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Item 2. Management’s Discussion and Analysis

2025-07-29 compared with 2025-05-08 · 126 added, 69 removed, 320 unchanged (38% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations supplements, and should be read in conjunction with, the discussion in Item 7:

The following discussion and analysis of our financial condition and results of operations supplements should be read in conjunction with the discussion in Item 7:

Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2024 Annual Report.

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Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Net revenue for the three months ended March 31, 2025 was $911.3 million, a decrease of 9.5% on a reported basis compared to $1,006.7 million in the prior period.

Excluding a decrease of 0.6% attributed to changes in foreign currency exchange rates and a decrease of 4.5% related to the effect of disposals, net revenue decreased 4.4% on an organic basis.

Net revenue for the three months ended June 30, 2025 was $943.4 million, a decrease of 8.9% on a reported basis compared to $1,035.5 million in the prior period.

Excluding an increase of 0.9% attributed to changes in foreign currency exchange rates and a decrease of 8.3% related to the effect of disposals, net revenue decreased 1.5% on an organic basis.

Organic revenue growth (or decline), discussed throughout this Item 2:

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Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information regarding our use of organic revenue growth (or decline).

Operating income for the three months ended March 31, 2025 was $122.2 million (13.4% of net revenue), a decrease of $22.6 million, or 15.6% compared to operating income of $144.8 million (14.4% of net revenue) in the three months ended March 31, 2024.

Refer to Results of Operations included elsewhere in this MD&A for additional discussion of our earnings results for the three months ended March 31, 2025 compared to the prior year period.

We generated $119.2 million of operating cash flows in the three months ended March 31, 2025, ending the quarter with $588.1 million in cash and cash equivalents.

In the three months ended March 31, 2025, we used cash of approximately $32.6 million for capital expenditures, $17.9 million for payment of cash dividends, and $100.5 million for share repurchases as part of our share repurchase plan.

Net revenue for the six months ended June 30, 2025 was $1,854.6 million, a decrease of 9.2% compared to $2,042.2 million in the prior period.

Excluding an increase of 0.2% attributed to changes in foreign currency exchange rates and a decrease of 6.4% related to the effect of disposals, net revenue decreased 3.0% on an organic basis.

Operating income for the three months ended June 30, 2025 was $138.1 million (14.6% of net revenue), an increase of $8.1 million, or 6.2% compared to operating income of $129.9 million (12.5% of net revenue) in the three months ended June 30, 2024.

Operating income for the six months ended June 30, 2025 decreased $14.5 million, or 5.3%, to $260.3 million (14.0% of net revenue) from $274.7 million (13.5% of net revenue) in the six months ended June 30, 2024.

Refer to Results of Operations included elsewhere in this MD&A for additional discussion of our earnings results for the three and six months ended June 30, 2025 compared to the prior periods.

We generated $260.1 million of operating cash flows in the six months ended June 30, 2025, ending the quarter with $661.8 million in cash and cash equivalents.

In the six months ended June 30, 2025, we used cash of approximately $58.0 million for capital expenditures, $35.5 million for payment of cash dividends, and $120.6 million for share repurchases as part of our share repurchase plan.

Results of Operations

The table below presents our historical results of operations, in millions of dollars and as a percentage of net revenue, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

We have derived the results of

operations from the Financial Statements included elsewhere in this Report.

The table below presents our historical results of operations, in millions of dollars and as a percentage of net revenue, for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.

We have derived the results of operations from the Financial Statements included elsewhere in this Report.

Amounts and percentages in the table below have been calculated based on unrounded numbers.

Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

For the three months ended

March 31, 2025 March 31, 2024

For the three months ended For the six months ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Amount Percent

Performance Sensing $ 652.2 69.1 % $ 723.9 69.9 % $ 1,302.6 70.2 % $ 1,437.2 70.4 %

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Net income $ 60.7 6.4 % $ 71.7 6.9 % $ 130.6 7.0 % $ 147.7 7.2 %

Net revenue for the three months ended March 31, 2025 decreased 9.5% compared to the prior period.

Net revenue decreased 4.4% on an organic basis, which excludes a decrease of 0.6% attributed to changes in foreign currency exchange rates and a decrease of 4.5% due primarily to the effects of the divestiture of the Insights business in the third quarter of 2024.

Net revenue for the three months ended June 30, 2025 decreased 8.9% compared to the prior period.

Net revenue decreased 1.5% on an organic basis, which excludes an increase of 0.9% attributed to changes in foreign currency exchange rates and a decrease of 8.3% due primarily to the effects of the divestitures of the Insights Business in the third quarter of 2024 and the MSP Business in the first quarter of 2025.

Net revenue for the six months ended June 30, 2025 decreased 9.2% compared to the prior period.

Net revenue decreased 3.0% on an organic basis, which excludes an increase of 0.2% attributed to changes in foreign currency exchange rates and a decrease of 6.4% due primarily to the effects of the divestitures of the Insights Business in the third quarter of 2024 and the MSP Business in the first quarter of 2025.

Performance Sensing

Performance Sensing net revenue for the three months ended March 31, 2025 decreased 8.8% on a reported basis and 7.5% on an organic basis compared to the prior period, which was primarily due to decreases in automotive and HVOR production levels in North America and Europe.

Performance Sensing net revenue for the three months ended June 30, 2025 decreased 9.9% on a reported basis, which includes the effects of the divestiture of the MSP Business in the first quarter of 2025, and 6.1% on an organic basis compared to the prior period, which was primarily due to decreases in automotive and HVOR production in North America and Europe.

Performance Sensing net revenue for the six months ended June 30, 2025 decreased 9.4% on a reported basis and 6.8% on an organic basis compared to the prior period, which was primarily due to lower automotive and HVOR production levels in North America and Europe.

Sensing Solutions

Sensing Solutions net revenue for the three months ended March 31, 2025 increased 1.2% on a reported basis and 3.8% on an organic basis compared to the prior period, which is primarily growth in our industrial market.

Sensing Solutions net revenue for the three months ended June 30, 2025 increased 8.6% on a reported basis and 10.7% on an organic basis compared to the prior period, which is primarily due to content growth in our industrial market.

Sensing Solutions net revenue for the six months ended June 30, 2025 increased 5.0% on a reported basis and 7.4% on an organic basis compared to the prior period, which is primarily due to content growth in our industrial market.

Operating Costs and Expenses

Operating costs and expenses for the three months ended March 31, 2025 and 2024 are presented, in millions of dollars and as a percentage of net revenue, in the following table.

Operating costs and expenses for the three and six months ended June 30, 2025 and 2024 are presented, in millions of dollars and as a percentage of net revenue, in the following table.

Amounts and percentages in the table below have been calculated based on unrounded numbers.

Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

For the three months ended

March 31, 2025 March 31, 2024

For the three months ended For the six months ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Amount Percent

Operating costs and expenses:

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Cost of revenue

For the three months ended March 31, 2025, cost of revenue as a percentage of net revenue increased from the prior period, primarily due to (1) the unfavorable effect of changes in foreign currency exchange rates, (2) the net impacts of inflation on material and logistics costs and pricing recoveries from customers, and (3) unfavorable product mix.

For the three months ended June 30, 2025, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to a decrease in product line and product lifecycle management charges, partially offset by the unfavorable effect of changes in foreign currency exchange rates.

For the six months ended June 30, 2025, cost of revenue as a percentage of net revenue increased from the prior period, primarily due to (1) the net impacts of inflation on material and logistics costs and pricing recoveries from customers and (2) unfavorable product mix, partially offset by the favorable effect of changes in foreign currency exchange rates.

Research and development expense

For the three months ended March 31, 2025, research and development expense did not fluctuate materially from the prior year period.

For the three and six months ended June 30, 2025, research and development expense decreased primarily as a result of the divestiture of the Insights Business in the third quarter of 2024 and restructuring actions impacting certain product lines.

Selling, general and administrative expense

For the three months ended March 31, 2025, SG&A expense did not fluctuate materially from the prior year period.

For the three and six months ended June 30, 2025, SG&A expense did not fluctuate materially from the prior periods.

Amortization of intangible assets

For the three months ended March 31, 2025, amortization of intangible assets decreased from the prior period, primarily due to the divestiture of the Insights Business, resulting in approximately $9.8 million lower amortization expense during fiscal year 2025, and the effect of amortization of intangible assets in accordance with their expected economic benefit, which generally results in acceleration of amortization expense in the early years of the life of an intangible asset.

For the three and six months ended June 30, 2025, amortization of intangible assets decreased from the prior period, primarily due to the divestiture of the Insights Business, resulting in approximately $9.8 million and $19.7 million, respectively, of lower amortization expense during fiscal year 2025, and the effect of amortization of intangible assets in accordance with their expected economic benefit, which generally results in acceleration of amortization expense in the early years of the life of an intangible asset.

Restructuring and other charges, net

In the three months ended March 31, 2025, restructuring and other charges, net increased from the prior year period, primarily due to the loss on the sale of the Magnetic Speed and Positioning business and charges associated with the 2H 2024 Plan.

In the three and six months ended June 30, 2025, restructuring and other charges, net increased from the prior periods, primarily due to the loss on the sale of the Magnetic Speed and Positioning business and charges associated with the 2H 2024 Plan.

Refer to Note 5:

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Operating Income

For the three months ended March 31, 2025, operating income was $122.2 million, compared to $144.8 million in the prior period.

This unfavorable impact was driven primarily by (1) the impact of organic revenue declines and manufacturing efficiencies, (2) the disposition of the Insights business in the third quarter of 2024, and (3) the unfavorable impact of foreign exchange rates, partially offset by (1) a $17.9 million decrease in amortization of intangibles and (2) cost savings as a result of actions taken as part of the 2H 2024 and Q3 2023 Plans.

For the three months ended June 30, 2025, operating income was $138.1 million, compared to $129.9 million in the prior period.

This favorable impact was driven primarily by (1) a decrease in product line and product lifecycle management charges, (2) a $17.9 million decrease in amortization of intangibles, and (3) cost savings as a result of actions taken as part of the 2H 2024 and Q3 2023 Plans, partially offset by (1) the impact of organic revenue declines and (2) the dispositions of the Insights Business in the third quarter of 2024 and the MSP Business in the first quarter of 2025.

For the six months ended June 30, 2025, operating income was $260.3 million, compared to $274.7 million in the prior period.

This unfavorable impact was driven primarily by (1) the impact of organic revenue declines and (2) the disposition of the Insights Business in the third quarter of 2024, partially offset by (1) the favorable impact of foreign exchange rates, (2) a $35.8 million decrease in amortization of intangibles and (3) cost savings as a result of actions taken as part of the 2H 2024 and Q3 2023 Plans.

Interest Expense

For the three months ended March 31, 2025, interest expense did not fluctuate materially from the prior year period.

For the three and six months ended June 30, 2025, interest expense did not fluctuate materially from the prior periods.

Interest Income

For the three months ended March 31, 2025, interest income did not fluctuate materially from the prior year period.

For the three and six months ended June 30, 2025, interest income did not fluctuate materially from the prior periods.

Other, net primarily includes currency remeasurement gains and losses on net monetary assets, gains and losses on foreign currency and commodity forward contracts not designated as hedging instruments, mark-to-market gains and losses on investments, losses related to debt refinancing, and the portion of our net periodic benefit cost excluding service cost.

For the three months ended March 31, 2025, other, net represented a net gain of $2.1 million, a favorable impact on earnings of $13.7 million compared to a net loss of $11.5 million in the prior period.

This favorable impact was primarily due to the gain on commodity forward contracts and the absence of a $14.8 million loss recognized in the first quarter of 2024 as a result of observable price changes related to an equity investment held using the measurement alternative.

For the three months ended June 30, 2025, other, net represented a net gain of $0.9 million, an unfavorable impact on earnings of $3.2 million compared to a net gain of $4.1 million in the prior period.

This unfavorable impact was primarily due to a lesser gain recognized on commodity forward contracts and the currency remeasurement of net monetary assets in 2025 compared to the prior period.

For the six months ended June 30, 2025, other, net represented a net gain of $3.1 million, a favorable impact on earnings of $10.5 million compared to a net loss of $7.4 million in the prior period.

This favorable impact was primarily due to the absence of a $14.8 million loss recognized in the first quarter of 2024 as a result of observable price changes related to an equity investment held using the measurement alternative.

Refer to Note 13:

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We believe that organic revenue growth (or decline) provides investors with helpful information with respect to our operating performance, and we use organic revenue growth (or decline) to evaluate our ongoing operations as well as for internal planning and forecasting purposes.

We believe that organic revenue growth (or decline) provides useful information in evaluating the results of our business because it excludes items that we believe are not indicative of ongoing performance or that we believe impact comparability with the prior-year period.

Market outgrowth is calculated as organic revenue growth less our weighted market growth.

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GAAP, excluding interest expense, interest income, and provision for (or benefit from) income taxes, depreciation expense, amortization of intangible assets, and the following non-GAAP adjustments, if applicable:

(1) restructuring related and other, (2) financing and other transaction costs, and (3) other, net activities.

(1) restructuring related and other, (2) financing and other transaction costs, and (3) other, net.

Refer to Non-GAAP Adjustments below for additional discussion of these adjustments.

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• Restructuring related and other :

commodity forward contacts that we believe impact comparisons to prior period operating results.

includes net charges related to certain restructuring and other exit activities, other costs (or income) that we believe are either unique or unusual to the identified reporting period, and the impact of commodity forward contacts that we believe impact comparisons to prior period operating results.

Such costs include charges related to optimization of our manufacturing processes to increase productivity.

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The following tables present reconciliations of certain financial measures calculated in accordance with U.S.

GAAP to the related non-GAAP financial measures for the three months ended March 31, 2025 and 2024.

GAAP to the related non-GAAP financial measures for the three months ended June 30, 2025 and 2024.

Refer to the Non-GAAP Adjustments section above for additional information regarding these adjustments.

Amounts and percentages in the tables below have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

For the three months ended March 31, 2025

For the three months ended June 30, 2025

(Dollars in millions, except per share amounts) Operating Income Operating Margin Income Taxes Net Income Diluted EPS

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Adjusted (non-GAAP) $ 179.1 19.0 % $ 19.7 $ 127.3 $ 0.87

For the three months ended March 31, 2024

For the three months ended June 30, 2024

(Dollars in millions, except per share amounts) Operating Income Operating Margin Income Taxes Net Income Diluted EPS

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Adjusted (non-GAAP) $ 196.7 19.0 % $ 24.0 $ 139.3 $ 0.92

(a) The following table presents the components of our restructuring related and other non-GAAP adjustment to net income for the three months ended March 31, 2025 and 2024 (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

For the three months ended March 31,

The following tables present reconciliations of certain financial measures calculated in accordance with U.S.

GAAP to the related non-GAAP financial measures for the six months ended June 30, 2025 and 2024.

For the six months ended June 30, 2025

(Dollars in millions, except per share amounts) Operating Income Operating Margin Income Taxes Net Income Diluted EPS

Reported (GAAP) $ 260.3 14.0 % $ 65.8 $ 130.6 $ 0.88

Non-GAAP adjustments:

Restructuring related and other (a)

34.6 1.9 0.9 35.5 0.24

Financing and other transaction costs (b)

9.0 0.5 0.1 9.1 0.06

Amortization of intangible assets (c)

41.8 2.3 — 41.8 0.28

Amortization of debt issuance costs — — — 2.4 0.02

— — (0.6) (3.6) (0.02)

Deferred taxes and other tax related — — 28.3 28.3 0.19

Total adjustments 85.3 4.6 28.7 113.4 0.77

Adjusted (non-GAAP) $ 345.6 18.6 % $ 37.1 $ 243.9 $ 1.65

For the six months ended June 30, 2024

(Dollars in millions, except per share amounts) Operating Income Operating Margin Income Taxes Net Income Diluted EPS

Reported (GAAP) $ 274.7 13.5 % $ 49.9 $ 147.7 $ 0.98

Non-GAAP adjustments:

Restructuring related and other (a)

28.7 1.4 (1.2) 27.5 0.18

Financing and other transaction costs (b)

7.3 0.4 (1.2) 6.1 0.04

Amortization of intangible assets (c)

74.4 3.6 — 74.4 0.49

Amortization of debt issuance costs — — — 3.2 0.02

— — 1.4 8.8 0.06

Deferred taxes and other tax related (4)

— — 5.4 5.4 0.04

Total adjustments 110.5 5.4 4.4 125.5 0.83

Adjusted (non-GAAP) $ 385.2 18.9 % $ 45.4 $ 273.3 $ 1.81

(a) The following table presents the components of our restructuring related and other non-GAAP adjustment to net income for the three and six months ended June 30, 2025 and 2024 (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

For the three months ended June 30,

For the six months ended June 30,

(In millions) 2025 2024 2025 2024

Business and corporate repositioning (i)

$ 16.2 $ 26.8 $ 34.3 $ 29.2

0.1 (0.1) 0.3 (0.5)

Income tax effect (ii)

(0.6) (0.8) 0.9 (1.2)

Total non-GAAP restructuring related and other (iii)

$ 15.6 $ 25.9 $ 35.5 $ 27.5

__________________________

Primarily includes charges related to repositioning our business and corporate functions to more effectively respond to the challenges that face the business, including severance, contract termination costs, charges related to asset write-downs, and other various restructuring-related charges.

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Certain portions of these adjustments are non-operating and are excluded from the non-GAAP adjustments to operating income.

(b) The following table presents the components of our financing and other transaction costs non-GAAP adjustment to net income for the three months ended March 31, 2025 and 2024 (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

For the three months ended March 31,

(b) The following table presents the components of our financing and other transaction costs non-GAAP adjustment to net income for the three and six months ended June 30, 2025 and 2024 (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

For the three months ended June 30,

For the six months ended June 30,

(In millions) 2025 2024 2025 2024

Transaction loss (i)

$ 3.9 $ (0.4) $ 8.6 2.7

Merger and acquisition compensation arrangements (ii)

(0.3) 2.8 0.4 4.1

Acquisition-related depreciation

Income tax effect (iii)

0.1 (1.0) 0.1 (1.2)

Total financing and other transaction costs (iv)

$ 3.6 $ 1.7 $ 9.1 $ 6.1

__________________________

Primarily includes losses or gains related to the divestiture of a business, costs incurred, including for legal, accounting, and other professional services, that are directly related to an acquisition, divestiture, or other transaction.

In the three months ended March 31, 2025, this line includes costs and losses associated with the disposition of the Magnetic Speed and Positioning ("MSP") Business.

In the six months ended June 30, 2025, this line includes costs and losses associated with the disposition of the Magnetic Speed and Positioning ("MSP") Business.

Refer to Note 16:

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(c) In the three months ended December 31, 2024, we discontinued the use of adjustments to exclude step-up depreciation in our non-GAAP measures and we adjusted operating income and net income to exclude the amortization of all our intangible assets.

The three months ended March 31, 2024 have not been recast.

If we had recast this non-GAAP measure for the three months ended March 31, 2024, adjusted operating income and adjusted net income would have increased by an additional $1.1 million.

The three and six months ended June 30, 2024 have not been recast.

If we had recast this non-GAAP measure for the three and six months ended June 30, 2024, adjusted operating income and adjusted net income would have increased by an additional $1.8 million and $3.2 million, respectively.

The following table provides a reconciliation of net cash provided by operating activities in accordance with U.S.

GAAP to free cash flow.

For the three months ended March 31,

For the six months ended June 30,

(In millions) 2025 2024

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GAAP to adjusted corporate and other expenses.

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(In millions) 2025 2024 2025 2024

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GAAP to adjusted EBITDA.

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(In millions) LTM 2025 2024 2025 2024

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Financing and other transaction costs 135.3 3.6 2.5 9.0 6.8

7.8 (2.1) 11.5

Other, net 11.0 (0.9) (4.1) (3.1) 7.4

Adjusted EBITDA $ 840.3 $ 212.1 $ 231.7 $ 412.3 $ 454.9

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GAAP to gross and net leverage ratios.

(Dollars in millions) March 31,

(Dollars in millions) June 30,

2025 December 31,

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Liquidity and Capital Resources

As of March 31, 2025 and December 31, 2024, we held cash and cash equivalents in the following regions (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

(In millions) March 31,

As of June 30, 2025 and December 31, 2024, we held cash and cash equivalents in the following regions (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

(In millions) June 30,

2025 December 31,

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Our cash and cash equivalents balances are held in the following significant currencies (amounts in the tables below have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

As of March 31, 2025

As of June 30, 2025

(In millions) United States Dollar ("USD")

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USD Equivalent $ 10.1 $ 4.5 $ 199.2 $ 10.7

The table below summarizes our primary sources and uses of cash for the three months ended March 31, 2025 and 2024.

The table below summarizes our primary sources and uses of cash for the six months ended June 30, 2025 and 2024.

We have derived these summarized statements of cash flows from the Financial Statements included elsewhere in this Report.

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Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

For the three months ended

(In millions) March 31, 2025 March 31, 2024

For the six months ended

(In millions) June 30, 2025 June 30, 2024

Net cash provided by/(used in):

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Operating activities.

Net cash provided by operating activities for the three months ended March 31, 2025 increased compared to the corresponding period of the prior year, primarily due to favorable changes in working capital, partially offset by lower cash provided by earnings.

Net cash provided by operating activities for the six months ended June 30, 2025 increased compared to the corresponding period of the prior year, primarily due to favorable changes in working capital, partially offset by lower cash provided by earnings.

Investing activities.

Net cash used in investing activities for the three months ended March 31, 2025 was $6.9 million compared to a use of cash of $42.1 million for the corresponding period of the prior year.

Net cash used in investing activities for the six months ended June 30, 2025 was $33.6 million compared to a use of cash of $85.2 million for the corresponding period of the prior year.

This change was primarily due to a reduction in capital expenditures and proceeds received from the sale of the MSP Business.

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Financing activities .

Net cash used in financing activities for the three months ended March 31, 2025 increased compared to the corresponding period of the prior year, primarily due to an increase in the amount of cash paid to repurchase ordinary shares, partially offset by the payment of $79.4 million to repurchase the remaining equity interest in a joint venture in the prior year.

Net cash used in financing activities for the six months ended June 30, 2025 was 160.8 million compared to cash provided by financing activities of 365.1 million in the corresponding period of the prior year, primarily due to the issuance of the $500.0 million aggregate principal amount of 6.625% senior notes due 2032, partially offset by an increase in the amount of cash paid to repurchase ordinary shares in the current period and the payment of $79.4 million to repurchase the remaining equity interest in a joint venture in the prior year.

Refer to Note 12:

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Indebtedness and Liquidity

As of March 31, 2025, we had $3.2 billion in gross indebtedness, which includes finance lease obligations and excludes debt discounts, premiums, and deferred financing costs.

As of June 30, 2025, we had $3.2 billion in gross indebtedness, which includes finance lease obligations and excludes debt discounts, premiums, and deferred financing costs.

Capital Resources

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Our sources of liquidity include cash on hand, cash flows from operations, and available capacity under the Revolving Credit Facility.

As of March 31, 2025, we had $745.8 million available under the Revolving Credit Facility, net of $4.2 million of obligations in respect of outstanding letters of credit issued thereunder.

As of June 30, 2025, we had $745.8 million available under the Revolving Credit Facility, net of $4.2 million of obligations in respect of outstanding letters of credit issued thereunder.

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

As of March 31, 2025, no amounts had been drawn against these outstanding letters of credit.

As of June 30, 2025, no amounts had been drawn against these outstanding letters of credit.

This Revolving Credit Facility includes an accordion feature under which maximum borrowings may be increased under certain circumstances.

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Our ability to raise additional financing, and our borrowing costs, may be impacted by short and long term debt ratings assigned by independent rating agencies, which are based, in significant part, on our performance as measured by certain credit metrics such as interest coverage and leverage ratios.

As of April 25, 2025, Moody’s Investors Service’s corporate credit rating for STBV was Ba2 with a positive outlook, and Standard & Poor’s corporate credit rating for STBV was BB+ with a stable outlook.

As of July 17, 2025, Moody’s Investors Service’s corporate credit rating for STBV was Ba2 with a stable outlook, and Standard & Poor’s corporate credit rating for STBV was BB+ with a stable outlook.

Any future downgrades to STBV's credit ratings may increase our future borrowing costs but will not reduce availability under the Credit Agreement.

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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 upon the incurrence of certain indebtedness (excluding any permitted indebtedness).

These provisions were not triggered during the three months ended March 31, 2025.

These provisions were not triggered during the six months ended June 30, 2025.

The Credit Agreement and the Senior Notes Indentures contain restrictions and covenants that limit the ability of our wholly-owned subsidiary, STBV, and certain of its subsidiaries to, among other things, incur subsequent indebtedness, sell assets, pay dividends, and make other restricted payments.

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These restrictions and covenants, which are subject to important exceptions and qualifications set forth in the Credit Agreement and Senior Notes Indentures, were taken into consideration when we established our share repurchase programs and will be evaluated periodically with respect to future potential funding of those programs.

As of March 31, 2025, we believe we were in compliance with all covenants and default provisions under our credit arrangements.

As of June 30, 2025, we believe we were in compliance with all covenants and default provisions under our credit arrangements.

Share repurchase programs

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

We currently have authorization for the September 2023 Program, under which approximately $302.5 million remained available as of March 31, 2025.

In the three months ended March 31, 2025, and 2024, we repurchased 3.5 million and 0.3 million ordinary shares under the September 2023 Program.

In the three months ended March 31, 2025 and 2024, we paid aggregate cash dividends of $17.9 million and $18.1 million, respectively.

On April 21, 2025, we announced that our Board of Directors approved a quarterly dividend of $0.12 per share, payable on May 28, 2025 to shareholders of record as of May 14, 2025.

We currently have authorization for the September 2023 Program, under which approximately $282.4 million remained available as of June 30, 2025.

In the six months ended June 30, 2025, and 2024, we repurchased 4.2 million and 0.3 million ordinary shares under the September 2023 Program.

In the six months ended June 30, 2025 and 2024, we paid aggregate cash dividends of $35.5 million and $36.1 million, respectively.

In July 2025, we announced that our Board of Directors approved a quarterly dividend of $0.12 per share, payable in August 2025 to shareholders of record as of August 13, 2025.

Critical Accounting Policies and Estimates

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It also requires that we make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes.

No material changes to our critical accounting policies and estimates, as previously disclosed, have occurred during the first three months of 2025.

No material changes to our critical accounting policies and estimates, as previously disclosed, have occurred during the first six months of 2025.

Quantitative and Qualitative Disclosures About Market Risk.

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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-Q

Item 2. Management’s Discussion and Analysis