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 ~~June~~September 30, 2023


☐			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 ~~July 14,~~October 16, 2023, ~~152,422,440~~151,355,005 ordinary shares were outstanding.

Table of Contents

TABLE OF CONTENTS


PART I
	Item 1.	Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets as of ~~June~~September 30,, 2023 and December 31, 2022	3
		Condensed Consolidated Statements of Operations for the Three and ~~and Six~~Nine Months Ended ~~June~~September 30,, 2023 and 2022	4
		Condensed Consolidated Statements of Comprehensive Income for the Three and ~~and Six~~Nine Months Ended ~~June~~Sep tember 30,, 2023 and 2022	5
		Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June 30~~September ,30, 2023 and 2022	6
		Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and SNine ix Months Ended ~~June~~September 30,, 2023 and 2022	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2123
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3336
	Item 4.	Controls and Procedures	3336

PART II
	Item 1.	Legal Proceedings	3437
	Item 1A.	Risk Factors	3437
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3437
	Item 3.	Defaults Upon Senior Securities	3437
	Item 5.	Other Information	3437
	Item 6.	Exhibits	3538
		Signatures	3639

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)


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	857,312	$	1,225,518	Cash and cash equivalents	$	889,703	$	1,225,518
Accounts receivable, net of allowances of $32,409 and $24,246 as of June 30, 2023 and December 31, 2022, respectively		772,427		742,382
Accounts receivable, net of allowances of $35,207 and $24,246 as of September 30, 2023 and December 31, 2022, respectively						Accounts receivable, net of allowances of $35,207 and $24,246 as of September 30, 2023 and December 31, 2022, respectively	766,835		742,382
Inventories	Inventories	660,082		644,875		Inventories	683,646		644,875
Prepaid expenses and other current assets	Prepaid expenses and other current assets	186,807		162,268		Prepaid expenses and other current assets	152,981		162,268

Total current assets	Total current assets	2,476,628		2,775,043		Total current assets	2,493,165		2,775,043
Property, plant and equipment, net	Property, plant and equipment, net	858,760		840,819		Property, plant and equipment, net	874,126		840,819
Goodwill	Goodwill	3,861,872		3,911,224		Goodwill	3,864,490		3,911,224
Other intangible assets, net of accumulated amortization of $2,444,191 and $2,352,813 as of June 30, 2023 and December 31, 2022, respectively		961,180		999,722
Other intangible assets, net of accumulated amortization of $2,484,206 and $2,352,813 as of September 30, 2023 and December 31, 2022, respectively						Other intangible assets, net of accumulated amortization of $2,484,206 and $2,352,813 as of September 30, 2023 and December 31, 2022, respectively	921,444		999,722
Deferred income tax assets	Deferred income tax assets	93,782		100,539		Deferred income tax assets	93,858		100,539
Other assets	Other assets	140,378		128,873		Other assets	141,252		128,873
Total assets	Total assets	$	8,392,600	$	8,756,220	Total assets	$	8,388,335	$	8,756,220
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	$	1,809	$	256,471	Current portion of long-term debt, finance lease and other financing obligations	$	1,888	$	256,471
Accounts payable	Accounts payable	523,968		531,572		Accounts payable	515,095		531,572
Income taxes payable	Income taxes payable	31,920		43,987		Income taxes payable	28,399		43,987
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	323,201		346,942		Accrued expenses and other current liabilities	327,291		346,942

Total current liabilities	Total current liabilities	880,898		1,178,972		Total current liabilities	872,673		1,178,972
Deferred income tax liabilities	Deferred income tax liabilities	390,743		364,593		Deferred income tax liabilities	389,551		364,593
Pension and other post-retirement benefit obligations	Pension and other post-retirement benefit obligations	38,960		36,086		Pension and other post-retirement benefit obligations	39,131		36,086
Finance lease and other financing obligations, less current portion	Finance lease and other financing obligations, less current portion	23,771		24,742		Finance lease and other financing obligations, less current portion	23,456		24,742
Long-term debt, net	Long-term debt, net	3,770,507		3,958,928		Long-term debt, net	3,771,810		3,958,928
Other long-term liabilities	Other long-term liabilities	77,949		82,092		Other long-term liabilities	66,533		82,092
Total liabilities	Total liabilities	5,182,828		5,645,413		Total liabilities	5,163,154		5,645,413
Commitments and contingencies (Note 11)	Commitments and contingencies (Note 11)					Commitments and contingencies (Note 11)
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 175,793 and 175,207 shares issued as of June 30, 2023 and December 31, 2022, respectively		2,249		2,242
Treasury shares, at cost, 23,371 and 22,781 shares as of June 30, 2023 and December 31, 2022, respectively		(1,149,838)		(1,124,713)
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 175,819 and 175,207 shares issued as of September 30, 2023 and December 31, 2022, respectively						Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 175,819 and 175,207 shares issued as of September 30, 2023 and December 31, 2022, respectively	2,249		2,242
Treasury shares, at cost, 24,260 and 22,781 shares as of September 30, 2023 and December 31, 2022, respectively						Treasury shares, at cost, 24,260 and 22,781 shares as of September 30, 2023 and December 31, 2022, respectively	(1,185,060)		(1,124,713)
Additional paid-in capital	Additional paid-in capital	1,889,234		1,866,201		Additional paid-in capital	1,896,081		1,866,201
Retained earnings	Retained earnings	2,472,281		2,383,341		Retained earnings	2,516,218		2,383,341
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(4,154)		(16,264)		Accumulated other comprehensive loss	(4,307)		(16,264)

Total shareholders' equity	Total shareholders' equity	3,209,772		3,110,807		Total shareholders' equity	3,225,181		3,110,807
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	8,392,600	$	8,756,220	Total liabilities and shareholders' equity	$	8,388,335	$	8,756,220

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 six months ended					For the three months ended				For the nine months ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022			September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Net revenue	Net revenue	$	1,062,112	$	1,020,548	$	2,060,287	$	1,996,318	Net revenue	$	1,001,302	$	1,018,268	$	3,061,589	$	3,014,586
Operating costs and expenses:	Operating costs and expenses:									Operating costs and expenses:
Cost of revenue	Cost of revenue	732,108		686,603		1,402,579		1,343,683		Cost of revenue	687,959		694,535		2,090,538		2,038,218
Research and development	Research and development	44,857		47,971		90,796		93,951		Research and development	45,448		47,947		136,244		141,898
Selling, general and administrative	Selling, general and administrative	91,312		97,329		177,462		193,009		Selling, general and administrative	85,661		90,013		263,123		283,022
Amortization of intangible assets	Amortization of intangible assets	54,563		36,805		95,337		74,172		Amortization of intangible assets	39,970		40,313		135,307		114,485
Restructuring and other charges, net	Restructuring and other charges, net	21,259		12,897		27,258		26,630		Restructuring and other charges, net	26,004		(107,441)		53,262		(80,811)
Total operating costs and expenses	Total operating costs and expenses	944,099		881,605		1,793,432		1,731,445		Total operating costs and expenses	885,042		765,367		2,678,474		2,496,812
Operating income	Operating income	118,013		138,943		266,855		264,873		Operating income	116,260		252,901		383,115		517,774
Interest expense, net	Interest expense, net	(38,105)		(44,842)		(78,196)		(90,287)		Interest expense, net	(36,908)		(44,856)		(115,104)		(135,143)

Other, net	Other, net	(10,924)		(39,240)		(9,532)		(89,696)		Other, net	1,317		(21,371)		(8,215)		(111,067)
Income before taxes	Income before taxes	68,984		54,861		179,127		84,890		Income before taxes	80,669		186,674		259,796		271,564
Provision for income taxes	Provision for income taxes	19,873		20,020		43,599		27,608		Provision for income taxes	17,868		46,421		61,467		74,029
Net income	Net income	$	49,111	$	34,841	$	135,528	$	57,282	Net income	$	62,801	$	140,253	$	198,329	$	197,535
Basic net income per share	Basic net income per share	$	0.32	$	0.22	$	0.89	$	0.36	Basic net income per share	$	0.41	$	0.91	$	1.30	$	1.27
Diluted net income per share	Diluted net income per share	$	0.32	$	0.22	$	0.88	$	0.36	Diluted net income per share	$	0.41	$	0.91	$	1.30	$	1.26

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 six months ended					For the three months ended				For the nine months ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022			September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Net income	Net income	$	49,111	$	34,841	$	135,528	$	57,282	Net income	$	62,801	$	140,253	$	198,329	$	197,535
Other comprehensive income:
Other comprehensive (loss)/income:										Other comprehensive (loss)/income:
Cash flow hedges	Cash flow hedges	8,686		9,183		11,493		12,033		Cash flow hedges	(401)		10,329		11,092		22,362
Defined benefit and retiree healthcare plans	Defined benefit and retiree healthcare plans	224		380		617		808		Defined benefit and retiree healthcare plans	248		577		865		1,385
Other comprehensive income		8,910		9,563		12,110		12,841
Other comprehensive (loss)/income										Other comprehensive (loss)/income	(153)		10,906		11,957		23,747
Comprehensive income	Comprehensive income	$	58,021	$	44,404	$	147,638	$	70,123	Comprehensive income	$	62,648	$	151,159	$	210,286	$	221,282

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 six months ended					For the nine months ended
		June 30, 2023		June 30, 2022			September 30, 2023		September 30, 2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	135,528	$	57,282	Net income	$	198,329	$	197,535
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	63,560		62,882		Depreciation	96,877		94,562
Amortization of debt issuance costs	Amortization of debt issuance costs	3,421		3,433		Amortization of debt issuance costs	5,110		5,256
Gain on sale of business	Gain on sale of business	(5,877)		—		Gain on sale of business	(5,877)		(135,112)
Share-based compensation	Share-based compensation	17,607		15,739		Share-based compensation	24,454		24,180
Loss on debt financing	Loss on debt financing	857		—		Loss on debt financing	857		5,468
Amortization of intangible assets	Amortization of intangible assets	95,337		74,172		Amortization of intangible assets	135,307		114,485
Deferred income taxes	Deferred income taxes	13,449		(5,211)		Deferred income taxes	12,323		3,313
Mark-to-market loss on equity investments, net		302		71,100
Loss on equity investments, net						Loss on equity investments, net	678		75,135
Unrealized loss on derivative instruments and other	Unrealized loss on derivative instruments and other	14,674		20,669		Unrealized loss on derivative instruments and other	15,712		40,702
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	(30,045)		(102,845)		Accounts receivable, net	(24,768)		(88,617)
Inventories	Inventories	(19,036)		(69,379)		Inventories	(42,600)		(77,059)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(13,408)		(17,762)		Prepaid expenses and other current assets	5,905		(24,145)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(39,665)		56,767		Accounts payable and accrued expenses	(28,368)		10,928
Income taxes payable	Income taxes payable	(12,067)		(11,384)		Income taxes payable	(15,588)		16,205
Other	Other	(3,615)		1,425		Other	(4,154)		(3,603)
Acquisition-related compensation payments	Acquisition-related compensation payments	(8,380)		(15,000)		Acquisition-related compensation payments	(22,620)		(23,500)
Net cash provided by operating activities	Net cash provided by operating activities	212,642		141,888		Net cash provided by operating activities	351,577		235,733
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	—		(48,989)		Acquisitions, net of cash received	—		(632,683)
Additions to property, plant and equipment and capitalized software	Additions to property, plant and equipment and capitalized software	(84,444)		(74,069)		Additions to property, plant and equipment and capitalized software	(136,224)		(110,424)
Investment in debt and equity securities	Investment in debt and equity securities	(390)		(6,878)		Investment in debt and equity securities	(390)		(7,773)
Proceeds from the sale of business, net of cash sold	Proceeds from the sale of business, net of cash sold	19,000		—		Proceeds from the sale of business, net of cash sold	19,000		198,841

Other	Other	—		152		Other	—		152
Net cash used in investing activities	Net cash used in investing activities	(65,834)		(129,784)		Net cash used in investing activities	(117,614)		(551,887)
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	5,346		14,577		Proceeds from exercise of stock options and issuance of ordinary shares	5,346		16,460
Payment of employee restricted stock tax withholdings	Payment of employee restricted stock tax withholdings	(11,470)		(7,577)		Payment of employee restricted stock tax withholdings	(12,067)		(7,834)

Proceeds from borrowings on debt						Proceeds from borrowings on debt	—		500,000
Payments on debt	Payments on debt	(448,390)		(5,664)		Payments on debt	(448,640)		(507,968)
Dividends paid	Dividends paid	(35,113)		(17,225)		Dividends paid	(53,380)		(34,271)
Payments to repurchase ordinary shares	Payments to repurchase ordinary shares	(25,076)		(144,279)		Payments to repurchase ordinary shares	(60,290)		(241,903)

Payments of debt financing costs	Payments of debt financing costs	(311)		(2,313)		Payments of debt financing costs	(747)		(13,369)

Net cash used in financing activities	Net cash used in financing activities	(515,014)		(162,481)		Net cash used in financing activities	(569,778)		(288,885)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	(368,206)		(150,377)		Net change in cash and cash equivalents	(335,815)		(605,039)
Cash and cash equivalents, beginning of year	Cash and cash equivalents, beginning of year	1,225,518		1,708,955		Cash and cash equivalents, beginning of year	1,225,518		1,708,955
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	857,312	$	1,558,578	Cash and cash equivalents, end of period	$	889,703	$	1,103,916

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 March 31, 2023		175,298	$	2,243	(22,781)	$	(1,124,713)	$	1,876,168	$	2,452,858	$	(13,064)			$	3,193,492
Balance as of June 30, 2023																				Balance as of June 30, 2023	175,793		$	2,249		(23,371)							$	(1,149,838)			$	1,889,234			$	2,472,281	$	(4,154)			$	3,209,772
Surrender of shares for tax withholding	Surrender of shares for tax withholding	—	—		(231)	(11,347)		—		—		—						(11,347)		Surrender of shares for tax withholding	—		—			(14)		(597)			—				—				—						(597)
Stock options exercised	Stock options exercised	76	1		—	—		2,665		—		—						2,666		Stock options exercised	—		—			—		—			—				—				—						—
Vesting of restricted securities	Vesting of restricted securities	650	7		—	—		—		(7)		—						—		Vesting of restricted securities	40		—			—		—			—				—				—						—
Cash dividends paid	Cash dividends paid	—	—		—	—		—		(18,336)		—						(18,336)		Cash dividends paid	—		—			—		—			—				(18,267)				—						(18,267)
Repurchase of ordinary shares	Repurchase of ordinary shares	—	—		(590)	(25,125)		—		—		—						(25,125)		Repurchase of ordinary shares	—		—			(889)		(35,222)			—				—				—						(35,222)
Retirement of ordinary shares	Retirement of ordinary shares	(231)	(2)		231	11,347		—		(11,345)		—						—		Retirement of ordinary shares	(14)		—			14		597			—				(597)				—						—
Share-based compensation	Share-based compensation	—	—		—	—		10,401		—		—						10,401		Share-based compensation	—		—			—		—			6,847				—				—						6,847

Net income	Net income	—	—		—	—		—		49,111		—						49,111		Net income	—		—			—		—			—				62,801				—						62,801
Other comprehensive income		—	—		—	—		—		—		8,910						8,910
Balance as of June 30, 2023		175,793	$	2,249	(23,371)	$	(1,149,838)	$	1,889,234	$	2,472,281	$	(4,154)					$	3,209,772
Other comprehensive loss																				Other comprehensive loss	—		—			—		—			—				—				(153)						(153)
Balance as of September 30, 2023																				Balance as of September 30, 2023	175,819		$	2,249		(24,260)		$	(1,185,060)		$	1,896,081			$	2,516,218			$	(4,307)					$	3,225,181


Balance as of December 31, 2022	Balance as of December 31, 2022	175,207	$	2,242	(22,781)	$	(1,124,713)	$	1,866,201	$	2,383,341	$	(16,264)	$	3,110,807	Balance as of December 31, 2022	175,207	$	2,242	(22,781)	$	(1,124,713)	$	1,866,201	$	2,383,341	$	(16,264)	$	3,110,807
Surrender of shares for tax withholding	Surrender of shares for tax withholding	—	—		(233)	(11,470)		—		—		—		(11,470)		Surrender of shares for tax withholding	—	—		(247)	(12,067)		—		—		—		(12,067)
Stock options exercised	Stock options exercised	158	2		—	—		5,426		—		—		5,428		Stock options exercised	158	2		—	—		5,426		—		—		5,428
Vesting of restricted securities	Vesting of restricted securities	661	7		—	—		—		(7)		—		—		Vesting of restricted securities	701	7		—	—		—		(7)		—		—
Cash dividends paid	Cash dividends paid	—	—		—	—		—		(35,113)		—		(35,113)		Cash dividends paid	—	—		—	—		—		(53,380)		—		(53,380)
Repurchase of ordinary shares	Repurchase of ordinary shares	—	—		(590)	(25,125)		—		—		—		(25,125)		Repurchase of ordinary shares	—	—		(1,479)	(60,347)		—		—		—		(60,347)
Retirement of ordinary shares	Retirement of ordinary shares	(233)	(2)		233	11,470		—		(11,468)		—		—		Retirement of ordinary shares	(247)	(2)		247	12,067		—		(12,065)		—		—
Share-based compensation	Share-based compensation	—	—		—	—		17,607		—		—		17,607		Share-based compensation	—	—		—	—		24,454		—		—		24,454

Net income	Net income	—	—		—	—		—		135,528		—		135,528		Net income	—	—		—	—		—		198,329		—		198,329
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		12,110		12,110		Other comprehensive income	—	—		—	—		—		—		11,957		11,957
Balance as of June 30, 2023		175,793	$	2,249	(23,371)	$	(1,149,838)	$	1,889,234	$	2,472,281	$	(4,154)	$	3,209,772
Balance as of September 30, 2023																Balance as of September 30, 2023	175,819	$	2,249	(24,260)	$	(1,185,060)	$	1,896,081	$	2,516,218	$	(4,307)	$	3,225,181


		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)/Income							Total Shareholders' Equity
		Number	Amount		Number	Amount								Total Shareholders' Equity				Amount	Number		Amount	Additional Paid-In Capital												Total Shareholders' Equity
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
Surrender of shares for tax withholding	Surrender of shares for tax withholding	—	—		(148)	(7,442)		—		—		—			(7,442)		Surrender of shares for tax withholding	—	—		(6)	(257)		—				—				—							(257)
Stock options exercised	Stock options exercised	39	—		—	—		1,229		—		—			1,229		Stock options exercised	45	—		—	—		1,883				—				—							1,883
Vesting of restricted securities	Vesting of restricted securities	450	5		—	—		—		(5)		—			—		Vesting of restricted securities	20	1		—	—		—				(1)				—							—
Cash dividends paid	Cash dividends paid	—	—		—	—		—		(17,225)		—			(17,225)		Cash dividends paid	—	—		—	—		—				(17,046)				—							(17,046)
Repurchase of ordinary shares	Repurchase of ordinary shares	—	—		(1,693)	(78,898)		—		—		—			(78,898)		Repurchase of ordinary shares	—	—		(2,346)	(98,446)		—				—				—							(98,446)
Retirement of ordinary shares	Retirement of ordinary shares	(148)	(2)		148	7,442		—		(7,440)		—			—		Retirement of ordinary shares	(6)	—		6	257		—				(257)				—							—
Share-based compensation	Share-based compensation	—	—		—	—		9,199		—		—			9,199		Share-based compensation	—	—		—	—		8,441				—				—							8,441

Net income	Net income	—	—		—	—		—		34,841		—			34,841		Net income	—	—		—	—		—				140,253				—							140,253
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		9,563			9,563		Other comprehensive income	—	—		—	—		—				—				10,906							10,906
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
Balance as of September 30, 2022																	Balance as of September 30, 2022	174,983	$	2,240	(21,615)	$	(1,077,041)	$	1,852,249			$	2,287,683			$	4,187						$	3,069,318


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	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	—	—		(151)	(7,577)		—		—		—		(7,577)		Surrender of shares for tax withholding	—	—		(157)	(7,834)		—		—		—		(7,834)
Stock options exercised	Stock options exercised	329	4		—	—		13,942		—		—		13,946		Stock options exercised	374	4		—	—		15,825		—		—		15,829
Vesting of restricted securities	Vesting of restricted securities	459	5		—	—		—		(5)		—		—		Vesting of restricted securities	479	6		—	—		—		(6)		—		—
Cash dividends paid	Cash dividends paid	—	—		—	—		—		(17,225)		—		(17,225)		Cash dividends paid	—	—		—	—		—		(34,271)		—		(34,271)
Repurchase of ordinary shares	Repurchase of ordinary shares	—	—		(2,831)	(146,156)		—		—		—		(146,156)		Repurchase of ordinary shares	—	—		(5,177)	(244,602)		—		—		—		(244,602)
Retirement of ordinary shares	Retirement of ordinary shares	(151)	(2)		151	7,577		—		(7,575)		—		—		Retirement of ordinary shares	(157)	(2)		157	7,834		—		(7,832)		—		—
Share-based compensation	Share-based compensation	—	—		—	—		15,739		—		—		15,739		Share-based compensation	—	—		—	—		24,180		—		—		24,180

Net income	Net income	—	—		—	—		—		57,282		—		57,282		Net income	—	—		—	—		—		197,535		—		197,535
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		12,841		12,841		Other comprehensive income	—	—		—	—		—		—		23,747		23,747
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
Balance as of September 30, 2022																Balance as of September 30, 2022	174,983	$	2,240	(21,615)	$	(1,077,041)	$	1,852,249	$	2,287,683	$	4,187	$	3,069,318

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

Table of Contents

SENSATA TECHNOLOGIES HOLDING PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements reflect the financial position, results of operations, comprehensive 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 interim 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, 2022, filed with the U.S. Securities and Exchange Commission (the "SEC") on February 13, 2023 (the "2022 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 present net revenue disaggregated by segment and end market for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 for our two reportable segments, Performance Sensing ("PS") and Sensing Solutions ("SS"):


		For the three months ended June 30, 2023				For the three months ended June 30, 2022 (3)						For the three months ended September 30, 2023						For the three months ended September 30, 2022 (3)
		PS		SS		Total		PS		SS			Total			PS		SS		Total		PS		SS		Total
Automotive	Automotive	$	530,268	$	9,550	$	539,818	$	506,232	$	9,932		$	516,164	Automotive	$	548,759	$	10,365	$	559,124	$	525,271	$	8,616	$	533,887
HVOR (1)	HVOR (1)	227,176		—		227,176		225,413		—			225,413		HVOR (1)	205,229		—		205,229		214,178		—		214,178
Industrial	Industrial	—		185,202		185,202		—		137,331			137,331		Industrial	—		129,641		129,641		—		162,269		162,269
Appliance and HVAC (2)	Appliance and HVAC (2)	—		50,952		50,952		—		57,675			57,675		Appliance and HVAC (2)	—		48,316		48,316		—		51,927		51,927
Aerospace	Aerospace	—		46,832		46,832		—		38,558			38,558		Aerospace	—		48,638		48,638		—		37,789		37,789
Other	Other	—		12,132		12,132		—		45,407			45,407		Other	—		10,354		10,354		—		18,218		18,218
Total	Total	$	757,444	$	304,668	$	1,062,112	$	731,645	$	288,903		$	1,020,548	Total	$	753,988	$	247,314	$	1,001,302	$	739,449	$	278,819	$	1,018,268


		For the six months ended June 30, 2023 (3)				For the six months ended June 30, 2022 (3)						For the nine months ended September 30, 2023 (3)						For the nine months ended September 30, 2022 (3)
		PS		SS		Total		PS		SS			Total			PS		SS		Total		PS		SS		Total
Automotive	Automotive	$	1,047,152	$	17,684	$	1,064,836	$	1,008,594	$	19,217		$	1,027,811	Automotive	$	1,595,911	$	28,049	$	1,623,960	$	1,533,865	$	27,833	$	1,561,698
HVOR (1)	HVOR (1)	448,560		—		448,560		425,746		—			425,746		HVOR (1)	653,789		—		653,789		639,924		—		639,924
Industrial	Industrial	—		333,714		333,714		—		266,952			266,952		Industrial	—		463,355		463,355		—		429,221		429,221
Appliance and HVAC (2)	Appliance and HVAC (2)	—		98,426		98,426		—		116,500			116,500		Appliance and HVAC (2)	—		146,742		146,742		—		168,427		168,427
Aerospace	Aerospace	—		91,158		91,158		—		71,828			71,828		Aerospace	—		139,796		139,796		—		109,617		109,617
Other	Other	—		23,593		23,593		—		87,481			87,481		Other	—		33,947		33,947		—		105,699		105,699
Total	Total	$	1,495,712	$	564,575	$	2,060,287	$	1,434,340	$	561,978		$	1,996,318	Total	$	2,249,700	$	811,889	$	3,061,589	$	2,173,789	$	840,797	$	3,014,586

(1) Heavy vehicle and off-road

(2) Heating, ventilation and air conditioning

Table of Contents

(3) Effective April 1, 2023, we moved our material handling products from the HVOR operating segment (in the Performance Sensing reportable segment) to the Sensing Solutions operating segment to align with new management reporting. The amounts previously reported in the tables above for the three and ~~six~~nine months ended ~~June~~September 30, 2022 have been retrospectively recast to reflect this change. In addition, the ~~six~~nine months ended ~~June~~September 30, 2023 includes amounts for the three months ended March 31, 2023 that have been retrospectively adjusted for this change.

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~~nine months ended ~~June~~September 30, 2023 and 2022:


		For the three months ended				For the six months ended					For the three months ended				For the nine months ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022			September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Stock options	Stock options	$	(205)	$	2	$	(86)	$	309	Stock options	$	(2)	$	158	$	(88)	$	467
Restricted securities	Restricted securities	10,606		9,197		17,693		15,430		Restricted securities	6,849		8,283		24,542		23,713
Share-based compensation expense	Share-based compensation expense	$	10,401	$	9,199	$	17,607	$	15,739	Share-based compensation expense	$	6,847	$	8,441	$	24,454	$	24,180

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~~nine months ended ~~June~~September 30, 2023:


Awards Granted To:	Awards Granted To:	Type of Award	Number of Units Granted (in thousands)	Weighted Average Grant Date Fair Value		Awards Granted To:	Type of Award	Number of Units Granted (in thousands)	Weighted Average Grant Date Fair Value

Directors	Directors	RSU (1)	33	$	40.95	Directors	RSU (1)	33	$	40.95
Various executives and employees	Various executives and employees	RSU (2)	547	$	49.57	Various executives and employees	RSU (2)	552	$	49.53
Various executives and employees	Various executives and employees	PRSU (3)	241	$	49.53	Various executives and employees	PRSU (3)	245	$	49.45
Various executives and employees	Various executives and employees	PRSU (4)	102	$	55.50	Various executives and employees	PRSU (4)	103	$	55.50

(1) These RSUs cliff vest one year from the grant date (May and June 2024).

(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 2026 and ~~June~~August 2026.

(3) These PRSUs vest on various dates between April 2026 and ~~June~~July 2026. The number of units that ultimately vest will be between 0% and ~~150%~~200% and is dependent on the achievement of certain performance criteria.

(4) These awards include certain PRSUs with market performance conditions that will be evaluated relative to the performance of certain peers as defined in the award agreement. The number of units that ultimately vest (in April 2026 and July 2026) will be from 0% to 150%, depending on achievement of these performance criteria. Total grant date value of these PRSUs is approximately ~~$5.6~~$5.7 million and was valued using the Monte Carlo method. Related share-based compensation expense recognized in the three and ~~six~~nine months ended ~~June~~September 30, 2023 was $0.6 ~~million.~~million and $1.1 million, respectively.

5. Restructuring and Other Charges, Net

Q3 2023 Plan

Table of Contents

5. We expect these restructuring charges to impact our business segments and corporate functions as follows:


		Charges
(Dollars in thousands)	Positions	Minimum		Maximum
Performance Sensing	157	$	7,043	$	8,495
Sensing Solutions	145	5,214		7,495
Corporate and other	149	8,243		9,510
Total	451	$	20,500	$	25,500

Restructuring ~~and Other Charges, Net~~

~~The following table presents the components of restructuring and other~~ charges ~~net for~~recognized in the three and ~~six~~nine months ended ~~June~~September 30, 2023 resulting from the Q3 2023 Plan are presented by business segment and ~~2022:~~

For the three months ended For the six months ended
June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Severance costs, net (1)
$ 4,749 $ — $ 8,962 $ 587
Facility and other exit costs 310 1,241 535 2,289
Gain on sale of business — — (5,877) —
Acquisition-related compensation arrangements (2)
3,330 12,834 10,602 31,089
Other (1)(2)(3)
12,870 (1,178) 13,036 (7,335)
Restructuring and other charges, net $ 21,259 $ 12,897 $ 27,258 $ 26,630
corporate functions below.


	Severance		Facility and other exit costs (1)
Performance Sensing	$	7,086	$	237
Sensing Solutions	4,570		955
Corporate and other	8,533		—
Q3 2023 Plan total	$	20,189	$	1,192

(1) ~~The three and six months ended~~Includes site closures

Marine Business

On June ~~30,~~6, 2023, ~~include certain costs~~we announced that we had made the decision to exit the marine energy storage business (the "Marine Business") of Spear Power Systems (“Spear”) ~~as discussed below.~~

~~(2)~~ ~~We have reclassified acquisition-related compensation arrangements for~~, which had been included in the Sensing Solutions reportable segment. Exiting the Marine Business resulted in charges of $0.9 million and $39.2 million in the three and ~~six~~nine months ended ~~June~~September 30, ~~2022 from~~2023, respectively, as presented in the ~~"other" caption within~~table below:


		Period ended September 30, 2023
	Location	Three months		Nine Months
Accelerated amortization	Amortization of intangible assets	$	—	$	13,527
Write-down of inventory	Cost of revenue	—		10,479
Severance charges	Restructuring and other charges, net	—		1,168
Write-down of property, plant and equipment	Restructuring and other charges, net	—		1,735

Other charges, including contract termination costs	Restructuring and other charges, net	876		12,278
Total		$	876	$	39,187

Summary

The following table presents the charges and gains included as components of restructuring and other charges, net for the three and nine months ended September 30, 2023 and 2022:


	For the three months ended				For the nine months ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Q3 2023 Plan charges (1)	$	21,381	$	—	$	21,381	$	—
Other restructuring and other charges, net
Severance charges, net (2)	(435)		6,249		8,527		6,836
Facility and other exit costs	494		2,181		1,029		4,470
Gain on sale of business	—		(135,112)		(5,877)		(135,112)
Acquisition-related compensation arrangements	3,769		7,359		14,371		38,448
Other (3)(4)	795		11,882		13,831		4,547
Restructuring and other charges, net	$	26,004	$	(107,441)	$	53,262	$	(80,811)

(1) Includes severance charges and facility and other exit costs relating to ~~correspond to current~~the Q3 2023 Plan as detailed under the heading Q3 2023 Plan above.

Table of Contents

(2) Each period ~~presentation.~~presented includes severance charges, net of reversals, that do not represent the initiation of a larger restructuring plan. The nine months ended September 30, 2023 includes severance charges incurred as a result of the exit of the Marine Business as detailed under the heading Marine Business above.

(3) The ~~six~~three and nine months ended ~~June~~September 30, 2023 include charges related to the exit of the Marine Business, including the write-down of property, plant and equipment and other charges, including contract termination costs, as detailed under the heading Marine Business above.

(4) The three and nine months ended September 30, 2022 ~~primarily includes~~include transaction-related charges to sell various assets and liabilities comprising our semiconductor test and thermal business (collectively, the "Qinex Business"), partially offset in the nine months ended September 30, 2022 by gains related to changes in the fair value of acquisition-related contingent consideration amounts.

On June 6, 2023, we announced that we had made the decision to exit the Marine Business, which was included in the Sensing Solutions reportable segment. Exiting the Marine Business resulted in a charge of $38.3 million in the three and six months ended June 30, 2023. The charge included $13.5 million of accelerated amortization of definite-lived intangible assets, presented in amortization of intangible assets, and a $10.5 million write-down of inventory, presented in cost of revenue. In addition, certain of these charges are presented in restructuring and other charges, net, including $1.2 million of severance costs, $1.7 million related to the write-down of property, plant, and equipment, $2.3 million related to the write-down of accounts receivables, and $9.1 million of other charges, including contract termination costs.

The following table presents a rollforward of our severance liability for the ~~six~~nine months ended ~~June~~September 30, 2023:

~~Severance~~

~~Balance as of December 31, 2022~~

~~8,617~~

~~Charges, net of reversals~~

~~8,962~~

~~Payments~~

~~(12,344)~~

~~Foreign currency remeasurement~~

~~166~~

~~Balance as of June 30, 2023~~

~~5,401~~


	Q3 2023 Plan		Other		Total
Balance as of December 31, 2022	$	—	$	8,617	$	8,617
Charges, net of reversals	20,189		8,527		28,716
Payments	(2,988)		(14,686)		(17,674)
Foreign currency remeasurement	—		92		92
Balance as of September 30, 2023	$	17,201	$	2,550	$	19,751

The severance liability as of ~~June~~September 30, 2023 and December 31, 2022 ~~was~~were entirely recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

6. Other, Net

The following table presents the components of other, net for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:


		For the three months ended				For the six months ended					For the three months ended				For the nine months ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022			September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Currency remeasurement loss on net monetary assets	Currency remeasurement loss on net monetary assets	$	(9,307)	$	(14,090)	$	(10,566)	$	(14,157)	Currency remeasurement loss on net monetary assets	$	(4,491)	$	(12,583)	$	(15,057)	$	(26,740)
Gain on foreign currency forward contracts		4,423		3,165		4,607		1,922
(Loss)/gain on foreign currency forward contracts										(Loss)/gain on foreign currency forward contracts	(1,301)		6,178		3,306		8,100
Loss on commodity forward contracts	Loss on commodity forward contracts	(6,269)		(18,254)		(4,370)		(8,830)		Loss on commodity forward contracts	(476)		(5,773)		(4,846)		(14,603)
Loss on debt financing	Loss on debt financing	(372)		—		(857)		—		Loss on debt financing	—		(5,468)		(857)		(5,468)
Mark-to-market loss on equity investments, net		(302)		(11,821)		(302)		(71,100)
Loss on equity investments, net										Loss on equity investments, net	(376)		(4,035)		(678)		(75,135)
Net periodic benefit cost, excluding service cost	Net periodic benefit cost, excluding service cost	(810)		(639)		(1,781)		(1,394)		Net periodic benefit cost, excluding service cost	(863)		(868)		(2,644)		(2,262)
Other	Other	1,713		2,399		3,737		3,863		Other	8,824		1,178		12,561		5,041
Other, net	Other, net	$	(10,924)	$	(39,240)	$	(9,532)	$	(89,696)	Other, net	$	1,317	$	(21,371)	$	(8,215)	$	(111,067)

~~Table of Contents~~

7. Income Taxes

The following table presents the provision for income taxes for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:

For the three months ended For the six months ended
June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Provision for income taxes $ 19,873 $ 20,020 $ 43,599 $ 27,608


	For the three months ended				For the nine months ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022


Provision for income taxes	$	17,868	$	46,421	$	61,467	$	74,029

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 changes in our assessment of the realizability of our deferred tax assets.

We recorded a partial valuation allowance against certain interest carryforwards in the U.S. at both December 31, 2022 and December 31, 2021. We are continually evaluating both the positive and negative evidence for this partial valuation allowance. We believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become

Table of Contents

available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of this deferred tax asset and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability and future utilization of this attribute that we are able to actually achieve.

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~~nine months ended ~~June~~September 30, 2023 and 2022 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 six months ended			For the three months ended		For the nine months ended
		June 30, 2023	June 30, 2022	June 30, 2023	June 30, 2022		September 30, 2023	September 30, 2022	September 30, 2023	September 30, 2022
Basic weighted-average ordinary shares outstanding	Basic weighted-average ordinary shares outstanding	152,700	156,477	152,609	156,950	Basic weighted-average ordinary shares outstanding	152,046	154,474	152,421	156,124
Dilutive effect of stock options	Dilutive effect of stock options	55	190	103	331	Dilutive effect of stock options	19	107	75	256
Dilutive effect of unvested restricted securities	Dilutive effect of unvested restricted securities	309	327	482	531	Dilutive effect of unvested restricted securities	314	362	426	475
Diluted weighted-average ordinary shares outstanding	Diluted weighted-average ordinary shares outstanding	153,064	156,994	153,194	157,812	Diluted weighted-average ordinary shares outstanding	152,379	154,943	152,922	156,855

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 six months ended			For the three months ended		For the nine months ended
		June 30, 2023	June 30, 2022	June 30, 2023	June 30, 2022		September 30, 2023	September 30, 2022	September 30, 2023	September 30, 2022
Anti-dilutive shares excluded	Anti-dilutive shares excluded	1,625	1,426	1,003	715	Anti-dilutive shares excluded	1,815	1,917	1,274	1,116
Contingently issuable shares excluded	Contingently issuable shares excluded	1,366	1,383	1,317	1,192	Contingently issuable shares excluded	1,239	1,513	1,291	1,299

9. Inventories

The following table presents the components of inventories as of ~~June~~September 30, 2023 and December 31, 2022:


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Finished goods	Finished goods	$	223,295	$	202,531	Finished goods	$	242,695	$	202,531
Work-in-process	Work-in-process	109,297		117,691		Work-in-process	119,104		117,691
Raw materials	Raw materials	327,490		324,653		Raw materials	321,847		324,653
Inventories	Inventories	$	660,082	$	644,875	Inventories	$	683,646	$	644,875

1112

Table of Contents

10. Debt

The following table presents the components of long-term debt, finance lease and other financing obligations as of ~~June~~September 30, 2023 and December 31, 2022:


		Maturity Date	June 30, 2023		December 31, 2022			Maturity Date	September 30, 2023		December 31, 2022
Term Loan (1)	Term Loan (1)	September 20, 2026	$	—	$	446,834	Term Loan (1)	September 20, 2026	$	—	$	446,834

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
5.875% Senior Notes	5.875% Senior Notes	September 1, 2030	500,000		500,000		5.875% Senior Notes	September 1, 2030	500,000		500,000

Less: debt discount, net of premium	Less: debt discount, net of premium		(2,355)		(3,360)		Less: debt discount, net of premium		(1,994)		(3,360)
Less: deferred financing costs	Less: deferred financing costs		(27,138)		(29,916)		Less: deferred financing costs		(26,196)		(29,916)
Less: current portion	Less: current portion		—		(254,630)		Less: current portion		—		(254,630)
Long-term debt, net	Long-term debt, net		$	3,770,507	$	3,958,928	Long-term debt, net		$	3,771,810	$	3,958,928

Finance lease and other financing obligations	Finance lease and other financing obligations		$	25,580	$	26,583	Finance lease and other financing obligations		$	25,344	$	26,583
Less: current portion	Less: current portion		(1,809)		(1,841)		Less: current portion		(1,888)		(1,841)
Finance lease and other financing obligations, less current portion	Finance lease and other financing obligations, less current portion		$	23,771	$	24,742	Finance lease and other financing obligations, less current portion		$	23,456	$	24,742

(1) On February 6, 2023, we prepaid $250.0 million of outstanding principal on our Term Loan balance. Accordingly, that portion of the principal balance outstanding on the Term Loan as of December 31, 2022 was presented as current portion of long-term debt. On May 3, 2023, we prepaid $196.8 million of outstanding principal on the Term Loan, representing the remaining balance on the Term Loan as of that date plus $0.5 million in interest.

Our debt consists of secured credit facilities and various tranches of senior unsecured notes. Refer to Note 14: Debt of the audited consolidated financial statements and notes thereto included in the 2022 Annual Report for additional information regarding our existing indebtedness.

On August 22, 2023, certain of our indirect, wholly-owned subsidiaries, including Sensata Technologies, Inc. ("STI"), Sensata Technologies Intermediate Holding B.V., and Sensata Technologies B.V. (“STBV”), entered into an amendment (the “Thirteenth 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 (as amended, supplemented, waived, or otherwise modified prior to the Thirteenth Amendment).

Among other changes to the Credit Agreement, the Thirteenth Amendment, (i) released the Foreign Guarantors (excluding STBV) (the "Specified Foreign Guarantors") from all of their remaining obligations as guarantors and securing parties under the Credit Agreement, subject to an obligation to reinstate the guarantees under certain conditions, and (ii) modified certain of the operational and restrictive covenants and other terms and conditions of the Credit Agreement to provide us increased flexibility and permissions thereunder.

The Specified Foreign Guarantors were released from their guaranty obligations with respect to STBV’s 5.625% senior notes due 2024, 5.000% senior notes due 2025, 4.000% senior notes due 2029 and 5.875% senior notes due 2030 and with respect to STI’s 4.375% senior notes due 2030 and 3.750% senior notes due 2031, in each case in accordance with the terms of the relevant indenture pursuant to which such senior notes were issued.

As of ~~June~~September 30, 2023, we had $746.1 million available under our $750.0 million revolving credit facility (the "Revolving Credit 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 ~~June~~September 30, 2023, no amounts had been drawn against these outstanding letters of credit.

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 ~~June~~September 30, 2023 and December 31, 2022, accrued interest totaled ~~$48.9~~$54.0 million and $50.1 million, respectively.

Table of Contents

11. 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.

12. Shareholders' Equity

Cash Dividends

In the three and ~~six~~nine months ended ~~June~~September 30, 2023, we paid aggregate cash dividends of $18.3 million and ~~$35.1~~$53.4 million, respectively, compared to ~~$17.2~~$17.0 million and $34.3 million in ~~each of~~ the three and ~~six~~nine months ended ~~June~~September 30, ~~2022.~~2022, respectively. On ~~July 20,~~October 26, 2023, we announced that our Board of Directors approved a quarterly dividend of $0.12 per share, payable on ~~August 23,~~November 22, 2023 to shareholders of record as of ~~August 9,~~November 8, 2023.

~~Table of Contents~~

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, our Board of Directors authorized a $500.0 million ordinary share repurchase program (the “January 2022 Program”), which replaced the previous $500.0 million program approved in July 2019. On September 26, 2023, our Board of Directors authorized a new $500.0 million ordinary share repurchase program (the “September 2023 Program”), which replaced the January 2022 Program and became effective on October 1, 2023.

In the three and ~~six~~nine months ended ~~June~~September 30, 2023, we repurchased ~~0.6~~0.9 million and 1.5 million ordinary shares, respectively (for an aggregate value of ~~$25.1 million)~~$35.2 million and $60.3 million, respectively). ~~We did not repurchase any ordinary shares under this program in the three months ended March 31, 2023.~~ In the three and ~~six~~nine months ended ~~June~~September 30, 2022, we repurchased ~~1.7~~2.3 million and 5.2 million ordinary shares, respectively (for an aggregate value of ~~$78.9 million)~~$98.4 million and ~~2.8~~$244.6 million, ~~ordinary shares (for an aggregate value of $146.2 million), respectively.~~respectively). All share repurchases in these periods were made under the January 2022 Program. As of ~~June~~September 30, 2023, ~~$199.4~~$164.2 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 ~~six~~nine months ended ~~June~~September 30, 2023:


		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, 2022	Balance as of December 31, 2022	$	15,665	$	(31,929)	$	(16,264)	Balance as of December 31, 2022	$	15,665	$	(31,929)	$	(16,264)
Other comprehensive income before reclassifications, net of tax	Other comprehensive income before reclassifications, net of tax	24,206		—		24,206		Other comprehensive income before reclassifications, net of tax	31,903		—		31,903
Reclassifications from accumulated other comprehensive loss, net of tax	Reclassifications from accumulated other comprehensive loss, net of tax	(12,713)		617		(12,096)		Reclassifications from accumulated other comprehensive loss, net of tax	(20,811)		865		(19,946)
Other comprehensive income	Other comprehensive income	11,493		617		12,110		Other comprehensive income	11,092		865		11,957
Balance as of June 30, 2023		$	27,158	$	(31,312)	$	(4,154)
Balance as of September 30, 2023								Balance as of September 30, 2023	$	26,757	$	(31,064)	$	(4,307)

Table of Contents

The following table presents the amounts reclassified from accumulated other comprehensive loss for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:


		For the three months ended June 30,				For the six months ended June 30,				Affected Line in Condensed Consolidated Statements of Operations		For the three months ended September 30,				For the nine months ended September 30,				Affected Line in Condensed Consolidated Statements of Operations
Component	Component	2023		2022		2023		2022			Component	2023		2022		2023		2022
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	$	(4,394)	$	(9,476)	$	(11,033)	$	(13,740)	Net revenue (1)	Foreign currency forward contracts	$	(4,186)	$	(14,909)	$	(15,219)	$	(28,649)	Net revenue (1)
Foreign currency forward contracts	Foreign currency forward contracts	(4,403)		(2,603)		(6,100)		(5,232)		Cost of revenue (1)	Foreign currency forward contracts	(6,728)		(1,260)		(12,828)		(6,492)		Cost of revenue (1)

Total, before taxes	Total, before taxes	(8,797)		(12,079)		(17,133)		(18,972)		Income before taxes	Total, before taxes	(10,914)		(16,169)		(28,047)		(35,141)		Income before taxes
Income tax effect	Income tax effect	2,269		3,116		4,420		4,894		Provision for income taxes	Income tax effect	2,816		4,172		7,236		9,066		Provision for income taxes
Total, net of taxes	Total, net of taxes	$	(6,528)	$	(8,963)	$	(12,713)	$	(14,078)	Net income	Total, net of taxes	$	(8,098)	$	(11,997)	$	(20,811)	$	(26,075)	Net income

Defined benefit and retiree healthcare plans	Defined benefit and retiree healthcare plans	$	311	$	519	$	848	$	1,130	Other, net	Defined benefit and retiree healthcare plans	$	339	$	725	$	1,187	$	1,855	Other, net

Income tax effect	Income tax effect	(87)		(139)		(231)		(322)		Provision for income taxes	Income tax effect	(91)		(148)		(322)		(470)		Provision for income taxes
Total, net of taxes	Total, net of taxes	$	224	$	380	$	617	$	808	Net income	Total, net of taxes	$	248	$	577	$	865	$	1,385	Net income

(1) Refer to Note 14: Derivative Instruments and Hedging Activities for additional information regarding amounts to be reclassified from accumulated other comprehensive loss in future periods.

~~Table of Contents~~

13. Fair Value Measures

Measured on a Recurring Basis

The fair values of our assets and liabilities measured at fair value on a recurring basis as of ~~June~~September 30, 2023 and December 31, 2022 are shown in the below table.


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Assets	Assets					Assets
Cash equivalents (Level 1)	Cash equivalents (Level 1)	$	380,130	$	860,034	Cash equivalents (Level 1)	$	496,937	$	860,034
Foreign currency forward contracts (Level 2)	Foreign currency forward contracts (Level 2)	43,046		31,126		Foreign currency forward contracts (Level 2)	36,008		31,126
Commodity forward contracts (Level 2)	Commodity forward contracts (Level 2)	2,011		4,181		Commodity forward contracts (Level 2)	1,388		4,181
Total	Total	$	425,187	$	895,341	Total	$	534,333	$	895,341

Liabilities	Liabilities					Liabilities
Foreign currency forward contracts (Level 2)	Foreign currency forward contracts (Level 2)	$	8,162	$	9,866	Foreign currency forward contracts (Level 2)	$	5,344	$	9,866
Commodity forward contracts (Level 2)	Commodity forward contracts (Level 2)	5,260		4,671		Commodity forward contracts (Level 2)	4,206		4,671
Total	Total	$	13,422	$	14,537	Total	$	9,550	$	14,537

Refer to Note 14: Derivative Instruments and Hedging Activities for additional information regarding our forward contracts. Cash equivalents consist of U.S. Government Treasury money market funds and are classified as Level 1 as they are exchange traded in an active market.

Measured on a Nonrecurring Basis

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 2022 and determined that they were not impaired. In the three months ended June 30, 2023, we exited the Marine Business, as discussed further in Note 5: Restructuring and Other Charges, Net. We considered the exit of the Marine Business and determined that goodwill related to the Clean Energy Solutions reporting unit was not impaired as of the date of the exit. No other events or changes in circumstances occurred in the ~~six~~nine months ended ~~June~~September 30, 2023 that would have triggered the need for an additional impairment review of our goodwill and other indefinite-lived intangible assets.

Table of Contents

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~~September 30, 2023 and December 31, 2022. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.


		June 30, 2023				December 31, 2022					September 30, 2023				December 31, 2022
		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	$	—	$	—	$	446,834	$	443,483	Term Loan	$	—	$	—	$	446,834	$	443,483

5.625% Senior Notes	5.625% Senior Notes	$	400,000	$	396,000	$	400,000	$	398,000	5.625% Senior Notes	$	400,000	$	395,000	$	400,000	$	398,000
5.0% Senior Notes	5.0% Senior Notes	$	700,000	$	679,910	$	700,000	$	684,250	5.0% Senior Notes	$	700,000	$	677,250	$	700,000	$	684,250

4.375% Senior Notes	4.375% Senior Notes	$	450,000	$	400,500	$	450,000	$	400,500	4.375% Senior Notes	$	450,000	$	393,750	$	450,000	$	400,500
3.75% Senior Notes	3.75% Senior Notes	$	750,000	$	635,625	$	750,000	$	626,250	3.75% Senior Notes	$	750,000	$	618,750	$	750,000	$	626,250
4.0% Senior Notes	4.0% Senior Notes	$	1,000,000	$	882,500	$	1,000,000	$	875,000	4.0% Senior Notes	$	1,000,000	$	872,500	$	1,000,000	$	875,000
5.875% Senior Notes	5.875% Senior Notes	$	500,000	$	481,250	$	500,000	$	473,750	5.875% Senior Notes	$	500,000	$	471,250	$	500,000	$	473,750

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

In addition to the above, we hold certain equity investments that do not have readily determinable fair values for which we use the measurement alternative prescribed in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments—Equity Securities. As of ~~June~~September 30, 2023 and December 31, 2022, we held equity investments under the measurement alternative of ~~$18.3~~$18.2 million and $15.0 million, respectively, which are presented in other assets in the condensed consolidated balance sheets. There were no impairments or changes resulting from observable transactions for these investments in the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 and no adjustments have been made to their carrying values as of ~~June~~September 30, 2023 and December 31, 2022.

~~Table of Contents~~

14. Derivative Instruments and Hedging Activities

Hedges of Foreign Currency Risk

For the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, 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 ~~June~~September 30, 2023, we estimated that ~~$30.1~~$30.8 million of net gains will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending ~~June~~September 30, 2024.

Table of Contents

As of ~~June~~September 30, 2023, 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)

~~11.0~~33.0 EUR

~~June 21,~~September 27, 2023

~~July~~October 31, 2023

Euro ("EUR") to USD

~~1.09~~1.05 USD

Not designated

~~375.0~~423.6 EUR

Various from ~~July~~October 2021 to ~~June~~September 2023

Various from ~~July~~October 2023 to ~~June~~September 2025

EUR to USD

~~1.09~~1.10 USD

Cash flow hedge

~~770.0~~422.0 CNY

~~June 21,~~September 22, 2023

~~July~~October 31, 2023

USD to Chinese Renminbi ("CNY")

~~7.16~~7.21 CNY

Not designated

~~300.0 CNY~~35.0 USD

~~Various in January~~September 26, 2023

~~Various from July 2023 to September~~October 31, 2023

USD to CNY

~~6.74~~7.21 CNY

~~Cash flow hedge~~

~~436.0 JPY~~

~~June 21, 2023~~

~~July 31, 2023~~

~~USD to Japanese Yen ("JPY")~~

~~141.47 JPY~~

~~Not designated~~

~~26,312.5 KRW~~

~~Various from August 2021 to June 2023~~

~~Various from July 2023 to May 2025~~

~~USD to Korean Won ("KRW")~~

~~1,273.23 KRW~~

~~Cash flow hedge~~

~~25.0 MYR~~

~~June 21, 2023~~

~~July 31, 2023~~

~~USD to Malaysian Ringgit ("MYR")~~

~~4.63 MYR~~

Not designated

~~4,318.3~~259.0 JPY

September 27, 2023

October 31, 2023

USD to Japanese Yen ("JPY")

148.51 JPY

Not designated

28,600.8 KRW

Various from November 2021 to September 2023

Various from October 2023 to August 2025

USD to Korean Won ("KRW")

1,281.04 KRW

Cash flow hedge

20.0 MYR

September 26, 2023

October 31, 2023

USD to Malaysian Ringgit ("MYR")

4.66 MYR

Not designated

147.0 MXN

September 27, 2023

October 31, 2023

USD to Mexican Peso ("MXN")

17.71 MXN

Not designated

4,510.0 MXN

Various from ~~July~~October 2021 to ~~June~~September 2023

Various from ~~July~~October 2023 to ~~June~~September 2025

USD to Mexican Peso ("MXN")

~~20.78~~20.18 MXN

Cash flow hedge

~~5.2~~2.5 GBP

~~June 21,~~September 27, 2023

~~July~~October 31, 2023

British Pound Sterling ("GBP") to USD

~~1.27~~1.21 USD

Not designated

~~58.6~~59.1 GBP

Various from ~~July~~October 2021 to ~~June~~September 2023

Various from ~~July~~October 2023 to ~~June~~September 2025

GBP to USD

1.23 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 ~~June~~September 30, 2023, 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:

Commodity

Notional

Remaining Contracted Periods

Weighted-Average Strike Price Per Unit

Silver

~~862,162~~769,760 troy oz.