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Item 5. Market for Registrant’s Common Equity

2022-02-10 compared with 2021-02-12 · 10 added, 102 removed, 41 unchanged (73% of the section changed)

16 unchanged sentences

(which acts as nominee shareholder for the Depository Trust Company).

We have never declared or paid any dividends on our ordinary shares, and we currently do not plan to declare any such dividends in the foreseeable future.

Because we are a holding company, our ability to pay cash dividends on our ordinary shares may be limited by restrictions on our ability to obtain sufficient funds through dividends from our subsidiaries, including

restrictions under the terms of the agreements governing our indebtedness.

We do not currently pay dividends on our ordinary shares.

In that regard, our indirect, wholly-owned subsidiary, Sensata Technologies B.V.

("STBV"), may be limited in its ability to pay dividends or otherwise make distributions to its immediate parent company and, ultimately, to us.

Refer to Note 14, "Debt," of our audited consolidated financial statements and accompanying notes thereto (our "Financial Statements") included elsewhere in this Report for additional information related to our dividend restrictions.

Refer to Note 14:

Debt of our audited consolidated financial statements and accompanying notes thereto (our "Financial Statements") included elsewhere in this Report for additional information related to our dividend restrictions.

Additionally, certain of our subsidiaries may be limited in their ability to pay dividends or make other distributions to the extent that the shareholders' equity of such subsidiary exceeds the reserves required to be maintained by law or under its articles of association.

1 unchanged sentence

Distributable reserves are a company’s accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital duly made.

Realized reserves are determined in accordance with generally accepted accounting principles at the time the relevant accounts are prepared.

Realized reserves are determined in accordance with International Financial Reporting Standards at the time the relevant accounts are prepared.

We are not permitted to make a distribution if, at the time, the amount of our net assets is less than the aggregate of our issued and paid-up share capital and undistributable reserves or to the extent that the distribution will reduce our net assets below such amount.

16 unchanged sentences

__________________________

(1) The number of ordinary shares presented were withheld upon the vesting of restricted securities to cover payment of employee withholding tax.

(1) The number of ordinary shares presented includes ordinary shares that were withheld upon the vesting of restricted securities to cover payment of employee withholding tax.

These withholdings took place outside of a publicly announced repurchase plan.

SELECTED FINANCIAL DATA

We have derived the selected consolidated statements of operations and other financial data for the years ended December 31, 2020, 2019, and 2018 and the selected consolidated balance sheet data as of December 31, 2020 and 2019 from our Financial Statements.

We have derived the selected consolidated statements of operations and other financial data for the years ended December 31, 2017 and 2016 and the selected consolidated balance sheet data as of December 31, 2018, 2017, and 2016 from audited consolidated financial statements not included in this Report.

You should read the following information in conjunction with our Financial Statements and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," included elsewhere in this Report (the "MD&A").

Our historical results are not necessarily indicative of the results to be expected in any future period.

Sensata Technologies Holding plc (Consolidated) (a)

For the year ended December 31,

(In thousands, except per share data) 2020 2019 2018 2017 2016

Statement of operations data:

Net revenue $ 3,045,578 $ 3,450,631 $ 3,521,627 $ 3,306,733 $ 3,202,288

Operating costs and expenses:

Cost of revenue 2,119,044 2,267,433 2,266,863 2,138,898 2,084,159

Research and development 131,429 148,425 147,279 130,127 126,656

Selling, general and administrative 294,725 281,442 305,558 301,896 293,506

Amortization of intangible assets 129,549 142,886 139,326 161,050 201,498

Restructuring and other charges, net (c)

33,094 53,560 (47,818) 18,975 4,113

Total operating costs and expenses 2,707,841 2,893,746 2,811,208 2,750,946 2,709,932

Operating income 337,737 556,885 710,419 555,787 492,356

Interest expense, net (171,757) (158,554) (153,679) (159,761) (165,818)

Other, net (d)

(339) (7,908) (30,365) 6,415 (5,093)

Income before taxes 165,641 390,423 526,375 402,441 321,445

Provision for/(benefit from) income taxes (e)

1,355 107,709 (72,620) (5,916) 59,011

Net income $ 164,286 $ 282,714 $ 598,995 $ 408,357 $ 262,434

Basic net income per share $ 1.04 $ 1.76 $ 3.55 $ 2.39 $ 1.54

Diluted net income per share $ 1.04 $ 1.75 $ 3.53 $ 2.37 $ 1.53

Weighted-average ordinary shares outstanding—basic 157,373 160,946 168,570 171,165 170,709

Weighted-average ordinary shares outstanding—diluted 158,134 161,968 169,859 172,169 171,460

Other financial data:

Net cash provided by/(used in):

Operating activities $ 559,775 $ 619,562 $ 620,563 $ 557,646 $ 521,525

Investing activities $ (182,092) $ (208,777) $ (237,606) $ (140,722) $ (174,778)

Financing activities $ 710,178 $ (366,499) $ (406,213) $ (15,263) $ (337,582)

Additions to property, plant and equipment and capitalized software $ (106,719) $ (161,259) $ (159,787) $ (144,584) $ (130,217)

As of December 31,

(In thousands) 2020 2019 2018 2017 2016

Balance sheet data:

Cash and cash equivalents $ 1,861,980 $ 774,119 $ 729,833 $ 753,089 $ 351,428

Working capital (f)

$ 1,484,815 $ 1,330,906 $ 1,277,211 $ 1,218,796 $ 758,189

Total assets $ 7,844,202 $ 6,834,519 $ 6,797,687 $ 6,641,525 $ 6,240,976

Total debt, net including finance lease and other financing obligations $ 3,998,883 $ 3,255,613 $ 3,264,941 $ 3,270,269 $ 3,273,594

Total shareholders’ equity $ 2,705,486 $ 2,573,755 $ 2,608,434 $ 2,345,626 $ 1,942,007

__________________________________________

(a) On March 28, 2018, the cross-border merger of Sensata Technologies Holding N.V.

("Sensata N.V.") and Sensata Technologies Holding plc ("Sensata plc") was completed, with Sensata plc being the surviving entity (the "Merger").

On the date of the Merger, Sensata plc became the publicly-traded parent of the subsidiary companies that were previously controlled by Sensata N.V., with no changes made to the business being conducted by Sensata N.V.

prior to the Merger.

Due to the various legal aspects of the Merger, Sensata plc retains the historical data of Sensata N.V., and no recasting or adjustment is required as a result of the Merger.

(b) We acquired GIGAVAC, LLC ("GIGAVAC") in fiscal year 2018.

Pro forma amounts are not shown.

We sold the capital stock of Schrader Bridgeport International, Inc.

and August France Holding Company SAS (collectively, the "Valves Business") in fiscal year 2018.

Prior year amounts have not been recast.

(c) Restructuring and other charges, net for the years ended December 31, 2020, 2019, 2018, 2017, and 2016 consisted of the following (refer also to Note 5, "Restructuring and Other Charges, Net," of our Financial Statements):

For the year ended December 31,

(In thousands) 2020 2019 2018 2017 2016

Q2 2020 Global Restructure Program (i)

$ 24,458 $ — $ — $ — $ —

Other restructuring charges

Severance costs, net (i)(ii)

3,042 29,240 7,566 11,125 813

Facility and other exit costs (iii)

1,323 808 877 7,850 3,300

Gain on sale of Valves Business (i)

— — (64,423) — —

4,271 23,512 8,162 — —

Restructuring and other charges, net $ 33,094 $ 53,560 $ (47,818) $ 18,975 $ 4,113

__________________________________________

(i) Refer to Note 5, "Restructuring and Other Charges, Net," of our Financial Statements for additional information regarding amounts recognized in each of the years ended December 31, 2020, 2019, and 2018.

(ii) For the year ended December 31, 2017, included $8.4 million of charges related to the closure of our facility in Minden, Germany, a site we obtained in connection with the acquisition of certain subsidiaries of Custom Sensors & Technologies Ltd.

("CST") in fiscal year 2015.

(iii) For the year ended December 31, 2017, these amounts included $3.2 million of costs related to the closure of our facility in Minden, Germany and $3.1 million of costs associated with the consolidation of two other manufacturing sites in Europe.

For the year ended December 31, 2016 these amounts primarily related to the relocation of manufacturing lines from our facility in the Dominican Republic to a manufacturing facility in Mexico.

(d) Other, net for the years ended December 31, 2020, 2019, 2018, 2017, and 2016 consisted of the following:

For the year ended December 31,

(In thousands) 2020 2019 2018 2017 2016

Gain/(loss) related to foreign currency exchange rates (i)

$ 4,071 $ (4,577) $ (16,835) $ 2,423 $ (12,471)

Gain/(loss) on commodity forward contracts 10,027 4,888 (8,481) 9,989 7,399

Loss on debt financing — (4,364) (2,350) (2,670) —

Net periodic benefit cost, excluding service cost (9,980) (3,186) (3,585) (3,402) (192)

Other (4,457) (669) 886 75 171

Other, net $ (339) $ (7,908) $ (30,365) $ 6,415 $ (5,093)

__________________________________________

(i) Includes net losses and gains on foreign currency remeasurement and foreign currency forward contracts.

Refer to Note 6, "Other, Net," of our Financial Statements for additional information.

(e) In the year ended December 31, 2020, we completed the transfer of intangible property which resulted in a $54.2 million deferred tax benefit.

For the year ended December 31, 2018, this amount included an income tax benefit of $122.1 million related to the realization of U.S.

deferred tax assets previously offset by a valuation allowance.

Refer to Note 7, "Income Taxes," of our Financial Statements for additional information.

For the year ended December 31, 2017, this amount included an income tax benefit of $73.7 million related to the enactment of U.S.

tax legislation in the fourth quarter of 2017.

(f) We define working capital as current assets less current liabilities.

There were 668 ordinary shares withheld in October 2021 and 396 ordinary shares withheld in December 2021, representing a total aggregate fair value of $61 thousand based on the closing price of our ordinary shares on the date of withholdings.

(2) Other than shares withheld to cover required tax withholding upon the vesting of restricted securities, all purchases during the three months ended December 31, 2021 were conducted pursuant to a $500.0 million share repurchase program authorized by our Board of Directors and publicly announced on July 30, 2019 (the "July 2019 Program").

On January 20, 2022, we announced that our Board of Directors had authorized a new ordinary share repurchase program of $500 million (the “January 2022 Program”), which replaces the July 2019 Program.

The January 2022 Program does not have an established expiration date.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity