UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________________________________

FORM 10-Q

_________________________________________________________________________________

(Mark One)


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

For the quarterly period ended ~~September~~June 30, ~~2021~~2022


☐			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

98-1386780

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

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. Yes ☒ 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). Yes ☒ 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

☒

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 ☒

As of ~~October~~July 15, ~~2021, 158,472,871~~2022, 155,251,755 ordinary shares were outstanding.

Table of Contents

TABLE OF CONTENTS


PART I
	Item 1.	Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets as of ~~September 30, 2021~~June 3 0 , 2022 and December 31, ~~2020~~2021	3
		Condensed Consolidated Statements of Operations for the Three and ~~Nine~~ Si x Months Ended ~~September 30,~~June 3 0 , 2022 and 2021 ~~and 2020~~	4
		Condensed Consolidated Statements of Comprehensive Income for the Three and ~~Nine~~Six Months Ended ~~September 30,~~June 3 0 , 2022 and 2021 ~~and 2020~~	5
		Condensed Consolidated Statements of Cash Flows for the ~~Nine~~ S ix Months Ended ~~September 30,~~June 3 0 , 2022 and 2021 ~~and 2020~~	6
		Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and ~~Nine~~Six Months Ended ~~September 30,~~June 3 0 , 2022 and 2021 ~~and 2020~~	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2423
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3934
	Item 4.	Controls and Procedures	3934

PART II
	Item 1.	Legal Proceedings	4135
	Item 1A.	Risk Factors	4135
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4135
	Item 3.	Defaults Upon Senior Securities	4135

	Item 6.	Exhibits	4236
		Signatures	4337

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)


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,958,144	$	1,861,980	Cash and cash equivalents	$	1,558,578	$	1,708,955
Accounts receivable, net of allowances of $20,709 and $19,033 as of September 30, 2021 and December 31, 2020, respectively		662,751		576,647
Accounts receivable, net of allowances of $26,448 and $17,003 as of June 30, 2022 and December 31, 2021, respectively						Accounts receivable, net of allowances of $26,448 and $17,003 as of June 30, 2022 and December 31, 2021, respectively	743,048		653,438
Inventories	Inventories	551,628		451,005		Inventories	656,736		588,231
Prepaid expenses and other current assets	Prepaid expenses and other current assets	130,141		90,340		Prepaid expenses and other current assets	161,367		126,370

Total current assets	Total current assets	3,302,664		2,979,972		Total current assets	3,119,729		3,076,994
Property, plant and equipment, net	Property, plant and equipment, net	805,202		803,825		Property, plant and equipment, net	825,862		820,933
Goodwill	Goodwill	3,301,947		3,111,349		Goodwill	3,534,438		3,502,063
Other intangible assets, net of accumulated amortization of $2,245,877 and $2,145,634 as of September 30, 2021 and December 31, 2020, respectively		859,367		691,549
Other intangible assets, net of accumulated amortization of $2,351,560 and $2,277,393 as of June 30, 2022 and December 31, 2021, respectively						Other intangible assets, net of accumulated amortization of $2,351,560 and $2,277,393 as of June 30, 2022 and December 31, 2021, respectively	904,929		946,731
Deferred income tax assets	Deferred income tax assets	78,597		84,785		Deferred income tax assets	101,899		105,028
Other assets	Other assets	156,981		172,722		Other assets	119,820		162,017
Total assets	Total assets	$	8,504,758	$	7,844,202	Total assets	$	8,606,677	$	8,613,766
Liabilities and shareholders' equity	Liabilities and shareholders' equity					Liabilities and shareholders' equity
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt, finance lease and other financing obligations	Current portion of long-term debt, finance lease and other financing obligations	$	6,632	$	757,205	Current portion of long-term debt, finance lease and other financing obligations	$	6,566	$	6,833
Accounts payable	Accounts payable	427,271		393,907		Accounts payable	537,261		459,093
Income taxes payable	Income taxes payable	32,830		19,215		Income taxes payable	15,309		26,517
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	363,087		324,830		Accrued expenses and other current liabilities	327,993		343,816

Total current liabilities	Total current liabilities	829,820		1,495,157		Total current liabilities	887,129		836,259
Deferred income tax liabilities	Deferred income tax liabilities	306,703		259,857		Deferred income tax liabilities	341,383		339,273
Pension and other post-retirement benefit obligations	Pension and other post-retirement benefit obligations	43,621		48,002		Pension and other post-retirement benefit obligations	37,863		38,758
Finance lease and other financing obligations, less current portion	Finance lease and other financing obligations, less current portion	27,000		27,931		Finance lease and other financing obligations, less current portion	25,623		26,564
Long-term debt, net	Long-term debt, net	4,214,388		3,213,747		Long-term debt, net	4,213,512		4,214,946
Other long-term liabilities	Other long-term liabilities	73,603		94,022		Other long-term liabilities	77,583		63,232
Total liabilities	Total liabilities	5,495,135		5,138,716		Total liabilities	5,583,093		5,519,032
Commitments and contingencies (Note 12)	Commitments and contingencies (Note 12)	0		0		Commitments and contingencies (Note 12)	0		0
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 174,079 and 173,266 shares issued as of September 30, 2021 and December 31, 2020, respectively		2,230		2,220
Treasury shares, at cost, 15,631 shares as of September 30, 2021 and December 31, 2020		(784,596)		(784,596)
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 174,924 and 174,287 shares issued as of June 30, 2022 and December 31, 2021, respectively						Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 174,924 and 174,287 shares issued as of June 30, 2022 and December 31, 2021, respectively	2,239		2,232
Treasury shares, at cost, 19,269 and 16,438 shares as of June 30, 2022 and December 31, 2021, respectively						Treasury shares, at cost, 19,269 and 16,438 shares as of June 30, 2022 and December 31, 2021, respectively	(978,595)		(832,439)
Additional paid-in capital	Additional paid-in capital	1,798,549		1,759,668		Additional paid-in capital	1,841,925		1,812,244
Retained earnings	Retained earnings	2,020,346		1,777,729		Retained earnings	2,164,734		2,132,257
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(26,906)		(49,535)		Accumulated other comprehensive loss	(6,719)		(19,560)

Total shareholders' equity	Total shareholders' equity	3,009,623		2,705,486		Total shareholders' equity	3,023,584		3,094,734
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	8,504,758	$	7,844,202	Total liabilities and shareholders' equity	$	8,606,677	$	8,613,766

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 nine months ended					For the three months ended				For the six months ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net revenue	Net revenue	$	951,021	$	788,313	$	2,886,209	$	2,139,087	Net revenue	$	1,020,548	$	992,660	$	1,996,318	$	1,935,188
Operating costs and expenses:	Operating costs and expenses:									Operating costs and expenses:
Cost of revenue	Cost of revenue	628,922		530,255		1,922,556		1,509,104		Cost of revenue	686,603		658,285		1,343,683		1,293,634
Research and development	Research and development	40,060		33,423		118,929		98,115		Research and development	47,971		42,913		93,951		78,869
Selling, general and administrative	Selling, general and administrative	85,784		75,747		249,728		217,698		Selling, general and administrative	97,329		86,821		193,009		163,944
Amortization of intangible assets	Amortization of intangible assets	34,571		32,562		101,492		98,397		Amortization of intangible assets	36,805		34,857		74,172		66,921
Restructuring and other charges, net	Restructuring and other charges, net	345		(10,519)		9,956		32,197		Restructuring and other charges, net	12,897		5,029		26,630		9,611
Total operating costs and expenses	Total operating costs and expenses	789,682		661,468		2,402,661		1,955,511		Total operating costs and expenses	881,605		827,905		1,731,445		1,612,979
Operating income	Operating income	161,339		126,845		483,548		183,576		Operating income	138,943		164,755		264,873		322,209
Interest expense, net	Interest expense, net	(45,137)		(44,129)		(134,393)		(124,340)		Interest expense, net	(44,842)		(45,213)		(90,287)		(89,256)
Other, net	Other, net	(9,403)		9,194		(47,788)		(1,511)		Other, net	(39,240)		1,012		(89,696)		(38,385)
Income before taxes	Income before taxes	106,799		91,910		301,367		57,725		Income before taxes	54,861		120,554		84,890		194,568
Provision for income taxes	Provision for income taxes	21,840		15,181		49,759		15,106		Provision for income taxes	20,020		7,638		27,608		27,919
Net income	Net income	$	84,959	$	76,729	$	251,608	$	42,619	Net income	$	34,841	$	112,916	$	57,282	$	166,649
Basic net income per share	Basic net income per share	$	0.54	$	0.49	$	1.59	$	0.27	Basic net income per share	$	0.22	$	0.71	$	0.36	$	1.05
Diluted net income per share	Diluted net income per share	$	0.53	$	0.49	$	1.58	$	0.27	Diluted net income per share	$	0.22	$	0.71	$	0.36	$	1.05

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 Income

(In thousands)

(unaudited)


		For the three months ended				For the nine months ended					For the three months ended				For the six months ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net income	Net income	$	84,959	$	76,729	$	251,608	$	42,619	Net income	$	34,841	$	112,916	$	57,282	$	166,649
Other comprehensive income/(loss):
Other comprehensive income:										Other comprehensive income:
Cash flow hedges	Cash flow hedges	2,975		(2,197)		18,651		(26,698)		Cash flow hedges	9,183		1,398		12,033		15,676
Defined benefit and retiree healthcare plans	Defined benefit and retiree healthcare plans	594		1,015		3,978		6,029		Defined benefit and retiree healthcare plans	380		1,672		808		3,384
Other comprehensive income/(loss)		3,569		(1,182)		22,629		(20,669)
Other comprehensive income										Other comprehensive income	9,563		3,070		12,841		19,060
Comprehensive income	Comprehensive income	$	88,528	$	75,547	$	274,237	$	21,950	Comprehensive income	$	44,404	$	115,986	$	70,123	$	185,709

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 nine months ended					For the six months ended
		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	251,608	$	42,619	Net income	$	57,282	$	166,649
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	Depreciation	94,361		94,216		Depreciation	62,882		62,833
Amortization of debt issuance costs	Amortization of debt issuance costs	5,142		5,026		Amortization of debt issuance costs	3,433		3,426

Share-based compensation	Share-based compensation	18,871		14,212		Share-based compensation	15,739		11,475
Loss on debt financing	Loss on debt financing	30,066		—		Loss on debt financing	—		30,066
Amortization of intangible assets	Amortization of intangible assets	101,492		98,397		Amortization of intangible assets	74,172		66,921
Deferred income taxes	Deferred income taxes	(2,070)		(11,600)		Deferred income taxes	(5,211)		(7,070)

Acquisition-related compensation payments						Acquisition-related compensation payments	(15,000)		—
Mark-to-market loss on equity investments, net						Mark-to-market loss on equity investments, net	71,100		—
Unrealized loss on derivative instruments and other	Unrealized loss on derivative instruments and other	17,359		5,876		Unrealized loss on derivative instruments and other	20,669		12,700
Changes in operating assets and liabilities, net of the effects of acquisitions:	Changes in operating assets and liabilities, net of the effects of acquisitions:					Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net	Accounts receivable, net	(66,340)		(5,205)		Accounts receivable, net	(102,845)		(97,906)
Inventories	Inventories	(93,651)		71,207		Inventories	(69,379)		(45,664)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(18,390)		15,689		Prepaid expenses and other current assets	(17,762)		(8,280)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	44,879		(10,939)		Accounts payable and accrued expenses	56,767		68,764
Income taxes payable	Income taxes payable	13,615		(23,806)		Income taxes payable	(11,384)		6,448
Other	Other	(3,716)		(2,354)		Other	1,425		(2,431)
Net cash provided by operating activities	Net cash provided by operating activities	393,226		293,338		Net cash provided by operating activities	141,888		267,931
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Acquisitions, net of cash received	Acquisitions, net of cash received	(414,959)		(64,452)		Acquisitions, net of cash received	(48,989)		(421,951)
Additions to property, plant and equipment and capitalized software	Additions to property, plant and equipment and capitalized software	(100,410)		(79,939)		Additions to property, plant and equipment and capitalized software	(74,069)		(63,572)
Investment in debt and equity securities	Investment in debt and equity securities	(4,655)		(24,794)		Investment in debt and equity securities	(6,878)		(6,444)

Other	Other	3,919		10,717		Other	152		2,862
Net cash used in investing activities	Net cash used in investing activities	(516,105)		(158,468)		Net cash used in investing activities	(129,784)		(489,105)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from exercise of stock options and issuance of ordinary shares	Proceeds from exercise of stock options and issuance of ordinary shares	20,016		2,237		Proceeds from exercise of stock options and issuance of ordinary shares	14,577		17,957
Payment of employee restricted stock tax withholdings	Payment of employee restricted stock tax withholdings	(8,987)		(2,335)		Payment of employee restricted stock tax withholdings	(7,577)		(7,948)
Proceeds from borrowings on debt	Proceeds from borrowings on debt	1,001,875		1,150,000		Proceeds from borrowings on debt	—		1,001,875
Payments on debt						Payments on debt	(5,664)		(757,889)
Dividends paid						Dividends paid	(17,225)		—
Payments to repurchase ordinary shares						Payments to repurchase ordinary shares	(144,279)		—

Payments on debt		(760,768)		(406,568)
Payments to repurchase ordinary shares		—		(35,175)
Payments of debt financing costs	Payments of debt financing costs	(33,093)		(6,957)		Payments of debt financing costs	(2,313)		(33,032)

Net cash provided by financing activities		219,043		701,202
Net cash (used in)/provided by financing activities						Net cash (used in)/provided by financing activities	(162,481)		220,963
Net change in cash and cash equivalents	Net change in cash and cash equivalents	96,164		836,072		Net change in cash and cash equivalents	(150,377)		(211)
Cash and cash equivalents, beginning of period		1,861,980		774,119
Cash and cash equivalents, beginning of year						Cash and cash equivalents, beginning of year	1,708,955		1,861,980
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	1,958,144	$	1,610,191	Cash and cash equivalents, end of period	$	1,558,578	$	1,861,769

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								Total Shareholders' Equity	Number					Amount		Number			Amount		Additional Paid-In Capital			Retained Earnings
Balance as of June 30, 2021		174,005	$	2,229	(15,631)	$	(784,596)	$	1,789,863	$	1,936,427	$	(30,475)			$	2,913,448
Balance as of March 31, 2022																				Balance as of March 31, 2022	174,583		$	2,236		(17,576)							$	(899,697)			$	1,831,497			$	2,154,563	$	(16,282)			$	3,072,317
Surrender of shares for tax withholding	Surrender of shares for tax withholding	—	—		(18)	(1,039)		—		—		—						(1,039)		Surrender of shares for tax withholding	—		—			(148)		(7,442)			—				—				—						(7,442)
Stock options exercised	Stock options exercised	34	—		—	—		1,290		—		—						1,290		Stock options exercised	39		—			—		—			1,229				—				—						1,229
Vesting of restricted securities	Vesting of restricted securities	58	1		—	—		—		(1)		—						—		Vesting of restricted securities	450		5			—		—			—				(5)				—						—

Cash dividends paid																				Cash dividends paid	—		—			—		—			—				(17,225)				—						(17,225)
Repurchase of ordinary shares																				Repurchase of ordinary shares	—		—			(1,693)		(78,898)			—				—				—						(78,898)
Retirement of ordinary shares	Retirement of ordinary shares	(18)	—		18	1,039		—		(1,039)		—						—		Retirement of ordinary shares	(148)		(2)			148		7,442			—				(7,440)				—						—
Share-based compensation	Share-based compensation	—	—		—	—		7,396		—		—						7,396		Share-based compensation	—		—			—		—			9,199				—				—						9,199

Net income	Net income	—	—		—	—		—		84,959		—						84,959		Net income	—		—			—		—			—				34,841				—						34,841
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		3,569						3,569		Other comprehensive income	—		—			—		—			—				—				9,563						9,563
Balance as of September 30, 2021		174,079	$	2,230	(15,631)	$	(784,596)	$	1,798,549	$	2,020,346	$	(26,906)					$	3,009,623
Balance as of June 30, 2022																				Balance as of June 30, 2022	174,924		$	2,239		(19,269)		$	(978,595)		$	1,841,925			$	2,164,734			$	(6,719)					$	3,023,584


		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								Total Shareholders' Equity				Amount	Number		Amount	Additional Paid-In Capital												Total Shareholders' Equity
Balance as of December 31, 2020		173,266	$	2,220	(15,631)	$	(784,596)	$	1,759,668	$	1,777,729	$	(49,535)		$	2,705,486
Balance as of December 31, 2021																	Balance as of December 31, 2021	174,287	$	2,232	(16,438)					$	(832,439)			$	1,812,244				$	2,132,257	$	(19,560)			$	3,094,734
Surrender of shares for tax withholding	Surrender of shares for tax withholding	—	—		(154)	(8,987)		—		—		—			(8,987)		Surrender of shares for tax withholding	—	—		(151)	(7,577)		—				—				—							(7,577)
Stock options exercised	Stock options exercised	501	6		—	—		20,010		—		—			20,016		Stock options exercised	329	4		—	—		13,942				—				—							13,946
Vesting of restricted securities	Vesting of restricted securities	466	6		—	—		—		(6)		—			—		Vesting of restricted securities	459	5		—	—		—				(5)				—							—

Cash dividends paid																	Cash dividends paid	—	—		—	—		—				(17,225)				—							(17,225)
Repurchase of ordinary shares																	Repurchase of ordinary shares	—	—		(2,831)	(146,156)		—				—				—							(146,156)
Retirement of ordinary shares	Retirement of ordinary shares	(154)	(2)		154	8,987		—		(8,985)		—			—		Retirement of ordinary shares	(151)	(2)		151	7,577		—				(7,575)				—							—
Share-based compensation	Share-based compensation	—	—		—	—		18,871		—		—			18,871		Share-based compensation	—	—		—	—		15,739				—				—							15,739

Net income	Net income	—	—		—	—		—		251,608		—			251,608		Net income	—	—		—	—		—				57,282				—							57,282
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		22,629			22,629		Other comprehensive income	—	—		—	—		—				—				12,841							12,841
Balance as of September 30, 2021		174,079	$	2,230	(15,631)	$	(784,596)	$	1,798,549	$	2,020,346	$	(26,906)		$	3,009,623
Balance as of June 30, 2022																	Balance as of June 30, 2022	174,924	$	2,239	(19,269)	$	(978,595)	$	1,841,925			$	2,164,734			$	(6,719)						$	3,023,584


		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								Total Shareholders' Equity				Amount	Number		Amount	Additional Paid-In Capital												Total Shareholders' Equity
Balance as of June 30, 2020		172,844	$	2,215	(15,631)	$	(784,596)	$	1,735,826	$	1,579,931	$	(39,971)		$	2,493,405
Balance as of March 31, 2021																	Balance as of March 31, 2021	173,533	$	2,223	(15,631)					$	(784,596)			$	1,775,320				$	1,831,241	$	(33,545)			$	2,790,643
Surrender of shares for tax withholding	Surrender of shares for tax withholding	—	—		—	(21)		—		—		—			(21)		Surrender of shares for tax withholding	—	—		(132)	(7,727)		—				—				—							(7,727)
Stock options exercised	Stock options exercised	29	1		—	—		1,090		—		—			1,091		Stock options exercised	208	3		—	—		8,167				—				—							8,170
Vesting of restricted securities	Vesting of restricted securities	2	—		—	—		—		—		—			—		Vesting of restricted securities	396	5		—	—		—				(5)				—							—

Retirement of ordinary shares	Retirement of ordinary shares	—	—		—	21		—		(21)		—			—		Retirement of ordinary shares	(132)	(2)		132	7,727		—				(7,725)				—							—
Share-based compensation	Share-based compensation	—	—		—	—		4,622		—		—			4,622		Share-based compensation	—	—		—	—		6,376				—				—							6,376

Net income	Net income	—	—		—	—		—		76,729		—			76,729		Net income	—	—		—	—		—				112,916				—							112,916
Other comprehensive loss		—	—		—	—		—		—		(1,182)			(1,182)
Balance as of September 30, 2020		172,875	$	2,216	(15,631)	$	(784,596)	$	1,741,538	$	1,656,639	$	(41,153)		$	2,574,644
Other comprehensive income																	Other comprehensive income	—	—		—	—		—				—				3,070							3,070
Balance as of June 30, 2021																	Balance as of June 30, 2021	174,005	$	2,229	(15,631)	$	(784,596)	$	1,789,863			$	1,936,427			$	(30,475)						$	2,913,448


		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								Total Shareholders' Equity				Amount	Number		Amount	Additional Paid-In Capital												Total Shareholders' Equity
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
Balance as of December 31, 2020																	Balance as of December 31, 2020	173,266	$	2,220	(15,631)					$	(784,596)			$	1,759,668				$	1,777,729	$	(49,535)			$	2,705,486
Surrender of shares for tax withholding	Surrender of shares for tax withholding	—	—		(83)	(2,335)		—		—		—			(2,335)		Surrender of shares for tax withholding	—	—		(136)	(7,948)		—				—				—							(7,948)
Stock options exercised	Stock options exercised	84	2		—	—		2,235		—		—			2,237		Stock options exercised	467	6		—	—		18,720				—				—							18,726
Vesting of restricted securities	Vesting of restricted securities	313	3		—	—		—		(3)		—			—		Vesting of restricted securities	408	5		—	—		—				(5)				—							—
Repurchase of ordinary shares		—	—		(898)	(35,175)		—		—		—			(35,175)

Retirement of ordinary shares	Retirement of ordinary shares	(83)	(1)		83	2,335		—		(2,334)		—			—		Retirement of ordinary shares	(136)	(2)		136	7,948		—				(7,946)				—							—
Share-based compensation	Share-based compensation	—	—		—	—		14,212		—		—			14,212		Share-based compensation	—	—		—	—		11,475				—				—							11,475

Net income	Net income	—	—		—	—		—		42,619		—			42,619		Net income	—	—		—	—		—				166,649				—							166,649
Other comprehensive loss		—	—		—	—		—		—		(20,669)			(20,669)
Balance as of September 30, 2020		172,875	$	2,216	(15,631)	$	(784,596)	$	1,741,538	$	1,656,639	$	(41,153)		$	2,574,644
Other comprehensive income																	Other comprehensive income	—	—		—	—		—				—				19,060							19,060
Balance as of June 30, 2021																	Balance as of June 30, 2021	174,005	$	2,229	(15,631)	$	(784,596)	$	1,789,863			$	1,936,427			$	(30,475)						$	2,913,448

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

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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 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 consolidated 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. 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, ~~2020~~2021 filed with the U.S. Securities and Exchange Commission (the ~~"2020~~"SEC") on February 10, 2022 (the "2021 Annual Report").

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

2. New Accounting Standards

There are no recently issued accounting standards that have been adopted in the current period or will be adopted in future periods that have had or are expected to have a material impact on our consolidated financial position or results of operations.

3. Revenue Recognition

The following ~~tables~~table presents net revenue disaggregated by segment and end market for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


		For the three months ended September 30, 2021						For the three months ended September 30, 2020							For the three months ended June 30, 2022						For the three months ended June 30, 2021
		Performance Sensing		Sensing Solutions		Total		Performance Sensing		Sensing Solutions		Total			Performance Sensing		Sensing Solutions		Total		Performance Sensing		Sensing Solutions		Total
Automotive	Automotive	$	488,041	$	9,451	$	497,492	$	456,200	$	7,801	$	464,001	Automotive	$	506,232	$	9,932	$	516,164	$	518,367	$	12,052	$	530,419
HVOR (1)	HVOR (1)	218,425		—		218,425		124,736		—		124,736		HVOR (1)	240,650		—		240,650		223,485		—		223,485
Industrial	Industrial	—		106,809		106,809		—		87,174		87,174		Industrial	—		122,094		122,094		—		105,474		105,474
Appliance and HVAC (2)	Appliance and HVAC (2)	—		62,793		62,793		—		47,618		47,618		Appliance and HVAC (2)	—		57,675		57,675		—		63,187		63,187
Aerospace	Aerospace	—		34,377		34,377		—		31,740		31,740		Aerospace	—		38,558		38,558		—		32,793		32,793
Other	Other	—		31,125		31,125		—		33,044		33,044		Other	—		45,407		45,407		—		37,302		37,302
Total	Total	$	706,466	$	244,555	$	951,021	$	580,936	$	207,377	$	788,313	Total	$	746,882	$	273,666	$	1,020,548	$	741,852	$	250,808	$	992,660

~~________________________~~

(1) Heavy vehicle and off-road

(2) Heating, ventilation and air conditioning


		For the nine months ended September 30, 2021						For the nine months ended September 30, 2020							For the six months ended June 30, 2022						For the six months ended June 30, 2021
		Performance Sensing		Sensing Solutions		Total		Performance Sensing		Sensing Solutions		Total			Performance Sensing		Sensing Solutions		Total		Performance Sensing		Sensing Solutions		Total
Automotive	Automotive	$	1,543,121	$	33,003	$	1,576,124	$	1,180,402	$	23,316	$	1,203,718	Automotive	$	1,008,594	$	19,217	$	1,027,811	$	1,055,080	$	23,552	$	1,078,632
HVOR	HVOR	619,709		—		619,709		354,430		—		354,430		HVOR	455,985		—		455,985		401,284		—		401,284
Industrial	Industrial	—		302,758		302,758		—		247,037		247,037		Industrial	—		236,713		236,713		—		195,949		195,949
Appliance and HVAC	Appliance and HVAC	—		185,896		185,896		—		136,703		136,703		Appliance and HVAC	—		116,500		116,500		—		123,103		123,103
Aerospace	Aerospace	—		99,847		99,847		—		101,057		101,057		Aerospace	—		71,828		71,828		—		65,470		65,470
Other	Other	—		101,875		101,875		—		96,142		96,142		Other	—		87,481		87,481		—		70,750		70,750
Total	Total	$	2,162,830	$	723,379	$	2,886,209	$	1,534,832	$	604,255	$	2,139,087	Total	$	1,464,579	$	531,739	$	1,996,318	$	1,456,364	$	478,824	$	1,935,188

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4. Share-Based Payment Plans

The following table presents the components of non-cash compensation expense related to our equity awards for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


		For the three months ended				For the nine months ended					For the three months ended				For the six months ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Stock options	Stock options	$	307	$	179	$	1,072	$	2,721	Stock options	$	2	$	305	$	309	$	765
Restricted securities	Restricted securities	7,089		4,443		17,799		11,491		Restricted securities	9,197		6,071		15,430		10,710
Share-based compensation expense	Share-based compensation expense	$	7,396	$	4,622	$	18,871	$	14,212	Share-based compensation expense	$	9,199	$	6,376	$	15,739	$	11,475

Equity Awards

At our Annual General Meeting held on May 27, 2021, our shareholders approved the Sensata Technologies Holding plc 2021 Equity Incentive Plan (the "2021 Equity Plan"), which replaced the Sensata Technologies Holding plc First Amended and Restated 2010 Equity Incentive Plan (the "2010 Equity Plan"). The 2021 Equity Plan is substantially similar to the 2010 Equity Plan with some updates based on changes in law and current practices. The purpose of the 2021 Equity Plan is to promote the long-term growth, profitability, and interests of the Company and its shareholders by aiding us in attracting and retaining employees, officers, consultants, advisors, and non-employee directors capable of assuring our future success. All awards granted subsequent to this approval were made under the 2021 Equity Plan.

We granted the following restricted stock units ("RSUs" and each, an "RSU") and performance-based restricted stock units ("PRSUs" and each, a "PRSU") under the Sensata Technologies Holding plc 2021 Equity ~~Plan and 2010 Equity~~Incentive Plan during the ~~nine~~six months ended ~~September~~June 30, ~~2021:~~2022:

Awards Granted To: Type of Award Number of Units Granted (in thousands) Percentage of PRSUs Awarded that May Vest Weighted Average Grant Date Fair Value
Directors
RSU (1)(5)
27 N/A $ 58.63
Various executives and employees
RSU (2)(4)
373 N/A $ 58.37
Various executives and employees
PRSU (3)(4)
236 0.0% - 200.0% $ 58.20
~~________________________~~


Awards Granted To:	Type of Award	Number of Units Granted (in thousands)	Percentage of PRSUs Awarded that May Vest	Weighted Average Grant Date Fair Value

Directors	RSU (1)	29	N/A	$	46.30
Various executives and employees	RSU (2)	518	N/A	$	50.72
Various executives and employees	PRSU (3)	349	0.0% - 200.0%	$	50.52

(1) These RSUs cliff vest one year from the grant date (May ~~2022)~~2023).

(2) These RSUs vest ratably over three years, one-third per year beginning on the first anniversary of the grant date. These RSUs will fully vest on various dates between ~~February 2024~~January 2025 and ~~August 2024.~~June 2025.

(3) These PRSUs vest on various dates between April ~~2024~~2025 and ~~May 2024.~~June 2025. The number of units that ultimately vest is dependent on the achievement of certain performance criteria.

~~(4)~~ ~~Primarily granted under the 2010 Equity Plan.~~

~~(5)~~ ~~Primarily granted under the 2021 Equity Plan.~~

5. Restructuring and Other Charges, Net

On June 30, 2020, in response to the potential long-term impact of the global financial and health crisis caused by the coronavirus ("COVID-19") pandemic on our business, we committed to a plan to reorganize our business (the “Q2 2020 Global Restructure Program”), consisting of voluntary and involuntary reductions-in-force and certain site closures. The Q2 2020 Global Restructure Program was commenced in order to align our cost structure to the then anticipated future demand outlook, and as of September 30, 2021, we have completed all actions contemplated thereunder, with approximately 840 positions impacted. Since inception of the Q2 2020 Global Restructure Program, we have recognized cumulative costs of $33.2 million, of which $28.4 million related to severance charges and $4.8 million related to facility and exit costs. As of September 30, 2021, we have a liability of approximately $7.5 million related to actions taken under this plan. We expect to settle these remaining liabilities with cash on hand.

~~Table of Contents~~

~~Restructuring actions taken under the Q2 2020 Global Restructure Program impacted our business segments and corporate functions as follows:~~

Reductions-in-Force Site Closures
(Dollars in millions) Positions Minimum Maximum Minimum Maximum
Performance Sensing 170 $ 9.3 $ 10.0 $ 3.0 $ 4.0
Sensing Solutions 280 8.0 8.0 3.0 4.0
Corporate and other (1)
390 9.7 11.0 — —
Total 840 $ 27.0 $ 29.0 $ 6.0 $ 8.0

~~(1)~~ The majority of these positions relate to engineering and manufacturing operations, which are allocated to corporate and other. However, these restructuring actions will benefit the results of Performance Sensing and Sensing Solutions as well.

Charges recognized in the three and nine months ended September 30, 2021 and 2020 resulting from the Q2 2020 Global Restructure Program are presented by impacted segment below. However, as discussed in ~~Note 17: Segment Reporting, restructuring and other charges, net are excluded from segment operating income.~~

For the three months ended For the nine months ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Performance Sensing $ 1,106 $ — $ 1,909 $ 7,609
Sensing Solutions 1,992 — 5,132 7,181
Corporate and other — — 1,711 9,330
Restructuring and other charges $ 3,098 $ — $ 8,752 $ 24,120

Approximately $1.3 million and $3.0 million of these charges in the three and nine months ended September 30, 2021, respectively, relate to site closures in Sensing Solutions. Approximately $0.9 million and $1.2 million of these charges in the three and nine months ended September 30, 2021, respectively, relate to site closures in Performance Sensing. None of the charges recognized in 2020 relate to site closures.

The following table presents the components of restructuring and other charges, net for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


		For the three months ended				For the nine months ended					For the three months ended				For the six months ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Q2 2020 Global Restructure Program charges	Q2 2020 Global Restructure Program charges	$	3,098	$	—	$	8,752	$	24,120	Q2 2020 Global Restructure Program charges	$	—	$	3,830	$	—	$	5,654
Other restructuring charges
Other restructuring and other charges, net										Other restructuring and other charges, net
Severance costs, net ~~(1)~~	Severance costs, net ~~(1)~~	133		206		726		4,103		Severance costs, net ~~(1)~~	—		407		587		593
Facility and other exit costs	Facility and other exit costs	541		423		1,832		423		Facility and other exit costs	1,241		625		2,289		1,291

Other ~~(2)~~(1)	Other ~~(2)~~(1)	(3,427)		(11,148)		(1,354)		3,551		Other ~~(2)~~(1)	11,656		167		23,754		2,073
Restructuring and other charges, net	Restructuring and other charges, net	$	345	$	(10,519)	$	9,956	$	32,197	Restructuring and other charges, net	$	12,897	$	5,029	$	26,630	$	9,611

(1) ~~Severance costs, net (excluding those~~Primarily includes expenses related to compensation arrangements entered into concurrent with the ~~Q2 2020 Global Restructure Program) for the nine months ended September 30, 2020 were related~~closing of acquisitions, partially offset by gains relating to ~~termination benefits arising from the shutdown and relocation of an operating site in Northern Ireland.~~

~~(2)~~ In the three months ended September 30, 2020, we settled a patent infringement case brought by Wasica Finance GmbH ("Wasica") against Schrader, and released $11.7 million of the related liability, which is presented in restructuring and other charges, net. For the nine months ended September 30, 2020, this release largely offset a charge of $12.1 million resulting from a prejudgment interest-related award granted by the court on behalf of Wasica in intellectual property litigationchanges in the ~~second quarter~~fair value of ~~2020.~~acquisition-related contingent consideration amounts. Refer to Note 16: Acquisitions and Divestitures for additional information.

109

Table of Contents

The following table presents a rollforward of the severance portion of our restructuring obligations for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.


		Q2 2020 Global Restructure Program		Other		Total			Q2 2020 Global Restructure Program		Other		Total
Balance at December 31, 2020		$	10,842	$	4,037	$	14,879
Balance as of December 31, 2021								Balance as of December 31, 2021	$	3,853	$	3,380	$	7,233
Charges, net of reversals	Charges, net of reversals	4,579		726		5,305		Charges, net of reversals	—		587		587
Payments	Payments	(7,736)		(3,239)		(10,975)		Payments	(3,018)		(1,383)		(4,401)
Foreign currency remeasurement	Foreign currency remeasurement	(171)		(10)		(181)		Foreign currency remeasurement	(14)		(159)		(173)
Balance at September 30, 2021		$	7,514	$	1,514	$	9,028
Balance as of June 30, 2022								Balance as of June 30, 2022	$	821	$	2,425	$	3,246

The severance liability as of ~~September~~June 30, ~~2021~~2022 was entirely recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheet.

6. Other, Net

The following table presents the components of other, net for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


		For the three months ended				For the nine months ended					For the three months ended				For the six months ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Currency remeasurement (loss)/gain on net monetary assets	Currency remeasurement (loss)/gain on net monetary assets	$	(324)	$	5,422	$	187	$	5,878	Currency remeasurement (loss)/gain on net monetary assets	$	(14,090)	$	1,988	$	(14,157)	$	511
Loss on foreign currency forward contracts		(2,414)		(1,060)		(4,791)		(4,424)
Gain/(loss) on foreign currency forward contracts										Gain/(loss) on foreign currency forward contracts	3,165		(1,419)		1,922		(2,377)
(Loss)/gain on commodity forward contracts	(Loss)/gain on commodity forward contracts	(6,495)		6,138		(6,462)		5,990		(Loss)/gain on commodity forward contracts	(18,254)		1,186		(8,830)		33
Loss on debt refinancing		—		—		(30,066)		—
Loss on debt financing										Loss on debt financing	—		—		—		(30,066)
Mark-to-market loss on investments, net										Mark-to-market loss on investments, net	(11,821)		—		(71,100)		—
Net periodic benefit cost, excluding service cost	Net periodic benefit cost, excluding service cost	(1,053)		(1,506)		(5,731)		(8,403)		Net periodic benefit cost, excluding service cost	(639)		(2,268)		(1,394)		(4,678)
Other	Other	883		200		(925)		(552)		Other	2,399		1,525		3,863		(1,808)
Other, net	Other, net	$	(9,403)	$	9,194	$	(47,788)	$	(1,511)	Other, net	$	(39,240)	$	1,012	$	(89,696)	$	(38,385)

7. Income Taxes

The following table presents the provision for income taxes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:

For the three months ended For the nine months ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Provision for income taxes $ 21,840 $ 15,181 $ 49,759 $ 15,106

The increase in total tax for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was primarily due to the increase in income before taxes. The increase in total tax for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was predominantly due to the increase in income before taxes as impacted by the mix of profits in the various jurisdictions in which we operate as well as the nonrecurrence of the benefit recognized in the first quarter of 2020 as a result of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act").

In response to the global financial and health crisis caused by 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 recognized 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 subject to a valuation allowance.


	For the three months ended				For the six months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021


Provision for income taxes	$	20,020	$	7,638	$	27,608	$	27,919

The provision for income taxes consists of (1) current tax expense, which relates primarily to our profitable operations in tax jurisdictions with limited or no net operating loss carryforwards and withholding taxes related to management fees, royalties, and the repatriation of foreign earnings; and (2) deferred tax expense (or benefit), which represents adjustments in book-to-tax basis differences primarily related to (a) book versus tax basis in intangible assets, (b) changes in net operating loss carryforwards, and (c) changes in withholding taxes on unremitted earnings. Other items impacting deferred tax expense include changes in tax rates and ~~(d)~~ changes in our assessment of the realizability of our deferred tax assets.

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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 and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 the weighted-average ordinary shares outstanding used to calculate basic and diluted net income per share were as follows:


		For the three months ended		For the nine months ended			For the three months ended		For the six months ended
		September 30, 2021	September 30, 2020	September 30, 2021	September 30, 2020		June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Basic weighted-average ordinary shares outstanding	Basic weighted-average ordinary shares outstanding	158,394	157,220	158,122	157,335	Basic weighted-average ordinary shares outstanding	156,477	158,208	156,950	157,986
Dilutive effect of stock options	Dilutive effect of stock options	603	233	660	211	Dilutive effect of stock options	190	670	331	689
Dilutive effect of unvested restricted securities	Dilutive effect of unvested restricted securities	482	526	569	444	Dilutive effect of unvested restricted securities	327	466	531	612
Diluted weighted-average ordinary shares outstanding	Diluted weighted-average ordinary shares outstanding	159,479	157,979	159,351	157,990	Diluted weighted-average ordinary shares outstanding	156,994	159,344	157,812	159,287

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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~~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 were as follows:


		For the three months ended		For the nine months ended			For the three months ended		For the six months ended
		September 30, 2021	September 30, 2020	September 30, 2021	September 30, 2020		June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Anti-dilutive shares excluded	Anti-dilutive shares excluded	9	1,680	8	1,868	Anti-dilutive shares excluded	1,426	8	715	7
Contingently issuable shares excluded	Contingently issuable shares excluded	1,072	1,183	1,037	1,010	Contingently issuable shares excluded	1,383	1,089	1,192	1,020

9. Inventories

The following table presents the components of inventories as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Finished goods	Finished goods	$	185,044	$	170,488	Finished goods	$	223,919	$	201,424
Work-in-process	Work-in-process	102,671		87,006		Work-in-process	114,277		101,558
Raw materials	Raw materials	263,913		193,511		Raw materials	318,540		285,249
Inventories	Inventories	$	551,628	$	451,005	Inventories	$	656,736	$	588,231

10. Pension and Other Post-Retirement Benefits

The following table presents the components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020 were as follows:~~2021:

U.S. Plans Non-U.S. Plans
Defined Benefit Retiree Healthcare Defined Benefit Total
2021 2020 2021 2020 2021 2020 2021 2020
Service cost $ — $ — $ 2 $ 2 $ 725 $ 777 $ 727 $ 779
Interest cost 167 206 21 37 405 294 593 537
Expected return on plan assets (226) (292) — — (177) (177) (403) (469)
Amortization of net loss 243 311 — (1) 461 257 704 567
Amortization of prior service (credit)/cost — — (159) (196) 3 2 (156) (194)
Loss on settlement 315 31 — — — 785 315 816
Loss on curtailment — — — 249 — — — 249
Net periodic benefit cost/(credit) $ 499 $ 256 $ (136) $ 91 $ 1,417 $ 1,938 $ 1,780 $ 2,285

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	U.S. Plans								Non-U.S. Plans
	Defined Benefit				Retiree Healthcare				Defined Benefit				Total
	2022		2021		2022		2021		2022		2021		2022		2021
Service cost	$	—	$	—	$	2	$	2	$	982	$	1,325	$	984	$	1,327
Interest cost	113		120		18		21		426		401		557		542
Expected return on plan assets	(195)		(226)		—		—		(242)		(179)		(437)		(405)
Amortization of net loss/(gain)	226		401		(43)		—		330		462		513		863
Amortization of prior service (credit)/cost	—		—		(100)		(159)		3		13		(97)		(146)
Loss on settlement	103		1,414		—		—		—		—		103		1,414

Net periodic benefit cost/(credit)	$	247	$	1,709	$	(123)	$	(136)	$	1,499	$	2,022	$	1,623	$	3,595

The following table presents the components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020 were as follows:~~2021:


		U.S. Plans								Non-U.S. Plans									U.S. Plans								Non-U.S. Plans
		Defined Benefit				Retiree Healthcare				Defined Benefit				Total					Defined Benefit				Retiree Healthcare				Defined Benefit				Total
		2021		2020		2021		2020		2021		2020		2021		2020			2022		2021		2022		2021		2022		2021		2022		2021
Service cost	Service cost	$	—	$	—	$	6	$	7	$	3,028	$	2,485	$	3,034	$	2,492	Service cost	$	—	$	—	$	4	$	4	$	1,938	$	2,303	$	1,942	$	2,307
Interest cost	Interest cost	407		679		63		110		1,210		1,005		1,680		1,794		Interest cost	226		240		64		42		850		805		1,140		1,087
Expected return on plan assets	Expected return on plan assets	(678)		(1,018)		—		—		(534)		(523)		(1,212)		(1,541)		Expected return on plan assets	(390)		(452)		—		—		(486)		(357)		(876)		(809)
Amortization of net loss		1,045		906		—		18		1,382		852		2,427		1,776
Amortization of net loss/(gain)																		Amortization of net loss/(gain)	367		802		(43)		—		608		921		932		1,723
Amortization of prior service (credit)/cost	Amortization of prior service (credit)/cost	—		—		(477)		(589)		19		7		(458)		(582)		Amortization of prior service (credit)/cost	—		—		(200)		(318)		5		16		(195)		(302)
Loss on settlement	Loss on settlement	3,294		4,363		—		—		—		2,344		3,294		6,707		Loss on settlement	393		2,979		—		—		—		—		393		2,979
Loss on curtailment		—		—		—		249		—		—		—		249

Net periodic benefit cost/(credit)	Net periodic benefit cost/(credit)	$	4,068	$	4,930	$	(408)	$	(205)	$	5,105	$	6,170	$	8,765	$	10,895	Net periodic benefit cost/(credit)	$	596	$	3,569	$	(175)	$	(272)	$	2,915	$	3,688	$	3,336	$	6,985

Components of net periodic benefit cost/(credit) other than service cost are presented in other, net in the condensed consolidated statements of operations. Refer to Note 6: Other, Net.

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11. Debt

~~Our~~The following table presents the components of long-term debt, finance lease and other financing obligations as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020 consisted~~2021:


	Maturity Date	June 30, 2022		December 31, 2021
Term Loan	September 20, 2026	$	449,150	$	451,465
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

4.375% Senior Notes	February 15, 2030	450,000		450,000
3.75% Senior Notes	February 15, 2031	750,000		750,000
4.0% Senior Notes	April 15, 2029	1,000,000		1,000,000


Less: debt discount, net of premium		(4,317)		(5,207)
Less: deferred financing costs		(26,691)		(26,682)
Less: current portion		(4,630)		(4,630)
Long-term debt, net		$	4,213,512	$	4,214,946

Finance lease and other financing obligations		$	27,559	$	28,767
Less: current portion		(1,936)		(2,203)
Finance lease and other financing obligations, less current portion		$	25,623	$	26,564

Our debt consists of secured credit facilities and various tranches of senior unsecured notes. Refer to Note 14: Debt of our 2021 Annual Report for additional information related to our existing indebtedness.

Secured Credit Facilities

On June 23, 2022, certain of our indirect, wholly-owned subsidiaries, including Sensata Technologies, Inc. ("STI"), Sensata Technologies Intermediate Holding B.V. ("STIHBV"), and Sensata Technologies B.V. (“STBV”), entered into an amendment (the “Eleventh Amendment”) to (i) the credit agreement, dated as of May 12, 2011 (as amended, supplemented, waived, or otherwise modified, the “Credit Agreement”), and (ii) the Foreign Guaranty, dated as of May 12, 2011.

Among other changes to the Credit Agreement, the Eleventh Amendment (i) increased the aggregate principal amount of the ~~following:~~

Maturity Date September 30, 2021 December 31, 2020
Term Loan September 20, 2026 $ 452,623 $ 456,096
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
4.375% Senior Notes February 15, 2030 450,000 450,000
3.75% Senior Notes February 15, 2031 750,000 750,000
4.0% Senior Notes April 15, 2029 1,000,000 —
Less: discount, net of premium (5,652) (9,605)
Less: deferred financing costs (27,953) (28,114)
Less: current portion (4,630) (754,630)
Long-term debt, net $ 4,214,388 $ 3,213,747
Finance lease and other financing obligations $ 29,002 $ 30,506
Less: current portion (2,002) (2,575)
Finance lease and other financing obligations, less current portion $ 27,000 $ 27,931

revolving credit facility under the Credit Agreement (the "Revolving Credit Facility") to $750.0 million; (ii) extended the maturity date of the Revolving Credit Facility to June 23, 2027 (which could be accelerated to June 22, 2026 if, prior to June 22, 2026, the term loan under the Credit Agreement (the "Term Loan") is not refinanced with a maturity date that is on or after June 23, 2027); (iii) released the Foreign Guarantors (as defined in the Credit Agreement), excluding STBV, from their obligations to guarantee the obligations of STI and the other Loan Parties (as defined in the Credit Agreement) relating to the Revolving Credit Facility and certain related obligations, subject to an obligation to reinstate such guaranties under certain conditions; (iv) replaced the LIBOR-based interest rates referenced by the Credit Agreement regarding revolving credit loans to (a) for revolving credit loans denominated in U.S. dollars, an interest rate based on the secured overnight financing rate ("SOFR") published by the Federal Reserve Bank of New York and (b) for revolving credit loans denominated in pounds sterling, an interest rate based on the Sterling Overnight Index Average ("SONIA"); and (v) certain of the operational and restrictive covenants and other terms and conditions of the Credit Agreement were modified to provide STI and its affiliates increased flexibility and permissions thereunder.

As of ~~September~~June 30, ~~2021,~~2022, we had ~~$416.1~~$746.1 million available under our ~~$420.0~~$750.0 million ~~revolving credit facility (the "Revolving~~Revolving Credit ~~Facility"),~~Facility, net of $3.9 million of obligations in respect of outstanding letters of credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of ~~September~~June 30, ~~2021,~~2022, no amounts had been drawn against these outstanding letters of credit.

~~6.25% Senior Notes redemption~~Accounting for Debt Financing Transactions

~~On February 3, 2021,~~In the six months ended June 30, 2022, in connection with the entry into the Eleventh Amendment, we ~~announced that we intended to redeem in full the $750.0~~recognized $2.6 million ~~aggregate principal amount outstanding~~of deferred financing costs, which are presented as a reduction of long-term debt on our 6.25% senior notes due 2026 (the "6.25% Senior Notes"). On February 15, 2021, the “make-whole” premium with respect to the 6.25% Senior Notes expired. Accordingly, we reflected the 6.25% Senior Notes as a current liability on ourcondensed consolidated balance ~~sheet as of December 31, 2020.~~

We redeemed the 6.25% Senior Notes on March 5, 2021 in accordance with the terms of the indenture under which the 6.25% Senior Notes were issued and the terms of the notice of redemption at a redemption price equal to 103.125% of the aggregatesheets.

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principal amount of the outstanding 6.25% Senior Notes, plus accrued and unpaid interest to (but not including) the redemption date. In addition to the $750.0 million aggregate principal amount outstanding, at redemption we paid the $23.4 million premium and $2.6 million accrued interest.

~~4.0% Senior Notes~~

On March 29, 2021, our indirect, wholly-owned subsidiary, Sensata Technologies B.V. ("STBV"), completed the issuance and sale of $750.0 million aggregate principal amount of 4.0% senior notes due 2029 (the "4.0% Senior Notes"). The 4.0% Senior Notes were issued under an indenture dated as of March 29, 2021 among STBV, as issuer, The Bank of New York Mellon, as trustee (the "Trustee"), and our guarantor subsidiaries (the "Guarantors") named therein (the "4.0% Senior Notes Indenture").

The 4.0% Senior Notes Indenture contains covenants that limit the ability of STBV and its subsidiaries to, among other things: incur liens; engage in sale and leaseback transactions; with respect to any subsidiary of STBV, incur indebtedness without such subsidiary’s guaranteeing the 4.0% Senior Notes; or consolidate, merge with, or sell, assign, convey, transfer, lease, or otherwise dispose of all or substantially all of their properties or assets to, another person. These covenants are subject to important exceptions and qualifications set forth in the 4.0% Senior Notes Indenture.

The 4.0% Senior Notes bear interest at 4.0% per year and mature on April 15, 2029. Interest is payable semi-annually on April 15 and October 15 of each year, commencing on October 15, 2021. The 4.0% Senior Notes are guaranteed by each of STBV's wholly-owned subsidiaries that is a borrower or guarantor under the senior secured credit facilities (the "Senior Secured Credit Facilities") of STBV's wholly-owned subsidiary Sensata Technologies, Inc. ("STI") and the issuer or a guarantor under our existing senior notes as follows: STBV's 4.875% Senior Notes due 2023, 5.625% Senior Notes due 2024, and 5.0% Senior Notes due 2025; and STI's 4.375% Senior Notes due 2030 and 3.75% Senior Notes due 2031.

At any time, and from time to time, prior to April 15, 2024, STBV may redeem the 4.0% Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 4.0% Senior Notes being redeemed, plus a “make whole” premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time on or after April 15, 2024, STBV may redeem the 4.0% Senior Notes, in whole or in part, at the following prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, up to but excluding the redemption date.

Period beginning April 15, Price
2024 102.000 %
2025 101.000 %
2026 and thereafter 100.000 %

In addition, at any time prior to April 15, 2024, STBV may redeem up to 40% of the principal amount of the outstanding 4.0% Senior Notes (including additional 4.0% Senior Notes, if any, that may be issued after March 29, 2021) with the net cash proceeds of certain equity offerings at a redemption price (expressed as a percentage of principal amount) of 104.00%, plus accrued and unpaid interest, if any, up to but excluding the redemption date, provided that at least 60% of the aggregate principal amount of the 4.0% Senior Notes (including additional 4.0% Senior Notes, if any) remains outstanding immediately after each such redemption.

Upon the occurrence of certain changes in control, each holder of the 4.0% Senior Notes will have the right to require STBV to repurchase the 4.0% Senior Notes at 101% of their principal amount plus accrued and unpaid interest, if any, up to but excluding the date of repurchase.

Upon changes in certain tax laws or treaties, or any change in the official application, administration, or interpretation thereof, STBV may, at its option, redeem the 4.0% Senior Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, up to but excluding the redemption date, premium, if any, and all Additional Amounts (as defined in the 4.0% Senior Notes Indenture), if any, then due and which will become due on the date of redemption.

On April 8, 2021, STBV completed the issuance and sale of an additional $250.0 million in aggregate principal amount of 4.0% Senior Notes (the “Additional Notes”). The Additional Notes were priced at 100.75% and were issued pursuant to the 4.0% Senior Notes Indenture, as supplemented by the First Supplemental Indenture, dated as of April 8, 2021, among STBV, the Guarantors, and the Trustee. The Additional Notes are consolidated and form a single class with the $750.0 million aggregate principal amount of 4.0% Senior Notes issued by STBV on March 29, 2021 (the “Initial Notes”). The Additional Notes have the same terms as the Initial Notes, other than with respect to the date of issuance and the issue price.

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We intend to use the net proceeds from the issuance and sale of the 4.0% Senior Notes and the Additional Notes for general corporate purposes, which may include working capital, capital expenditures, the acquisition of other companies, businesses, or assets, strategic investments, the refinancing or repayment of debt, and share repurchases.

~~Accounting for Debt Financing Transactions~~

~~We account for our debt financing transactions as disclosed in~~ ~~Note 2: Significant Accounting Policies~~ ~~of the audited consolidated financial statements and notes thereto included in our 2020 Annual Report.~~

In the ~~nine~~six months ended ~~September~~June 30, 2021, in connection with the redemption of ~~the~~$750.0 million aggregate principal amount of 6.25% senior notes due 2026 (the "6.25% Senior ~~Notes,~~Notes"), we recognized a loss of $30.1 million, which included $23.4 million in premiums paid, with the remaining loss representing write-off of debt discounts and deferred financing costs. In addition, in connection with the issuance of the 4.0% Senior Notes, we recognized $9.6 million of deferred financing costs, which are presented as a reduction of long-term debt on our condensed consolidated balance sheets and $1.7 million of issuance premiums, which are presented as an addition to long-term debt on our condensed consolidated balance sheets.

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 ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, accrued interest totaled ~~$64.7~~$44.5 million and ~~$53.6~~$45.1 million, respectively.

12. Commitments and Contingencies

We are regularly involved in a number of claims and litigation matters that arise in the ordinary course of business. 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,~~condition, and/or cash flows.

13. Shareholders' Equity

~~Ordinary and~~ Cash Dividends

On May 25, 2022, we paid a cash dividend of $0.11 per share, or $17.2 million in aggregate, to shareholders of record as of May 11, 2022.

Treasury Shares

~~Our authorized share capital consists of 177,069 ordinary shares with a nominal value of €0.01 per share.~~ From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by the Board at any time. ~~We currently have an~~On January 20, 2022, we announced that our Board of Directors had authorized a new $500.0 million ordinary share repurchase program ~~under~~(the “January 2022 Program”), which ~~approximately $302.3~~replaced the previous $500.0 million program approved in July 2019, which had availability of $254.5 million as of December 31, 2021. As of June 30, 2022, $370.6 million remained available ~~as of September 30, 2021. On April 2, 2020, we announced a temporary suspension of this share~~for repurchase ~~program.~~ ~~We intend to resume our share repurchase program in~~under the ~~fourth quarter.~~January 2022 Program.

Accumulated Other Comprehensive Loss

The following table presents the components of accumulated other comprehensive loss for the ~~nine~~six months ended ~~September~~June 30, ~~2021 were as follows:~~2022:


		Cash Flow Hedges		Defined Benefit and Retiree Healthcare Plans		Accumulated Other Comprehensive Loss			Cash Flow Hedges		Defined Benefit and Retiree Healthcare Plans		Accumulated Other Comprehensive Loss
Balance at December 31, 2020		$	(6,733)	$	(42,802)	$	(49,535)
Balance as of December 31, 2021								Balance as of December 31, 2021	$	16,831	$	(36,391)	$	(19,560)
Other comprehensive income before reclassifications, net of tax	Other comprehensive income before reclassifications, net of tax	16,032		—		16,032		Other comprehensive income before reclassifications, net of tax	26,111		—		26,111
Reclassifications from accumulated other comprehensive loss, net of tax	Reclassifications from accumulated other comprehensive loss, net of tax	2,619		3,978		6,597		Reclassifications from accumulated other comprehensive loss, net of tax	(14,078)		808		(13,270)
Other comprehensive income	Other comprehensive income	18,651		3,978		22,629		Other comprehensive income	12,033		808		12,841
Balance at September 30, 2021		$	11,918	$	(38,824)	$	(26,906)
Balance as of June 30, 2022								Balance as of June 30, 2022	$	28,864	$	(35,583)	$	(6,719)

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The following table presents the amounts reclassified from accumulated other comprehensive loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020 were as follows:~~2021:


		For the three months ended September 30,				For the nine months ended September 30,				Affected Line in Condensed Consolidated Statements of Operations		For the three months ended June 30,				For the six months ended June 30,				Affected Line in Condensed Consolidated Statements of Operations
Component	Component	2021		2020		2021		2020			Component	2022		2021		2022		2021
Derivative instruments designated and qualifying as cash flow hedges:	Derivative instruments designated and qualifying as cash flow hedges:										Derivative instruments designated and qualifying as cash flow hedges:
Foreign currency forward contracts	Foreign currency forward contracts	$	1,976	$	(625)	$	9,816	$	(13,640)	Net revenue (1)	Foreign currency forward contracts	$	(9,476)	$	3,433	$	(13,740)	$	7,840	Net revenue (1)
Foreign currency forward contracts	Foreign currency forward contracts	(3,557)		3,371		(6,324)		1,796		Cost of revenue (1)	Foreign currency forward contracts	(2,603)		(2,024)		(5,232)		(2,767)		Cost of revenue (1)

Total, before taxes	Total, before taxes	(1,581)		2,746		3,492		(11,844)		Income before taxes	Total, before taxes	(12,079)		1,409		(18,972)		5,073		Income before taxes
Income tax effect	Income tax effect	395		(687)		(873)		2,961		Provision for income taxes	Income tax effect	3,116		(352)		4,894		(1,268)		Provision for income taxes
Total, net of taxes	Total, net of taxes	$	(1,186)	$	2,059	$	2,619	$	(8,883)	Net income	Total, net of taxes	$	(8,963)	$	1,057	$	(14,078)	$	3,805	Net income

Defined benefit and retiree healthcare plans	Defined benefit and retiree healthcare plans	$	863	$	1,438	$	5,263	$	8,150	Other, net (2)	Defined benefit and retiree healthcare plans	$	519	$	2,131	$	1,130	$	4,400	Other, net (2)

Income tax effect	Income tax effect	(269)		(423)		(1,285)		(2,121)		Provision for income taxes	Income tax effect	(139)		(459)		(322)		(1,016)		Provision for income taxes
Total, net of taxes	Total, net of taxes	$	594	$	1,015	$	3,978	$	6,029	Net income	Total, net of taxes	$	380	$	1,672	$	808	$	3,384	Net income

~~__________________________~~

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

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

14. Fair Value Measures

Measured on a Recurring Basis

The fair values of our derivative assets and liabilities measured at fair value on a recurring basis as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are shown in the below table. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Foreign currency forward contracts	Foreign currency forward contracts	$	19,070	$	16,163	Foreign currency forward contracts	$	45,074	$	25,112
Commodity forward contracts	Commodity forward contracts	2,625		8,902		Commodity forward contracts	616		2,979
Total	Total	$	21,695	$	25,065	Total	$	45,690	$	28,091

Liabilities	Liabilities					Liabilities
Foreign currency forward contracts	Foreign currency forward contracts	$	5,014	$	24,660	Foreign currency forward contracts	$	6,270	$	3,073
Commodity forward contracts	Commodity forward contracts	6,983		310		Commodity forward contracts	12,047		4,492
Total	Total	$	11,997	$	24,970	Total	$	18,317	$	7,565

Refer to Note 15: Derivative Instruments and Hedging Activities for additional information related to our forward contracts.

~~Measured on a Nonrecurring Basis~~Quanergy

~~We evaluated our goodwill and other indefinite-lived intangible assets for impairment as~~As of October 1, 2020 and determined that they were not impaired. During the nine months ended September 30, 2021, no events or changes in circumstances occurred that would have triggered the need for an additional impairment review of these assets.

~~In the third quarter of~~December 31, 2021, we reorganized our Sensing Solutions operating segment, moving the portion of our electrical protection product category that includes high voltage contactors, inverters, and battery management systems from the industrial business unit toheld a ~~new business unit, Clean Energy Solutions. We~~$50.0 million investment in Quanergy Systems, Inc. ("Quanergy") Series B Preferred Stock (the "Series B Investment"). The Series B Investment did not have concluded that this reorganization has not impacted our reportable or operating segment evaluations. Clean Energy Solutions will focus on electric vehicle infrastructure, energy storage, smart grid, and renewable energy applications. The reorganization was effective beginning July 1, 2021. We evaluated our goodwill and other indefinite-lived intangible assets for impairment before and after the reorganization and determined that they were not impaired.

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~~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 September 30, 2021 and December 31, 2020. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.

September 30, 2021 December 31, 2020

Carrying Value (1)
Fair Value
Carrying Value (1)
Fair Value
Liabilities
Term Loan $ 452,623 $ 452,057 $ 456,096 $ 454,955
4.875% Senior Notes $ 500,000 $ 532,500 $ 500,000 $ 538,750
5.625% Senior Notes $ 400,000 $ 444,000 $ 400,000 $ 448,000
5.0% Senior Notes $ 700,000 $ 771,750 $ 700,000 $ 777,000
6.25% Senior Notes $ — $ — $ 750,000 $ 778,125
4.375% Senior Notes $ 450,000 $ 483,750 $ 450,000 $ 487,125
3.75% Senior Notes $ 750,000 $ 750,000 $ 750,000 $ 776,250
4.0% Senior Notes $ 1,000,000 $ 1,012,500 $ — $ —

~~(1)~~ ~~Excluding any related debt discounts, or premiums, and deferred financing costs.~~

~~Cash and cash equivalents are carried at cost, which approximates fair value because of their short-term nature.~~

~~In addition to the above, we hold certain equity investments that do not have~~a readily determinable fair ~~values for which we use~~value and was held using the measurement alternative prescribed in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("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 identical or similar investments of the same issuer.

On June 22, 2021, Quanergy announced that it had entered into a definitive business combination agreement (the "Merger Agreement") with CITIC Capital Acquisition Corp ("CITIC") (NYSE: CCAC). On July 16, 2021, CITIC filed a Registration Statement on Form S-4 (together with subsequent amendments, the "SPAC Form S-4") with the SEC, the effectiveness of which was a condition to closing of the business combination (the "SPAC Merger"). At December 31, 2021, we assessed our investment in Quanergy based on the proposed terms of the Merger Agreement and concluded that there were no indicators of impairment.

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On January 6, 2022, the SPAC Form S-4 was declared effective by the SEC. An extraordinary general meeting of shareholders of CITIC was held on January 31, 2022, at which time the SPAC Merger was approved. The SPAC Merger closed on February 8, 2022. Beginning on February 9, 2022, the combined company, which retained the name "Quanergy Systems, Inc.," was listed on the New York Stock Exchange (the "NYSE") under the ticker symbol QNGY.

Upon closing of the SPAC Merger, our investment in Quanergy comprised the following:

•5.0 million common shares, which represented the conversion of the $50.0 million Series B Investment (at a $10.00 per common share implied valuation);

•750 thousand common shares, purchased in exchange for a $7.5 million contribution as part of a private investment in public equity ("PIPE") subscription agreement; and

•2.5 million warrants (the "Warrants"), each of which represent the right to purchase 1 common share at a price of $0.01 per share, received from Quanergy as up-front consideration for a four-year technical and marketing support agreement (the "Support Agreement").

The 5.75 million common share investment in Quanergy (including the investment in the PIPE) has a historical cost basis of $57.5 million. The fair value of the Warrants was determined to be equal to their intrinsic value at closing of the SPAC Merger in accordance with the guidance in FASB ASC Topic 815, Derivatives and Hedging. At closing of the SPAC Merger, the common shares underlying the Warrants were valued at $7.05 per share (the closing market price on February 8, 2022). The intrinsic value of the Warrants, reflecting the $0.01 exercise price, was $17.6 million, which was recorded as deferred income.

A summary of our investment in Quanergy is presented in the table below, as of June 30, 2022 (at $0.41 per share), March 31, 2022 (at $1.84 per share), February 8, 2022 (at $7.05 per share), and December 31, 2021. Our investment in Quanergy is presented in other assets on our condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021.



	June 30, 2022		March 31, 2022		February 8, 2022		December 31, 2021
Series B Investment	$	—	$	—	$	—	$	50,000
Common shares (1)	3,075		9,200		50,000		—
PIPE investment	308		1,380		7,500		—
Warrants (1)	—		4,575		17,600		—
Total equity investment in Quanergy	$	3,383	$	15,155	$	75,100	$	50,000

(1) In the three months ended June 30, 2022, we converted the Warrants into common shares. Accordingly, as of June 30, 2022, we had 7.5 million common shares outstanding (excluding the PIPE investment), compared to 5.0 million common shares outstanding as of March 31, 2022.

For the three and six months ended June 30, 2022, we recorded losses (presented in in other, net on our condensed consolidated statements of operations) to adjust the carrying value of our aggregate investment in Quanergy to its fair value at June 30, 2022 as follows:


	For the three months ended June 30, 2022		For the six months ended June 30, 2022
Mark-to-market loss	$	(11,772)	$	(71,717)

As noted above, in exchange for the Warrants, we entered into the Support Agreement, whereby we agreed to provide technical and business development services to Quanergy for a term of four years from the effective date of February 8, 2022. This transaction is an exchange of noncash consideration for services and was accounted for under FASB ASC Topic 845, Nonmonetary Transactions, using the fair value of the Warrants at February 8, 2022 ($17.6 million) as the measure of compensation received. We have deferred this consideration and are recognizing it in earnings on a straight-line basis over the term of the agreement (48 months).

Measured on a Nonrecurring Basis

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 2021 and determined that they were not impaired. No events or changes in circumstances occurred in the six months ended June 30, 2022 that would have triggered the need for an additional impairment review of our goodwill and other indefinite-lived intangible assets.

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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 June 30, 2022 and December 31, 2021. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.


	June 30, 2022				December 31, 2021
	Carrying Value(1)		Fair Value		Carrying Value(1)		Fair Value
Liabilities
Term Loan	$	449,150	$	443,535	$	451,465	$	450,901
4.875% Senior Notes	$	500,000	$	491,250	$	500,000	$	526,250
5.625% Senior Notes	$	400,000	$	395,000	$	400,000	$	438,000
5.0% Senior Notes	$	700,000	$	672,000	$	700,000	$	759,500

4.375% Senior Notes	$	450,000	$	383,625	$	450,000	$	479,250
3.75% Senior Notes	$	750,000	$	601,875	$	750,000	$	747,188
4.0% Senior Notes	$	1,000,000	$	850,000	$	1,000,000	$	1,022,500

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

Cash and cash equivalents are carried at cost, which approximates fair value because of their short-term nature.

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. There were no impairments or changes resulting from observable transactions for any of these investments and no adjustments were made to their carrying values.

Refer to the table below for the carrying values of equity investments using the measurement alternative, which are presented as a component of other assets in the condensed consolidated balance sheets.


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Quanergy		$	50,000	$	50,000
Quanergy Systems, Inc. (1)						Quanergy Systems, Inc. (1)	$	—	$	50,000
Other	Other	15,000		15,000		Other	15,000		15,000

Total	Total	$	65,000	$	65,000	Total	$	15,000	$	65,000

On(1) As of June ~~22, 2021,~~30, 2022, Quanergy ~~Systems, Inc. ("Quanergy") announced that it had entered into~~is no longer classified as an equity investment without a definitive business combination agreement with CITIC Capital Acquisition Corp (NYSE: CCAC). Upon closing of the business combination, which is expected to be in the fourth quarter of 2021, subject to customary closing conditions and the effectiveness of a Registration Statement on Form S-4, the combined company is expected to be listed on the New York Stock Exchange ("NYSE")readily determinable fair value. See additional discussion under the ~~ticker symbol QNGY. We have assessed our investment~~heading Quanergy elsewhere in Quanergy based on the proposed terms of the business combination agreement and concluded that there were no indicators of impairment as of September 30, 2021. Subsequent to closing, we will mark our investment to market each reporting period.this Note.

15. Derivative Instruments and Hedging Activities

Hedges of Foreign Currency Risk

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, amounts excluded from the assessment of effectiveness of our foreign currency forward contracts that are designated as cash flow hedges were not material. As of ~~September~~June 30, ~~2021,~~2022, we estimated that ~~$14.0~~$34.8 million of net gains will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending ~~September~~June 30, ~~2022.~~2023.

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As of ~~September~~June 30, ~~2021,~~2022, we had the following outstanding foreign currency forward contracts:

Notional
(in millions)

Effective Date(s)

Maturity Date(s)

Index (Exchange Rates)

Weighted-Average Strike Rate

Hedge

Designation (1)

~~13.0~~21.0 EUR

~~September~~June 28, ~~2021~~2022

~~October~~July 29, ~~2021~~2022

Euro ("EUR") to USD

~~1.17~~1.05 USD

Not designated

~~383.8~~358.9 EUR

Various from ~~November 19, 2019~~August 2020 to ~~September 23, 2021~~June 2022

Various from ~~October 29, 2021~~July 2022 to ~~September 29, 2023~~June 2024

EUR to USD

~~1.19~~1.17 USD

Cash flow hedge

~~881.0~~388.0 CNY

~~September~~June 27, ~~2021~~2022

~~October~~July 29, ~~2021~~2022

USD to Chinese Renminbi ("CNY")

~~6.49~~6.70 CNY

Not designated

~~260.4~~756.2 CNY

Various from ~~November 5, 2020~~October 2021 to ~~January 5, 2021~~March 2022

Various from ~~10/19/21~~July 2022 to December ~~31, 2021~~2022

USD to CNY

~~6.68~~6.46 CNY

Cash flow hedge

~~518.0~~60.0 JPY

~~September~~June 28, ~~2021~~2022

~~October~~July 29, ~~2021~~2022

USD to Japanese Yen ("JPY")

~~111.59~~135.93 JPY

Not designated

~~21,416.7~~24,760.0 KRW

Various from ~~November 19, 2019~~August 2020 to ~~September 23, 2021~~June 2022

Various from ~~October 29, 2021~~July 2022 to ~~August 31, 2023~~May 2024

USD to Korean Won ("KRW")

~~1,149.75~~1,191.72 KRW

Cash flow hedge

~~26.0~~22.0 MYR

~~September~~June 27, ~~2021~~2022

~~October~~July 29, ~~2021~~2022

USD to Malaysian Ringgit ("MYR")

~~4.19~~4.40 MYR

Not designated

~~408.0~~70.0 MXN

~~September~~June 28, ~~2021~~2022

~~October~~July 29, ~~2021~~2022

USD to Mexican Peso ("MXN")

~~20.39~~20.13 MXN

Not designated

~~3,290.0~~3,458.7 MXN

Various from ~~November 19, 2019~~August 2020 to ~~September 23, 2019~~June 2022

Various from ~~October 29, 2021~~July 2022 to ~~September 29, 2023~~June 2024

USD to MXN

~~22.28~~22.15 MXN

Cash flow hedge

~~3.2~~10.0 GBP

~~September~~June 28, ~~2021~~2022

~~October~~July 29, ~~2021~~2022

British Pound Sterling ("GBP") to USD

~~1.35~~1.22 USD

Not Designated

~~52.4~~60.0 GBP

Various from ~~November 19, 2019~~August 2020 to ~~September 23, 2021~~June 2022

Various from ~~October 29, 2021~~July 2022 to ~~September 29, 2023~~June 2024

GBP to USD

~~1.34~~1.33 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

As of ~~September~~June 30, ~~2021,~~2022, we had the following outstanding commodity forward contracts, none of which were designated for hedge accounting treatment in accordance with FASB ASC Topic ~~815,~~ ~~Derivatives and Hedging~~:815:

Commodity

Notional

Remaining Contracted Periods

Weighted-Average Strike Price Per Unit

Silver

~~1,144,155~~1,092,999 troy oz.