form 10-qd18rn0p25nwr6d.cloudfront.net/cik-0001477294/7bc42740-54... · 2019-10-30 · (399,417 )...

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UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549_________________________________________________________________________________

FORM 10-Q_________________________________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-34652_________________________________________________________________________________

SENSATA TECHNOLOGIES HOLDING PLC(Exact name of registrant as specified in its charter)

_________________________________________________________________________________

England and Wales 98-1386780

(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

Interface House, Interface Business Park, Bincknoll LaneRoyal Wootton Bassett, Swindon SN4 8SY, United Kingdom

529 Pleasant StreetAttleboro, Massachusetts, 02703, United States(Address of principal executive offices, including zip code))

+1 (508) 236 3800(Registrant's telephone number, including area code)

Not applicable(Former name, former address and former fiscal year, if changed since last report)

_____________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of exchange on which registeredOrdinary Shares - nominal value €0.01 per share ST New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See thedefinitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 18, 2019, 158,853,596 ordinary shares were outstanding.

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TABLE OF CONTENTS

PART I Item 1. Financial Statements (unaudited): Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 3 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018 4

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2019 and2018 5

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 6

Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months ended September 30,2019 and 2018 7

Notes to Condensed Consolidated Financial Statements 8 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3. Quantitative and Qualitative Disclosures About Market Risk 32 Item 4. Controls and Procedures 33 PART II Item 1. Legal Proceedings 34 Item 1A. Risk Factors 34 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 34 Item 3. Defaults Upon Senior Securities 34 Item 6. Exhibits 35 Signatures 36

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

SENSATA TECHNOLOGIES HOLDING PLCCondensed Consolidated Balance Sheets(In thousands, except per share amounts)

(unaudited)

September 30,

2019 December 31,

2018

Assets Current assets:

Cash and cash equivalents $ 721,386 $ 729,833

Accounts receivable, net of allowances of $15,969 and $13,762 as of September 30, 2019 and December 31, 2018,respectively

596,814 581,769

Inventories 502,939 492,319

Prepaid expenses and other current assets 128,447 113,234

Total current assets 1,949,586 1,917,155Property, plant and equipment, net 817,040 787,178

Goodwill 3,104,447 3,081,302

Other intangible assets, net of accumulated amortization of $2,004,646 and $1,896,861 as of September 30, 2019 andDecember 31, 2018, respectively

790,692 897,191

Deferred income tax assets 25,599 27,971

Other assets 156,210 86,890

Total assets $ 6,843,574 $ 6,797,687

Liabilities and shareholders’ equity Current liabilities:

Current portion of long-term debt, finance lease and other financing obligations $ 7,863 $ 14,561

Accounts payable 365,823 379,824

Income taxes payable 29,753 27,429

Accrued expenses and other current liabilities 217,064 218,130

Total current liabilities 620,503 639,944Deferred income tax liabilities 246,216 225,694

Pension and other post-retirement benefit obligations 29,249 33,958

Finance lease and other financing obligations, less current portion 29,415 30,618

Long-term debt, net 3,219,412 3,219,762

Other long-term liabilities 95,891 39,277

Total liabilities 4,240,686 4,189,253Commitments and contingencies (Note 12) Shareholders’ equity:

Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 172,427 and 171,719 shares issued, as ofSeptember 30, 2019 and December 31, 2018, respectively

2,211 2,203

Treasury shares, at cost, 13,084 and 7,571 shares as of September 30, 2019 and December 31, 2018, respectively (665,263) (399,417)

Additional paid-in capital 1,716,682 1,691,190

Retained earnings 1,562,856 1,340,636

Accumulated other comprehensive loss (13,598) (26,178)

Total shareholders’ equity 2,602,888 2,608,434

Total liabilities and shareholders’ equity $ 6,843,574 $ 6,797,687

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

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SENSATA TECHNOLOGIES HOLDING PLCCondensed Consolidated Statements of Operations

(In thousands, except per share amounts)(unaudited)

For the three months ended For the nine months ended

September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Net revenue $ 849,715 $ 873,552 $ 2,603,940 $ 2,673,705Operating costs and expenses:

Cost of revenue 554,910 558,334 1,710,951 1,723,300

Research and development 38,189 37,800 109,970 111,781

Selling, general and administrative 68,158 73,886 210,733 235,681

Amortization of intangible assets 35,905 33,911 108,079 103,574

Restructuring and other charges, net 6,421 (52,698) 28,040 (48,688)

Total operating costs and expenses 703,583 651,233 2,167,773 2,125,648Operating income 146,132 222,319 436,167 548,057Interest expense, net (39,556) (38,058) (118,417) (114,808)

Other, net (7,560) (10,581) (7,925) (26,267)

Income before taxes 99,016 173,680 309,825 406,982Provision for income taxes 28,341 24,562 80,649 62,086

Net income $ 70,675 $ 149,118 $ 229,176 $ 344,896

Basic net income per share: $ 0.44 $ 0.89 $ 1.42 $ 2.03

Diluted net income per share: $ 0.44 $ 0.88 $ 1.41 $ 2.01


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SENSATA TECHNOLOGIES HOLDING PLCCondensed Consolidated Statements of Comprehensive Income

(In thousands)(unaudited)


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Net income $ 70,675 $ 149,118 $ 229,176 $ 344,896Other comprehensive income, net of tax:

Cash flow hedges 6,917 10,343 12,331 39,555

Defined benefit and retiree healthcare plans 83 3,610 249 4,648

Other comprehensive income 7,000 13,953 12,580 44,203

Comprehensive income $ 77,675 $ 163,071 $ 241,756 $ 389,099


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SENSATA TECHNOLOGIES HOLDING PLCCondensed Consolidated Statements of Cash Flows


For the nine months ended

September 30, 2019 September 30, 2018Cash flows from operating activities: Net income $ 229,176 $ 344,896

Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 84,354 79,518

Amortization of debt issuance costs 5,573 5,480

Gain on sale of business — (63,688)

Share-based compensation 15,188 17,813

Loss on debt financing 4,364 2,350

Amortization of intangible assets 108,079 103,574

Deferred income taxes 20,313 9,547

Unrealized loss on derivative instruments and other 23,545 9,020

Changes in operating assets and liabilities, net of the effects of acquisitions and divestitures: Accounts receivable, net (12,119) (78,611)

Inventories (7,192) (65,370)

Prepaid expenses and other current assets 4,281 (13,350)

Accounts payable and accrued expenses (40,092) 84,082

Income taxes payable 2,028 (8,910)

Other (3,971) (6,212)

Net cash provided by operating activities 433,527 420,139

Cash flows from investing activities: Acquisitions, net of cash received (32,315) —

Additions to property, plant and equipment and capitalized software (123,206) (111,275)

Proceeds from the sale of business, net of cash sold — 149,136

Other (5,003) 5,000

Net cash (used in)/provided by investing activities (160,524) 42,861

Cash flows from financing activities: Proceeds from exercise of stock options and issuance of ordinary shares 10,309 6,051

Payment of employee restricted stock tax withholdings (6,953) (3,673)

Proceeds from issuance of debt 450,000 —

Payments on debt (461,190) (14,094)

Payments to repurchase ordinary shares (265,846) (399,417)

Payments of debt and equity issuance costs (7,770) (9,931)

Other — 16,369

Net cash used in financing activities (281,450) (404,695)Net change in cash and cash equivalents (8,447) 58,305Cash and cash equivalents, beginning of period 729,833 753,089

Cash and cash equivalents, end of period $ 721,386 $ 811,394


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SENSATA TECHNOLOGIES HOLDING PLCCondensed Consolidated Statements of Changes in Shareholders' Equity


Ordinary Shares Treasury Shares AdditionalPaid-InCapital Retained Earnings

AccumulatedOther

ComprehensiveLoss

TotalShareholders’

Equity Number Amount Number Amount Balance as of June 30, 2019 172,325 $ 2,209 (10,986) $ (567,615) $ 1,710,711 $ 1,492,356 $ (20,598) $ 2,617,063

Surrender of shares for tax withholding — — (4) (175) — — — (175)

Stock options exercised 93 2 — — 3,208 — — 3,210

Vesting of restricted securities 13 — — — — — — —

Repurchase of ordinary shares — — (2,098) (97,648) — — — (97,648)

Retirement of ordinary shares (4) — 4 175 — (175) — —

Share-based compensation — — — — 2,763 — — 2,763

Net income — — — — — 70,675 — 70,675

Other comprehensive income — — — — — — 7,000 7,000

Balance as of September 30, 2019 172,427 $ 2,211 (13,084) $ (665,263) $ 1,716,682 $ 1,562,856 $ (13,598) $ 2,602,888


AccumulatedOther

ComprehensiveLoss


Equity Number Amount Number Amount Balance as of December 31, 2018 171,719 $ 2,203 (7,571) $ (399,417) $ 1,691,190 $ 1,340,636 $ (26,178) $ 2,608,434

Surrender of shares for tax withholding — — (148) (6,953) — — — (6,953)


Vesting of restricted securities 451 5 — — — (5) — —


Retirement of ordinary shares (148) (2) 148 6,953 — (6,951) — —


Net income — — — — — 229,176 — 229,176




AccumulatedOther

ComprehensiveLoss


Equity Number Amount Number Amount Balance as of June 30, 2018 171,634 $ 2,202 (1,137) $ (60,105) $ 1,676,172 $ 937,452 $ (32,914) $ 2,522,807

Surrender of shares for tax withholding — — (1) (33) — — — (33)


Vesting of restricted securities 2 — — — — — — —


Retirement of ordinary shares (1) — 1 33 — (33) — —


Net income — — — — — 149,118 — 149,118



Ordinary Shares Treasury Shares Additional Paid-In Capital Retained Earnings

Accumulated Other

Comprehensive Loss

Total Shareholders’

Equity Number Amount Number Amount Balance as of December 31, 2017 178,437 $ 2,289 (7,076) $ (288,478) $ 1,663,367 $ 1,031,612 $ (63,164) $ 2,345,626

Surrender of shares for tax withholding — — (71) (3,674) — — — (3,674)

Stock options exercised 113 2 58 2,250 3,956 (157) — 6,051

Vesting of restricted securities 257 2 — — — (2) — —


Retirement of ordinary shares (7,089) (90) 7,089 289,902 — (289,812) — —


Net income — — — — — 344,896 — 344,896





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SENSATA TECHNOLOGIES HOLDING PLCNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

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

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States ("U.S.") generally acceptedaccounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q. Accordingly, these interim financial statements do not includeall of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normalrecurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. These unaudited condensedconsolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report onForm 10-K for the year ended December 31, 2018.

All U.S. dollar and share amounts presented, except per share amounts, are stated in thousands, unless otherwise indicated.

2. New Accounting Standards

In February 2016 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), whichestablishes new accounting and disclosure requirements for leases. FASB Accounting Standards Codification ("ASC") Topic 842, Leases, requires lessees toclassify most leases as either finance or operating leases and to recognize a lease liability and right-of-use asset. For finance leases, the statements of operationsinclude separate recognition of interest on the lease liability and amortization of the right-of-use asset. For operating leases, the statements of operations include asingle lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. We adopted the provisions of FASB ASU No. 2016-02 on January 1, 2019 using the modified retrospective transition method. Refer to Note 18, "Leases" for additional discussion of this adoption.

3. Revenue Recognition

The following tables present net revenue disaggregated by segment and end market for the three and nine months ended September 30, 2019 and 2018:

For the three months ended September 30, 2019 For the three months ended September 30, 2018

Performance Sensing Sensing Solutions Total Performance Sensing Sensing Solutions TotalAutomotive $ 493,675 $ 10,738 $ 504,413 $ 507,961 $ 11,544 $ 519,505HVOR (1) 134,918 — 134,918 141,650 — 141,650

Appliance and HVAC (2) — 49,724 49,724 — 53,505 53,505

Industrial — 83,718 83,718 — 84,057 84,057

Aerospace — 41,962 41,962 — 41,062 41,062

Other — 34,980 34,980 — 33,773 33,773

Total $ 628,593 $ 221,122 $ 849,715 $ 649,611 $ 223,941 $ 873,552

__________________________(1) Heavy vehicle and off-road(2) Heating, ventilation and air conditioning

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For the nine months ended September 30, 2019 For the nine months ended September 30, 2018

Performance Sensing Sensing Solutions Total Performance

Sensing Sensing Solutions TotalAutomotive $ 1,483,986 $ 32,838 $ 1,516,824 $ 1,570,340 $ 38,402 $ 1,608,742HVOR 429,151 — 429,151 418,317 — 418,317

Appliance and HVAC — 157,260 157,260 — 164,432 164,432

Industrial — 272,177 272,177 — 253,289 253,289

Aerospace — 129,843 129,843 — 123,268 123,268

Other — 98,685 98,685 — 105,657 105,657

Total $ 1,913,137 $ 690,803 $ 2,603,940 $ 1,988,657 $ 685,048 $ 2,673,705

4. Share-Based Payment Plans

Share-Based Compensation Expense

The table below presents non-cash compensation expense related to our equity awards, which is recognized within selling, general and administrative expense inthe condensed consolidated statements of operations, during the identified periods:


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Stock options $ 1,499 $ 1,381 $ 4,987 $ 4,459Restricted securities 1,264 4,930 10,201 13,354

Share-based compensation expense $ 2,763 $ 6,311 $ 15,188 $ 17,813

Equity Awards

Awards granted in or after April 2019 permit accelerated vesting for qualified retirements.

We granted the following options under the Sensata Technologies Holding plc First Amended and Restated 2010 Equity Incentive Plan (the "2010 Equity Plan")during the nine months ended September 30, 2019:

Options Granted To: Number of Options Granted

(in thousands) Weighted- Average Grant

Date Fair Value Vesting PeriodVarious executives and employees 382 $ 13.90 25% per year over four years

We granted the following restricted stock units ("RSUs" and each, an "RSU") and performance-based restricted stock units ("PRSUs" and each, a "PRSU") underthe 2010 Equity Plan during the nine months ended September 30, 2019:

Awards Granted To: Type of Award

Number of UnitsGranted (inthousands)

Percentage of PRSUsAwarded That May

Vest Weighted- Average

Grant Date Fair ValueVarious executives and employees RSU (1) 257 N/A $ 47.98

Directors RSU (1) 28 N/A $ 43.92

Various executives and employees PRSU (2) 138 0.0% - 172.5% $ 46.92

Various executives and employees PRSU (2) 76 0.0% - 150.0% $ 46.92__________________________(1) RSUs granted during the nine months ended September 30, 2019 vest on various dates between March 2020 and August 2022.(2) PRSUs granted during the nine months ended September 30, 2019 vest in April and August 2022. The number of units that ultimately vest is dependent on the

achievement of certain performance criteria.

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5. Restructuring and Other Charges, Net

Restructuring and other charges, net for the three and nine months ended September 30, 2019 and 2018 were as follows:


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Severance costs, net (1) $ 5,549 $ 4,888 $ 23,035 $ 8,208Facility and other exit costs 208 187 245 877

Gain on sale of Valves Business (2) (4) — (63,688) — (63,688)

Other (3) (4) 664 5,915 4,760 5,915

Restructuring and other charges, net $ 6,421 $ (52,698) $ 28,040 $ (48,688)

___________________________________(1) Severance costs, net for the three and nine months ended September 30, 2019 and 2018 were primarily related to limited workforce reductions of

manufacturing, engineering, and administrative positions as well as the elimination of certain positions related to site consolidations. Severance costs, net forthe three months ended September 30, 2019 primarily comprise termination benefits provided under a one-time benefit arrangement related to the shutdownand relocation of an operating site in Germany. Severance costs, net for the nine months ended September 30, 2019 also included a charge of approximately$13 million related to benefits provided for under a voluntary retirement incentive program offered to a limited number of eligible employees in the U.S. Themajority of these benefits were paid in the third quarter of 2019.

(2) In the three months ended September 30, 2018 we completed the sale of the capital stock of Schrader Bridgeport International, Inc. and August FranceHolding Company SAS (collectively, the "Valves Business").

(3) Other charges in the three and nine months ended September 30, 2019 were primarily related to deferred compensation incurred in connection with theacquisition of GIGAVAC, LLC ("GIGAVAC"). Other charges in the three and nine months ended September 30, 2018 included incremental direct costs inorder to transact the sale of the Valves Business.

(4) Refer to Note 16, "Acquisitions and Divestitures," for further discussion of the acquisition of GIGAVAC and the divestiture of the Valves Business.

Changes to the severance portion of our restructuring liability during the nine months ended September 30, 2019 were as follows:

SeveranceBalance at December 31, 2018 $ 6,591Charges, net of reversals 23,035

Payments (18,283)

Impact of changes in foreign currency exchange rates (251)

Balance at September 30, 2019 $ 11,092

6. Other, Net

Other, net consisted of the following for the three and nine months ended September 30, 2019 and 2018:


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Currency remeasurement loss on net monetary assets $ (6,031) $ (9,568) $ (8,492) $ (18,497)Gain on foreign currency forward contracts 1,289 3,668 2,806 3,118

Gain/(loss) on commodity forward contracts 1,786 (4,233) 2,807 (8,854)

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

Net periodic benefit cost, excluding service cost (272) (285) (846) (799)

Other 32 (163) 164 1,115

Other, net $ (7,560) $ (10,581) $ (7,925) $ (26,267)

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7. Income Taxes

We recorded provision for income taxes of the following in the periods presented:


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Provision for income taxes $ 28,341 $ 24,562 $ 80,649 $ 62,086

The increase in the provision for income taxes relates to changes in the jurisdictional mix of profits, effects of changes in tax laws and rates in the locations wherewe operate, changes in tax accruals related to prior year tax positions, and the utilization of previously unbenefited net operating losses in our U.S. jurisdiction. Theprovision for income taxes consists of:

• current tax expense, which relates primarily to our profitable operations in non-U.S. tax jurisdictions and withholding taxes related to management fees,royalties, and the repatriation of foreign earnings; and

• deferred tax expense (or benefit), which represents adjustments in book-to-tax basis differences primarily related to (1) the step-up in fair value of fixedand intangible assets acquired in connection with business combination transactions, (2) the utilization of net operating losses, (3) changes in tax rates,and (4) changes in our assessment of the realizability of our deferred tax assets.

8. Net Income per Share

Basic and diluted net income per share are calculated by dividing net income by the number of basic and diluted weighted-average ordinary shares outstandingduring the period. For the three and nine months ended September 30, 2019 and 2018 the weighted-average ordinary shares outstanding for basic and diluted netincome per share were as follows:


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Basic weighted-average ordinary shares outstanding 160,458 167,290 161,774 170,045Dilutive effect of stock options 530 886 578 898

Dilutive effect of unvested restricted securities 320 418 417 438

Diluted weighted-average ordinary shares outstanding 161,308 168,594 162,769 171,381

Net income and net income per share are presented in the condensed consolidated statements of operations.

Certain potential ordinary shares were excluded from our calculation of diluted weighted-average ordinary shares outstanding because either they would have hadan anti–dilutive effect on net income per share or they related to equity awards that were contingently issuable for which the contingency had not been satisfied.These potential ordinary shares are as follows:


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Anti-dilutive shares excluded 1,381 983 1,251 894Contingently issuable shares excluded 767 807 679 801

9. Inventories

The components of inventories as of September 30, 2019 and December 31, 2018 were as follows:

September 30, 2019 December 31, 2018Finished goods $ 193,143 $ 187,095Work-in-process 103,536 104,405

Raw materials 206,260 200,819

Inventories $ 502,939 $ 492,319

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10. Pension and Other Post-Retirement Benefits

The components of net periodic benefit cost associated with our defined benefit and retiree healthcare plans for the three months ended September 30, 2019 and2018 were as follows:

U.S. Plans Non-U.S. Plans

Defined Benefit Retiree Healthcare Defined Benefit Total

2019 2018 2019 2018 2019 2018 2019 2018Service cost $ — $ — $ 2 $ 9 $ 715 $ 757 $ 717 $ 766Interest cost 394 387 48 45 332 327 774 759

Expected return on plan assets (442) (415) — — (175) (230) (617) (645)

Amortization of net loss 242 235 7 20 191 237 440 492

Amortization of prior service(credit)/cost

— — (327) (530) 2 2 (325) (528)

Loss on settlement — 207 — — — — — 207

Net periodic benefit cost/(credit) $ 194 $ 414 $ (270) $ (456) $ 1,065 $ 1,093 $ 989 $ 1,051

The components of net periodic benefit cost associated with our defined benefit and retiree healthcare plans for the nine months ended September 30, 2019 and2018 were as follows:

U.S. Plans Non-U.S. Plans

Defined Benefit Retiree Healthcare Defined Benefit Total

2019 2018 2019 2018 2019 2018 2019 2018Service cost $ — $ — $ 6 $ 47 $ 2,078 $ 2,392 $ 2,084 $ 2,439Interest cost 1,192 1,078 154 185 1,008 1,001 2,354 2,264

Expected return on plan assets (1,344) (1,251) — — (526) (702) (1,870) (1,953)

Amortization of net loss 732 835 29 20 574 372 1,335 1,227

Amortization of prior service(credit)/cost

— — (981) (1,198) 8 3 (973) (1,195)

Loss on settlement — 752 — — — — — 752

Gain on curtailment — — — — — (296) — (296)

Net periodic benefit cost/(credit) $ 580 $ 1,414 $ (792) $ (946) $ 3,142 $ 2,770 $ 2,930 $ 3,238

Components of net periodic benefit cost other than service cost are presented in other, net. Refer to Note 6, "Other, Net."

11. Debt

Our long-term debt and finance lease and other financing obligations as of September 30, 2019 and December 31, 2018 consisted of the following:

Maturity Date September 30, 2019 December 31, 2018Term Loan September 20, 2026 $ 461,883 $ 917,7944.875% Senior Notes October 15, 2023 500,000 500,000

5.625% Senior Notes November 1, 2024 400,000 400,000

5.0% Senior Notes October 1, 2025 700,000 700,000

6.25% Senior Notes February 15, 2026 750,000 750,000

4.375% Senior Notes February 15, 2030 450,000 —

Less: discount (12,296) (15,169)

Less: deferred financing costs (25,545) (23,159)

Less: current portion (4,630) (9,704)

Long-term debt, net $ 3,219,412 $ 3,219,762

Finance lease and other financing obligations $ 32,648 $ 35,475

Less: current portion (3,233) (4,857)

Finance lease and other financing obligations, less current portion $ 29,415 $ 30,618


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Our debt consists of a secured facility and various tranches of senior unsecured notes.

Secured Credit Facility

The credit agreement governing our secured credit facility (the "Credit Agreement") provides for senior secured credit facilities (the "Senior Secured CreditFacilities") consisting of a term loan facility (the "Term Loan"), a $420.0 million revolving credit facility (the "Revolving Credit Facility"), and incrementalavailability under which additional secured credit facilities could be issued under certain circumstances.

On March 27, 2019 certain indirect, wholly-owned subsidiaries of Sensata plc, including Sensata Technologies B.V. ("STBV"), entered into the ninth amendment(the "Ninth Amendment") of the Credit Agreement. Among other changes to the Credit Agreement, the Ninth Amendment (i) extended the maturity date of theRevolving Credit Facility to March 27, 2024; (ii) added pounds sterling as an available currency for revolving credit loans and letters of credit under the RevolvingCredit Facility; (iii) lowered certain index rate spreads related to the Revolving Credit Facility; (iv) lowered our letter of credit fees; (v) reduced our revolvingcredit commitment fees; and (vi) modified the senior secured net leverage ratio financial covenant to increase the Revolving Credit Facility utilization thresholdabove which such financial covenant is tested from 10% to 20%.

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

On September 20, 2019 certain of our subsidiaries, including STBV and its indirect, wholly-owned subsidiary, Sensata Technologies Inc. ("STI"), entered into thetenth amendment of the Credit Agreement (the "Tenth Amendment"). Under the terms of the Tenth Amendment, among other changes to the Credit Agreement, (i)the final maturity date of the Term Loan was extended to September 20, 2026; (ii) STI became the sole borrower under the Credit Agreement and assumedsubstantially all of the obligations of STBV and Sensata Technologies Finance Company, LLC ("STFC") thereunder; (iii) the permission to incur incrementaladditional indebtedness under the Credit Agreement was increased; and (iv) certain of the operational and restrictive covenants and other terms and conditions ofthe Senior Secured Credit Facilities to which STBV and its restricted subsidiaries are subject were modified to provide us with increased flexibility andpermissions thereunder (including permission to make restricted payments (including dividends) in an amount equal to $50.0 million annually, which can befurther increased to an unlimited amount subject to no default or event of default and compliance with certain financial covenants).

In addition, under the Tenth Amendment, STBV became a guarantor of STI’s obligations under the Credit Agreement, STFC ceased to be a guarantor with respectto the Credit Agreement, and certain subsidiaries of STBV that previously guaranteed the obligations under the Credit Agreement (the ‘‘Released Guarantors’’)were released from their guarantees, subject to satisfaction of certain conditions.

As of September 30, 2019 there was $416.1 million available under the Revolving Credit Facility, net of $3.9 million of obligations in respect of outstanding lettersof credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of September 30, 2019 no amountshad been drawn against these outstanding letters of credit.

Senior Notes

We have various tranches of senior notes outstanding. Prior to September 20, 2019 these consisted of $500.0 million in aggregate principal amount of4.875% senior notes due 2023 (the "4.875% Senior Notes"), $400.0 million in aggregate principal amount of 5.625% senior notes due 2024 (the "5.625% SeniorNotes"), $700.0 million in aggregate principal amount of 5.0% senior notes due 2025 (the "5.0% Senior Notes"), and $750.0 million in aggregate principal amountof 6.25% senior notes due 2026 (the "6.25% Senior Notes" and together with each tranche of senior notes outstanding prior to September 20, 2019, the "ExistingSenior Notes").

On September 20, 2019, coincident with the entry into the Tenth Amendment, STI issued $450.0 million in aggregate principal amount of 4.375% senior notes due2030 (the "4.375% Senior Notes"). The proceeds of the issuance of the 4.375% Senior Notes were used to partially repay the Term Loan. The 4.375% Senior Noteswere issued under an indenture dated September 20, 2019 among STI, as issuer, The Bank of New York Mellon, as trustee, and our guarantor subsidiaries namedtherein (the "Guarantors"). The 4.375% Senior Notes were offered at par, and interest is payable semi-annually on February 15 and August 15 of each year,commencing on February 15, 2020.

At any time, and from time to time, STI may redeem the 4.375% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount of the notesredeemed, plus accrued and unpaid interest, if any, up to, but excluding, the date of redemption, and, for redemptions occurring prior to November 15, 2029, a"make-whole" premium. Beginning on November 15, 2029, the "make-whole" premium will be eliminated. In addition, upon the occurrence of certain specifickinds of changes

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in control, STI will be required to offer to repurchase the notes at 101% of their principal amount plus accrued and unpaid interest, if any, to, but excluding, thedate of repurchase.

Upon changes in certain tax laws or treaties, or any change in the official application, administration, or interpretation thereof, STI may, at its option, redeem the4.375% Senior Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, butexcluding, the redemption date, premium, if any, and all additional amounts (as described in the indenture governing the 4.375% Senior Notes), if any, then dueand which will become due on the date of redemption.

Upon consummation of the Tenth Amendment, the guarantees of the Released Guarantors under the Existing Senior Notes were released (the "GuaranteesRelease"). Accordingly, as of September 20, 2019, the 4.375% Senior Notes are guaranteed by STBV and all of the subsidiaries of STBV (other than STI) thatguarantee the Existing Senior Notes and the Credit Agreement, in each case, giving effect to the Guarantees Release.

Accounting for Debt Financing Transactions

We accounted for our debt financing transactions in accordance with our policies as disclosed in Note 2, "Significant Accounting Policies" included in our AnnualReport on Form 10-K for the year ended December 31, 2018.

In connection with the entry into the Ninth Amendment, we incurred $2.4 million of creditor fees and related third-party costs, which were recorded as anadjustment to the carrying amount of long-term debt.

In connection with of the issuance of the 4.375% Senior Notes, the entry into the Tenth Amendment, and the subsequent partial repayment of the Term Loan, werecognized a loss of $4.4 million, presented in the other, net line of our condensed consolidated statement of operations, as well as $5.0 million of deferredfinancing costs, which are presented as a reduction of long-term debt on our condensed consolidated balance sheets.

Accrued Interest

Accrued interest associated with our outstanding debt is included as a component of accrued expenses and other current liabilities in the condensed consolidatedbalance sheets. As of September 30, 2019 and December 31, 2018 accrued interest totaled $45.5 million and $40.6 million, respectively.

12. Commitments and Contingencies

We are a defendant in a lawsuit, Wasica Finance Gmbh et al v. Schrader International Inc. et al, Case No. 13-1353-CPS, U.S.D.C., Delaware, in which theclaimant alleges infringement of their patent (US 5,602,524) in connection with our tire pressure monitoring system products. The patent in question has expired,and as a result, the claimant is seeking damages for past alleged infringement with interest and costs. Should the claimant prevail, these amounts could be material.We have denied liability and have been defending the litigation, which is in discovery. Trial is currently expected in February 2020. We do not believe a lossrelated to this matter is probable. As of September 30, 2019, we have no accrual recorded related to this matter.

We are a defendant in a lawsuit, Metal Seal Precision, Ltd. v. Sensata Technologies Inc., Case No. 2017-0518-BCSI, MA Superior Court (Suffolk County), in whichthe claimant ("Metal Seal"), a supplier of certain metal parts used in the manufacture of our products, alleges breach of contract, breach of covenant of good faithand fair dealing, and anticipatory repudiation. The dispute arises out of an agreement under which Metal Seal alleges certain purchase requirements were not met,resulting in damages and lost profits. On April 12, 2019 the court granted, in part, our motion for summary judgment and dismissed Metal Seal's unfair tradepractices claims. Plaintiff’s damage expert claims that Metal Seal has losses ranging up to $51.0 million. We dispute Metal Seal's claims and continue to defend thelawsuit, with trial currently expected in December 2019. We do not believe a loss related to this matter is probable. As of September 30, 2019, we have no accrualrecorded related to this matter.

13. Shareholders' Equity

On July 30, 2019, our Board of Directors approved a new $500.0 million share repurchase program with terms consistent to those of our previously authorized$250.0 million share repurchase program. The $250.0 million share repurchase program was terminated upon commencement of the new program.

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Accumulated Other Comprehensive Loss

The following is a roll forward of the components of accumulated other comprehensive loss for the nine months ended September 30, 2019:

Cash Flow Hedges

Defined Benefit andRetiree Healthcare

Plans Accumulated OtherComprehensive Loss

Balance at December 31, 2018 $ 9,184 $ (35,362) $ (26,178)Other comprehensive income before reclassifications, net of tax 27,725 — 27,725

Reclassifications from accumulated other comprehensive loss, net of tax (15,394) 249 (15,145)

Other comprehensive income 12,331 249 12,580

Balance at September 30, 2019 $ 21,515 $ (35,113) $ (13,598)

The details of the (gain)/loss reclassified from accumulated other comprehensive loss for the three and nine months ended September 30, 2019 and 2018 are asfollows:

For the three months ended

September 30, For the nine monthsended September 30,

Affected Line in Condensed ConsolidatedStatements of OperationsComponent 2019 2018 2019 2018

Derivative instruments designated and qualifying as cashflow hedges: Foreign currency forward contracts $ (7,615) $ 1,490 $ (17,327) $ 20,438 Net revenue (1)

Foreign currency forward contracts (968) (1,353) (2,037) (3,189) Cost of revenue (1)

Foreign currency forward contracts — — — 1,376 Other, net (1)

Total, before taxes (8,583) 137 (19,364) 18,625 Income before taxes

Income tax effect 1,760 (34) 3,970 (4,656) Provision for income taxes

Total, net of taxes $ (6,823) $ 103 $ (15,394) $ 13,969 Net income

Defined benefit and retiree healthcare plans $ 115 $ 171 $ 362 $ 488 Other, net (2)

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

Total, before taxes 115 399 362 716 Income before taxes

Income tax effect (32) (32) (113) 111 Provision for income taxes

Total, net of taxes $ 83 $ 367 $ 249 $ 827 Net income

__________________________(1) Refer to Note 15, "Derivative Instruments and Hedging Activities" for additional details on amounts to be reclassified from accumulated other comprehensive

loss in future periods.(2) Refer to Note 10, "Pension and Other Post-Retirement Benefits" for additional details of net periodic benefit cost.(3) Amount represents an equity component of the Valves Business, which was sold in the third quarter of 2018. Refer to Note 5, "Restructuring and Other

Charges, Net" and Note 16, "Acquisitions and Divestitures" for additional information related to the divestiture of the Valves Business.

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14. 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, 2019 and December 31, 2018 are as shown in the belowtable. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.

September 30, 2019 December 31, 2018Assets Foreign currency forward contracts $ 31,388 $ 17,871

Commodity forward contracts 2,799 831

Total $ 34,187 $ 18,702

Liabilities Foreign currency forward contracts $ 4,006 $ 5,165

Commodity forward contracts 1,506 4,137

Total $ 5,512 $ 9,302

Measured on a Nonrecurring Basis

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 2018 and determined that they were not impaired. As ofSeptember 30, 2019 no events or changes in circumstances occurred that would have triggered the need for an additional impairment review of these assets.

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 asof September 30, 2019 and December 31, 2018. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.

September 30, 2019 December 31, 2018

Carrying Value (1) Fair Value Carrying Value (1) Fair Value

Liabilities Term Loan $ 461,883 $ 464,770 $ 917,794 $ 904,027

4.875% Senior Notes $ 500,000 $ 524,375 $ 500,000 $ 491,875

5.625% Senior Notes $ 400,000 $ 434,000 $ 400,000 $ 400,500

5.0% Senior Notes $ 700,000 $ 748,125 $ 700,000 $ 660,625

6.25% Senior Notes $ 750,000 $ 796,875 $ 750,000 $ 751,875

4.375% Senior Notes $ 450,000 $ 448,875 $ — $ —___________________________________(1) Excluding any related debt discounts and deferred financing costs.

Cash and cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates fair value because of their short-term nature.

In addition to the above, we hold certain equity investments that do not have readily determinable fair values, and as such measure them using the measurementalternative prescribed in FASB ASC Topic 321, Investments - Equity Securities. Such investments are measured at cost, less any impairment, plus or minuschanges resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. There were no impairments orchanges resulting from observable transactions for any of these investments, and no adjustments have been made to their carrying values.

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Refer to the table below for a detail of the carrying values of these investments, each of which are included in other assets.

September 30, 2019 December 31, 2018Quanergy Systems, Inc $ 50,000 $ 50,000

Lithium Balance (1) 3,700 —

Total $ 53,700 $ 50,000

___________________________________(1) Our investment in Lithium Balance A/S ("Lithium Balance") was purchased in July 2019.

15. Derivative Instruments and Hedging Activities

Hedges of Foreign Currency Risk

We are exposed to fluctuations in various foreign currencies against our functional currency, the U.S. dollar (the "USD"). We enter into forward contracts forcertain of these foreign currencies to manage this exposure. We currently have outstanding foreign currency forward contracts that qualify as cash flow hedgesintended to offset the effect of exchange rate fluctuations on forecasted sales and certain manufacturing costs. We also have outstanding foreign currency forwardcontracts that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities, which are not designated for hedgeaccounting treatment in accordance with FASB ASC Topic 815, Derivatives and Hedging.

For the three and nine months ended September 30, 2019 and 2018 amounts excluded from the assessment of effectiveness of our foreign currency forwardcontracts that are designated as cash flow hedges were not material. As of September 30, 2019 we estimate that $24.7 million of net gains will be reclassified fromaccumulated other comprehensive loss to earnings during the twelve-month period ending September 30, 2020.

As of September 30, 2019 we had the following outstanding foreign currency forward contracts:

Notional(in millions) Effective Date(s) Maturity Date(s) Index (Exchange Rates)

Weighted-Average

Strike Rate Hedge

Designation (1)

12.0 EUR September 26, 2019 October 31, 2019 Euro ("EUR") to USD 1.10 USD Not designated

339.7 EUR Various from July 2017 to September

2019 Various from October 2019 to

August 2021 EUR to USD 1.19 USD Cash flow hedge

379.0 CNY September 25, 2019 October 31, 2019 USD to Chinese Renminbi

("CNY") 7.14 CNY Not designated

271.1 CNY January 10, 2019 Various from October to December

2019 USD to CNY 6.82 CNY Cash flow hedge

709.0 JPY September 26, 2019 October 31, 2019 USD to Japanese Yen ("JPY") 107.20 JPY Not designated

23,821.4 KRW Various from November 2017 to

September 2019 Various from October 2019 to

August 2021 USD to Korean Won ("KRW") 1,119.73 KRW Cash flow hedge

22.0 MYR September 25, 2019 October 31, 2019 USD to Malaysian Ringgit

("MYR") 4.21 MYR Not designated

131.0 MXN September 26, 2019 October 31, 2019 USD to Mexican Peso ("MXN") 19.67 MXN Not designated

2,823.8 MXN Various from November 2017 to


August 2021 USD to MXN 20.88 MXN Cash flow hedge

47.8 GBP Various from November 2017 to


August 2021 British Pound Sterling ("GBP") to

USD 1.31 USD Cash flow hedge

_________________________(1) Derivative financial instruments not designated as hedges are used to manage our exposure to currency exchange rate risk. They are intended to preserve

economic value, and they are not used for trading or speculative purposes.

Hedges of Commodity Risk

We enter into commodity forward contracts in order to limit our exposure to variability in raw material costs that is caused by movements in the price ofunderlying metals. The terms of these forward contracts fix the price at a future date for various notional amounts associated with these commodities. Theseinstruments are not designated for hedge accounting treatment in accordance with FASB ASC Topic 815.

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As of September 30, 2019 we had the following outstanding commodity forward contracts:

Commodity Notional Remaining Contracted Periods Weighted-Average

Strike Price Per UnitSilver 888,764 troy oz. October 2019-September 2021 $16.42Gold 8,116 troy oz. October 2019-September 2021 $1,373.99

Nickel 236,380 pounds October 2019-September 2021 $6.15

Aluminum 3,680,177 pounds October 2019-September 2021 $0.90

Copper 2,406,213 pounds October 2019-September 2021 $2.89

Platinum 7,171 troy oz. October 2019-September 2021 $894.43

Palladium 823 troy oz. October 2019-September 2021 $1,330.48

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 ofSeptember 30, 2019 and December 31, 2018:

Asset Derivatives Liability Derivatives

Balance Sheet Location September 30, 2019 December 31, 2018 Balance Sheet Location September 30, 2019 December 31, 2018Derivatives designated ashedging instruments Foreign currency forwardcontracts

Prepaid expenses andother current assets $ 27,433 $ 14,608

Accrued expenses andother current liabilities $ 2,956 $ 3,615

Foreign currency forwardcontracts

Other assets 3,902 3,168 Other long-term liabilities 652 1,134

Total $ 31,335 $ 17,776 $ 3,608 $ 4,749

Derivatives not designated ashedging instruments

Commodity forward contracts Prepaid expenses andother current assets $ 2,320 $ 524

Accrued expenses andother current liabilities $ 1,154 $ 3,679

Commodity forward contracts Other assets 479 307 Other long-term liabilities 352 458

Foreign currency forwardcontracts

Prepaid expenses andother current assets 53 95

Accrued expenses andother current liabilities 398 416

Total $ 2,852 $ 926 $ 1,904 $ 4,553

These fair value measurements are 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 condensedconsolidated statements of comprehensive income for the three months ended September 30, 2019 and 2018:

Derivatives designated ashedging instruments

Amount of Deferred Gain/(Loss) Recognized

in Other Comprehensive Income Location of Net Gain/(Loss)

Reclassified from AccumulatedOther Comprehensive Loss

into Net Income

Amount of Net Gain/(Loss) Reclassifiedfrom Accumulated Other Comprehensive

Loss into Net Income

2019 2018 2019 2018Foreign currency forward contracts $ 19,797 $ 7,190 Net revenue $ 7,615 $ (1,490)Foreign currency forward contracts $ (2,514) $ 6,464 Cost of revenue $ 968 $ 1,353

Derivatives not designated ashedging instruments

Amount of Gain/(Loss) Recognized in Net

Income

Location of Gain/(Loss) Recognized in Net Income 2019 2018 Commodity forward contracts $ 1,786 $ (4,233) Other, netForeign currency forward contracts $ 1,289 $ 3,668 Other, net

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The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensedconsolidated statements of comprehensive income for the nine months ended September 30, 2019 and 2018:

Derivatives designated as hedging instruments

Amount of Deferred Gain Recognized in

Other Comprehensive Income Location of Net Gain/(Loss)

Reclassified from AccumulatedOther Comprehensive Loss

into Net Income

Amount of Net Gain/(Loss) Reclassifiedfrom Accumulated Other Comprehensive

Loss into Net Income

2019 2018 2019 2018Foreign currency forward contracts $ 30,124 $ 22,993 Net revenue $ 17,327 $ (20,438)Foreign currency forward contracts $ 3,946 $ 11,122 Cost of revenue $ 2,037 $ 3,189

Foreign currency forward contracts $ — $ — Other, net $ — $ (1,376)

Derivatives not designated as hedging instruments

Amount of Gain/(Loss) Recognized in Net

Income

Location of Gain/(Loss) Recognized in Net Income 2019 2018 Commodity forward contracts $ 2,807 $ (8,854) Other, netForeign currency forward contracts $ 2,806 $ 4,494 Other, net

Credit Risk Related Contingent Features

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

As of September 30, 2019 the termination value of outstanding derivatives in a liability position, excluding any adjustment for non-performance risk, was $5.5million. As of September 30, 2019 we have not posted any cash collateral related to these agreements. If we breach any of the default provisions on any of ourindebtedness as described above, we could be required to settle our obligations under the derivative agreements at their termination values.

16. Acquisitions and Divestitures

Other acquisition

On September 13, 2019 we completed one acquisition for approximately $30 million, net of cash acquired and subject to customary post-closing adjustments. Weare in the process of completing our assessment of the fair values of assets acquired and liabilities assumed.

GIGAVAC merger

On September 24, 2018 we entered into an agreement and plan of merger with GIGAVAC, whereby GIGAVAC would merge with one of our wholly-ownedsubsidiaries, thereby becoming a wholly-owned subsidiary of Sensata. On October 31, 2018 we completed the acquisition of GIGAVAC for $229.9 million of cashconsideration, approximately $12.0 million of which related to certain compensation arrangements with certain GIGAVAC employees and shareholders.

Based in Carpinteria, California, GIGAVAC has more than 270 employees and is a leading provider of solutions that enable electrification in demandingenvironments within the automotive, battery storage, industrial, and HVOR end markets. We acquired GIGAVAC to increase our content and capabilities forelectrification, including products such as cars, delivery trucks, buses, material handling equipment, and charging stations. Portions of GIGAVAC will beintegrated into each of our operating segments.

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

Net working capital, excluding cash $ 16,980

Property, plant and equipment 4,384

Goodwill 113,731

Other intangible assets 122,742

Other assets 63

Deferred income tax liabilities (27,000)

Other long-term liabilities (1,000)

Fair value of net assets acquired, excluding cash and cash equivalents 229,900Cash and cash equivalents 359

Fair value of net assets acquired $ 230,259

The allocation of purchase price related to the GIGAVAC merger is preliminary, and is based on management’s judgments after evaluating several factors,including preliminary valuation assessments of tangible and intangible assets. The final allocation of the purchase price to the assets acquired will be completedwhen the final valuations are completed. The preliminary goodwill recognized as a result of this acquisition was approximately $113.7 million, which representsfuture economic benefits expected to arise from synergies from combining operations and the extension of existing customer relationships. The amount of goodwillrecorded that is expected to be deductible for tax purposes is not material.

In connection with the allocation of purchase price to the assets acquired and liabilities assumed, we identified certain definite-lived intangible assets. Thefollowing 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 $ 74,500 10

Completed technologies 31,040 13

Tradenames 15,400 15

Other 1,802 6

Total definite-lived intangible assets acquired $ 122,742 12

The definite-lived intangible assets were valued using the income approach. We used the relief-from-royalty method to value completed technologies andtradenames, and we used the multi-period excess earnings method to value customer relationships. These valuation methods incorporate assumptions includingexpected discounted future cash flows resulting from either the future estimated after-tax royalty payments avoided as a result of owning the completedtechnologies or the future earnings related to existing customer relationships.

Valves Business Divestiture

On August 31, 2018 we completed the divestiture of the Valves Business to Pacific Industrial Co. Ltd. (together with its affiliates, "Pacific"). Contemporaneouswith the closing of the sale, Sensata and Pacific entered into a long-term supply agreement, which imposes an obligation on us to purchase minimum quantities ofproduct from Pacific over a period of nearly five years.

In exchange for selling the Valves Business and entering into the long-term supply agreement, we received cash consideration from Pacific of approximately$165.5 million, net of $11.8 million of cash and cash equivalents sold.

We determined that the terms of the long-term supply agreement entered into concurrent with the divestiture of the Valves Business were not at market.Accordingly, we recognized a liability of $16.4 million, measured at fair value, which represented the fair value of the off-market component of the supplyagreement.

17. Segment Reporting

We organize our business into two reportable segments, Performance Sensing and Sensing Solutions, each of which is also an operating segment. Our operatingsegments are businesses that we manage as components of an enterprise for which separate

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financial information is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and assess performance.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes amortization of intangible assets, restructuringand other charges, net, and certain corporate costs/credits not associated with the operations of the segment, including share-based compensation expense and aportion of depreciation expense associated with assets recorded in connection with acquisitions. Corporate and other costs excluded from an operating segment’sperformance are separately stated below and also include costs that are related to functional areas, such as finance, information technology, legal, and humanresources. We believe that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of our segments.However, this measure should be considered in addition to, and not as a substitute for, or superior to, operating income or other measures of financial performanceprepared in accordance with U.S. GAAP. The accounting policies of each of our reporting segments are materially consistent with those in the summary ofsignificant accounting policies as described in Note 2, "Significant Accounting Policies" included in our Annual Report on Form 10-K for the year endedDecember 31, 2018.

The following table presents net revenue and segment operating income for the reported segments and other operating results not allocated to the reportedsegments for the three and nine months ended September 30, 2019 and 2018:


September 30,

2019 September 30,

2018 September 30,

2019 September 30,

2018Net revenue:

Performance Sensing $ 628,593 $ 649,611 $ 1,913,137 $ 1,988,657

Sensing Solutions 221,122 223,941 690,803 685,048

Total net revenue $ 849,715 $ 873,552 $ 2,603,940 $ 2,673,705

Segment operating income (as defined above): Performance Sensing $ 165,076 $ 178,391 $ 483,657 $ 535,166

Sensing Solutions 70,952 73,295 223,036 224,249

Total segment operating income 236,028 251,686 706,693 759,415Corporate and other (47,570) (48,154) (134,407) (156,472)

Amortization of intangible assets (35,905) (33,911) (108,079) (103,574)

Restructuring and other charges, net (6,421) 52,698 (28,040) 48,688

Operating income 146,132 222,319 436,167 548,057Interest expense, net (39,556) (38,058) (118,417) (114,808)

Other, net (7,560) (10,581) (7,925) (26,267)

Income before taxes $ 99,016 $ 173,680 $ 309,825 $ 406,982

18. Leases

As discussed in Note 2, "New Accounting Standards," we adopted FASB ASC Topic 842 on January 1, 2019, using the modified retrospective transition method.We have elected to apply the package of practical expedients and the land easement practical expedient. We have not elected to apply the hindsight practicalexpedient.

As a result of this adoption, we classify most leases as either finance or operating leases and recognize a related lease liability and right-of-use asset on ourconsolidated balance sheets. Our accounting for finance leases remains unchanged after the adoption of FASB ASC Topic 842. We have elected to account forleases with a term of one year or less (short-term leases) using a method similar to the operating lease model under FASB ASC Topic 840, Leases (i.e. they are notrecorded on the consolidated balance sheets).

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We elected to apply the transition provisions of this guidance, including its disclosure requirements, at its date of adoption instead of at the beginning of the earliestcomparative period presented. Accordingly, we have not restated our consolidated balance sheet as of December 31, 2018. There was no cumulative effect ofadoption on our retained earnings or any other components of equity. The below adjustments were made to our condensed consolidated balance sheet on January 1,2019 to reflect the new guidance:

December 31, 2018 Adjustment January 1, 2019Prepaid expenses and other current assets $ 113,234 $ (253) $ 112,981Other intangible assets, net $ 897,191 $ (1,510) $ 895,681

Other assets $ 86,890 $ 58,496 $ 145,386

Accrued expenses and other current liabilities $ 218,130 $ 12,119 $ 230,249

Other long-term liabilities $ 39,277 $ 44,614 $ 83,891

The table below presents the amounts recognized and location of recognition in our condensed consolidated balance sheet as of September 30, 2019 related to ouroperating and finance leases:

September 30, 2019Operating lease right-of-use assets: Other assets $ 56,200

Total operating lease right-of-use assets $ 56,200

Operating lease liabilities: Accrued expenses and other current liabilities $ 10,773Other long-term liabilities 45,695

Total operating lease liabilities $ 56,468

Finance lease right-of-use assets: Property, plant and equipment, at cost $ 49,714Accumulated depreciation (23,864)

Property, plant and equipment, net $ 25,850

Finance lease liabilities: Current portion of long-term debt, finance lease and other financing obligations $ 2,116Finance lease and other financing obligations, less current portion 29,209

Total finance lease liabilities $ 31,325

The table below presents the lease liabilities arising from obtaining right-of-use assets in the nine months ended September 30, 2019:

For the nine months ended September 30, 2019Operating leases $ 3,837Finance leases $ —

For finance leases, the consolidated statements of operations include separate recognition of interest on the lease liability and amortization of the right-of-use asset.For operating leases, the consolidated statements of operations include a single lease cost, calculated so that the cost of the lease is allocated over the lease term ona straight-line basis. The table below presents our total lease cost for the three and nine months ended September 30, 2019:


September 30, 2019 September 30, 2019Operating lease cost $ 3,817 $ 12,041

Finance lease cost: Amortization of right-of-use assets $ 452 $ 1,356

Interest on lease liabilities 671 2,031

Total finance lease cost $ 1,123 $ 3,387

Short-term lease cost was not material for the three and nine months ended September 30, 2019.

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Cash flows from operating activities include (1) interest on finance lease liabilities and (2) payments arising from operating leases. Cash flows from financingactivities include repayments of the principal portion of finance lease liabilities. The table below presents the cash paid related to our operating and finance leasesfor the nine months ended September 30, 2019:

For the nine months ended September 30, 2019Operating cash flows from operating leases $ 11,887Operating cash flows from finance leases $ 1,961Financing cash flows from finance leases $ 1,264

We occupy leased facilities with initial terms ranging up to 20 years. These lease agreements frequently include options to renew for additional periods andgenerally require that we pay taxes, insurance, and maintenance costs. We also lease certain vehicles and equipment. The table below presents the weighted-average remaining lease term of our operating and finance leases (in years):

September 30, 2019Operating leases 8.1Finance leases 12.7

Our lease liabilities are initially measured at the present value of the lease payments not yet paid, discounted using our incremental borrowing rate for a period thatis comparable to the remaining lease term. Upon adoption of FASB ASC Topic 842, we initially measured our operating lease liabilities using this methodology,while our accounting for finance leases remained unchanged. We use our incremental borrowing rate, adjusted for collateralization, because the discount rateimplicit in our leases are generally not readily determinable. The table below presents our weighted-average discount rate as of September 30, 2019:

September 30, 2019Operating leases 5.7%Finance leases 8.5%

The table below presents a maturity analysis of the obligations related to our operating lease liabilities and finance lease liabilities in effect as of September 30,2019:

Operating Leases Finance LeasesYear ending December 31, 2019 (excluding the nine months ended September 30, 2019) $ 3,869 $ 1,434

2020 13,861 4,513

2021 10,317 4,035

2022 8,344 3,685

2023 7,080 3,744

Thereafter 29,960 36,228

Total undiscounted cash flows related to lease liabilities 73,431 53,639Less imputed interest (16,963) (22,314)

Total lease liabilities $ 56,468 $ 31,325

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Cautionary Statements Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q, including any documents incorporated by reference herein, includes "forward-looking statements" within the meaning of thePrivate Securities Litigation Reform Act of 1995. These forward-looking statements relate to analyses and other information that are based on forecasts of futureresults and estimates of amounts not yet determinable. These forward-looking statements also relate to our future prospects, developments, and business strategiesand may be identified by terminology such as "may," "will," "could," "should," "expect," "anticipate," "believe," "estimate," "predict," "project," "forecast,""continue," "intend," "plan," and similar terms or phrases, or the negative of such terminology, including references to assumptions. However, these terms are notthe exclusive means of identifying such statements.

Forward-looking statements contained herein, or in other statements made by us, are made based on management’s expectations and beliefs concerning futureevents impacting us. These statements are subject to uncertainties and other important factors relating to our operations and business environment, all of which aredifficult to predict, and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied byforward-looking statements. Although we believe that our plans, intentions, and expectations reflected in, or suggested by, such forward-looking statements arereasonable, we can give no assurances that any of the events anticipated by these forward-looking statements will occur or, if any of them do, what impact they willhave on our results of operations and financial condition.

We believe that the following important factors, among others (including those described in Item 1A, "Risk Factors," in our Annual Report on Form 10-K for theyear ended December 31, 2018), could affect our future performance and the liquidity and value of our securities and cause our actual results to differ materiallyfrom those expressed or implied by forward-looking statements made by us or on our behalf:

• instability and changes in the global markets, including regulatory, political, economic, and military matters, such as the impending exit of the UnitedKingdom (the "U.K.") from the European Union (the "EU");

• adverse conditions or competition in the industries upon which we are dependent, including the automotive industry;• pressure from customers to reduce prices;• supplier interruption or non-performance, limiting our access to manufactured components or raw materials;• we may not realize all of the revenue or achieve anticipated gross margins from products subject to existing purchase orders for which we are currently

engaged in development;• risks related to the acquisition or disposition of businesses, or the restructuring of our business;• market acceptance of new product introductions and product innovations;• losses and costs as a result of intellectual property, product liability, warranty, and recall claims;• business disruptions due to natural disasters or other disasters outside our control;• labor disruptions or increased labor costs;• security breaches, cyber theft of our intellectual property, and other disruptions to our information technology infrastructure, or improper disclosure of

confidential, personal, or proprietary data;• foreign currency risks, changes in socio-economic conditions, or changes to monetary and fiscal policies;• our level of indebtedness, or our inability to meet debt service obligations or comply with the covenants contained in the credit agreement and

indentures;• risks related to the potential for goodwill impairment;• the impact of United States ("U.S.") federal income tax reform, or taxing authorities challenging our historical and future tax positions or our allocation

of taxable income among our subsidiaries, and challenges to the sovereign taxation regimes of EU member states by the European Commission;• changes to current policies, such as trade tariffs, by the U.S. government;• changes to, or inability to comply with, various regulations, including tax laws, import/export regulations, anti-bribery laws, environmental, health, and

safety laws, and other governmental regulations; and• risks related to our domicile in the U.K.

All forward-looking statements attributable to us or persons acting on our behalf speak only as of the date of this Quarterly Report on Form 10-Q and are expresslyqualified in their entirety by the cautionary statements contained in this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. We urgereaders to review carefully the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2018 and in the other documents thatwe file with the U.S. Securities and Exchange Commission. You can read these documents at www.sec.gov or on our website at www.sensata.com.

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Item 2. 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 should be read in conjunction with the audited consolidated financialstatements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the U.S. Securities and ExchangeCommission on February 6, 2019, and the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Reporton Form 10-Q.

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 and nine months endedSeptember 30, 2019 compared to the three and nine months ended September 30, 2018. We have derived the results of operations from the condensed consolidatedfinancial statements included elsewhere in this Quarterly Report on Form 10-Q. Amounts and percentages in the table below have been calculated based onunrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018

Amount Margin* Amount Margin* Amount Margin* Amount Margin*Net revenue:

Performance Sensing $ 628.6 74.0 % $ 649.6 74.4 % $ 1,913.1 73.5 % $ 1,988.7 74.4 %

Sensing Solutions 221.1 26.0 223.9 25.6 690.8 26.5 685.0 25.6

Net revenue 849.7 100.0 873.6 100.0 2,603.9 100.0 2,673.7 100.0Operating costs and expenses 703.6 82.8 651.2 74.5 2,167.8 83.2 2,125.6 79.5

Operating income 146.1 17.2 222.3 25.5 436.2 16.8 548.1 20.5Interest expense, net (39.6) (4.7) (38.1) (4.4) (118.4) (4.5) (114.8) (4.3)

Other, net (7.6) (0.9) (10.6) (1.2) (7.9) (0.3) (26.3) (1.0)

Income before taxes 99.0 11.7 173.7 19.9 309.8 11.9 407.0 15.2Provision for income taxes 28.3 3.3 24.6 2.8 80.6 3.1 62.1 2.3

Net income $ 70.7 8.3 % $ 149.1 17.1 % $ 229.2 8.8 % $ 344.9 12.9 %

__________________________* Represents the amount presented divided by total net revenue.

Net revenue

The following table presents a reconciliation of organic revenue decline, a financial measure not presented in accordance with U.S. generally accepted accountingprinciples ("GAAP"), to reported net revenue (decline)/growth, a financial measure determined in accordance with U.S. GAAP, for the three and nine monthsended September 30, 2019 compared to the comparable periods of the prior year. Refer to the section entitled Non-GAAP Financial Measures below for furtherinformation on our use of organic revenue growth (or decline).

Three-Month (Decline)/Growth Nine-Month (Decline)/Growth

Performance Sensing Sensing Solutions Total Performance Sensing Sensing Solutions TotalReported net revenue (decline)/growth (3.2)% (1.3)% (2.7)% (3.8)% 0.8 % (2.6)%Percent impact of:

Acquisition and divestiture, net (1) (1.2) 5.6 0.4 (2.6) 5.5 (0.5)

Foreign currency remeasurement (2) (0.3) (0.6) (0.3) (0.9) (0.9) (0.9)

Organic revenue decline (1.7)% (6.3)% (2.8)% (0.3)% (3.8)% (1.2)%

__________________________(1) Represents the percentage change in net revenue attributed to the effect of acquisitions and divestitures for the 12 months immediately following the

respective transaction dates. The percentage amounts presented relate to the sale of the capital stock of Schrader Bridgeport International, Inc. and AugustFrance Holding Company SAS (collectively, the "Valves Business") in August 2018 and the merger with GIGAVAC, LLC ("GIGAVAC") in October 2018,each of which is discussed in Note 16, "Acquisitions and Divestitures" of our condensed consolidated financial statements included elsewhere in this QuarterlyReport on Form 10-Q.

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(2) Represents the percentage change in net revenue between the comparative periods attributed to differences in exchange rates used to remeasure foreigncurrency denominated revenue transactions into U.S. dollars, which is the functional currency of the Company and each of its subsidiaries. The percentageamounts presented above relate primarily to the U.S. dollar to Chinese Renminbi exchange rates.

Performance Sensing

For the three months ended September 30, 2019, Performance Sensing net revenue declined 3.2%, or 1.7% on an organic basis. Continued weakness across manyof the markets served by our heavy vehicle and off-road ("HVOR") business was partially offset by content growth, namely in China. In our automotive business,weakness in Europe was partially offset by our outgrowth (i.e. the combined impact of content and pricing) of the markets in Asia (primarily China) from increasedcontent on systems and applications we serve. In addition, our North American automotive business generated organic revenue growth despite the impact of theGeneral Motors strike.

For the nine months ended September 30, 2019, Performance Sensing net revenue declined 3.8%, or 0.3% on an organic basis. In our automotive business, wecontinue to outgrow end markets, which declined principally in China and Europe, largely due to content growth. In our HVOR business, content growth in Chinaas well as the agriculture and North America on-road truck markets more than offset general market weakness.

We continue to expect sustained content growth as we execute on our clean & efficient and electrification initiatives in our automotive and HVOR businesses.However, we expect global automotive production will remain under pressure for the full year 2019, and we expect our HVOR markets, in aggregate, to furtherweaken in the fourth quarter of 2019.

Sensing Solutions

For the three months ended September 30, 2019, Sensing Solutions net revenue declined 1.3%, or 6.3% on an organic basis. This organic revenue decline was duemainly to weakness in the industrial markets we serve, partially offset by content growth in our aerospace business.

For the nine months ended September 30, 2019, Sensing Solutions net revenue grew 0.8%, but declined 3.8% on an organic basis. This organic revenue declinewas primarily attributable to weakness in the industrial markets we serve partially offset by content and market growth in our aerospace business.

Weakness in the industrial markets we serve is consistent with trends in certain indicators of demand, such as global manufacturing Purchasing Managers' Index("PMI") data, which is signaling continued demand contraction, consistent with slowing customer production and reductions in inventory. Our industrial growth inChina is particularly weak as exports out of China have slowed as a result of tariffs and global trade actions.

Operating costs and expenses

Operating costs and expenses for the three and nine months ended September 30, 2019 and 2018 are presented in the following table. Amounts and percentages inthe table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.


September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018

Amount Margin* Amount Margin* Amount Margin* Amount Margin*Operating costs and expenses:

Cost of revenue $ 554.9 65.3% $ 558.3 63.9 % $ 1,711.0 65.7% $ 1,723.3 64.5 %

Research and development 38.2 4.5 37.8 4.3 110.0 4.2 111.8 4.2

Selling, general and administrative 68.2 8.0 73.9 8.5 210.7 8.1 235.7 8.8

Amortization of intangible assets 35.9 4.2 33.9 3.9 108.1 4.2 103.6 3.9

Restructuring and other charges, net 6.4 0.8 (52.7) (6.0) 28.0 1.1 (48.7) (1.8)

Total operating costs and expenses $ 703.6 82.8% $ 651.2 74.5 % $ 2,167.8 83.2% $ 2,125.6 79.5 %

__________________________* Represents the amount presented divided by total net revenue.

Cost of revenue

For the three and nine months ended September 30, 2019, cost of revenue as a percentage of net revenue increased from the prior periods, primarily as a result oforganic revenue decline, negative mix due to new product launches, the impact of acquisitio

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ns and divestitures, and increased tariff costs, partially offset by the positive impact of changes in foreign currency exchange rates and lower variablecompensation.

Research and development ("R&D") expense

For the three months ended September 30, 2019, R&D expense was relatively consistent with the prior period as increased spend was offset by the positive impactof changes in foreign currency exchange rates.

For the nine months ended September 30, 2019, R&D expense declined from the prior period, primarily as a result of the positive impact of changes in foreigncurrency exchange rates.

Selling, general and administrative ("SG&A") expense

For the three and nine months ended September 30, 2019, SG&A expense declined from the prior periods, primarily due to lower variable compensation, lowerselling costs, the divestiture of the Valves Business, and the favorable impact of foreign currency exchange rates, partially offset by additional SG&A expenserelated to GIGAVAC. In addition, the nine months ended September 30, 2019 was favorably impacted by lower costs related to our redomicile in the prior year.

Amortization of intangible assets

For the three and nine months ended September 30, 2019, amortization expense increased from the prior periods due to the intangible assets acquired withGIGAVAC, partially offset by the effect of the economic benefit method.

Restructuring and other charges, net

Restructuring and other charges, net for the three and nine months ended September 30, 2019 and 2018 consisted of the following (amounts have been calculatedbased on unrounded numbers: accordingly, certain amounts may not appear to recalculate due to the effect of rounding):


($ in millions) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Severance costs, net (1) $ 5.5 $ 4.9 $ 23.0 $ 8.2Facility and other exit costs 0.2 0.2 0.2 0.9

Gain on sale of Valves Business (2) (4) — (63.7) — (63.7)

Other (3) (4) 0.7 5.9 4.8 5.9

Restructuring and other charges, net $ 6.4 $ (52.7) $ 28.0 $ (48.7)

__________________________(1) Severance costs, net for the three and nine months ended September 30, 2019 and 2018 were primarily related to limited workforce reductions of

manufacturing, engineering, and administrative positions as well as the elimination of certain positions related to site consolidations. Severance costs, net forthe three months ended September 30, 2019 primarily comprise termination benefits provided under a one-time benefit arrangement related to the shutdownand relocation of an operating site in Germany. Severance costs, net for the nine months ended September 30, 2019 also included a charge of approximately$13 million related to benefits provided for under a voluntary retirement incentive program offered to a limited number of eligible employees in the U.S. Themajority of these benefits were paid in the third quarter of 2019.

(2) In the three months ended September 30, 2018 we completed the divestiture of the Valves Business.(3) Other charges for the three and nine months ended September 30, 2019 were primarily related to deferred compensation incurred in connection with the

acquisition of GIGAVAC. Other charges for the three and nine months ended September 30, 2018 included incremental direct costs in order to transact thesale of the Valves Business.

(4) Refer to Note 16, "Acquisitions and Divestitures" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form10-Q for further discussion of the acquisition of GIGAVAC and the divestiture of the Valves Business.

Operating income

Operating income decreased $76.2 million, or 34.3%, to $146.1 million (17.2% of net revenue) in the three months ended September 30, 2019 from $222.3 million(25.5% of net revenue) in the three months ended September 30, 2018. The decline in operating income was due primarily to the divestiture of the Valves Businessin the third quarter of 2018 (including the gain on sale), lower volume, and net productivity headwinds partly due to the scaling up of new product launches,partially offset by

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lower variable compensation, the impact of the acquisition of GIGAVAC, and the overall favorable impact of foreign currency exchange rates.

Operating income decreased $111.9 million, or 20.4%, to $436.2 million (16.8% of net revenue) in the nine months ended September 30, 2019 from $548.1 million(20.5% of net revenue) in the nine months ended September 30, 2018. The decline in operating income was due primarily to the divestiture of the Valves Businessin the third quarter of 2018 (including the gain on sale), net productivity headwinds partly due to the scaling up of new product launches, higher severance charges,and the impact of increased tariffs, partially offset by lower variable compensation, the favorable impact of foreign currency rates, and the impact of the acquisitionof GIGAVAC.

Other, net

Other, net for the three and nine months ended September 30, 2019 and 2018 consisted of the following (amounts have been calculated based on unroundednumbers; accordingly, certain amounts may not appear to recalculate due to the effect of rounding):


($ in millions) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018Currency remeasurement loss on net monetary assets (1) $ (6.0) $ (9.6) $ (8.5) $ (18.5)Gain on foreign currency forward contracts (2) 1.3 3.7 2.8 3.1

Gain/(loss) on commodity forward contracts 1.8 (4.2) 2.8 (8.9)

Loss on debt financing (4.4) — (4.4) (2.4)

Net periodic benefit cost, excluding service cost (0.3) (0.3) (0.8) (0.8)

Other 0.0 (0.2) 0.2 1.1

Other, net $ (7.6) $ (10.6) $ (7.9) $ (26.3)

__________________________(1) Relates to the remeasurement of non-U.S. dollar denominated monetary assets and liabilities into U.S. dollars.(2) Relates to changes in the fair value of derivative financial instruments not designated as hedges. Refer to Note 15, "Derivative Instruments and Hedging

Activities" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a more detailed discussion.

Provision for income taxes

The increase in our total tax provision for the three and nine months ended September 30, 2019 compared to the prior year relates to changes in the jurisdictionalmix of profits, effects of changes in tax laws and rates in the locations where we operate, changes in tax accruals related to prior year tax positions, and theutilization of previously unbenefited net operating losses in our U.S. jurisdiction. The provision for income taxes consists of (i) current tax expense, which relatesprimarily to our profitable operations in non-U.S. tax jurisdictions and withholding taxes on management fees and royalty income; and (ii) deferred tax expense,which represents adjustments in book-to-tax basis differences primarily related to the step-up in fair value of fixed and intangible assets acquired in connectionwith business combination transactions, the utilization of net operating losses, and changes in tax rates.

Non-GAAP Financial Measures

This Quarterly Report on Form 10-Q includes references to organic revenue growth (or decline), which is a non-GAAP financial measure. Organic revenue growthis defined as the reported percentage change in net revenue, calculated in accordance with U.S. GAAP, excluding the period-over-period impact of foreignexchange rate differences as well as the net impact of acquisitions and divestitures for the 12-month period following the respective transaction date(s). Refer to theNet revenue section above for a reconciliation of organic revenue growth to reported revenue decline.

We believe that organic revenue growth provides investors with helpful information with respect to our operating performance, and we use organic revenue growthto evaluate our ongoing operations, as well as for internal planning and forecasting purposes. We believe that organic revenue growth provides useful informationin evaluating the results of our business because it excludes items that we believe are not indicative of ongoing performance or that we believe impactcomparability with the prior-year period.

Organic revenue growth should be considered as supplemental in nature and is not intended to be considered in isolation or as a substitute for reported percentagechange in net revenue calculated in accordance with U.S. GAAP. In addition, our measure of

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organic revenue growth may not be the same as, or comparable to, similar non-GAAP financial measures presented by other companies.

Liquidity and Capital Resources

As of September 30, 2019 and December 31, 2018 we held cash and cash equivalents in the following regions:

(in millions) September 30, 2019 December 31, 2018

United Kingdom $ 12.8 $ 8.8United States 11.1 4.6

The Netherlands 381.1 482.1

China 200.3 125.2

Other 116.1 109.1

Total $ 721.4 $ 729.8

The amount of cash and cash equivalents held in these geographic regions fluctuates throughout the year due to a variety of factors, such as our use ofintercompany loans and dividends and the timing of cash receipts and disbursements in the normal course of business. Our earnings are not considered to bepermanently reinvested in certain jurisdictions in which they were earned. We recognize a deferred tax liability on these unremitted earnings to the extent theremittance of such earnings cannot be recovered in a tax-free manner.

Cash Flows:

The table below summarizes our primary sources and uses of cash for the nine months ended September 30, 2019 and 2018. We have derived the summarizedstatements of cash flows from the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Amounts in the tablebelow have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

For the nine months ended(in millions) September 30, 2019 September 30, 2018

Net cash provided by/(used in): Operating activities:

Net income adjusted for non-cash items $ 490.6 $ 508.5

Changes in operating assets and liabilities, net (57.1) (88.4)

Operating activities 433.5 420.1Investing activities (160.5) 42.9

Financing activities (281.5) (404.7)

Net change $ (8.4) $ 58.3

Operating activities. Net cash provided by operating activities for the nine months ended September 30, 2019 and 2018 was $433.5 million and $420.1 million,respectively. Net cash provided by operating activities was favorably impacted by the timing of cash receipts and payments, partially offset by lower profitability.

Investing activities. Net cash (used in)/provided by investing activities for the nine months ended September 30, 2019 and 2018 was $(160.5) million and $42.9million, respectively, which included $123.2 million and $111.3 million, respectively, in capital expenditures. In 2019, we anticipate capital expenditures ofapproximately $160.0 million to $170.0 million, which we expect to be funded from net cash provided by operating activities. In addition, net cash used ininvesting activities for the nine months ended September 30, 2019 included $32.3 million paid for acquisitions, which relates primarily to a small acquisition in thethird quarter of 2019. Net cash provided by investing activities for the nine months ended September 30, 2018 included $149.1 million received related to thedivestiture of the Valves Business. Refer to Note 16, "Acquisitions and Divestitures" of our condensed consolidated financial statements included elsewhere in thisQuarterly Report on Form 10-Q for further discussion of these transactions.

Financing activities. Net cash used in financing activities for the nine months ended September 30, 2019 and 2018 was $281.5 million and $404.7 million,respectively, which included $265.8 million and $399.4 million, respectively, in payments to repurchase our ordinary shares. Net cash used in financing activitiesfor the nine months ended September 30, 2019 also included $461.2 million in payments on debt, partially offset by $450.0 million in proceeds from the issuanceof debt. The debt related cash flows resulted from the issuance of $450.0 million in aggregate principal amount of 4.375% senior notes due 2030

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(the "4.375% Senior Notes"), the proceeds of which were used to partially repay the balance due on the term loan outstanding under our secured credit facilities.Refer to Note 11, "Debt" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion ofthis transaction.

Indebtedness and Liquidity:

As of September 30, 2019, we had $3,294.5 million in gross indebtedness, which includes finance lease and other financing obligations and excludes debtdiscounts and deferred financing costs.

A summary of our indebtedness as of September 30, 2019 is as follows:

($ in millions) Maturity Date September 30, 2019

Term Loan September 20, 2026 $ 461.94.875% Senior Notes October 15, 2023 500.0

5.625% Senior Notes November 1, 2024 400.0

5.0% Senior Notes October 1, 2025 700.0

6.25% Senior Notes February 15, 2026 750.0

4.375% Senior Notes February 15, 2030 450.0

Less: discount (12.3)

Less: deferred financing costs (25.5)

Less: current portion (4.6)

Long-term debt, net $ 3,219.4

Finance lease and other financing obligations $ 32.6

Less: current portion (3.2)

Finance lease and other financing obligations, less current portion $ 29.4

Our debt consists of a secured facility and various tranches of senior unsecured notes.

Secured Credit Facility

The credit agreement governing our secured credit facility (the "Credit Agreement") provides for senior secured credit facilities (the "Senior Secured CreditFacilities") consisting of a term loan facility (the "Term Loan"), a $420.0 million revolving credit facility (the "Revolving Credit Facility"), and incrementalavailability under which additional secured credit facilities could be issued under certain circumstances (the "Accordion").

On March 27, 2019 certain indirect, wholly owned subsidiaries of Sensata Technologies Holding plc entered into the ninth amendment (the "Ninth Amendment")of the Credit Agreement. On June 13, 2019, our subsidiaries that were at the time borrowers under the Credit Agreement entered into a technical amendment to theCredit Agreement (the "Technical Amendment"). Refer to Note 11, "Debt" of our condensed consolidated financial statements included elsewhere in this QuarterlyReport on Form 10-Q for discussion of the Ninth Amendment and the Technical Amendment.

On September 20, 2019 certain of our subsidiaries, including Sensata Technologies B.V. ("STBV") and its indirect, wholly-owned subsidiary, SensataTechnologies Inc. ("STI"), entered into the tenth amendment of the Credit Agreement (the "Tenth Amendment"). Under the terms of the Tenth Amendment, amongother changes to the Credit Agreement, (i) the final maturity date of the Term Loan was extended to September 20, 2026; (ii) STI became the sole borrower underthe Credit Agreement and assumed substantially all of the obligations of STBV and Sensata Technologies Finance Company, LLC ("STFC") thereunder; (iii) thepermission to incur incremental additional indebtedness under the Credit Agreement was increased; and (iv) certain of the operational and restrictive covenants andother terms and conditions of the Senior Secured Credit Facilities to which STBV and its restricted subsidiaries are subject were modified to provide us withincreased flexibility and permissions thereunder (including permission to make restricted payments (including dividends) in an amount equal to $50.0 millionannually which can be further increased to an unlimited amount subject to no default or event of default and compliance with certain financial covenants).

In addition, under the Tenth Amendment, STBV became a guarantor of STI’s obligations under the Credit Agreement, STFC ceased to be a guarantor with respectto the Credit Agreement, and certain subsidiaries of STBV that previously guaranteed the obligations under the Credit Agreement (the ‘‘Released Guarantors’’)were released from their guarantees, subject to satisfaction of certain conditions.

As of September 30, 2019 there was $416.1 million available under the Revolving Credit Facility, net of $3.9 million of obligations in respect of outstanding lettersof credit issued thereunder. Outstanding letters of credit are issued primarily for the

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benefit of certain operating activities. As of September 30, 2019, no amounts had been drawn against these outstanding letters of credit.

Senior Notes

We have various tranches of senior notes outstanding. Prior to September 20, 2019 these consisted of $500.0 million in aggregate principal amount of4.875% senior notes due 2023 (the "4.875% Senior Notes"), $400.0 million in aggregate principal amount of 5.625% senior notes due 2024 (the "5.625% SeniorNotes"), $700.0 million in aggregate principal amount of 5.0% senior notes due 2025 (the "5.0% Senior Notes"), and $750.0 million in aggregate principal amountof 6.25% senior notes due 2026 (the "6.25% Senior Notes" and together with each tranche of senior notes outstanding prior to September 20, 2019, the "ExistingSenior Notes").

On September 20, 2019, coincident with the entry into the Tenth Amendment, STI issued the 4.375% Senior Notes. The proceeds of the issuance of the 4.375%Senior Notes were used to partially repay the Term Loan. The 4.375% Senior Notes were issued under an indenture dated September 20, 2019 among STI, asissuer, The Bank of New York Mellon, as trustee, and our guarantor subsidiaries named therein (the "Guarantors"). The 4.375% Senior Notes were offered at par,and interest is payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2020.

At any time, and from time to time, STI may redeem the 4.375% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount of the notesredeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption, and, for redemptions occurring prior to November 15, 2029, a "make-whole" premium. Beginning on November 15, 2029, the "make-whole" premium will be eliminated. In addition, upon the occurrence of certain specific kinds ofchanges in control, STI will be required to offer to repurchase the notes at 101% of their principal amount plus accrued and unpaid interest, if any, to, butexcluding, the date of repurchase.

Upon changes in certain tax laws or treaties, or any change in the official application, administration, or interpretation thereof, STI may, at its option, redeem the4.375% Senior Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, butexcluding, the redemption date, premium, if any, and all additional amounts (as described in the indenture governing the 4.375% Senior Notes), if any, then dueand which will become due on the date of redemption.

Upon consummation of the Tenth Amendment, the guarantees of the Released Guarantors under the Existing Senior Notes were released (the "GuaranteesRelease"). Accordingly, as of September 20, 2019, the 4.375% Senior Notes are guaranteed by STBV and all of the subsidiaries of STBV (other than STI) thatguarantee the Existing Senior Notes and the Credit Agreement, in each case, giving effect to the Guarantees Release.

Capital Resources

Our sources of liquidity include cash on hand, cash flows from operations, and available capacity under the Revolving Credit Facility. In addition, the SeniorSecured Credit Facilities provide for the Accordion, under which additional secured debt may be issued or the capacity of the Revolving Credit Facility may beincreased. Subject to certain limitations as set forth in the indentures under which our senior notes were issued, availability under the Accordion is unlimited solong as our senior secured leverage ratio (as defined in the Credit Agreement) does not exceed 2.5:1.0; if our senior secured leverage ratio exceeds 2.5:1.0 wewould be limited to the greater of $920.0 million or the measure of EBITDA as set forth in the Credit Agreement.

We believe, based on our current level of operations as reflected in our results of operations for the nine months ended September 30, 2019, and taking intoconsideration the restrictions and covenants discussed below, that these sources of liquidity will be sufficient to fund our operations, capital expenditures, ordinaryshare repurchases, and debt service for at least the next twelve months. However, we cannot make assurances that our business will generate sufficient cash flowsfrom operations or that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs.Further, our highly-leveraged nature may limit our ability to procure additional financing in the future.

The Credit Agreement stipulates certain events and conditions that may require us to use excess cash flow, as defined by the terms of the Credit Agreement,generated by operating, investing, or financing activities, to prepay some or all of the outstanding borrowings under our secured credit facilities. The CreditAgreement also requires mandatory prepayments of the outstanding borrowings under our secured credit facilities upon certain asset dispositions and casualtyevents, in each case subject to certain reinvestment rights, and upon the incurrence of certain indebtedness (excluding any permitted indebtedness). Theseprovisions were not triggered during the nine months ended September 30, 2019.

The Credit Agreement and the indentures under which our senior notes were issued contain restrictions and covenants that limit the ability of STBV and certain ofits subsidiaries to, among other things, incur additional indebtedness, pay dividends, and make other restricted payments. For a full discussion of these restrictionsand covenants, refer to Part II, Item 7,

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"Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources," included in our Annual Report on Form 10-K forthe year ended December 31, 2018. As of September 30, 2019, we believe we were in compliance with all covenants and default provisions under our creditarrangements.

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 October 18, 2019Moody’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 borrowing costs, but will not reduce availability under the RevolvingCredit Facility.

On July 30, 2019, our Board of Directors approved a new $500.0 million share repurchase program, which replaced the previously authorized $250.0 million sharerepurchase program. Under this program we may repurchase ordinary shares at such times and in amounts to be determined by our management, based on marketconditions, legal requirements, and other corporate considerations, on the open market or in privately negotiated transactions, provided that such transactions arecompleted pursuant to an agreement and with a third party approved by our shareholders. During the nine months ended September 30, 2019, we repurchasedapproximately 5.5 million ordinary shares under our share repurchase programs for a total purchase price of approximately $265.8 million, which are now held astreasury shares. Remaining availability under this program was $421.6 million as of September 30, 2019.

Recently Issued Accounting Pronouncements

In February 2016 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), whichestablishes new accounting and disclosure requirements for leases. We adopted the provisions of FASB ASU No. 2016-02 on January 1, 2019 using the modifiedretrospective transition method. Refer to Note 2, "New Accounting Standards" and Note 18, "Leases," each of our condensed consolidated financial statementsincluded elsewhere in this Quarterly Report on Form 10-Q, for additional discussion of this adoption. We do not expect adoption of FASB ASU No. 2016-02 tohave a material impact on our future results of operations.

Critical Accounting Policies and Estimates

For a discussion of the critical accounting policies that require the use of significant judgments and estimates by management, refer to Part II, Item 7,"Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" included in our AnnualReport on Form 10-K for the year ended December 31, 2018.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

No significant changes to our market risk have occurred since December 31, 2018. For a discussion of market risks affecting us, refer to Part II, Item 7A—"Quantitative and Qualitative Disclosures About Market Risk" included in our Annual Report on Form 10-K for the year ended December 31, 2018.

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Item 4. Controls and Procedures.

The required certifications of our Chief Executive Officer and Chief Financial Officer are included as exhibits to this Quarterly Report on Form 10-Q. Thedisclosures set forth in this Item 4 contain information concerning the evaluation of our disclosure controls and procedures and changes in internal control overfinancial reporting referred to in these certifications. These certifications should be read in conjunction with this Item 4 for a more complete understanding of thematters covered by the certifications.

Evaluation of Disclosure Controls and Procedures

With the participation of our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures asof September 30, 2019. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, asamended (the "Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by acompany in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in theUnited States ("U.S.") Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls andprocedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulatedand communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisionsregarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonableassurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls andprocedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2019, our Chief Executive Officer and Chief Financial Officerconcluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three monthsended September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

There are inherent limitations to the effectiveness of any system of internal control over financial reporting. Accordingly, even an effective system of internalcontrol over financial reporting can only provide reasonable assurance with respect to financial statement preparation and presentation in accordance with U.S.generally accepted accounting principles. Our internal controls over financial reporting are subject to various inherent limitations, including cost limitations,judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk offraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes inconditions and the risk that the degree of compliance with policies or procedures may deteriorate over time.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

As discussed in Part I, Item 3—"Legal Proceedings" in our Annual Report on Form 10-K for the year ended December 31, 2018, we are regularly involved in anumber of claims and litigation matters in the ordinary course of business. Most of our litigation matters are third-party claims related to patent infringementallegations or for property damage allegedly caused by our products, but some involve allegations of personal injury or wrongful death. From time to time, we arealso involved in disagreements with vendors and customers. Information on certain legal proceedings in which we are involved is included in Note 12,"Commitments and Contingencies" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Although it isnot feasible to predict the outcome of these matters, based upon our experience and current information known to us, we do not expect the outcome of thesematters, either individually or in the aggregate, to have a material adverse effect on our results of operations, financial position, or cash flows.

Item 1A. Risk Factors.

Information regarding risk factors appears in Part I, Item 1A—"Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018. Therehave been no material changes to the risk factors disclosed therein.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

Period

Total Number of Shares

Purchased (in shares)

Weighted-Average Price

Paid per Share

Total Number of Shares Purchased as Part of

Publicly Announced Plan or

Programs

Approximate Dollar Value ofShares that May Yet Be

Purchased Under the Plan orPrograms

(in millions) (2)

July 1 through July 31, 2019 405,704 (1) $ 47.96 401,916 $ 500.0August 1 through August 31, 2019 1,042,396 $ 44.85 1,042,396 $ 453.2

September 1 through September 30, 2019 653,943 $ 48.34 653,943 $ 421.6

Quarter total 2,102,043 $ 46.54 2,098,255 $ 421.6

__________________________(1) Upon the vesting of restricted securities, we collect and pay withholding tax for employees by withholding shares to cover such tax. The number of shares

presented includes 3,788 shares withheld in this manner with an aggregate value of $175 thousand, based on the closing price of our ordinary shares on thedate of withholding. These withholdings took place outside of a publicly announced repurchase plan.

(2) Other than shares withheld to cover required tax withholding upon the vesting of restricted securities, all purchases during the three months endedSeptember 30, 2019 were conducted pursuant to a $250.0 million share repurchase program authorized by our Board of Directors and publicly announced onOctober 30, 2018 (the "October 2018 Program") or a $500.0 million share repurchase program authorized by our Board of Directors and publicly announcedon July 30, 2019 (the "July 2019 Program"). The October 2018 Program was terminated upon the authorization of the July 2019 Program, and no furtherpurchases will be made pursuant to it. The July 2019 Program does not have an established expiration date.

Item 3. Defaults Upon Senior Securities.

None.

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Item 6. Exhibits.

Exhibit No. Description

4.1

Indenture, dated as of September 20, 2019, among Sensata Technologies, Inc., the Guarantors, and The Bank of New York Mellon, as Trustee(incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on September 26, 2019).

4.2

Form of 4.375% Senior Notes due 2030 (incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed onSeptember 26, 2019) (included as Exhibit A thereto).

10.1 Amended and Restated Employment Agreement dated August 1, 2019 between Paul Chawla and Sensata Technologies, Inc. * 10.2

Letter Agreement dated August 1, 2019 between Steven Beringhause and Sensata Technologies, Inc. *

10.3

Amendment No. 10 to Credit Agreement and Amendment No. 1 to Domestic Guaranty and Foreign Guaranty, dated as of September 20, 2019,by and among Sensata Technologies Inc., Sensata Technologies Intermediate Holding B.V., Sensata Technologies B.V., the other guarantorsparty thereto, Morgan Stanley Senior Funding, Inc., and the other lenders party thereto (incorporated by reference to Exhibit 10.1 of theRegistrant's Current Report on Form 8-K filed on September 26, 2019).

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002.*

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embeddedwithin the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document. * 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. * 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. * 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. * 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. * 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) ___________________________* Filed herewith

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https://content.edgar-online.com/ExternalLink/EDGAR/0001477294-19-000111.html?hash=a2dee1912781a8f0c2c69e5ee5502f3892cbd8bef4cfe30c15b82b5802c2c9dd&dest=EXHIBIT4-1_HTM








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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersignedthereunto duly authorized.

Date: October 30, 2019

SENSATA TECHNOLOGIES HOLDING PLC

/s/ Martha Sullivan(Martha Sullivan)

Chief Executive Officer(Principal Executive Officer)

/s/ Paul Vasington

(Paul Vasington)Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

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Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is hereby executed byand between Sensata Technologies, Inc., a Delaware corporation (the “Company”), and Paul Chawla (“Executive”), to be effectiveas of August 1, 2019 (the “Effective Date”).

WHEREAS, the Company and Executive have executed that certain Employment Agreement, effective as ofSeptember 1, 2018 (the “Original Employment Agreement”); and

WHEREAS, the Company and Executive desire to amend and restate the Original Employment Agreement inaccordance with the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, continued employment of Executiveby the Company and other good and valuable consideration, the receipt and sufficiency of which are expressly herebyacknowledged, the parties hereto agree as follows:

1. Employment. The Company shall employ Executive, and Executive hereby accepts employment with the Company,upon the terms and conditions set forth in this Agreement for the period beginning on the Effective Date and ending as provided inSection 4 hereof (the “Employment Period”). The parties agree that for purposes of calculating years of service, Executive’semployment with the Company commenced as of June 16, 2014.

2. Position and Duties.

(a) During the Employment Period, Executive shall serve as Executive Vice President, Performance Sensing Auto ofthe Company and shall have the normal duties, responsibilities, functions and authority that are normally associated with the positionof Executive Vice President. Executive’s duties shall be subject to the power and authority of the Company’s Board of Directors (the“Company Board”) and the Board of Directors (the “Board”) of Sensata Technologies Holding plc, a public limited company formedunder the laws of England and Wales (“Parent”), in consultation with Executive’s Reporting Manager (defined below) and/or ChiefExecutive Officer (the “Chief Executive Officer”), to expand or limit such duties, responsibilities, functions and authority and tooverrule actions of officers of the Company. During the Employment Period, Executive shall render to Parent and its Subsidiaries (asdefined herein) administrative, financial and other executive and managerial services that are consistent with Executive’s position asthe Board or Executive’s Reporting Manager may from time to time direct.

(b) Executive shall report to the Chief Executive Officer, the President or the President and Chief Executive Officerof the Company if such position is combined (“Executive’s Reporting Manager”). Executive shall devote his full business time andattention

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(except for vacation periods consistent with past practice and reasonable periods of illness or other incapacity) to the business andaffairs of Parent and its Subsidiaries. In performing his duties and exercising his authority under the Agreement, Executive shallsupport and implement the business and strategic plans approved from time to time by the Board and shall support and cooperatewith Parent’s and its Subsidiaries’ efforts to expand their businesses and operate profitably and in conformity with the business andstrategic plans approved by the Board. As long as Executive is employed by the Company, Executive shall not, without the priorwritten consent of Executive’s Reporting Manager, perform other services for compensation. Unless otherwise agreed by Executive,Executive’s place of work shall be in the greater Attleboro, Massachusetts metropolitan area, except for travel reasonably requiredfor Company business.

(c) For purposes of this Agreement, “Subsidiaries” shall mean any corporation or other entity of which the securitiesor other ownership interests having the voting power to elect a majority of the board of directors or other governing body are, at thetime of determination, owned by Parent, directly or through one or more Subsidiaries.

(d) For purposes of this Agreement, “Affiliate” shall mean with respect to Parent and its Subsidiaries, any otherPerson controlling, controlled by or under common control with Parent or any of its Subsidiaries and, in the case of a Person that is apartnership, any partner of the Person.

(e) For purposes of this Agreement, “Person” shall mean an individual, a partnership, a corporation, a limitedliability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmentalentity or any department, agency or political subdivision thereof.

3. Compensation and Benefits.

(a) During the Employment Period, Executive’s base salary shall be equal to the amount determined by the Board orthe Compensation Committee of the Board, after consultation with the Chief Executive Officer, on an annual basis (as adjusted fromtime to time, the “Base Salary”), which salary shall be payable by the Company in regular installments in accordance with theCompany’s general payroll practices (in effect from time to time); provided, however, that the increase in Executive’s Base Salary inconnection with Executive’s promotion to Executive Vice President shall be effective June 1, 2019. In addition, during theEmployment Period, Executive shall be entitled to participate in all of the Company’s employee benefit programs for which seniorexecutive employees of Parent and its Subsidiaries are generally eligible (assuming Executive and/or his family meet the eligibilityrequirements of those benefit programs) (the “Senior Executive Benefits”).

(b) During the Employment Period, Executive shall be reimbursed by the Company for all reasonable businessexpenses incurred by him in the course of performing his duties and responsibilities under this Agreement, which business expensesare consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other businessexpenses. Reimbursement of the costs and expenses set forth in this Section 3(b) are

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subject to the Company’s requirements with respect to reporting and documentation of such costs and expenses.

(c) In addition to the Base Salary, Executive shall be eligible to earn an annual bonus (“Annual Bonus”) in anamount equal to a certain percentage of the Base Salary then in effect, and based upon the achievement by Parent and itsSubsidiaries of financial and other objectives established for each fiscal year by the Board or the Compensation Committee of theBoard. Executive will become entitled to receive an Annual Bonus, if any, only if Executive continues to be employed by Parent orany of its Subsidiaries through April 1st of the fiscal year following the fiscal year to which such Annual Bonus relates and suchAnnual Bonus, if any, will be paid to Executive by the Company on or before April 15th of the fiscal year following the fiscal year towhich such Annual Bonus relates.

4. Term.

(a) The Employment Period shall end on the first anniversary of this Agreement, but shall automatically be renewedon the same terms and conditions set forth herein (as may be modified from time to time in accordance with the terms of thisAgreement) for additional one-year periods beginning on the first anniversary of the date hereof and on each successive anniversarydate, unless the Company or Executive gives the other party written notice of the election not to renew the Employment Period atleast 90 days prior to any such renewal date; provided that, the Employment Period shall terminate prior to such date immediatelyupon Executive’s resignation (with or without Good Reason, as defined below), death or Disability (as defined below) or upon theCompany’s termination of Executive’s employment (whether with Cause (as defined below) or without Cause).

(b) If the Employment Period is terminated (1) by the Company without Cause (other than as a result of Executive’sDisability) or (2) upon Executive’s resignation with Good Reason, Executive shall be entitled to (i) his Base Salary through the dateof termination; (ii) any bonus amounts to which Executive is entitled for years that ended on or prior to the date of termination as setforth in Section 3(c) (including that Executive has been employed by the Parent or its Subsidiaries through April 1 of the fiscal yearfollowing the fiscal year to which such bonus relates); (iii) an amount equal to one year of Executive’s then current Base Salary plusan amount equal to the average of the Annual Bonus paid to Executive in respect of each of the two years immediately preceding thetermination of Executive’s employment; and (iv) running concurrently with his COBRA period, continued participation throughoutthe Severance Period (as defined below) in all health and dental benefit plans in which Executive was entitled to participateimmediately prior to the termination of Executive’s employment (or the Company shall arrange to make available to Executivebenefits substantially similar to those which Executive would otherwise have been entitled to receive over such period if Executive’semployment had not been terminated) on the same terms and conditions (including employee contributions toward premiumpayments) under which Executive was entitled to participate immediately prior to his termination. Any vested stock options, RSUsor other restricted equity granted to Executive shall be subject to the terms and conditions of the applicable Management EquityPlans. The amounts and benefits described in clauses (iii) and (iv) of this Section 4(b)

3

will be paid if and only if Executive has executed and delivered to the Company a separation agreement with a general release to beprovided by the Company, and such release has become effective and no longer subject to revocation not later than sixty (60) daysfollowing the date of termination (the “General Release”) and only if Executive does not breach the provisions of Sections 5 through7 hereof. The amounts payable pursuant to clause (iii) of this Section 4(b) shall be payable in regular installments over the twelve(12)-month period following the date of termination (the “Severance Period”) in accordance with the Company’s general payrollpractices as in effect on the date of termination, but in no event less frequently than monthly; provided that no amounts shall be paiduntil the first scheduled payment date following the date the General Release is executed and no longer subject to revocation, withthe first such payment being in an amount equal to the total amount to which Executive would otherwise have been entitled duringthe period following the date of termination through such payment date if such deferral had not been required; provided, however,that any such amounts that constitute nonqualified deferred compensation within the meaning of Internal Revenue Code Section409A and the regulations and guidance promulgated thereunder (“Code Section 409A”) shall not be paid until the 60th day followingsuch termination to the extent necessary to avoid adverse tax consequences under Code Section 409A, and, if such payments arerequired to be so deferred, the first payment shall be in an amount equal to the total amount to which Executive would otherwisehave been entitled during the period following the date of termination through such payment date if such deferral had not beenrequired.

(c) If the Employment Period is terminated (1) by the Company with Cause, (2) due to Executive’s death orDisability or (3) by Executive’s resignation without Good Reason, Executive shall be entitled to receive (i) his Base Salary throughthe date of termination and (ii) any bonus amounts to which Executive is entitled determined by reference to years that ended on orprior to the date of termination.

(d) Except as otherwise expressly provided herein, Executive shall not be entitled to any other salary, bonuses,employee benefits or compensation from the Company or its Subsidiaries after the termination of the Employment Period and all ofExecutive’s rights to salary, bonuses, employee benefits and other compensation hereunder which would have accrued or becomepayable after the termination of the Employment Period (other than vested retirement benefits accrued on or prior to the terminationof the Employment Period or other amounts owing hereunder as of the date of such termination that have not yet been paid) shallcease upon such termination, other than those expressly required under applicable law (such as COBRA) or as provided in anapplicable Management Equity Plan.

(e) Executive is under no obligation to mitigate damages or the amount of any payment provided for hereunder byseeking other employment or otherwise, and the Company shall have no right of offset for any amounts received by Executive fromother employment; provided that, notwithstanding anything to the contrary herein, Executive’s coverage under the Company’s healthand dental benefit plans will terminate when Executive becomes eligible under any employee benefit plan made available by anotheremployer covering health and dental benefits. Executive shall notify the Company within thirty (30) days after becoming eligible forany such benefits.

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(f) The Company may offset any amounts Executive owes Parent and its Subsidiaries against any amounts Parentand its Subsidiaries owe Executive hereunder.

(g) For purposes of this Agreement, “Cause” shall mean, with respect to Executive, one or more of the following:(1) the indictment for a felony or other crime involving moral turpitude or the commission of any other act or any omission to actinvolving fraud with respect to Parent or any of its Subsidiaries or any of their customers or suppliers; (2) any act or any omission toact involving dishonesty or disloyalty which causes, or in the good faith judgment of the Board would be reasonably likely to cause,material harm (including reputational harm) to Parent or any of its Subsidiaries or any of their customers or suppliers; (3) any(i) repeated abuse of alcohol or (ii) abuse of controlled substances, in either case, that adversely affects Executive’s workperformance (and, in the case of clause (i), continues to occur at any time more than thirty (30) days after Executive has been givenwritten notice thereof) or brings Parent or its Subsidiaries into public disgrace or disrepute; (4) the failure by Executive tosubstantially perform duties as reasonably directed by the Board, the Company Board, or Executive’s supervisor(s), which non-performance remains uncured for ten (10) days after written notice thereof is given to Executive; (5) willful misconduct with respectto Parent or any of its Subsidiaries, which misconducts causes, or in the good faith judgment of the Board would be reasonably likelyto cause, material harm (including reputational harm) to Parent or any of its Subsidiaries; (6) the failure of Executive to cooperate inany audit or investigation of the business or financial practices of the Parent or any of its Subsidiaries; or (7) any breach byExecutive of Sections 5 through 7 of this Agreement or any other material breach of this Agreement or the Management EquityPlans (as defined below).

(h) Executive will be “Disabled” only if, as a result of his incapacity due to physical or mental illness, Executive isconsidered disabled under the Company’s long-term disability insurance plans.

(i) For purposes of this Agreement, “Good Reason” shall mean if Executive resigns from employment with theCompany and, if applicable, its Subsidiaries prior to the end of the Employment Period as a result of one or more of the followingreasons: (1) any reduction in Executive’s Base Salary or bonus opportunity, without Executive’s prior consent, in either case otherthan any reduction which (i) is generally applicable to senior leadership team executives of the Company and (ii) does not exceed15% of Executive’s Base Salary and bonus opportunity in the aggregate; (2) any material breach by Parent or any of its Subsidiariesof any agreement between such Persons and Executive; (3) a change in Executive’s principal office without Executive’s priorconsent to a location that is more than fifty (50) miles from Executive’s principal office on the date hereof; or (4) delivery by theCompany of a notice of non-renewal of the Employment Period; provided that, any such reason was not cured by the Company toExecutive’s reasonable satisfaction within thirty (30) days after delivery of written notice thereof to the Company; further providedthat, in each case written notice of an Executive’s resignation with Good Reason must be delivered to the Company within thirty(30) days after the occurrence of any such event in order for Executive’s resignation with Good Reason to be effective hereunder.

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(j) For purposes of this Agreement, “Management Equity Plans” shall mean the First Amended and Restated 2010Equity Incentive Plan of Parent, including any amendments thereto, together with any other incentive equity plan of Parent or any ofits Subsidiaries under which Executive may in the future receive any equity or equity-based award, along with any AwardAgreements (as defined therein) and any attachments thereto, as amended from time to time.

5. Confidential Information.

(a) Executive acknowledges that the continued success of Parent and its Subsidiaries and Affiliates, depends uponthe use and protection of a large body of confidential and proprietary information. All of such confidential and proprietaryinformation now existing or to be developed in the future will be referred to in this Agreement as “Confidential Information”.Confidential Information will be interpreted as broadly as possible to include all information of any sort (whether merelyremembered or embodied in a tangible or intangible form) that is (1) related to Parent’s or its Subsidiaries’ or Affiliates’ current orpotential business and (2) is not generally or publicly known. Confidential Information includes, without specific limitation, theinformation, observations and data obtained by Executive during the course of his performance under this Agreement concerning thebusiness and affairs of Parent and its Subsidiaries and Affiliates, information concerning acquisition opportunities in or reasonablyrelated to the Parent’s or its Subsidiaries’ or Affiliates’ business or industry of which Executive becomes aware during theEmployment Period, the persons or entities that are current, former or prospective suppliers or customers of any one or more of themduring Executive’s course of performance under this Agreement, as well as development, transition and transformation plans,methodologies and methods of doing business, strategic, marketing and expansion plans, including plans regarding planned andpotential sales, financial and business plans, employee lists and telephone numbers, locations of sales representatives, new andexisting programs and services, prices and terms, customer service, integration processes, requirements and costs of providingservice, support and equipment. Therefore, Executive agrees that during his employment and for a period of three (3) years aftertermination of his employment for any reason (and as to information that constitutes a trade secret under applicable law, for suchlonger period as the same shall remain a trade secret) he shall not disclose to any unauthorized person or use for his own account anyof such Confidential Information without the Board’s prior written consent, unless and to the extent that any ConfidentialInformation (i) becomes generally known to and available for use by the public other than as a result of Executive’s acts oromissions to act; or (ii) is required to be disclosed pursuant to any applicable law or court order. Executive agrees to deliver to theCompany at the end of the Employment Period, or at any other time the Company may request in writing, all memoranda, notes,plans, records, reports and other documents (and copies thereof) relating to the business of Parent or its Subsidiaries or Affiliates(including, without limitation, all Confidential Information) that he may then possess or have under his control.

(b) During the Employment Period, Executive shall not use or disclose any confidential information, including tradesecrets, if any, of any former employers or any other person to whom Executive has an obligation of confidentiality, and shall notbring onto the

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premises of Parent or its Subsidiaries or Affiliates any unpublished documents or any property belonging to any former employer orany other Person to whom Executive has an obligation of confidentiality unless consented to in writing by the former employer orPerson. Executive shall use in the performance of his duties only information that is (1) generally known and used by persons withtraining and experience comparable to Executive’s and that is (i) common knowledge in the industry or (ii) is otherwise legally inthe public domain; (2) otherwise provided or developed by Parent or its Subsidiaries or Affiliates; or (3) in the case of materials,property or information belonging to any former employer or other Person to whom Executive has an obligation of confidentiality,approved for such use in writing by such former employer or Person. If at any time during the Employment Period, Executivebelieves he is being asked to engage in work that will, or will be likely to, jeopardize any confidentiality or other obligationsExecutive may have to former employers, Executive shall immediately advise the Board so that Executive’s duties can be modifiedappropriately.

(c) Executive represents and warrants to the Parent and its Subsidiaries that Executive took nothing with him thatbelonged to any former employer when Executive left his position(s) with such employer(s) that Executive was not authorized totake and that Executive has nothing that contains any confidential information that belongs to any former employer. If at any timeExecutive discovers that this representation is incorrect, Executive shall promptly return any such materials to Executive’s formeremployer(s). Parent and its Subsidiaries do not want any such materials, and Executive shall not be permitted to use or refer to anysuch materials in the performance of Executive’s duties hereunder.

(d) Executive understands that Parent and its Subsidiaries and Affiliates will receive from third parties confidentialor proprietary information (“Third Party Information”) subject to a duty on Parent’s and its Subsidiaries’ and Affiliates’ part tomaintain the confidentiality of such information and to use it only for certain limited purposes. During the Employment Period andthereafter, and without in any way limiting the provisions of Section 5(a) above, Executive will hold Third Party Information in thestrictest confidence and will not disclose to anyone (other than personnel of Parent or its Subsidiaries and Affiliates who need toknow such information in connection with their work for Parent or such Subsidiaries and Affiliates) or use, except in connectionwith his work for Parent or its Subsidiaries and Affiliates, Third Party Information unless expressly authorized by a member of theBoard in writing.

(e) Under the federal Defend Trade Secrets Act of 2016, Executive shall not be held criminally or civilly liableunder any federal or state trade secret law for the disclosure of a trade secret that: (1) is made (i) in confidence to a federal, state, orlocal government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating asuspected violation of law; or (2) is made to Executive’s attorney in relation to a lawsuit for retaliation against the Company forreporting a suspected violation of law; or (3) is made in a complaint or other document filed in a lawsuit or other proceeding, if suchfiling is made under seal.

6. Intellectual Property, Inventions and Patents. Executive acknowledges that all discoveries, concepts, ideas, inventions,innovations, improvements, developments, methods,

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designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including anyconfidential information) and all registrations or applications related thereto, all other proprietary information and all similar orrelated information (whether or not patentable) that relate to Parent’s or any of its Subsidiaries’ actual or anticipated business,research and development or existing or future products or services and which are conceived, developed or made by Executive(whether alone or jointly with others) while employed by the Company and its Subsidiaries, whether before or after the date of thisAgreement (“Work Product”), belong to Parent, the Company or such Subsidiary. At the Company’s expense, Executive shallperform all actions reasonably requested by the Board (whether during or after the Employment Period) to establish and confirmsuch ownership (including, without limitation, assignments, consents, powers of attorney and other instruments).

7. Non-Compete; Non-Solicitation.

(a) In further consideration of the compensation to be paid to Executive hereunder, Executive acknowledges thatduring the course of his employment with the Company and its Subsidiaries, he has and shall become familiar with Parent’s and itsSubsidiaries’ and Affiliates’ corporate strategy, pricing and other market information, know-how, trade secrets and valuablecustomer, supplier and employee relationships, and with other Confidential Information concerning Parent and its Subsidiaries andAffiliates, and that his services have been and shall be of special, unique and extraordinary value to Parent and its Subsidiaries andAffiliates. Accordingly, and in consideration for receiving the salary increase in connection with this Agreement and the potentialseverance benefits set forth in paragraph 4(b) above, Executive agrees that, during the Employment Period and for one (1) yearthereafter (the “Non-compete Period”), if the termination of Executive’s employment is voluntary or for “Cause” (as defined above),he shall not, directly or indirectly, without the prior written consent of the Company, in a capacity similar to the position(s) held byExecutive with the Company in the last two (2) years of Executive’s employment by the Company, and in a geographic area towhich Executive was assigned, in which Executive provided services or had a material presence or influence, or for which Executivewas responsible, during the last two years of his employment by the Company, own any interest in, manage, control, participate in,consult with, render services for, or in any manner engage in any Competing Business that conducts operations or sales in such U.S.states, or such countries outside the United States, as Parent and its Subsidiaries conduct sales or operations as of the date oftermination of the Employment Period. Nothing herein shall prohibit Executive from being a passive owner of not more than 2% ofthe outstanding stock of any class of a publicly-traded corporation, so long as Executive has no active participation in the business ofsuch corporation. For purpose of this Agreement, “Competing Business” shall mean any business engaged (whether directly orindirectly) in the design, manufacture, marketing, or sale of products or services competitive with those designed, manufactured,marketed or sold by the Parent or its Subsidiaries or Affiliates. Executive acknowledges and agrees that Executive has receivedsufficient mutually agreed-upon consideration for agreeing to be bound by the obligations in this Section, specifically the salaryincrease and the potential to receive severance set forth in Section 4(b) above. The restrictions in this Section do not becomeeffective until the 11th business day after this Agreement is executed by Executive.

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(b) During the Non-compete Period, Executive shall not directly or indirectly through another person or entity (1)induce or attempt to induce any employee of Parent or any Subsidiary to leave the employ of Parent or such Subsidiary, or in anyway interfere with the relationship between Parent or any Subsidiary and any employee thereof; (2) knowingly hire any person whowas an employee of Parent or any Subsidiary at any time during the twelve (12) months prior to the termination of Executive’semployment; or (3) induce or encourage, or attempt to induce, encourage or solicit, any customer, supplier, licensee, licensor orother business relation of Parent or any Subsidiary to cease doing business with Parent or such Subsidiary, or in any way interferewith the relationship between any such customer, supplier, licensee, licensor or business relation and Parent or any Subsidiary(including, without limitation, making any negative or disparaging statements or communications regarding Parent or itsSubsidiaries); provided that, in each case, this Section 7(b) shall only apply if Executive shall have done business with, or hadsupervisory or other responsibility for, the employee, customer, supplier, licensee, licensor, or business relation to which theapplicable clause of this Section 7(b) applies.

(c) If, at the time of enforcement of this Section 7, a court shall hold that the duration, scope or area restrictionsstated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or areareasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed torevise the restrictions contained herein to cover the maximum period, scope and area permitted by law. Executive acknowledges thatthe restrictions contained in this Section 7 are reasonable and that he has reviewed the provisions of this Agreement with his legalcounsel.

(d) Executive acknowledges that any breach or threatened breach of the provisions of this Section 7 would causeParent and its Subsidiaries irreparable harm. Accordingly, in addition to other rights and remedies existing in its favor, the Companyshall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order toenforce or prevent any violations of the provisions hereof (without posting a bond or other security). Further, in the event of analleged breach or violation by Executive of this Section 7, the Non-compete Period shall be tolled until such breach or violation hasbeen duly cured.

8. Executive’s Representations. Executive hereby represents and warrants to the Company that (a) the execution, deliveryand performance of this Agreement by Executive do not and shall not conflict with, breach, violate or cause a default under anycontract, agreement, instrument, order, judgment or decree to which Executive is a party or by which he is bound, (b) Executive isnot a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any other personor entity and (c) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and bindingobligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents that he hasconsulted with independent legal counsel regarding his rights and obligations under this Agreement and that he fully understands theterms and conditions contained herein.

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9. Survival. Sections 4 through 23 (other than Section 21) shall survive and continue in full force in accordance with theirterms notwithstanding the termination of the Employment Period.

10. Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent byreputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address belowindicated:

Notices to Executive:

Executive’s last residence shown on the records of the Company.

Notices to the Company:

Sensata Technologies, Inc.529 Pleasant StreetAttleboro, MA 02703Attention: General Counsel

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to thesending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed.

11. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effectiveand valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respectunder any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provisionof this Agreement or any action in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in suchjurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

12. Complete Agreement. This Agreement, those documents expressly referred to herein, and other documents of even dateherewith embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings,agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in anyway.

13. No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the partieshereto to express their mutual intent, and no rule of strict construction shall be applied against any party.

14. Counterparts. This Agreement may be executed in separate counterparts (including by means of facsimile), each ofwhich is deemed to be an original and all of which taken together constitute one and the same agreement.

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15. Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Company and anysuccessor to the Company, including, without limitation, any Persons acquiring directly or indirectly all or substantially all of thebusiness or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shallthereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be assignable, transferable ordelegable by the Company other than to Parent or any of its Subsidiaries. This Agreement will inure to the benefit of and beenforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees,but otherwise will not otherwise be assignable, transferable or delegable by Executive. This Agreement is personal in nature andneither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights orobligations hereunder except as otherwise expressly provided in this Section 15.

16. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of thisAgreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State ofDelaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or anyother jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

17. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior writtenconsent of the Company (as approved by the Board or the Compensation Committee of the Board as appropriate) and Executive, andno course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions ofthis Agreement (including, without limitation, the Company’s right to terminate the Employment Period with Cause or, except asotherwise stated herein, Executive’s right to terminate the Employment Agreement with Good Reason) shall affect the validity,binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

18. Insurance. The Company may, at its discretion, apply for and procure in its own name and for its own benefit life and/ordisability insurance on Executive in any amount or amounts considered advisable. Executive agrees to cooperate in any medical orother examination, supply any information and execute and deliver any applications or other instruments in writing as may bereasonably necessary to obtain and constitute such insurance.

19. Tax Matters; Code Section 409A.

(a) The Company and its respective Subsidiaries shall be entitled to deduct or withhold from any amounts owingfrom the Company or any of its Subsidiaries to Executive any federal, state, local or foreign withholding taxes, excise tax, oremployment taxes (“Taxes”) imposed with respect to Executive’s compensation or other payments from the Company or any of itsSubsidiaries or Executive’s ownership interest in Parent (including, without limitation, wages, bonuses, dividends, the receipt orexercise of equity options and/or the receipt or vesting of restricted equity). In the event the Company or any of its Subsidiaries doesnot make such deductions or withholdings, Executive shall indemnify the Company and its Subsidiaries for any

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amounts paid with respect to any such Taxes, together (if such failure to withhold was at the written direction of Executive) with anyinterest, penalties and related expenses thereto.

(b) The intent of the parties is that payments and benefits under this Agreement comply with Code Section 409Aand, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. In no eventwhatsoever shall the Company, or Parent or any of their Subsidiaries be liable for any additional tax, interest or penalty that may beimposed on Executive by Code Section 409A or damages for failing to comply with Code Section 409A.

(c) A termination of employment shall not be deemed to have occurred for purposes of any provision of thisAgreement providing for the payment of any amounts or benefits upon or following a termination of employment unless suchtermination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision ofthis Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”Notwithstanding anything to the contrary in this Agreement, if Executive is deemed on the date of termination to be a “specifiedemployee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision ofany benefit that is considered “nonqualified deferred compensation” under Code Section 409A payable on account of a “separationfrom service,” such payment or benefit shall not be made or provided until the date which is the earlier of (1) the expiration of thesix-month period measured from the date of such “separation from service” of Executive, and (2) the date of Executive’s death, tothe extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayedpursuant to this Section 19(c) (whether they would have otherwise been payable in a single sum or in installments in the absence ofsuch delay) shall be paid or reimbursed to Executive in a lump sum, and any remaining payments and benefits due under thisAgreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(d) To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualifieddeferred compensation” for purposes of Code Section 409A, (1) all such expenses or other reimbursements hereunder shall be madeon or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive; (2) anyright to such reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; and (3) no suchreimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect theexpenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

(e) For purposes of Code Section 409A, Executive’s right to receive any installment payments pursuant to thisAgreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under thisAgreement specifies a payment period with reference to a number of days, the actual date of payment within the specified periodshall be within the sole discretion of the Company.

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(f) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under thisAgreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by anyother amount unless otherwise permitted by Code Section 409A.

20. Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIESHERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL),EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDINGRELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

21. Corporate Opportunity. During the Employment Period, Executive shall submit to the Board all business, commercialand investment opportunities or offers presented to Executive, or of which Executive becomes aware, at any time during theEmployment Period, which opportunities relate to the business of designing, manufacturing, marketing, or selling products orservices competitive with those designed, manufactured, marketed or sold by the Parent or its Subsidiaries or Affiliates (“CorporateOpportunities”). During the Employment Period, unless approved by the Board, Executive shall not accept or pursue, directly orindirectly, any Corporate Opportunities on Executive’s own behalf.

22. Executive’s Cooperation. During the Employment Period and thereafter, Executive shall reasonably cooperate withParent and its Subsidiaries in any internal investigation or administrative, regulatory or judicial proceeding as reasonably requestedby Parent or any Subsidiary (including, without limitation, Executive being available to Parent and its Subsidiaries upon reasonablenotice for interviews and factual investigations, appearing at Parent’s or any Subsidiary’s request to give truthful and accuratetestimony without requiring service of a subpoena or other legal process, volunteering to Parent and its Subsidiaries all pertinentinformation and turning over to Parent and its Subsidiaries all relevant documents which are or may come into Executive’spossession, all at times and on schedules that are reasonably consistent with Executive’s other permitted activities andcommitments). In the event Parent or any Subsidiary requires Executive’s cooperation in accordance with this Section 22, Parentshall pay Executive a per diem reasonably determined by the Board or the Compensation Committee and reimburse Executive forreasonable expenses incurred in connection therewith (including lodging and meals, upon submission of receipts).

23. Nondisparagement. Executive agrees not to, except as may be required by law, directly or indirectly, publicly orprivately, make, publish or solicit, or encourage others to make, publish or solicit, any disparaging statements, comments,announcements, or remarks concerning Parent or its Affiliates, or any of their respective past and present directors, officers oremployees. Parent and its Affiliates agree not to, except as may be required by law, directly or indirectly, publicly or privately,make, publish or solicit, or encourage others to make, publish or solicit, any disparaging statements, comments, announcements orremarks concerning Executive or his employment with the Company or any of its Subsidiaries.

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24. Acknowledgement. Executive acknowledges that he had the opportunity to consult with counsel regarding thisAgreement.

* * * * *

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date set forth above.

SENSATA TECHNOLOGIES, INC.

/s/ Martha SullivanMartha SullivanChief Executive Officer

EXECUTIVE

/s/ Paul ChawlaPaul ChawlaExecutive Vice President, Performance Sensing Auto

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Exhibit 10.2

August 1, 2019

Steven Beringhausec/o Sensata Technologies, Inc.529 Pleasant StreetAttleboro, MA 02703

RE: LETTER AGREEMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Dear Steven:

This Letter Agreement (this “Letter Agreement”) shall serve as an amendment to your Amended and Restated Employment Agreement,dated November 14, 2016 (your “Employment Agreement”), by and between you and Sensata Technologies, Inc., a Delaware corporation(the “Company”). This Letter Agreement, along with the terms of your Employment Agreement not amended by this Letter Agreement, shallgovern the terms of your employment with the Company as of the date set forth above (the “Effective Date”). In consideration of the mutualcovenants contained in this Letter Agreement and other good and valuable consideration, the receipt and sufficiency of which areacknowledged, you and the Company hereby agree to the following:

1. Defined Terms. Capitalized terms not otherwise defined in this Letter Agreement shall have the meaning assigned to them in yourEmployment Agreement.

2. Position and Duties.

(a) The first sentence of Section 2(a) of your Employment Agreement is hereby deleted in its entirety and replaced with thefollowing: “During the Employment Period, Executive shall serve as Executive Vice President, Chief Technology Officer of the Company, orsuch other title as may be determined by Executive’s Reporting Manager (as defined below), and shall have the normal duties,responsibilities, function and authority of an Executive Vice President subject to the power and authority of the Company’s Board ofDirectors (the “Company Board”) and the Parent’s Board of Directors (the “Parent Board” or the “Board”), in consultation with theCompany’s Chief Executive Officer (the “Chief Executive Officer”) and Executive’s Reporting Manager, to expand or limit such duties,responsibilities, functions and authority and to overrule actions of officers of the Company.”

(b) The first sentence of Section 2(b) of your Employment Agreement is hereby deleted in its entirety and replaced with thefollowing: “Executive shall report to the Chief Executive Officer, the President or the Chief Executive Officer and President, if the role iscombined (“Executive’s Reporting Manager”).”

(c) Except for in Section 3 of your Employment Agreement, references in your Employment Agreement to the defined term“Chief Executive Officer” shall be replaced with the defined term “Executive’s Reporting Manager” as set forth herein.

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(d) Section 2(f) of your Employment Agreement is hereby deleted in its entirety and replaced with the following: “Forpurposes of this Agreement, “Parent” shall mean Sensata Technologies Holding plc, a company incorporated under the laws of England andWales.”

3. Compensation and Benefits. During the Employment Period, you shall continue to be eligible to receive the compensation andbenefits described in Section 3 of your Employment Agreement, in accordance with this Letter Agreement, your Employment Agreement(except as amended by this Letter Agreement) and the Company’s policies (which shall control). In addition, the Company agrees that it willnot at any time during the Employment Period reduce your current base salary below the base salary in effect as of the Effective Date. TheCompany also agrees that if you remain employed by the Company through April 30, 2020, you shall be eligible to receive awards under theManagement Equity Plans and bonus payments under the Annual Bonus Plans, to the extent awards and bonuses are offered to other similarlysituated executives and subject to the approval by the Compensation Committee of the Board.

4. Term; Early Termination; Bonus Payment; Succession Transition.

(a) Section 4(a) of your Employment Agreement is hereby deleted in its entirety and replaced with the following: “TheEmployment Period shall end on April 30, 2021 (“Employment End Date”); provided, however, that the Employment Period shall terminateearlier upon (i) Executive’s early retirement date (provided Executive has provided at least six months prior written notice of his intendedearly retirement date); (ii) Executive’s resignation (with or without Good Reason); (iii) Executive’s death or Disability; or (iv) the Company’stermination of Executive’s employment with Cause.”

(b) If you are employed by the Company or an Affiliate on January 4, 2021, in exchange for your execution (and non-revocation) of the General Release (substantially in the form of et forth at Exhibit A of the Employment Agreement, which shall be modifiedby amending (a) and (b) of such Exhibit A to reflect the payment contemplated herein), Sensata will pay to you on January 4, 2021, in asingle lump sum payment, an amount equal to (i) eight (8) months of your then current Base Salary plus (ii) an amount equal to the averageof the Annual Bonus paid to you in April 2019 and April 2020 (such payment to be reduced by all applicable taxes and withholdings) (the“Bonus Payment”).

(c) In addition to the Bonus Payment in Paragraph 4(b) above, if you remain employed with the Company as of January 4,2021, in exchange for your execution and non-revocation of the General Release, you shall transition into a consulting role effective January4, 2021 and provide transition services, as requested by the Company, until your Employment End Date (the “Succession Transition Period”).During the Succession Transition Period, you understand you will remain an active Sensata employee, subject to all Company policies,procedures and practices, and you shall continue to receive the compensation and benefits set forth in Section 3 of your EmploymentAgreement (as then in effect). For clarity, during the Succession Transition Period (i) you shall continue to accrue service for purposes ofvesting under the Management Equity Plans; and (ii) the Company will continue to pay its portion of the premium for your (and your spouseand dependents, if any) health, dental and vision coverage, as applicable, and you will continue to be responsible for your share of thepremium payment. After the Succession Transition Period (beginning May 1, 2021), you may elect COBRA coverage, which would be solelyat your own expense.

(d) Although it is anticipated that you will elect to retire effective May 1, 2021, notwithstanding anything to the contrarycontained in this Letter Agreement, you may elect to retire at any time during the Employment Period and receive such benefits under thethen existing Sensata retirement plans and programs for which you are then eligible. However, if you are not employed as of January 4, 2021,for any reason, you will not receive the “Bonus Payment” described in Paragraph 4(c) of this Letter Agreement. To clarify: (i) the terms andconditions set forth in Section 4 of your Employment Agreement and Paragraph 4(b) above, if applicable, shall apply for any termination ofthe Employment Period prior to January 4, 2021; and (ii) in no case shall you be

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entitled to any termination payments under Section 4 of your Employment Agreement in addition to the Bonus Payment.

5. Entire Agreement. This Letter Agreement and the terms of your Employment Agreement not amended by this Letter Agreement setforth the complete agreement between you and Sensata with respect to the matters contemplated herein. To avoid doubt, all provisions of theEmployment Agreement not specifically amended by this Agreement shall remain and continue in full force and effect including withoutlimitations Section 7 of the Employment Agreement, which you acknowledge and agree remains in effect in accordance with its terms.

Remainder of Page Intentionally Left Blank

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If you accept the terms of this Letter Agreement, please sign and date below in the space provided and return to me.

Very truly yours,

/s/ Martha SullivanMartha SullivanChief Executive Officer

Acknowledged and Agreed:

/s/ Steven BeringhauseSteven Beringhause

Date: August 5, 2019

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Exhibit 31.1

Certification

I, Martha Sullivan, certify that:1. I have reviewed this quarterly report on Form 10-Q of Sensata Technologies Holding plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (theregistrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internalcontrol over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant'sauditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financialreporting.


/s/ Martha SullivanMartha Sullivan

Chief Executive Officer

Exhibit 31.2

Certification

I, Paul Vasington, certify that:1. I have reviewed this quarterly report on Form 10-Q of Sensata Technologies Holding plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (theregistrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internalcontrol over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant'sauditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financialreporting.


/s/ Paul VasingtonPaul Vasington

Executive Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO18 U.S.C. 1350

AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Sensata Technologies Holding plc (the “Company”) for the quarter ended September 30, 2019, as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned chief executive officer and chief financial officer of theCompany, certifies, to the best knowledge and belief of the signatory, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002, that:1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Martha Sullivan

Martha Sullivan

Chief Executive Officer

Date: October 30, 2019 /s/ Paul Vasington

Paul Vasington

Executive Vice President and Chief Financial Officer


form 10-qd18rn0p25nwr6d.cloudfront.net/cik-0001477294/7bc42740-54... · 2019-10-30 · (399,417 )...

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