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 ~~March 31,~~June 30, 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 ~~April~~July 15, 2022, ~~156,917,754~~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 ~~March~~June 3 10 , ~~202~~2 2022 and December 31, ~~202~~12021	3
		Condensed Consolidated Statements of Operations for the Three and Si x Months Ended ~~March 31,~~June 3 0 , 2022 and 2021	4
		Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended ~~March 31,~~June 3 0 , 2022 and 2021	5
		Condensed Consolidated Statements of Cash Flows for the ~~Three~~ S ix Months Ended ~~March 31,~~June 3 0 , 2022 and 2021	6
		Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended ~~March 31,~~June 3 0 , 2022 and 2021	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2023
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2934
	Item 4.	Controls and Procedures	2934

PART II
	Item 1.	Legal Proceedings	3035
	Item 1A.	Risk Factors	3035
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3035
	Item 3.	Defaults Upon Senior Securities	3035
	~~Item 5.~~	~~Other Information~~	31
	Item 6.	Exhibits	3236
		Signatures	3337

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, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,608,481	$	1,708,955	Cash and cash equivalents	$	1,558,578	$	1,708,955
Accounts receivable, net of allowances of $28,001 and $17,003 as of March 31, 2022 and December 31, 2021, respectively		693,568		653,438
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	641,709		588,231		Inventories	656,736		588,231
Prepaid expenses and other current assets	Prepaid expenses and other current assets	146,342		126,370		Prepaid expenses and other current assets	161,367		126,370

Total current assets	Total current assets	3,090,100		3,076,994		Total current assets	3,119,729		3,076,994
Property, plant and equipment, net	Property, plant and equipment, net	822,633		820,933		Property, plant and equipment, net	825,862		820,933
Goodwill	Goodwill	3,555,369		3,502,063		Goodwill	3,534,438		3,502,063
Other intangible assets, net of accumulated amortization of $2,314,755 and $2,277,393 as of March 31, 2022 and December 31, 2021, respectively		907,315		946,731
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	104,226		105,028		Deferred income tax assets	101,899		105,028
Other assets	Other assets	131,745		162,017		Other assets	119,820		162,017
Total assets	Total assets	$	8,611,388	$	8,613,766	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	$	6,694	$	6,833	Current portion of long-term debt, finance lease and other financing obligations	$	6,566	$	6,833
Accounts payable	Accounts payable	486,432		459,093		Accounts payable	537,261		459,093
Income taxes payable	Income taxes payable	19,249		26,517		Income taxes payable	15,309		26,517
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	327,670		343,816		Accrued expenses and other current liabilities	327,993		343,816

Total current liabilities	Total current liabilities	840,045		836,259		Total current liabilities	887,129		836,259
Deferred income tax liabilities	Deferred income tax liabilities	339,332		339,273		Deferred income tax liabilities	341,383		339,273
Pension and other post-retirement benefit obligations	Pension and other post-retirement benefit obligations	39,089		38,758		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	26,347		26,564		Finance lease and other financing obligations, less current portion	25,623		26,564
Long-term debt, net	Long-term debt, net	4,215,505		4,214,946		Long-term debt, net	4,213,512		4,214,946
Other long-term liabilities	Other long-term liabilities	78,753		63,232		Other long-term liabilities	77,583		63,232
Total liabilities	Total liabilities	5,539,071		5,519,032		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 174,583 and 174,287 shares issued as of March 31, 2022 and December 31, 2021, respectively		2,236		2,232
Treasury shares, at cost, 17,576 and 16,438 shares as of March 31, 2022 and December 31, 2021, respectively		(899,697)		(832,439)
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	1,831,497		1,812,244		Additional paid-in capital	1,841,925		1,812,244
Retained earnings	Retained earnings	2,154,563		2,132,257		Retained earnings	2,164,734		2,132,257
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(16,282)		(19,560)		Accumulated other comprehensive loss	(6,719)		(19,560)

Total shareholders' equity	Total shareholders' equity	3,072,317		3,094,734		Total shareholders' equity	3,023,584		3,094,734
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	8,611,388	$	8,613,766	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 three months ended				For the six months ended
		March 31, 2022		March 31, 2021				June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net revenue	Net revenue	$	975,770	$	942,528		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	657,080		635,349			Cost of revenue	686,603		658,285		1,343,683		1,293,634
Research and development	Research and development	45,980		35,956			Research and development	47,971		42,913		93,951		78,869
Selling, general and administrative	Selling, general and administrative	95,680		77,123			Selling, general and administrative	97,329		86,821		193,009		163,944
Amortization of intangible assets	Amortization of intangible assets	37,367		32,064			Amortization of intangible assets	36,805		34,857		74,172		66,921
Restructuring and other charges, net	Restructuring and other charges, net	13,733		4,582			Restructuring and other charges, net	12,897		5,029		26,630		9,611
Total operating costs and expenses	Total operating costs and expenses	849,840		785,074			Total operating costs and expenses	881,605		827,905		1,731,445		1,612,979
Operating income	Operating income	125,930		157,454			Operating income	138,943		164,755		264,873		322,209
Interest expense, net	Interest expense, net	(45,445)		(44,043)			Interest expense, net	(44,842)		(45,213)		(90,287)		(89,256)
Other, net	Other, net	(50,456)		(39,397)			Other, net	(39,240)		1,012		(89,696)		(38,385)
Income before taxes	Income before taxes	30,029		74,014			Income before taxes	54,861		120,554		84,890		194,568
Provision for income taxes	Provision for income taxes	7,588		20,281			Provision for income taxes	20,020		7,638		27,608		27,919
Net income	Net income	$	22,441	$	53,733		Net income	$	34,841	$	112,916	$	57,282	$	166,649
Basic net income per share	Basic net income per share	$	0.14	$	0.34		Basic net income per share	$	0.22	$	0.71	$	0.36	$	1.05
Diluted net income per share	Diluted net income per share	$	0.14	$	0.34		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 three months ended				For the six months ended
		March 31, 2022		March 31, 2021				June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net income	Net income	$	22,441	$	53,733		Net income	$	34,841	$	112,916	$	57,282	$	166,649
Other comprehensive income:	Other comprehensive income:						Other comprehensive income:
Cash flow hedges	Cash flow hedges	2,850		14,278			Cash flow hedges	9,183		1,398		12,033		15,676
Defined benefit and retiree healthcare plans	Defined benefit and retiree healthcare plans	428		1,712			Defined benefit and retiree healthcare plans	380		1,672		808		3,384
Other comprehensive income	Other comprehensive income	3,278		15,990			Other comprehensive income	9,563		3,070		12,841		19,060
Comprehensive income	Comprehensive income	$	25,719	$	69,723		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 three months ended					For the six months ended
		March 31, 2022		March 31, 2021			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	$	22,441	$	53,733	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	31,531		31,197		Depreciation	62,882		62,833
Amortization of debt issuance costs	Amortization of debt issuance costs	1,716		1,711		Amortization of debt issuance costs	3,433		3,426

Share-based compensation	Share-based compensation	6,540		5,099		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	37,367		32,064		Amortization of intangible assets	74,172		66,921
Deferred income taxes	Deferred income taxes	(340)		130		Deferred income taxes	(5,211)		(7,070)
Acquisition-related compensation payments	Acquisition-related compensation payments	(7,500)		—		Acquisition-related compensation payments	(15,000)		—
Mark-to-market loss on equity investments, net	Mark-to-market loss on equity investments, net	59,279		—		Mark-to-market loss on equity investments, net	71,100		—
Unrealized (gain)/loss on derivative instruments and other		(517)		8,797
Unrealized loss on derivative instruments and other						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	(49,821)		(62,198)		Accounts receivable, net	(102,845)		(97,906)
Inventories	Inventories	(53,004)		(16,857)		Inventories	(69,379)		(45,664)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(8,807)		(4,971)		Prepaid expenses and other current assets	(17,762)		(8,280)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	13,488		26,409		Accounts payable and accrued expenses	56,767		68,764
Income taxes payable	Income taxes payable	(7,268)		2,283		Income taxes payable	(11,384)		6,448
Other	Other	2,250		(2,952)		Other	1,425		(2,431)
Net cash provided by operating activities	Net cash provided by operating activities	47,355		104,511		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	(48,441)		(20,406)		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	(35,711)		(27,172)		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	(6,853)		(1,799)		Investment in debt and equity securities	(6,878)		(6,444)

Other	Other	152		340		Other	152		2,862
Net cash used in investing activities	Net cash used in investing activities	(90,853)		(49,037)		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	13,348		10,556		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	(135)		(221)		Payment of employee restricted stock tax withholdings	(7,577)		(7,948)
Proceeds from borrowings on debt	Proceeds from borrowings on debt	—		750,000		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		(2,931)		(752,753)
Payments to repurchase ordinary shares		(67,258)		—
Payments of debt financing costs	Payments of debt financing costs	—		(31,110)		Payments of debt financing costs	(2,313)		(33,032)

Net cash used in financing activities		(56,976)		(23,528)
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	(100,474)		31,946		Net change in cash and cash equivalents	(150,377)		(211)
Cash and cash equivalents, beginning of year	Cash and cash equivalents, beginning of year	1,708,955		1,861,980		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	$	1,608,481	$	1,893,926	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 December 31, 2021		174,287	$	2,232	(16,438)	$	(832,439)	$	1,812,244	$	2,132,257	$	(19,560)			$	3,094,734
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	—	—		(3)	(135)		—		—		—						(135)		Surrender of shares for tax withholding	—		—			(148)		(7,442)			—				—				—						(7,442)
Stock options exercised	Stock options exercised	290	4		—	—		12,713		—		—						12,717		Stock options exercised	39		—			—		—			1,229				—				—						1,229
Vesting of restricted securities	Vesting of restricted securities	9	—		—	—		—		—		—						—		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	—	—		(1,138)	(67,258)		—		—		—						(67,258)		Repurchase of ordinary shares	—		—			(1,693)		(78,898)			—				—				—						(78,898)
Retirement of ordinary shares	Retirement of ordinary shares	(3)	—		3	135		—		(135)		—						—		Retirement of ordinary shares	(148)		(2)			148		7,442			—				(7,440)				—						—
Share-based compensation	Share-based compensation	—	—		—	—		6,540		—		—						6,540		Share-based compensation	—		—			—		—			9,199				—				—						9,199

Net income	Net income	—	—		—	—		—		22,441		—						22,441		Net income	—		—			—		—			—				34,841				—						34,841
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		3,278						3,278		Other comprehensive income	—		—			—		—			—				—				9,563						9,563
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
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
		Number	Amount		Number	Amount								Total Shareholders' Equity			Ordinary Shares		Treasury Shares			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss								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
																		Number	Amount		Number							Amount				Additional Paid-In Capital	Retained Earnings		Accumulated Other Comprehensive Loss			Total Shareholders' Equity
Balance as of December 31, 2021																	Balance as of December 31, 2021	174,287	$	2,232	(16,438)	$	(832,439)					$	3,094,734
Surrender of shares for tax withholding	Surrender of shares for tax withholding	—	—		(4)	(221)		—		—		—			(221)		Surrender of shares for tax withholding	—	—		(151)	(7,577)		—		—				—						(7,577)
Stock options exercised	Stock options exercised	259	3		—	—		10,553		—		—			10,556		Stock options exercised	329	4		—	—		13,942		—				—						13,946
Vesting of restricted securities	Vesting of restricted securities	12	—		—	—		—		—		—			—		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	(4)	—		4	221		—		(221)		—			—		Retirement of ordinary shares	(151)	(2)		151	7,577		—		(7,575)				—						—
Share-based compensation	Share-based compensation	—	—		—	—		5,099		—		—			5,099		Share-based compensation	—	—		—	—		15,739		—				—						15,739

Net income	Net income	—	—		—	—		—		53,733		—			53,733		Net income	—	—		—	—		—		57,282				—						57,282
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		15,990			15,990		Other comprehensive income	—	—		—	—		—		—				12,841						12,841
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
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
	Number	Amount		Number	Amount
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	—	—		(132)	(7,727)		—		—		—		(7,727)
Stock options exercised	208	3		—	—		8,167		—		—		8,170
Vesting of restricted securities	396	5		—	—		—		(5)		—		—

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

Net income	—	—		—	—		—		112,916		—		112,916
Other comprehensive income	—	—		—	—		—		—		3,070		3,070
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
	Number	Amount		Number	Amount
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	—	—		(136)	(7,948)		—		—		—		(7,948)
Stock options exercised	467	6		—	—		18,720		—		—		18,726
Vesting of restricted securities	408	5		—	—		—		(5)		—		—

Retirement of ordinary shares	(136)	(2)		136	7,948		—		(7,946)		—		—
Share-based compensation	—	—		—	—		11,475		—		—		11,475

Net income	—	—		—	—		—		166,649		—		166,649
Other comprehensive income	—	—		—	—		—		—		19,060		19,060
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, 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, 2021 filed with the U.S. Securities and Exchange Commission (the "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 table presents net revenue disaggregated by segment and end market for the three and six months ended ~~March 31,~~June 30, 2022 and 2021:


		For the three months ended March 31, 2022						For the three months ended March 31, 2021							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	$	502,362	$	9,285	$	511,647	$	536,713	$	11,500	$	548,213	Automotive	$	506,232	$	9,932	$	516,164	$	518,367	$	12,052	$	530,419
HVOR (1)	HVOR (1)	215,335		—		215,335		177,799		—		177,799		HVOR (1)	240,650		—		240,650		223,485		—		223,485
Industrial	Industrial	—		114,619		114,619		—		90,475		90,475		Industrial	—		122,094		122,094		—		105,474		105,474
Appliance and HVAC (2)	Appliance and HVAC (2)	—		58,825		58,825		—		59,916		59,916		Appliance and HVAC (2)	—		57,675		57,675		—		63,187		63,187
Aerospace	Aerospace	—		33,270		33,270		—		32,677		32,677		Aerospace	—		38,558		38,558		—		32,793		32,793
Other	Other	—		42,074		42,074		—		33,448		33,448		Other	—		45,407		45,407		—		37,302		37,302
Total	Total	$	717,697	$	258,073	$	975,770	$	714,512	$	228,016	$	942,528	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 six months ended June 30, 2022						For the six months ended June 30, 2021
	Performance Sensing		Sensing Solutions		Total		Performance Sensing		Sensing Solutions		Total
Automotive	$	1,008,594	$	19,217	$	1,027,811	$	1,055,080	$	23,552	$	1,078,632
HVOR	455,985		—		455,985		401,284		—		401,284
Industrial	—		236,713		236,713		—		195,949		195,949
Appliance and HVAC	—		116,500		116,500		—		123,103		123,103
Aerospace	—		71,828		71,828		—		65,470		65,470
Other	—		87,481		87,481		—		70,750		70,750
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 six months ended ~~March 31,~~June 30, 2022 and 2021:


		For the three months ended				For the three months ended				For the six months ended
		March 31, 2022		March 31, 2021				June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Stock options	Stock options	$	307	$	460		Stock options	$	2	$	305	$	309	$	765
Restricted securities	Restricted securities	6,233		4,639			Restricted securities	9,197		6,071		15,430		10,710
Share-based compensation expense	Share-based compensation expense	$	6,540	$	5,099		Share-based compensation expense	$	9,199	$	6,376	$	15,739	$	11,475

Equity Awards

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 Incentive Plan during the six months ended June 30, 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)	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

~~Table of Contents~~(1) These RSUs cliff vest one year from the grant date (May 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 January 2025 and June 2025.

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

5. Restructuring and Other Charges, Net

The following table presents the components of restructuring and other charges, net for the three and six months ended ~~March 31,~~June 30, 2022 and 2021:


		For the three months ended				For the three months ended				For the six months ended
		March 31, 2022		March 31, 2021				June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Q2 2020 Global Restructure Program charges	Q2 2020 Global Restructure Program charges	$	—	$	1,824		Q2 2020 Global Restructure Program charges	$	—	$	3,830	$	—	$	5,654
Other restructuring and other charges, net	Other restructuring and other charges, net						Other restructuring and other charges, net
Severance costs, net	Severance costs, net	587		186			Severance costs, net	—		407		587		593
Facility and other exit costs	Facility and other exit costs	1,048		666			Facility and other exit costs	1,241		625		2,289		1,291

Other (1)	Other (1)	12,098		1,906			Other (1)	11,656		167		23,754		2,073
Restructuring and other charges, net	Restructuring and other charges, net	$	13,733	$	4,582		Restructuring and other charges, net	$	12,897	$	5,029	$	26,630	$	9,611

~~________________________~~

(1) Primarily includes expenses related to ~~acquisition-related incentive~~ compensation arrangements entered into concurrent with the closing of acquisitions, partially offset by ~~a gain resulting from reduction~~gains relating to changes in the fair value of ~~the liability for~~acquisition-related contingent consideration ~~for Spear Power Systems ("Spear").~~amounts. Refer to Note 16: Acquisitions and Divestitures for additional information.

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The following table presents a rollforward of the severance portion of our restructuring obligations for the ~~three~~six months ended ~~March 31,~~June 30, 2022.


		Q2 2020 Global Restructure Program		Other		Total			Q2 2020 Global Restructure Program		Other		Total
Balance as of December 31, 2021	Balance as of December 31, 2021	$	3,853	$	3,380	$	7,233	Balance as of December 31, 2021	$	3,853	$	3,380	$	7,233
Charges, net of reversals	Charges, net of reversals	—		587		587		Charges, net of reversals	—		587		587
Payments	Payments	(2,955)		(1,130)		(4,085)		Payments	(3,018)		(1,383)		(4,401)
Foreign currency remeasurement	Foreign currency remeasurement	(6)		12		6		Foreign currency remeasurement	(14)		(159)		(173)
Balance as of March 31, 2022		$	892	$	2,849	$	3,741
Balance as of June 30, 2022								Balance as of June 30, 2022	$	821	$	2,425	$	3,246

The severance liability as of ~~March 31,~~June 30, 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 six months ended ~~March 31,~~June 30, 2022 and 2021:


		For the three months ended				For the three months ended				For the six months ended
		March 31, 2022		March 31, 2021				June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Currency remeasurement loss on net monetary assets		$	(67)	$	(1,477)
Loss on foreign currency forward contracts		(1,243)		(958)
Gain/(loss) on commodity forward contracts		9,424		(1,153)
Currency remeasurement (loss)/gain on net monetary assets							Currency remeasurement (loss)/gain on net monetary assets	$	(14,090)	$	1,988	$	(14,157)	$	511
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	(18,254)		1,186		(8,830)		33
Loss on debt financing	Loss on debt financing	—		(30,066)			Loss on debt financing	—		—		—		(30,066)
Mark-to-market loss on investments, net	Mark-to-market loss on investments, net	(59,279)		—			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	(755)		(2,410)			Net periodic benefit cost, excluding service cost	(639)		(2,268)		(1,394)		(4,678)
Other	Other	1,464		(3,333)			Other	2,399		1,525		3,863		(1,808)
Other, net	Other, net	$	(50,456)	$	(39,397)		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 six months ended ~~March 31,~~June 30, 2022 and 2021:

For the three months ended
March 31, 2022 March 31, 2021
Provision for income taxes $ 7,588 $ 20,281

~~Table of Contents~~

The decrease in total tax for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was predominantly related to the overall decrease in income before taxes, driven in part by the mark-to-market loss on our investment in Quanergy as discussed in ~~Note 14: Fair Value Measures~~.


	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.

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 six months ended ~~March 31,~~June 30, 2022 and 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 three months ended			For the six months ended
		March 31, 2022	March 31, 2021			June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Basic weighted-average ordinary shares outstanding	Basic weighted-average ordinary shares outstanding	157,422	157,764		Basic weighted-average ordinary shares outstanding	156,477	158,208	156,950	157,986
Dilutive effect of stock options	Dilutive effect of stock options	473	708		Dilutive effect of stock options	190	670	331	689
Dilutive effect of unvested restricted securities	Dilutive effect of unvested restricted securities	735	758		Dilutive effect of unvested restricted securities	327	466	531	612
Diluted weighted-average ordinary shares outstanding	Diluted weighted-average ordinary shares outstanding	158,630	159,230		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 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 three months ended			For the six months ended
		March 31, 2022	March 31, 2021			June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Anti-dilutive shares excluded	Anti-dilutive shares excluded	4	6		Anti-dilutive shares excluded	1,426	8	715	7
Contingently issuable shares excluded	Contingently issuable shares excluded	1,002	950		Contingently issuable shares excluded	1,383	1,089	1,192	1,020

9. Inventories

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


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Finished goods	Finished goods	$	222,375	$	201,424	Finished goods	$	223,919	$	201,424
Work-in-process	Work-in-process	114,496		101,558		Work-in-process	114,277		101,558
Raw materials	Raw materials	304,838		285,249		Raw materials	318,540		285,249
Inventories	Inventories	$	641,709	$	588,231	Inventories	$	656,736	$	588,231

~~Table of Contents~~

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 ~~March 31,~~June 30, 2022 and 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
		2022		2021		2022		2021		2022		2021		2022		2021			2022		2021		2022		2021		2022		2021		2022		2021
Service cost	Service cost	$	—	$	—	$	2	$	2	$	956	$	978	$	958	$	980	Service cost	$	—	$	—	$	2	$	2	$	982	$	1,325	$	984	$	1,327
Interest cost	Interest cost	113		120		46		21		424		404		583		545		Interest cost	113		120		18		21		426		401		557		542
Expected return on plan assets	Expected return on plan assets	(195)		(226)		—		—		(244)		(178)		(439)		(404)		Expected return on plan assets	(195)		(226)		—		—		(242)		(179)		(437)		(405)
Amortization of net loss		141		401		—		—		278		459		419		860
Amortization of net loss/(gain)																		Amortization of net loss/(gain)	226		401		(43)		—		330		462		513		863
Amortization of prior service (credit)/cost	Amortization of prior service (credit)/cost	—		—		(100)		(159)		2		3		(98)		(156)		Amortization of prior service (credit)/cost	—		—		(100)		(159)		3		13		(97)		(146)
Loss on settlement	Loss on settlement	290		1,565		—		—		—		—		290		1,565		Loss on settlement	103		1,414		—		—		—		—		103		1,414

Net periodic benefit cost/(credit)	Net periodic benefit cost/(credit)	$	349	$	1,860	$	(52)	$	(136)	$	1,416	$	1,666	$	1,713	$	3,390	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 six months ended June 30, 2022 and 2021:


	U.S. Plans								Non-U.S. Plans
	Defined Benefit				Retiree Healthcare				Defined Benefit				Total
	2022		2021		2022		2021		2022		2021		2022		2021
Service cost	$	—	$	—	$	4	$	4	$	1,938	$	2,303	$	1,942	$	2,307
Interest cost	226		240		64		42		850		805		1,140		1,087
Expected return on plan assets	(390)		(452)		—		—		(486)		(357)		(876)		(809)
Amortization of net loss/(gain)	367		802		(43)		—		608		921		932		1,723
Amortization of prior service (credit)/cost	—		—		(200)		(318)		5		16		(195)		(302)
Loss on settlement	393		2,979		—		—		—		—		393		2,979

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

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


		Maturity Date	March 31, 2022		December 31, 2021			Maturity Date	June 30, 2022		December 31, 2021
Term Loan	Term Loan	September 20, 2026	$	450,308	$	451,465	Term Loan	September 20, 2026	$	449,150	$	451,465
4.875% Senior Notes	4.875% Senior Notes	October 15, 2023	500,000		500,000		4.875% Senior Notes	October 15, 2023	500,000		500,000
5.625% Senior Notes	5.625% Senior Notes	November 1, 2024	400,000		400,000		5.625% Senior Notes	November 1, 2024	400,000		400,000
5.0% Senior Notes	5.0% Senior Notes	October 1, 2025	700,000		700,000		5.0% Senior Notes	October 1, 2025	700,000		700,000

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

Less: debt discount, net of premium	Less: debt discount, net of premium		(4,763)		(5,207)		Less: debt discount, net of premium		(4,317)		(5,207)
Less: deferred financing costs	Less: deferred financing costs		(25,410)		(26,682)		Less: deferred financing costs		(26,691)		(26,682)
Less: current portion	Less: current portion		(4,630)		(4,630)		Less: current portion		(4,630)		(4,630)
Long-term debt, net	Long-term debt, net		$	4,215,505	$	4,214,946	Long-term debt, net		$	4,213,512	$	4,214,946

Finance lease and other financing obligations	Finance lease and other financing obligations		$	28,411	$	28,767	Finance lease and other financing obligations		$	27,559	$	28,767
Less: current portion	Less: current portion		(2,064)		(2,203)		Less: current portion		(1,936)		(2,203)
Finance lease and other financing obligations, less current portion	Finance lease and other financing obligations, less current portion		$	26,347	$	26,564	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 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 ~~March 31,~~June 30, 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 ~~March 31,~~June 30, 2022, no amounts had been drawn against these outstanding letters of credit.

Accounting for Debt Financing Transactions

In the ~~three~~six months ended ~~March 31,~~June 30, 2022, in connection with the entry into the Eleventh Amendment, we recognized $2.6 million of deferred financing costs, which are presented as a reduction of long-term debt on our condensed consolidated balance sheets.

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In the six months ended June 30, 2021, in connection with the redemption of $750.0 million aggregate principal amount of 6.25% senior notes due 2026 (the "6.25% Senior 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.

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,~~June 30, 2022 and December 31, 2021, accrued interest totaled ~~$63.1~~$44.5 million and $45.1 million, respectively.

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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 condition, and/or cash flows.

13. Shareholders' Equity

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

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. On January 20, 2022, we announced that our Board of Directors had authorized a new $500.0 million ordinary share repurchase program (the “January 2022 Program”), which 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 ~~March 31,~~June 30, 2022, ~~$449.5~~$370.6 million remained available for repurchase under the January 2022 Program.

Accumulated Other Comprehensive Loss

The following table presents the components of accumulated other comprehensive loss for the ~~three~~six months ended ~~March 31,~~June 30, 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 as of December 31, 2021	Balance as of December 31, 2021	$	16,831	$	(36,391)	$	(19,560)	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	7,965		—		7,965		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	(5,115)		428		(4,687)		Reclassifications from accumulated other comprehensive loss, net of tax	(14,078)		808		(13,270)
Other comprehensive income	Other comprehensive income	2,850		428		3,278		Other comprehensive income	12,033		808		12,841
Balance as of March 31, 2022		$	19,681	$	(35,963)	$	(16,282)
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 six months ended ~~March 31,~~June 30, 2022 and 2021:


		For the three months ended March 31,				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	2022		2021			Component			2022			2021			2022					Affected Line in Condensed Consolidated Statements of Operations
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	$	(4,264)	$	4,407		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	(2,629)		(743)			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	(6,893)		3,664			Income before taxes		Total, before taxes		(12,079)			1,409			(18,972)		5,073			Income before taxes
Income tax effect	Income tax effect	1,778		(916)			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	$	(5,115)	$	2,748		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	$	611	$	2,269		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	(183)		(557)			Provision for income taxes		Income tax effect		(139)			(459)			(322)		(1,016)			Provision for income taxes
Total, net of taxes	Total, net of taxes	$	428	$	1,712		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).

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


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Foreign currency forward contracts	Foreign currency forward contracts	$	29,063	$	25,112	Foreign currency forward contracts	$	45,074	$	25,112
Commodity forward contracts	Commodity forward contracts	8,474		2,979		Commodity forward contracts	616		2,979
Total	Total	$	37,537	$	28,091	Total	$	45,690	$	28,091

Liabilities	Liabilities					Liabilities
Foreign currency forward contracts	Foreign currency forward contracts	$	3,682	$	3,073	Foreign currency forward contracts	$	6,270	$	3,073
Commodity forward contracts	Commodity forward contracts	1,752		4,492		Commodity forward contracts	12,047		4,492
Total	Total	$	5,434	$	7,565	Total	$	18,317	$	7,565

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

Quanergy

As of December 31, 2021, we held a $50.0 million investment in Quanergy Systems, Inc. ("Quanergy") Series B Preferred ~~Stock. This equity investment~~Stock (the "Series B Investment"). The Series B Investment did not have a readily determinable fair value and it 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.~~combination (the "SPAC Merger"). At December 31, 2021, we assessed our investment in Quanergy based on the proposed terms of the ~~business combination agreement~~Merger Agreement and concluded that there were no indicators of impairment.

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On January 6, 2022, the ~~related Registration Statement on~~SPAC Form S-4 was declared effective by the SEC. An ~~Extraordinary General Meeting~~extraordinary general meeting of shareholders of CITIC was held on January 31, 2022, at which time the ~~business combination~~SPAC Merger was approved. The ~~business combination~~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 ~~business combination,~~SPAC Merger, our investment in Quanergy comprised the following:

•5.0 million common shares, which represented the conversion of ~~our $50~~the $50.0 million Series B ~~Preferred Stock investment~~Investment (at a ~~$10~~$10.00 per common share implied valuation);

•~~750,000 unregistered~~750 thousand common shares, ~~representing~~purchased in exchange for a $7.5 million contribution as part of a private investment in public equity ("PIPE") ~~contribution;~~subscription agreement; and

•2.5 million ~~common shares~~warrants (the ~~"Warrant Shares"~~"Warrants"), ~~representing~~each of which represent the ~~conversion~~right to purchase 1 common share at a price of ~~2.5 million warrants provided by~~$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 ~~(excluding~~(including the ~~Warrant Shares) have~~investment in the PIPE) has a historical cost basis of $57.5 million. The ~~Warrant Shares~~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 ~~converted~~valued at ~~a share price of~~ $7.05 per share (the closing market price on February 8, 2022)~~, or approximately~~. The intrinsic value of the Warrants, reflecting the $0.01 exercise price, was $17.6 million, which was recorded as deferred income. ~~Refer to below discussion for additional details on the Support Agreement. Refer to the below table for a~~

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

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


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

						For the three months ended March 31, 2022
Mark-to-market loss						$	59,945

(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.

~~The mark-to-market loss presented~~For the three and six months ended June 30, 2022, we recorded losses (presented in ~~the table above is presented~~ in other, net ~~and is~~on our condensed consolidated statements of operations) to adjust the ~~result~~carrying value of ~~the decline~~our aggregate investment in Quanergy ~~share price~~ to ~~$1.84 per share on March 31, 2022.~~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 ~~Warrant Shares,~~Warrants, we entered into the Support Agreement, whereby we agreed to provide technical and ~~marketing assistance~~business development services to Quanergy for a term of four years from the effective date of February 8, 2022. ~~We will recognize~~This transaction is an exchange of noncash consideration for services and was accounted for under FASB ASC Topic 845, Nonmonetary Transactions, using the ~~consideration~~fair value of the Warrants at February 8, 2022 ($17.6 million) ~~for~~as the ~~Support Agreement~~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. We recognized approximately $0.7 million of income in the three months ended March 31, 2022 and will recognize approximately $1.1 million of income each quarter through the end of the term of the Support Agreement.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. ~~During the three months ended March 31, 2022, no~~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 ~~these~~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 ~~March 31,~~June 30, 2022 and December 31, 2021. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.


		March 31, 2022				December 31, 2021					June 30, 2022				December 31, 2021
		Carrying Value (1)		Fair Value		Carrying Value (1)		Fair Value			Carrying Value(1)		Fair Value		Carrying Value(1)		Fair Value
Liabilities	Liabilities									Liabilities
Term Loan	Term Loan	$	450,308	$	449,182	$	451,465	$	450,901	Term Loan	$	449,150	$	443,535	$	451,465	$	450,901
4.875% Senior Notes	4.875% Senior Notes	$	500,000	$	512,500	$	500,000	$	526,250	4.875% Senior Notes	$	500,000	$	491,250	$	500,000	$	526,250
5.625% Senior Notes	5.625% Senior Notes	$	400,000	$	416,000	$	400,000	$	438,000	5.625% Senior Notes	$	400,000	$	395,000	$	400,000	$	438,000
5.0% Senior Notes	5.0% Senior Notes	$	700,000	$	714,875	$	700,000	$	759,500	5.0% Senior Notes	$	700,000	$	672,000	$	700,000	$	759,500

4.375% Senior Notes	4.375% Senior Notes	$	450,000	$	432,000	$	450,000	$	479,250	4.375% Senior Notes	$	450,000	$	383,625	$	450,000	$	479,250
3.75% Senior Notes	3.75% Senior Notes	$	750,000	$	690,938	$	750,000	$	747,188	3.75% Senior Notes	$	750,000	$	601,875	$	750,000	$	747,188
4.0% Senior Notes	4.0% Senior Notes	$	1,000,000	$	942,500	$	1,000,000	$	1,022,500	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.

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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.


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

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

(1) As of ~~March 31,~~June 30, 2022, Quanergy is no longer classified as an equity investment without a readily determinable fair value. See additional discussion under the heading Quanergy elsewhere in this Note.

15. Derivative Instruments and Hedging Activities

Hedges of Foreign Currency Risk

For the three and six months ended ~~March 31,~~June 30, 2022 and 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 ~~March 31,~~June 30, 2022, we estimated that ~~$23.7~~$34.8 million of net gains will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending ~~March 31,~~June 30, 2023.

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As of ~~March 31,~~June 30, 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)

~~15.0~~21.0 EUR

~~March 29,~~June 28, 2022

~~April~~July 29, 2022

Euro ("EUR") to USD

~~1.11~~1.05 USD

Not designated

~~349.6~~358.9 EUR

Various from ~~May~~August 2020 to ~~March~~June 2022

Various from ~~April~~July 2022 to ~~March~~June 2024

EUR to USD

~~1.19~~1.17 USD

Cash flow hedge

~~1,170.0~~388.0 CNY

~~Various in March~~June 27, 2022

~~Various in April~~July 29, 2022

USD to Chinese Renminbi ("CNY")

~~6.38~~6.70 CNY

Not designated

~~1,134.3~~756.2 CNY

Various from October 2021 to March 2022

Various from ~~April~~July 2022 to December 2022

USD to CNY

~~6.44~~6.46 CNY

Cash flow hedge

~~684.0~~60.0 JPY

~~March 29,~~June 28, 2022

~~April 28,~~July 29, 2022

USD to Japanese Yen ("JPY")

~~122.02~~135.93 JPY

Not designated

~~24,400.0~~24,760.0 KRW

Various from ~~May~~August 2020 to ~~March~~June 2022

Various from ~~April~~July 2022 to ~~February~~May 2024

USD to Korean Won ("KRW")

~~1,170.98~~1,191.72 KRW

Cash flow hedge

~~24.0~~22.0 MYR

~~March 28,~~June 27, 2022

~~April~~July 29, 2022

USD to Malaysian Ringgit ("MYR")

~~4.21~~4.40 MYR

Not designated

~~259.0~~70.0 MXN

~~March 29,~~June 28, 2022

~~April~~July 29, 2022

USD to Mexican Peso ("MXN")

~~20.05~~20.13 MXN

Not designated

~~3,477.3~~3,458.7 MXN

Various from ~~May~~August 2020 to ~~March~~June 2022

Various from ~~April~~July 2022 to ~~March~~June 2024

USD to MXN

~~22.11~~22.15 MXN

Cash flow hedge

~~52.4~~10.0 GBP

~~Various from May 2020 to March~~June 28, 2022

~~Various from April~~July 29, 2022 ~~to March 2024~~

British Pound Sterling ("GBP") to USD

~~1.36~~1.22 USD

Not Designated

60.0 GBP

Various from August 2020 to June 2022

Various from July 2022 to June 2024

GBP to USD

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.

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Hedges of Commodity Risk

As of ~~March 31,~~June 30, 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

~~1,109,868~~1,092,999 troy oz.