepresentation. The dispute arises out of a long-term supply agreement under which Metal Seal alleges certain purchase requirements were not met, resulting in damages and lost profits. On April 12, 2019

~~Table of Contents~~

the court granted, in part, our motion for summary judgment and dismissed Metal Seal's unfair trade practices claims. Plaintiff’s damage expert claims that Metal Seal has losses ranging up to $51.0 million. We are defending the lawsuit and do not believe a loss related to this matter is probable. As of March 31, 2019 we have not recorded an accrual related to this matter.unsuccessful.

13. Shareholders' Equity

Treasury Shares

~~In May 2018 we announced that~~From time to time, our Board of Directors ~~had~~has authorized ~~a $400.0 million~~various share repurchase ~~program.~~programs. The ~~program was completed during the three months ended March 31, 2019. Since inception we repurchased 7,584 thousand ordinary shares under the program.~~

~~In October 2018~~authorized amount of our various share repurchase programs may be modified or terminated by our Board of Directors at any time. We currently have an authorized ~~a new $250.0~~$500.0 million share repurchase ~~program. Under this~~ program we may repurchase ordinary shares at such times and in amounts to be determined by our management, based on market conditions, legal requirements, and other corporate considerations, on the open market or in privately negotiated transactions, provided that such transactions are completed pursuant to an agreement and with a third party approved by our shareholders at the annual general meetingunder which approximately $302.3 million remained available as of ~~shareholders held in May 2018. We repurchased 3,023 thousand ordinary shares under this program during the three months ended~~ March 31, ~~2019, for~~2020. On April 2, 2020, we announced a ~~total purchase price~~temporary suspension of ~~approximately $150.2 million, which are now held as treasury shares.~~this share repurchase program to enhance our financial flexibility in light of the uncertainties surrounding COVID-19.

Accumulated Other Comprehensive Loss

The ~~following is a roll forward of the~~ components of accumulated other comprehensive loss for the three months ended March 31, ~~2019:~~2020 were as follows:



	Cash Flow Hedges			Defined Benefit and Retiree Healthcare Plans			Accumulated Other Comprehensive Loss
Balance at December 31, 2019	$	16,546		$	(37,030	)	$	(20,484	)
Other comprehensive loss before reclassifications, net of tax	(13,041		)	—			(13,041		)
Reclassifications from accumulated other comprehensive loss, net of tax	(6,293		)	3,342			(2,951		)
Other comprehensive (loss)/income	(19,334		)	3,342			(15,992		)
Balance at March 31, 2020	$	(2,788	)	$	(33,688	)	$	(36,476	)

Cash Flow Hedges Defined Benefit and Retiree Healthcare Plans Accumulated Other Comprehensive Loss
Balance as of December 31, 2018 $ 9,184
$ (35,362 ) $ (26,178 )
Other comprehensive income before reclassifications, net of tax 12,721
—
12,721
Reclassifications from accumulated other comprehensive loss, net of tax (2,661 ) 83
(2,578 )
Other comprehensive income 10,060
83
10,143
Balance as of March 31, 2019 $ 19,244
$ (35,279 ) $ (16,035 )

The details of the amounts reclassified from accumulated other comprehensive loss for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 are as follows:



	Loss/(Gain) Reclassified from Accumulated Other Comprehensive Loss						Affected Line in Condensed Consolidated Statements of Operations
	For the three months ended							For the three months ended March 31,
Component	March 31, 2019			March 31, 2018				2020			2019
Derivative instruments designated and qualifying as cash flow hedges:
Foreign currency forward contracts	$	(3,219	)	$	10,884		Net revenue ⁽¹⁾
Foreign currency forward contracts	(128		)	826			Cost of revenue ⁽¹⁾	$	(6,623	)	$	(3,219	)	Net revenue ⁽¹⁾
Foreign currency forward contracts	—			1,376			Other, net ⁽¹⁾	(1,768		)	(128		)	Cost of revenue ⁽¹⁾
Total, before taxes	(3,347		)	13,086			Income before taxes	(8,391		)	(3,347		)	Income before taxes
Income tax effect	686			(3,272		)	Provision for income taxes	2,098			686			(Benefit from)/provision for income taxes
Total, net of taxes	$	(2,661	)	$	9,814		Net income	$	(6,293	)	$	(2,661	)	Net income

Defined benefit and retiree healthcare plans	$	123		$	224		Other, net ⁽²⁾	$	4,369		$	123		Other, net ⁽²⁾
Income tax effect	(40		)	175			Provision for income taxes	(1,027		)	(40		)	(Benefit from)/provision for income taxes
Total, net of taxes	$	83		$	399		Net income	$	3,342		$	83		Net income

__________________________


⁽¹⁾	Refer to Note 15, "Derivative Instruments and Hedging Activities" for additional ~~details~~information on amounts to be reclassified from accumulated other comprehensive loss in future periods.

~~Table of Contents~~


⁽²⁾	Refer to Note 10, "Pension and Other Post-Retirement Benefits" for additional ~~details of~~information on net periodic benefit ~~cost.~~cost/(credit).

14. Fair Value Measures

~~Our assets and liabilities recorded at fair value have been categorized based upon the fair value hierarchy in accordance with FASB ASC Topic 820,~~ ~~Fair Value Measurement~~.

Measured on a Recurring Basis

The fair values of our assets and liabilities measured at fair value on a recurring basis as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 are as shown in the below table. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.



	March 31, 2020		December 31, 2019
Assets
Foreign currency forward contracts	$	20,095	$	23,561
Commodity forward contracts	2,079		3,623
Total	$	22,174	$	27,184

Liabilities
Foreign currency forward contracts	$	24,052	$	1,959
Commodity forward contracts	4,993		462
Total	$	29,045	$	2,421

March 31, 2019 December 31, 2018
Assets
Foreign currency forward contracts $ 27,152
$ 17,871
Commodity forward contracts 981
831
Total $ 28,133
$ 18,702
Liabilities
Foreign currency forward contracts $ 2,882
$ 5,165
Commodity forward contracts 2,293
4,137
Total $ 5,175
$ 9,302

Measured on a Nonrecurring Basis

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, ~~2018~~2019 and determined that they were not impaired. As of March 31, ~~2019 no events or changes in circumstances occurred~~2020, we have assessed the market impact of COVID-19, including the resulting impact on our forecasts, and have determined that ~~would have triggered the need for an additional impairment review~~our intangible assets (including goodwill) were not impaired as of ~~these assets.~~

We periodically reevaluate the carrying values and estimated useful lives of long-lived assets whenever events or changes in circumstances indicate that the carrying values of such assets may not be recoverable.

~~We account for our investment in Series B Preferred Stock of Quanergy Systems, Inc. ("Quanergy") under the measurement alternative in FASB ASC Topic 321,~~ ~~Investments - Equity Securities~~ for equity investments without a readily determinable fair value. Such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. No adjustments to the carrying value of this investment were required in the first quarter of 2019 or since the adoption of this guidance. Accordingly, our investment in Quanergy continues to be held at cost of $50.0 million.March 31, 2020.

Financial Instruments Not Recorded at Fair Value

The following table presents the carrying values and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of March 31, ~~2019~~2020 and December 31, ~~2018.~~2019. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.


	March 31, 2019					December 31, 2018
	Carrying Value ⁽¹⁾		Fair Value			Carrying Value ⁽¹⁾			Fair Value			March 31, 2020						December 31, 2019
	Carrying Value ⁽¹⁾				Carrying Value ⁽¹⁾				Fair Value			Fair Value			Carrying Value ⁽¹⁾			Fair Value
Liabilities			Fair Value
Term Loan	$	915,516	$	916,661		Carrying Value ⁽¹⁾	$	917,794		$	904,027		$	459,568		$	436,590		$	460,725		$	464,181
4.875% Senior Notes	$	500,000	$	514,375		$	500,000		$	491,875		$	500,000		$	480,000		$	500,000		$	532,500
5.625% Senior Notes	$	400,000	$	425,000		$	400,000		$	400,500		$	400,000		$	384,000		$	400,000		$	444,000
5.0% Senior Notes	$	700,000	$	714,000		$	700,000		$	660,625		$	700,000		$	665,000		$	700,000		$	759,500
6.25% Senior Notes	$	750,000	$	793,125		$	750,000		$	751,875		$	750,000		$	727,500		$	750,000		$	808,125
4.375% Senior Notes												$	450,000		$	396,000		$	450,000		$	457,875

⁽¹⁾ Excluding any related debt discounts and deferred financing costs.

In addition to the above, we hold certain equity investments that do not have readily determinable fair values for which we use the measurement alternative prescribed in FASB ASC Topic 321, Investments - Equity Securities. Such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. There were no impairments or changes resulting from observable transactions for any of these investments, and no adjustments have been made to their carrying values.

Refer to the table below for a detail of the carrying values of these investments, each of which are presented in other assets.



	March 31, 2020		December 31, 2019
Quanergy Systems, Inc	$	50,000	$	50,000
Lithium Balance	—		3,700
Total	$	50,000	$	53,700

~~Table of Contents~~

The fair values of the Term Loan and the senior notes are determined primarily using observable prices in markets where these instruments are generally not traded on a daily basis. Cash and cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates fair value because of their short-term nature.

15. Derivative Instruments and Hedging Activities

Hedges of Foreign Currency Risk

We are exposed to fluctuations in various foreign currencies against our functional currency, the U.S. dollar (the "USD"). We enter into forward contracts for certain of these foreign currencies to manage this exposure. We currently have outstanding foreign currency forward contracts that qualify as cash flow hedges intended to offset the effect of exchange rate fluctuations on forecasted sales and certain manufacturing costs. We also have outstanding foreign currency forward contracts that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities, which are not designated for hedge accounting treatment in accordance with FASB ASC Topic 815, ~~Derivatives and Hedging~~.

For the three months ended March 31, ~~2019~~2020 and ~~2018~~2019, amounts excluded from the assessment of effectiveness of our foreign currency forward ~~agreements~~contracts that are designated as cash flow hedges were not material. As of March 31, ~~2019~~2020, we estimate that ~~$20.8~~$3.5 million of net gains will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending March 31, ~~2020.~~2021.

As of March 31, ~~2019~~2020, we had the following outstanding foreign currency forward contracts:



Notional (in millions)	Effective Date(s)	Maturity Date(s)	Index (Exchange Rates)	~~Weighted- Average~~Weighted-Average Strike Rate	Hedge Designation ⁽¹⁾
~~46.0~~30.0 EUR	March 27, ~~2019~~2020	April 30, ~~2019~~2020	Euro ("EUR") to USD ~~Exchange Rate~~	~~1.13~~1.10 USD	Not designated
~~340.9~~325.7 EUR	Various from May ~~2017~~2018 to March ~~2019~~2020	Various from April ~~2019~~2020 to February ~~2021~~2022	~~Euro~~EUR to USD ~~Exchange Rate~~	~~1.21~~1.16 USD	Cash flow hedge
~~387.0~~437.0 CNY	March ~~22, 2019~~26, 2020	April 30, ~~2019~~2020	USD to Chinese Renminbi ~~Exchange Rate~~("CNY")	~~6.74~~7.12 CNY	Not designated
~~813.4~~804.6 CNY	Various from December 2019 to January ~~10, 2019~~2020	Various from April to December ~~2019~~2020	USD to ~~Chinese Renminbi Exchange Rate~~CNY	~~6.81~~6.99 CNY	Cash flow hedge
~~578.0~~498.0 JPY	March 27, ~~2019~~2020	April ~~26, 2019~~30, 2020	USD to Japanese Yen ~~Exchange Rate~~("JPY")	~~110.22~~107.94 JPY	Not designated
~~25,897.0~~22,742.4 KRW	Various from May ~~2017~~2018 to March ~~2019~~2020	Various from April ~~2019~~2020 to February ~~2021~~2022	USD to Korean Won ~~Exchange Rate~~("KRW")	~~1,091.92~~1,151.92 KRW	Cash flow hedge
~~24.0~~16.0 MYR	March 26, ~~2019~~2020	April 30, ~~2019~~2020	USD to Malaysian Ringgit ~~Exchange Rate~~("MYR")	~~4.08~~4.31 MYR	Not designated
~~175.0~~202.0 MXN	March 27, ~~2019~~2020	April 30, ~~2019~~2020	USD to Mexican Peso ~~Exchange Rate~~("MXN")	~~19.32~~23.53 MXN	Not designated
~~2,656.6~~2,961.0 MXN	Various from May ~~2017~~2018 to March ~~2019~~2020	Various from April ~~2019~~2020 to February ~~2021~~2022	USD to ~~Mexican Peso Exchange Rate~~MXN	~~20.81~~21.36 MXN	Cash flow hedge
~~43.0~~2.0 GBP	March 27, 2020	April 30, 2020	British Pound Sterling ("GBP") to USD	1.23 USD	Not Designated
53.7 GBP	Various from May ~~2017~~2018 to March ~~2019~~2020	Various from April ~~2019~~2020 to February ~~2021~~2022	~~British Pound Sterling~~GBP to USD ~~Exchange Rate~~	~~1.34~~1.29 USD	Cash flow hedge

_________________________


⁽¹⁾	Derivative financial instruments not designated as hedges are used to manage our exposure to currency exchange rate risk. They are intended to preserve economic value, and they are not used for trading or speculative purposes.

Hedges of Commodity Risk

~~We enter into~~As of March 31, 2020, we had the following outstanding commodity forward contracts, ~~in order to limit our exposure to variability in raw material costs that is caused by movements in the price~~none of ~~underlying metals. The terms of these forward contracts fix the price at a future date for various notional amounts associated with these commodities. These instruments are not~~which were designated for hedge accounting treatment in accordance with FASB ASC Topic ~~815.~~815, Derivatives and Hedging:

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~~As of March 31, 2019 we had the following outstanding commodity forward contracts:~~



Commodity	Notional	Remaining Contracted Periods	Weighted-Average Strike Price Per Unit
Silver	~~985,928~~850,249 troy oz.	April ~~2019-February 2021~~2020 - February 2022	$~~16.21~~16.65
Gold	~~8,862~~7,733 troy oz.	April ~~2019-February 2021~~2020 - February 2022	$~~1,314.95~~1,457.41
Nickel	~~261,138~~221,697 pounds	April ~~2019-February 2021~~2020 - February 2022	$~~5.84~~6.16
Aluminum	~~4,401,529~~3,103,095 pounds	April ~~2019-February 2021~~2020 - February 2022	$~~0.93~~0.87
Copper	~~2,742,639~~2,290,867 pounds	April ~~2019-February 2021~~2020 - February 2022	$~~3.11~~2.69
Platinum	~~7,694~~7,821 troy oz.	April ~~2019-February 2021~~2020 - February 2022	$~~900.11~~896.59
Palladium	~~808~~942 troy oz.	April ~~2019-February 2021~~2020 - February 2022	$~~1,042.41~~1,620.30

Financial Instrument Presentation

The following table presents the fair values of our derivative financial instruments and their classification in the condensed consolidated balance sheets as of March 31, ~~2019~~2020 and December 31, ~~2018:~~2019:



	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	March 31, 2020		December 31, 2019		Balance Sheet Location	March 31, 2020		December 31, 2019
Derivatives designated as hedging instruments
Foreign currency forward contracts	Prepaid expenses and other current assets	$	17,224	$	20,957	Accrued expenses and other current liabilities	$	17,139	$	1,055
Foreign currency forward contracts	Other assets	2,840		2,530		Other long-term liabilities	6,504		428
Total		$	20,064	$	23,487		$	23,643	$	1,483

Derivatives not designated as hedging instruments
Commodity forward contracts	Prepaid expenses and other current assets	$	1,635	$	3,069	Accrued expenses and other current liabilities	$	3,603	$	394
Commodity forward contracts	Other assets	444		554		Other long-term liabilities	1,390		68
Foreign currency forward contracts	Prepaid expenses and other current assets	31		74		Accrued expenses and other current liabilities	409		476
Total		$	2,110	$	3,697		$	5,402	$	938

Asset Derivatives Liability Derivatives
Balance Sheet Location March 31, 2019 December 31, 2018 Balance Sheet Location March 31, 2019 December 31, 2018
Derivatives designated as hedging instruments
Foreign currency forward contracts Prepaid expenses and other current assets $ 22,835
$ 14,608
Accrued expenses and other current liabilities $ 2,421
$ 3,615
Foreign currency forward contracts Other assets 4,185
3,168
Other long-term liabilities 214
1,134
Total $ 27,020
$ 17,776
$ 2,635
$ 4,749
Derivatives not designated as hedging instruments
Commodity forward contracts Prepaid expenses and other current assets $ 675
$ 524
Accrued expenses and other current liabilities $ 2,132
$ 3,679
Commodity forward contracts Other assets 306
307
Other long-term liabilities 161
458
Foreign currency forward contracts Prepaid expenses and other current assets 132
95
Accrued expenses and other current liabilities 247
416
Total $ 1,113
$ 926
$ 2,540
$ 4,553

These fair value measurements are all categorized within Level 2 of the fair value hierarchy.

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The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive (loss)/income for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


Derivatives designated as hedging instruments	Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive Income					Location of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income		Amount of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income								Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive (Loss)/Income							Location of Net Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income		Amount of Net Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income
Derivatives designated as hedging instruments	2019		2018				2019				2018				2020				2019					2020				2019
Foreign currency forward contracts	$	9,118	$	(17,838	)		Net revenue		$	3,219			$	(10,884	)		$	12,544			$	9,118		Net revenue		$	6,623			$	3,219
Foreign currency forward contracts	$	6,078	$	13,471		Cost of revenue		$	128			$	(826	)		$	(29,630	)		$	6,078		Cost of revenue		$	1,768			$	128
Foreign currency forward contracts	$	—	$	—		Other, net		$	—			$	(1,376	)



Derivatives not designated as hedging instruments	Amount of (Loss)/Gain Recognized in Net Income					Location of (Loss)/Gain Recognized in Net Income
Derivatives not designated as hedging instruments	2020			2019		Location of (Loss)/Gain Recognized in Net Income
Commodity forward contracts	$	(5,575	)	$	1,123	Other, net
Foreign currency forward contracts	$	(3,781	)	$	478	Other, net

Derivatives not designated as
hedging instruments
Amount of Gain/(Loss) Recognized in Net Income Location of Gain/(Loss) Recognized in Net Income
2019 2018
Commodity forward contracts $ 1,123
$ (3,195 ) Other, net
Foreign currency forward contracts $ 478
$ (4,950 ) Other, net

Credit Risk Related Contingent Features

We have agreements with certain of our derivative counterparties that contain a provision whereby if we default on our indebtedness and ~~where~~ repayment of the indebtedness has been accelerated by the lender, then we could also be declared in default on our derivative obligations.

As of March 31, ~~2019~~2020, the termination value of outstanding derivatives in a liability position, excluding any adjustment for non-performance risk, was ~~$5.2~~$29.3 million. As of March 31, ~~2019~~2020, we ~~have not~~had 0t posted any cash collateral related to these agreements. If we breach any of the default provisions on any of our indebtedness as described above, we could be required to settle our obligations under the derivative agreements at their termination values.

16. Acquisitions ~~and Divestitures~~

~~GIGAVAC merger~~

On September 24, 2018 we entered into an agreement and plan of merger with GIGAVAC, whereby GIGAVAC would merge with one of our wholly-owned subsidiaries, thereby becoming a wholly-owned subsidiary of Sensata. On October 31, 201813, 2019, we completed ~~the~~1 acquisition ~~of GIGAVAC~~ for ~~$233~~approximately $30 million, net of cash ~~consideration, subject to working capital and other adjustments, approximately $12.0 million of which related to certain compensation arrangements with certain GIGAVAC employees and shareholders.~~

Based in Carpinteria, California, GIGAVAC has more than 270 employees and is a leading provider of solutions that enable electrification in demanding environments within the automotive, battery storage, industrial, and HVOR end markets. We acquired GIGAVAC to increase our content and capabilities for electrification, including products such as cars, delivery trucks, buses, material handling equipment, and charging stations. Portions of GIGAVAC will be integrated into each of our operating segments.

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~~The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed:~~

Net working capital, excluding cash $ 16,980
Property, plant and equipment 4,384
Goodwill 113,731
Other intangible assets 122,742
Other assets 63
Deferred income tax liabilities (27,000 )
Other long-term liabilities (1,000 )
Fair value of net assets acquired, excluding cash and cash equivalents 229,900
Cash and cash equivalents 359
Fair value of net assets acquired $ 230,259

The allocation of purchase price related to the GIGAVAC merger is preliminary, and is based on management’s judgments after evaluating several factors, including preliminary valuation assessments of tangible and intangible assets. The final allocation of the purchase price to the assets acquired will be completed when the final valuations are completed. The preliminary goodwill recognized as a result of this acquisition was approximately $113.7 million, which represents future economic benefits expected to arise from synergies from combining operations and the extension of existing customer relationships. The amount of goodwill recorded that is expected to be deductible for tax purposes is not material.

In connection with the allocation of purchase price to the assets acquired and liabilities assumed, we identified certain definite-lived intangible assets. The following table presents the acquired intangible assets, their estimated fair values, and weighted average lives:

Acquisition Date Fair Value Weighted-Average Lives (years)
Acquired definite-lived intangible assets:
Customer relationships $ 74,500
10
Completed technologies 31,040
13
Tradenames 15,400
15
Other 1,802
6
Total definite-lived intangible assets acquired $ 122,742
12

The definite-lived intangible assets were valued using the income approach. We used the relief-from-royalty method to value completed technologies and tradenames, and we used the multi-period excess earnings method to value customer relationships. These valuation methods incorporate assumptions including expected discounted future cash flows resulting from either the future estimated after-tax royalty payments avoided as a result of owning the completed technologies or the future earnings related to existing customer relationships.

~~Valves Business Divestiture~~

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. (together with its affiliates, "Pacific"). Contemporaneous with the closing of the sale, Sensata and Pacific entered into a long-term supply agreement, which imposes an obligation on us to purchase minimum quantities of product from Pacific over a period of nearly five years.

In exchange for selling the Valves Business and entering into the long-term supply agreement, we received cash consideration from Pacific of approximately $165.5 million, net of $11.8 million of cash and cash equivalents sold.

We determined that the terms of the long-term supply agreement entered into concurrent with the sale of the Valves Business were not at market. Accordingly, we recognized a liability of $16.4 million, measured at fair value, which represented the fair value of the off-market component of the supply agreement.

17. Segment Reporting

We ~~organize our business into two~~operate in, and report financial information for, the following 2 reportable segments, Performance Sensing and Sensing Solutions, each of which is also an operating segment. Our operating segments are businesses that we manage as components of an enterprise, for which separate

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financial information is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and assess performance.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes amortization of intangible assets, restructuring and other charges, net, and certain corporate costs/credits not associated with the operations of the segment, including share-based compensation expense and a portion of depreciation expense associated with assets recorded in connection with acquisitions. ~~In addition, an operating segment’s performance excludes results from discontinued operations, if any.~~ Corporate and other costs excluded from an operating segment’s performance are separately stated below and also include costs that are related to functional areas, such as finance, information technology, legal, and human resources. We believe that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of our segments. However, this measure should be considered in addition to, and not as a substitute for, or superior to, operating income or other measures of financial performance prepared in accordance with U.S. GAAP. The accounting policies of each of our reporting segments are materially consistent with those in the summary of significant accounting policies as described in Note 2, "Significant Accounting Policies" included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

The following table presents net revenue and segment operating income for the reported segments and other operating results not allocated to the reported segments for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:



	For the three months ended
	March 31, 2020			March 31, 2019
Net revenue:
Performance Sensing	$	568,689		$	640,028
Sensing Solutions	205,580			230,471
Total net revenue	$	774,269		$	870,499
Segment operating income (as defined above):
Performance Sensing	$	129,062		$	150,509
Sensing Solutions	55,949			74,969
Total segment operating income	185,011			225,478
Corporate and other	(88,822		)	(41,430		)
Amortization of intangible assets	(33,092		)	(36,143		)
Restructuring and other charges, net	(4,498		)	(5,309		)
Operating income	58,599			142,596
Interest expense, net	(39,403		)	(39,253		)
Other, net	(12,281		)	3,189
Income before taxes	$	6,915		$	106,532

For the three months ended
March 31, 2019 March 31, 2018
Net revenue:
Performance Sensing $ 640,028
$ 662,829
Sensing Solutions 230,471
223,464
Total net revenue $ 870,499
$ 886,293
Segment operating income (as defined above):
Performance Sensing $ 150,509
$ 169,410
Sensing Solutions 74,969
71,884
Total segment operating income 225,478
241,294
Corporate and other (41,430 ) (54,781 )
Amortization of intangible assets (36,143 ) (35,069 )
Restructuring and other charges, net (5,309 ) (3,766 )
Operating income 142,596
147,678
Interest expense, net (39,253 ) (38,429 )
Other, net 3,189
(4,633 )
Income before taxes $ 106,532
$ 104,616

18. ~~Leases~~Subsequent Events

~~As discussed~~On April 2, 2020, we announced a series of actions taken in ~~Note 2, "New Accounting Standards," we adopted FASB ASC Topic 842 on January 1, 2019, using~~response to COVID-19. These actions are designed to protect the ~~modified retrospective transition method. We have elected~~health and safety of our employees, enable us to ~~apply the package~~continue to serve critical customer needs, and further enhance our financial flexibility. Actions taken to enhance our financial flexibility included a temporary suspension of ~~practical expedients~~our share repurchase program and ~~the land easement practical expedient. We have not elected to apply the hindsight practical expedient.~~

As a result of this adoption, we classify most leases as either finance or operating leases and recognize a related lease liability and right-of-use asset on our consolidated balance sheets. Our accounting for finance leases remains unchanged after the adoption of FASB ASC Topic 842. We have elected to account for leases with a term of one year or less (short-term leases) using a method similar to the operating lease model under FASB ASC Topic 840, ~~Leases~~ ~~(i.e. they are not recorded~~$400.0 million drawdown on the ~~consolidated balance sheets).~~Revolving Credit Facility on April 1, 2020, leaving us with cash on hand of approximately $1.2 billion on that date.

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We elected to apply the transition provisions of this guidance, including its disclosure requirements, at its date of adoption instead of at the beginning of the earliest comparative period presented. Accordingly, we have not restated our consolidated balance sheet as of December 31, 2018. There was no cumulative effect of adoption on our retained earnings or any other components of equity. The below adjustments were made to our condensed consolidated balance sheet on January 1, 2019 to reflect the new guidance:

December 31, 2018 Adjustment January 1, 2019
Prepaid expenses and other current assets $ 113,234
$ (253 ) $ 112,981
Other intangible assets, net $ 897,191
$ (1,510 ) $ 895,681
Other assets $ 86,890
$ 58,496
$ 145,386
Accrued expenses and other current liabilities $ 218,130
$ 12,119
$ 230,249
Other long-term liabilities $ 39,277
$ 44,614
$ 83,891

~~The table below presents the amounts recognized and location of recognition in our condensed consolidated balance sheet as of March 31, 2019 related to our operating and finance leases:~~

March 31, 2019
Operating lease right-of-use assets:
Other assets $ 54,672
Total operating lease right-of-use assets $ 54,672
Operating lease liabilities:
Accrued expenses and other current liabilities $ 12,209
Other long-term liabilities 42,908
Total operating lease liabilities $ 55,117
Finance lease right-of-use assets:
Property, plant and equipment, at cost $ 49,714
Accumulated depreciation (22,960 )
Property, plant and equipment, net $ 26,754
Finance lease liabilities:
Current portion of long-term debt, finance lease and other financing obligations $ 1,956
Finance lease and other financing obligations, less current portion 30,468
Total finance lease liabilities $ 32,424

~~The table below presents the lease liabilities arising from obtaining right-of-use assets in the three months ended March 31, 2019:~~

For the three months ended
March 31, 2019
Operating leases $ 158
Finance leases $ —

For finance leases, the consolidated statements of operations include separate recognition of interest on the lease liability and amortization of the right-of-use asset. For operating leases, the consolidated statements of operations include a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. The table below presents our total lease cost for the three months ended March 31, 2019:

For the three months ended
March 31, 2019
Operating lease cost $ 3,979

Finance lease cost:
Amortization of right-of-use assets $ 452
Interest on lease liabilities 689
Total finance lease cost $ 1,141

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~~Short term lease cost was not material for the three months ended March 31, 2019.~~

Cash flows from operating activities include (1) interest on finance lease liabilities and (2) payments arising from operating leases. Cash flows from financing activities include repayments of the principal portion of finance lease liabilities. The table below presents the cash paid related to our operating and financing leases for the three months ended March 31, 2019:

For the three months ended
March 31, 2019
Operating cash flows from operating leases $ 3,788
Operating cash flows from finance leases $ 619
Financing cash flows from finance leases $ 459

We occupy leased facilities with initial terms ranging up to 20 years. These lease agreements frequently include options to renew for additional periods and generally require that we pay taxes, insurance, and maintenance costs. We also lease certain vehicles and equipment. The table below presents the weighted average remaining lease term of our operating and finance leases (in years):



	~~March 31, 2019~~
~~Operating leases~~	~~8.3~~
~~Finance leases~~	~~13.0~~

Our lease liabilities are initially measured at the present value of the lease payments not yet paid, discounted using our incremental borrowing rate for a period that is comparable to the remaining lease term. Upon adoption of FASB ASC Topic 842, we initially measured our operating lease liabilities using this methodology, while our accounting for finance leases remained unchanged. We use our incremental borrowing rate because the discount rate implicit in our leases are generally not readily determinable. The table below presents our weighted average discount rate as of March 31, 2019:



	~~March 31, 2019~~
~~Operating leases~~	~~5.8~~	%
~~Finance leases~~	~~8.5~~	%

~~The table below presents a maturity analysis of the obligations related to our operating lease liabilities and finance lease liabilities in effect as of March 31, 2019:~~

Operating Leases Finance Leases
Year ending December 31,
2019 (excluding the three months ended March 31, 2019) $ 11,521
$ 3,613
2020 12,359
4,559
2021 8,506
4,081
2022 6,894
3,731
2023 5,790
3,790
Thereafter 27,339
36,398
Total undiscounted cash flows related to lease liabilities 72,409
56,172
Less imputed interest (17,292 ) (23,748 )
Total lease liabilities $ 55,117
$ 32,424

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Cautionary Statements Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q, including any documents incorporated by reference herein, includes "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 and may be identified by terminology such as "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.

Forward-looking statements contained herein, or in other statements made by us, are made based on management’s expectations and beliefs concerning future events impacting us. These statements are subject to uncertainties and other important factors relating to our operations and business environment, all of which are difficult to predict, and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we can give no assurances that any of the events anticipated by these forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition.

We believe that the following important factors, among others (including those set forth here and described in Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, ~~2018)~~2019), could affect our future performance and the liquidity and value of our securities and cause our actual results to differ materially from those expressed or implied by forward-looking statements made by us or on our behalf:

Future risks and existing uncertainties associated with the COVID-19 pandemic, which continues to have a significant adverse impact on our business and operations including: (i) full or partial shutdowns of our facilities as mandated by government decrees, (ii) limited ability to adjust certain costs due to government actions, (iii) significant travel restrictions and “work-from-home” orders limiting the availability of our workforce, (iv) supplier constraints and supply-chain interruptions, (v) logistics challenges and limitations, (vi) reduced demand from certain customers, (vi) uncertainties associated with a protracted economic slowdown that could negatively affect the financial condition of our customers and suppliers, and (vii) uncertainties and volatility in the global capital markets;

business disruptions due to natural disasters or other disasters outside our control, such as the global coronavirus (COVID-19) pandemic.

instability and changes in the global markets, including regulatory, political, economic, governmental, and military matters, such as the ~~impending~~recent exit of the United Kingdom (the "U.K.") from the European Union (the "EU");

adverse conditions or competition in the industries upon which we are dependent, including the automotive industry;

competitive pressure from customers that could require us to reduce ~~prices;~~prices or result in reduced demand;

losses and costs as a result of intellectual property, product liability, warranty, and recall claims;

market acceptance of new product introductions and product innovations;

supplier interruption or non-performance, limiting our access to manufactured components or raw materials;

~~we may not~~risks related to the acquisition or disposition of businesses, or the restructuring of our business;

labor disruptions or increased labor costs;

inability to realize all of the revenue or achieve anticipated gross margins from products subject to existing purchase orders for which we are currently engaged in development;

~~risks related to the acquisition or disposition of businesses, or the restructuring of our business;~~

~~market acceptance of new product introductions and product innovations;~~

~~losses and costs as a result of intellectual property, product liability, warranty, and recall claims;~~

~~business disruptions due to natural disasters or other disasters outside our control;~~

~~labor disruptions or increased labor costs;~~

security breaches, cyber theft of our intellectual property, and other disruptions to our information technology infrastructure, or improper disclosure of confidential, personal, or proprietary data;

foreign currency risks, changes in socio-economic conditions, or changes to monetary and fiscal policies;

our level of indebtedness, or our inability to meet debt service obligations or comply with the covenants contained in the credit agreement and senior notes indentures;

changes to current policies, such as trade tariffs, by the U.S. government;

risks related to the potential for goodwill impairment;

the impact of ~~United States ("U.S.") federal income tax reform, or~~challenges by taxing authorities ~~challenging~~of our historical and future tax positions or our allocation of taxable income among our subsidiaries, and challenges to the sovereign taxation regimes of EU member states by the European ~~Commission;~~

~~changes to current policies, such as trade tariffs, by~~Commission and the ~~U.S. government;~~Organization for Economic Co-operation and Development;

changes to, or inability to comply with, various regulations, including tax laws, import/export regulations, anti-bribery laws, environmental, health, and safety laws, and other governmental regulations; and

risks related to our domicile in the U.K.

In addition, the extent to which the COVID-19 pandemic will continue to impact our business and financial results going forward will be dependent on future developments, such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable.

All forward-looking statements attributable to us or persons acting on our behalf speak only as of the date of this Quarterly Report on Form 10-Q and are expressly qualified in their entirety by the cautionary statements contained in this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. We urge readers to review carefully the risk factors described in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 and in the other documents that we file with the U.S. Securities and Exchange Commission. You can read these documents at www.sec.gov or on our website at www.sensata.com.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, filed with the ~~United States ("~~U.S.") Securities and Exchange Commission on February ~~6, 2019,~~11, 2020, and the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Overview

The COVID-19 pandemic has caused widespread disruptions to our Company, employees, customers, suppliers and communities. During the first quarter, these disruptions were primarily limited to our manufacturing operations in China, most of which were closed for approximately three weeks during the quarter due to government mandates. As the virus spread to the rest of the world in March, most of our other operations outside of China also were impacted. As of March 31, 2020, we were still experiencing significant disruptions, and at a minimum, we expect those disruptions to continue throughout the second quarter of 2020. These disruptions include, depending on the specific location, full or partial shutdowns of our facilities as mandated by government decrees, limited ability to adjust certain costs due to government actions, significant travel restrictions and “work-from-home” orders limiting the availability of our workforce, supplier constraints and material supply-chain interruptions, logistics challenges and limitations, and reduced demand from certain customers.

The COVID-19 outbreak did have a negative impact on our first quarter 2020 results, and we expect it to have a negative impact on our second quarter 2020 results. The extent of the impact on our second quarter 2020 results and beyond will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable.

Given these uncertainties and negative impact of the COVID-19 pandemic, we have taken steps to manage and reduce operating costs and further enhance our financial flexibility, including the Board’s formation of a Health & Economic Response Committee to oversee the impact of the COVID-19 pandemic. These steps also include the following actions to reduce compensation expense in the second quarter 2020: (1) a 50% reduction to the cash retainers paid to non-employee directors; (2) a reduction to the Chief Executive officer salary to $1.00; (3) a 25% reduction to the salaries of all senior leaders of the Company; and (4) temporary furloughs or equivalent cost saving methods for the remaining workforce. We also are taking steps to reduce capital and discretionary expenditures and to ramp down certain production facilities in line with end market demand. We expect these actions to generate approximately $15 million to $20 million in cost savings during the second quarter of 2020.

Further, to provide maximum financial flexibility due to COVID-19, we drew down $400.0 million on the Revolving Credit Facility on April 1, 2020, resulting in cash on hand as of that date of approximately $1.2 billion. In addition, effective April 1, 2020, we have temporarily suspended our share repurchase program.

Given the foregoing and unprecedented market uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations. The Company plans to continue taking actions to help mitigate, as best we can, the impact of the COVID-19 pandemic on the health and well-being of our employees, the communities in which we operate and our business partners, as well as the impact on our operations and business as a whole. However, there can be no assurance that the COVID-19 pandemic will not have a material adverse impact on our financial condition, liquidity, and results of operations.

Results of Operations

The table below presents our historical results of operations, in millions of dollars and as a percentage of net revenue, for the three months ended March 31, ~~2019~~2020 compared to the three months ended March 31, ~~2018.~~2019. We have derived the results of operations from the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not ~~sum~~appear to recalculate due to the effect of rounding.


	For the three months ended										For the three months ended
	March 31, 2019					March 31, 2018					March 31, 2020					March 31, 2019
	Amount			Percent of Net Revenue		Amount			Percent of Net Revenue		Amount			Margin*		Amount			Margin*
Net revenue:
Performance Sensing	$	640.0		73.5	%	$	662.8		74.8	%	$	568.7		73.4	%	$	640.0		73.5	%
Sensing Solutions	230.5			26.5		223.5			25.2		205.6			26.6		230.5			26.5
Net revenue	870.5			100.0		886.3			100.0		774.3			100.0		870.5			100.0
Operating costs and expenses:
Cost of revenue	580.8			66.7		582.5			65.7
Research and development	35.1			4.0		36.0			4.1
Selling, general and administrative	70.5			8.1		81.3			9.2
Amortization of intangible assets	36.1			4.2		35.1			4.0
Restructuring and other charges, net	5.3			0.6		3.8			0.4
Total operating costs and expenses	727.9			83.6		738.6			83.3
Operating costs and expenses											715.7			92.4		727.9			83.6
Operating income	142.6			16.4		147.7			16.7		58.6			7.6		142.6			16.4
Interest expense, net	(39.3		)	(4.5	)	(38.4		)	(4.3	)	(39.4		)	(5.1	)	(39.3		)	(4.5	)
Other, net	3.2			0.4		(4.6		)	(0.5	)	(12.3		)	(1.6	)	3.2			0.4
Income before taxes	106.5			12.2		104.6			11.8		6.9			0.9		106.5			12.2
Provision for income taxes	21.5			2.5		14.1			1.6
(Benefit from)/provision for income taxes											(1.5		)	(0.2	)	21.5			2.5
Net income	$	85.1		9.8	%	$	90.5		10.2	%	$	8.4		1.1	%	$	85.1		9.8	%

__________________________

* Represents the amount presented divided by total net revenue.

Net revenue

Net revenue for the three months ended March 31, 2019 decreased $15.8 million, or 1.8%, to $870.5 million from $886.3 million for the three months ended March 31, 2018. This decline in net revenue was composed of a 3.4% decline in Performance Sensing and a 3.1% increase in Sensing Solutions.

~~Table of Contents~~

The following table ~~reconciles~~presents a reconciliation of organic revenue decline, a non-GAAP financial measure, to reported net revenue ~~(decline)/growth,~~decline, a financial measure determined in accordance with U.S. ~~generally accepted accounting principles ("GAAP"),~~GAAP, for the three months ended March 31, 2020 compared to ~~organic revenue growth/(decline), a non-GAAP financial measure, for~~ the three months ended March 31, 2019. Refer to the section entitled Non-GAAP Financial Measures below for further information on our use of ~~this measure.~~organic revenue decline.

Three Months Ended March, 31 2019 Compared to Prior Year
Total Performance Sensing Sensing Solutions
Reported net revenue (decline)/growth (1.8 )% (3.4 )% 3.1 %
Percent impact of:
Acquisition and divestiture, net⁽¹⁾
(1.4 ) (3.6 ) 4.9
Foreign currency remeasurement⁽²⁾
(1.2 ) (1.2 ) (0.9 )
Organic revenue growth/(decline) 0.8 % 1.4 % (0.9 )%



	Three-Month Decline
	Performance Sensing		Sensing Solutions		Total
Reported net revenue decline	(11.1	)%	(10.8	)%	(11.1	)%
Percent impact of:
Foreign currency remeasurement⁽¹⁾	(0.7	)	(0.4	)	(0.7	)
Organic revenue decline	(10.4	)%	(10.4	)%	(10.4	)%

__________________________

⁽¹⁾

Represents the percentage change in net revenue attributed to the effect of acquisitions and divestitures for the 12 months immediately following the respective transaction dates. The percentage amounts presented relate to the sale of the capital stock of Schrader Bridgeport International, Inc. and August France Holding Company SAS, (collectively, the "Valves Business") in August 2018 and the merger with GIGAVAC, LLC ("GIGAVAC") in October 2018, each of which is discussed in Note 16, "Acquisitions and Divestitures" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

⁽²⁾

Represents the percentage change in net revenue between the comparative periods attributed to differences in exchange rates used to remeasure foreign currency denominated revenue transactions into ~~U.S. dollars,~~USD, which is the functional currency of the Company and each of its subsidiaries. The percentage amounts presented above ~~relate~~related primarily to the ~~Euro~~USD to ~~U.S. dollar~~CNY and ~~U.S. dollar~~the EUR to ~~Chinese Renminbi~~USD exchange rates.

Performance Sensing

For the three months ended March 31, 2020, Performance Sensing net revenue declined 11.1%, or 10.4% on an organic basis.

Automotive net revenue declined 11.0% in the first quarter of 2020 versus the corresponding prior-year period. Excluding a 0.6% decline attributed to foreign exchange rate differences between the two periods, automotive net revenue declined 10.4% on an organic basis.

HVOR net revenue declined 11.5% in the three months ended March 31, 2020 versus the corresponding prior-year period. Excluding a 0.8% decline attributed to foreign exchange rate differences between the two periods, HVOR net revenue declined 10.7% on an organic basis.

While our automotive business experienced a 10.4% organic revenue decline, our end-market production was down 19.5% in the first quarter of 2020 versus the corresponding prior-year period. The difference between the performance of our automotive business and that of the end-markets we serve is due primarily to two factors. First, we were able to alleviate the impact of end-market declines by delivering market outgrowth, driven by increased content in all regions, but particularly in China where we experienced strong content growth, following the adoption of NS6 emissions regulations. Additionally, we noted growth as the result of automotive OEMs, particularly in China, stocking inventory to ensure adequate supply levels in anticipation of reopening plants and ramping up production. We expect automotive end-markets to be worse in the second quarter of 2020 as OEM plant shutdowns and production declines continue. Our primary independent third-party source for information on automotive production in future periods is predicting a 47% decline in automotive production for the second quarter of 2020 and a 22% decline in automotive production for the full year 2020.

While our HVOR business generated a 10.7% organic revenue decline, end-market production was down 20.0% in the first quarter of 2020 versus the corresponding prior-year period. The difference between the performance of our HVOR business and the performance of the end-markets it serves is the result of market outgrowth, due primarily to increased content. Similar to our automotive business, a significant portion of this content came from China following the adoption of NS6 emissions regulations. We evaluate key economic indicators to gauge the health of our HVOR customers and the markets they serve, including freight load factors, truck inventory to sales ratios, building permits, industrial production, crop futures, and farm machinery. Based on some of these indicators, we expect HVOR end-markets to remain down throughout the second quarter of 2020.

Sensing Solutions

For the three months ended March 31, 2020, Sensing Solutions net revenue declined 10.8%, or 10.4% on an organic basis.

Industrial and other net revenue declined 12.8% in the first quarter of 2020 versus the corresponding prior-year period. Excluding a 0.5% decline attributed to foreign exchange rate differences between the two periods, industrial and other net revenue declined 12.3% on an organic basis.

Aerospace net revenue declined 2.0%, on a reported and organic basis, in the first quarter of 2020 versus the corresponding prior-year period.

Our industrial and other business observed a 15.0% decline in the global end-markets it serves. These market declines were primarily attributed to China, where the COVID-19 pandemic resulted in government mandated shutdowns. The key economic indicators we routinely evaluate for our industrial end-markets, such as regional PMI data, GDP, and housing starts, help develop a forward-looking view of future demand levels. These currently indicate further deterioration in demand in the second quarter of 2020 and, as a result, we believe our industrial and other business will be adversely impacted.

While our Aerospace business generated a 2.0% organic revenue decline, end-market production was down 6.3% in the first quarter of 2020 versus the corresponding prior year period. For our aerospace business, this market outgrowth, which we define as the difference between the performance of our aerospace business and the performance of the end-markets it serves, was primarily attributed to increased content. Expectations for future OEM commercial and defense production build rates and passenger miles flown are good indicators of future demand for our aerospace products and aftermarket services. We expect demand to be down in the second quarter of 2020 due to continued lower OEM production levels driven by COVID-19 and the worldwide travel restrictions which will continue to be in place in the second quarter of 2020.

Operating costs and expenses

Operating costs and expenses for the three months ended March 31, 2020 and 2019 ~~decreased $22.8 million, or 3.4%,~~are presented, in millions of dollars and as a percentage of net revenue, in the following table. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to ~~$640.0 million from $662.8 million for~~recalculate due to the effect of rounding.



	For the three months ended
	March 31, 2020				March 31, 2019
	Amount		Margin*		Amount		Margin*
Operating costs and expenses:
Cost of revenue	$	566.4	73.2	%	$	580.8	66.7	%
Research and development	34.5		4.4		35.1		4.0
Selling, general and administrative	77.2		10.0		70.5		8.1
Amortization of intangible assets	33.1		4.3		36.1		4.2
Restructuring and other charges, net	4.5		0.6		5.3		0.6
Total operating costs and expenses	$	715.7	92.4	%	$	727.9	83.6	%

__________________________

* Represents the amount presented divided by total net revenue.

Cost of revenue

For the three months ended March 31, 2018. Organic revenue growth of 1.4% in the three months ended March 31, 2019 was primarily attributable to content growth in our automotive and heavy vehicle and off-road ("HVOR") businesses, partially offset by market declines in our automotive business. Content growth in our automotive business was primarily generated by sales to customers in Asia (excluding China) and Europe. Content growth in our HVOR business was primarily generated by sales to customers in China as well as in the agriculture and North American on-road truck markets.

Sensing Solutions net revenue for the three months ended March 31, 2019 increased $7.0 million, or 3.1%, to $230.5 million from $223.5 million for the three months ended March 31, 2018. Organic revenue decline of 0.9% in the three months ended March 31, 2019 was primarily due to lower demand from industrial customers as a result of lower housing starts, a decline in the European Purchasing Managers Index ("PMI"), and weakness in the semiconductor market, partially offset by growth in our industrial sensing and aerospace businesses.

~~Operating income~~

Operating income decreased $5.1 million, or 3.4%, from $142.6 million (16.4% of net revenue) in the three months ended March 31, 2019 to $147.7 million (16.7% of net revenue) in the three months ended March 31, 2018. Operating income was lower in the first quarter of 2019 as a result of lower net revenue compared to the first quarter of 2018, partially offset by a reduction in operating costs and expenses.

~~Cost of revenue~~

~~Cost of revenue for the three months ended March 31, 2019 and 2018 was $580.8 million (66.7% of net revenue) and $582.5 million (65.7% of net revenue), respectively. Cost~~2020, cost of revenue as a percentage of net revenue increased from the prior period. The largest driver of this increase was a $29.2 million loss recognized in cost of revenue related to a judgment against us in an intellectual property litigation with Wasica Finance Gmbh. We continue to deny any wrongdoing and will appeal the decision. Refer to Note 12, "Commitments and Contingencies," of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information. Other drivers of the increase included productivity headwinds and volume declines primarily ~~as a result~~resulting from the impacts of ~~negative mix due to new product launches and lower productivity in our supply chain operations,~~COVID-19, partially offset by the positive impact of changes in foreign currency exchange rates.

~~Research~~In response to the impacts we are seeing to our business due to COVID-19, we will continue to align our costs to the demand we are experiencing by ramping down certain production facilities in line with end market demand. This will be a challenge in the second quarter of 2020, as we address COVID-19 and ~~development expense~~corresponding government actions, which are creating operating restrictions, supply disruptions and increased freight costs, which will negatively impact our future cost of revenue margin. We are also taking steps to reduce discretionary spend and to reduce or delay capital expenditures for the near future.

Research and development ("R&D") expense ~~for~~

For the three months ended March 31, ~~2019 and 2018 was $35.1 million and $36.0 million, respectively.~~

~~Table~~2020, R&D expense decreased from the prior period, primarily as a result of ~~Contents~~

the positive impact of changes in foreign currency exchange rates.

Selling, general and administrative ("SG&A") expense

~~SG&A expense for~~For the three months ended March 31, ~~2019 and 2018 was $70.5 million and $81.3 million, respectively.~~2020, SG&A expense ~~declined~~increased from the prior period, primarily due to ~~lower selling costs, lower variable~~higher compensation ~~the divestiture of the Valves Business, lower~~to retain and incentivize critical employee talent and increased costs related to optimization of our ~~redomicile in the first quarter of 2018, and the favorable impact of foreign currency exchange rates, partially offset by additional SG&A expense related~~global operating processes to ~~GIGAVAC and increased share-based compensation.~~increase productivity.

Amortization of intangible assets

~~Amortization expense associated with definite-lived intangible assets for~~For the three months ended March 31, 2019 and 2018 was $36.1 million and $35.1 million, respectively. Definite-lived intangible assets are amortized on an economic benefit basis according to the useful lives of the assets, or on a straight-line basis if a pattern of economic benefits cannot be reliably determined. In general, the economic benefit of an intangible asset is concentrated towards the beginning of that intangible asset's useful life. The increase in2020, amortization expense isdecreased from the prior period due to ~~the intangible assets acquired with GIGAVAC, partially offset by~~ the effect of the economic benefit method.

Restructuring and other charges, net

Restructuring and other charges, net for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 consisted of the following (amounts in the table below have been calculated based on unrounded numbers; accordingly, certain amounts may not ~~sum~~appear to recalculate due to the effect of rounding):

For the three months ended
($ in millions) March 31, 2019 March 31, 2018
Severance costs ⁽¹⁾
$ 2.9
$ 3.6
Facility and other exit costs —
0.2
Other ⁽²⁾
2.5
—
Restructuring and other charges, net $ 5.3
$ 3.8



	For the three months ended
(In millions)	March 31, 2020		March 31, 2019
Severance costs, net ⁽¹⁾	$	3.9	$	2.9
Other ⁽²⁾	0.6		2.5
Restructuring and other charges, net	$	4.5	$	5.3

__________________________


⁽¹⁾	Severance costs, net for the three months ended March 31, 2020, were primarily related to termination benefits arising from the shutdown and relocation of an operating site in Northern Ireland. Severance costs for the three months ended March 31, 2019 ~~and 2018~~ were ~~attributable~~primarily related to limited workforce reductions of manufacturing, engineering, and administrative positions.


⁽²⁾	Other ~~costs for~~charges in the three months ended March 31, 2020 and 2019 were primarily related to deferred compensation incurred in connection with the acquisition of ~~GIGAVAC. Refer to Note 16, "Acquisitions and Divestitures" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.~~GIGAVAC, LLC.

~~Interest expense,~~Operating income

Operating income decreased $84.0 million, or 58.9%, to $58.6 million (7.6% of net

~~Interest expense, net for~~ revenue) in the three months ended March 31, ~~2019~~2020, from $142.6 million (16.4% of net revenue) in the three months ended March 31, 2019. The decline in operating income was due primarily to the impact of the global economic downturn caused by COVID-19 as well as the $29.2 million loss recognized in cost of revenue related to a judgment against us in an intellectual property litigation with Wasica Finance Gmbh (refer to Note 12, "Commitments and ~~2018 was $39.3 million and $38.4 million, respectively.~~Contingencies," of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information).

Other, net

Other, net for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 consisted of the following (amounts in the table below have been calculated based on unrounded numbers; accordingly, certain amounts may not ~~sum~~appear to recalculate due to the effect of rounding):

For the three months ended
($ in millions) March 31, 2019 March 31, 2018
Currency remeasurement gain on net monetary assets ⁽¹⁾
$ 1.9
$ 6.7
Gain/(loss) on foreign currency forward contracts ⁽²⁾
0.5
(6.3 )
Gain/(loss) on commodity forward contracts 1.1
(3.2 )
Loss on debt financing —
(2.4 )
Net periodic benefit cost, excluding service cost (0.3 ) (0.3 )
Other 0.0
0.8
Other, net $ 3.2
$ (4.6 )



	For the three months ended
(In millions)	March 31, 2020			March 31, 2019
Currency remeasurement loss on net monetary assets ⁽¹⁾	$	1.6		$	1.9
(Loss)/gain on foreign currency forward contracts ⁽²⁾	(3.8		)	0.5
(Loss)/gain on commodity forward contracts	(5.6		)	1.1
Net periodic benefit cost, excluding service cost	(4.4		)	(0.3		)
Other	(0.1		)	—
Other, net	$	(12.3	)	$	3.2

__________________________


⁽¹⁾	Relates to the remeasurement of ~~non-U.S. dollar~~non-USD denominated monetary assets and liabilities into ~~U.S. dollars.~~USD.


⁽²⁾	Relates to changes in the fair value of derivative financial instruments not designated as hedges. Refer to Note 15, "Derivative Instruments and Hedging Activities" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a more detailed discussion.

~~Table of Contents~~

~~Provision~~(Benefit from)/provision for income taxes

~~Provision for~~The decrease in total tax from the prior period was predominantly related to the overall decrease in income ~~taxes for~~before tax as impacted by the mix of profits in the various jurisdictions in which we operate.

In response to COVID-19, the U.S. federal government enacted the CARES Act on March 27, 2020. Federal limitations on interest deductions were reduced in connection with this legislation, and we recorded a deferred tax benefit of $7.5 million in the three months ended March 31, ~~2019 and 2018~~2020, as we were able to utilize additional interest expense that was ~~$21.5 million and $14.1 million, respectively.~~ previously subject to a valuation allowance.

The increase in our total tax provision in the first quarter of 2019 compared to the prior year relates predominantly to the utilization of previously unbenefitted net operating losses in our U.S. jurisdiction. The (benefit from)/provision for income taxes consists ~~of (i)~~ of:

current tax expense, which relates primarily to our profitable operations in non-U.S. tax jurisdictions and withholding taxes ~~on interest~~related to management fees, royalties, and ~~royalty income;~~the repatriation of foreign earnings; and ~~(ii)~~

deferred tax expense (or benefit), which represents adjustments in book-to-tax basis differences primarily related to (1) the step-up in fair value of fixed and intangible assets acquired in connection with business combination transactions, ~~the utilization of~~(2) changes in net operating ~~losses, and~~loss carryforwards, (3) changes in tax ~~rates.~~rates, and (4) changes in our assessment of the realizability of our deferred tax assets.

Non-GAAP Financial Measures

This Quarterly Report on Form 10-Q includes references to organic revenue growth (or decline), which is a non-GAAP financial measure. Organic revenue growth (or decline) is defined as the reported percentage change in net revenue, calculated in accordance with U.S. GAAP, excluding the period-over-period impact of foreign exchange rate differences as well as the net impact of material acquisitions and divestitures for the 12-month period following the respective transaction date(s). Refer to the Net revenue section above for a reconciliation of ~~reported~~organic revenue decline to ~~organic~~reported revenue ~~growth.~~decline.

We believe that organic revenue growth (or decline) provides investors with helpful information with respect to our operating performance, and we use organic revenue growth (or decline) to evaluate our ongoing operations, as well as for internal planning and forecasting purposes. We believe that organic revenue growth (or decline) provides useful information in evaluating the results of our business because it excludes items that we believe are not indicative of ongoing performance or that we believe impact comparability with the prior-year period.

~~However, organic~~Organic revenue growth (or decline) should be considered as supplemental in nature and is not intended to be considered in isolation or as a substitute for reported percentage change in net revenue calculated in accordance with U.S. GAAP. In addition, our measure of organic revenue growth (or decline) may not be the same as, or comparable to, similar non-GAAP financial measures presented by other companies.

Liquidity and Capital Resources

As of March 31, ~~2019~~2020 and December 31, ~~2018~~2019, we held cash and cash equivalents in the following regions (amounts have been calculated based on unrounded numbers; accordingly, certain amounts may not ~~sum~~appear to recalculate due to the effect of rounding):


(in millions)	March 31, 2019		December 31, 2018
(In millions)					March 31, 2020		December 31, 2019
United Kingdom	$	14.6	$	8.8	$	14.4	$	8.8
United States	9.3		4.6		6.6		7.0
The Netherlands	311.3		482.1		546.3		522.9
China	202.1		125.2		121.1		119.3
Other	112.3		109.1		114.6		116.1
Total	$	649.5	$	729.8	$	803.0	$	774.1

The amount of cash and cash equivalents held in these geographic regions fluctuates throughout the year due to a variety of factors, such as our use of intercompany loans and dividends and the timing of cash receipts and disbursements in the normal course of business. Our earnings are not considered to be permanently reinvested in certain jurisdictions in which they were earned. We recognize a deferred tax liability on these unremitted earnings to the extent the remittance of such earnings cannot be recovered in a ~~tax free~~tax-free manner.

~~Table of Contents~~

Cash Flows:

The table below summarizes our primary sources and uses of cash for the three months ended March 31, ~~2019~~2020 and ~~2018.~~2019. We have derived the summarized statements of cash flows from the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Amounts in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not ~~sum~~appear to recalculate due to the effect of rounding.


	For the three months ended						For the three months ended
(in millions)	March 31, 2019			March 31, 2018
(In millions)							March 31, 2020			March 31, 2019
Net cash provided by/(used in):
Operating activities:
Net income adjusted for non-cash items	$	167.5		$	172.1		$	120.1		$	167.5
Changes in operating assets and liabilities, net	(54.8		)	(48.9		)	(21.5		)	(54.8		)
Operating activities	112.7			123.3			98.5			112.7
Investing activities	(42.4		)	(30.9		)	(32.8		)	(42.4		)
Financing activities	(150.6		)	(17.1		)	(36.9		)	(150.6		)
Net change	$	(80.3	)	$	75.2		$	28.9		$	(80.3	)

Operating activities. Net cash provided by operating activities ~~for the three months ended March 31, 2019~~declined primarily due to lower net income, higher inventory balances, higher payments to third parties and ~~2018 was $112.7 million and $123.3 million, respectively. The decrease in cash provided by operating activities relates primarily to a decline in profitability~~suppliers, and timing of ~~supplier~~income tax payments, ~~and~~partially offset by timing of customer ~~receipts.~~payments.

Investing activities. Net cash used in investing activities ~~for~~declined from the ~~three months ended March 31,~~first quarter of 2019 ~~and 2018 was $42.4 million and $30.9 million, respectively, which included $41.7 million and $30.9 million, respectively,~~primarily due to a reduction in capital ~~expenditures.~~expenditures as a result of COVID-19. In ~~2019,~~fiscal year 2020, we anticipate capital expenditures of approximately ~~$155~~$120.0 million to ~~$175~~$130.0 million, a decline from previously forecasted capital expenditures, which we expect to be funded from net cash provided by operating activities.

Financing activities. Net cash used in financing activities ~~for~~declined from the ~~three months ended March 31,~~first quarter of 2019 ~~and 2018 was $150.6 million and $17.1 million, respectively, which included $4.2 million and $11.3 million, respectively,~~primarily due to a reduction in ~~payments on debt. The three months ended March 31, 2019 also included $150.7 million in payments to repurchase~~share repurchases. On April 2, 2020 we announced a temporary suspension of our ~~ordinary shares related to our $250.0 million~~ share repurchase ~~program.~~program to further enhance our financial flexibility in light of COVID-19.

Indebtedness and Liquidity:

As of March 31, ~~2019~~2020, we had ~~$3,300.1~~$3,290.3 million in gross indebtedness, which ~~includes~~included finance lease and other financing obligations and ~~excludes~~excluded debt discounts and deferred financing costs.

~~A summary of our indebtedness as of March 31, 2019 is as follows:~~

($ in thousands) Maturity Date March 31, 2019
Term Loan October 14, 2021 $ 915,516
4.875% Senior Notes October 15, 2023 500,000
5.625% Senior Notes November 1, 2024 400,000
5.0% Senior Notes October 1, 2025 700,000
6.25% Senior Notes February 15, 2026 750,000
Less: discount (14,481 )
Less: deferred financing costs (24,405 )
Less: current portion (9,901 )
Long-term debt, net $ 3,216,729

Finance lease and other financing obligations $ 34,623
Less: current portion (3,759 )
Finance lease and other financing obligations, less current portion $ 30,864

On March 27, 2019 certain indirect, wholly owned subsidiaries of Sensata Technologies Holding plc entered into the ninth amendment (the "Ninth Amendment") of the credit agreement dated as of May 12, 2011 (as amended, the "Credit Agreement"),

~~Table of Contents~~

which governs our senior secured credit facilities. Pursuant to the Ninth Amendment, among other changes to the Credit Agreement, (i) the maturity date of the $420.0 million revolving credit facility (the "Revolving Credit Facility") was extended to March 27, 2024, (ii) certain rates and fees were modified, and (iii) the senior secured net leverage ratio financial covenant was modified to increase the Revolving Credit Facility utilization threshold above which such financial covenant is tested from 10% to 20%, deleting the requirement that such financial covenant be tested (regardless of utilization) in determining whether a default exists for purposes of satisfying the conditions to borrowing or other utilization of the Revolving Credit Facility. Refer to Note 11, ~~"Debt"~~"Debt," of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for ~~further discussion~~additional information on the components of our debt.

Capital Resources

The credit agreement governing our secured credit facility (as amended, the ~~Ninth Amendment.~~

As"Credit Agreement") provides for senior secured credit facilities (the "Senior Secured Credit Facilities") consisting of ~~March 31, 2019 we had $416.1 million available under~~a term loan facility (the "Term Loan"), the Revolving Credit Facility, ~~net of $3.9 million in letters of credit. Outstanding letters of~~and incremental availability (the "Accordion") under which additional secured credit ~~are~~facilities could be issued ~~primarily for the benefit of~~under certain ~~operating activities. As of March 31, 2019, no amounts had been drawn against these outstanding letters of credit.~~

~~Capital Resources~~circumstances.

Our sources of liquidity include cash on hand, cash flows from operations, and available capacity under the Revolving Credit Facility. ~~In addition,~~Availability under the Accordion varies each period based on our ~~senior secured credit facilities provide for incremental availability (the "Accordion"), under which additional secured debt may be issued or~~attainment of certain financial metrics as set forth in the ~~capacity~~terms of the ~~Revolving~~ Credit ~~Facility may be increased. Subject to certain limitations as defined in~~Agreement and the indentures under which our senior notes were issued ~~we have $1.0 billion~~(the "Senior Notes Indentures"). As of March 31, 2020, availability under the ~~Accordion.~~Accordion was approximately $0.9 billion.

We believe, based on our current level of operations ~~as reflected in our results of operations for the three months ended March 31, 2019,~~ and taking into consideration the restrictions and covenants ~~discussed below,~~included in the Credit Agreement and Senior Notes Indentures, that these sources of liquidity will be sufficient to fund our operations, capital expenditures, ordinary share repurchases, and debt service for at least the next twelve months. However, we cannot make assurances that our business will generate sufficient cash flows from operations or that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Further, our highly-leveraged nature may limit our ability to procure additional financing in the future.

~~In May 2018~~As a result of COVID-19, although we ~~announced that~~believe our Board of Directors had authorized a $400.0 million share repurchase program. The program was completed during the three months ended March 31, 2019. Since inception we repurchased 7,584 thousand ordinary shares under the program.

~~In October 2018 our Board of Directors authorized a new $250.0 million share repurchase program. Under this program we may repurchase ordinary shares at such times and in amounts~~financial position to be ~~determined~~strong, we decided to further enhance our financial flexibility by ~~our management, based on market conditions, legal requirements, and other corporate considerations,~~executing a $400 million drawdown on the ~~open market or in privately negotiated transactions, provided that such transactions are completed pursuant to an agreement and~~Revolving Credit Facility on April 1, 2020, leaving us with a third party approved by our shareholders at the annual general meeting of shareholders held in May 2018. We repurchased 3,023 thousand ordinary shares under this program during the three months ended March 31, 2019, for a total purchase pricecash on hand of approximately ~~$150.2 million, which are now held as treasury shares.~~$1.2 billion on that date.

The Credit Agreement ~~stipulates certain events and conditions~~provides that, ~~may require us~~if our senior secured net leverage ratio exceeds a specified level, we are required to use a portion of our excess cash flow, as defined ~~by the terms of~~in the Credit Agreement, generated by operating, investing, or financing activities to prepay some or all of the outstanding borrowings under ~~our secured credit facilities.~~the Senior Secured Credit Facilities. The Credit Agreement also requires mandatory prepayments of the outstanding borrowings under ~~our secured credit facilities~~the Senior Secured Credit Facilities upon certain asset dispositions and casualty events, in each case subject to certain reinvestment rights, and upon the incurrence of certain indebtedness (excluding any permitted indebtedness). These provisions were not triggered during the three months ended March 31, 2020.

The Credit Agreement and the Senior Notes Indentures contain restrictions and covenants that limit the ability of our wholly-owned subsidiary, Sensata Technologies B.V. ("STBV"), and certain of its subsidiaries to, among other things, incur subsequent indebtedness, sell assets, pay dividends, and make other restricted payments. For a full discussion of these restrictions and covenants, refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources," included in our Annual Report on Form 10-K for the year ended December 31, 2019.

These restrictions and covenants, which are subject to important exceptions and qualifications set forth in the Credit Agreement and Senior Notes Indentures, were taken into consideration when we established our share repurchase programs, and will be evaluated periodically with respect to future potential funding of those programs. As of March 31, 2020, we believe we were in compliance with all covenants and default provisions under our credit arrangements.

Our ability to raise additional financing, and our borrowing costs, may be impacted by short- and long-term debt ratings assigned by independent rating agencies, which are based, in significant part, on our performance as measured by certain credit metrics such as interest coverage and leverage ratios. As of April ~~26, 2019~~24, 2020, Moody’s Investors Service’s corporate credit rating for ~~Sensata Technologies B.V. ("STBV")~~STBV was Ba2 with a stable outlook and Standard & Poor’s corporate credit rating for STBV was BB+ with a ~~stable~~negative outlook. The Standard & Poor's outlook represents a decline from our prior quarter outlook of "stable." The change in outlook reflects the uncertainties in the markets caused by COVID-19. Any future downgrades to STBV's credit ratings may increase our future borrowing costs, but will not reduce availability under the Credit Agreement.

From time to time, our Board of Directors has authorized various share repurchase programs. The ~~Credit Agreement and the indentures~~authorized amount of our various share repurchase programs may be modified or terminated by our Board of Directors at any time. We currently have an authorized $500.0 million share repurchase program under which our senior notes were issued contain restrictions and covenants that limit the ability of STBV and certain of its subsidiaries to, among other things, incur subsequent indebtedness, sell assets, make capital expenditures, pay dividends, and make other restricted payments. For a full discussion of these restrictions and covenants, refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources," included in our Annual Report on Form 10-K for the year ended December 31, 2018.

~~Table of Contents~~

Asapproximately $302.3 million remained available as of March 31, ~~2019~~2020. During the three months ended March 31, 2020, we ~~believe we were in compliance with all covenants and default provisions~~repurchased approximately 0.9 million ordinary shares under our ~~credit arrangements.~~share repurchase program for a total purchase price of approximately $35.2 million, which are now held as treasury shares. On April 2, 2020, we announced a temporary suspension of our share repurchase program to enhance our financial flexibility in light of the uncertainties surrounding COVID-19.

Recently Issued Accounting Pronouncements

~~Adopted~~There are no recently issued accounting standards that have been adopted in the current period

~~In February 2016 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02,~~ ~~Leases (Topic 842), which establishes new accounting and disclosure requirements for leases. FASB Accounting Standards Codification Topic 842 requires lessees~~ or will be adopted in future periods that have had or are expected to ~~classify most leases as either finance or operating leases and to recognize~~have a ~~lease liability and right-of-use asset. For finance leases, the statements of operations include separate recognition of interest~~material impact on the lease liability and amortization of the right-of-use asset. For operating leases, the statements of operations include a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. We adopted the provisions of FASB ASU No. 2016-02 on January 1, 2019 using the modified retrospective transition method. Refer to Note 18, “Leases” of our ~~condensed~~ consolidated financial ~~statements included elsewhere in this Quarterly Report on Form 10-Q for additional discussion~~position or results of ~~this adoption.~~operations.

Critical Accounting Policies and Estimates

For a discussion of the critical accounting policies that require the use of significant judgments and estimates by management, refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.


Item 3.	Quantitative and Qualitative Disclosures About Market Risk.

No significant changes to our market risk have occurred since December 31, ~~2018.~~2019. For a discussion of market risks affecting us, refer to Part II, Item 7A—"Quantitative and Qualitative Disclosures About Market Risk" included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

~~Table of Contents~~


Item 4.	Controls and Procedures.

The required certifications of our Chief Executive Officer and Chief Financial Officer are included as exhibits to this Quarterly Report on Form 10-Q. The disclosures set forth in this Item 4 contain information concerning the evaluation of our disclosure controls and procedures and changes in internal control over financial reporting referred to in these certifications. These certifications should be read in conjunction with this Item 4 for a more complete understanding of the matters covered by the certifications.

Evaluation of Disclosure Controls and Procedures

With the participation of our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as of March 31, ~~2019.~~2020. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the ~~United States ("~~U.S.") Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, ~~2019,~~2020, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended March 31, ~~2019~~2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

There are inherent limitations to the effectiveness of any system of internal control over financial reporting. Accordingly, even an effective system of internal control over financial reporting can only provide reasonable assurance with respect to financial statement preparation and presentation in accordance with U.S. generally accepted accounting principles. Our internal controls over financial reporting are subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time.

~~Table of Contents~~

PART II—OTHER INFORMATION


Item 1.	Legal Proceedings.

~~As discussed in Part I, Item 3—"Legal Proceedings" in our Annual Report on Form 10-K for the year ended December 31, 2018, we~~We are regularly involved in a number of claims and litigation matters in the ordinary course of business. Most of our litigation matters are third-party claims related to patent infringement allegations or for property damage allegedly caused by our products, but some involve allegations of personal injury or wrongful death. From time to time, we are also involved in disagreements with vendors and customers. Information on certain legal proceedings in which we are involved is included in Note ~~10,~~12, "Commitments and Contingencies" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Although it is not feasible to predict the outcome of these matters, based upon our experience and current information known to us, we do not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on our results of operations, financial position, or cash flows.


Item 1A.	Risk Factors.

Information regarding risk factors appears in Part I, Item 1A—"Risk ~~Factors"~~Factors," in our Annual Report on Form 10-K for the year ended December 31, ~~2018. There have been no material changes to~~2019. The information presented below updates and should be read in connection with the risk factors and information previously disclosed therein.

We are subject to various risks related to public health crises, including the global coronavirus (COVID-19) pandemic, which could have material and adverse impacts on our business, financial condition, liquidity and results of operations.

Any outbreaks of contagious diseases and other adverse public health developments in countries where we operate could have a material and adverse impact on our business, financial condition, liquidity and results of operations. For example, the COVID-19 pandemic has caused widespread disruptions to our Company in the first quarter of 2020. During the first quarter, these disruptions were primarily limited to our operations in China, portions of which were closed during the end of January and first half of February due to government mandates. As the virus spread to the rest of the world in March, our operations outside of China also have been materially impacted. As of March 31, 2020, we were still experiencing significant disruptions, and at a minimum we expect those disruptions to continue throughout the second quarter of 2020. These disruptions include, depending on the specific location, full or partial shutdowns of our facilities as mandated by government decree, government actions limiting our ability to adjust certain costs, significant travel restrictions, “work-from-home” orders, limited availability of our workforce, supplier constraints, supply-chain interruptions, logistics challenges and limitations, and reduced demand from certain customers. In addition, in these challenging and dynamic circumstances, we are working to protect our employees, maintain business continuity and sustain our operations, including ensuring the safety and protection of our people who work in our plants and distribution centers across the world, many of whom support the manufacturing and delivery of products deemed part of the critical infrastructure or essential businesses by the applicable local or country governments. The extent to which the COVID-19 pandemic will continue to impact our business and financial results going forward will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable.

In addition, the COVID-19 pandemic increases the likelihood and potential severity of other risks previously discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for our fiscal year ended December 31, 2019. These include, but are not limited to, the following:

A protracted economic downturn could negatively affect the financial condition of the industries and customers we serve, which may result in an increase in bankruptcies or insolvencies, a delay in payments, and decreased sales.

A scarcity of resources or other hardships caused by the COVID-19 pandemic may result in increased nationalism, protectionism and political tensions which may cause governments and/or other entities to take actions that may have a significant negative impact on the ability of the Company, its suppliers and its customers to conduct business.

The impact of the COVID-19 pandemic may cause us to restructure our business or divest some of our businesses or product lines in the future, which may have a material adverse effect on our results of operations, financial condition, and cash flows.

To mitigate the spread of COVID-19, we have transitioned a significant subset of our employee population to a remote work environment, which may exacerbate various cybersecurity risks to our business, including an increased demand for information technology resources, an increased risk of phishing and other cybersecurity attacks, and an increased risk of unauthorized dissemination of sensitive personal information or proprietary or confidential information.

The COVID-19 pandemic has disrupted the supply of raw materials, and we may experience increased difficulties in obtaining a consistent supply of materials at stable pricing levels.

If the financial performance of our businesses were to decline significantly as a result of the COVID-19 pandemic, we could incur a material non-cash charge to our income statement for the impairment of goodwill and other intangible assets.

The continued global spread of COVID-19 has led to disruption and volatility in the global capital markets, which may increase the cost of, and adversely impacted access to, capital. In addition, as a public limited company incorporated under the laws of England and Wales, we may have even less flexibility with respect to certain aspects of capital management.

If the financial performance of our businesses were to decline significantly for an extended period of time as a result of the COVID-19 pandemic, we may face challenges to comply with the covenants contained in our credit arrangements.

As of the date of this Quarterly Report on Form10-Q, given the speed with which the COVID-19 pandemic is evolving and the uncertainty of its duration and impact, we are not able to predict the impact of the COVID-19 pandemic on our business, financial condition, liquidity and financial results, and there can be no assurance that the COVID-19 pandemic will not have a material and adverse effect on our financial results during any quarter or year in which we are affected.


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

Issuer Purchases of Equity Securities

Period
Total
Number
of Shares
Purchased (in shares)

Weighted-Average
Price
Paid per Share
Total Number of
Shares Purchased as Part of Publicly
Announced Plan or Programs
Approximate Dollar Value of Shares that
May Yet Be
Purchased
Under the Plan or Programs
(in millions) ⁽²⁾
January 1 through January 31, 2019 4,602
$ 45.28
—
$ 250.6
February 1 through February 28, 2019 1,400,438
$ 49.31
1,399,210
$ 181.6
March 1 through March 31, 2019 1,636,630
$ 49.96
1,636,443
$ 99.8
Total 3,041,670
⁽¹⁾
$ 49.65
3,035,653
$ 99.8



Period	Total Number of Shares Purchased (in shares)		Weighted-Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs (in millions) ⁽²⁾
January 1 through January 31, 2020	—		$	—	—	$	337.5
February 1 through February 29, 2020	90,159	(1)	$	44.49	89,831	$	333.5
March 1 through March 31, 2020	808,701		$	38.56	808,701	$	302.3
Quarter total	898,860		$	39.15	898,532	$	302.3

~~__________________~~__________________________

⁽¹⁾

Upon the vesting of restricted securities, we collect and pay withholding tax for employees by withholding shares to cover such tax. The number of shares presented includes ~~6,017~~328 shares withheld in this manner with an aggregate value of ~~$275~~$15 thousand, based on the closing price of our ordinary shares on the date of withholding. These withholdings took place outside of a publicly announced repurchase plan.

⁽²⁾

Other than shares withheld to cover required tax withholding upon the vesting of restricted securities, all purchases during the three months ended March 31, ~~2019~~2020 were conducted pursuant to a ~~$400.0~~$500.0 million share repurchase program authorized by our Board of Directors and publicly announced on ~~May 31, 2018 (the "May 2018 Program") or a $250.0 million~~July 30, 2019. This share repurchase program authorized by our Board of Directors and publicly announced on October 30, 2018 (the "October 2018 Program"). The May 2018 Program was completed during the three months ended March 31, 2019 and no further purchases will be made pursuant to it. The October 2018 Program does not have an established expiration date. On April 2, 2020, we announced a temporary suspension of our share repurchase program to enhance our financial flexibility in light of the uncertainties surrounding COVID-19.


Item 3.	Defaults Upon Senior Securities.

None.


Item 5.	Other Information.

As previously reported in our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2020 (the “Prior Report”), on March 1, 2020, Jeffrey Cote assumed the role of our Chief Executive Officer upon the effective retirement of Martha Sullivan from that role.

~~Table~~As reported in the Prior Report, in connection with Mr. Cote becoming our Chief Executive Officer, his annual base salary was increased to $930,000 and his annual incentive opportunity was set at 120% of ~~Contents~~his annual base salary. Effective as of March 1, 2020, Mr. Cote entered into a Third Amended and Restated Employment Agreement (the “Cote Employment Agreement”) with our subsidiary Sensata Technologies, Inc. (“STI”) to give effect to these adjustments. In addition, the Cote Employment Agreement provides for an increase to the severance payable to Mr. Cote from an amount equal to one year of his annual base salary to an amount equal to two years of his annual base salary in the event that his employment is terminated by us without “cause” or by him for “good reason” (as those terms are defined in the Cote Employment Agreement).

As also reported in the Prior Report, effective as of March 1, 2020, Ms. Sullivan assumed the role of Executive Advisor, and her annual base salary was adjusted to $472,500. On March 1, 2020, STI and Ms. Sullivan entered into a Third Amended and Restated Employment Agreement (the “Sullivan Employment Agreement”) to give effect to this change and the other changes described in the Prior Report. In addition, we and Ms. Sullivan entered into an Amendment to Martha Sullivan Award Agreements dated February 29, 2020 (the “Sullivan Award Amendment”), to provide for the previously announced amendment to Ms. Sullivan’s stock option awards granted from 2013 through 2018 to allow for their continued exercisability until 60 days after her service as a director on our Board ends.

The foregoing description of the Cote Employment Agreement, the Sullivan Employment Agreement, and the Sullivan Award Amendment is a summary and is qualified in its entirety by reference to the full text of the Cote Employment Agreement, the Sullivan Employment Agreement, and the Sullivan Award Amendment, which are attached to this Quarterly Report on Form 10-Q as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.


Item 6.	Exhibits.



Exhibit No.		Description

10.1		~~Amendment No. 9 to Credit~~Third Amended and Restated Employment Agreement ~~dated as of March 27, 2019, to the Credit Agreement, dated as of May 12, 2011, by~~between Jeffrey Cote and ~~among~~ Sensata Technologies ~~B.V.~~Inc., dated March 1, 2020. *†

10.2		Third Amended and Restated Employment Agreement between Martha Sullivan and Sensata Technologies ~~Finance Company, LLC,~~Inc., dated March 1, 2020. *†

10.3		Amendment to Martha Sullivan Award Agreements with Sensata Technologies ~~Intermediate~~ Holding ~~B.V.~~plc, dated February 29, 2020. *†

10.4		Amended and Restated Employment Agreement between Yann Etienvre and Sensata Technologies Inc., ~~the subsidiary guarantors party thereto, Morgan Stanley Senior Funding,~~dated March 5, 2020.*†

10.5		Amended and Restated Employment Agreement between Vineet Nargolwala and Sensata Technologies Inc., dated March 5, 2020.*†

10.6		Amended and ~~the other lenders party thereto (incorporated by reference~~Restated Employment Agreement between Hans Lidforss and Sensata Technologies Inc., dated March 5, 2020.*†

10.7		Form of Consent to ~~Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on~~Reduction in Salary April ~~2, 2019, Commission File Number 001-34652).~~1, 2020 through June 30, 2020 for Executive Officers.*†

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

~~101~~101.INS		~~The following materials from~~Inline XBRL Instance Document - the ~~Registrant's Quarterly Report on Form 10-Q for~~instance document does not appear in the ~~quarterly period ended March 31, 2019, formatted~~Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document. *

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document. *

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document. *

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document. *

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document. *

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Changes in Shareholders' Equity, and (vi) Notes to the Condensed Consolidated Financial Statements.Exhibit 101)

___________________________

* Filed herewith

~~Table of Contents~~

† Indicates management contract or compensatory plan, contract, or arrangement

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.

Date: ~~May 1, 2019~~April 29, 2020

~~SENSATA TECHNOLOGIES HOLDING PLC~~

SENSATA TECHNOLOGIES HOLDING PLC

/s/ ~~Martha Sullivan~~Jeffrey Cote

(~~Martha Sullivan)~~Jeffrey Cote)

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Paul Vasington

(Paul Vasington)

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

3332



	Severance
Balance at December 31, 2018	$	6,591
Charges	2,855
Payments	(2,210		)
Impact of changes in foreign currency exchange rates	24
Balance at March 31, 2019	$	7,260



	For the three months ended
	March 31, 2019	March 31, 2018
Basic weighted-average ordinary shares outstanding	163,247	171,404
Dilutive effect of stock options	635	926
Dilutive effect of unvested restricted securities	639	526
Diluted weighted-average ordinary shares outstanding	164,521	172,856



Derivatives not designated as hedging instruments	Amount of Gain/(Loss) Recognized in Net Income					Location of Gain/(Loss) Recognized in Net Income
Derivatives not designated as hedging instruments	2019		2018			Location of Gain/(Loss) Recognized in Net Income
Commodity forward contracts	$	1,123	$	(3,195	)	Other, net
Foreign currency forward contracts	$	478	$	(4,950	)	Other, net



Net working capital, excluding cash	$	16,980
Property, plant and equipment	4,384
Goodwill	113,731
Other intangible assets	122,742
Other assets	63
Deferred income tax liabilities	(27,000		)
Other long-term liabilities	(1,000		)
Fair value of net assets acquired, excluding cash and cash equivalents	229,900
Cash and cash equivalents	359
Fair value of net assets acquired	$	230,259



	Acquisition Date Fair Value		Weighted-Average Lives (years)
Acquired definite-lived intangible assets:
Customer relationships	$	74,500	10
Completed technologies	31,040		13
Tradenames	15,400		15
Other	1,802		6
Total definite-lived intangible assets acquired	$	122,742	12



	December 31, 2018		Adjustment			January 1, 2019
Prepaid expenses and other current assets	$	113,234	$	(253	)	$	112,981
Other intangible assets, net	$	897,191	$	(1,510	)	$	895,681
Other assets	$	86,890	$	58,496		$	145,386
Accrued expenses and other current liabilities	$	218,130	$	12,119		$	230,249
Other long-term liabilities	$	39,277	$	44,614		$	83,891



	March 31, 2019
Operating lease right-of-use assets:
Other assets	$	54,672
Total operating lease right-of-use assets	$	54,672
Operating lease liabilities:
Accrued expenses and other current liabilities	$	12,209
Other long-term liabilities	42,908
Total operating lease liabilities	$	55,117
Finance lease right-of-use assets:
Property, plant and equipment, at cost	$	49,714
Accumulated depreciation	(22,960		)
Property, plant and equipment, net	$	26,754
Finance lease liabilities:
Current portion of long-term debt, finance lease and other financing obligations	$	1,956
Finance lease and other financing obligations, less current portion	30,468
Total finance lease liabilities	$	32,424



	For the three months ended
	March 31, 2019
Operating leases	$	158
Finance leases	$	—



	For the three months ended
	March 31, 2019
Operating lease cost	$	3,979

Finance lease cost:
Amortization of right-of-use assets	$	452
Interest on lease liabilities	689
Total finance lease cost	$	1,141



	For the three months ended
	March 31, 2019
Operating cash flows from operating leases	$	3,788
Operating cash flows from finance leases	$	619
Financing cash flows from finance leases	$	459



	Operating Leases			Finance Leases
Year ending December 31,
2019 (excluding the three months ended March 31, 2019)	$	11,521		$	3,613
2020	12,359			4,559
2021	8,506			4,081
2022	6,894			3,731
2023	5,790			3,790
Thereafter	27,339			36,398
Total undiscounted cash flows related to lease liabilities	72,409			56,172
Less imputed interest	(17,292		)	(23,748		)
Total lease liabilities	$	55,117		$	32,424



	For the three months ended
($ in millions)	March 31, 2019		March 31, 2018
Severance costs ⁽¹⁾	$	2.9	$	3.6
Facility and other exit costs	—		0.2
Other ⁽²⁾	2.5		—
Restructuring and other charges, net	$	5.3	$	3.8



($ in thousands)	Maturity Date	March 31, 2019
Term Loan	October 14, 2021	$	915,516
4.875% Senior Notes	October 15, 2023	500,000
5.625% Senior Notes	November 1, 2024	400,000
5.0% Senior Notes	October 1, 2025	700,000
6.25% Senior Notes	February 15, 2026	750,000
Less: discount		(14,481		)
Less: deferred financing costs		(24,405		)
Less: current portion		(9,901		)
Long-term debt, net		$	3,216,729

Finance lease and other financing obligations		$	34,623
Less: current portion		(3,759		)
Finance lease and other financing obligations, less current portion		$	30,864