What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-10 compared with 2021-02-12 · 529 added, 464 removed, 1577 unchanged (39% of the section changed)

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The following audited consolidated financial statements of Sensata Technologies Holding plc are included in this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

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We also evaluated the Company’s income tax disclosures included in Note 7 in relation to these matters.

Accounting for Acquisitions – Valuation of Identified Intangibles

Description of the Matter As described in Note 21 to the consolidated financial statements, the Company completed several acquisitions during 2021.

The most significant of these were (1) the acquisition of Xirgo Technologies, LLC (Xirgo) for an aggregate cash purchase price of $401.7 million, and (2) the acquisition of SmartWitness Holdings, Inc.

(SmartWitness) for an aggregate cash purchase price of $204.2 million.

These transactions are accounted for as business combinations.

With respect to SmartWitness, the allocation of purchase price is preliminary and is subject to revision as the final valuations are completed.

Auditing the Company's accounting for its acquisitions of Xirgo and SmartWitness was complex due to the significant estimation required by management in determining the fair value of identifiable intangible assets, which on a combined basis principally consisted of customer relationship and completed technology intangible assets of $222.6 million and $96.2 million, respectively.

The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business.

The Company used the income approach to measure the customer relationship and completed technology intangible assets.

The significant assumptions used to estimate the fair value of these intangible assets included the expected discounted future net cash flows generated by each asset.

These significant assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's process for valuing intangible assets acquired in business combinations.

For example, we tested controls over the appropriateness of the valuation model, assumptions management used as well as controls over the completeness and accuracy of the data underlying the valuation of the customer relationship and completed technology intangible assets.

To test the estimated fair value of the customer relationship and completed technology intangible assets, our audit procedures included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data supporting the significant assumptions and estimates used by the Company in the valuations.

We tested significant assumptions through a combination of procedures, as applicable for each assumption, including comparing them to current and forecasted industry trends, as well as to the historical results of the acquired businesses and other guideline companies within the same industry.

With the assistance of our valuation specialists, we evaluated the methodology used by the Company and significant assumptions included in the fair value estimates.

/s/ Ernst & Young LLP

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Income before taxes 413,917 165,641 390,423

Provision for/(benefit from) income taxes 1,355 107,709 ( 72,620 )

Provision for income taxes 50,337 1,355 107,709

Net income 363,580 164,286 282,714

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Net income $ 363,580 $ 164,286 $ 282,714

Other comprehensive (loss)/income, net of tax:

Other comprehensive income/(loss), net of tax:

Cash flow hedges 23,564 ( 23,279 ) 7,362

Defined benefit and retiree healthcare plans 6,411 ( 5,772 ) ( 1,668 )

Other comprehensive (loss)/income ( 29,051 ) 5,694 36,986

Other comprehensive income/(loss) 29,975 ( 29,051 ) 5,694

Comprehensive income 393,555 135,235 288,408

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Amortization of debt issuance costs 6,858 6,854 7,804

Gain on sale of business — — ( 64,423 )

Share-based compensation 25,663 19,125 18,757

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Deferred income taxes ( 5,270 ) ( 44,900 ) 27,623

Acquisition-related deferred compensation payments ( 15,630 ) — —

Unrealized loss on derivative instruments and other 13,837 4,709 30,292

Changes in operating assets and liabilities, net of the effects of acquisitions and divestitures:

Changes in operating assets and liabilities, net of the effects of acquisitions:

Accounts receivable, net ( 48,106 ) ( 16,668 ) 26,605

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Investment in debt and equity securities ( 5,533 ) ( 22,963 ) ( 9,950 )

Proceeds from sale of business, net of cash sold — — 149,777

Other 3,919 12,022 ( 5,103 )

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Payments to repurchase ordinary shares ( 47,843 ) ( 35,175 ) ( 350,004 )

Payments of debt and equity issuance costs ( 8,279 ) ( 10,050 ) ( 9,931 )

Other — — 16,369

Payments of debt financing costs ( 33,093 ) ( 8,279 ) ( 10,050 )

Net cash provided by/(used in) financing activities 174,918 710,178 ( 366,499 )

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Comprehensive

Shareholders’

Loss Total Shareholders' Equity

Number Amount Number Amount

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Vesting of restricted securities 454 5 — — — ( 5 ) — —

Retirement of ordinary shares due to Merger

( 7,018 ) ( 89 ) 7,018 286,228 — ( 286,139 ) — —

Repurchase of ordinary shares — — ( 7,162 ) ( 350,004 ) — — — ( 350,004 )

Other retirements of ordinary shares ( 71 ) ( 1 ) 71 3,674 — ( 3,673 ) — —

Retirement of ordinary shares ( 149 ) ( 2 ) 149 6,990 — ( 6,988 ) — —

Share-based compensation — — — — 18,757 — — 18,757

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Net income — — — — — 164,286 — 164,286

Other comprehensive income — — — — — — 5,694 5,694

Other comprehensive loss — — — — — — ( 29,051 ) ( 29,051 )

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

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Net income — — — — — 363,580 — 363,580

Other comprehensive loss — — — — — — ( 29,051 ) ( 29,051 )

Other comprehensive income — — — — — — 29,975 29,975

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

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Description of Business

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

Prior to March 28, 2018, our parent company issuer was Sensata Technologies Holding N.V.

("Sensata N.V."), which was incorporated under the laws of the Netherlands.

On March 28, 2018, Sensata plc completed a cross-border merger (the "Merger") with Sensata N.V., which changed the location of our incorporation from the Netherlands to England and Wales, but did not change the business being conducted by us or our subsidiaries.

We are a global industrial technology company that develops, manufactures, and sells sensors, electrical protection products, and other products that are used in mission-critical systems and applications that create valuable business insights for our customers and end users.

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

We are a global industrial technology company that develops, manufactures, and sells sensors, electrical protection components, and other products that are used in mission-critical systems and applications that create valuable business insights for our customers and end users.

Our sensors are used by our customers to translate a physical parameter, such as pressure, temperature, position, or location of an object, into electronic signals that our customers’ products and solutions can act upon.

These actionable insights lead to products that are safer, cleaner, more efficient, more electrified, and increasingly more connected.

Our electrical protection product portfolio is comprised of various sensors, controllers, receivers, and software, and includes high-voltage contactors and other products embedded within systems to maximize their efficiency and protect them from excessive heat or current.

Sensata plc conducts its operations through subsidiary companies that operate business and product development centers primarily in Belgium, Bulgaria, China, Denmark, France, India, Japan, the Netherlands, South Korea, the United Kingdom (the "U.K."), and the United States (the "U.S.");

Our electrical protection component portfolio is comprised of various switches, fuses, battery management systems, inverters, energy storage systems, controllers, and software, and includes high-voltage contactors and other products embedded within systems to maximize their efficiency and performance and ensure safety.

Sensata plc conducts its operations through subsidiary companies that operate business and product development centers primarily in Belgium, Bulgaria, China, Denmark, India, Japan, Lithuania, the Netherlands, South Korea, the United Kingdom (the "U.K."), and the United States (the "U.S.");

and manufacturing operations primarily in Bulgaria, China, Malaysia, Mexico, the U.K., and the U.S.

We operate in, and report financial information for, two reportable segments:

Performance Sensing and Sensing Solutions.

Refer to Note 20, "Segment Reporting," for additional information related to each of our segments.

We present financial information for two reportable segments, Performance Sensing and Sensing Solutions.

Refer to Note 20:

Segment Reporting for additional information related to each of our segments.

Basis of Presentation

The accompanying audited consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles ("U.S.

GAAP") and present separately our financial position, results of operations, comprehensive income, cash flows, and changes in shareholders’ equity.

generally accepted accounting principles ("GAAP") and present separately our financial position, results of operations, comprehensive income, cash flows, and changes in shareholders’ equity.

All intercompany balances and transactions have been eliminated.

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

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

Significant Accounting Policies

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It also requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingencies at the date of the financial statements, and the reported amounts of net revenue and expense during the reporting periods.

Estimates are used when accounting for certain items such as allowance for doubtful accounts and sales returns, inventory obsolescence, asset impairments (including goodwill and other intangible assets), contingencies, the value of certain equity awards and the measurement of share-based compensation, the determination of accrued expenses, certain asset valuations, accounting for income taxes, the useful lives of plant and equipment, measurement of our post-retirement benefit obligations, and the identification, valuation, and determination of useful lives of identifiable intangible assets acquired in business combinations.

The accounting estimates used in the preparation of the consolidated financial statements may change as new

events occur, as more experience is acquired, as additional information is obtained, and as the operating environment changes.

Estimates are used when accounting for certain items such as allowance for doubtful accounts and sales returns, inventory obsolescence, asset impairments (including goodwill and other intangible assets), contingencies, the value of certain equity awards and the measurement of share-based compensation, the determination of accrued expenses, certain asset valuations, accounting for income taxes, the useful lives of plant and equipment, measurement of our post-retirement benefit obligations, and with respect to business combinations, valuation of contingent consideration, and the identification, valuation, and determination of useful lives of acquired identifiable intangible assets.

The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained, and as the operating environment changes.

Actual results could differ from those estimates.

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We recognize revenue to depict the transfer of promised goods to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods.

In order to achieve this, we use the five step model outlined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers .

In order to achieve this, we use the five-step model outlined in

Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers .

This five-step model requires us to identify the contract with the customer, identify the performance obligation(s) in the contract, determine the transaction price, allocate the transaction price to the performance obligation(s), and recognize revenue when (or as) we satisfy the performance obligation(s).

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Our standard terms of sale provide our customers with a warranty against faulty workmanship and the use of defective materials, which is not considered a distinct performance obligation in accordance with FASB ASC Topic 606.

Depending on the product, we generally provide such warranties for a period of twelve to eighteen months after the date we ship the product to our customer or for a period of twelve months after the date the customer resells our product, whichever comes first.

Depending on the product, we generally provide such warranties for a period of three years after the date we ship the product to our original equipment manufacturer ("OEM") customers or for a period of twelve months after the date the customer resells our product to the end consumer, whichever comes first.

Our liability associated with this warranty is, at our option, to repair the product, replace the product, or provide the customer with a credit.

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In addition, many sales take place in situations where commercial or civil codes, or other laws, would imply various warranties and restrict limitations on liability.

Refer to Note 3, "Revenue Recognition," for additional information related to the net revenue recognized in the consolidated statements of operations.

Refer to Note 3:

Revenue Recognition for additional information related to the net revenue recognized in the consolidated statements of operations.

Share-Based Compensation

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For awards without performance conditions that are subject to graded vesting, companies have the option to recognize compensation expense either on a straight-line or accelerated basis.

We have elected to recognize compensation expense for these awards on a straight-line basis.

We have elected to recognize compensation expense for these awards on a straight-line

However, awards that are subject to both graded vesting and performance conditions must be expensed on an accelerated basis.

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• Expected dividend yield.

The dividend yield of 0 % is based on our history of having never declared or paid any dividends on our ordinary shares as well as our current intention not to declare dividends in the foreseeable future.

The dividend yield of 0 % is based on our history of having never declared or paid any dividends on our ordinary shares, as well as our intention, at the time of grant, of not declaring dividends in the foreseeable future.

Restricted securities are valued using the closing price of our ordinary shares on the NYSE on the grant date.

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Compensation expense recognized for each award ultimately reflects the number of units that actually vest.

Refer to Note 4, "Share-Based Payment Plans," for additional information related to share-based compensation.

Refer to Note 4:

Share-Based Payment Plans for additional information related to share-based compensation.

Financial Instruments

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Derivative financial instruments

We account for our derivative financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures and FASB ASC Topic 815, Derivatives and Hedging .

We account for our derivative financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurement and FASB ASC Topic 815, Derivatives and Hedging .

In accordance with FASB ASC Topic 815, we recognize all derivatives on the balance sheet at fair value.

The fair value of our derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument.

The fair value of our derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected net cash flows of each instrument.

These analyses utilize observable market-based inputs, including foreign currency exchange rates and commodity forward curves, and reflect the contractual terms of these instruments, including the period to maturity.

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The accounting for changes in the fair value of our cash flow hedges depends on whether we have elected to designate the derivative as a hedging instrument for accounting purposes and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.

In accordance with FASB ASC Topic 815, both the effective and ineffective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recognized in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings.

Changes in the fair value of derivative instruments that are not designated as accounting hedges are recognized

immediately in other, net.

Refer to Note 16, "Shareholders' Equity," and Note 19, "Derivative Instruments and Hedging Activities," for additional information related to the reclassification of amounts from accumulated other comprehensive loss into earnings.

In accordance with FASB ASC Topic 815, both the effective and ineffective portions of changes in the fair value of derivatives designated and qualifying as cash flow hedges are recognized in accumulated other comprehensive loss and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings.

Changes in the fair value of derivative instruments that are not designated as accounting hedges are recognized immediately in other, net.

Refer to Note 16:

Shareholders' Equity and Note 19:

Derivative Instruments and Hedging Activities for additional information related to the reclassification of amounts from accumulated other comprehensive loss into earnings.

We present the cash flows arising from our derivative financial instruments in a manner consistent with the presentation of cash flows that relate to the underlying hedged items.

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We believe there are no significant concentrations of risk associated with our derivative instruments.

Refer to Note 19, "Derivative Instruments and Hedging Activities," for additional information related to our derivative instruments.

Refer to Note 19:

Derivative Instruments and Hedging Activities for additional information related to our derivative instruments.

Debt Instruments

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Amortization of these amounts is included as a component of interest expense, net in the consolidated statements of operations.

In accounting for debt refinancing transactions, we apply the provisions of FASB ASC Subtopic 470-50, Modifications and Extinguishments .

In accounting for debt financing transactions, we apply the provisions of FASB ASC Subtopic 470-50, Modifications and Extinguishments .

Our evaluation of the accounting under FASB ASC Subtopic 470-50 is done on a creditor by creditor basis in order to determine if the terms of the debt are substantially different and, as a result, whether to apply modification or extinguishment accounting.

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Borrowings associated with individual holders of new debt that are not holders of existing debt are accounted for as new issuances.

Refer to Note 14, "Debt," for additional information related to our debt instruments and transactions.

Refer to Note 14:

Debt for additional information related to our debt instruments and transactions.

Equity Investments

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Under the measurement alternative, such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

Refer to Note 18, "Fair Value Measures," for additional information related to our measurement of financial instruments, including equity investments.

Refer to Note 18:

Fair Value Measures for additional information related to our measurement of financial instruments, including equity investments.

Trade accounts receivable

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If we elect not to use this option, or if we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we prepare a discounted cash flow analysis to determine whether the carrying value of reporting unit exceeds its estimated fair value.

If the carrying value of a reporting unit exceeds its estimated fair value, we recognize an impairment of goodwill for the amount of this excess, in accordance with the guidance in FASB Accounting Standards Update ("ASU") No.

2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment , which we adopted as of January 1, 2020.

Indefinite-lived intangible assets

Similar to goodwill, we perform an annual impairment review of our indefinite-lived intangible assets in the fourth quarter of each fiscal year, unless events occur that trigger the need for an earlier impairment

We have the option to first assess qualitative factors in determining whether it is more likely than not that an indefinite-lived intangible asset is impaired.

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We determine fair value by using the appropriate income approach valuation methodology, depending on the nature of the definite-lived intangible asset.

Refer to Note 11, "Goodwill and Other Intangible Assets, Net," for additional information related to our goodwill and other intangible assets.

Refer to Note 11:

Goodwill and Other Intangible Assets, Net for additional information related to our goodwill and other intangible assets.

We estimate our provision for (or benefit from) income taxes in each of the jurisdictions in which we operate.

The provision for (or benefit from) income taxes includes both our current and deferred tax exposure.

Our deferred tax exposure is measured using the asset and liability method, under which deferred income taxes are recognized to reflect the future tax consequences of differences between the tax bases of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to reverse or settle.

The provision for (or benefit from) income taxes includes both our current and deferred tax expense.

Our deferred tax expense is measured using the asset and liability method, under which deferred income taxes are recognized to reflect the future tax consequences of differences between the tax bases of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to reverse or settle.

The effect on deferred tax assets and liabilities of a change in statutory tax rates is recognized in the consolidated statements of operations as an adjustment to income tax expense in the period that includes the enactment date.

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Penalties and interest related to uncertain tax positions may be classified as either income taxes or another expense line item in the consolidated statements of operations.

We classify interest and penalties related to uncertain tax positions within the provision for/(benefit from) income taxes line of the consolidated statements of operations.

Refer to Note 7, "Income Taxes," for additional information related to our income taxes.

We classify interest and penalties related to uncertain tax positions within the provision for (or benefit from) income taxes line of the consolidated statements of operations.

Refer to Note 7:

Income Taxes for additional information related to our income taxes.

Pension and Other Post-Retirement Benefits

We sponsor various pension and other post-retirement benefit plans covering our current and former employees in several countries.

The funded status of pension and other post-retirement benefit plans, recognized on our consolidated balance sheets as an asset, current liability, or long-term liability, is measured as the difference between the fair value of plan assets and the benefit

obligation at the measurement date.

In general, the measurement date coincides with our fiscal year end, however, certain significant events, such as (1) plan amendments, (2) business combinations, (3) settlements or curtailments, or (4) plan mergers, may trigger the need for an interim measurement of both the plan assets and benefit obligations.

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Changes to benefit obligations may also be initiated by a settlement or curtailment.

A settlement of a defined benefit obligation is an irrevocable transaction that relieves us (or the plan) of primary responsibility for the defined benefit obligation and eliminates significant risks related to the obligation and the assets used to effect the settlement.

The settlement of all or more than a minor portion of the pension obligation constitutes an event that requires recognition of all or part of the net actuarial gains or losses deferred in accumulated other comprehensive loss.

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Our policy is that a curtailment event represents one for which we expect a 10% (or greater) reduction in future years of service or an elimination of the accrual of defined benefits for some or all of the future services of 10% (or greater) of the plan's participants.

Contributions made to pension and other post-retirement benefit plans are presented as cash used in operations within the consolidated statements of cash flows.

Contributions made to pension and other post-retirement benefit plans are presented as a component of operating cash flows within the consolidated statements of cash flows.

We present the service cost component of net periodic benefit cost in the cost of revenue, research and development ("R&D"), and SG&A expense line items, and we present the non–service components of net periodic benefit cost in other, net.

Refer to Note 13, "Pension and Other Post-Retirement Benefits," for additional information related to our pension and other post-retirement benefit plans.

Refer to Note 13:

Pension and Other Post-Retirement Benefits for additional information related to our pension and other post-retirement benefit plans.

Inventories are stated at the lower of cost or estimated net realizable value.

The cost of raw materials, work-in-process, and finished goods is determined based on a first-in, first-out basis and includes material, labor, and applicable manufacturing overhead.

We conduct quarterly inventory reviews for salability and obsolescence, and inventory considered unlikely to be sold is adjusted to net realizable value.

Refer to Note 9, "Inventories," for additional information related to our inventory balances.

We conduct quarterly inventory reviews for salability and obsolescence, and inventories considered unlikely to be sold are adjusted to net realizable value.

Refer to Note 9:

Inventories for additional information related to our inventory balances.

Property, Plant and Equipment and Other Capitalized Costs

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Expenditures for maintenance and repairs are charged to expense as incurred, whereas major improvements that increase asset values and extend useful lives are capitalized.

Refer to Note 10, "Property, Plant and Equipment," for additional information related to our PP&E balances.

We enter into leases agreements for many of our facilities around the world.

Refer to Note 10:

Property, Plant and Equipment, Net for additional information related to our PP&E balances.

We account for leases in accordance with the guidance in FASB ASC Topic 842, Leases .

We enter into lease agreements for many of our facilities around the world.

We occupy leased facilities with initial terms ranging up to 20 years.

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For operating leases, the consolidated statements of operations include a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis.

Cash flows from operating activities include (1) interest on finance lease liabilities and (2) payments arising from operating leases.

Cash flows from financing activities include repayments of the principal portion of finance lease liabilities.

Net cash flows from operating activities include (1) interest on finance lease liabilities and (2) payments arising from operating leases.

Net cash flows from financing activities include repayments of the principal portion of finance lease liabilities.

We also lease certain vehicles and equipment, which generally have a term of one year or less.

We have elected to account for leases with a term of one year or less (short-term leases) using a method similar to the operating lease model under FASB ASC Topic 840, Leases (i.e.

they are not recorded on the consolidated balance sheets) as permitted by FASB ASC Topic 842, Leases .

Refer to Note 17, "Leases," for additional information related to amounts recognized in the consolidated financial statements related to our leases.

they are not recorded on the consolidated balance sheets) as permitted by FASB ASC Topic 842.

Refer to Note 17:

Leases for additional information related to amounts recognized in the consolidated financial statements related to our leases.

Foreign Currency

We derive a significant portion of our net revenue from markets outside of the U.S.

For financial reporting purposes, the functional currency of all of our subsidiaries is the USD because of the significant influence of the USD on our operations.

For financial reporting purposes, the functional currency of almost all of our subsidiaries is the USD because of the significant influence of the USD on our operations.

In certain instances, we enter into transactions that are denominated in a currency other than the USD.

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At each balance sheet date, recorded monetary balances denominated in a currency other than USD are adjusted to USD using the exchange rate at the balance sheet date, with gains or losses recognized in other, net in the consolidated statements of operations.

The impact of currency translation adjustment for subsidiaries with a functional currency other than USD is not material.

Cash and Cash Equivalents

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Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of change in value, and have original maturities of three months or less.

Recently issued accounting standards adopted in the current period:

In January 2017, the FASB issued ASU No.

2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment in order to simplify the subsequent measurement of goodwill.

This guidance changes the method by which an impairment of goodwill is calculated.

Under the previous guidance, goodwill impairment was calculated in two steps.

In Step 1, an entity would assess whether an impairment had occurred, either qualitatively or by comparing the estimated fair values of our reporting units to their respective carrying values, including goodwill.

If the results of Step 1 indicated an impairment had occurred, Step 2 would be performed, in which the implied value of goodwill of the reporting unit would be calculated and an impairment would be recognized for the difference between the implied value of goodwill and the recorded amount of goodwill.

Under FASB ASU No.

2017-04, while Step 1 of this process has not changed, Step 2 as described above has been eliminated, and impairment charges are recorded for the amount by which the carrying value of the reporting unit exceeds its estimated fair value.

2017-04 was effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019.

We adopted FASB ASU No.

2017-04 as of January 1, 2020.

This adoption did not have an impact on our financial statements as none of our reporting units were determined to have carrying values in excess of fair values during the year ended December 31, 2020.

Recently issued accounting standards to be adopted in a future period:

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

Recently issued accounting standards:

In October 2021, the FASB issued Accounting Standards Update ("ASU") No.

2021-08, Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to improve the accounting for acquired revenue contracts with customers in a business combination.

The amendments in FASB ASU No.

2021-08 require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with FASB ASC Topic 606 as if it had originated the contracts.

Previous guidance required an entity to recognize contract assets and contract liabilities at fair value as of the acquisition date.

The amendments in FASB ASU No.

2021-08 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim period.

We have elected to early adopt FASB ASU No.

2021-08 in the fourth quarter of 2021, and in accordance with the requirements of FASB ASU No.

2021-08 related to early adoption in an interim period, we have applied its provisions retrospectively to all acquisitions completed on or after January 1, 2021 and will apply them prospectively to all future acquisitions.

There was no retrospective impact on our financial statements resulting from this adoption.

Any future impact will be dependent on facts and circumstances of future acquisitions.

There have been no other 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.

Revenue Recognition

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We do not offer separately priced extended warranty or product maintenance contracts.

Refer to Note 2, "Significant Accounting Policies," for additional information.

Refer to Note 2:

Significant Accounting Policies for additional information.

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

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(2) Heating, ventilation and air conditioning

In addition, refer to Note 20, "Segment Reporting," for a presentation of net revenue disaggregated by product category and geographic region.

In addition, refer to Note 20:

Segment Reporting for a presentation of net revenue disaggregated by product category and geographic region.

Contract Assets and Liabilities

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Share-Based Payment Plans

We issue share-based compensation awards under the Sensata Technologies Holding plc First Amended and Restated 2010 Equity Incentive Plan (the "2010 Equity Incentive Plan").

The purpose of the 2010 Equity Incentive Plan is to promote long-term growth and profitability by providing our present and future eligible directors, officers, and employees with incentives to contribute to, and participate in, our success.

There are 10.0 million ordinary shares authorized for grants of awards under the 2010 Equity Incentive Plan, of which 1.8 million were available as of December 31, 2020.

Refer to Note 2, "Significant Accounting Policies," for additional information related to our to share-based compensation accounting policies.

At our Annual General Meeting held on May 27, 2021, our shareholders approved the Sensata Technologies Holding plc 2021 Equity Incentive Plan (the "2021 Equity Plan"), which replaced the Sensata Technologies Holding plc First Amended and Restated 2010 Equity Incentive Plan (the "2010 Equity Plan").

The 2021 Equity Plan is substantially similar to the 2010 Equity Plan with some updates based on changes in law and current practices.

The purpose of the 2021 Equity Plan is to promote the long-term growth, profitability, and interests of the Company and its shareholders by aiding us in attracting and retaining employees, officers, consultants, advisors, and non-employee directors capable of assuring our future success.

All awards granted subsequent to this approval were made under the 2021 Equity Plan.

The 2010 Equity Plan was terminated as to the grant of any additional awards, but prior awards remain outstanding in accordance with their terms.

As of December 31, 2021, there were 5.7 million ordinary shares authorized and available for grants of awards under the 2021 Equity Plan.

Refer to Note 2:

Significant Accounting Policies for additional information related to our share-based compensation accounting policies.

Share-Based Compensation Awards

We grant option, restricted stock unit ("RSU"), and performance-based restricted stock unit ("PRSU") awards under the 2010 Equity Incentive Plan.

We grant option, restricted stock unit ("RSU"), and performance-based restricted stock unit ("PRSU") awards.

Awards prior to May 27, 2021 were granted under the 2010 Equity Plan.

Awards subsequent to May 27, 2021 were granted under the 2021 Equity Plan.

For option and RSU awards, vesting is typically subject only to service conditions.

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Throughout this Annual Report on Form 10-K, RSU and PRSU awards are often referred to collectively as "restricted securities."

A summary of stock option activity for the years ended December 31, 2020, 2019, and 2018 is presented in the table below (amounts have been calculated based on unrounded shares):

A summary of stock option activity for the years ended December 31, 2021, 2020, and 2019 is presented in the table below (amounts have been calculated based on unrounded shares, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Number of Options (thousands) Weighted-Average

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Balance as of December 31, 2019 3,464 $ 41.19 5.0 $ 44,696

Granted 382 $ 46.92

Forfeited or expired ( 155 ) $ 48.30

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Vested and expected to vest as of December 31, 2021 2,121 $ 43.08 3.9 $ 39,481

A summary of the status of our unvested options as of December 31, 2020, and of the changes during the year then ended, is presented in the table below (amounts have been calculated based on unrounded shares):

A summary of the status of our unvested options as of December 31, 2021 and of the changes during the year then ended is presented in the table below (amounts have been calculated based on unrounded shares, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Number of Options (thousands) Weighted-Average Grant-Date Fair Value

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The fair value of stock options that vested during the years ended December 31, 2021, 2020, and 2019 was $ 2.5 million, $ 4.4 million, and $ 7.8 million, respectively.

Option awards granted to employees under the 2010 Equity Incentive Plan generally vest 25 % per year over four years from the grant date.

Option awards granted to employees generally vest 25 % per year over four years from the grant date.

We recognize compensation expense for options on a straight-line basis over the requisite service period, which is generally the same as the vesting period.

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For options granted prior to April 2019, except as otherwise provided in specific option award agreements, if a participant ceases to be employed by us, options not yet vested generally expire and are forfeited at the termination date, and options that are fully vested generally expire 90 days after termination of the participant’s employment.

Exclusions to the general policy for terminated employees include termination for cause (in which case the options expire on the participant’s termination date) and termination due to death or disability (in which case any unvested options shall immediately vest and expire six months after the participant’s termination date).

For options granted in or after April 2019, the same terms apply, except that fully vested options expire 90 days after termination of the participant's employment for any reason other than termination for cause (in which case the options expire on the participant's termination date), termination due to due to death or disability (in which case the options expire one year after the participant's termination date), and termination for a qualified retirement (in which case options will continue to vest and expire ten years from the grant date).

We did no t grant any options in the year ended December 31, 2020.

The weighted-average grant-date fair value per option granted during the years ended December 31, 2019 and 2018 was $ 13.90 and $ 15.70 , respectively.

Exclusions to the general policy for terminated employees include termination for cause (in which case the options expire on the participant’s termination date) and termination due to death or disability (in which case any unvested options shall immediately vest and expire one year after the participant’s termination date).

For options granted in or after April 2019, the same terms apply, except that in the event of termination due to a qualified retirement, options not yet vested will continue to vest and will expire ten years from the grant date.

We did no t grant any options in the years ended December 31, 2021 or 2020.

The weighted-average grant-date fair value per option granted during the year ended December 31, 2019 was $ 13.90 .

The fair value of options was estimated on the date of grant using the Black-Scholes-Merton option-pricing model.

The weighted-average key assumptions used in estimating the grant-date fair value of options for the years ended December 31, 2019 and 2018 were as follows:

The weighted-average key assumptions used in estimating the grant-date fair value of options for the year ended December 31, 2019 were as follows:

For the year ended December 31, 2019

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Restricted Securities

We grant RSU awards that cliff vest between one year and three years from the grant date, and we grant PRSU awards that cliff vest three years after the grant date.

For PRSU awards, the number of units that ultimately vest depends on the extent to which certain performance criteria are met, as described in the table below.

For restricted securities granted in or after April 2019, terms include provisions allowing continued or accelerated vesting for a qualified retirement.

Beginning in April 2020, we began granting RSUs that 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 April 2023 and December 2023.

Starting in April 2020, we grant RSU awards that vest ratably over three years and PRSU awards that cliff vest three years after the grant date.

Previously, we granted RSU and PRSU awards each of which cliff vested three years after the grant date.

In the event of a qualifying termination, any unvested restricted securities that would have otherwise vested within the next six months vest in full on the termination date, and in the event of termination by reason of a covered retirement, any unvested restricted securities remain outstanding on the termination date and subject to continued vesting.

For PRSU awards, the number of units that ultimately vest depends on the extent to which certain performance criteria, described in the table below, are met.

A summary of restricted securities granted in the years ended December 31, 2021, 2020, and 2019 is presented below:

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0.0 % to 172.5 %

0.0 % to 200.0 %

(Awards in thousands) RSU Awards Granted Weighted-Average

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Fair Value PRSU Awards Granted Weighted-Average

2021 413 $ 58.29 170 $ 58.56 — $ — 76 $ 57.04

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Compensation expense for the year ended December 31, 2021 reflects our estimate of the probable outcome of the performance conditions associated with the PRSU awards granted in the years ended December 31, 2021, 2020, and 2019.

A summary of activity related to outstanding restricted securities for the years ended December 31, 2020, 2019, and 2018 is presented in the table below (amounts have been calculated based on unrounded shares):

A summary of activity related to outstanding restricted securities for the years ended December 31, 2021, 2020, and 2019 is presented in the table below (amounts have been calculated based on unrounded shares, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Restricted Securities (thousands) Weighted-Average

Balance as of December 31, 2018 1,119 $ 44.66

Granted 399 $ 51.40

Forfeited ( 115 ) $ 47.07

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Balance as of December 31, 2019 1,105 $ 47.51

Granted 1,207 $ 28.78

Forfeited ( 284 ) $ 37.89

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Share-Based Compensation Expense

The table below presents non-cash compensation expense related to our equity awards, which is recognized within SG&A expense in the consolidated statements of operations, during the identified periods:

The table below presents non-cash compensation expense related to our equity awards, which is recognized within SG&A expense in the consolidated statements of operations, for the years ended December 31, 2021, 2020, and 2019:

For the year ended December 31,

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Restructuring and Other Charges, Net

On June 30, 2020, in response to the potential long-term impact of the global financial and health crisis caused by the coronavirus ("COVID-19") pandemic on our business, we committed to a plan to reorganize our business (the “Q2 2020 Global Restructure Program”).

The Q2 2020 Global Restructure Program, consisting of voluntary and involuntary reductions-in-force and certain site closures, was commenced in order to align our cost structure to the demand levels that we anticipated in the coming quarters.

We have taken a large portion of the actions contemplated under the Q2 2020 Global Restructure Program, with the majority expected to be completed on or before June 30, 2021.

The reductions-in-force, which are subject to the laws and regulations of the countries in which the actions are planned, are expected to impact approximately 880 positions.

Over the life of the Q2 2020 Global Restructure Program, we expect to incur restructuring charges of betwe en $ 31.0 million and $ 33.7 million related to reductions-in-force and between $ 8.0 million and $ 10.0 million related to site closures.

We expect to settle these charges with cash on hand.

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

Reductions-in-Force Site Closures

(Dollars in millions) Positions Minimum Maximum Minimum Maximum

Performance Sensing 180 $ 10.7 $ 11.6 $ 3.0 $ 4.0

Sensing Solutions 286 8.9 9.6 5.0 6.0

Corporate and other 414 11.4 12.5 — —

Total 880 $ 31.0 $ 33.7 $ 8.0 $ 10.0

Charges recognized in the year ended December 31, 2020 resulting from the Q2 2020 Global Restructure Program are presented by segment below.

Approximately $ 0.6 million of these charges relate to site closures in Sensing Solutions.

For the year ended

December 31, 2020

On June 30, 2020, in response to the potential long-term impact of the global financial and health crisis caused by the COVID-19 pandemic on our business, we committed to a plan to reorganize our business (the “Q2 2020 Global Restructure Program”) consisting of voluntary and involuntary reductions-in-force and certain site closures.

The Q2 2020 Global Restructure Program was commenced in order to align our cost structure to the then anticipated future demand outlook.

We have completed all actions contemplated thereunder, with approximately 840 positions impacted.

Since inception of the Q2 2020 Global Restructure Program, we have recognized cumulative costs of $ 33.2 million, of which $ 28.4 million related to severance charges and $ 4.8 million related to facility and other exit costs.

As of December 31, 2021, we have a liability of approximately $ 3.9 million related to actions taken under this plan.

We expect to settle these remaining liabilities with cash on hand.

Charges recognized in the years ended December 31, 2021 and 2020 resulting from the Q2 2020 Global Restructure Program are presented by impacted segment below.

However, as discussed in Note 20:

Segment Reporting , restructuring and other charges, net are excluded from segment operating income.

For the year ended December 31,

Performance Sensing (1)

$ 2,584 9,073

Sensing Solutions (2)

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Q2 2020 Global Restructure Program, net $ 7,120 $ 24,458

Restructuring and other charges, net for the years ended December 31, 2020, 2019, and 2018 were as follows:

__________________________

(1) Approximately $ 1.2 million of these charges for the year ended December 31, 2021 relate to site closures.

There were no site closures related to Performance Sensing in the year ended December 31, 2020.

(2) Approximately $ 3.8 million and $ 0.6 million of these charges for the years ended December 31, 2021 and 2020, respectively, relate to site closures.

The following table presents the components of restructuring and other charges, net for the years ended December 31, 2021, 2020, and 2019:

For the year ended December 31,

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Facility and other exit costs 2,433 1,323 808

Gain on sale of Valves Business (2)

885 4,271 23,512

4,271 23,512 8,162

Restructuring and other charges, net $ 14,942 $ 33,094 $ 53,560

__________________________

(1) For each of the years ended December 31, 2020, 2019, and 2018, these charges include termination benefits provided in connection with workforce reductions of manufacturing, engineering, and administrative positions, including the elimination of certain positions related to site consolidations, net of reversals.

For the year ended December 31, 2020, these charges related to termination benefits arising from the shutdown and relocation of operating sites in Northern Ireland and Belgium.

For the year ended December 31, 2019, these charges included approximately $ 12.7 million of benefits provided under a voluntary retirement incentive program offered to a limited number of eligible employees in the U.S., and $ 6.5 million of termination benefits provided under a one-time benefit arrangement related to the shutdown and relocation of an operating site in Germany.

(2) In the year ended December 31, 2018, we completed the sale of the capital stock of Schrader Bridgeport International, Inc.

and August France Holding Company SAS (collectively, the "Valves Business").

The gain on this sale was recorded in restructuring and other charges, net.

(1) Includes termination benefits provided in connection with workforce reductions of manufacturing, engineering, and administrative positions, including the elimination of certain positions related to site consolidations, net of reversals.

The year ended December 31, 2020 primarily related to termination benefits arising from the shutdown and relocation of operating sites in Northern Ireland and Belgium.

The year ended December 31, 2019 also included $ 12.7 million of benefits provided under a voluntary retirement incentive program offered to a limited number of eligible employees in the U.S.

and $ 6.5 million of termination benefits provided under a one-time benefit arrangement related to the shutdown and relocation of an operating site in Germany.

(2) Represents charges that are not included in one of the other classifications.

In the year ended December 31, 2020, we settled intellectual property litigation brought against Schrader by Wasica Finance GmbH ("Wasica") and released $ 11.7 million of the related liability.

This release largely offset a charge of $ 12.1 million resulting from a prejudgment interest-related award granted by the court on behalf of Wasica in the three months ended June 30, 2020.

Refer to Note 15, "Commitments and Contingencies," for additional information related to this matter.

In the year ended December 31, 2019, we recognized a $ 17.8 million loss related to the termination of a supply agreement in connection with the Metal Seal Precision, Ltd.

("Metal Seal") litigation.

In the year ended December 31, 2018, we incurred $ 5.9 million of incremental direct costs in order to transact the sale of the Valves Business.

For each of the years ended December 31, 2020, 2019, and 2018, we recorded expense related to the deferred compensation arrangement that we entered into in connection with the acquisition of GIGAVAC, LLC ("GIGAVAC") in the year ended December 31, 2018.

In the year ended December 31, 2020, we settled intellectual property litigation brought against Schrader by Wasica Finance GmbH ("Wasica") and released $ 11.7 million of the related liability, which is presented in restructuring and other charges, net.

This release largely offset a charge of $ 12.1 million resulting from a prejudgment interest-related award granted by the court on behalf of Wasica in fiscal year 2020.

In the year ended December 31, 2019, we recognized a $ 17.8 million loss related to the termination of a supply agreement in connection with litigation related to Metal Seal Precision, Ltd.

The following table presents a rollforward of the severance portion of our restructuring obligations for the years ended December 31, 2021 and 2020:

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The severance liability as of December 31, 2021 and 2020 was entirely recorded in accrued expenses and other current liabilities on our consolidated balance sheets.

Refer to Note 12, "Accrued Expenses and Other Current Liabilities."

Other, net consisted of the following for the years ended December 31, 2020, 2019, and 2018:

Refer to Note 12:

Accrued Expenses and Other Current Liabilities .

The following table presents the components of other, net for the years ended December 31, 2021, 2020, and 2019:

For the year ended December 31,

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( 7,553 ) ( 6,762 ) 2,225

Gain/(loss) on commodity forward contracts (2)

(Loss)/gain on commodity forward contracts (2)

( 2,967 ) 10,027 4,888

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(1) Relates to the remeasurement of non-USD denominated net monetary assets and liabilities into USD.

Refer to the Foreign Currency section of Note 2, "Significant Accounting Policies," for additional information.

Refer to Note 2:

Significant Accounting Policies — Foreign Currency for additional information.

(2) Relates to changes in the fair value of derivative financial instruments not designated as cash flow hedges.

Refer to Note 19, "Derivative Instruments and Hedging Activities," for additional information related to gains and losses on our commodity and foreign currency exchange forward contracts.

(3) Refer to Note 14, "Debt," for additional information related to our debt financing transactions.

(4) Refer to Note 13, "Pension and Other Post-Retirement Benefits," for additional information on net periodic benefit cost included in other, net.

Refer to Note 19:

Derivative Instruments and Hedging Activities for additional information related to gains and losses on our commodity and foreign currency forward contracts.

(3) Refer to Note 14:

Debt for additional information related to our debt financing transactions.

(4) Refer to Note 13:

Pension and Other Post-Retirement Benefits for additional information on net periodic benefit cost included in other, net.

Effective April 27, 2006 (inception), and concurrent with the completion of the acquisition of the Sensors & Controls business ("S&C") of Texas Instruments Incorporated ("TI") (the "2006 Acquisition"), we commenced filing tax returns in the Netherlands as a stand-alone entity.

On March 28, 2018, the Company reincorporated its headquarters in the U.K.

We file income tax returns in the countries in which our subsidiaries are incorporated and/or operate, including Belgium, Bulgaria, China, France, Germany, Japan, Malaysia, Mexico, the Netherlands, South Korea, the U.S., and the U.K.

The 2006 Acquisition purchase accounting and the related debt and equity capitalization of the various subsidiaries of the consolidated company, and the realignment of the functions performed and risks assumed by the various subsidiaries, are of significant consequence to the determination of future book and taxable income of the respective subsidiaries and Sensata as a whole.

Refer to Note 2, "Significant Accounting Policies," for detailed discussion of the accounting policies related to income taxes.

We file income tax returns in the countries in which our subsidiaries are incorporated and/or operate, including Belgium, Bulgaria, China, France, Germany, Japan, Malaysia, Malta, Mexico, the Netherlands, South Korea, the U.S., and the U.K.

consequence to the determination of future book and taxable income of the respective subsidiaries and Sensata as a whole.

Refer to Note 2:

Significant Accounting Policies for detailed discussion of the accounting policies related to income taxes.

Income before taxes

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2019 $ 13,183 $ 377,240 $ 390,423

Provision for/(benefit from) income taxes

Provision for/(benefit from) income taxes for the years ended December 31, 2020, 2019, and 2018 was categorized by jurisdiction as follows:

Provision for income taxes

Provision for income taxes for the years ended December 31, 2021, 2020, and 2019 comprised provisions for (or benefits from) income tax by jurisdiction as follows:

Current $ 1,005 $ 54,401 $ 201 $ 55,607

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Tax computed at statutory rate of 21% $ 86,923 $ 34,785 $ 81,989

Intangible property transfers ( 54,188 ) — —

Foreign tax rate differential ( 30,485 ) ( 21,994 ) ( 19,107 )

Valuation allowances 20,512 8,869 19,640

Reserve for tax exposure ( 16,330 ) ( 171 ) 20,079

Withholding taxes not creditable 13,259 12,198 9,509

Change in tax laws or rates 11,229 5,121 ( 22,264 )

Research and development incentives ( 11,067 ) ( 7,408 ) ( 8,410 )

Change in tax laws or rates ( 7,070 ) 11,229 5,121

Unrealized foreign currency exchange (gains)/losses, net ( 6,137 ) 2,650 ( 43 )

state taxes, net of federal benefit 1,119 3,504 863

3,504 863 ( 11,499 )

Unrealized foreign currency exchange losses/(gains), net 2,650 ( 43 ) 11,346

Reserve for tax exposure ( 171 ) 20,079 10,775

Nontaxable items and other 11,881 ( 1,932 ) 3,850

Provision for/(benefit from) income taxes $ 1,355 $ 107,709 $ ( 72,620 )

Intangible property transfers — ( 54,188 ) —

The decrease in our effective tax rate for the year ended December 31, 2020, was primarily due to a $ 54.2 million net income tax benefit in the fourth quarter of 2020 related to intangible property transfers.

Nontaxable items and other ( 387 ) 11,881 ( 1,932 )

Provision for income taxes $ 50,337 $ 1,355 $ 107,709

Foreign tax rate differential

We operate in locations outside the U.S., including Belgium, Bermuda, Bulgaria, China, Malaysia, the Netherlands, South Korea, and the U.K., that historically have had statutory tax rates different than the U.S.

We operate in locations outside the U.S., including Belgium, Bulgaria, China, Malaysia, Malta, the Netherlands, South Korea, and the U.K., that historically have had statutory tax rates different than the U.S.

statutory tax rate.

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This foreign tax rate differential can change from year to year based upon the jurisdictional mix of earnings and changes in current and future enacted tax rates.

Our subsidiary in Changzhou, China is currently eligible for a reduced tax rate of 15 %, which is effective through 2021.

The impact on current tax expense of the tax holidays and exemptions is included in the foreign tax rate differential line in the reconciliation of the statutory tax rate to effective rate.

Certain of our subsidiaries are currently eligible, or have been eligible, for tax exemptions or reduced tax rates in their respective jurisdictions.

From 2019 through 2021, a subsidiary in Changzhou, China was eligible for a reduced corporate income tax rate of 15 %.

The impact on current tax expense of the tax holidays and exemptions is included in the foreign tax rate differential disclosure, reconciling the statutory rate to our effective rate.

The remeasurement of the deferred tax assets and liabilities is included in the change in tax laws or rates line.

Valuation allowance impact on tax expense

During the year ended December 31, 2018, we released a substantial portion of our valuation allowance against our deferred tax assets in the U.S.

We continue to maintain a valuation allowance against certain of our interest, goodwill tax basis, foreign tax, and state tax credit carryforwards.

Withholding taxes not creditable

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statutory tax rate.

Certain R&D expenses are eligible for a bonus deduction under China’s R&D super deduction regime.

In fiscal year 2018, we substantially completed an assessment of our ability to claim an R&D credit in the U.S.

As a result of this assessment, we recognized a tax benefit of $ 10.0 million.

Qualified investments are eligible for a bonus deduction under China’s R&D super deduction regime.

In the U.S., we benefit from R&D credit incentives.

Intangible property transfers

The decrease in our effective tax rate for the year ended December 31, 2020, was primarily due to a net $ 54.2 million deferred tax benefit in the fourth quarter of 2020 related to intangible property transfers.

Deferred income tax assets and liabilities

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The more negative evidence that exists, the more positive evidence is necessary, and the more difficult it is to support a conclusion that a valuation allowance is not needed.

Additionally, we utilize the "more likely than not" criteria established in FASB ASC Topic 740 to determine whether the future

tax benefit from the deferred tax assets should be recognized.

Additionally, we utilize the "more likely than not" criteria established in FASB ASC Topic 740 to determine whether the future tax benefit from the deferred tax assets should be recognized.

As a result, we have established valuation allowances on the deferred tax assets in jurisdictions that have incurred net operating losses and in which it is more likely than not that such losses will not be utilized in the foreseeable future.

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This liability may not be used to support deductible temporary differences, such as net operating loss carryforwards, which may expire within a definite period.

The total valuation allowance increased $ 55.3 million in the year ended December 31, 2020 and decreased $ 10.3 million in the year ended December 31, 2019.

In connection with our 2020 intangible property transfer, we recorded a valuation allowance of $ 43.2 million.

The total valuation allowance increased $ 23.8 million and $ 55.3 million in the years ended December 31, 2021 and 2020, respectively.

As a result of changes in interest limitation rules in the Netherlands that became effective in 2021, we recorded a valuation allowance against our interest carryforwards in this jurisdiction in the year ended December 31, 2021.

In connection with our 2020 intangible property transfer, we recorded a valuation allowance of $ 43.2 million in the year ended December 31, 2020.

Subsequently reported tax benefits relating to the valuation allowance for deferred tax assets as of December 31, 2021 will be allocated to income tax benefit recognized in the consolidated statements of operations.

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Decreases related to lapse of applicable statute of limitations ( 483 ) ( 452 ) ( 87 )

Changes related to foreign currency exchange rate 1,337 173 ( 416 )

Changes related to foreign currency exchange rates ( 571 ) 1,337 173

Balance at end of year $ 223,791 $ 201,410 $ 117,591

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These provisions provide for the reimbursement of future tax liabilities paid by us that relate to the pre-acquisition periods of the acquired businesses including S&C, First Technology Automotive and Special Products, Airpax Holdings, Inc., August Cayman Company, Inc.

("Schrader"), CST, and GIGAVAC.

("Schrader"), CST, GIGAVAC, LLC ("GIGAVAC"), Xirgo Technologies Intermediate Holdings, LLC, and SmartWitness Holdings, Inc.

("SmartWitness").

Net Income per Share

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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.

Refer to Note 4, "Share-Based Payment Plans," for additional information related to our equity awards.

Refer to Note 4:

Share-Based Payment Plans for additional information related to our equity awards.

These potential ordinary shares are as follows:

3 unchanged sentences

Contingently issuable shares excluded 1,029 995 641

The components of inventories as of December 31, 2020 and 2019 were as follows:

The following table presents the components of inventories as of December 31, 2021 and 2020:

As of December 31,

3 unchanged sentences

Inventories $ 588,231 $ 451,005

Refer to Note 2, "Significant Accounting Policies," for a discussion of our accounting policies related to inventories.

Refer to Note 2:

Significant Accounting Policies for a discussion of our accounting policies related to inventories.

Property, Plant and Equipment, Net

13 unchanged sentences

Assets under finance leases in property, plant and equipment, net $ 21,893 $ 23,607

Refer to Note 2, "Significant Accounting Policies," for a discussion of our accounting policies related to PP&E, net.

Refer to Note 2:

Significant Accounting Policies for a discussion of our accounting policies related to PP&E, net.

Goodwill and Other Intangible Assets, Net

2 unchanged sentences

Balance as of December 31, 2019 $ 2,172,020 $ 921,578 $ 3,093,598

GIGAVAC acquisition 16,387 ( 16,564 ) ( 177 )

Other acquisition — 12,473 12,473

Acquisition 17,751 — 17,751

Balance as of December 31, 2020 2,189,771 921,578 3,111,349

Other acquisition 17,751 — 17,751

Acquisitions 290,827 99,887 390,714

Balance as of December 31, 2021 $ 2,480,598 $ 1,021,465 $ 3,502,063

At each of December 31, 2020, 2019, and 2018, accumulated goodwill impairment was $ 0.0 million related to Performance Sensing and $ 18.5 million related to Sensing Solutions.

Goodwill attributed to acquisitions reflects our allocation of purchase price to the estimated fair value of certain assets acquired and liabilities assumed, and has been included in our segments based on a methodology using anticipated future earnings of the components of business.

At each of December 31, 2021, 2020, and 2019, accumulated goodwill impairment related to Performance Sensing and Sensing Solutions was $ 0.0 million and $ 18.5 million, respectively.

Refer to Note 21:

Acquisitions for additional information related to goodwill added as a result of acquisitions.

Goodwill attributed to acquisitions reflects our allocation of purchase price to the estimated fair value of certain assets acquired and liabilities assumed.

Net assets acquired are comprised of tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values.

We apply estimates and assumptions to determine the fair value of the intangible assets and of any contingent consideration obligations.

Critical estimates in valuing purchased technology, customer relationships, and other identifiable intangible assets include future cash flows that we expect to generate from the acquired assets.

In addition, we estimate the economic lives of these identified intangible assets and these lives are used to calculate amortization expense.

Goodwill has been included in our segments based on a methodology using anticipated future earnings of the components of business.

We own the Klixon ® and Airpax ® tradenames, which are indefinite-lived intangible assets as they have each been in continuous use for over 65 years and we have no plans to discontinue using either of them.

We have recorded $ 59.1 million and $ 9.4 million, respectively, on the consolidated balance sheets related to these tradenames.

We have recorded $ 59.1 million and $ 9.4 million, respectively, on our consolidated balance sheets related to these tradenames.

In addition, in the year ended December 31, 2020, we recognized indefinite-lived intangible assets of $ 6.9 million related to in-process research & development acquired in a fiscal year 2020 business combination transaction.

Effective July 1, 2021, we reorganized our Sensing Solutions operating segment, which resulted in realignment of our reporting units.

As a result of this reorganization, our electrical protection product category that includes high-voltage contactors, inverters, and battery management systems was moved to a new reporting unit, Clean Energy Solutions.

The remaining portions of our Electrical Protection, Industrial Sensing, Power Management, and Interconnection reporting units were consolidated into a new reporting unit, Industrial Solutions.

This reorganization had no impact on our Aerospace reporting unit.

Accordingly, as of October 1, 2021, we had five reporting units, Automotive, HVOR, Industrial Solutions, Aerospace, and Clean Energy Solutions.

With the acquisition of SmartWitness in the fourth quarter of 2021, we formed Sensata Insights, a business unit organized under the HVOR operating segment, to drive growth of our smart and connected offerings to the transportation market, including both those developed organically and through the acquisition of Xirgo Technologies, LLC ("Xirgo") and SmartWitness.

We concluded that Sensata Insights was a separate reporting unit from HVOR.

Accordingly, as of December 31, 2021, we had six reporting units, Automotive, HVOR, Sensata Insights, Industrial Solutions, Aerospace, and Clean Energy Solutions.

We concluded that these reorganizations have not impacted our reportable or operating segment evaluations.

We reassigned assets and liabilities, including goodwill, to these new reporting units as required by FASB ASC Topic 350.

We evaluated our goodwill and other indefinite-lived intangible assets for impairment before and after the reorganization and formation of these reporting units and determined that they were not impaired.

Refer to Note 21:

Acquisitions for additional information on these acquisitions.

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 2021 using a combination of the quantitative and qualitative methods.

3 unchanged sentences

Based on these analyses, we have determined that as of October 1, 2021 the fair value of each of our reporting units and indefinite-lived intangible assets exceeded their carrying values.

We consider a combination of quantitative and qualitative factors to determine whether a reporting unit is at risk of failing Step 1 of the goodwill impairment test, including:

We consider a combination of quantitative and qualitative factors to determine whether a reporting unit is at risk of failing the goodwill impairment test, including:

the timing of our most recent quantitative impairment tests and the relative amount by which a reporting unit’s fair value exceeded its then carrying value, the inputs and assumptions underlying our valuation models and the sensitivity of our fair value measurements to those inputs and assumptions, the impact that adverse economic or market conditions may have on the degree of uncertainty inherent in our long-term operating forecasts, and changes in the carrying value of a reporting unit’s net assets from the time of our most recent goodwill impairment test.

Based on the results of this analysis, we do not consider any of our reporting units to be at risk of failing Step 1 of the goodwill impairment test.

Based on the results of this analysis, we do not consider any of our reporting units to be at risk of failing the goodwill impairment test.

The following tables outline the components of definite-lived intangible assets as of December 31, 2021 and 2020.

Definite-lived intangible assets acquired in our business combinations completed in the fourth quarter of 2021 are included in the table as of December 31, 2021 but are preliminary and are subject to change.

Refer to Note 21:

Acquisitions for details on these definite-lived intangible assets.

As of December 31, 2021

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Customer relationships 11 1,858,998 ( 1,501,960 ) ( 12,144 ) 344,894

Non-compete agreements 8 23,400 ( 23,400 ) — —

Tradenames 21 66,654 ( 19,816 ) — 46,838

22 unchanged sentences

Accrued interest 45,123 53,630

Foreign currency and commodity forward contracts 19,627 1,925

Accrued severance 14,879 14,779

Current portion of operating lease liabilities 11,035 11,389

Accrued severance 7,233 14,879

Foreign currency and commodity forward contracts 5,591 19,627

Current portion of pension and post-retirement benefit obligations 2,554 3,498

2 unchanged sentences

Pension and Other Post-Retirement Benefits

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

Refer to Note 2, "Significant Accounting Policies," for a detailed discussion of the accounting policies related to our pension and other post-retirement benefit plans.

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

Refer to Note 2:

Significant Accounting Policies for a detailed discussion of our accounting policies related to our pension and other post-retirement benefit plans.

Benefit Plans

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We intend to contribute amounts to the qualified defined benefit pension plan in order to meet the minimum funding requirements of federal laws and regulations, plus such additional amounts as we deem appropriate.

During the year ended December 31, 2020, we did not contribute to the qualified defined benefit plan.

We expect to contribute to the qualified defined benefit pension plan in fiscal year 2021.

During the year ended December 31, 2021, we contributed $ 3.0 million to the qualified defined benefit pension plan.

We do not expect to contribute to the qualified defined benefit pension plan in fiscal year 2022.

We also sponsor a non-qualified defined benefit pension plan, which is closed to new participants and is unfunded.

Effective January 31, 2012, we froze the defined benefit pension plans and eliminated future benefit accruals.

Defined Contribution Plans

Defined Contribution Plan

We have one defined contribution plan for U.S.

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Defined Benefit Retiree Healthcare Defined Benefit Defined Benefit Retiree Healthcare Defined Benefit Defined Benefit Retiree Healthcare Defined Benefit

$ — $ 10 $ 3,522 $ — $ 7 $ 2,836 $ — $ 50 $ 3,122

Service cost $ — $ 6 $ 4,064 $ — $ 10 $ 3,522 $ — $ 7 $ 2,836

Interest cost 544 77 1,602 762 155 1,466 1,483 203 1,344

Expected return on plan assets ( 887 ) — ( 708 ) ( 1,339 ) — ( 712 ) ( 1,694 ) — ( 702 )

( 1,339 ) — ( 712 ) ( 1,694 ) — ( 702 ) ( 1,710 ) — ( 929 )

Amortization of net loss 1,184 16 1,204 946 — 766 1,080 5 407

Amortization of net loss/(gain) 1,314 ( 111 ) 1,851 1,184 16 1,204 946 — 766

Amortization of net prior service (credit)/cost — ( 636 ) 9 — ( 1,029 ) 5 — ( 1,306 ) 9

Loss on settlement 5,026 — 2,712 565 — 1,572 1,047 — 1,461

Loss on curtailment — 530 — — — — — — 891

Settlement loss 4,894 — 202 5,026 — 2,712 565 — 1,572

Curtailment (gain)/loss — — ( 623 ) — 530 — — — —

Net periodic benefit cost/(credit) $ 5,865 $ ( 664 ) $ 6,397 $ 5,633 $ ( 318 ) $ 8,197 $ 1,300 $ ( 1,096 ) $ 5,825

Components of net periodic benefit cost/(credit) other than service cost are presented in other, net in the consolidated statements of operations.

Refer to Note 6:

The following table outlines the rollforward of the benefit obligation and plan assets for the defined benefit and retiree healthcare benefit plans for the years ended December 31, 2021 and 2020:

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Actuarial loss/(gain) 1,595 ( 863 ) 431 7,526 ( 1,213 ) 13,006

Curtailment loss — 530 — — — —

Curtailment (gain)/loss — — ( 1,368 ) — 530 —

Benefits paid ( 15,990 ) ( 960 ) ( 3,517 ) ( 17,568 ) ( 719 ) ( 8,507 )

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Funded status $ ( 1,266 ) $ ( 3,962 ) $ ( 36,084 ) $ ( 6,614 ) $ ( 5,047 ) $ ( 39,839 )

Balances recognized within accumulated other comprehensive loss that have not been recognized as components of net periodic benefit cost, net of tax, as of December 31, 2020, 2019, and 2018 are as follows:

Balances recognized within accumulated other comprehensive loss that have not been recognized as components of net periodic benefit cost/(credit), net of tax, as of December 31, 2021, 2020, and 2019 are as follows:

As of December 31,

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Net prior service cost/(credit) $ — $ 1,583 $ ( 31 ) $ — $ 1,094 $ ( 20 ) $ — $ 306 $ ( 16 )

Net loss $ 19,026 $ ( 131 ) $ 22,833 $ 18,780 $ 809 $ 17,151 $ 20,759 $ 880 $ 14,425

Net loss/(gain) $ 15,853 $ ( 709 ) $ 19,695 $ 19,026 $ ( 131 ) $ 22,833 $ 18,780 $ 809 $ 17,151

Information for plans with an accumulated benefit obligation in excess of plan assets as of December 31, 2021 and 2020 is as follows:

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Defined Benefit Retiree Healthcare Defined Benefit Defined Benefit Retiree Healthcare Defined Benefit Defined Benefit Retiree Healthcare Defined Benefit

Net (gain)/loss $ 4,997 $ ( 928 ) $ 8,425 $ ( 824 ) $ ( 71 ) $ 4,365 $ 2,002 $ ( 124 ) $ 3,669

Amortization of net loss

( 906 ) ( 12 ) ( 839 ) ( 723 ) — ( 539 ) ( 1,080 ) ( 5 ) ( 298 )

Net loss/(gain) $ 1,598 $ ( 663 ) $ ( 905 ) $ 4,997 $ ( 928 ) $ 8,425 $ ( 824 ) $ ( 71 ) $ 4,365

Amortization of net (loss)/gain ( 1,010 ) 85 ( 1,337 ) ( 906 ) ( 12 ) ( 839 ) ( 723 ) — ( 539 )

Amortization of net prior service credit/(cost) — 489 ( 7 ) — 562 ( 4 ) — 998 ( 6 )

Divestiture — — — — — — — — ( 228 )

Plan amendment — — — — — — — ( 3,243 ) —

Settlement effect ( 3,761 ) — ( 155 ) ( 3,845 ) — ( 1,904 ) ( 432 ) — ( 1,100 )

14 unchanged sentences

assumed discount rate 4.52 % NA 5.53 % NA 5.76 % NA

average long-term rate of return on plan assets

4.29 % NA 4.53 % NA 4.57 % NA

average long-term rate of return on plan assets

1.61 % NA 1.77 % NA 2.26 % NA

average long-term rate of return on plan assets 4.00 % NA 4.29 % NA 4.53 % NA

average long-term rate of return on plan assets 1.52 % NA 1.61 % NA 1.77 % NA

average long-term pay progression 4.50 % NA 4.83 % NA 4.43 % NA

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Information about the assets for each of these plans is detailed below.

Refer to Note 18, "Fair Value Measures," for additional information related to the level s of the fair value hierarchy in accordance with FASB ASC Topic 820.

Refer to Note 18:

Fair Value Measures for additional information related to the level s of the fair value hierarchy in accordance with FASB ASC Topic 820.

Our target asset allocation for the U.S.

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Money market funds 13 % 4 %

__________________________________________

The portfolio is monitored for automatic rebalancing on a monthly basis.

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Japan Plan Assets

The target asset allocation of the Japan defined benefit plan is 50 % fixed income securities and 50 % equity securities, cash, and cash equivalents, with allowance for a 40 % deviation in either direction.

The target asset allocation of the Japan defined benefit plan is 50 % fixed income securities, cash, and cash equivalents and 50 % equity securities, with allowance for a 40 % deviation in either direction.

We, along with the trustee of the plan's assets, minimize investment risk by thoroughly assessing potential investments based on indicators of historical returns and current credit ratings.

14 unchanged sentences

Total plan assets $ 32,898 $ 33,486

All fair value measures presented above are categorized in Level 1 of the fair value hierarchy, with the exception of U.S.

fixed income securities of $ 0.3 million of December 31, 2020 and 2019, which are categorized as Level 2.

As of December 31, 2021 and 2020 , all fair value measures presented above are categorized in Level 1 of the fair value hierarchy, with the exception of U.S.

fixed income securities of $ 0.3 million as of December 31, 2020 , which are categorized as Level 2.

The fair values of equity and fixed income securities are based on publicly-quoted closing stock and bond values on the last business day of the year.

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These fair value measurements are categorized in Level 3 of the fair value hierarchy.

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

Our long-term debt, net and finance lease and other financing obligations as of December 31, 2021 and 2020 consisted of the following:

As of December 31,

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6.25 % Senior Notes (1)

February 15, 2026 750,000 750,000

4.375 % Senior Notes

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February 15, 2031 750,000 750,000

debt discount ( 9,605 ) ( 11,758 )

4.0 % Senior Notes

April 15, 2029 1,000,000 —

debt discount, net of premium ( 5,207 ) ( 9,605 )

deferred financing costs ( 26,682 ) ( 28,114 )

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__________________________

(1) On February 3, 2021, we announced that we intended to redeem in full the $ 750.0 million aggregate principal amount outstanding on our 6.25 % Senior Notes due 2026 in March 2021.

As a result, these notes have been classified as current on our consolidated balance sheet as of December 31, 2020.

(1) On February 3, 2021, we announced that we intended to redeem in full the aggregate principal amount outstanding on our $ 750.0 million 6.25 % senior notes due 2026 (the " 6.25 % Senior Notes") in March 2021.

As a result, these notes were classified in current portion of debt on our consolidated balance sheet as of December 31, 2020.

There were no outstanding borrowings on our $ 420.0 million revolving credit facility (the "Revolving Credit Facility") as of December 31, 2021 and 2020.

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The credit agreement governing our secured credit facility (as amended, the "Credit Agreement") provides for senior secured credit facilities (the "Senior Secured Credit Facilities") consisting of a term loan facility (the "Term Loan"), the Revolving Credit Facility, and incremental availability under which additional secured credit facilities could be issued under certain circumstances.

All obligations under the Senior Secured Credit Facilities are unconditionally guaranteed by certain of our subsidiaries and secured by substantially all present and future property and assets of STBV and its guarantor subsidiaries.

The Credit Agreement provides that, if our senior secured net leverage ratio exceeds a specified level, we are required to use a portion of our excess cash flow, as defined in the Credit Agreement, generated by operating, investing, or financing activities to prepay the outstanding borrowings under the Senior Secured Credit Facilities.

The Credit Agreement also requires mandatory prepayments of the outstanding borrowings under the Senior Secured Credit Facilities upon certain asset dispositions and casualty events, in each case subject to certain reinvestment rights, and the incurrence of certain indebtedness (excluding any permitted indebtedness).

These provisions were not triggered during the year ended December 31, 2021.

The principal amount of the Term Loan amortizes in equal quarterly installments in an aggregate annual amount equal to 1.0 % of the aggregate principal amount of the Term Loan upon completion of the tenth amendment of the Credit Agreement entered into on September 20, 2019 (the "Tenth Amendment,") with the balance due at maturity.

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Availability under the Revolving Credit Facility may be borrowed, repaid, and re-borrowed to fund our working capital needs and for other general corporate purposes.

Early redemption of the 6.25% Senior Notes

Fiscal Year 2021 transactions

6.25% Senior Notes Redemption

On February 3, 2021, we announced that we intended to redeem in full the $ 750.0 million aggregate principal amount outstanding on our 6.25 % Senior Notes due 2026 in March 2021.

On February 15, 2021, the “make-whole” premium with respect to the 6.25% Senior Notes will expire, and we will redeem the 6.25% Senior Notes in accordance with the terms of the 6.25% Senior Notes Indenture and the terms of the notice of redemption.

We expect to redeem the 6.25% Senior Notes on March 5, 2021 at a redemption price equal to 103.125 % of the aggregate principal amount of the outstanding 6.25% Senior Notes, plus accrued and unpaid interest to (but not including) the redemption date.

On February 15, 2021, the “make-whole” premium with respect to the 6.25 % Senior Notes expired.

Accordingly, we reflected the 6.25 % Senior Notes as a current liability on our consolidated balance sheet as of December 31, 2020.

We redeemed the 6.25 % Senior Notes on March 5, 2021 in accordance with the terms of the indenture under which the 6.25 % Senior Notes were issued and the terms of the notice of redemption at a redemption price equal to 103.125 % of the aggregate principal amount of the outstanding 6.25 % Senior Notes, plus accrued and unpaid interest to (but not including) the redemption

In addition to the $ 750.0 million aggregate principal amount outstanding, at redemption we paid a premium of $ 23.4 million and accrued interest of $ 2.6 million.

4.0% Senior Notes

On March 29, 2021, our indirect, wholly-owned subsidiary, Sensata Technologies B.V.

("STBV"), completed the issuance and sale of $ 750.0 million aggregate principal amount of 4.0 % senior notes due 2029 (the " 4.0 % Senior Notes").

The 4.0 % Senior Notes were issued under an indenture dated as of March 29, 2021 among STBV, as issuer, The Bank of New York Mellon, as trustee (the "Trustee"), and our guarantor subsidiaries (the "Guarantors") named therein (the " 4.0 % Senior Notes Indenture").

The 4.0 % Senior Notes bear interest at 4.0 % per year and mature on April 15, 2029.

Interest is payable semi-annually on April 15 and October 15 of each year, commencing on October 15, 2021.

The 4.0 % Senior Notes are guaranteed by each of STBV's wholly-owned subsidiaries that is a borrower or guarantor under the Senior Secured Credit Facilities of STBV's wholly-owned subsidiary Sensata Technologies, Inc.

("STI") and the issuer or a guarantor under our existing senior notes as follows:

STBV's $ 500.0 million aggregate principal amount of 4.875 % senior notes due 2023 (the “4.875% Senior Notes”), $ 400.0 million aggregate principal amount of 5.625 % senior notes due 2024 (the "5.625% Senior Notes"), and $ 700.0 million aggregate principal amount of 5.0 % senior notes due 2025 (the "5.0% Senior Notes");

and STI's $ 450.0 million aggregate principal amount of 4.375 % senior notes due 2030 (the “4.375% Senior Notes”) and $ 750.0 million aggregate principal amount of 3.75 % senior notes due 2031 (the “3.75% Senior Notes”).

On April 8, 2021, STBV completed the issuance and sale of an additional $ 250.0 million in aggregate principal amount of 4.0% Senior Notes (the “Additional Notes”).

The Additional Notes were priced at 100.75 % and were issued pursuant to the 4.0% Senior Notes Indenture, as supplemented by the First Supplemental Indenture, dated as of April 8, 2021, among STBV, the Guarantors, and the Trustee.

The Additional Notes are consolidated and form a single class with the $ 750.0 million aggregate principal amount of 4.0% Senior Notes issued by STBV on March 29, 2021 (the “Initial Notes”).

The Additional Notes have the same terms as the Initial Notes, other than with respect to the date of issuance and the issue price.

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

Fiscal year 2020 transactions

On April 1, 2020, in order to enhance our financial flexibility given the general uncertainty associated with the COVID-19 pandemic, we withdrew $ 400.0 million from the Revolving Credit Facility.

On August 17, 2020, we repaid these borrowings using a portion of the proceeds from issuance of $ 750.0 million aggregate principal amount of 3.75 % senior notes due 2031 (the "3.75% Senior Notes"), issued by our indirect, wholly-owned subsidiary, Sensata Technologies Inc.

Fiscal year 2019 transactions

On March 27, 2019 certain indirect, wholly-owned subsidiaries of Sensata plc, including Sensata Technologies B.V.

("STBV"), entered into the ninth amendment (the "Ninth Amendment") of the Credit Agreement.

Among other changes to the Credit Agreement, the Ninth Amendment (i) extended the maturity date of the Revolving Credit Facility to March 27, 2024;

(ii) added pounds sterling as an available currency for revolving credit loans and letters of credit under the Revolving Credit Facility;

(iii) lowered the interest rate margins related to the Revolving Credit Facility (depending on our senior secured net leverage ratio);

(iv) lowered our letter of credit fees (depending on our senior secured net leverage ratio);

(v) reduced our revolving credit commitment fees (depending on our senior secured net leverage ratio);

and (vi) modified the senior secured net leverage ratio financial covenant to increase the Revolving Credit Facility utilization threshold above which such financial covenant is tested from 10 % to 20 % and eliminated the requirement that such ratio be tested (regardless of utilization) for purposes of satisfying the conditions to any borrowing or other utilization under the Revolving Credit Facility.

On June 13, 2019, our subsidiaries that were at the time borrowers under the Credit Agreement entered into an amendment to the Credit Agreement with the administrative agent to correct certain technical and immaterial errors in the Credit Agreement.

On September 20, 2019 certain of our subsidiaries, including STBV and STI, entered into the Tenth Amendment.

Under the terms of the Tenth Amendment, among other changes to the Credit Agreement, (i) the final maturity date of the Term Loan was extended to September 20, 2026;

(ii) STI became the sole borrower under the Credit Agreement and assumed substantially all of the obligations of STBV and Sensata Technologies Finance Company, LLC ("STFC") thereunder;

(iii) STBV became a guarantor of STI’s obligations under the Credit Agreement, and STFC ceased to be a guarantor with respect to the Credit Agreement;

(iv) certain subsidiaries of STBV that previously guaranteed STBV’s and/or STFC’s obligations under the Credit Agreement (the “Released Guarantors”) were released from their guarantees under the Credit Agreement, subject to the satisfaction of certain tests (the “Guarantees Release”);

(v) the permission to incur incremental additional indebtedness under the Credit Agreement was increased;

and (vi) certain of the operational and restrictive covenants and other terms and conditions of the Senior Secured Credit Facilities to which STBV and its restricted subsidiaries are subject were modified to provide us with increased flexibility and permissions thereunder (including permission, subject to no default or event of default, to make restricted payments (including dividends) in an amount equal to $ 50.0 million annually, which can be increased to an unlimited amount subject to compliance with a specified senior secured net leverage ratio).

These provisions were not triggered during the year ended December 31, 2020.

We have various tranches of senior notes outstanding.

On August 17, 2020, we repaid these borrowings using a portion of the proceeds from issuance of $ 750.0 million aggregate principal amount of the 3.75% Senior Notes issued by STI.

We have various tranches of senior notes outstanding as of December 31, 2021.

Information regarding these senior notes (together, the "Senior Notes") is included in the following table.

The Senior Notes were issued under indentures (the "Senior Notes Indentures") among the issuers listed in the table below, The Bank of New York Mellon, as trustee, and our guarantor subsidiaries named in the respective Senior Notes Indentures.

Each of the Senior Notes were issued at par, with interest payable semi-annually on the dates shown in the table below.

4.875% Senior Notes 5.625% Senior Notes 5.000% Senior Notes 6.250% Senior Notes (1)

4.375% Senior Notes (2)

3.750% Senior Notes

4.875% Senior Notes 5.625% Senior Notes 5.0% Senior Notes 4.375% Senior Notes 3.750% Senior Notes 4.0% Senior Notes

Aggregate principal amount $ 500,000 $ 400,000 $ 700,000 $ 450,000 $ 750,000 $ 1,000,000

Interest rate 4.875 % 5.625 % 5.000 % 4.375 % 3.750 % 4.000 %

Issuer STBV STBV STBV STUK STI STI

Issue date April 2013 October 2014 March 2015 November 2015 September 2019 August 2020

Interest due April 15 May 1 April 1 February 15 February 15 February 15

Interest due October 15 November 1 October 1 August 15 August 15 August 15

Maturity Date October 2023 November 2024 October 2025 February 2026 February 2030 February 2031

Issue price 100.000 % 100.000 % 100.000 % 100.000 % 100.000 % Various (1)

Issuer STBV STBV STBV STI STI STBV

Issue date April 2013 October 2014 March 2015 September 2019 August 2020 Various (1)

Interest due April 15 May 1 April 1 February 15 February 15 April 15

Interest due October 15 November 1 October 1 August 15 August 15 October 15

__________________________

(1) The 6.25% Senior Notes were issued by our indirect, wholly-owned subsidiary, Sensata Technologies UK Financing Co.

plc ("STUK") under an indenture dated as of November 27, 2015 (the "6.25% Senior Notes Indenture").

On February 3, 2021, we announced that we intended to redeem in full the $ 750.0 million aggregate principal amount outstanding on our 6.25% Senior Notes due 2026 in March 2021.

(2) The proceeds of the issuance of the 4.375% Senior Notes were used to repay a portion of the Term Loan concurrent with the entry into the Tenth Amendment.

Except as described below with respect to the 3.75% Senior Notes and the 4.375% Senior Notes, at any time, and from time to time, we may optionally redeem the Senior Notes, in whole or in part, at a price equal to 100 % of the principal amount of the notes redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the date of redemption, plus a "make-whole" premium set forth in the relevant Senior Notes Indenture.

(1) On March 29, 2021, we issued $ 750.0 million of 4.0 % Senior Notes that were priced at 100.00 %.

On April 8, 2021, we issued $ 250.0 million of 4.0 % Senior Notes that were priced at 100.75 %.

Except as described below with respect to the 3.75% Senior Notes, the 4.375% Senior Notes, and the 4.0% Senior Notes, at any time, and from time to time, we may optionally redeem the Senior Notes, in whole or in part, at a price equal to 100 % of the principal amount of the notes redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the date of redemption, plus a "make-whole" premium set forth in the relevant Senior Notes Indenture.

The "make-whole" premium will not be payable with respect to any such redemption of the 4.375% Senior Notes on or after November 15, 2029.

5 unchanged sentences

2028 and thereafter 100.000 %

The "make-whole" premium will not be payable with respect to any such redemption of the 4.0% Senior Notes on or after April 15, 2024;

on or after such date, we may optionally redeem the 4.0% Senior Notes, in whole or in part, at the following prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, up to but excluding the redemption date:

Period beginning April 15, Price

2024 102.000 %

2025 101.000 %

2026 and thereafter 100.000 %

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

Upon the occurrence of certain specific change in control events, we will be required to offer to repurchase the notes at 101 % of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

4 unchanged sentences

The Senior Notes Indentures provide for events of default that include, among others, nonpayment of principal or interest when due, breach of covenants or other provisions in the relevant Senior Notes Indenture, defaults in payment of certain other indebtedness, certain events of bankruptcy or insolvency, failure to pay certain judgments, and the cessation of the full force and effect of the guarantees of significant subsidiaries.

Generally, if an event of default occurs, the trustee or the holders of at least 25 % in principal amount of the then outstanding Senior Notes issued under the relevant Senior Notes Indenture may declare the principal of, and accrued but unpaid interest on, all of the relevant Senior Notes to be due and payable immediately.

Generally, if an event of default occurs, the trustee or the holders of at

least 25 % in principal amount of the then outstanding Senior Notes issued under the relevant Senior Notes Indenture may declare the principal of, and accrued but unpaid interest on, all of the relevant Senior Notes to be due and payable immediately.

All provisions regarding remedies in an event of default are subject to the relevant Senior Notes Indenture.

4 unchanged sentences

STBV has not designated any subsidiaries as unrestricted.

The net assets of STBV subject to these restrictions totaled $ 2,726.2 million at December 31, 2020.

The net assets of STBV subject to these restrictions totaled $ 3.0 billion at December 31, 2021.

Credit Agreement

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STBV, however, is limited in its ability to pay dividends or otherwise make distributions to its immediate parent company and, ultimately, to Sensata plc, under the Credit Agreement.

Specifically, the Credit Agreement prohibits STBV from paying dividends or making distributions to its parent companies except for purposes that include, but are not limited to, the following:

Specifically, the Credit Agreement prohibits STBV from paying

dividends or making distributions to its parent companies except for purposes that include, but are not limited to, the following:

• customary and reasonable operating expenses, legal and accounting fees and expenses, and overhead of such parent companies incurred in the ordinary course of business, provided that such amounts, in the aggregate, do not exceed $ 20.0 million in any fiscal year;

6 unchanged sentences

Accounting for Debt Financing Transactions

During the year ended December 31, 2020, in connection with the entry into the 3.75% Senior Notes, we incurred $ 8.4 million of related third-party costs, which are presented as a reduction of long-term debt on our consolidated balance sheets.

During the year ended December 31, 2019, in connection with the entry into the Ninth Amendment, we incurred $ 2.4 million of creditor fees and related third-party costs, which are presented as a reduction of long-term debt on our consolidated balance sheets.

During the year ended December 31, 2019, in connection with of the issuance of the 4.375% Senior Notes, the entry into the Tenth Amendment, and the subsequent partial repayment of the Term Loan, we recognized a loss of $ 4.4 million, presented in the other, net line of our consolidated statement of operations, as well as $ 5.0 million of deferred financing costs, which are presented as a reduction of long-term debt on our consolidated balance sheets.

During the year ended December 31, 2018, in connection with the Merger, we paid $ 5.8 million of creditor fees and related third-party costs in order to obtain consents to the transaction from our existing lenders.

As a result, and based on application of the provisions in FASB ASC Subtopic 470-50, we recognized a $ 3.5 million adjustment to the carrying value of long-term debt, net and a $ 2.4 million loss in other, net.

Refer to Note 2, "Significant Accounting Policies," for additional information related to our accounting policies regarding debt financing transactions.

In the year ended December 31, 2021, in connection with the early redemption of the 6.25% Senior Notes, we recognized a loss of $ 30.1 million, which primarily reflects payment of $ 23.4 million for the early redemption premium, with the remaining loss representing write-off of debt discounts and deferred financing costs.

In addition, in connection with the issuance of the 4.0% Senior Notes, we recognized $ 9.6 million of deferred financing costs, which are presented as a reduction of long-term debt on our consolidated balance sheets and $ 1.7 million of issuance premiums, which are presented as an addition to long-term debt on our consolidated balance sheets.

In the year ended December 31, 2020, in connection with the entry into the 3.75% Senior Notes, we incurred $ 8.4 million of related third-party costs, which are presented as a reduction of long-term debt on our consolidated balance sheets.

In the year ended December 31, 2019, in connection with the entry into the Ninth Amendment, we incurred $ 2.4 million of creditor fees and related third-party costs, which are presented as a reduction of long-term debt on our consolidated balance sheets.

In the year ended December 31, 2019, in connection with of the issuance of the 4.375% Senior Notes, the entry into the Tenth Amendment, and the subsequent partial repayment of the Term Loan, we recognized a loss of $ 4.4 million, presented in the other, net line of our consolidated statements of operations, as well as $ 5.0 million of deferred financing costs, which are presented as a reduction of long-term debt on our consolidated balance sheets.

Refer to Note 2:

Significant Accounting Policies for additional information related to our accounting policies regarding debt financing transactions.

Finance Lease and Other Financing Obligations

Refer to Note 17, "Leases," for additional information related to our finance leases.

Refer to Note 17:

Leases for additional information related to our finance leases.

Debt Maturities

4 unchanged sentences

The following table presents the remaining mandatory principal repayments of long-term debt, excluding finance lease payments, other financing obligations, and discretionary repurchases of debt, in each of the years ended December 31, 2022 through 2026 and thereafter.

On February 3, 2021, we announced that we intended to redeem in full the $ 750.0 million aggregate principal amount outstanding on our 6.25 % Senior Notes due 2026 in March 2021.

This redemption is reflected in fiscal year 2021 in the following table.

In accordance with the terms of the 6.25% Senior Notes, redemption will be at 103.125 % of aggregate principal amount outstanding, and will represent an additional cash outflow of approximately $ 23.4 million in fiscal year 2021, which is not presented below.

For the year ended December 31, Aggregate Maturities

2021 $ 754,630

Thereafter 2,200,000

1 unchanged sentence

Commitments and Contingencies

Non-cancelable purchase agreements exist with various suppliers, primarily for services such as information technology support.

Non-cancelable purchase agreements exist with various suppliers, primarily for services such as information technology ("IT") support.

The terms of these agreements are fixed and determinable.

As of December 31, 2020, we had the following purchase commitments:

As of December 31, 2021, we had the following purchase commitments, presented by expected payment dates:

For the year ending December 31,

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Officers and Directors:

liabilities, including all expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit, or proceeding, provided he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful or outside of his or her mandate.

Our articles of association provide for indemnification of directors and officers by us to the fullest extent permitted by applicable law, as it now exists or may hereinafter be amended (but, in the case of an amendment, only to the extent such amendment permits broader indemnification rights than permitted prior thereto), against any and all liabilities, including all expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit, or proceeding, provided he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or

proceeding, had no reasonable cause to believe his or her conduct was unlawful or outside of his or her mandate.

The articles do not provide a limit to the maximum future payments, if any, under the indemnification.

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Product Warranty Liabilities

Refer to Revenue Recognition in Note 2, "Significant Accounting Policies," for additional information related to the warranties we provide to customers.

Refer to Note 2:

Significant Accounting Policies — Revenue Recognition for additional information related to the warranties we provide to customers.

In the event a warranty claim based on defective materials exists, we may be able to recover some of the cost of the claim from the vendor from whom the materials were purchased.

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Under FASB ASC Topic 450, loss contingency provisions are recognized for probable and estimable losses at our best estimate of a loss or, when a best estimate cannot be made, at our estimate of the minimum loss.

These estimates are often developed prior to knowing the

amount of the ultimate loss, require the application of considerable judgment, and are refined each accounting period as additional information becomes known.

These estimates are often developed prior to knowing the amount of the ultimate loss, require the application of considerable judgment, and are refined each accounting period as additional information becomes known.

Accordingly, we are often initially unable to develop a best estimate of loss and therefore the minimum amount, which could be an immaterial amount, is recognized.

As information becomes known, either the minimum loss amount is increased, or a best estimate can be made, generally resulting in additional loss provisions.

A best estimate amount may be changed to a lower amount when events result in an expectation of a more favorable outcome than previously expected.

estimate amount may be changed to a lower amount when events result in an expectation of a more favorable outcome than previously expected.

Pending Litigation and Claims:

There are no material pending litigation and claims outstanding as of December 31, 2020.

Litigation and Claims resolved in the current year:

We were a defendant in a lawsuit, Wasica Finance Gmbh et al v.

Schrader International Inc.

et al, Case No.

13-1353-CPS, U.S.D.C., Delaware , in which the claimant alleged infringement of their patent (US 5,602,524) in connection with certain of our tire pressure monitoring system products.

The patent in question has expired, and as a result, the claimant sought damages for past alleged infringement with interest and costs.

The asserted patent was the U.S.

counterpart of a German patent that had been previously asserted against Schrader.

Schrader succeeded in proving that German patent to be invalid.

On February 14, 2020, a jury found us liable for damages in the amount of $ 31.2 million.

As a result, we recorded a loss of $ 29.2 million in the three months ended March 31, 2020 through cost of revenue.

On July 6, 2020, the court awarded an additional $ 12.1 million for plaintiffs and against us for prejudgment interest-related damages, and as a result, in the three months ended June 30, 2020, we recorded a loss of $ 12.1 million through restructuring and other charges, net, to reflect the court's order.

The parties executed and closed a Litigation Settlement & License Agreement on September 18, 2020 to settle the matter for $ 31.6 million.

As a result of this settlement, in the three months ended September 30, 2020, we recognized a gain of $ 11.7 million, presented in restructuring and other charges, net.

The lawsuit was formally dismissed by the District Court (D.

Del) on September 22, 2020, and the U.S.

Court of Appeals for the Federal Circuit on September 24, 2020.

There are no material pending litigation or claims outstanding as of December 31, 2021.

Shareholders' Equity

Treasury Shares

Ordinary shares repurchased by us are recognized, measured at cost, and presented as treasury shares on our consolidated balance sheets, resulting in a reduction of shareholders' equity.

In connection with the Merger, all then outstanding treasury shares were canceled in accordance with U.K.

Accordingly, we (1) derecognized the total purchase price of these treasury shares, (2) recognized a reduction to ordinary shares at an amount equal to the total par value of such shares, and (3) recognized a reduction to retained earnings at an amount equal to the excess of the total repurchase price over the total par value of the then outstanding treasury shares, or $ 286.1 million.

From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by our Board of Directors at any time.

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The authorized amount of our various share repurchase programs may be modified or terminated by our Board of Directors at any time.

We currently have a $ 500.0 million share repurchase program authorized by our Board of Directors in July 2019 (the "July 2019 Program").

On April 2, 2020, we announced a temporary suspension of July 2019 Program, which will continue to remain on hold until market conditions show greater improvement and stability.

Ordinary shares repurchased by us are recognized, measured at cost, and presented as treasury shares on our consolidated balance sheets, resulting in a reduction of shareholders' equity.

In July 2019 our Board of Directors authorized a $ 500.0 million share repurchase program (the "July 2019 Program").

On April 2, 2020, we announced a temporary suspension of the July 2019 Program.

At the time of this announcement, approximately $ 302.3 million remained available under this program.

We resumed repurchasing shares under the July 2019 Program in November 2021, and for the year ended December 31, 2021, we repurchased approximately 0.8 million shares for $ 47.8 million (an average price per share of $ 59.28 ).

As of December 31, 2021, approximately $ 254.5 million remained available under the July 2019 Program.

As a result of certain aspects of U.K.

law, we discontinued the practice of reissuing treasury shares as part of our share-based compensation programs upon completion of the Merger.

The number of treasury shares reissued prior to completion of the Merger was not material.

On January 20, 2022, we announced that our Board of Directors had authorized a new ordinary share repurchase program of $ 500.0 million (the “January 2022 Program”), which replaces the July 2019 Program.

Sensata’s shareholders have previously approved the forms of share repurchase agreements and the potential broker counterparties needed to execute the buyback program.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss were as follows:

The components of accumulated other comprehensive loss for the years ended December 31, 2021, 2020, and 2019 were as follows:

Cash Flow Hedges Defined Benefit and Retiree Healthcare Plans Accumulated Other Comprehensive Loss

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Pre-tax current period change 9,816 ( 2,198 ) 7,618

Tax effect ( 12,454 ) 806 ( 11,648 )

Income tax effect ( 2,454 ) 530 ( 1,924 )

Balance as of December 31, 2019 16,546 ( 37,030 ) ( 20,484 )

Pre-tax current period change ( 31,114 ) ( 7,848 ) ( 38,962 )

Tax effect ( 2,454 ) 530 ( 1,924 )

Income tax effect 7,835 2,076 9,911

Balance as of December 31, 2020 ( 6,733 ) ( 42,802 ) ( 49,535 )

Pre-tax current period change 31,671 8,145 39,816

Tax effect 7,835 2,076 9,911

Income tax effect ( 8,107 ) ( 1,734 ) ( 9,841 )

Balance as of December 31, 2021 $ 16,831 $ ( 36,391 ) $ ( 19,560 )

The details of the components of other comprehensive (loss)/income, net of tax, for the years ended December 31, 2020, 2019, and 2018 are as follows:

The details of the components of other comprehensive income/(loss), net of tax, for the years ended December 31, 2021, 2020, and 2019 are as follows:

For the year ended December 31,

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Cash Flow Hedges Defined Benefit and Retiree Healthcare Plans Total Cash Flow Hedges Defined Benefit and Retiree Healthcare Plans Total Cash Flow Hedges Defined Benefit and Retiree Healthcare Plans Total

Other comprehensive (loss)/income before reclassifications $ ( 17,738 ) $ ( 12,494 ) $ ( 30,232 ) $ 28,795 $ ( 3,470 ) $ 25,325 $ 26,859 $ ( 2,120 ) $ 24,739

Other comprehensive income/(loss) before reclassifications $ 23,883 $ ( 30 ) $ 23,853 $ ( 17,738 ) $ ( 12,494 ) $ ( 30,232 ) $ 28,795 $ ( 3,470 ) $ 25,325

Amounts reclassified from accumulated other comprehensive loss ( 319 ) 6,441 6,122 ( 5,541 ) 6,722 1,181 ( 21,433 ) 1,802 ( 19,631 )

Other comprehensive (loss)/income $ ( 23,279 ) $ ( 5,772 ) $ ( 29,051 ) $ 7,362 $ ( 1,668 ) $ 5,694 $ 37,363 $ ( 377 ) $ 36,986

The details of the (gain)/loss reclassified from accumulated other comprehensive loss for the years ended December 31, 2020, 2019, and 2018 are as follows:

Amount of (Gain)/Loss Reclassified from Accumulated Other Comprehensive Loss

Other comprehensive income/(loss) $ 23,564 $ 6,411 $ 29,975 $ ( 23,279 ) $ ( 5,772 ) $ ( 29,051 ) $ 7,362 $ ( 1,668 ) $ 5,694

The amounts reclassified from accumulated other comprehensive loss for the years ended December 31, 2021, 2020, and 2019 were as follows:

Amount of Loss/(Gain) Reclassified from Accumulated Other Comprehensive Loss

For the year ended December 31, Affected Line in Consolidated Statements of Operations

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Derivative instruments designated and qualifying as cash flow hedges:

Foreign currency forward contracts

$ ( 10,785 ) $ ( 26,180 ) $ 18,072 Net revenue (1)

Foreign currency forward contracts

3,397 ( 2,397 ) ( 5,442 ) Cost of revenue (1)

Foreign currency forward contracts

— — 1,376 Other, net (1)

Foreign currency forward contracts $ 9,281 $ ( 10,785 ) $ ( 26,180 ) Net revenue (1)

Foreign currency forward contracts ( 9,707 ) 3,397 ( 2,397 ) Cost of revenue (1)

Total, before taxes ( 426 ) ( 7,388 ) ( 28,577 ) Income before taxes

Income tax effect 1,847 7,144 ( 3,502 ) Provision for/(benefit from) income taxes

Income tax effect 107 1,847 7,144 Provision for income taxes

Total, net of taxes $ ( 319 ) $ ( 5,541 ) $ ( 21,433 ) Net income

Defined benefit and retiree healthcare plans $ 8,268 $ 9,118 $ 2,552 Other, net (2)

Defined benefit and retiree healthcare plans — — 228 Restructuring and other charges, net (3)

Total, before taxes 8,268 9,118 2,552 Income before taxes

Income tax effect ( 2,396 ) ( 750 ) ( 478 ) Provision for/(benefit from) income taxes

Income tax effect ( 1,827 ) ( 2,396 ) ( 750 ) Provision for income taxes

Total, net of taxes $ 6,441 $ 6,722 $ 1,802 Net income

__________________________

(1) Refer to Note 19, "Derivative Instruments and Hedging Activities," for additional information related to amounts to be reclassified from accumulated other comprehensive loss in future periods.

(2) Refer to Note 13, "Pension and Other Post-Retirement Benefits," for additional information related to net periodic benefit cost.

(3) Amount represents an equity component of the Valves Business, which was sold in fiscal year 2018.

Refer to Note 5, "Restructuring and Other Charges, Net."

(1) Refer to Note 19:

Derivative Instruments and Hedging Activities for additional information related to amounts to be reclassified from accumulated other comprehensive loss in future periods.

(2) Refer to Note 13:

Pension and Other Post-Retirement Benefits for additional information related to net periodic benefit cost.

The table below shows right-of-use asset and lease liability amounts and the financial statement line item in which those amounts are presented:

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Operating lease right-of-use assets:

$ 49,980 $ 55,333

Other assets $ 44,118 $ 49,980

Total operating lease right-of-use assets $ 44,118 $ 49,980

$ 49,980 $ 55,333

Operating lease liabilities:

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Total operating lease liabilities $ 46,776 $ 54,696

$ 54,696 $ 57,000

Finance lease right-of-use assets:

Property, plant and equipment, at cost $ 49,714 $ 49,714

$ 49,714 $ 49,714

Accumulated depreciation ( 27,821 ) ( 26,107 )

( 26,107 ) ( 24,316 )

Property, plant and equipment, net $ 21,893 $ 23,607

$ 23,607 $ 25,398

Finance lease liabilities:

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Total finance lease liabilities $ 28,767 $ 30,334

The vast majority of our finance lease obligations are for facilities in Baoying, China and Attleboro, Massachusetts.

As of December 31, 2020 and 2019, the combined finance lease obligation outstanding for these facilities was $ 29.4 million and $ 29.4 million, respectively.

The table below presents the lease liabilities arising from obtaining right-of-use assets in the years ended December 31, 2021 and 2020:

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For the year ended December 31,

2021 2020 2019

Operating lease cost $ 15,529 $ 16,658 $ 16,124

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Total finance lease cost $ 4,191 $ 4,359 $ 4,503

Rent expense for the year ended December 31, 2018 (prior to the adoption of FASB ASC Topic 842) was $ 21.0 million.

The table below presents the cash paid related to our operating and finance leases for the years ended December 31, 2021, 2020, and 2019:

For the year ended December 31,

Operating cash flows from operating leases

2021 2020 2019

Operating cash flows from finance leases

$ 2,262 $ 2,731

Financing cash flows from finance leases

$ 944 $ 1,933

The table below presents the weighted-average remaining lease term of our operating and finance leases (in years):

Operating cash outflow related to operating leases $ 15,173 $ 16,489 $ 15,911

Operating cash outflow related to finance leases $ 2,372 $ 2,262 $ 2,731

Financing cash outflow related to finance leases $ 1,806 $ 944 $ 1,933

The table below presents the weighted-average remaining lease term of our operating and finance leases (in years) as of December 31, 2021:

Operating leases 7.2

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Total undiscounted cash flows related to lease liabilities 58,577 45,517

70,030 49,526

Less imputed interest ( 11,801 ) ( 16,750 )

( 15,334 ) ( 19,192 )

Total lease liabilities $ 46,776 $ 28,767

$ 54,696 $ 30,334

Fair Value Measures

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Measured on a Recurring Basis

The fair values of our assets and liabilities measured at fair value on a recurring basis as of as of December 31, 2020 and 2019 are as shown in the below table.

The fair values of our assets and liabilities measured at fair value on a recurring basis as of as of December 31, 2021 and 2020 are shown in the below table.

All fair value measures presented are categorized in Level 2 of the fair value hierarchy.

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Total liabilities measured at fair value 7,565 24,970

Refer to Note 2, "Significant Accounting Policies," for additional information related to the methods used to estimate the fair value of our financial instruments, and refer Note 19, "Derivative Instruments and Hedging Activities," for additional information related to the inputs used to determine these fair value measurements and the nature of the risks that these derivative instruments are intended to mitigate.

Refer to Note 2:

Significant Accounting Policies for additional information related to the methods used to estimate the fair value of our financial instruments and Note 19:

Derivative Instruments and Hedging Activities for additional information related to the inputs used to determine these fair value measurements and the nature of the risks that these derivative instruments are intended to mitigate.

Although we have determined that the majority of the inputs used to value our derivative instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to appropriately reflect both our own non-performance risk and the respective counterparties' non-performance risk in the fair value measurement.

As of December 31, 2020 and 2019, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have

determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

As of December 31, 2021 and 2020, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

As a result, we have determined that our derivatives in their entirety are classified in Level 2 in the fair value hierarchy.

Measured on a Nonrecurring Basis

Effective July 1, 2021, we reorganized our Sensing Solutions operating segment, which resulted in realignment of our reporting units.

As a result of this reorganization, our electrical protection product category that includes high voltage contactors, inverters, and battery management systems was moved to a new reporting unit, Clean Energy Solutions.

The remaining portions of our Electrical Protection, Industrial Sensing, Power Management, and Interconnection reporting units were consolidated into a new reporting unit, Industrial Solutions.

This reorganization had no impact on our Aerospace reporting unit.

We evaluated our goodwill and other indefinite-lived intangible assets for impairment before and after the reorganization and determined that they were not impaired.

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 2021.

Refer to Note 11, "Goodwill and Other Intangible Assets, Net," for additional information.

Based on these analyses, we determined that no impairments were required.

Based on these analyses, we determined that they were not impaired.

We concluded that Sensata Insights was a separate reporting unit from HVOR.

Accordingly, as of December 31, 2021, we had six reporting units, Automotive, HVOR, Sensata Insights, Industrial Solutions, Aerospace, and Clean Energy Solutions.

We concluded that these reorganizations have not impacted our reportable or operating segment evaluations.

We reassigned assets and liabilities, including goodwill, to these new reporting units as required by FASB ASC Topic 350.

Refer to Note 21:

Acquisitions for additional information related to these acquisitions.

As of December 31, 2021, no events or changes in circumstances occurred that would have triggered the need for an additional impairment review of goodwill or other indefinite-lived intangible assets.

Refer to Note 11:

Goodwill and Other Intangible Assets, Net for additional information.

Financial Instruments Not Recorded at Fair Value

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$ 750,000 $ 747,188 $ 750,000 $ 776,250

4.0 % Senior Notes

$ 1,000,000 $ 1,022,500 $ — $ —

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

__________________________

(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 FASB ASC Topic 321 .

Such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

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

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.

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

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

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Quanergy Systems, Inc.

$ 50,000 $ 50,000

Other 15,000 15,000

Total $ 65,000 $ 65,000

On June 22, 2021, Quanergy Systems, Inc.

("Quanergy") announced that it had entered into a definitive business combination agreement with CITIC Capital Acquisition Corp ("CITIC") (NYSE:

On July 16, 2021, CITIC filed a Registration Statement on Form S-4 with the U.S.

Securities and Exchange Commission (the "SEC"), the effectiveness of which was a condition to closing of the business combination.

At December 31, 2021, we assessed our investment in Quanergy based on the proposed terms of the business combination agreement and concluded that there were no indicators of impairment.

On January 6, 2022, the related Registration Statement on Form S-4 was declared effective by the SEC.

An Extraordinary General Meeting of shareholders of CITIC was held on January 31, 2022 at which time the business combination was approved.

The business combination closed on February 8, 2022.

Beginning on February 9, 2022, the combined company, which retained the name "Quanergy Systems, Inc.," was listed on the NYSE under the ticker symbol QNGY.

Accordingly, we will begin marking our investment in Quanergy to market each reporting period.

Derivative Instruments and Hedging Activities

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Derivative financial instruments not designated as hedges are used to manage our exposure to certain risks, not for trading or speculative purposes.

Refer to Note 2, "Significant Accounting Policies," for additional information related to the valuation techniques and accounting policies regarding derivative instruments and hedging activities.

Refer to Note 2:

Significant Accounting Policies for additional information related to the valuation techniques and accounting policies regarding derivative instruments and hedging activities.

Foreign Currency Risk

1 unchanged sentence

We enter into forward contracts to manage this exposure.

We currently have outstanding foreign currency forward contracts that qualify as cash flow hedges intended to offset the effect of exchange rate fluctuations on forecasted sales and certain

manufacturing costs.

We currently have outstanding foreign currency forward contracts that qualify as cash flow hedges intended to offset the effect of exchange rate fluctuations on forecasted sales and certain manufacturing costs.

We also have outstanding foreign currency forward contracts that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities, which are not designated for hedge accounting treatment in accordance with FASB ASC Topic 815.

For each of the years ended December 31, 2020, 2019, and 2018, amounts excluded from the assessment of effectiveness of our foreign currency forward contracts were not material.

As of December 31, 2020, we estimate that $ 9.7 million of net losses will be reclassified from accumulated other comprehensive loss to earnings during the twelve month period ending December 31, 2021.

For each of the years ended December 31, 2021, 2020, and 2019, 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 December 31, 2021, we estimate that $ 20.2 million of net gains will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending December 31, 2022.

As of December 31, 2021, we had the following outstanding foreign currency forward contracts:

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1,020.0 CNY December 27, 2021 January 28, 2022 USD to Chinese Renminbi ("CNY") 6.39 CNY Not designated

500.0 CNY November 5, 2020 Various from January to December 2021 USD to CNY 6.74 CNY Cash flow hedge

255.6 CNY October 21, 2021 Various from January 2022 to December 2022 USD to CNY 6.54 CNY Cash flow hedge

530.0 JPY December 27, 2021 January 31, 2022 USD to Japanese Yen ("JPY") 114.71 JPY Not designated

17,321.7 KRW Various from March 2019 to December 2020 Various from January 2021 to December 2022 USD to Korean Won ("KRW") 1,167.03 KRW Cash flow hedge

22,033.3 KRW Various from February 2020 to December 2021 Various from January 2022 to November 2023 USD to Korean Won ("KRW") 1,158.60 KRW Cash flow hedge

27.0 MYR December 27, 2021 January 31, 2022 USD to Malaysian Ringgit ("MYR") 4.19 MYR Not designated

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These instruments are not designated for hedge accounting treatment in accordance with FASB ASC Topic 815.

As of December 31, 2020, we had the following outstanding commodity forward contracts:

As of December 31, 2021, we had the following outstanding commodity forward contracts, none of which were designated for hedge accounting treatment in accordance with FASB ASC Topic 815:

Commodity Notional Remaining Contracted Periods Weighted-Average

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Financial Instrument Presentation

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

The following table presents the fair value of our derivative financial instruments and their classification in the consolidated balance sheets as of December 31, 2021 and 2020:

Asset Derivatives Liability Derivatives

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

Refer to Note 18, "Fair Value Measures," for additional information related to the categorization of these fair value measurements within the fair value hierarchy.

Refer to Note 18:

Fair Value Measures for additional information related to the categorization of these fair value measurements within the fair value hierarchy.

The following tables present the effect of our derivative financial instruments on the consolidated statements of operations and the consolidated statements of comprehensive income for the years ended December 31, 2021 and 2020:

Derivatives designated as hedging instruments Amount of Deferred (Loss)/Gain Recognized in Other Comprehensive (Loss)/Income Location of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income Amount of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income

Derivatives designated as hedging instruments Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive Income/(Loss) Location of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income Amount of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income

For the year ended December 31, For the year ended December 31,

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Foreign currency forward contracts $ ( 601 ) $ 2,140 Cost of revenue $ 9,707 $ ( 3,397 )

Derivatives not designated as hedging instruments Amount of Gain/(Loss) Recognized in Net Income Location of Gain/(Loss) Recognized in Net Income

Derivatives not designated as hedging instruments Amount of (Loss)/Gain Recognized in Net Income Location of (Loss)/Gain Recognized in Net Income

For the year ended December 31,

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Segment Reporting

In the three months ended June 30, 2020, we altered the way we measure segment operating income in order to align with a change to the performance measures provided to and used by our chief operating decision maker for purposes of assessing

performance and deciding how to allocate resources to each segment.

Whereas R&D and SG&A expenses related to our megatrend initiatives were historically allocated to our operating segments, beginning in fiscal year 2020 these amounts are presented within corporate and other.

Prior period information has been recast to reflect this revised presentation.

We have historically operated in, and reported financial information for, the following two reportable segments:

Performance Sensing and Sensing Solutions, each of which was also an operating segment.

In the fourth quarter of 2020, a change in focus of the evaluation of our business by our chief operating decision maker in order to make decisions about resource allocation, among other factors such as solidification of a reporting structure to accommodate this focus, necessitated a reevaluation of our conclusion that Performance Sensing was an operating segment.

Based on our assessment of these factors, we determined that the Performance Sensing operating segment should be divided into two operating segments, Automotive and HVOR.

We also determined that each of these operating segments meet the criteria for aggregation in FASB ASC Topic 280, Reportable Segments .

No change was made to Sensing Solutions, and it remains an operating segment.

None of the preceding changes resulted in any impact on the overall composition of our reportable segments and prior periods were not required to be recast for this change.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes amortization of intangible assets, restructuring and other charges, net, and certain corporate costs/credits not associated with the operations of the segment, including share-based compensation expense and a portion of depreciation expense associated with assets recorded in connection with acquisitions.

Corporate and other costs excluded from an operating (and reportable) segment’s performance are separately stated below and also include costs that are related to functional areas such as finance, information technology, legal, and human resources.

We present financial information for two reportable segments, Performance Sensing and Sensing Solutions.

The Performance Sensing reportable segment consists of two operating segments, Automotive and HVOR, each of which meet the criteria for aggregation in FASB ASC Topic 280, Segment Reporting .

The Sensing Solutions reportable segment is also an operating segment.

Our operating segments are businesses that we manage as components of an enterprise, for which separate financial information is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and assess performance.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes amortization of intangible assets, restructuring and other charges, net, certain costs associated with our strategic megatrend initiatives, and certain corporate costs or credits not associated with the operations of the segment, including share-based compensation expense and a portion of depreciation expense associated with assets recognized in connection with acquisitions.

We believe that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of our segments.

However, this measure should be considered in addition to, and not as a substitute for, or superior to, operating income or other measures of financial performance prepared in accordance with U.S.

The accounting policies of each of our operating and reportable segments are materially consistent with those described in Note 2, "Significant Accounting Policies."

As discussed above, the Performance Sensing reportable segment represents the aggregation of the Automotive and HVOR operating segments, which primarily serve the automotive and HVOR industries, respectively, through development and manufacture of sensors, high-voltage contactors, and other solutions used in mission-critical systems and applications such as those in subsystems of automobiles, on-road trucks, and off-road equipment (e.g., tire pressure monitoring, thermal management, electrical protection, regenerative braking, powertrain (engine/transmission), and exhaust management).

Our products are used in subsystems that, among other things, improve operating performance and efficiency, as well as contribute to environmentally sustainable and safe solutions as the world continues to pivot in those directions

Sensing Solutions primarily serves the industrial and aerospace industries through development and manufacture of a broad portfolio of application-specific sensor and electrical protection products used in a diverse range of industrial markets, including the appliance, HVAC, semiconductor, material handling, factory automation, and water management markets, as well as the aerospace market.

The following table presents net revenue and segment operating income for the reported segments and other operating results not allocated to the reported segments for the years ended December 31, 2020, 2019, and 2018 (prior periods have been recast as discussed above):

The accounting policies of each of our operating and reportable segments are materially consistent with those described in Note 2:

Significant Accounting Policies .

The Performance Sensing segment serves the automotive and HVOR industries through its development and manufacture of sensors, high-voltage solutions (i.e.

electrical protection components), and other solutions that are used in mission-critical systems and applications.

Examples include those used in subsystems of automobiles, on-road trucks, and off-road equipment, such as tire pressure monitoring, thermal management, electrical protection, regenerative braking, powertrain (engine/transmission), and exhaust management.

Our products are used in subsystems that, among other things, improve operating performance and efficiency, contribute to environmentally sustainable and safe solutions, and provide data-driven insight, connectivity, and prognostics to commercial fleet operators and asset managers.

the appliance, HVAC, semiconductor, factory automation, water management, and charging infrastructure markets, as well as the aerospace market, including commercial aircraft, defense, and aftermarket markets.

The following table presents net revenue and segment operating income for the reportable segments and other operating results not allocated to the reportable segments for the years ended December 31, 2021, 2020, and 2019:

For the year ended December 31,

19 unchanged sentences

Sensors X X $ 3,027,183 $ 2,380,608 $ 2,712,926

Electrical Protection (1)

X X 504,001 573,631 522,172

X X 160,969 164,074 244,175

Electrical protection X X 635,141 504,001 573,631

Other X X 158,482 160,969 164,074

Net revenue $ 3,820,806 $ 3,045,578 $ 3,450,631

(1) Beginning in the year ended December 31, 2020, we adjusted our product categories to better reflect how we view our products.

The product category we previously referred to as "controls" was renamed to "electrical protection," and our GIGAVAC products, which were previously grouped in "other," have been recast into "electrical protection." The amount of revenue recast from "other" to "electrical protection" in the years ended December 31, 2019 and 2018 was $ 91.9 million and $ 13.4 million, respectively.

The "sensors" product category was unchanged.

The following table presents depreciation and amortization expense for our reportable segments for the years ended December 31, 2021, 2020, and 2019:

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__________________________

(1) Included within corporate and other is depreciation and amortization expense associated with the fair value step-up recognized in prior acquisitions and accelerated depreciation recognized in connection with restructuring actions.

We do not allocate the additional depreciation and amortization expense associated with the step-up in the fair value of the PP&E and intangible assets associated with these acquisitions or accelerated depreciation related to restructuring actions

to our segments.

(1) Included within corporate and other is depreciation and amortization expense associated with the fair value step-up recognized in acquisitions and accelerated depreciation recognized in connection with restructuring actions.

This treatment is consistent with the financial information reviewed by our chief operating decision maker.

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United States $ 1,311,878 $ 1,082,671 $ 1,333,532

Netherlands 482,020 576,804 585,036

China 871,667 641,516 575,211

The Netherlands 621,658 482,020 576,804

Korea 191,045 172,229 188,226

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Property, plant and equipment, net $ 820,933 $ 803,825

Unaudited Quarterly Data

A summary of the unaudited quarterly results of operations for the years ended December 31, 2020 and 2019 is as follows:

For the three months ended

December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020

Net revenue $ 906,491 $ 788,313 $ 576,505 $ 774,269

Gross profit $ 296,551 $ 258,058 $ 164,062 $ 207,863

Net income $ 121,667 $ 76,729 $ ( 42,541 ) $ 8,431

Basic net income per share $ 0.77 $ 0.49 $ ( 0.27 ) $ 0.05

Diluted net income per share $ 0.77 $ 0.49 $ ( 0.27 ) $ 0.05

For the three months ended

December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019

Net revenue $ 846,691 $ 849,715 $ 883,726 $ 870,499

Gross profit $ 290,209 $ 294,805 $ 308,491 $ 289,693

Net income $ 53,538 $ 70,675 $ 73,436 $ 85,065

Basic net income per share (1)

$ 0.34 $ 0.44 $ 0.45 $ 0.52

Diluted net income per share $ 0.34 $ 0.44 $ 0.45 $ 0.52

__________________________________________

(1) The sum of net income per share for the four quarters does not equal the full year net income per share due to rounding.

The decline in revenue in the first, second, and third quarters of 2020 compared to the corresponding quarters of 2019 relates in large part to the impact of the COVID-19 pandemic on our business.

The second quarter of 2020 was most significantly impacted, and we experienced partial recovery in the third quarter of 2020.

Restructuring and other charges, net

The below table presents amounts recognized in restructuring and other charges, net in the periods presented:

For the three months ended

December 31, September 30, June 30, March 31,

2020 $ 897 $ ( 10,519 ) $ 38,218 $ 4,498

2019 $ 25,520 $ 6,421 $ 16,310 $ 5,309

On June 30, 2020, we initiated the Q2 2020 Global Restructure Program and recognized approximately $ 24.1 million of severance charges related to that program in the second quarter of 2020.

In the third quarter of 2020, we settled intellectual property litigation brought against Schrader by Wasica, which resulted in the derecognition of nearly the entire $ 12.1 million liability that we recorded in the second quarter of 2020 resulting from a prejudgment interest-related award granted by the court on behalf of Wasica.

In fiscal year 2019, restructuring and other charges net includes a $ 17.8 million loss related to the termination of a supply agreement in connection with the Metal Seal litigation in the fourth quarter, $ 6.5 million of termination benefits provided under a one-time benefit arrangement related to the shutdown and relocation of an operating site in Germany in the third quarter, and $ 12.7 million of benefits provided under a voluntary retirement incentive program offered to a limited number of eligible employees in the U.S., in the second quarter.

Refer to Note 5, "Restructuring and Other Charges, Net," for additional information related to restructuring and other charges.

In response to the global financial and health crisis caused by the COVID-19 pandemic, the U.S.

federal government enacted the Coronavirus Aid, Relief, and Economic Security Act on March 27, 2020.

Federal limitations on interest deductions were reduced in connection with this legislation, and we recorded a deferred tax benefit of $ 7.5 million in the three months ended March 31, 2020, as we were able to utilize additional interest expense that was previously subject to a valuation allowance.

In the fourth quarter of 2020 we recognized a net income tax benefit of $ 54.2 million related to intangible property transfers.

In the first quarter of 2020, we recognized a $ 29.2 million loss in cost of revenue as a result of a judgment issued against us for damages in intellectual property litigation brought against Schrader by Wasica.

We settled this litigation in the third quarter of 2020.

Additional amounts recognized related to this litigation are presented in restructuring and other charges, net as discussed above.

See Note 15, "Commitments and Contingencies," for additional information regarding the intellectual property litigation with Wasica.

Subsequent Events

On February 3, 2021, we announced that we intended to redeem in full the $ 750.0 million aggregate principal amount outstanding on our 6.25 % Senior Notes due 2026 in March 2021.

This resulted in classification of the Senior Notes as current on our December 31, 2020 consolidated balance sheet.

Refer to Note 14, “Debt,” for additional information on the terms of this redemption.

On February 11, 2021, we entered into a securities purchase agreement (the "SPA") to acquire all of the outstanding equity interests of Xirgo Technologies, LLC ("Xirgo") for an aggregate purchase price of $ 400 million, subject to adjustment for certain closing and post-closing items.

Xirgo is a leading provider of telematics and data insight, headquartered in Camarillo, California.

The product offerings and technology of Xirgo will augment our existing portfolio in advancing our Smart & Connected megatrend initiative.

We expect to integrate Xirgo into our Performance Sensing reportable segment.

transaction contemplated by the SPA is expected to close in the first quarter of 2021, subject to clearance under the Hart-Scott-Rodino Act and the satisfaction of certain customary closing conditions.

On April 1, 2021, we completed the acquisition of all of the equity interests in Xirgo, a leading telematics and data insights provider across the fleet transportation and logistics segments, headquartered in Camarillo, California, for an aggregate cash purchase price of $ 401.7 million.

In addition to the aggregate purchase price, we paid $ 7.0 million of cash at closing related to an employee retention arrangement, which is reflected as an operating cash outflow on our consolidated statements of cash flows.

The product offerings and technology of Xirgo will augment our existing portfolio in advancing our Insights megatrend initiative, and greatly expands our ability to provide data insights to fleet transportation and logistics customers, by serving telematics service providers, fleet management solution providers, and fleet operators themselves.

Xirgo brings a comprehensive suite of telematics and asset tracking devices, cloud-based data insight solutions, as well as emerging cargo capacity and video sensing applications and data services.

We are integrating Xirgo into our Performance Sensing reportable segment.

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

Net working capital, excluding cash $ 11,536

Property, plant and equipment 1,427

Goodwill 164,280

Other intangible assets 249,612

Other assets 508

Deferred income tax liabilities ( 32,518 )

Other long-term liabilities ( 292 )

Fair value of net assets acquired, excluding cash and cash equivalents 394,553

Cash and cash equivalents 7,117

Fair value of net assets acquired $ 401,670

The goodwill recognized as a result of this acquisition was approximately $ 164.3 million, which represents future economic benefits expected to arise from synergies from combining operations and the extension of existing customer relationships.

The amount of goodwill recognized that is expected to be deductible for tax purposes is not material.

In connection with the allocation of purchase price to the assets acquired and liabilities assumed, we identified certain definite-lived intangible assets.

The following table presents the acquired intangible assets, their estimated fair values, and weighted-average lives:

Acquisition Date Fair Value Weighted-Average Lives (years)

Acquired definite-lived intangible assets

Customer relationships $ 198,540 15

Completed technologies 44,130 10

Tradenames 6,930 11

Total definite-lived intangible assets acquired $ 249,612 14

The definite-lived intangible assets were valued using the income approach.

We primarily used the relief-from-royalty method to value completed technologies and tradenames, and we used the multi-period excess earnings method to value customer relationships.

These valuation methods incorporate assumptions including expected discounted future net cash flows resulting from either the future estimated after-tax royalty payments avoided as a result of owning the completed technologies or the future earnings related to existing customer relationships.

On November 19, 2021, we acquired all of the equity interests in Spear Power Systems ("Spear"), a leader in electrification solutions that supports our newly established Clean Energy Solutions business unit, for an aggregate purchase price of $ 114.4 million, subject to certain post-closing items, including the discounted present value of contingent consideration of $ 8.6 million, which is recorded as a liability on our consolidated balance sheet as of December 31, 2021.

Spear is headquartered in Grandview, Missouri, and develops next generation scalable lithium-ion battery storage systems for demanding land, sea, and air applications.

The acquisition of Spear advances Sensata’s Electrification portfolio and strategy into new clean energy markets.

Spear expands on Sensata’s acquisition of Lithium Balance in battery management systems and GIGAVAC in high-voltage contactors and provides energy storage solutions for OEMs and system integrators in fast-growing end-markets that offer significant growth opportunities.

We are integrating Spear into our Sensing Solutions Segment.

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

Net working capital, excluding cash $ 4,431

Property, plant and equipment 4,443

Goodwill 72,756

Other intangible assets 30,736

Deferred income tax liabilities ( 2,468 )

Fair value of net assets acquired, excluding cash and cash equivalents 109,898

Cash and cash equivalents 4,547

Fair value of net assets acquired $ 114,445

The allocation of purchase price of Spear is preliminary and is based on management’s judgments after evaluating several factors, including preliminary valuation assessments of tangible and intangible assets.

The final allocation of the purchase price to the assets acquired will be completed when the final valuations are completed.

The preliminary goodwill recognized as a result of this acquisition was approximately $ 72.8 million, which represents future economic benefits expected to arise from synergies from combining operations and the extension of existing customer relationships.

The amount of goodwill recognized in this acquisition will not be deductible for tax purposes.

In connection with the allocation of purchase price to the assets acquired and liabilities assumed, we identified certain definite-lived intangible assets.

The following table presents the acquired intangible assets, their preliminary estimated fair values, and weighted-average lives:

Acquisition Date Fair Value Weighted-Average Lives (years)

Acquired definite-lived intangible assets

Customer relationships $ 6,100 10

Completed technologies 22,400 13

Tradenames 1,900 10

Total definite-lived intangible assets acquired $ 30,736 12

The definite-lived intangible assets were valued using the income approach.

We primarily used the relief-from-royalty method to value completed technologies and tradenames, and we used the multi-period excess earnings method to value customer relationships.

On November 19, 2021, we acquired all of the outstanding equity interests of SmartWitness, a privately held innovator of video telematics technology for heavy- and light-duty fleets, for an aggregate cash purchase price of $ 204.2 million, subject to certain post-closing conditions.

In addition to the aggregate purchase price, we paid $ 8.6 million of cash at closing related to an employee retention arrangement, which is reflected as an operating cash outflow on our consolidated statements of cash flows.

SmartWitness is headquartered in Schaumburg, Illinois and expands the capabilities of Sensata Insights into high growth video telematics applications, providing access to applications that will drive adoption of traditional and video telematics solutions.

SmartWitness will be integrated into the Performance Sensing reportable segment.

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

Net working capital, excluding cash $ 10,256

Property, plant and equipment 58

Goodwill 126,549

Other intangible assets 76,800

Other assets 4

Deferred income tax liabilities ( 18,920 )

Fair value of net assets acquired, excluding cash and cash equivalents 194,747

Cash and cash equivalents 9,502

Fair value of net assets acquired $ 204,249

The allocation of purchase price of SmartWitness is preliminary and is based on management’s judgments after evaluating several factors, including preliminary valuation assessments of tangible and intangible assets.

The final allocation of the purchase price to the assets acquired will be completed when the final valuations are completed.

The preliminary goodwill recognized as a result of this acquisition was approximately $ 126.5 million, which represents future economic benefits expected to arise from synergies from combining operations and the extension of existing customer relationships.

The amount of goodwill recognized in this acquisition will not be deductible for tax purposes.

In connection with the allocation of purchase price to the assets acquired and liabilities assumed, we identified certain definite-lived intangible assets.

The following table presents the acquired intangible assets, their preliminary estimated fair values, and weighted-average lives:

Acquisition Date Fair Value Weighted-Average Lives (years)

Acquired definite-lived intangible assets

Customer relationships $ 24,100 16

Completed technologies 52,000 10

Tradenames 700 6

Total definite-lived intangible assets acquired $ 76,800 12

The definite-lived intangible assets were valued using the income approach.

We primarily used the relief-from-royalty method to value completed technologies and tradenames, and we used the multi-period excess earnings method to value customer relationships.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

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Other, net ( 215 ) 115 ( 21 )

(Loss)/income before income taxes and equity in net income of subsidiaries ( 12,841 ) 667,825 ( 14,388 )

Net income/(loss) before income taxes and equity in net income of subsidiaries 185,783 ( 12,841 ) 667,825

Equity in net income/(loss) of subsidiaries 175,663 182,733 ( 401,715 )

(Provision for)/benefit from income taxes ( 5,606 ) 16,604 —

Benefit from/(provision for) income taxes 2,134 ( 5,606 ) 16,604

Net income $ 363,580 $ 164,286 $ 282,714

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Net income $ 363,580 $ 164,286 $ 282,714

Other comprehensive (loss)/income, net of tax:

Other comprehensive income/(loss), net of tax:

Defined benefit plan — — —

Subsidiaries' other comprehensive (loss)/income ( 29,051 ) 5,694 36,451

Other comprehensive (loss)/income ( 29,051 ) 5,694 36,986

Subsidiaries' other comprehensive income/(loss) 29,975 ( 29,051 ) 5,694

Other comprehensive income/(loss) 29,975 ( 29,051 ) 5,694

Comprehensive income $ 393,555 $ 135,235 $ 288,408

8 unchanged sentences

Cash flows from investing activities:

Intercompany loans ( 224,972 ) — —

Dividends received from subsidiary 200,000 — 700,000

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Sensata plc and subsidiaries' audited consolidated financial statements are included elsewhere in this Report.

On September 28, 2017, the Board of Directors of Sensata Technologies Holding N.V.

("Sensata N.V.") unanimously approved a plan to change our location of incorporation from the Netherlands to the United Kingdom (the "U.K.").

To effect this change, on February 16, 2018 the shareholders of Sensata N.V.

approved a cross-border merger between Sensata N.V.

and Sensata plc, a newly formed, public limited company incorporated under the laws of England and Wales, with Sensata plc being the surviving entity (the "Merger").

We received approval of the Merger by the U.K.

High Court of Justice, and the Merger was completed, on March 28, 2018.

As a result thereof, 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 us prior to the Merger.

Due to the fact that the Merger was a business combination between entities under common control, the assets and liabilities exchanged were accounted for at their carrying values.

Sensata plc conducts limited separate operations and acts primarily as a holding company.

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However, Sensata Technologies B.V., an indirect, wholly-owned subsidiary of Sensata plc, is limited in its ability to pay dividends or otherwise make distributions to its immediate parent company and, ultimately, to Sensata plc, under its senior secured credit facilities and the indentures governing its senior notes.

For a discussion of the debt obligations of the subsidiaries of Sensata plc, refer to Note 14, "Debt," of Sensata plc and subsidiaries' audited consolidated financial statements included elsewhere in this Report (the "Consolidated Financial Statements").

For a discussion of the debt obligations of the subsidiaries of Sensata plc, refer to Note 14:

Debt of Sensata plc and subsidiaries' audited consolidated financial statements included elsewhere in this Report (the "Consolidated Financial Statements").

dollar amounts presented except per share amounts are stated in thousands, unless otherwise indicated.

Commitments and Contingencies

For a discussion of the commitments and contingencies of the subsidiaries of Sensata plc, refer to Note 15, "Commitments and Contingencies," of the Consolidated Financial Statements.

For a discussion of the commitments and contingencies of the subsidiaries of Sensata plc, refer to Note 15:

Commitments and Contingencies of the Consolidated Financial Statements.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

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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 8. Financial Statements and Supplementary Data