What changed in this filing

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Item 1. Financial Statements

2024-04-29 compared with 2023-11-07 · 212 added, 322 removed, 360 unchanged (60% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

September 30,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 460,359 $ 508,104

Accounts receivable, net of allowances of $ 35,207 and $ 24,246 as of September 30, 2023 and December 31, 2022, respectively

Accounts receivable, net of allowances of $ 21,851 and $ 28,980 as of March 31, 2024 and December 31, 2023, respectively

760,092 744,129

4 unchanged sentences

Goodwill 3,542,725 3,542,770

Other intangible assets, net of accumulated amortization of $ 2,484,206 and $ 2,352,813 as of September 30, 2023 and December 31, 2022, respectively

Other intangible assets, net of accumulated amortization of $ 2,561,367 and $ 2,522,760 as of March 31, 2024 and December 31, 2023, respectively

845,555 883,671

11 unchanged sentences

Pension and other post-retirement benefit obligations 38,053 38,178

Finance lease and other financing obligations, less current portion 23,456 24,742

Finance lease obligations, less current portion 22,587 22,949

Long-term debt, net 3,375,511 3,373,988

3 unchanged sentences

Shareholders’ equity:

Ordinary shares, € 0.01 nominal value per share, 177,069 shares authorized, and 175,819 and 175,207 shares issued as of September 30, 2023 and December 31, 2022, respectively

Treasury shares, at cost, 24,260 and 22,781 shares as of September 30, 2023 and December 31, 2022, respectively

Ordinary shares, € 0.01 nominal value per share, 177,069 shares authorized, and 175,839 and 175,832 shares issued as of March 31, 2024 and December 31, 2023, respectively

Treasury shares, at cost, 25,365 and 25,090 shares as of March 31, 2024 and December 31, 2023, respectively

( 1,223,212 ) ( 1,213,160 )

1 unchanged sentence

Retained earnings 2,353,440 2,295,604

Accumulated other comprehensive loss ( 4,307 ) ( 16,264 )

Accumulated other comprehensive income 4,710 9,962

Total shareholders' equity 2,974,834 2,996,276

4 unchanged sentences

(In thousands, except per share amounts)

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

For the three months ended

March 31, 2024 March 31, 2023

Net revenue $ 1,006,709 $ 998,175

7 unchanged sentences

Operating income 144,792 148,842

Interest expense, net ( 36,908 ) ( 44,856 ) ( 115,104 ) ( 135,143 )

Interest expense ( 38,395 ) ( 48,791 )

Interest income 3,738 8,700

Other, net ( 11,544 ) 1,392

8 unchanged sentences

(In thousands)

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

For the three months ended

March 31, 2024 March 31, 2023

Net income $ 76,021 $ 86,417

2 unchanged sentences

Defined benefit and retiree healthcare plans 227 393

Cumulative translation adjustment ( 14,721 ) —

Other comprehensive (loss)/income ( 5,252 ) 3,200

4 unchanged sentences

(In thousands)

For the nine months ended

September 30, 2023 September 30, 2022

For the three months ended

March 31, 2024 March 31, 2023

Cash flows from operating activities:

9 unchanged sentences

Loss on equity investments, net

Unrealized loss on derivative instruments and other 15,712 40,702

Unrealized (gain)/loss on derivative instruments and other ( 4,184 ) 3,107

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

8 unchanged sentences

Cash flows from investing activities:

Acquisitions, net of cash received — ( 632,683 )

Additions to property, plant and equipment and capitalized software ( 42,130 ) ( 36,882 )

Investment in debt and equity securities ( 390 ) ( 7,773 )

Proceeds from the sale of business, net of cash sold — 14,000

3 unchanged sentences

Payment of employee restricted stock tax withholdings ( 129 ) ( 123 )

Proceeds from borrowings on debt — 500,000

Payments on debt ( 279 ) ( 250,944 )

1 unchanged sentence

Payments to repurchase ordinary shares ( 10,052 ) —

Purchase of noncontrolling interest in joint venture ( 79,393 ) —

Payments of debt financing costs ( 39 ) ( 308 )

Net cash used in financing activities ( 107,948 ) ( 265,390 )

Effect of exchange rate changes on cash and cash equivalents ( 4,154 ) —

Net change in cash and cash equivalents ( 47,745 ) ( 191,384 )

5 unchanged sentences

(In thousands)

Ordinary Shares Treasury Shares Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders' Equity

Ordinary Shares Treasury Shares Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Total Shareholders' Equity

Number Amount Number Amount

Balance as of June 30, 2023 175,793 $ 2,249 ( 23,371 ) $ ( 1,149,838 ) $ 1,889,234 $ 2,472,281 $ ( 4,154 ) $ 3,209,772

Surrender of shares for tax withholding — — ( 14 ) ( 597 ) — — — ( 597 )

Stock options exercised — — — — — — — —

Vesting of restricted securities 40 — — — — — — —

Cash dividends paid — — — — — ( 18,267 ) — ( 18,267 )

Repurchase of ordinary shares — — ( 889 ) ( 35,222 ) — — — ( 35,222 )

Retirement of ordinary shares ( 14 ) — 14 597 — ( 597 ) — —

Share-based compensation — — — — 6,847 — — 6,847

Net income — — — — — 62,801 — 62,801

Other comprehensive loss — — — — — — ( 153 ) ( 153 )

Balance as of September 30, 2023 175,819 $ 2,249 ( 24,260 ) $ ( 1,185,060 ) $ 1,896,081 $ 2,516,218 $ ( 4,307 ) $ 3,225,181

Balance as of December 31, 2023 175,832 $ 2,249 ( 25,090 ) $ ( 1,213,160 ) $ 1,901,621 $ 2,295,604 $ 9,962 $ 2,996,276

Surrender of shares for tax withholding — — ( 3 ) ( 129 ) — — — ( 129 )

Stock options exercised 158 2 — — 5,426 — — 5,428

Vesting of restricted securities 10 — — — — — — —

3 unchanged sentences

Share-based compensation — — — — 8,133 — — 8,133

Purchase of noncontrolling interest in joint venture — — — — ( 72,107 ) — — ( 72,107 )

Net income — — — — — 76,021 — 76,021

Other comprehensive income — — — — — — 11,957 11,957

Balance as of September 30, 2023 175,819 $ 2,249 ( 24,260 ) $ ( 1,185,060 ) $ 1,896,081 $ 2,516,218 $ ( 4,307 ) $ 3,225,181

Ordinary Shares Treasury Shares Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss)/Income

Total Shareholders' Equity

Other comprehensive loss — — — — — — ( 5,252 ) ( 5,252 )

Balance as of March 31, 2024 175,839 $ 2,249 ( 25,365 ) $ ( 1,223,212 ) $ 1,837,647 $ 2,353,440 $ 4,710 $ 2,974,834

Ordinary Shares Treasury Shares Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders' Equity

Number Amount Number Amount

Balance as of June 30, 2022 174,924 $ 2,239 ( 19,269 ) $ ( 978,595 ) $ 1,841,925 $ 2,164,734 $ ( 6,719 ) $ 3,023,584

Surrender of shares for tax withholding — — ( 6 ) ( 257 ) — — — ( 257 )

Stock options exercised 45 — — — 1,883 — — 1,883

Vesting of restricted securities 20 1 — — — ( 1 ) — —

Cash dividends paid — — — — — ( 17,046 ) — ( 17,046 )

Repurchase of ordinary shares — — ( 2,346 ) ( 98,446 ) — — — ( 98,446 )

Retirement of ordinary shares ( 6 ) — 6 257 — ( 257 ) — —

Share-based compensation — — — — 8,441 — — 8,441

Net income — — — — — 140,253 — 140,253

Other comprehensive income — — — — — — 10,906 10,906

Balance as of September 30, 2022 174,983 $ 2,240 ( 21,615 ) $ ( 1,077,041 ) $ 1,852,249 $ 2,287,683 $ 4,187 $ 3,069,318

Balance as of December 31, 2022 175,207 $ 2,242 ( 22,781 ) $ ( 1,124,713 ) $ 1,866,201 $ 2,383,341 $ ( 16,264 ) $ 3,110,807

3 unchanged sentences

Cash dividends paid — — — — — ( 16,777 ) — ( 16,777 )

Repurchase of ordinary shares — — ( 5,177 ) ( 244,602 ) — — — ( 244,602 )

Retirement of ordinary shares ( 2 ) — 2 123 — ( 123 ) — —

2 unchanged sentences

Other comprehensive income — — — — — — 3,200 3,200

Balance as of September 30, 2022 174,983 $ 2,240 ( 21,615 ) $ ( 1,077,041 ) $ 1,852,249 $ 2,287,683 $ 4,187 $ 3,069,318

Balance as of March 31, 2023 175,298 $ 2,243 ( 22,781 ) $ ( 1,124,713 ) $ 1,876,168 $ 2,452,858 $ ( 13,064 ) $ 3,193,492

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

9 unchanged sentences

Securities and Exchange Commission (the "SEC") on February 29, 2024 (the "2023 Annual Report").

In the three months ended March 31, 2024, we realigned our business as a result of organizational changes that better allocate our resources to support changes to our business strategy.

The most significant changes include combining our Automotive and HVOR businesses (with the combined business remaining in Performance Sensing) and moving the Insights business out of Performance Sensing to a new operating segment, which is not aggregated within either of our reportable segments.

We combined the Automotive and HVOR businesses to better leverage our core capabilities and prioritize product focus.

We also moved certain shorter-cycle businesses from Performance Sensing to Sensing Solutions, which will benefit from organizing our predominantly shorter-cycle businesses together, by allowing us to scale core capabilities and better serve our customers.

Prior year amounts in this Quarterly Report on Form 10-Q have been recast to reflect this realignment.

Refer to Note 15:

Segment Reporting for additional information

In the three months ended March 31, 2024, we presented interest income on the condensed consolidated statements of operations separate from interest expense.

In the three months ended March 31, 2023, interest income had been included in interest expense, net.

Accordingly, we reclassified prior period interest income to a separate caption in the condensed consolidated statements of operations to conform to current period presentation.

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

New Accounting Standards

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

In November 2023, the FASB issued Accounting Standards Update ("ASU") No.

2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures , to improve disclosures about a public entity's reportable segments.

This guidance requires that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss and an amount for "other segment items" included in the determination of segment operating income.

The guidance also requires that a public entity provide all annual disclosures about a reportable segment's profit or loss and assets currently required by FASB ASC Topic 280, Segment Reporting , in interim periods, and that a public entity provide the title and position of the chief operating decision maker.

Other requirements of the guidance are not expected to be material.

There is no change to the guidance for identification or aggregation of operating or reportable segments.

2023-07 will be effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The guidance must be applied retrospectively to all prior periods presented.

We adopted the guidance in FASB ASU No.

2023-07 on January 1, 2024 and will include the required new annual and quarterly disclosures in our Annual Report on Form 10-K for the period ended December 31, 2024 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2025, respectively.

In December 2023, the FASB issued ASU No.

2023-09, Income taxes (Topic 740):

Improvements to Income Tax Disclosures , to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

The guidance also includes certain other amendments to improve the effectiveness of income tax disclosures.

For public business entities, the standard is effective for annual periods beginning after December 15, 2024.

We are currently evaluating the impact on our income tax related disclosures .

Revenue Recognition

The following tables present net revenue disaggregated by segment and end market for the three and nine months ended September 30, 2023 and 2022 for our two reportable segments, Performance Sensing ("PS") and Sensing Solutions ("SS"):

For the three months ended September 30, 2023 For the three months ended September 30, 2022 (3)

PS SS Total PS SS Total

The following tables present net revenue disaggregated by segment and end market for the three months ended March 31, 2024 and 2023 for our two reportable segments, Performance Sensing ("PS") and Sensing Solutions ("SS"), and other:

For the three months ended March 31, 2024

PS SS Other Total

Automotive $ 530,624 $ 32,408 $ — $ 563,032

6 unchanged sentences

Total $ 713,318 $ 257,839 $ 35,552 $ 1,006,709

For the nine months ended September 30, 2023 (3)

For the nine months ended September 30, 2022 (3)

PS SS Total PS SS Total

For the three months ended March 31, 2023

PS SS Other (3)

Automotive (3)

$ 499,095 $ 25,923 $ — $ 525,018

168,667 5,754 — 174,421

Industrial (4)

Appliance and HVAC (2)

— 148,512 — 148,512

Appliance and HVAC — 47,474 — 47,474

Aerospace — 44,326 — 44,326

Other — 33,947 33,947 — 105,699 105,699

— 11,461 46,963 58,424

Total $ 667,762 $ 283,450 $ 46,963 $ 998,175

2 unchanged sentences

(2) Heating, ventilation and air conditioning.

(3) Effective April 1, 2023, we moved our material handling products from the HVOR operating segment (in the Performance Sensing reportable segment) to the Sensing Solutions operating segment to align with new management reporting.

The amounts previously reported in the tables above for the three and nine months ended September 30, 2022 have been retrospectively recast to reflect this change.

In addition, the nine months ended September 30, 2023 includes amounts for the three months ended March 31, 2023 that have been retrospectively adjusted for this change.

(3) In the three months ended March 31, 2024, we realigned our segments, as discussed further in Note 1:

Basis of Presentation and Note 15:

Segment Reporting .

As a result, certain revenue in the Automotive and HVOR end markets have been moved from Performance Sensing to Sensing Solutions.

In addition, Insights revenue was moved from the HVOR end market (in Performance Sensing) to the other end market in a separate operating segment that is not aggregated within either of our reportable segments.

The three months ended March 31, 2023 have been retrospectively recast to reflect this change.

(4) Effective April 1, 2023, we moved our material handling products from Performance Sensing to Sensing Solutions operating segment to align with new management reporting.

As a result, material handling revenue was moved from the HVOR end market to the Industrial end market.

The three months ended March 31, 2023 have been retrospectively recast to reflect this change.

Share-Based Payment Plans

The following table presents the components of non-cash compensation expense related to our equity awards for the three and nine months ended September 30, 2023 and 2022:

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

The following table presents the components of non-cash compensation expense related to our equity awards for the three months ended March 31, 2024 and 2023:

For the three months ended

March 31, 2024 March 31, 2023

Stock options $ — $ 119

1 unchanged sentence

Share-based compensation expense $ 8,133 $ 7,206

Equity Awards

We granted the following restricted stock units ("RSUs" and each, an "RSU") and performance-based restricted stock units ("PRSUs" and each, a "PRSU") under the Sensata Technologies Holding plc 2021 Equity Incentive Plan during the nine months ended September 30, 2023:

Awards Granted To:

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

Directors RSU (1)

Various executives and employees RSU (2)

Various executives and employees PRSU (3)

Various executives and employees PRSU (4)

____________________________________

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

(2) These RSUs vest ratably over three years , one-third per year beginning on the first anniversary of the grant date.

These RSUs will fully vest on various dates between January 2026 and August 2026.

(3) These PRSUs vest on various dates between April 2026 and July 2026.

The number of units that ultimately vest will be between 0 % and 200 % and is dependent on the achievement of certain performance criteria.

(4) These awards include certain PRSUs with market performance conditions that will be evaluated relative to the performance of certain peers as defined in the award agreement.

The number of units that ultimately vest (in April 2026 and July 2026) will be from 0 % to 150 %, depending on achievement of these performance criteria.

Total grant date value of these PRSUs is approximately $ 5.7 million and was valued using the Monte Carlo method.

Related share-based compensation expense recognized in the three and nine months ended September 30, 2023 was $ 0.6 million and $ 1.1 million, respectively.

Restructuring and Other Charges, Net

In the three months ended September 30, 2023, we committed to a plan to reorganize our business (the “Q3 2023 Plan”).

The Q3 2023 Plan, consisting of voluntary and involuntary reductions-in-force, site closures, and other cost-savings initiatives, was commenced to adjust our cost structure and business activities to better align with weaker market demand and continued economic uncertainty in many of our end-markets and to take active measures to accelerate our margin recovery.

The Q3 2023 Plan, consisting of voluntary and involuntary reductions-in-force, site closures, and other cost-savings initiatives, was

commenced to adjust our cost structure and business activities to better align with weaker market demand and continued economic uncertainty in many of our end-markets and to take active measures to accelerate our margin recovery.

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 510 positions.

9 unchanged sentences

Total 510 20,500 25,500

Restructuring charges recognized in the three and nine months ended September 30, 2023 resulting from the Q3 2023 Plan are presented by business segment and corporate functions below.

Severance Facility and other exit costs (1)

Restructuring charges, net recognized in the three months ended March 31, 2024 resulting from the Q3 2023 Plan are presented by business segment and corporate functions below.

(In thousands) Severance Facility and other exit costs (1)

Performance Sensing $ 528 $ —

4 unchanged sentences

(1) Includes site closures.

Marine Business

On June 6, 2023, we announced that we had made the decision to exit the marine energy storage business (the "Marine Business") of Spear Power Systems (“Spear”), which had been included in the Sensing Solutions reportable segment.

Exiting the Marine Business resulted in charges of $ 0.9 million and $ 39.2 million in the three and nine months ended September 30, 2023, respectively, as presented in the table below:

Period ended September 30, 2023

Location Three months Nine Months

Accelerated amortization Amortization of intangible assets $ — $ 13,527

Write-down of inventory Cost of revenue — 10,479

Severance charges

Restructuring and other charges, net — 1,168

Write-down of property, plant and equipment

Restructuring and other charges, net — 1,735

Other charges, including contract termination costs Restructuring and other charges, net 876 12,278

Total $ 876 $ 39,187

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

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Q3 2023 Plan charges (1)

$ 21,381 $ — $ 21,381 $ —

The following table presents the charges and gains included as components of restructuring and other charges, net for the three months ended March 31, 2024 and 2023:

For the three months ended

March 31, 2024 March 31, 2023

Q3 2023 Plan charges, net (1)

Other restructuring and other charges, net

Severance charges, net (2)

( 435 ) 6,249 8,527 6,836

Facility and other exit costs 168 225

1 unchanged sentence

Acquisition-related compensation arrangements 955 7,272

795 11,882 13,831 4,547

Other ( 930 ) 166

Restructuring and other charges, net $ 782 $ 5,999

___________________________________

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

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

(2) Each period presented includes severance charges, net of reversals, that do not represent the initiation of a larger restructuring plan.

The nine months ended September 30, 2023 includes severance charges incurred as a result of the exit of the Marine Business as detailed under the heading Marine Business above.

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

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

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

The following table presents a rollforward of our severance liability for the three months ended March 31, 2024:

Q3 2023 Plan Other Total

3 unchanged sentences

Foreign currency remeasurement ( 97 ) ( 13 ) ( 110 )

Balance as of September 30, 2023 $ 17,201 $ 2,550 $ 19,751

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

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

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Currency remeasurement loss on net monetary assets $ ( 4,491 ) $ ( 12,583 ) $ ( 15,057 ) $ ( 26,740 )

(Loss)/gain on foreign currency forward contracts ( 1,301 ) 6,178 3,306 8,100

Loss on commodity forward contracts ( 476 ) ( 5,773 ) ( 4,846 ) ( 14,603 )

Balance as of March 31, 2024 $ 3,222 $ 378 $ 3,600

The severance liability as of March 31, 2024 and December 31, 2023 were entirely recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

The following table presents the components of other, net for the three months ended March 31, 2024 and 2023:

For the three months ended

March 31, 2024 March 31, 2023

Currency remeasurement gain/(loss) on net monetary assets $ 1,031 $ ( 1,259 )

Gain on foreign currency forward contracts 680 184

Gain on commodity forward contracts 1,099 1,899

Loss on debt financing — ( 485 )

Loss on equity investments, net (1)

( 376 ) ( 4,035 ) ( 678 ) ( 75,135 )

Net periodic benefit cost, excluding service cost ( 841 ) ( 971 )

1 unchanged sentence

Other, net $ ( 11,544 ) $ 1,392

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

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

___________________________________

(1) Primarily includes a loss on an equity investment that does not have a readily determinable fair value for which we use the measurement alternative prescribed in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments—Equity Securities .

Refer to Note 13:

Fair Value Measures for additional information.

The following table presents the provision for income taxes for the three months ended March 31, 2024 and 2023:

For the three months ended

March 31, 2024 March 31, 2023

Provision for income taxes $ 22,570 $ 23,726

2 unchanged sentences

Other items impacting deferred tax expense include changes in tax rates and changes in our assessment of the realizability of our deferred tax assets.

We recorded a partial valuation allowance against certain interest carryforwards in the U.S.

at both December 31, 2022 and December 31, 2021.

We are continually evaluating both the positive and negative evidence for this partial valuation allowance.

We believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become

available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed.

Release of the valuation allowance would result in the recognition of this deferred tax asset and a decrease to income tax expense for the period the release is recorded.

However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability and future utilization of this attribute that we are able to actually achieve.

Net Income per Share

Basic and diluted net income per share are calculated by dividing net income by the number of basic and diluted weighted-average ordinary shares outstanding during the period.

For the three and nine months ended September 30, 2023 and 2022 the weighted-average ordinary shares outstanding used to calculate basic and diluted net income per share were as follows:

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

For the three months ended March 31, 2024 and 2023 the weighted-average ordinary shares outstanding used to calculate basic and diluted net income per share were as follows:

For the three months ended

March 31, 2024 March 31, 2023

Basic weighted-average ordinary shares outstanding 150,480 152,518

4 unchanged sentences

These potential ordinary shares were as follows:

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

For the three months ended

March 31, 2024 March 31, 2023

Anti-dilutive shares excluded 1,763 381

Contingently issuable shares excluded 1,060 1,268

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

September 30,

The following table presents the components of inventories as of March 31, 2024 and December 31, 2023:

2024 December 31,

3 unchanged sentences

Inventories $ 720,628 $ 713,485

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

Maturity Date September 30,

The following table presents the components of long-term debt, net and finance lease obligations as of March 31, 2024 and December 31, 2023:

Maturity Date March 31,

2024 December 31,

Term Loan (1)

September 20, 2026 $ — $ 446,834

5.0 % Senior Notes

November 1, 2024 400,000 400,000

5.0 % Senior Notes

October 1, 2025 $ 700,000 $ 700,000

9 unchanged sentences

deferred financing costs ( 23,259 ) ( 24,444 )

current portion — ( 254,630 )

Long-term debt, net $ 3,375,511 $ 3,373,988

Finance lease and other financing obligations $ 25,344 $ 26,583

Finance lease obligations $ 24,927 $ 25,225

current portion ( 2,340 ) ( 2,276 )

Finance lease and other financing obligations, less current portion $ 23,456 $ 24,742

___________________________________

(1) On February 6, 2023, we prepaid $ 250.0 million of outstanding principal on our Term Loan balance.

Accordingly, that portion of the principal balance outstanding on the Term Loan as of December 31, 2022 was presented as current portion of long-term debt.

On May 3, 2023, we prepaid $ 196.8 million of outstanding principal on the Term Loan, representing the remaining balance on the Term Loan as of that date plus $ 0.5 million in interest.

Our debt consists of secured credit facilities and various tranches of senior unsecured notes.

Finance lease obligations, less current portion $ 22,587 $ 22,949

Our debt as of March 31, 2024 and December 31, 2023 consists of various tranches of senior unsecured notes.

We also have secured credit facilities which provide for our $ 750.0 million revolving credit facility (the "Revolving Credit Facility") and incremental availability under which additional debt can be issued.

Refer to Note 14:

Debt of the audited consolidated financial statements and notes thereto included in the 2023 Annual Report for additional information regarding our existing indebtedness.

On August 22, 2023, certain of our indirect, wholly-owned subsidiaries, including Sensata Technologies, Inc.

("STI"), Sensata Technologies Intermediate Holding B.V., and Sensata Technologies B.V.

(“STBV”), entered into an amendment (the “Thirteenth Amendment”) to (i) the credit agreement, dated as of May 12, 2011 (as amended, supplemented, waived, or otherwise modified, the “Credit Agreement"), and (ii) the Foreign Guaranty, dated as of May 12, 2011 (as amended, supplemented, waived, or otherwise modified prior to the Thirteenth Amendment).

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

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

As of September 30, 2023, we had $ 746.1 million available under our $ 750.0 million revolving credit facility (the "Revolving Credit Facility"), net of $ 3.9 million of obligations in respect of outstanding letters of credit issued thereunder.

As of March 31, 2024, we had $ 746.1 million available under the Revolving Credit Facility, net of $ 3.9 million of obligations in respect of outstanding letters of credit issued thereunder.

Outstanding letters of credit are issued primarily for the benefit of certain operating activities.

As of September 30, 2023, no amounts had been drawn against these outstanding letters of credit.

As of March 31, 2024, no amounts had been drawn against these outstanding letters of credit.

Accrued Interest

Accrued interest associated with our outstanding debt is included as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets.

As of September 30, 2023 and December 31, 2022, accrued interest totaled $ 54.0 million and $ 50.1 million, respectively.

As of March 31, 2024 and December 31, 2023, accrued interest totaled $ 44.7 million and $ 45.2 million, respectively.

Commitments and Contingencies

2 unchanged sentences

Shareholders' Equity

Purchase of noncontrolling interest in joint venture

In February 2024, Sensata purchased the remaining 50 % interest in the Company’s joint venture with Dongguan Churod Electronics Co., Ltd.

for approximately $ 79.4 million.

Prior to the transaction, the Company had been consolidating the joint venture.

The purchase of the 50 % non-controlling interest was accounted for as an equity transaction.

No gain or loss was recognized in the condensed consolidated statements of operations.

The difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized as a reduction of additional paid in capital recorded in equity.

Cash Dividends

In the three and nine months ended September 30, 2023, we paid aggregate cash dividends of $ 18.3 million and $ 53.4 million, respectively, compared to $ 17.0 million and $ 34.3 million in the three and nine months ended September 30, 2022, respectively.

On October 26, 2023, we announced that our Board of Directors approved a quarterly dividend of $ 0.12 per share, payable on November 22, 2023 to shareholders of record as of November 8, 2023.

In the three months ended March 31, 2024 and 2023, we paid aggregate cash dividends of $ 18.1 million and $ 16.8 million, respectively.

On April 24, 2024, we announced that our Board of Directors approved a quarterly dividend of $ 0.12 per share, payable on May 22, 2024 to shareholders of record as of May 8, 2024.

Foreign Currency Translation

Prior to October 1, 2023, the functional currency of the Company's wholly-owned subsidiaries in China was USD.

Effective October 1, 2023, as a result of significant changes in economic facts and circumstances in the operations of our China foreign entities, the functional currency of the Company's wholly-owned subsidiaries in China changed to the CNY.

The changes in economic facts and circumstances caused a permanent change to our strategy in China toward a more self-contained model, making China the primary economic environment in which these subsidiaries operate.

This change was accounted for prospectively and does not impact prior period financial statements.

As a result of this change, in the fourth quarter of 2023, we started recording an adjustment to translate these subsidiaries' financial statements from CNY to USD (our reporting currency).

These adjustments are included in other comprehensive income and are presented under the heading Accumulated Other Comprehensive Income/(Loss) below .

Treasury Shares

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

Under these programs, we may repurchase ordinary shares at such times and in amounts to be determined by our management, based on market conditions, legal requirements, and other corporate considerations, on the open market or in privately negotiated transactions, provided that such transactions were completed pursuant to an agreement and with a third party approved by our shareholders at the annual general meeting.

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.

On January 20, 2022, our Board of Directors authorized a $ 500.0 million ordinary share repurchase program (the “January 2022 Program”), which replaced the previous $ 500.0 million program approved in July 2019.

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

In the three and nine months ended September 30, 2023, we repurchased 0.9 million and 1.5 million ordinary shares, respectively (for an aggregate value of $ 35.2 million and $ 60.3 million, respectively).

In the three and nine months ended September 30, 2022, we repurchased 2.3 million and 5.2 million ordinary shares, respectively (for an aggregate value of $ 98.4 million and $ 244.6 million, respectively).

All share repurchases in these periods were made under the January 2022 Program.

As of September 30, 2023, $ 164.2 million remained available for repurchase under the January 2022 Program.

Accumulated Other Comprehensive Loss

The following table presents the components of accumulated other comprehensive loss for the nine months ended September 30, 2023:

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

In the three months ended March 31, 2024, we repurchased 0.3 million ordinary shares for $ 10.1 million.

These repurchases were made under the September 2023 Program.

We did not repurchase any shares in the three months ended March 31, 2023.

As of March 31, 2024, $ 461.8 million remained available for repurchase under the September 2023 Program.

Accumulated Other Comprehensive Income

The following table presents the components of accumulated other comprehensive income for the three months ended March 31, 2024:

Cash Flow Hedges Defined Benefit and Retiree Healthcare Plans Cumulative Translation Adjustment Accumulated Other Comprehensive Income

Balance as of December 31, 2023 $ 17,513 $ ( 28,499 ) $ 20,948 $ 9,962

Other comprehensive income before reclassifications, net of tax 14,779 — ( 14,721 ) 58

Reclassifications from accumulated other comprehensive loss, net of tax ( 20,811 ) 865 ( 19,946 )

Reclassifications from accumulated other comprehensive income, net of tax ( 5,537 ) 227 — ( 5,310 )

Other comprehensive income 9,242 227 ( 14,721 ) ( 5,252 )

Balance as of September 30, 2023 $ 26,757 $ ( 31,064 ) $ ( 4,307 )

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

For the three months ended September 30, For the nine months ended September 30, Affected Line in Condensed Consolidated Statements of Operations

Balance as of March 31, 2024 $ 26,755 $ ( 28,272 ) $ 6,227 $ 4,710

The following table presents the amounts reclassified from accumulated other comprehensive income for the three months ended March 31, 2024 and 2023:

For the three months ended March 31, Affected Line in Condensed Consolidated Statements of Operations

Component 2024 2023

10 unchanged sentences

(1) Refer to Note 14:

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

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

Fair Value Measures

Measured on a Recurring Basis

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

September 30,

The fair values of our assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 are shown in the below table.

2024 December 31,

11 unchanged sentences

Measured on a Nonrecurring Basis

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 2022 and determined that they were not impaired.

In the three months ended June 30, 2023, we exited the Marine Business, as discussed further in Note 5:

Restructuring and Other Charges, Net .

We considered the exit of the Marine Business and determined that goodwill related to the Clean Energy Solutions reporting unit was not impaired as of the date of the exit.

No other events or changes in circumstances occurred in the nine months ended September 30, 2023 that would have triggered the need for an additional impairment review of our goodwill and other indefinite-lived intangible assets.

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 2023 and determined that our Insights reporting unit was impaired.

Refer to additional information in our 2023 Annual Report.

No events or changes in circumstances occurred in the three months ended March 31, 2024 that would have triggered the need for an additional impairment review of our goodwill and other indefinite-lived intangible assets.

In the three months ended March 31, 2024, we made the decision to reorganize our segments, as discussed in more detail in Note 1:

Basis of Presentation .

This reorganization resulted in the creation of a new reporting unit for a business that was previously part of the Automotive reporting unit, which was moved to the Sensing Solutions segment.

We reassigned assets and liabilities, including goodwill, from the Automotive reporting unit to the new reporting unit 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.

As a result of this reorganization, we allocated $ 143.4 million of goodwill to the new reporting unit.

Financial Instruments Not Recorded at Fair Value

The following table presents the carrying values and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022.

The following table presents the carrying values and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023.

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Carrying Value (1)

Fair Value Carrying Value (1)

Term Loan $ — $ — $ 446,834 $ 443,483

5.0 % Senior Notes

8 unchanged sentences

$ 500,000 $ 488,750 $ 500,000 $ 495,000

5.875 % Senior Notes

___________________________________

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

In addition to the above, we hold certain equity investments that do not have readily determinable fair values for which we use the measurement alternative prescribed in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments—Equity Securities .

As of September 30, 2023 and December 31, 2022, we held equity investments under the measurement alternative of $ 18.2 million and $ 15.0 million, respectively, which are presented in other assets in the condensed consolidated balance sheets.

There were no impairments or changes resulting from observable transactions for these investments in the three and nine months ended September 30, 2023 and 2022 and no adjustments have been made to their carrying values as of September 30, 2023 and December 31, 2022.

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 identical or similar investments of the same issuer.

As of March 31, 2024 and December 31, 2023, we held equity investments under the measurement alternative of $ 6.3 million and $ 18.3 million, respectively, which are presented in other assets in the condensed consolidated balance sheets.

In the three months ended March 31, 2024, we adjusted the carrying value of one of these equity investments as a result of an observable price change, resulting in a loss of $ 14.8 million.

Derivative Instruments and Hedging Activities

Hedges of Foreign Currency Risk

For the three and nine months ended September 30, 2023 and 2022, amounts excluded from the assessment of effectiveness of our foreign currency forward contracts that are designated as cash flow hedges were not material.

As of September 30, 2023, we estimated that $ 30.8 million of net gains will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending September 30, 2024.

As of September 30, 2023, we had the following outstanding foreign currency forward contracts:

For the three months ended March 31, 2024 and 2023, amounts excluded from the assessment of effectiveness of our foreign currency forward contracts that are designated as cash flow hedges were not material.

As of March 31, 2024, we estimated that $ 29.6 million of net gains will be reclassified from accumulated other comprehensive income to earnings during the twelve-month period ending March 31, 2025.

As of March 31, 2024, we had the following outstanding foreign currency forward contracts:

(in millions) Effective Date(s) Maturity Date(s) Index (Exchange Rates) Weighted-Average Strike Rate Hedge

Designation (1)

33.0 EUR September 27, 2023 October 31, 2023 Euro ("EUR") to USD 1.05 USD Not designated

423.6 EUR Various from October 2021 to September 2023 Various from October 2023 to September 2025 EUR to USD 1.10 USD Cash flow hedge

422.0 CNY September 22, 2023 October 31, 2023 USD to Chinese Renminbi ("CNY") 7.21 CNY Not designated

35.0 USD September 26, 2023 October 31, 2023 USD to CNY 7.21 CNY Not designated

259.0 JPY September 27, 2023 October 31, 2023 USD to Japanese Yen ("JPY") 148.51 JPY Not designated

28,600.8 KRW Various from November 2021 to September 2023 Various from October 2023 to August 2025 USD to Korean Won ("KRW") 1,281.04 KRW Cash flow hedge

20.0 MYR September 26, 2023 October 31, 2023 USD to Malaysian Ringgit ("MYR") 4.66 MYR Not designated

147.0 MXN September 27, 2023 October 31, 2023 USD to Mexican Peso ("MXN") 17.71 MXN Not designated

4,510.0 MXN Various from October 2021 to September 2023 Various from October 2023 to September 2025 USD to Mexican Peso ("MXN") 20.18 MXN Cash flow hedge

2.5 GBP September 27, 2023 October 31, 2023 British Pound Sterling ("GBP") to USD 1.21 USD Not designated

59.1 GBP Various from October 2021 to September 2023 Various from October 2023 to September 2025 GBP to USD 1.23 USD Cash flow hedge

33.5 EUR March 26, 2024 April 30, 2024 Euro ("EUR") to USD 1.09 USD Not designated

407.2 EUR Various from April 2022 to March 2026 Various from April 2024 to March 2026 EUR to USD 1.10 USD Cash flow hedge

624.0 CNY March 26, 2024 April 30, 2024 USD to Chinese Renminbi ("CNY") 7.10 CNY Not designated

66.9 USD Various from February 2024 to March 2024 Various from April 2024 to March 2026 USD to CNY 7.01 CNY Cash flow hedge

1,145.0 JPY March 26, 2024 April 30, 2024 USD to Japanese Yen ("JPY") 150.62 JPY Not designated

34,691.4 KRW Various from May 2022 to March 2024 Various from April 2024 to February 2026 USD to Korean Won ("KRW") 1,291.93 KRW Cash flow hedge

18.0 MYR March 25, 2024 April 30, 2024 USD to Malaysian Ringgit ("MYR") 4.71 MYR Not designated

109.0 MXN March 25, 2024 April 30, 2024 USD to Mexican Peso ("MXN") 16.84 MXN Not designated

4,380.2 MXN Various from April 2022 to March 2024 Various from April 2024 to March 2026 USD to Mexican Peso ("MXN") 19.45 MXN Cash flow hedge

9.6 GBP March 26, 2024 April 30, 2024 British Pound Sterling ("GBP") to USD 1.27 USD Not designated

73.7 GBP Various from April 2022 to March 2024 Various from April 2024 to March 2026 GBP to USD 1.25 USD Cash flow hedge

___________________________________

1 unchanged sentence

They are intended to preserve economic value, and they are not used for trading or speculative purposes.

We may also enter into intercompany derivative instruments with our wholly-owned subsidiaries in order to hedge certain forecasted expenses.

Hedges of Commodity Risk

As of September 30, 2023, we had the following outstanding commodity forward contracts, none of which were designated for hedge accounting treatment in accordance with FASB ASC Topic 815, Derivatives and Hedging :

As of March 31, 2024, we had the following outstanding commodity forward contracts, none of which were designated for hedge accounting treatment in accordance with FASB ASC Topic 815, Derivatives and Hedging :

Commodity Notional Remaining Contracted Periods Weighted-Average Strike Price Per Unit

Silver 746,290 troy oz.

October 2023 to July 2025 $ 23.51

Gold 6,637 troy oz.

October 2023 to July 2025 $ 1,961.81

Nickel 176,177 pounds October 2023 to July 2025 $ 11.50

Aluminum 3,736,472 pounds October 2023 to July 2025 $ 1.16

Copper 7,021,620 pounds October 2023 to July 2025 $ 3.92

Platinum 7,621 troy oz.

October 2023 to July 2025 $ 983.17

Palladium 1,103 troy oz.

October 2023 to July 2025 $ 1,816.99

April 2024 to March 2026 $ 24.44

Copper 6,667,782 pounds April 2024 to March 2026 $ 3.90

Financial Instrument Presentation

The following table presents the fair values of our derivative financial instruments and their classification in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:

The following table presents the fair values of our derivative financial instruments and their classification in the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023:

Asset Derivatives Liability Derivatives

Balance Sheet Location September 30,

Balance Sheet Location March 31,

2024 December 31,

2022 Balance Sheet Location September 30,

2023 Balance Sheet Location March 31,

2024 December 31,

9 unchanged sentences

These fair value measurements were all categorized within Level 2 of the fair value hierarchy.

The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income for the three months ended September 30, 2023 and 2022:

Derivatives designated as

hedging instruments Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive (Loss)/Income Location of Net Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income Amount of Net Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income

2023 2022 2023 2022

Foreign currency forward contracts $ 12,995 $ 35,324 Net revenue $ 4,186 $ 14,909

Foreign currency forward contracts $ ( 2,622 ) $ ( 5,204 ) Cost of revenue $ 6,728 $ 1,260

Derivatives not designated as

hedging instruments Amount of (Loss)/Gain Recognized in Net Income Location of (Loss)/Gain Recognized in Net Income

Commodity forward contracts $ ( 476 ) $ ( 5,773 ) Other, net

Foreign currency forward contracts $ ( 1,301 ) $ 6,178 Other, net

Derivatives designated as

hedging instruments Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive (Loss)/Income Location of Net Gain Reclassified from Accumulated Other Comprehensive Income into Net Income Amount of Net Gain Reclassified from Accumulated Other Comprehensive Income into Net Income

2024 2023 2024 2023

2 unchanged sentences

Derivatives not designated as

hedging instruments Amount of (Loss)/Gain Recognized in Net Income Location of (Loss)/Gain Recognized in Net Income

hedging instruments Amount of Gain Recognized in Net Income Location of Gain Recognized in Net Income

Commodity forward contracts $ 1,099 $ 1,899 Other, net

2 unchanged sentences

We have agreements with our derivative counterparties that contain a provision whereby if we default on our indebtedness and repayment of the indebtedness has been accelerated by the lender, then we could also be declared in default on our derivative obligations.

As of September 30, 2023, the termination value of outstanding derivatives in a liability position, excluding any adjustment for non-performance risk, was $ 9.6 million.

As of September 30, 2023, we had no t posted any cash collateral related to these agreements.

As of March 31, 2024, the termination value of outstanding derivatives in a liability position, excluding any adjustment for non-performance risk, was $ 2.8 million.

As of March 31, 2024, we had no t posted any cash collateral related to these agreements.

If we breach any of the default provisions on any of our indebtedness as described above, we could be required to settle our obligations under the derivative agreements at their termination values.

Acquisitions and Divestitures

On February 11, 2022, we acquired all of the equity interests of Elastic M2M Inc.

("Elastic M2M") for an aggregate cash purchase price of $ 51.6 million, subject to certain post-closing items.

In addition to the aggregate cash purchase price, the previous shareholders of Elastic M2M are entitled to up to $ 30.0 million of additional acquisition-related incentive compensation, which was pending the completion of certain technical milestones in fiscal year 2022 and achievement of financial targets in fiscal years 2022 and 2023.

All technical milestones were completed in fiscal year 2022.

As of December 31, 2022, we had recognized $ 24.7 million of this acquisition-related incentive compensation.

In the three and nine months ended September 30, 2023, we recognized an additional $ 1.8 million and $ 5.3 million, respectively, of this acquisition-related incentive compensation, which is recorded in restructuring and other charges, net.

Elastic M2M is an innovator of connected intelligence for operational assets across heavy-duty transport, warehouse, supply chain and logistics, industrial, light-duty passenger car, and a variety of other industry segments.

Elastic M2M primarily serves telematics service providers and resellers, enabling them to leverage Elastic M2M’s cloud platform and analytics capabilities to deliver sensor-based operational insights to their end users.

This acquisition augments our cloud capabilities critical to delivering actionable sensor-based insights, an increasingly important capability in this fast-growing industry segment.

We are integrating Elastic M2M into the Performance Sensing reportable segment.

The allocation of the purchase price related to this acquisition was finalized in the three months ended March 31, 2023.

The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed:

Net working capital, excluding cash $ 35

Goodwill 28,211

Other intangible assets 27,700

Deferred income tax liabilities ( 5,925 )

Fair value of net assets acquired, excluding cash and cash equivalents 50,021

Cash and cash equivalents 1,597

Fair value of net assets acquired $ 51,618

The goodwill recognized as a result of this acquisition represents future economic benefits expected to arise from synergies from combining operations and the extension of existing customer relationships.

The 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 estimated fair values, and weighted-average lives:

Acquisition Date Fair Value Weighted-Average Lives (years)

Acquired definite-lived intangible assets

Customer relationships $ 17,500 13

Completed technologies 10,200 10

Total definite-lived intangible assets acquired $ 27,700 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 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 July 12, 2022, we completed the acquisition of all of the outstanding equity interests of DP Acquisition Corp ("Dynapower"), a leader in power conversion systems including inverters, converters, and rectifiers for renewable energy generation, green hydrogen production, electric vehicle charging stations, and microgrid applications, as well as industrial and defense applications, for an aggregate cash purchase price of $ 577.5 million.

Dynapower also provides aftermarket sales and service to maintain its equipment in the field.

Dynapower is a foundational addition to our Clean Energy Solutions strategy and complements our recent acquisitions of GIGAVAC, Lithium Balance, and Spear.

We are integrating Dynapower into our Sensing Solutions reportable segment.

We recorded measurement period adjustments in the three months ended June 30, 2023 that predominantly reflected an updated valuation of definite-lived intangible assets.

Accordingly, definite-lived intangible assets in the three months ended June 30, 2023 increased $ 57.2 million (primarily customer relationships).

Along with other adjustments, including the associated deferred income tax liability on acquired intangibles, goodwill decreased $ 41.0 million as a result of these adjustments.

The allocation of the purchase price related to this acquisition was finalized in the three months ended September 30, 2023.

The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed :

Net working capital, excluding cash $ 9,958

Property, plant and equipment 1,846

Goodwill 379,823

Other intangible assets 221,600

Other assets 1,656

Deferred income tax liabilities ( 40,785 )

Other long-term liabilities ( 1,035 )

Fair value of net assets acquired, excluding cash and cash equivalents 573,063

Cash and cash equivalents 4,410

Fair value of net assets acquired $ 577,473

The 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 estimated fair values, and weighted-average lives:

Acquisition Date Fair Value Weighted-Average Lives (years)

Acquired definite-lived intangible assets

Customer relationships $ 79,800 16

Backlog 15,500 3

Completed technologies 92,100 15

Tradenames 34,200 18

Total definite-lived intangible assets acquired $ 221,600 15

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.

Divestiture - Qinex Business

On May 27, 2022, we executed an asset purchase agreement (the "APA") whereby we agreed to sell the Qinex Business to LTI Holdi ngs, Inc.

("LTI") in exchange for consideration of approximately $ 219.0 million, subject to working capital and other adjustments.

Concurrent with the execution of the APA, the parties entered into a Contract Manufacturing Agreement ("CMA") and a Transition Services Agreement ("TSA"), each for nominal consideration.

The CMA commenced at closing of the transaction ("Closing") and had a term of either six or nine months , depending on the manufacturing site.

LTI also had the option of extending each contract for an additional three months .

The period from Closing to the end of the CMA term (including extensions, if any) is referred to as the "Transition Period." The terms of the CMA required that we provide manufacturing and distribution services for the Transition Period.

The TSA commenced at Closing and had a term that varied depending on the nature of the support services, ranging from one month to the entirety of the Transition Period.

The terms of the TSA required that we provide various forms of commercial, operational, and back-office support to LTI.

The Transition Period ended in the three months ended March 31, 2023.

Closing occurred in July 2022, at which time assets of approximately $ 70 million (including allocated goodwill of $ 45 million) and liabilities of approximately $ 2 million transferred to LTI.

Transferred assets and liabilities excluded inventories and accounts payable, which transferred to LTI at the end of the Transition Peri od.

We received cash consideration of $ 198.8 million at Closing and recognized a pre-tax gain of $ 135.1 million in the three months ended September 30, 2022.

Cash consideration received at Closing excluded amounts held in escrow until various milestones were met through the Transition Period.

In the three months ended June 30, 2023, we received an escrow payment of $ 15.0 million, which included $ 10.0 million (presented in cash flows from operating activities) related to the transfer of inventory.

Approximately $ 4.0 million remains in escrow as of September 30, 2023.

The Qinex Business manufactured semiconductor burn-in test sockets and thermal control solutions and was formed through the combination of Sensata’s semiconductor interconnect business with Wells-CTI in 2012.

The Qinex Business was included in our Sensing Solutions segment (and Industrial Solutions reporting unit).

We allocated goodwill to the Qinex Business based on its fair value relative to the total fair value of the Industrial Solutions reporting unit.

Segment Reporting

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, which meet the criteria for aggregation in FASB ASC Topic 280, Segment Reporting .

The Sensing Solutions reportable segment is also an operating segment.

In the three months ended March 31, 2024, we realigned our segments as a result of organizational changes that better allocate our resources to support changes to our business strategy.

Refer to Note 1:

Basis of Presentation for additional information.

This realignment added an "other" segment that represents the aggregation of immaterial operating segments.

As a result of this reorganization,

we moved $ 143.4 million of goodwill from Performance Sensing to Sensing Solutions.

Refer to Note 13:

Fair Value Measures for additional information.

Effective April 1, 2023, we moved our material handling products from the HVOR operating segment (in the Performance Sensing reportable segment) to the Sensing Solutions operating segment to align with new management reporting.

This product move resulted in a reallocation of $ 57.1 million of goodwill from the HVOR reporting unit to the Industrial Solutions reporting unit based on its fair value relative to the total fair value of the HVOR reporting unit .

Prior year amounts in the table below have been recast to reflect these realignments.

Prior to the three months ended March 31, 2024, the Performance Sensing reportable segment represented the aggregation of two operating segments, Automotive and HVOR.

As a result of the segment realignment, Performance Sensing now represents one operating segment, as does Sensing Solutions.

Other immaterial operating segments are aggregated in other, which was created as part of the segment realignment.

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.

5 unchanged sentences

Significant Accounting Policies of the audited consolidated financial statements and notes thereto included in our 2023 Annual Report.

The following table presents net revenue and segment operating income for our reportable segments and other operating results not allocated to our reportable segments for the three and nine months ended September 30, 2023 and 2022.

The amounts previously reported in the table below for the three and nine months ended September 30, 2022 have been retrospectively recast to reflect the move of the material handling products between operating segments as described above.

In addition, the nine months ended September 30, 2023 includes amounts for the three months ended March 31, 2023 that have been retrospectively adjusted for this change.

For the three months ended For the nine months ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

For the three months ended

March 31, 2024 March 31, 2023

Performance Sensing (1)(2)

$ 713,318 $ 667,762

Sensing Solutions (1)(2)

257,839 283,450

35,552 46,963

Total net revenue $ 1,006,709 $ 998,175

1 unchanged sentence

Performance Sensing (1)(2)

$ 185,132 $ 169,066

Sensing Solutions (1)(2)

72,479 84,020

Total segment operating income 264,392 258,056

3 unchanged sentences

Operating income 144,792 148,842

Interest expense, net ( 36,908 ) ( 44,856 ) ( 115,104 ) ( 135,143 )

Interest expense ( 38,395 ) ( 48,791 )

Interest income 3,738 8,700

Other, net ( 11,544 ) 1,392

Income before taxes $ 98,591 $ 110,143

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(1) The amounts previously reported for the three months ended March 31, 2023 have been retrospectively recast to reflect the move of the material handling products between operating segments in the second quarter of 2023 and to reflect the recasting of the Aftermarkets business and the radar products from Performance Sensing to Sensing Solutions.

(2) The amounts previously reported for the three months ended March 31, 2023 have been retrospectively recast to reflect the s egment realignment as discussed in Note 1:

Basis of Presentation .

Subsequent Events

On April 26, 2024, Jeff Cote informed our Board of his decision to retire as Chief Executive Officer ("CEO") and President and resign from the Board effective April 30, 2024.

The Board has appointed Martha Sullivan as Interim President and CEO effective May 1, 2024 and has established a CEO Search Committee to identify a new permanent CEO.

Cautionary Statements Concerning Forward-Looking Statements

9 unchanged sentences

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-Q

Item 1. Financial Statements