UNITED STATES

SECURITIES 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 March 31, ~~2020~~2021



☐			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.)

529 Pleasant Street

Attleboro,, 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 registered
Ordinary 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 for such 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 the definitions 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

☐

~~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 accounting standards 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 April 15, ~~2020, 157,161,723~~2021, 158,109,854 ordinary shares were outstanding.

Table of Contents

TABLE OF CONTENTS



PART I
		Item 1.	Financial Statements (unaudited):
			Condensed Consolidated Balance Sheets as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020	3
			Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020 ~~and 2019~~	4
			Condensed Consolidated Statements of Comprehensive Income/(Loss)~~/Income~~ for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	5
			Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	6
			Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months ~~ended~~Ended March 31, ~~2020~~2021 and ~~2019~~2020	7
			Notes to Condensed Consolidated Financial Statements	8
		Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1920
		Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2632
		Item 4.	Controls and Procedures	2732

PART II
		Item 1.	Legal Proceedings	2833
		Item 1A.	Risk Factors	2833
		Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2933
		Item 3.	Defaults Upon Senior Securities	2933
		Item 5.6.	~~Other Information~~Exhibits	3034
		~~Item 6.~~	~~Exhibits~~Signatures	3135
	~~Signatures~~	32

Table of Contents

PART I—FINANCIAL INFORMATION


~~Item 1.~~	~~Financial Statements.~~

Item 1.Financial Statements.

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

(unaudited)


	March 31, 2020			December 31, 2019				March 31, 2021		December 31, 2020
Assets							Assets
Current assets:							Current assets:
Cash and cash equivalents	$	802,971		$	774,119		Cash and cash equivalents	$	1,893,926	$	1,861,980
Accounts receivable, net of allowances of $15,832 and $15,129 as of March 31, 2020 and December 31, 2019, respectively	536,416			557,874
Accounts receivable, net of allowances of $18,891 and $19,033 as of March 31, 2021 and December 31, 2020, respectively							Accounts receivable, net of allowances of $18,891 and $19,033 as of March 31, 2021 and December 31, 2020, respectively	641,161		576,647
Inventories	514,274			506,678			Inventories	468,446		451,005
Prepaid expenses and other current assets	115,887			126,981			Prepaid expenses and other current assets	102,592		90,340
Total current assets	1,969,548			1,965,652			Total current assets	3,106,125		2,979,972
Property, plant and equipment, net	824,553			830,998			Property, plant and equipment, net	796,419		803,825
Goodwill	3,093,598			3,093,598			Goodwill	3,124,939		3,111,349
Other intangible assets, net of accumulated amortization of $2,072,227 and $2,039,436 as of March 31, 2020 and December 31, 2019, respectively	738,244			770,904
Other intangible assets, net of accumulated amortization of $2,176,498 and $2,145,634 as of March 31, 2021 and December 31, 2020, respectively							Other intangible assets, net of accumulated amortization of $2,176,498 and $2,145,634 as of March 31, 2021 and December 31, 2020, respectively	676,072		691,549
Deferred income tax assets	27,293			21,150			Deferred income tax assets	80,023		84,785
Other assets	159,582			152,217			Other assets	161,614		172,722
Total assets	$	6,812,818		$	6,834,519		Total assets	$	7,945,192	$	7,844,202
Liabilities and shareholders’ equity							Liabilities and shareholders’ equity
Current liabilities:							Current liabilities:
Current portion of long-term debt, finance lease and other financing obligations	$	7,095		$	6,918		Current portion of long-term debt, finance lease and other financing obligations	$	9,678	$	757,205
Accounts payable	345,787			376,968			Accounts payable	431,084		393,907
Income taxes payable	19,390			35,234			Income taxes payable	21,498		19,215
Accrued expenses and other current liabilities	248,789			215,626			Accrued expenses and other current liabilities	311,261		324,830
Total current liabilities	621,061			634,746			Total current liabilities	773,521		1,495,157
Deferred income tax liabilities	247,960			251,033			Deferred income tax liabilities	262,673		259,857
Pension and other post-retirement benefit obligations	33,716			36,100			Pension and other post-retirement benefit obligations	43,074		48,002
Finance lease and other financing obligations, less current portion	28,280			28,810			Finance lease and other financing obligations, less current portion	27,605		27,931
Long-term debt, net	3,220,359			3,219,885			Long-term debt, net	3,961,397		3,213,747
Other long-term liabilities	123,645			90,190			Other long-term liabilities	86,279		94,022
Total liabilities	4,275,021			4,260,764			Total liabilities	5,154,549		5,138,716
Commitments and contingencies (Note 12)							Commitments and contingencies (Note 12)	0		0
Shareholders’ equity:							Shareholders’ equity:
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 172,596 and 172,561 shares issued, as of March 31, 2020 and December 31, 2019, respectively	2,212			2,212
Treasury shares, at cost, 15,631 and 14,733 shares as of March 31, 2020 and December 31, 2019, respectively	(784,596		)	(749,421		)
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 173,533 and 173,266 shares issued as of March 31, 2021 and December 31, 2020, respectively							Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 173,533 and 173,266 shares issued as of March 31, 2021 and December 31, 2020, respectively	2,223		2,220
Treasury shares, at cost, 15,631 shares as of March 31, 2021 and December 31, 2020							Treasury shares, at cost, 15,631 shares as of March 31, 2021 and December 31, 2020	(784,596)		(784,596)
Additional paid-in capital	1,731,884			1,725,091			Additional paid-in capital	1,775,320		1,759,668
Retained earnings	1,624,773			1,616,357			Retained earnings	1,831,241		1,777,729
Accumulated other comprehensive loss	(36,476		)	(20,484		)	Accumulated other comprehensive loss	(33,545)		(49,535)
Total shareholders’ equity	2,537,797			2,573,755			Total shareholders’ equity	2,790,643		2,705,486
Total liabilities and shareholders’ equity	$	6,812,818		$	6,834,519		Total liabilities and shareholders’ equity	$	7,945,192	$	7,844,202

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

Table of Contents

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)


	For the three months ended
	March 31, 2021		March 31, 2020
Net revenue	$	942,528	$	774,269
Operating costs and expenses:
Cost of revenue	635,349		566,406
Research and development	35,956		34,453
Selling, general and administrative	77,123		77,221
Amortization of intangible assets	32,064		33,092
Restructuring and other charges, net	4,582		4,498
Total operating costs and expenses	785,074		715,670
Operating income	157,454		58,599
Interest expense, net	(44,043)		(39,403)
Other, net	(39,397)		(12,281)
Income before taxes	74,014		6,915
Provision for/(benefit from) income taxes	20,281		(1,516)
Net income	$	53,733	$	8,431
Basic net income per share	$	0.34	$	0.05
Diluted net income per share	$	0.34	$	0.05

For the three months ended
March 31, 2020 March 31, 2019
Net revenue $ 774,269
$ 870,499
Operating costs and expenses:
Cost of revenue 566,406
580,806
Research and development 34,453
35,096
Selling, general and administrative 77,221
70,549
Amortization of intangible assets 33,092
36,143
Restructuring and other charges, net 4,498
5,309
Total operating costs and expenses 715,670
727,903
Operating income 58,599
142,596
Interest expense, net (39,403 ) (39,253 )
Other, net (12,281 ) 3,189
Income before taxes 6,915
106,532
(Benefit from)/provision for income taxes (1,516 ) 21,467
Net income $ 8,431
$ 85,065
Basic net income per share: $ 0.05
$ 0.52
Diluted net income per share: $ 0.05
$ 0.52

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

Table of Contents

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Comprehensive Income/(Loss)~~/Income~~

(In thousands)

(unaudited)


	For the three months ended
	March 31, 2021		March 31, 2020
Net income	$	53,733	$	8,431
Other comprehensive income/(loss):
Cash flow hedges	14,278		(19,334)
Defined benefit and retiree healthcare plans	1,712		3,342
Other comprehensive income/(loss)	15,990		(15,992)
Comprehensive income/(loss)	$	69,723	$	(7,561)

For the three months ended
March 31, 2020 March 31, 2019
Net income $ 8,431
$ 85,065
Other comprehensive (loss)/income, net of tax:
Cash flow hedges (19,334 ) 10,060
Defined benefit and retiree healthcare plans 3,342
83
Other comprehensive (loss)/income (15,992 ) 10,143
Comprehensive (loss)/income $ (7,561 ) $ 95,208

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

Table of Contents

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)


	For the three months ended
	March 31, 2021		March 31, 2020
Cash flows from operating activities:
Net income	$	53,733	$	8,431
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	31,197		34,679
Amortization of debt issuance costs	1,711		1,631

Share-based compensation	5,099		6,084
Loss on debt financing	30,066		0
Amortization of intangible assets	32,064		33,092
Deferred income taxes	130		(4,100)
Loss on litigation judgment	0		29,200
Unrealized loss on derivative instruments and other	8,797		11,040
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net	(62,198)		21,458
Inventories	(16,857)		(7,596)
Prepaid expenses and other current assets	(4,971)		5,625
Accounts payable and accrued expenses	26,409		(19,962)
Income taxes payable	2,283		(15,844)
Other	(2,952)		(5,194)
Net cash provided by operating activities	104,511		98,544
Cash flows from investing activities:
Acquisitions, net of cash received	(20,406)		0
Additions to property, plant and equipment and capitalized software	(27,172)		(29,547)
Investment in debt and equity securities	(1,799)		(5,217)


Other	340		1,928
Net cash used in investing activities	(49,037)		(32,836)
Cash flows from financing activities:
Proceeds from exercise of stock options and issuance of ordinary shares	10,556		709
Payment of employee restricted stock tax withholdings	(221)		(15)
Proceeds from borrowings on debt	750,000		0

Payments on debt	(752,753)		(2,375)
Payments to repurchase ordinary shares	0		(35,175)
Payments of debt financing costs	(31,110)		0

Net cash used in financing activities	(23,528)		(36,856)
Net change in cash and cash equivalents	31,946		28,852
Cash and cash equivalents, beginning of period	1,861,980		774,119
Cash and cash equivalents, end of period	$	1,893,926	$	802,971

For the three months ended
March 31, 2020 March 31, 2019
Cash flows from operating activities:
Net income $ 8,431
$ 85,065
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 34,679
27,208
Amortization of debt issuance costs 1,631
1,836
Share-based compensation 6,084
5,940
Amortization of intangible assets 33,092
36,143
Deferred income taxes (4,100 ) 5,113
Loss on litigation judgment 29,200
—
Unrealized loss on derivative instruments and other 11,040
6,204
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net 21,458
(51,237 )
Inventories (7,596 ) 8,183
Prepaid expenses and other current assets 5,625
3,028
Accounts payable and accrued expenses (19,962 ) (14,917 )
Income taxes payable (15,844 ) (781 )
Other (5,194 ) 908
Net cash provided by operating activities 98,544
112,693
Cash flows from investing activities:
Acquisitions, net of cash received —
(1,681 )
Additions to property, plant and equipment and capitalized software (29,547 ) (41,690 )
Other (3,289 ) 1,000
Net cash used in investing activities (32,836 ) (42,371 )
Cash flows from financing activities:
Proceeds from exercise of stock options and issuance of ordinary shares 709
5,813
Payment of employee restricted stock tax withholdings (15 ) (275 )
Payments on debt (2,375 ) (4,157 )
Payments to repurchase ordinary shares (35,175 ) (150,749 )
Payments of debt and equity issuance costs —
(1,269 )
Net cash used in financing activities (36,856 ) (150,637 )
Net change in cash and cash equivalents 28,852
(80,315 )
Cash and cash equivalents, beginning of period 774,119
729,833
Cash and cash equivalents, end of period $ 802,971
$ 649,518

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

Table of Contents

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Changes in Shareholders' Equity

(In thousands)

(unaudited)


	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, 2020	173,266	$	2,220	(15,631)	$	(784,596)	$	1,759,668	$	1,777,729	$	(49,535)	$	2,705,486
Surrender of shares for tax withholding	—	—		(4)	(221)		—		—		—		(221)
Stock options exercised	259	3		—	—		10,553		—		—		10,556
Vesting of restricted securities	12	—		—	—		—		—		—		—

Retirement of ordinary shares	(4)	—		4	221		—		(221)		—		0
Share-based compensation	—	—		—	—		5,099		—		—		5,099
Net income	—	—		—	—		—		53,733		—		53,733
Other comprehensive income	—	—		—	—		—		—		15,990		15,990
Balance as of March 31, 2021	173,533	$	2,223	(15,631)	$	(784,596)	$	1,775,320	$	1,831,241	$	(33,545)	$	2,790,643

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, 2019 172,561
$ 2,212
(14,733 ) $ (749,421 ) $ 1,725,091
$ 1,616,357
$ (20,484 ) $ 2,573,755
Surrender of shares for tax withholding —
—
—
(15 ) —
—
—
(15 )
Stock options exercised 34
—
—
—
709
—
—
709
Vesting of restricted securities 1
—
—
—
—
—
—
—
Repurchase of ordinary shares —
—
(898 ) (35,175 ) —
—
—
(35,175 )
Retirement of ordinary shares —
—
—
15
—
(15 ) —
—
Share-based compensation —
—
—
—
6,084
—
—
6,084
Net income —
—
—
—
—
8,431
—
8,431
Other comprehensive loss —
—
—
—
—
—
(15,992 ) (15,992 )
Balance as of March 31, 2020 172,596
$ 2,212
(15,631 ) $ (784,596 ) $ 1,731,884
$ 1,624,773
$ (36,476 ) $ 2,537,797


	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, 2019	172,561	$	2,212	(14,733)	$	(749,421)	$	1,725,091	$	1,616,357	$	(20,484)	$	2,573,755
Surrender of shares for tax withholding	—	—		—	(15)		—		—		—		(15)
Stock options exercised	34	0		—	—		709		—		—		709
Vesting of restricted securities	1	—		—	—		—		—		—		—
Repurchase of ordinary shares	—	—		(898)	(35,175)		—		—		—		(35,175)
Retirement of ordinary shares	—	—		—	15		—		(15)		—		0
Share-based compensation	—	—		—	—		6,084		—		—		6,084
Net income	—	—		—	—		—		8,431		—		8,431
Other comprehensive loss	—	—		—	—		—		—		(15,992)		(15,992)
Balance as of March 31, 2020	172,596	$	2,212	(15,631)	$	(784,596)	$	1,731,884	$	1,624,773	$	(36,476)	$	2,537,797

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, 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 —
—
(6 ) (275 ) —
—
—
(275 )
Stock options exercised 248
3
—
—
5,810
—
—
5,813
Vesting of restricted securities 26
—
—
—
—
—
—
—
Repurchase of ordinary shares —
—
(3,036 ) (150,749 ) —
—
—
(150,749 )
Retirement of ordinary shares (6 ) —
6
275
—
(275 ) —
—
Share-based compensation —
—
—
—
5,940
—
—
5,940
Net income —
—
—
—
—
85,065
—
85,065
Other comprehensive income —
—
—
—
—
—
10,143
10,143
Balance as of March 31, 2019 171,987
$ 2,206
(10,607 ) $ (550,166 ) $ 1,702,940
$ 1,425,426
$ (16,035 ) $ 2,564,371

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

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SENSATA TECHNOLOGIES HOLDING PLC

NOTES 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/(loss)~~/income,~~, cash flows, and changes in shareholders' equity of Sensata Technologies Holding plc, a public limited company incorporated under the laws of England and Wales, and its wholly-owned subsidiaries, collectively referred to as the "Company," "Sensata," "we," "our," or "us."

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q. Accordingly, these interim financial statements do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020 (the "2020 Annual Report").

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

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

2. New Accounting Standards

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

3. Revenue Recognition

The following table presents net revenue disaggregated by segment and end market for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

For the three months ended March 31, 2020 For the three months ended March 31, 2019
Performance Sensing Sensing Solutions Total Performance Sensing Sensing Solutions Total
Automotive $ 437,703
$ 8,236
$ 445,939
$ 492,015
$ 11,428
$ 503,443
HVOR ⁽¹⁾
130,986
—
130,986
148,013
—
148,013
Industrial —
80,599
80,599
—
92,641
92,641
Appliance and HVAC ⁽²⁾
—
45,396
45,396
—
51,704
51,704
Aerospace —
42,124
42,124
—
42,979
42,979
Other —
29,225
29,225
—
31,719
31,719
Total $ 568,689
$ 205,580
$ 774,269
$ 640,028
$ 230,471
$ 870,499


	For the three months ended March 31, 2021						For the three months ended March 31, 2020
	Performance Sensing		Sensing Solutions		Total		Performance Sensing		Sensing Solutions		Total
Automotive	$	536,713	$	11,500	$	548,213	$	437,703	$	8,236	$	445,939
HVOR (1)	177,799		0		177,799		130,986		0		130,986
Industrial	0		90,475		90,475		0		80,599		80,599
Appliance and HVAC (2)	0		59,916		59,916		0		45,396		45,396
Aerospace	0		32,677		32,677		0		42,124		42,124
Other	0		33,448		33,448		0		29,225		29,225
Total	$	714,512	$	228,016	$	942,528	$	568,689	$	205,580	$	774,269

________________________

⁽¹⁾ Heavy vehicle and off-road

⁽²⁾ Heating, ventilation and air conditioning

4. Share-Based Payment Plans

The following table presents the components of non-cash compensation expense related to our equity awards for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020:


	For the three months ended
	March 31, 2021		March 31, 2020
Stock options	$	460	$	2,489
Restricted securities	4,639		3,595
Share-based compensation expense	$	5,099	$	6,084

For the three months ended
March 31, 2020 March 31, 2019
Stock options $ 2,489
$ 1,524
Restricted securities 3,595
4,416
Share-based compensation expense $ 6,084
$ 5,940

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5. Restructuring and Other Charges, Net

On June 30, 2020, in response to the potential long-term impact of the global financial and health crisis caused by the coronavirus ("COVID-19") pandemic on our business, we committed to a plan to reorganize our business (the “Q2 2020 Global Restructure Program”), consisting of voluntary and involuntary reductions-in-force and certain site closures. The Q2 2020 Global Restructure Program was commenced in order to align our cost structure to the demand levels that we anticipate in the coming quarters. We have taken a large portion of the actions contemplated under the Q2 2020 Global Restructure Program, with the majority of the remaining actions expected to be completed on or before June 30, 2021.

Over the life of the Q2 2020 Global Restructure Program, the reductions-in-force, which are subject to the laws and regulations of the countries in which the actions are planned, are expected to impact approximately 880 positions, for which we expect to incur severance charges of between $31.0 million and $33.7 million. In addition, over the life of the Q2 2020 Global Restructure Program, we expect to incur between $6.0 million and $8.0 million related to site closures. We expect to settle these charges with cash on hand.

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


		Reductions-in-Force				Site Closures
(Dollars in millions)	Positions	Minimum		Maximum		Minimum		Maximum
Performance Sensing	180	$	10.7	$	11.6	$	3.0	$	4.0
Sensing Solutions	286	8.9		9.6		3.0		4.0
Corporate and other (1)	414	11.4		12.5		0		0
Total	880	$	31.0	$	33.7	$	6.0	$	8.0

(1) The majority of these positions relate to engineering and manufacturing operations, which are allocated to corporate and other. However, these restructuring actions will benefit the results of Performance Sensing and Sensing Solutions as well.

Charges recognized in the three months ended March 31, 2021 resulting from the Q2 2020 Global Restructure Program are presented by impacted segment below. Approximately $0.8 million of these charges relate to site closures in Sensing Solutions. However, as noted in Note 17: Segment Reporting, restructuring and other charges, net are excluded from segment operating income.


	For the three months ended March 31, 2021
Performance Sensing	$	296
Sensing Solutions	1,528

Restructuring and other charges	$	1,824

The following table presents the components of restructuring and other charges, net for the three months ended March 31, 2021 and 2020:


	For the three months ended
	March 31, 2021		March 31, 2020
Q2 2020 Global Restructure Program charges	$	1,824	$	0
Other restructuring charges
Severance costs, net (1)	186		3,897
Facility and other exit costs	666		0

Other	1,906		601
Restructuring and other charges, net	$	4,582	$	4,498

(1) Severance costs, net for the three months ended March 31, 2020 were primarily related to termination benefits arising from the shutdown and ~~2019:~~relocation of an operating site in Northern Ireland.

For the three months ended
March 31, 2020 March 31, 2019
Severance costs, net ⁽¹⁾
$ 3,897
$ 2,855
Other ⁽²⁾
601
2,454
Restructuring and other charges, net $ 4,498
$ 5,309

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⁽¹⁾	Severance costs, net for the three months ended March 31, 2020 were primarily related to termination benefits arising from the shutdown and relocation of an operating site in Northern Ireland. Severance costs for the three months ended March 31, 2019 were primarily related to limited workforce reductions of manufacturing, engineering, and administrative positions.


⁽²⁾	~~Other charges in the three months ended March 31, 2020 and 2019 were primarily related to deferred compensation incurred in connection with the acquisition of GIGAVAC, LLC.~~

The following table presents ~~changes to~~a rollforward of the severance portion of our restructuring ~~liability during~~obligations for the three months ended March 31, ~~2020:~~2021.

Severance
Balance at December 31, 2019 $ 14,779
Charges, net of reversals 3,897
Payments (5,356 )
Foreign currency remeasurement (500 )
Balance at March 31, 2020 $ 12,820


	Q2 2020 Global Restructure Program		Other		Total
Balance at December 31, 2020	$	10,842	$	4,037	$	14,879
Charges, net of reversals	1,073		186		1,259
Payments	(3,054)		(519)		(3,573)
Foreign currency remeasurement	(207)		(17)		(224)
Balance at March 31, 2021	$	8,654	$	3,687	$	12,341

The severance liability as of March 31, 2021 was entirely recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheet.

6. Other, Net

The following table presents the components of other, net for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

For the three months ended
March 31, 2020 March 31, 2019
Currency remeasurement gain on net monetary assets $ 1,553
$ 1,865
(Loss)/gain on foreign currency forward contracts (3,781 ) 478
(Loss)/gain on commodity forward contracts (5,575 ) 1,123
Net periodic benefit cost, excluding service cost (4,381 ) (287 )
Other (97 ) 10
Other, net $ (12,281 ) $ 3,189


	For the three months ended
	March 31, 2021		March 31, 2020
Currency remeasurement (loss)/gain on net monetary assets	$	(1,477)	$	1,553
Loss on foreign currency forward contracts	(958)		(3,781)
Loss on commodity forward contracts	(1,153)		(5,575)
Loss on debt refinancing	(30,066)		0
Net periodic benefit cost, excluding service cost	(2,410)		(4,381)
Other	(3,333)		(97)
Other, net	$	(39,397)	$	(12,281)

7. Income Taxes

The following table presents the ~~(benefit~~provision for/(benefit from)~~/provision for~~ income taxes for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

For the three months ended
March 31, 2020 March 31, 2019
(Benefit from)/provision for income taxes $ (1,516 ) $ 21,467


	For the three months ended
	March 31, 2021		March 31, 2020


Provision for/(benefit from) income taxes	$	20,281	$	(1,516)

The ~~decrease~~increase in total tax from the prior period was predominantly related to the overall ~~decrease~~increase in income before ~~tax~~taxes as impacted by the mix of profits in the various jurisdictions in which we operate.

In response to the global financial and health crisis caused by ~~the coronavirus pandemic ("COVID-19"),~~COVID-19, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") on March 27, 2020. Federal limitations on interest deductions were reduced in connection with this legislation, and we recorded a deferred tax benefit of

~~$7.5~~ $7.5 million in the three months ended March 31, 2020, as we were able to utilize additional interest expense that was previously subject to a valuation allowance.

The ~~(benefit~~provision for/(benefit from)~~/provision for~~ income taxes consists ~~of:~~

of (1) 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

(2) deferred tax expense (or benefit), which represents adjustments in book-to-tax basis differences primarily related to ~~(1)~~(a) the step-up in fair value of fixed and intangible assets acquired in connection with business combination transactions, ~~(2)~~(b) changes in net operating loss carryforwards, ~~(3)~~(c) changes in tax rates, and ~~(4)~~(d) changes in our assessment of the realizability of our deferred tax assets.

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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 outstanding during the period. For the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 the weighted-average ordinary shares outstanding used to calculate basic and diluted net income per share were as follows:

For the three months ended
March 31, 2020 March 31, 2019
Basic weighted-average ordinary shares outstanding 157,599
163,247
Dilutive effect of stock options 334
635
Dilutive effect of unvested restricted securities 452
639
Diluted weighted-average ordinary shares outstanding 158,385
164,521

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


	For the three months ended
	March 31, 2021	March 31, 2020
Basic weighted-average ordinary shares outstanding	157,764	157,599
Dilutive effect of stock options	708	334
Dilutive effect of unvested restricted securities	758	452
Diluted weighted-average ordinary shares outstanding	159,230	158,385

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

For the three months ended
March 31, 2020 March 31, 2019
Anti-dilutive shares excluded 1,385
1,013
Contingently issuable shares excluded 596
477


	For the three months ended
	March 31, 2021	March 31, 2020
Anti-dilutive shares excluded	6	1,385
Contingently issuable shares excluded	950	596

9. Inventories

The following table presents the components of inventories as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

March 31, 2020 December 31, 2019
Finished goods $ 205,819
$ 197,531
Work-in-process 100,057
104,007
Raw materials 208,398
205,140
Inventories $ 514,274
$ 506,678


	March 31, 2021		December 31, 2020
Finished goods	$	152,729	$	170,488
Work-in-process	96,730		87,006
Raw materials	218,987		193,511
Inventories	$	468,446	$	451,005

10. Pension and Other Post-Retirement Benefits

The components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

U.S. Plans Non-U.S. Plans
Defined Benefit Retiree Healthcare Defined Benefit Total
2020 2019 2020 2019 2020 2019 2020 2019
Service cost $ —
$ —
$ 2
$ 2
$ 769
$ 731
$ 771
$ 733
Interest cost 267
399
37
53
315
338
619
790
Expected return on plan assets (433 ) (451 ) —
—
(174 ) (175 ) (607 ) (626 )
Amortization of net loss 295
245
10
11
236
191
541
447
Amortization of prior service (credit)/cost —
—
(196 ) (327 ) 2
3
(194 ) (324 )
Loss on settlement 4,022
—
—
—
—
—
4,022
—
Net periodic benefit cost/(credit) $ 4,151
$ 193
$ (147 ) $ (261 ) $ 1,148
$ 1,088
$ 5,152
$ 1,020


	U.S. Plans								Non-U.S. Plans
	Defined Benefit				Retiree Healthcare				Defined Benefit				Total
	2021		2020		2021		2020		2021		2020		2021		2020
Service cost	$	0	$	0	$	2	$	2	$	978	$	769	$	980	$	771
Interest cost	120		267		21		37		404		315		545		619
Expected return on plan assets	(226)		(433)		0		0		(178)		(174)		(404)		(607)
Amortization of net loss	401		295		0		10		459		236		860		541
Amortization of prior service (credit)/cost	0		0		(159)		(196)		3		2		(156)		(194)
Loss on settlement	1,565		4,022		0		0		0		0		1,565		4,022

Net periodic benefit cost/(credit)	$	1,860	$	4,151	$	(136)	$	(147)	$	1,666	$	1,148	$	3,390	$	5,152

Components of net periodic benefit cost/(credit) other than service cost are presented in other, ~~net.~~net in the condensed consolidated statements of operations. Refer to Note ~~6, "Other, Net."~~6: Other, Net.

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11. Debt

Our long-term debt, ~~and~~ finance lease, and other financing obligations as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 consisted of the following:


	Maturity Date	March 31, 2021		December 31, 2020
Term Loan	September 20, 2026	$	454,938	$	456,096
4.875% 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	0		750,000
4.375% Senior Notes	February 15, 2030	450,000		450,000
3.75% Senior Notes	February 15, 2031	750,000		750,000
4.0% Senior Notes	April 15, 2029	750,000		0
Other		2,605		0

Less: discount		(8,416)		(9,605)
Less: deferred financing costs		(30,495)		(28,114)
Less: current portion		(7,235)		(754,630)
Long-term debt, net		$	3,961,397	$	3,213,747


Finance lease and other financing obligations		$	30,048	$	30,506
Less: current portion		(2,443)		(2,575)
Finance lease and other financing obligations, less current portion		$	27,605	$	27,931

Maturity Date March 31, 2020 December 31, 2019
Term Loan September 20, 2026 $ 459,568
$ 460,725
4.875% 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
450,000
Less: discount (11,220 ) (11,758 )
Less: deferred financing costs (23,359 ) (24,452 )
Less: current portion (4,630 ) (4,630 )
Long-term debt, net $ 3,220,359
$ 3,219,885

Finance lease and other financing obligations $ 30,745
$ 31,098
Less: current portion (2,465 ) (2,288 )
Finance lease and other financing obligations, less current portion $ 28,280
$ 28,810

Revolving Credit Facility

As of March 31, ~~2020 there was~~2021, we had $416.1 million available under our $420.0 million revolving credit facility (the "Revolving Credit Facility"), net of $3.9 million of obligations ~~related to~~in respect of outstanding letters of credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of March 31, ~~2020,~~2021, 0 amounts had been drawn against these outstanding letters of credit.

6.25% Senior Notes redemption

On February 3, 2021, we announced that we intended to redeem in full the $750.0 million aggregate principal amount outstanding on our 6.25% senior notes due 2026 (the "6.25% Senior Notes"). On February 15, 2021, the “make-whole” premium with respect to the 6.25% Senior Notes expired. Accordingly, we reflected the 6.25% Senior Notes as a current liability on our consolidated balance sheet as of December 31, 2020.

We redeemed the 6.25% Senior Notes on March 5, 2021 in accordance with the terms of the indenture under which the 6.25% Senior Notes were issued and the terms of the notice of redemption at a redemption price equal to 103.125% of the aggregate principal amount of the outstanding 6.25% Senior Notes, plus accrued and unpaid interest to (but not including) the redemption date. In ~~order~~addition to ~~enhance~~the $750.0 million aggregate principal amount outstanding, at redemption we paid the $23.4 million premium and $2.6 million accrued interest.

On March 29, 2021, our ~~financial flexibility~~indirect, wholly-owned subsidiary, Sensata Technologies B.V. ("STBV"), completed the issuance and sale of $750.0 million aggregate principal amount of 4.0% senior notes due 2029 (the "4.0% Senior Notes"). The 4.0% Senior Notes were issued under an indenture dated as of March 29, 2021 among STBV, as issuer, The Bank of New York Mellon, as trustee (the "Trustee"), and our guarantor subsidiaries (the "Guarantors") named therein (the "4.0% Senior Notes Indenture").

The 4.0% Senior Notes Indenture contains covenants that limit the ability of STBV and its subsidiaries to, among other things: incur liens; engage in ~~light~~sale and leaseback transactions; with respect to any subsidiary of ~~COVID-19, we executed~~STBV, incur indebtedness without such subsidiary’s guaranteeing the 4.0% Senior Notes; or consolidate, merge with, or sell, assign, convey, transfer, lease, or otherwise dispose of all or substantially all of their properties or assets to, another person. These covenants are subject to important exceptions and qualifications set forth in the 4.0% Senior Notes Indenture.

The 4.0% Senior Notes bear interest at 4.0% per year and mature on April 15, 2029. Interest is payable semi-annually on April 15 and October 15 of each year, commencing on October 15, 2021. The 4.0% Senior Notes are guaranteed by each of STBV's wholly-owned subsidiaries that is a ~~$400.0 million drawdown~~borrower or guarantor under the senior secured credit facilities (the "Senior Secured Credit Facilities") of STBV's wholly-owned subsidiary Sensata Technologies, Inc. ("STI") and the issuer or a guarantor under our existing senior notes as follows: STBV's 4.875% Senior Notes due 2023, 5.625% Senior Notes due 2024, and 5.0% Senior Notes due 2025; and STI's 4.375% Senior Notes due 2030 and 3.75% Senior Notes due 2031.

At any time, and from time to time, prior to April 15, 2024, STBV may redeem the 4.0% Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 4.0% Senior Notes being redeemed, plus a “make whole” premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time on or after April 15, 2024, STBV may redeem the 4.0% Senior Notes, in whole or in part, at the following prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, up to but excluding the redemption date.


Period beginning April 15,	Price
2024	102.000	%
2025	101.000	%
2026 and thereafter	100.000	%

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

Upon the occurrence of certain changes in control, each holder of the 4.0% Senior Notes will have the right to require STBV to repurchase the 4.0% Senior Notes at 101% of their principal amount plus accrued and unpaid interest, if any, up to but excluding the date of repurchase.

Upon changes in certain tax laws or treaties, or any change in the official application, administration, or interpretation thereof, STBV may, at its option, redeem the 4.0% 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, up to but excluding the redemption date, premium, if any, and all Additional Amounts (as defined in the 4.0% Senior Notes Indenture), if any, then due and which will become due on the ~~Revolving Credit Facility~~date of redemption.

On April 8, 2021, STBV completed the issuance and sale of an additional $250.0 million in aggregate principal amount of 4.0% Senior Notes (the “Additional Notes”). The Additional Notes were priced at 100.75% and were issued pursuant to the 4.0% Senior Notes Indenture, as supplemented by the First Supplemental Indenture, dated as of April 8, 2021, among STBV, the Guarantors, and the Trustee. The Additional Notes are consolidated and form a single class with the $750.0 million aggregate principal amount of 4.0% Senior Notes issued by STBV on ~~April 1, 2020.~~March 29, 2021 (the “Initial Notes”). The Additional Notes have the same terms as the Initial Notes, other than with respect to the date of issuance and the issue price.

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

Accounting for Debt Financing Transactions

We account for our debt financing transactions as disclosed in Note 2: Significant Accounting Policies of the audited consolidated financial statements and notes thereto included in our 2020 Annual Report.

In connection with the redemption of the 6.25% Senior Notes, we recorded a loss of $30.1 million, which included $23.4 million in premiums paid, with the remaining loss representing write-off of debt discounts and deferred financing costs. In connection with the issuance of the 4.0% Senior Notes, we recognized $9.6 million of deferred financing costs, which are presented as a reduction of long-term debt on our condensed consolidated balance sheets.

Accrued interest associated with our outstanding debt is included as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, accrued interest totaled ~~$47.1~~$44.8 million and ~~$42.8~~$53.6 million, respectively.

12. Commitments and Contingencies

We are ~~a defendant~~regularly involved in a ~~lawsuit,~~ ~~Wasica Finance Gmbh et al v. Schrader International Inc. et al, Case No. 13-1353-CPS, U.S.D.C., Delaware,~~ ~~in which the claimant alleges infringement~~number of ~~their patent (US 5,602,524) in connection with certain of our tire pressure monitoring system products. The patent in question has expired,~~claims and ~~as a result, the claimant seeks damages for past alleged infringement with interest and costs. The asserted patent is the U.S. counterpart of a German patent~~litigation matters that had been previously asserted against Schrader. Schrader succeeded in proving that German patent to be invalid. On February 14, 2020, the federal jury trial related to this lawsuit concluded, and the jury found Schrader International Inc. liable for damagesarise in the ~~amount~~ordinary course of ~~$31.2 million. As a result,~~business. Although it is not feasible to predict the outcome of these matters, based upon our experience and current information known to us, we ~~recorded a loss~~do not expect the outcome of ~~$29.2 million~~these matters, either individually or in the ~~three months ended March 31, 2020 through cost~~aggregate, to have a material adverse effect on our results of revenue. We continue to deny any wrongdoing, have filed post-trial motions, and intend to appeal the jury's decision, including any final circuit court order against us. As of March 31, 2020, we have recorded an accrual of $31.2 million related to this matter in other long-term liabilities, based on timing of expected payment if our appeal is unsuccessful.operations, financial position, and/or cash flows.

13. Shareholders' Equity

From time to time, our Board of Directors has authorized various share repurchase ~~programs. The authorized amount of our various share repurchase~~ programs, which may be modified or terminated by our Board ~~of Directors~~ at any time. We currently have an authorized $500.0 million share repurchase program under which approximately $302.3 million remained available as of March 31, ~~2020.~~2021. On April 2, 2020, we announced a temporary suspension of this share repurchase program, which will continue to ~~enhance our financial flexibility in light of the uncertainties surrounding COVID-19.~~remain on hold until market conditions show greater improvement and stability.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss for the three months ended March 31, ~~2020~~2021 were as follows:

The ~~details of the~~ amounts reclassified from accumulated other comprehensive loss for the three months ended March 31, 2021 and 2020 ~~and 2019 are~~were as follows:

Net revenue ⁽¹⁾

Cost of revenue ⁽¹⁾

__________________________

⁽¹⁾ Refer to Note 15: Derivative Instruments and Hedging Activities for additional information 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 information on net periodic benefit cost/(credit).

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 March 31, ~~2020~~2021 and December 31, ~~2019~~2020 are shown in the below table. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.

March 31, 2020 December 31, 2019
Assets
Foreign currency forward contracts $ 20,095
$ 23,561
Commodity forward contracts 2,079
3,623
Total $ 22,174
$ 27,184

Liabilities
Foreign currency forward contracts $ 24,052
$ 1,959
Commodity forward contracts 4,993
462
Total $ 29,045
$ 2,421

Measured on a Nonrecurring Basis

We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, ~~2019~~2020 and determined that they were not impaired. ~~As of~~During the three months March 31, ~~2020, we~~2021, no events or changes in circumstances occurred that would have ~~assessed~~triggered the ~~market impact~~need for an additional impairment review of ~~COVID-19, including the resulting impact on our forecasts, and have determined that our intangible assets (including goodwill) were not impaired as of March 31, 2020.~~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 as of March 31, ~~2020~~2021 and December 31, ~~2019.~~2020. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.

Carrying Value ⁽¹⁾

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

Cash and cash equivalents 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 for which we use the measurement alternative prescribed in ~~FASB ASC~~Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments - Equity ~~Securities.~~ Securities. Such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar ~~investment~~investments of the same issuer. There were no impairments or changes resulting from observable transactions for any of these investments and no adjustments ~~have been~~were made to their carrying values.

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

March 31, 2020 December 31, 2019
Quanergy Systems, Inc $ 50,000
$ 50,000
Lithium Balance —
3,700
Total $ 50,000
$ 53,700


	March 31, 2021		December 31, 2020
Quanergy Systems, Inc.	$	50,000	$	50,000
Other	15,000		15,000

Total	$	65,000	$	65,000

15. Derivative Instruments and Hedging Activities

Hedges of Foreign Currency Risk

For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, amounts excluded from the assessment of effectiveness of our foreign currency forward contracts that are designated as cash flow hedges were not material. As of March 31, ~~2020,~~2021, we ~~estimate~~estimated that ~~$3.5~~$6.7 million of net gains will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending March 31, ~~2021.~~2022.

As of March 31, ~~2020,~~2021, we had the following outstanding foreign currency forward contracts:

~~Designation~~ ⁽¹⁾

_________________________

⁽¹⁾

(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

As of March 31, ~~2020,~~2021, we had the following outstanding commodity forward contracts, none of which were designated for hedge accounting treatment in accordance with FASB ASC Topic 815, Derivatives and Hedging:

Financial Instrument Presentation

The following table presents the fair values of our derivative financial instruments and their classification in the condensed consolidated balance sheets as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

Asset Derivatives Liability Derivatives
Balance Sheet Location March 31, 2020 December 31, 2019 Balance Sheet Location March 31, 2020 December 31, 2019
Derivatives designated as hedging instruments
Foreign currency forward contracts Prepaid expenses and other current assets $ 17,224
$ 20,957
Accrued expenses and other current liabilities $ 17,139
$ 1,055
Foreign currency forward contracts Other assets 2,840
2,530
Other long-term liabilities 6,504
428
Total $ 20,064
$ 23,487
$ 23,643
$ 1,483

Derivatives not designated as hedging instruments
Commodity forward contracts Prepaid expenses and other current assets $ 1,635
$ 3,069
Accrued expenses and other current liabilities $ 3,603
$ 394
Commodity forward contracts Other assets 444
554
Other long-term liabilities 1,390
68
Foreign currency forward contracts Prepaid expenses and other current assets 31
74
Accrued expenses and other current liabilities 409
476
Total $ 2,110
$ 3,697
$ 5,402
$ 938


	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	March 31, 2021		December 31, 2020		Balance Sheet Location	March 31, 2021		December 31, 2020
Derivatives designated as hedging instruments
Foreign currency forward contracts	Prepaid expenses and other current assets	$	13,616	$	11,281	Accrued expenses and other current liabilities	$	6,767	$	18,834
Foreign currency forward contracts	Other assets	3,558		4,728		Other long-term liabilities	742		5,182
Total		$	17,174	$	16,009		$	7,509	$	24,016
Derivatives not designated as hedging instruments
Commodity forward contracts	Prepaid expenses and other current assets	$	5,830	$	7,598	Accrued expenses and other current liabilities	$	939	$	149
Commodity forward contracts	Other assets	766		1,304		Other long-term liabilities	811		161
Foreign currency forward contracts	Prepaid expenses and other current assets	394		154		Accrued expenses and other current liabilities	105		644
Total		$	6,990	$	9,056		$	1,855	$	954

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

The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income/(loss)~~/income~~ for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

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 the indebtedness has been accelerated by the lender, then we could also be declared in default on our derivative obligations.

As of March 31, ~~2020,~~2021, the termination value of outstanding derivatives in a liability position, excluding any adjustment for non-performance risk, was ~~$29.3~~$9.4 million. As of March 31, ~~2020,~~2021, we had 0t posted any cash collateral related to these agreements. If we breach any of the default provisions on any of our indebtedness as described above, we could be required to settle our obligations under the derivative agreements at their termination values.

On ~~September 13, 2019,~~February 11, 2021, we ~~completed~~entered into a securities purchase agreement (the "SPA") to acquire all of the outstanding equity interests of Xirgo Technologies, LLC ("Xirgo"), which is a leading provider of telematics and data insight, headquartered in Camarillo, California. The product offerings and technology of Xirgo will augment our existing portfolio in advancing our Smart & Connected megatrend initiative. We expect to integrate Xirgo into our Performance Sensing reportable segment. The transaction contemplated by the SPA closed on April 1, ~~acquisition~~2021 for ~~approximately $30~~an aggregate purchase price of $400.0 million ~~net~~ of cash ~~acquired.~~consideration, subject to certain post-closing items. Due to recent closing of this acquisition, the initial accounting for this

acquisition is incomplete and we are not able to provide the disclosures otherwise required by FASB ASC Topic 805, Business Combinations.

17. Segment Reporting

In the three months ended June 30, 2020, we altered the way we measure segment operating income in order to align with a change to the performance measures provided to and used by our chief operating decision maker for purposes of assessing performance and deciding how to allocate resources to each segment. Whereas research and development ("R&D") and selling, general and administrative ("SG&A") expenses related to our megatrend initiatives were historically allocated to our operating segments, beginning in the second quarter of 2020 these amounts are presented within corporate and other. Prior period information has been recast to reflect this revised presentation.

We operate in, and report financial information for, the following 2 reportable ~~segments,~~segments: Performance Sensing and Sensing ~~Solutions,~~Solutions. In the fourth quarter of 2020, we divided the Performance Sensing reportable segment (which was previously also an operating segment) into 2 operating segments, Automotive and HVOR, each of which ~~is also~~meet the criteria for aggregation in FASB ASC Topic 280, Reportable Segments. No change was made to the composition of the Sensing Solutions reportable segment, which remains an operating segment. None of the preceding changes resulted in any impact on the overall composition of our reportable segments and prior periods were not required to be recast for this change.

Our operating segments are businesses that we manage as components of an enterprise, for which separate financial information is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and assess performance.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes amortization of intangible assets, restructuring and other charges, net, certain costs associated with our strategic megatrend initiatives, and certain corporate ~~costs/~~costs or credits not associated with the operations of the segment, including share-based compensation expense and a portion of depreciation expense associated with assets recorded in connection with acquisitions. Corporate and other costs excluded from an operating segment’s performance are separately stated below and also include costs that are related to functional areas, such as finance, information technology, legal, and human resources.

We believe that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of our segments. However, this measure should be considered in addition to, and not as a substitute for, or superior to, operating income or other measures of financial performance prepared in accordance with U.S. GAAP. The accounting policies of each of our reporting segments are materially consistent with those in the summary of significant accounting policies as described in Note ~~2, "Significant~~2: Significant Accounting ~~Policies"~~Policies of the audited consolidated financial statements and notes thereto included in our 2020 Annual ~~Report on Form 10-K for the year ended December 31, 2019.~~Report.

The following table presents net revenue and segment operating income for the ~~reported~~reportable segments and other operating results not allocated to the ~~reported~~reportable segments for the three months ended March 31, 2021 and 2020 ~~and 2019:~~(recast to reflect realignment of performance measures in the second quarter of 2020 as discussed above):

For the three months ended
March 31, 2020 March 31, 2019
Net revenue:
Performance Sensing $ 568,689
$ 640,028
Sensing Solutions 205,580
230,471
Total net revenue $ 774,269
$ 870,499
Segment operating income (as defined above):
Performance Sensing $ 129,062
$ 150,509
Sensing Solutions 55,949
74,969
Total segment operating income 185,011
225,478
Corporate and other (88,822 ) (41,430 )
Amortization of intangible assets (33,092 ) (36,143 )
Restructuring and other charges, net (4,498 ) (5,309 )
Operating income 58,599
142,596
Interest expense, net (39,403 ) (39,253 )
Other, net (12,281 ) 3,189
Income before taxes $ 6,915
$ 106,532

Table of Contents

~~18. Subsequent Events~~

On April 2, 2020, we announced a series of actions taken in response to COVID-19. These actions are designed to protect the health and safety of our employees, enable us to continue to serve critical customer needs, and further enhance our financial flexibility. Actions taken to enhance our financial flexibility included a temporary suspension of our share repurchase program and a $400.0 million drawdown on the Revolving Credit Facility on April 1, 2020, leaving us with cash on hand of approximately $1.2 billion on that date.

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 the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These forward-looking statements also relate to our future prospects, developments, and business ~~strategies and~~strategies. These forward-looking statements 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 not the 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 future events impacting us. These statements are subject to uncertainties and other important factors relating to our operations and business environment, all of which are difficult 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 by forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in, or suggested by, such forward-looking statements are reasonable, 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 will have on our results of operations and financial condition.

We believe that the following important factors, among others (including those ~~set forth here and~~ described in Item ~~1A, "Risk~~1A: Risk Factors", included in our 2020 Annual ~~Report on Form 10-K for the year ended December 31, 2019)~~Report), could affect our future performance and the liquidity and value of our securities and cause our actual results to differ materially from those expressed or implied by forward-looking statements made by us or on our behalf:

•Future risks and existing uncertainties associated with the COVID-19 pandemic, which continues to have a significant adverse impact on our business and operations including: (i) full or partial shutdowns of our facilities as mandated by government decrees, (ii) limited ability to adjust certain costs due to government actions, (iii) significant travel restrictions and “work-from-home” orders limiting the availability of our workforce, (iv) supplier constraints and supply-chain interruptions, (v) logistics challenges and limitations, (vi) reduced demand from certain customers, ~~(vi)~~(vii) uncertainties associated with a protracted economic slowdown that could negatively affect the financial condition of our customers and suppliers, and ~~(vii)~~(viii) uncertainties and volatility in the global capital markets;

~~business disruptions due to natural disasters or other disasters outside our control, such as the global coronavirus (COVID-19) pandemic.~~

•adverse conditions or competition in the industries upon which we are dependent, including the automotive industry;

~~competitive pressure from customers that could require us to reduce prices or result in reduced demand;~~

•market acceptance of new product introductions and product innovations;

~~supplier interruption or non-performance, limiting our access to manufactured components or raw materials;~~

•supplier interruption or non-performance, limiting our access to manufactured components or raw materials;

•risks related to the acquisition or disposition of businesses, or the restructuring of our business;

•labor disruptions or increased labor costs;

•competitive pressure from customers that could require us to reduce prices or result in reduced demand;

•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;

•our ability to attract and retain key senior management and qualified technical, sales, and other personnel;

•foreign currency risks, changes in ~~socio-economic~~socioeconomic 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 senior notes indentures;

•changes to current policies, such as trade tariffs, by ~~the U.S. government;~~various governments worldwide;

•risks related to the potential for goodwill impairment;

•the impact of challenges by taxing authorities of our historical and future tax positions or our allocation of taxable income among our subsidiaries, unfavorable developments in taxation sentiments in countries where we do business, and challenges to the sovereign taxation regimes of EU member states by the European Commission and the Organization for Economic Co-operation and Development;

•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.

In addition, the extent to which the COVID-19 pandemic will continue to impact our business and financial results going forward will be dependent on future developments, such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable.

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 expressly qualified 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 urge readers to review carefully the risk factors described in our 2020 Annual Report ~~on Form 10-K for the year ended December 31, 2019~~ and in the other documents that we file with the U.S. Securities and Exchange ~~Commission.~~Commission (the "SEC"). You can read these documents at www.sec.gov or on our website at www.sensata.com.

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 financial statements and notes thereto included in our 2020 Annual Report, ~~on Form 10-K for the year ended December 31, 2019,~~ filed with the ~~U.S. Securities and Exchange Commission~~SEC on February ~~11, 2020,~~12, 2021, and the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

The COVID-19 pandemic ~~has~~ caused widespread disruptions to our ~~Company,~~company, employees, customers, suppliers, and ~~communities. During~~communities in fiscal year 2020. In the first quarter of 2020, these disruptions were primarily limited to our manufacturing operations in China, most of which were closed for approximately three weeks during the quarter due to government mandates. As the virus spread to the rest of the world in March 2020, most of our ~~other~~ operations outside of China also ~~were impacted. As~~began to experience the impacts of ~~March 31, 2020, we were still experiencing significant disruptions, and at a minimum, we expect those disruptions to continue throughout~~ the ~~second quarter of 2020.~~pandemic. These disruptions ~~include,~~included, depending on the specific location, full or partial shutdowns of our facilities as mandated by government decrees, limited ability to adjust certain costs due to government actions, significant travel restrictions and “work-from-home” orders limiting the availability of our workforce, supplier constraints and material supply-chain interruptions, logistics challenges and limitations, and reduced demand from certain customers.

We acted early during the pandemic to reduce our cost structure while continuing to invest in megatrends that are shaping our end markets that we believe will enable us to deliver long-term sustainable growth. As a result, we have continued to capitalize on rapidly improving markets and supported our customers as they have returned to higher levels of production late in 2020 and during the first quarter of 2021. However, while the most severe impacts of the COVID-19 pandemic appear to be behind us, we continue to monitor leading economic indicators and third-party forecasts to help form our view of future demand.

First quarter results

The economic recovery we experienced during the second half of 2020 continued to gain momentum during the first quarter of 2021. Improved market results, combined with our response to increased demand, drove net revenue growth of 21.7% compared to the first quarter of 2020. This represented 790 basis points of market outgrowth. We use the term "market outgrowth" to describe the impact of an increasing quantity and value of our products used in customer systems and applications. It is only loosely correlated to normal unit demand fluctuations in the markets we serve.

In the first quarter of 2021, Performance Sensing net revenue increased 25.6% and Sensing Solutions net revenue increased 10.9% from the first quarter of 2020. Our automotive and HVOR businesses delivered market outgrowth of 910 basis points and 1,070 basis points, respectively. Refer to Results of Operations—Net Revenue included elsewhere in this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") for additional discussion.

Operating income increased 168.7% to $157.5 million in the first quarter of 2021, compared to $58.6 million in the first quarter of 2020, primarily as a result of the increased revenue discussed above and improved gross margin. The extent of this increase is a testament to our leading market positions and the strength and flexibility of our manufacturing and commercial model. Refer to Results of Operations—Operating costs and expenses—Cost of revenue included elsewhere in this MD&A for additional discussion of our improved gross margin.

Net income increased $45.3 million to $53.7 million in the first quarter of 2021, compared to $8.4 million in the first quarter of 2020. This increase was primarily a result of increased operating income, partially offset by the loss on redemption of the 6.25% Senior Notes as discussed at Results of Operations—Other, net and higher taxes as discussed at Results of Operations—Provision for/(benefit from) income taxes.

Forward-looking information

For the full year 2021, while a degree of market uncertainty remains, in particular with respect to the impact of the industry-wide semiconductor shortage, we are anticipating a continuation of improved and stable economic and business conditions. We are also anticipating a return to normal seasonality. We continue to expect to deliver industry-leading margins for our shareholders, while also increasing investments in our growth opportunities and our people. Our targeted market outgrowth for the automotive business is 400-600 basis points. Our targeted market outgrowth for the HVOR business is 600-800 basis points. For the past three years, on average, we have delivered market outgrowth in our automotive and HVOR businesses of 560 basis points and 780 basis points, respectively, near the top of those ranges.

Automotive production is expected to rebound sharply this year from last year, but at a pace slightly lower than expected in February given production slowdowns caused by the global semiconductor shortage. Global automotive production for the full year 2021 is now expected to grow 12% from the prior year. Record low inventory levels at our automotive customers, especially in North America, will help propel strong growth later in 2021. Offsetting the slower than expected automotive production growth, our HVOR and industrial end markets are now expected to grow faster in 2021 than we had communicated in February.

One headwind affecting our outlook for 2021 is the expected impact from the global semiconductor shortage facing the automotive supply chain, as well as other sectors, due in part to large-scale shutdowns early in 2020 caused by the COVID-19 ~~outbreak did~~pandemic. Semiconductors are the technology used to make microchips, and this shortage has resulted in paused production on certain vehicles and increased costs to procure microchips. This shortage has impacted our margins in the first quarter of 2021, and we believe it will continue to have ~~a negative~~an adverse impact on our operating costs in the remainder of fiscal year 2021.

We continue to demonstrate progress in our megatrend initiatives as we increase our investments to pursue these large, fast-growing markets driven by secular trends. We intend to expand our solutions for these areas organically, through third party collaboration, and through acquisitions, including technology collaborations and partnerships with third parties. We see numerous opportunities to utilize our strong financial position, engineering capabilities, supply chain, and customer relationships to meaningfully enlarge our addressable markets through organic efforts as well as bolt-on acquisitions and partnerships within these megatrends.

Our automotive addressable market is large today and growing rapidly. Applications in internal combustion vehicles make up most of our current automotive addressable market, which is expected to continue to grow over the next 10 years, even with the shift in type of vehicles produced. In addition, while the Electrification applications that we serve represent a smaller market today, these applications are expected to grow very rapidly until they become an even larger opportunity for us than internal combustion engines by 2030. As a result, we’re expecting a doubling of our automotive addressable market by 2030.

The rapid introduction of new electric vehicles provides a healthy tailwind for our revenue growth. Our content in electric vehicles represents a 20% uplift in content value as compared to internal combustion vehicles of a similar class. This content uplift is derived from the broad array of our sensors and other components that we design into battery electric vehicles, in many cases using the same underlying technology product families that we use in internal combustion vehicles. Additionally, certain sensors carry over directly from internal combustion vehicles, such as brake pressure and tire pressure sensors. We also build additional sensors or devices unique to electric vehicles, such as contactors and electric motor position sensors. We are broadening and deepening our product portfolio to support this expanding segment. In the first quarter, ~~2020 results,~~we completed the acquisition of Lithium Balance to add battery management systems to our product capabilities.

In addition, we achieved a meaningful milestone in our Electrification megatrend initiative when we agreed to a joint venture with Churod Electronics ("Churod") on April 8, 2021. This joint venture extends our electrical protection capabilities to mass-market electric vehicles and other electrified equipment worldwide and expands our contactor capabilities in the automotive market to vehicles that have shorter ranges and longer charging times, which are more common in Asia. This enables us to offer a broader electrification solution set for electric vehicle manufacturers globally. The joint venture will provide medium-voltage contactors to transportation original equipment manufacturers ("OEMs") in China, and we ~~expect it~~will sell the product line to ~~have~~customers elsewhere in the world. Churod will contribute access to its ceramic, high-levitation contactor intellectual property. These contactors are optimized for medium-voltage applications in the 150 amp to 400 amp range common in mass-market vehicles. They will also dedicate engineering resources and contribute manufacturing equipment to the joint venture. Sensata will contribute $9.5 million and will dedicate application engineers and salespeople.

Our Electrification megatrend initiative does not only represent a ~~negative impact~~ market opportunity in electric vehicles, but also electrified heavy vehicles and the charging infrastructure necessary to support this ecosystem. We see additional opportunities in industrial and grid applications, some of which are more nascent today. Sensata is already a leading provider of high-voltage protection

on ~~our second quarter 2020 results. The extent~~electric vehicles and charging infrastructure and we seek to be the partner of choice for heavy vehicle and industrial OEMs transitioning to electrified solutions as well. We also intend to participate in other areas of the ~~impact~~evolving market that enable Electrification to become more widespread.

In our Smart & Connected megatrend initiative, we acquired Xirgo, a leading telematics and data insights provider for fleet management across the transportation and logistics segments, on April 1, 2021. Refer to the section Xirgo below for additional information. In addition, during the first quarter of 2021, we signed up another North American fleet customer to begin installation of our ~~second~~Smart & Connected solution set, demonstrating our ability to move from selling hardware to providing data insight solutions on a monthly recurring subscription model.

We believe that the overall market environment may continue to provide opportunities to further strengthen our portfolio through strategically important, value-creating acquisitions and/or joint ventures. In addition, we are pursuing new technology collaborations and partnerships with third parties to expand our capabilities and accelerate our megatrend growth.

On April 1, 2021, we completed the acquisition of Xirgo, headquartered in Camarillo, California, for $400 million. This acquisition represents a meaningful milestone in our Smart & Connected megatrend initiative, greatly expanding our ability to provide data insights to transportation and logistics customers, as well as adding a new customer base for these solutions. Xirgo brings a comprehensive suite of telematics and asset tracking devices, cloud-based data insight solutions, as well as emerging sensing applications and data services. Xirgo is complementary to, and meaningfully extends, our organic Smart & Connected solution for commercial fleet managers. This acquisition is consistent with our strategy to move beyond serving vehicle OEMs and engage with the broader transportation and logistics ecosystem. Xirgo expands our Smart & Connected addressable markets by adding cargo, container, and light-vehicle fleet management to our heavy vehicle OEM and fleet focus.

Xirgo is expected to generate more than $100 million in annualized revenue in 2021 and grow in excess of 20% per year over the next several years. We already have committed orders for more than 80% of the revenue we expect Xirgo to generate for the remainder of 2021. We expect to integrate Xirgo into our Performance Sensing reportable segment. Refer to Note 16: Acquisitions of our condensed consolidated financial statements, included elsewhere in this Quarterly Report on Form 10-Q, for additional information.

We have sufficient cash to take advantage of strategic opportunities as they arise. At December 31, 2020, we had cash and cash equivalents of $1,862.0 million. In the first quarter ~~2020 results~~of 2021, we generated operating cash flows of $104.5 million, ending the quarter with cash and ~~beyond~~cash equivalents of $1,893.9 million. In the first quarter of 2021, we used the flexibility provided by such a large cash balance to lower our cost of capital and extend our debt maturity, by redeeming the 6.25% Senior Notes and issuing the 4.0% Senior Notes. Refer to Overview—Debt Transactions below for additional discussion of these transactions. On April 1, 2021, we used $400.0 million to acquire Xirgo, which will help advance our Smart & Connected megatrend initiative. Refer to Overview—Xirgo above for additional discussion of this acquisition. In addition, on April 8, 2021, we took advantage of continued favorability in the capital markets and issued an additional $250.0 million of 4.0% Senior Notes.

On March 5, 2021, we took advantage of our large cash balance and redeemed the $750.0 million aggregate principal amount outstanding on the 6.25% Senior Notes. The redemption was at a price of 103.125% of principal, resulting in additional payment of $23.4 million upon redemption. We recorded a loss of $30.1 million as a result of this transaction, consisting primarily of the premium payment and write-off of deferred financing costs. Subsequently, on March 29, 2021, we issued $750.0 million aggregate principal amount of 4.0% Senior Notes (at par) and on April 8, 2021, we issued an additional $250.0 million of 4.0% Senior Notes at a price of 100.75%. The combined effect of these transactions was to extend the average maturity of our debt profile and lower our total cost of fixed debt by 80 basis points to 4.5% as compared to the first quarter of 2020. Refer to Note 11: Debt of our condensed consolidated financial statements, included elsewhere in this Quarterly Report on Form 10-Q, for additional information on these transactions and our overall debt. Proceeds from the 4.0% Senior Notes will be ~~dependent on~~used for general corporate purposes, to fund future ~~developments such as the length~~acquisitions and ~~severity of the crisis, the potential resurgence of the crisis,~~our capital deployment strategy, and for future ~~government actions~~debt repayments.

Q2 2020 Global Restructure Program

On June 30, 2020, in response to the ~~crisis and the overall~~potential long-term impact of the COVID-19 pandemic on our business, we commenced the ~~global economy~~Q2 2020 Global Restructure Program, consisting of voluntary and ~~capital markets, among many other factors, all~~involuntary reductions-in-force and certain site closures, in order to align our cost structure to the demand levels that we anticipate in the coming quarters. Over the life of the Q2 2020

Global Restructure Program, the reductions in force, which are subject to the laws and regulations of the countries in which the actions are planned, are expected to impact approximately 880 positions, for which we expect to incur severance charges of between $31.0 million and $33.7 million. In addition, over the life of the Q2 2020 Global Restructure Program, we expect to incur between $6.0 million and $8.0 million related to site closures.

The majority of the actions under the Q2 2020 Global Restructure Program are expected to be completed on or before June 30, 2021. Including charges of $1.8 million in the first quarter of 2021, we have recognized charges of $26.3 million since inception of the Q2 2020 Global Restructure Program, of which ~~remain highly uncertain~~$24.9 million have been severance charges and ~~unpredictable.~~$1.4 million have been facility exit costs. As of March 31, 2021, our severance liability related to the Q2 2020 Global Restructure Program was $8.7 million, which is presented in accrued expenses and other current liabilities of our condensed consolidated balance sheets. We expect to settle these charges with cash on hand.

~~Given these uncertainties and negative impact of~~We expect that the ~~COVID-19 pandemic, we have~~actions taken steps to manage and reduce operating costs and further enhance our financial flexibility, including the Board’s formation of a Health & Economic Response Committee to oversee the impact of the COVID-19 pandemic. These steps also include the following actions to reduce compensation expense in the second quarter 2020: (1) a 50% reduction to the cash retainers paid to non-employee directors; (2) a reduction to the Chief Executive officer salary to $1.00; (3) a 25% reduction to the salaries of all senior leaders of the Company; and (4) temporary furloughs or equivalent cost saving methods for the remaining workforce. We also are taking steps to reduce capital and discretionary expenditures and to ramp down certain production facilities in line with end market demand. We expect these actions toQ2 2020 Global Restructure Program will generate approximately ~~$15 million to $20~~$43 million in ~~cost~~annual savings ~~during~~of personnel- and facilities-related costs. We continue to realize savings in the ~~second~~in the first quarter of ~~2020.~~

~~Further,~~2021 related to ~~provide maximum financial flexibility due to COVID-19, we drew down $400.0~~both the Q2 2020 Global Restructure Program and from ongoing cost reduction activities and spend controls. Such savings represented approximately $7 million onin the ~~Revolving Credit Facility on April 1, 2020, resulting in cash on hand as~~first quarter of ~~that date of approximately $1.2 billion. In addition, effective April 1, 2020, we have temporarily suspended our share repurchase program.~~

Given the foregoing and unprecedented market uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations. The Company plans to continue taking actions to help mitigate, as best we can, the impact of the COVID-19 pandemic on the health and well-being of our employees, the communities in which we operate and our business partners, as well as the impact on our operations and business as a whole. However, there can be no assurance that the COVID-19 pandemic will not have a material adverse impact on our financial condition, liquidity, and results of operations.

Results of Operations

The table below presents our historical results of operations, in millions of dollars and as a percentage of net revenue, for the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020. We have derived the results of operations from the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

__________________________

* Represents the amount presented divided by total net revenue.

~~The following table presents a reconciliation~~ for the first quarter of ~~organic revenue decline, a non-GAAP financial measure,~~2021 increased 21.7% compared to ~~reported~~the first quarter of 2020 largely due to improved market results and our continued outperformance relative to those markets. Excluding an increase of 2.9% attributed to changes in foreign currency exchange rates, net revenue ~~decline,~~for the first quarter of 2021 increased 18.8% on an organic basis. This represents a market outgrowth of 790 basis points. We are continuing to monitor all of our end markets and customers to ensure that our resources are balanced against forecasts and prioritized against critical growth opportunities. Organic revenue growth (or decline), presented throughout this MD&A, is a financial measure ~~determined~~not presented in accordance with U.S. ~~GAAP, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019.~~GAAP. Refer to the section entitled Non-GAAP Financial Measures below for ~~further~~additional information onrelated to our use of organic revenue ~~decline.~~growth (or decline).

Foreign currency remeasurement⁽¹⁾

~~__________________________~~

~~For the three months ended March 31, 2020,~~ Performance Sensing net revenue ~~declined 11.1%, or 10.4%~~for the first quarter of 2021 increased 25.6% compared to the first quarter of 2020. Excluding an increase of 3.2% attributed to changes in foreign currency exchange rates, Performance Sensing net revenue for the first quarter of 2021 increased 22.4% on an organic basis. Both the automotive and HVOR businesses contributed positively to these results.

Automotive net revenue ~~declined 11.0%~~for the first quarter of 2021 grew 22.6% compared to the first quarter of 2020. Excluding growth of 3.3% attributed to changes in foreign currency exchange rates, automotive net revenue for the first quarter of 2021 grew 19.3% on an organic basis. This increase is primarily due to recovery of customer production combined with our continued outperformance relative to the automotive market, which was led by continued new product launches in powertrain and emissions, safety, and electrification-related applications and systems. Market outgrowth was 910 basis points compared to total market growth of 10.2% in the first quarter of ~~2020 versus~~2021.

HVOR net revenue for the ~~corresponding prior-year period.~~first quarter of 2021 grew 35.7% compared to the first quarter of 2020. Excluding ~~a 0.6% decline~~growth of 2.9% attributed to changes in foreign currency exchange ~~rate differences between the two periods, automotive~~rates, HVOR net revenue ~~declined 10.4%~~for the first quarter of 2021 grew 32.8% on an organic basis.

This increase is primarily due to recovery of customer production combined with our continued outperformance relative to the HVOR ~~net revenue declined 11.5%~~markets. Our China on-road truck business continued to achieve better than expected growth, primarily from the adoption of NS6 emissions regulations as well as the benefit from a wave of electromechanical operator controls being installed in ~~the three months ended March 31, 2020 versus the corresponding prior-year period. Excluding a 0.8% decline attributed~~new off-road equipment. Market outgrowth was 1,070 basis points compared to ~~foreign exchange rate differences between the two periods, HVOR net revenue declined 10.7% on an organic basis.~~

~~While our automotive business experienced a 10.4% organic revenue decline, our end-market production was down 19.5%~~total market growth of 22.1% in the first quarter of 2020 versus the corresponding prior-year period. The difference between the performance of our automotive business and that of the end-markets we serve is due primarily to two factors. First, we were able to alleviate the impact of end-market declines by delivering market outgrowth, driven by increased content in all regions, but particularly in China where we experienced strong content growth, following the adoption of NS6 emissions regulations. Additionally, we noted growth as the result of automotive OEMs, particularly in China, stocking inventory to ensure adequate supply levels in anticipation of reopening plants and ramping up production. We expect automotive end-markets to be worse in the second quarter of 2020 as OEM plant shutdowns and production declines continue. Our primary independent third-party source2021.

Sensing Solutions net revenue for information on automotive production in future periods is predicting a 47% decline in automotive production for the second quarter of 2020 and a 22% decline in automotive production for the full year 2020.

~~While our HVOR business generated a 10.7% organic revenue decline, end-market production was down 20.0% in~~ the first quarter of ~~2020 versus~~2021 increased 10.9% compared to the corresponding prior-year period. The difference between the performance of our HVOR business and the performance of the end-markets it serves is the result of market outgrowth, due primarily to increased content. Similar to our automotive business, a significant portion of this content came from China following the adoption of NS6 emissions regulations. We evaluate key economic indicators to gauge the health of our HVOR customers and the markets they serve, including freight load factors, truck inventory to sales ratios, building permits, industrial production, crop futures, and farm machinery. Based on some of these indicators, we expect HVOR end-markets to remain down throughout the secondfirst quarter of 2020.

~~Sensing Solutions~~

~~For the three months ended March 31, 2020,~~ Excluding growth of 2.1% attributed to changes in foreign currency exchange rates, Sensing Solutions net revenue ~~declined 10.8%, or 10.4%~~for the first quarter of 2021 grew 8.8% on an organic basis.

~~Industrial and other~~ The increase in net revenue ~~declined 12.8%~~was driven by continued growth in industrial markets (particularly HVAC), new electrification launches, and supply chain restocking, partially offset by the impacts of a decline in the aerospace industry. The decline in the aerospace industry has continued throughout fiscal year 2020 and into the first quarter of ~~2020 versus the corresponding prior-year period. Excluding a 0.5% decline attributed~~2021, reflecting reduced OEM production and significantly lower air traffic, which continues to ~~foreign exchange rate differences between the two periods, industrial and other net revenue declined 12.3% on an organic basis.~~

~~Aerospace net revenue declined 2.0%, on a reported and organic basis,~~negatively impact our aerospace aftermarket business. New product launches, primarily in the ~~first quarter of 2020 versus~~defense space, partially offset the ~~corresponding prior-year period.~~

~~Our industrial and other business observed a 15.0%~~significant aerospace market decline in the global end-markets it serves. These market declines were primarily attributed to China, where the COVID-19 pandemic resulted in government mandated shutdowns. The key economic indicators we routinely evaluate for our industrial end-markets, such as regional PMI data, GDP, and housing starts, help develop a forward-looking view of future demand levels. These currently indicate further deterioration in demand in the second quarter of 2020 and, as a result, we believe our industrial and other business will be adversely impacted.

While our Aerospace business generated a 2.0% organic revenue decline, end-market production was down 6.3% in the first quarter of 2020 versus the corresponding prior year period. For our aerospace business, this market outgrowth, which we define as the difference between the performance of our aerospace business and the performance of the end-markets it serves, was primarily attributed to increased content. Expectations for future OEM commercial and defense production build rates and passenger miles flown are good indicators of future demand for our aerospace products and aftermarket services. We expect demand to be down in the second quarter of 2020 due to continued lower OEM production levels driven by COVID-19 and the worldwide travel restrictions which will continue to be in place in the second quarter of 2020.

Operating costs and expenses

Operating costs and expenses for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 are presented, in millions of dollars and as a percentage of net revenue, in the following table. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

__________________________

* Represents the amount presented divided by total net revenue.

For the three months ended March 31, ~~2020,~~2021, cost of revenue as a percentage of net revenue ~~increased~~decreased from the prior ~~period. The largest driver~~period, primarily as a result of ~~this increase was~~(1) the impact in the first quarter of 2021 of ongoing savings resulting from cost reduction activities taken in fiscal year 2020 as well as (2) improvement of various factors that drove cost of revenue as a percentage of revenue up in the first quarter of 2020 (primarily related to the COVID-19 pandemic) such as volume declines and productivity headwinds from our manufacturing facilities running at lower than normal capacity. In addition, the first quarter of 2020 included a $29.2 million loss ~~recognized in cost of revenue~~ related to a judgment against us in an intellectual property litigation ~~with Wasica Finance Gmbh.~~(settled in the third quarter of 2020). These favorable impacts on cost of revenue as a percentage of revenue were partially offset by the impacts of the microchip shortage and the unfavorable effect of changes in foreign currency exchange rates.

Research and development expense

For the three months ended March 31, 2021, R&D expense increased $1.5 million (4.4%) from the prior year, primarily as a result of increased investments in our megatrend initiatives and the unfavorable effect of changes in foreign currency exchange

rates, partially offset by the impact in the first quarter of 2021 of ongoing savings resulting from cost reduction activities taken in fiscal year 2020.

Megatrend investments were $12.4 million during the first quarter, an increase of $5.8 million from the prior year quarter. We ~~continue~~currently expect approximately $50 to ~~deny any wrongdoing~~$55 million in megatrend-related spend in 2021 to design and ~~will appeal~~develop differentiated sensor-rich and data insight solutions to enter new markets, develop new business models, and design new product categories in the ~~decision.~~fast-growing and transformational megatrend vectors of Electrification and Smart & Connected solutions.

Selling, general and administrative expense

For the three months ended March 31, 2021, SG&A expense decreased $0.1 million to $77.1 million (8.2% of revenue) from $77.2 million (10.0% of revenue) in the prior year. The reduction in SG&A expense is primarily a result of (1) the impact on first quarter of 2021 of ongoing savings resulting from cost reduction activities taken in fiscal year 2020, (2) the 2020 completion of a project related to enhancements and improvements of our global operating processes to increase productivity and the resulting reduction in professional fees, and (3) lower share-based compensation expense, largely offset by (1) higher compensation to retain and incentivize critical employee talent, (2) increased acquisition-related transaction costs, (3) incremental SG&A expense related to acquired businesses, and (4) the unfavorable impact of changes in foreign currency exchange rates.

Amortization of intangible assets

For the three months ended March 31, 2021, amortization expense decreased $1.0 million (3.1%) from the prior year primarily due to the effect of the economic benefit amortization method.

Restructuring and other charges, net

For the three months ended March 31, 2021, restructuring and other charges, net increased $0.1 million (1.9%) from the prior year. In the three months ended March 31, 2021, we incurred $1.8 million of charges related to the Q2 2020 Global Restructure Program. Refer to Overview—Q2 2020 Global Restructure Program elsewhere in this MD&A for additional discussion on this program.Refer to Note ~~12, "Commitments~~5: Restructuring and ~~Contingencies,"~~Other Charges, Net of our condensed consolidated financial statements, included elsewhere in this Quarterly Report on Form 10-Q, for additional ~~information. Other drivers of the increase included productivity headwinds~~information on our restructuring and ~~volume declines primarily resulting from the impacts of COVID-19, partially offset by the positive impact of changes in foreign currency exchange rates.~~other charges, net.

In response to the impacts we are seeing to our business due to COVID-19, we will continue to align our costs to the demand we are experiencing by ramping down certain production facilities in line with end market demand. This will be a challenge in the second quarter of 2020, as we address COVID-19 and corresponding government actions, which are creating operating restrictions, supply disruptions and increased freight costs, which will negatively impact our future cost of revenue margin. We are also taking steps to reduce discretionary spend and to reduce or delay capital expenditures for the near future.Operating income

~~Research and development ("R&D") expense~~

~~For~~In the three months ended March 31, ~~2020, R&D expense decreased from the prior period, primarily as a result of the positive impact of changes in foreign currency exchange rates.~~

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

~~For the three months ended March 31, 2020, SG&A expense~~2021, operating income increased from the prior period, primarily due to higher compensation to retain and incentivize critical employee talent and increased costs related to optimization of our global operating processes to increase productivity.

~~Amortization of intangible assets~~

~~For the three months ended March 31, 2020, amortization expense decreased from the prior period due to the effect of the economic benefit method.~~

~~Restructuring and other charges, net~~

Restructuring and other charges, net for the three months ended March 31, 2020 and 2019 consisted of the following (amounts in the table below have been calculated based on unrounded numbers; accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Severance costs, net ⁽¹⁾

~~__________________________~~

~~Operating income~~

~~Operating income decreased $84.0~~$98.9 million, or ~~58.9%~~168.7%, to $157.5 million (16.7% of net revenue) compared to $58.6 million (7.6% of net revenue) in the three months ended March 31, ~~2020, from $142.6 million (16.4%~~2020. The increase was primarily due to higher volume and improved gross margin as described elsewhere in this Results of Operations at Net Revenueand Operating costs and expenses—Cost of revenue.

We expect that the microchip shortage will increase our operating costs in the second quarter of 2021, compared to the second quarter of 2020. If the impacts of this shortage are more severe than we expect, it could result in deterioration of our results, potentially for a longer period than currently anticipated.

Interest expense, net ~~revenue) in~~

For the three months ended March 31, ~~2019. The decline~~2021, interest expense, net increased $4.6 million (11.8%) from the prior year primarily as a result of interest expense on the 3.75% Senior Notes, which were issued on August 17, 2020, and lower cash interest income due to declining interest rates. These increases were partially offset by lower interest expense on the 6.25% Senior Notes, which were redeemed on March 5, 2021, and lower interest expense on our term loan facility (the "Term Loan") as a result of lower interest rates. In addition, on March 29, 2021, we issued $750.0 million aggregate principal amount of 4.0% Senior Notes, and on April 8, 2021, we issued an additional $250.0 million aggregate principal amount of 4.0% Senior Notes. Refer to Overview—Debt Transactions elsewhere in ~~operating income was due primarily~~this MD&A for additional information related to the ~~impact~~redemption of the ~~global economic downturn caused by COVID-19~~6.25% Senior Notes and the issuance of the 4.0% Senior Notes. On an annualized basis, after completing these transactions, interest expense on our fixed rate debt will be $6.9 million lower than it would have been had these transactions not been completed.

Other, net primarily includes currency remeasurement gains and losses on net monetary assets, gains and losses on foreign currency and commodity forward contracts not designated as ~~well as the $29.2 million loss recognized in cost of revenue~~hedging instruments, losses related to debt refinancing, and the portion of our net periodic benefit cost excluding service cost. In the three months ended March 31, 2021, other, net represented a ~~judgment against us~~loss of $39.4 million, an unfavorable change of $27.1 million compared to a net loss of $12.3 million in ~~an intellectual property litigation with Wasica Finance Gmbh (refer~~the three months

ended March 31, 2020. This change was driven primarily by the loss of $30.1 million recorded on redemption of the 6.25% Senior Notes. Refer to Overview—Debt Transactions included elsewhere in this MD&A for additional information related to the redemption of the 6.25% Senior Notes. Refer to Note ~~12, "Commitments and Contingencies,"~~6: Other, Net of our condensed consolidated financial statements, included elsewhere in this Quarterly Report on Form 10-Q, for ~~additional information).~~more detailed information on amounts included in other, net.

~~Other, net~~Provision for/(benefit from) income taxes

~~Other, net for~~For the three months ended March 31, 2020 and 2019 consisted of the following (amounts in the table below have been calculated based on unrounded numbers; accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Currency remeasurement loss on net monetary assets ⁽¹⁾

(Loss)/gain on foreign currency forward contracts ⁽²⁾

~~__________________________~~

~~(Benefit from)/~~provision for income taxes

of $20.3 million, compared to a benefit from income taxes of $1.5 million in the prior quarter. The ~~decrease~~increase in total tax from the prior ~~period~~periods was predominantly related to the overall ~~decrease~~increase in income before tax as impacted by the mix of profits in the various jurisdictions in which we ~~operate.~~

~~In response to COVID-19,~~operate as well as the nonrecurrence of the benefit recorded in the first quarter of 2020 as a result of the enactment of the CARES Act, which was enacted by the U.S. federal government ~~enacted the CARES Act~~ on March 27, ~~2020. Federal~~2020 in response to the global financial and health crisis caused by the COVID-19 pandemic. In connection with this legislation, federal limitations on interest deductions were reduced ~~in connection with this legislation,~~ and we recorded a deferred tax benefit of $7.5 million in the three months ended March 31, 2020, as we were able to utilize additional interest expense that was previously subject to a valuation allowance.

The ~~(benefit~~provision for/(benefit from)~~/provision for~~ income taxes consists ~~of:~~

Non-GAAP Financial Measures

This ~~Quarterly Report on Form 10-Q includes references to~~section provides additional information regarding certain non-GAAP financial measures, including organic revenue growth (or decline), adjusted operating income, adjusted operating margin, adjusted net income, adjusted earnings per share ("EPS"), free cash flow, net leverage ratio, and adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA"), which ~~is a~~are used by our management, Board of Directors, and investors. We use these non-GAAP financial ~~measure.~~ measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance, and as a factor in determining compensation for certain employees.

The use of our non-GAAP financial measures have limitations. They should be considered as supplemental in nature and are not intended to be considered in isolation from, or as an alternative to, reported net revenue growth (or decline), operating income, operating margin, net income, diluted EPS, operating cash flows, segment operating margin, total debt, finance lease, and other financing obligations, or EBITDA, respectively, calculated in accordance with U.S. GAAP. In addition, our measures of organic revenue growth (or decline), adjusted operating income, adjusted operating margin, adjusted net income, adjusted EPS, free cash flow, net leverage ratio, and adjusted EBITDA may not be the same as, or comparable to, similar non-GAAP financial measures presented by other companies.

Organic revenue growth (or decline)

Organic revenue growth (or decline) is defined as the reported percentage change in net revenue, calculated in accordance with U.S. GAAP, excluding the period-over-period impact of foreign currency exchange rate differences as well as the net impact of material acquisitions and divestitures for the 12-month period following the respective transaction date(s). ~~Refer to the~~ ~~Net revenue~~ ~~section above for a reconciliation of organic revenue decline to reported revenue decline.~~

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

~~Organic revenue growth (or decline) should be considered~~Adjusted operating income, adjusted operating margin, adjusted net income, and adjusted EPS

We define adjusted operating income as ~~supplemental~~operating income determined in ~~nature and~~accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are described below. Adjusted operating margin is ~~not intended to be considered in isolation or as a substitute for reported percentage change in~~calculated by dividing adjusted operating income by net revenue calculated in accordance with U.S. GAAP. ~~In addition,~~We define adjusted net income as follows: net income determined in accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are described in Non-GAAP Adjustments below. Adjusted EPS is calculated by dividing adjusted net income by the number of diluted weighted-average ordinary shares outstanding in the period.



	Cash Flow Hedges			Defined Benefit and Retiree Healthcare Plans			Accumulated Other Comprehensive Loss
Balance at December 31, 2019	$	16,546		$	(37,030	)	$	(20,484	)
Other comprehensive loss before reclassifications, net of tax	(13,041		)	—			(13,041		)
Reclassifications from accumulated other comprehensive loss, net of tax	(6,293		)	3,342			(2,951		)
Other comprehensive (loss)/income	(19,334		)	3,342			(15,992		)
Balance at March 31, 2020	$	(2,788	)	$	(33,688	)	$	(36,476	)


	Cash Flow Hedges		Defined Benefit and Retiree Healthcare Plans		Accumulated Other Comprehensive Loss
Balance at December 31, 2020	$	(6,733)	$	(42,802)	$	(49,535)
Other comprehensive loss before reclassifications, net of tax	11,530		0		11,530
Reclassifications from accumulated other comprehensive loss, net of tax	2,748		1,712		4,460
Other comprehensive income	14,278		1,712		15,990
Balance at March 31, 2021	$	7,545	$	(41,090)	$	(33,545)


	For the three months ended March 31,								For the three months ended March 31,				Affected Line in Condensed Consolidated Statements of Operations
Component	2020			2019				Component	2021		2020
Derivative instruments designated and qualifying as cash flow hedges:								Derivative instruments designated and qualifying as cash flow hedges:
Foreign currency forward contracts	$	(6,623	)	$	(3,219	)	Net revenue ⁽¹⁾	Foreign currency forward contracts	$	4,407	$	(6,623)		Net revenue (1)
Foreign currency forward contracts	(1,768		)	(128		)	Cost of revenue ⁽¹⁾	Foreign currency forward contracts	(743)		(1,768)			Cost of revenue (1)

Total, before taxes	(8,391		)	(3,347		)	Income before taxes	Total, before taxes	3,664		(8,391)			Income before taxes
Income tax effect	2,098			686			(Benefit from)/provision for income taxes	Income tax effect	(916)		2,098			Provision for/(benefit from) income taxes
Total, net of taxes	$	(6,293	)	$	(2,661	)	Net income	Total, net of taxes	$	2,748	$	(6,293)		Net income

Defined benefit and retiree healthcare plans	$	4,369		$	123		Other, net ⁽²⁾	Defined benefit and retiree healthcare plans	$	2,269	$	4,369		Other, net (2)

Income tax effect	(1,027		)	(40		)	(Benefit from)/provision for income taxes	Income tax effect	(557)		(1,027)			Provision for/(benefit from) income taxes
Total, net of taxes	$	3,342		$	83		Net income	Total, net of taxes	$	1,712	$	3,342		Net income


	March 31, 2021		December 31, 2020
Assets
Foreign currency forward contracts	$	17,568	$	16,163
Commodity forward contracts	6,596		8,902
Total	$	24,164	$	25,065

Liabilities
Foreign currency forward contracts	$	7,614	$	24,660
Commodity forward contracts	1,750		310
Total	$	9,364	$	24,970


Derivatives designated as hedging instruments	Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive Income/(Loss)				Location of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income	Amount of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income
	2021		2020			2021		2020
Foreign currency forward contracts	$	18,799	$	12,544	Net revenue	$	(4,407)	$	6,623
Foreign currency forward contracts	$	(3,425)	$	(29,630)	Cost of revenue	$	743	$	1,768



	For the three months ended
	March 31, 2020			March 31, 2019
Net revenue	$	774,269		$	870,499
Operating costs and expenses:
Cost of revenue	566,406			580,806
Research and development	34,453			35,096
Selling, general and administrative	77,221			70,549
Amortization of intangible assets	33,092			36,143
Restructuring and other charges, net	4,498			5,309
Total operating costs and expenses	715,670			727,903
Operating income	58,599			142,596
Interest expense, net	(39,403		)	(39,253		)
Other, net	(12,281		)	3,189
Income before taxes	6,915			106,532
(Benefit from)/provision for income taxes	(1,516		)	21,467
Net income	$	8,431		$	85,065
Basic net income per share:	$	0.05		$	0.52
Diluted net income per share:	$	0.05		$	0.52



	Ordinary Shares			Treasury Shares					Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
	Number	Amount		Number		Amount			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance as of December 31, 2019	172,561	$	2,212	(14,733	)	$	(749,421	)	$	1,725,091	$	1,616,357		$	(20,484	)	$	2,573,755
Surrender of shares for tax withholding	—	—		—		(15		)	—		—			—			(15		)
Stock options exercised	34	—		—		—			709		—			—			709
Vesting of restricted securities	1	—		—		—			—		—			—			—
Repurchase of ordinary shares	—	—		(898	)	(35,175		)	—		—			—			(35,175		)
Retirement of ordinary shares	—	—		—		15			—		(15		)	—			—
Share-based compensation	—	—		—		—			6,084		—			—			6,084
Net income	—	—		—		—			—		8,431			—			8,431
Other comprehensive loss	—	—		—		—			—		—			(15,992		)	(15,992		)
Balance as of March 31, 2020	172,596	$	2,212	(15,631	)	$	(784,596	)	$	1,731,884	$	1,624,773		$	(36,476	)	$	2,537,797



	For the three months ended March 31, 2020						For the three months ended March 31, 2019
	Performance Sensing		Sensing Solutions		Total		Performance Sensing		Sensing Solutions		Total
Automotive	$	437,703	$	8,236	$	445,939	$	492,015	$	11,428	$	503,443
HVOR ⁽¹⁾	130,986		—		130,986		148,013		—		148,013
Industrial	—		80,599		80,599		—		92,641		92,641
Appliance and HVAC ⁽²⁾	—		45,396		45,396		—		51,704		51,704
Aerospace	—		42,124		42,124		—		42,979		42,979
Other	—		29,225		29,225		—		31,719		31,719
Total	$	568,689	$	205,580	$	774,269	$	640,028	$	230,471	$	870,499



	Severance
Balance at December 31, 2019	$	14,779
Charges, net of reversals	3,897
Payments	(5,356		)
Foreign currency remeasurement	(500		)
Balance at March 31, 2020	$	12,820



	March 31, 2020		December 31, 2019
Finished goods	$	205,819	$	197,531
Work-in-process	100,057		104,007
Raw materials	208,398		205,140
Inventories	$	514,274	$	506,678


⁽¹⁾ Refer to Note 15: Derivative Instruments and Hedging Activities for additional information 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 information on net periodic benefit cost/(credit). 14	~~Refer to Note 15, "Derivative Instruments and Hedging Activities" for additional information 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 information on net periodic benefit cost/(credit).~~



	March 31, 2020		December 31, 2019
Quanergy Systems, Inc	$	50,000	$	50,000
Lithium Balance	—		3,700
Total	$	50,000	$	53,700


⁽¹⁾ (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.	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.



Derivatives designated as hedging instruments	Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive (Loss)/Income					Location of Net Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income	Amount of Net Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income
Derivatives designated as hedging instruments	2020			2019			2020		2019
Foreign currency forward contracts	$	12,544		$	9,118	Net revenue	$	6,623	$	3,219
Foreign currency forward contracts	$	(29,630	)	$	6,078	Cost of revenue	$	1,768	$	128



Derivatives not designated as hedging instruments	Amount of (Loss)/Gain Recognized in Net Income					Location of (Loss)/Gain Recognized in Net Income
Derivatives not designated as hedging instruments	2020			2019		Location of (Loss)/Gain Recognized in Net Income
Commodity forward contracts	$	(5,575	)	$	1,123	Other, net
Foreign currency forward contracts	$	(3,781	)	$	478	Other, net


Derivatives not designated as hedging instruments	Amount of Loss Recognized in Net Income				Location of Loss Recognized in Net Income
	2021		2020
Commodity forward contracts	$	(1,153)	$	(5,575)	Other, net
Foreign currency forward contracts	$	(958)	$	(3,781)	Other, net



	Three-Month Decline
	Performance Sensing		Sensing Solutions		Total
Reported net revenue decline	(11.1	)%	(10.8	)%	(11.1	)%
Percent impact of:
Foreign currency remeasurement⁽¹⁾	(0.7	)	(0.4	)	(0.7	)
Organic revenue decline	(10.4	)%	(10.4	)%	(10.4	)%


⁽¹⁾	Represents the percentage change in net revenue between the comparative periods attributed to differences in exchange rates used to remeasure foreign currency denominated revenue transactions into USD, which is the functional currency of the Company and each of its subsidiaries. The percentage amounts presented above related primarily to the USD to CNY and the EUR to USD exchange rates.



	For the three months ended
(In millions)	March 31, 2020		March 31, 2019
Severance costs, net ⁽¹⁾	$	3.9	$	2.9
Other ⁽²⁾	0.6		2.5
Restructuring and other charges, net	$	4.5	$	5.3


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


⁽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 for2021, we recorded a ~~more detailed discussion.~~


	For the three months ended March 31, 2021
(Dollars in millions, except per share amounts)	Operating Income		Operating Margin		Net Income		Diluted EPS
Reported (GAAP)	$	157.5	16.7	%	$	53.7	$	0.34
Non-GAAP adjustments:
Restructuring related and other	4.5		0.5		7.3		0.05
Financing and other transaction costs	4.6		0.5		32.8		0.21
Step-up depreciation and amortization	29.7		3.2		29.7		0.19
Deferred loss on derivative instruments	1.8		0.2		2.2		0.01
Amortization of debt issuance costs	—		—		1.7		0.01
Deferred taxes and other tax related	—		—		10.1		0.06
Total adjustments	40.6		4.3		83.9		0.53
Adjusted (non-GAAP)	$	198.1	21.0	%	$	137.6	$	0.86


~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk.~~


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



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 of Shares that May Yet Be Purchased Under the Plan or Programs (in millions) ⁽²⁾
January 1 through January 31, 2020	—		$	—	—	$	337.5
February 1 through February 29, 2020	90,159	(1)	$	44.49	89,831	$	333.5
March 1 through March 31, 2020	808,701		$	38.56	808,701	$	302.3
Quarter total	898,860		$	39.15	898,532	$	302.3


4.1		Indenture dated as of March 29, 2021 among Sensata Technologies B.V., the Guarantors named therein , and T he 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 March 30,2021 ).

4.2		Form of 4.0% Senior Notes due 2029 . (incorporated by reference to Exhibit 4 .1 of the Registrant's Current Report on Form 8-K filed on March 30, 2021)(included as Exhibit A thereto ).

4.3		Supplemental Indenture, date d as of April 8, 2021, among Sensata Technologies B.V., the Guarantors named therein , and The Bank of New York Mellon, as Trustee (incorpora ted by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on April 9, 2021).


~~Exhibit No.~~		~~Description~~

~~10.1~~		~~Third Amended and Restated Employment Agreement between Jeffrey Cote and Sensata Technologies Inc., dated March 1, 2020. *†~~

~~10.2~~		~~Third Amended and Restated Employment Agreement between Martha Sullivan and Sensata Technologies Inc., dated March 1, 2020. *†~~
10.1
~~10.3~~	~~Amendment to Martha Sullivan~~Form of Award ~~Agreements with~~Agreement for Restricted Stock Units under the Sensata Technologies Holding plc ~~dated February 29, 2020. *†~~

~~10.4~~	First Amended and Restated ~~Employment~~2010 Equity Incentive Plan. †*

10.2		Form of Award Agreement ~~between Yann Etienvre and~~for Performance Restricted Stock Units under the Sensata Technologies ~~Inc., dated March 5, 2020.*†~~

~~10.5~~	Holding plc First Amended and Restated ~~Employment Agreement between Vineet Nargolwala and Sensata Technologies Inc., dated March 5, 2020.†~~2010 Equity Incentive Plan. †

~~10.6~~31.1		~~Amended and Restated Employment Agreement between Hans Lidforss and Sensata Technologies Inc., dated March 5, 2020.*†~~

~~10.7~~	~~Form of Consent to Reduction in Salary April 1, 2020 through June 30, 2020 for Executive Officers.*†~~

~~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~~31.3		Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1		Certification of Chief Executive Officer , Chief Financial Officer , and Chief ~~Financial~~Accounting Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-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 embedded within 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)



SENSATA TECHNOLOGIES HOLDING PLC

/s/ Jeffrey Cote
(Jeffrey Cote) ~~President and~~ Chief Executive Officer and President (Principal Executive Officer)

/s/ Paul Vasington
(Paul Vasington) Executive Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ Maria Freve
(Maria Freve) Vice President and Chief Accounting Officer (Principal Accounting Officer)