Table of Contents
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, 20222023
OR
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 Wales98-1386780
(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 classTrading Symbol(s)Name of exchange on which registered
Ordinary Shares - nominal value €0.01 per shareSTNew 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 filerAccelerated filer
Non-accelerated filerSmaller 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, 2022, 156,917,75414, 2023, 152,894,406 ordinary shares were outstanding.


Table of Contents
TABLE OF CONTENTS
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 5.
Item 6.
 
2

Table of Contents
PART I—FINANCIAL INFORMATION

Item 1.Financial Statements.
SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(unaudited)
March 31,
2022
December 31,
2021
March 31,
2023
December 31,
2022
AssetsAssetsAssets
Current assets:Current assets:Current assets:
Cash and cash equivalentsCash and cash equivalents$1,608,481 $1,708,955 Cash and cash equivalents$1,034,134 $1,225,518 
Accounts receivable, net of allowances of $28,001 and $17,003 as of March 31, 2022 and December 31, 2021, respectively693,568 653,438 
Accounts receivable, net of allowances of $23,675 and $24,246 as of March 31, 2023 and December 31, 2022, respectivelyAccounts receivable, net of allowances of $23,675 and $24,246 as of March 31, 2023 and December 31, 2022, respectively759,752 742,382 
InventoriesInventories641,709 588,231 Inventories658,562 644,875 
Prepaid expenses and other current assetsPrepaid expenses and other current assets146,342 126,370 Prepaid expenses and other current assets187,747 162,268 
Total current assetsTotal current assets3,090,100 3,076,994 Total current assets2,640,195 2,775,043 
Property, plant and equipment, netProperty, plant and equipment, net822,633 820,933 Property, plant and equipment, net848,033 840,819 
GoodwillGoodwill3,555,369 3,502,063 Goodwill3,902,862 3,911,224 
Other intangible assets, net of accumulated amortization of $2,314,755 and $2,277,393 as of March 31, 2022 and December 31, 2021, respectively907,315 946,731 
Other intangible assets, net of accumulated amortization of $2,393,587 and $2,352,813 as of March 31, 2023 and December 31, 2022, respectivelyOther intangible assets, net of accumulated amortization of $2,393,587 and $2,352,813 as of March 31, 2023 and December 31, 2022, respectively959,469 999,722 
Deferred income tax assetsDeferred income tax assets104,226 105,028 Deferred income tax assets98,230 100,539 
Other assetsOther assets131,745 162,017 Other assets136,065 128,873 
Total assetsTotal assets$8,611,388 $8,613,766 Total assets$8,584,854 $8,756,220 
Liabilities and shareholders' equityLiabilities and shareholders' equityLiabilities and shareholders' equity
Current liabilities:Current liabilities:Current liabilities:
Current portion of long-term debt, finance lease and other financing obligationsCurrent portion of long-term debt, finance lease and other financing obligations$6,694 $6,833 Current portion of long-term debt, finance lease and other financing obligations$198,696 $256,471 
Accounts payableAccounts payable486,432 459,093 Accounts payable529,941 531,572 
Income taxes payableIncome taxes payable19,249 26,517 Income taxes payable50,869 43,987 
Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities327,670 343,816 Accrued expenses and other current liabilities329,960 346,942 
Total current liabilitiesTotal current liabilities840,045 836,259 Total current liabilities1,109,466 1,178,972 
Deferred income tax liabilitiesDeferred income tax liabilities339,332 339,273 Deferred income tax liabilities369,897 364,593 
Pension and other post-retirement benefit obligationsPension and other post-retirement benefit obligations39,089 38,758 Pension and other post-retirement benefit obligations37,883 36,086 
Finance lease and other financing obligations, less current portionFinance lease and other financing obligations, less current portion26,347 26,564 Finance lease and other financing obligations, less current portion24,471 24,742 
Long-term debt, netLong-term debt, net4,215,505 4,214,946 Long-term debt, net3,768,627 3,958,928 
Other long-term liabilitiesOther long-term liabilities78,753 63,232 Other long-term liabilities81,018 82,092 
Total liabilitiesTotal liabilities5,539,071 5,519,032 Total liabilities5,391,362 5,645,413 
Commitments and contingencies (Note 12)00
Commitments and contingencies (Note 11)Commitments and contingencies (Note 11)
Shareholders’ equity:Shareholders’ equity:Shareholders’ equity:
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 174,583 and 174,287 shares issued as of March 31, 2022 and December 31, 2021, respectively2,236 2,232 
Treasury shares, at cost, 17,576 and 16,438 shares as of March 31, 2022 and December 31, 2021, respectively(899,697)(832,439)
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 175,298 and 175,207 shares issued as of March 31, 2023 and December 31, 2022, respectivelyOrdinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 175,298 and 175,207 shares issued as of March 31, 2023 and December 31, 2022, respectively2,243 2,242 
Treasury shares, at cost, 22,781 and 22,781 shares as of March 31, 2023 and December 31, 2022, respectivelyTreasury shares, at cost, 22,781 and 22,781 shares as of March 31, 2023 and December 31, 2022, respectively(1,124,713)(1,124,713)
Additional paid-in capitalAdditional paid-in capital1,831,497 1,812,244 Additional paid-in capital1,876,168 1,866,201 
Retained earningsRetained earnings2,154,563 2,132,257 Retained earnings2,452,858 2,383,341 
Accumulated other comprehensive lossAccumulated other comprehensive loss(16,282)(19,560)Accumulated other comprehensive loss(13,064)(16,264)
Total shareholders' equityTotal shareholders' equity3,072,317 3,094,734 Total shareholders' equity3,193,492 3,110,807 
Total liabilities and shareholders' equityTotal liabilities and shareholders' equity$8,611,388 $8,613,766 Total liabilities and shareholders' equity$8,584,854 $8,756,220 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

Table of Contents
SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
 
For the three months ended For the three months ended
March 31, 2022March 31, 2021 March 31, 2023March 31, 2022
Net revenueNet revenue$975,770 $942,528 Net revenue$998,175 $975,770 
Operating costs and expenses:Operating costs and expenses:Operating costs and expenses:
Cost of revenueCost of revenue657,080 635,349 Cost of revenue670,471 657,080 
Research and developmentResearch and development45,980 35,956 Research and development45,939 45,980 
Selling, general and administrativeSelling, general and administrative95,680 77,123 Selling, general and administrative86,150 95,680 
Amortization of intangible assetsAmortization of intangible assets37,367 32,064 Amortization of intangible assets40,774 37,367 
Restructuring and other charges, netRestructuring and other charges, net13,733 4,582 Restructuring and other charges, net5,999 13,733 
Total operating costs and expensesTotal operating costs and expenses849,840 785,074 Total operating costs and expenses849,333 849,840 
Operating incomeOperating income125,930 157,454 Operating income148,842 125,930 
Interest expense, netInterest expense, net(45,445)(44,043)Interest expense, net(40,091)(45,445)
Other, netOther, net(50,456)(39,397)Other, net1,392 (50,456)
Income before taxesIncome before taxes30,029 74,014 Income before taxes110,143 30,029 
Provision for income taxesProvision for income taxes7,588 20,281 Provision for income taxes23,726 7,588 
Net incomeNet income$22,441 $53,733 Net income$86,417 $22,441 
Basic net income per shareBasic net income per share$0.14 $0.34 Basic net income per share$0.57 $0.14 
Diluted net income per shareDiluted net income per share$0.14 $0.34 Diluted net income per share$0.56 $0.14 

The accompanying notes are an integral part of these condensed consolidated financial statements.
4

Table of Contents

SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Comprehensive Income
(In thousands)
(unaudited)
 
For the three months ended For the three months ended
March 31, 2022March 31, 2021 March 31, 2023March 31, 2022
Net incomeNet income$22,441 $53,733 Net income$86,417 $22,441 
Other comprehensive income:Other comprehensive income:Other comprehensive income:
Cash flow hedgesCash flow hedges2,850 14,278 Cash flow hedges2,807 2,850 
Defined benefit and retiree healthcare plansDefined benefit and retiree healthcare plans428 1,712 Defined benefit and retiree healthcare plans393 428 
Other comprehensive incomeOther comprehensive income3,278 15,990 Other comprehensive income3,200 3,278 
Comprehensive incomeComprehensive income$25,719 $69,723 Comprehensive income$89,617 $25,719 

The accompanying notes are an integral part of these condensed consolidated financial statements.
5

Table of Contents
SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
 For the three months ended
 March 31, 2022March 31, 2021
Cash flows from operating activities:
Net income$22,441 $53,733 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation31,531 31,197 
Amortization of debt issuance costs1,716 1,711 
Share-based compensation6,540 5,099 
Loss on debt financing— 30,066 
Amortization of intangible assets37,367 32,064 
Deferred income taxes(340)130 
Acquisition-related compensation payments(7,500)— 
Mark-to-market loss on equity investments, net59,279 — 
Unrealized (gain)/loss on derivative instruments and other(517)8,797 
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net(49,821)(62,198)
Inventories(53,004)(16,857)
Prepaid expenses and other current assets(8,807)(4,971)
Accounts payable and accrued expenses13,488 26,409 
Income taxes payable(7,268)2,283 
Other2,250 (2,952)
Net cash provided by operating activities47,355 104,511 
Cash flows from investing activities:
Acquisitions, net of cash received(48,441)(20,406)
Additions to property, plant and equipment and capitalized software(35,711)(27,172)
Investment in debt and equity securities(6,853)(1,799)
Other152 340 
Net cash used in investing activities(90,853)(49,037)
Cash flows from financing activities:
Proceeds from exercise of stock options and issuance of ordinary shares13,348 10,556 
Payment of employee restricted stock tax withholdings(135)(221)
Proceeds from borrowings on debt— 750,000 
Payments on debt(2,931)(752,753)
Payments to repurchase ordinary shares(67,258)— 
Payments of debt financing costs— (31,110)
Net cash used in financing activities(56,976)(23,528)
Net change in cash and cash equivalents(100,474)31,946 
Cash and cash equivalents, beginning of year1,708,955 1,861,980 
Cash and cash equivalents, end of period$1,608,481 $1,893,926 

 For the three months ended
 March 31, 2023March 31, 2022
Cash flows from operating activities:
Net income$86,417 $22,441 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation30,948 31,531 
Amortization of debt issuance costs1,734 1,716 
Gain on sale of business(5,877)— 
Share-based compensation7,206 6,540 
Loss on debt financing485 — 
Amortization of intangible assets40,774 37,367 
Deferred income taxes6,491 (340)
Acquisition-related compensation payments(3,000)(7,500)
Mark-to-market loss on equity investments, net— 59,279 
Unrealized loss/(gain) on derivative instruments and other3,107 (517)
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net(17,370)(49,821)
Inventories(13,687)(53,004)
Prepaid expenses and other current assets(19,668)(8,807)
Accounts payable and accrued expenses(27,586)13,488 
Income taxes payable6,882 (7,268)
Other32 2,250 
Net cash provided by operating activities96,888 47,355 
Cash flows from investing activities:
Acquisitions, net of cash received— (48,441)
Additions to property, plant and equipment and capitalized software(36,882)(35,711)
Investment in debt and equity securities— (6,853)
Proceeds from the sale of business, net of cash sold14,000 — 
Other— 152 
Net cash used in investing activities(22,882)(90,853)
Cash flows from financing activities:
Proceeds from exercise of stock options and issuance of ordinary shares2,762 13,348 
Payment of employee restricted stock tax withholdings(123)(135)
Payments on debt(250,944)(2,931)
Dividends paid(16,777)— 
Payments to repurchase ordinary shares— (67,258)
Payments of debt financing costs(308)— 
Net cash used in financing activities(265,390)(56,976)
Net change in cash and cash equivalents(191,384)(100,474)
Cash and cash equivalents, beginning of year1,225,518 1,708,955 
Cash and cash equivalents, end of period$1,034,134 $1,608,481 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

Table of Contents
SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Changes in Shareholders' Equity
(In thousands)
(unaudited) 
 Ordinary SharesTreasury SharesAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Shareholders' Equity
 NumberAmountNumberAmount
Balance as of December 31, 2022175,207 $2,242 (22,781)$(1,124,713)$1,866,201 $2,383,341 $(16,264)$3,110,807 
Surrender of shares for tax withholding— — (2)(123)— — — (123)
Stock options exercised82 — — 2,761 — — 2,762 
Vesting of restricted securities11 — — — — — — — 
Cash dividends paid— — — — — (16,777)— (16,777)
Retirement of ordinary shares(2)— 123 — (123)— — 
Share-based compensation— — — — 7,206 — — 7,206 
Net income— — — — — 86,417 — 86,417 
Other comprehensive income— — — — — — 3,200 3,200 
Balance as of March 31, 2023175,298 $2,243 (22,781)$(1,124,713)$1,876,168 $2,452,858 $(13,064)$3,193,492 
 Ordinary SharesTreasury SharesAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Shareholders' Equity
 NumberAmountNumberAmount
Balance as of December 31, 2021174,287 $2,232 (16,438)$(832,439)$1,812,244 $2,132,257 $(19,560)$3,094,734 
Surrender of shares for tax withholding— — (3)(135)— — — (135)
Stock options exercised290 — — 12,713 — — 12,717 
Vesting of restricted securities— — — — — — — 
Repurchase of ordinary shares— — (1,138)(67,258)— — — (67,258)
Retirement of ordinary shares(3)— 135 — (135)— — 
Share-based compensation— — — — 6,540 — — 6,540 
Net income— — — — — 22,441 — 22,441 
Other comprehensive income— — — — — — 3,278 3,278 
Balance as of March 31, 2022174,583 $2,236 (17,576)$(899,697)$1,831,497 $2,154,563 $(16,282)$3,072,317 
 Ordinary SharesTreasury SharesAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Shareholders' Equity
 NumberAmountNumberAmount
Balance as of December 31, 2020173,266 $2,220 (15,631)$(784,596)$1,759,668 $1,777,729 $(49,535)$2,705,486 
Surrender of shares for tax withholding— — (4)(221)— — — (221)
Stock options exercised259 — — 10,553 — — 10,556 
Vesting of restricted securities12 — — — — — — — 
Retirement of ordinary shares(4)— 221 — (221)— — 
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, 2021173,533 $2,223 (15,631)$(784,596)$1,775,320 $1,831,241 $(33,545)$2,790,643 

The accompanying notes are an integral part of these condensed consolidated financial statements.
7

Table of Contents
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, 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 consolidated 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 interim 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, 20212022, filed with the U.S. Securities and Exchange Commission (the "SEC") on February 10, 202213, 2023 (the "2021"2022 Annual Report").
All U.S. dollar ("USD") and share amounts presented, except per share amounts, are stated in thousands, unless otherwise indicated.
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, 20222023 and 2021:2022:
For the three months ended March 31, 2022For the three months ended March 31, 2021For the three months ended March 31, 2023For the three months ended March 31, 2022
Performance SensingSensing SolutionsTotalPerformance SensingSensing SolutionsTotalPerformance SensingSensing SolutionsTotalPerformance SensingSensing SolutionsTotal
AutomotiveAutomotive$502,362 $9,285 $511,647 $536,713 $11,500 $548,213 Automotive$516,884 $8,134 $525,018 $502,362 $9,285 $511,647 
HVOR (1)
HVOR (1)
215,335 — 215,335 177,799 — 177,799 
HVOR (1)
234,641 — 234,641 215,335 — 215,335 
IndustrialIndustrial— 114,619 114,619 — 90,475 90,475 Industrial— 135,255 135,255 — 114,619 114,619 
Appliance and HVAC (2)
Appliance and HVAC (2)
— 58,825 58,825 — 59,916 59,916 
Appliance and HVAC (2)
— 47,474 47,474 — 58,825 58,825 
AerospaceAerospace— 33,270 33,270 — 32,677 32,677 Aerospace— 44,326 44,326 — 33,270 33,270 
OtherOther— 42,074 42,074 — 33,448 33,448 Other— 11,461 11,461 — 42,074 42,074 
TotalTotal$717,697 $258,073 $975,770 $714,512 $228,016 $942,528 Total$751,525 $246,650 $998,175 $717,697 $258,073 $975,770 
________________________

(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, 20222023 and 2021:2022:
For the three months ended For the three months ended
March 31, 2022March 31, 2021 March 31, 2023March 31, 2022
Stock optionsStock options$307 $460 Stock options$119 $307 
Restricted securitiesRestricted securities6,233 4,639 Restricted securities7,087 6,233 
Share-based compensation expenseShare-based compensation expense$6,540 $5,099 Share-based compensation expense$7,206 $6,540 
8

Table of Contents

5. Restructuring and Other Charges, Net
The following table presents the components of restructuring and other charges, net for the three months ended March 31, 20222023 and 2021:2022:
For the three months endedFor the three months ended
March 31, 2022March 31, 2021March 31, 2023March 31, 2022
Q2 2020 Global Restructure Program charges$— $1,824 
Other restructuring and other charges, net
Severance costs, netSeverance costs, net587 186 Severance costs, net$4,213 $587 
Facility and other exit costsFacility and other exit costs1,048 666 Facility and other exit costs225 1,048 
Other (1)
12,098 1,906 
Gain on sale of businessGain on sale of business(5,877)— 
Acquisition-related compensation arrangements (1)
Acquisition-related compensation arrangements (1)
7,272 18,255 
Other (1)(2)
Other (1)(2)
166 (6,157)
Restructuring and other charges, netRestructuring and other charges, net$13,733 $4,582 Restructuring and other charges, net$5,999 $13,733 
________________________

(1)    PrimarilyWe have reclassified acquisition-related compensation arrangements for the three months ended March 31, 2022 from the "other" caption within restructuring and other charges, net, to correspond to current period presentation.
(2)    The three months ended March 31, 2022 primarily includes expensesgains related to acquisition-related incentive compensation, partially offset by a gain resulting from reductionchanges in the fair value of the liability foracquisition-related contingent consideration for Spear Power Systems ("Spear"). Refer to Note 16: Acquisitions for additional information.amounts.
The following table presents a rollforward of theour severance portion of our restructuring obligationsliability for the three months ended March 31, 2022.2023:
Q2 2020 Global Restructure ProgramOtherTotal
Balance as of December 31, 2021$3,853 $3,380 $7,233 
Charges, net of reversals— 587 587 
Payments(2,955)(1,130)(4,085)
Foreign currency remeasurement(6)12 
Balance as of March 31, 2022$892 $2,849 $3,741 
Severance
Balance as of December 31, 2022$8,617 
Charges, net of reversals4,213 
Payments(5,635)
Foreign currency remeasurement139 
Balance as of March 31, 2023$7,334 
The severance liability as of March 31, 2023 and December 31, 2022 was entirely recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheet.sheets.
6. Other, Net
The following table presents the components of other, net for the three months ended March 31, 20222023 and 2021:2022:
For the three months ended For the three months ended
March 31, 2022March 31, 2021 March 31, 2023March 31, 2022
Currency remeasurement loss on net monetary assetsCurrency remeasurement loss on net monetary assets$(67)$(1,477)Currency remeasurement loss on net monetary assets$(1,259)$(67)
Loss on foreign currency forward contracts(1,243)(958)
Gain/(loss) on commodity forward contracts9,424 (1,153)
Gain/(loss) on foreign currency forward contractsGain/(loss) on foreign currency forward contracts184 (1,243)
Gain on commodity forward contractsGain on commodity forward contracts1,899 9,424 
Loss on debt financingLoss on debt financing— (30,066)Loss on debt financing(485)— 
Mark-to-market loss on investments, net(59,279)— 
Mark-to-market loss on equity investments, netMark-to-market loss on equity investments, net— (59,279)
Net periodic benefit cost, excluding service costNet periodic benefit cost, excluding service cost(755)(2,410)Net periodic benefit cost, excluding service cost(971)(755)
OtherOther1,464 (3,333)Other2,024 1,464 
Other, netOther, net$(50,456)$(39,397)Other, net$1,392 $(50,456)
7. Income Taxes
The following table presents the provision for income taxes for the three months ended March 31, 20222023 and 2021:2022:
 For the three months ended
 March 31, 2022March 31, 2021
Provision for income taxes$7,588 $20,281 
9

Table of Contents

The decrease in total tax for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was predominantly related to the overall decrease in income before taxes, driven in part by the mark-to-market loss on our investment in Quanergy as discussed in Note 14: Fair Value Measures.
 For the three months ended
 March 31, 2023March 31, 2022
Provision for income taxes$23,726 $7,588 
The provision for income taxes consists of (1) current tax expense, which relates primarily to our profitable operations in tax jurisdictions with limited or no net operating loss carryforwards 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 (a) book versus tax basis in intangible assets, (b) changes in net operating loss
9

Table of Contents

carryforwards, and (c) changes in withholding taxes on unremitted earnings. Other items impacting deferred tax expense include changes in tax rates and (d) changes in our assessment of the realizability of our deferred tax assets.
We recorded a partial valuation allowance against certain interest carryforwards in the U.S. at both December 31, 2022 and December 31, 2021. We are continually evaluating both the positive and negative evidence for this partial valuation allowance. We believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of this deferred tax asset and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability and future utilization of this attribute that we are able to actually achieve.
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, 20222023 and 20212022 the weighted-average ordinary shares outstanding used to calculate basic and diluted net income per share were as follows:
For the three months ended For the three months ended
March 31, 2022March 31, 2021March 31, 2023March 31, 2022
Basic weighted-average ordinary shares outstandingBasic weighted-average ordinary shares outstanding157,422 157,764 Basic weighted-average ordinary shares outstanding152,518 157,422 
Dilutive effect of stock optionsDilutive effect of stock options473 708 Dilutive effect of stock options151 473 
Dilutive effect of unvested restricted securitiesDilutive effect of unvested restricted securities735 758 Dilutive effect of unvested restricted securities655 735 
Diluted weighted-average ordinary shares outstandingDiluted weighted-average ordinary shares outstanding158,630 159,230 Diluted weighted-average ordinary shares outstanding153,324 158,630 
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 endedFor the three months ended
March 31, 2022March 31, 2021March 31, 2023March 31, 2022
Anti-dilutive shares excludedAnti-dilutive shares excludedAnti-dilutive shares excluded381 
Contingently issuable shares excludedContingently issuable shares excluded1,002 950 Contingently issuable shares excluded1,268 1,002 
9. Inventories
The following table presents the components of inventories as of March 31, 20222023 and December 31, 2021:2022:
March 31, 2022December 31, 2021March 31,
2023
December 31,
2022
Finished goodsFinished goods$222,375 $201,424 Finished goods$217,181 $202,531 
Work-in-processWork-in-process114,496 101,558 Work-in-process115,608 117,691 
Raw materialsRaw materials304,838 285,249 Raw materials325,773 324,653 
InventoriesInventories$641,709 $588,231 Inventories$658,562 $644,875 
10

Table of Contents

10. Pension and Other Post-Retirement Benefits
The following table presents the components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the three months ended March 31, 2022 and 2021:
 U.S. PlansNon-U.S. Plans 
 Defined BenefitRetiree HealthcareDefined BenefitTotal
 20222021202220212022202120222021
Service cost$— $— $$$956 $978 $958 $980 
Interest cost113 120 46 21 424 404 583 545 
Expected return on plan assets(195)(226)— — (244)(178)(439)(404)
Amortization of net loss141 401 — — 278 459 419 860 
Amortization of prior service (credit)/cost— — (100)(159)(98)(156)
Loss on settlement290 1,565 — — — — 290 1,565 
Net periodic benefit cost/(credit)$349 $1,860 $(52)$(136)$1,416 $1,666 $1,713 $3,390 
Components of net periodic benefit cost/(credit) other than service cost are presented in other, net in the condensed consolidated statements of operations. Refer to Note 6: Other, Net.
11. Debt
The following table presents the components of long-term debt, finance lease and other financing obligations as of March 31, 20222023 and December 31, 2021:2022:
Maturity DateMarch 31, 2022December 31, 2021Maturity DateMarch 31,
2023
December 31,
2022
Term Loan(1)Term Loan(1)September 20, 2026$450,308 $451,465 Term Loan(1)September 20, 2026$196,834 $446,834 
4.875% Senior NotesOctober 15, 2023500,000 500,000 
5.625% Senior Notes5.625% Senior NotesNovember 1, 2024400,000 400,000 5.625% Senior NotesNovember 1, 2024400,000 400,000 
5.0% Senior Notes5.0% Senior NotesOctober 1, 2025700,000 700,000 5.0% Senior NotesOctober 1, 2025700,000 700,000 
4.375% Senior Notes4.375% Senior NotesFebruary 15, 2030450,000 450,000 4.375% Senior NotesFebruary 15, 2030450,000 450,000 
3.75% Senior Notes3.75% Senior NotesFebruary 15, 2031750,000 750,000 3.75% Senior NotesFebruary 15, 2031750,000 750,000 
4.0% Senior Notes4.0% Senior NotesApril 15, 20291,000,000 1,000,000 4.0% Senior NotesApril 15, 20291,000,000 1,000,000 
5.875% Senior Notes5.875% Senior NotesSeptember 1, 2030500,000 500,000 
Less: debt discount, net of premiumLess: debt discount, net of premium(4,763)(5,207)Less: debt discount, net of premium(2,831)(3,360)
Less: deferred financing costsLess: deferred financing costs(25,410)(26,682)Less: deferred financing costs(28,542)(29,916)
Less: current portionLess: current portion(4,630)(4,630)Less: current portion(196,834)(254,630)
Long-term debt, netLong-term debt, net$4,215,505 $4,214,946 Long-term debt, net$3,768,627 $3,958,928 
Finance lease and other financing obligationsFinance lease and other financing obligations$28,411 $28,767 Finance lease and other financing obligations$26,333 $26,583 
Less: current portionLess: current portion(2,064)(2,203)Less: current portion(1,862)(1,841)
Finance lease and other financing obligations, less current portionFinance lease and other financing obligations, less current portion$26,347 $26,564 Finance lease and other financing obligations, less current portion$24,471 $24,742 

(1)    On February 6, 2023, we prepaid $250.0 million of outstanding principal on our Term Loan balance. Accordingly, that portion of the principal balance outstanding on the Term Loan has been presented as current portion of long-term debt on our consolidated balance sheet as of December 31, 2022. On April 25, 2023, we announced that we intend to pay down the remaining balance on the Term Loan in the second quarter of 2023. Accordingly, the remaining principal balance outstanding on the Term Loan has been presented as current portion of long-term debt on our condensed consolidated balance sheet as of March 31, 2023.
Our debt consists of secured credit facilities and various tranches of senior unsecured notes. Refer to Note 14: Debt of our 2022 Annual Report for additional information related to our existing indebtedness.
As of March 31, 2022,2023, we had $416.1$746.1 million available under our $420.0$750.0 million revolving credit facility (the "Revolving Credit Facility"), net of $3.9 million of obligations in respect of outstanding letters of credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of March 31, 2022,2023, no amounts had been drawn against these outstanding letters of credit.
In the three months ended March 31, 2021, in connection with the redemption of $750.0 million aggregate principal amount of 6.25% senior notes due 2026 (the "6.25% Senior Notes"), we recognized 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.
Accrued Interest
Accrued interest associated with our outstanding debt is included as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets. As of March 31, 20222023 and December 31, 2021,2022, accrued interest totaled $63.1$54.4 million and $45.1$50.1 million, respectively.
11

Table of Contents

12.11. Commitments and Contingencies
We are regularly involved in a number of claims and litigation matters that arise in the ordinary course of business. Although it is not feasible to predict the outcome of these matters, based upon our experience and current information known to us, we do not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on our results of operations, financial condition, and/or cash flows.
13.12. Shareholders' Equity
Cash Dividends
On February 22, 2023, we paid a cash dividend of $0.11 per share, or $16.8 million in aggregate, to shareholders of record as of February 8, 2023. On April 13, 2023, we announced that our Board of Directors approved a quarterly dividend of $0.12 per share, payable on May 24, 2023 to shareholders of record as of May 10, 2023.
11

Table of Contents

Treasury Shares
From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by the Board at any time. On January 20, 2022, we announced that our Board of Directors had authorized a new $500.0 million ordinary share repurchase program (the “January 2022 Program”), which replaced the previous $500.0 million program approved in July 2019, which had availability of $254.52019. We did not repurchase any ordinary shares under this program in the three months ended March 31, 2023. In the three months ended March 31, 2022, we repurchased 1.1 million as of December 31, 2021.ordinary shares under the January 2022 Program. As of March 31, 2022, $449.52023, $224.5 million remained available for repurchase under the January 2022 Program.
Accumulated Other Comprehensive Loss
The following table presents the components of accumulated other comprehensive loss for the three months ended March 31, 2022:2023:
Cash Flow HedgesDefined Benefit and Retiree Healthcare PlansAccumulated Other Comprehensive LossCash Flow HedgesDefined Benefit and Retiree Healthcare PlansAccumulated Other Comprehensive Loss
Balance as of December 31, 2021$16,831 $(36,391)$(19,560)
Balance as of December 31, 2022Balance as of December 31, 2022$15,665 $(31,929)$(16,264)
Other comprehensive income before reclassifications, net of taxOther comprehensive income before reclassifications, net of tax7,965 — 7,965 Other comprehensive income before reclassifications, net of tax8,992 — 8,992 
Reclassifications from accumulated other comprehensive loss, net of taxReclassifications from accumulated other comprehensive loss, net of tax(5,115)428 (4,687)Reclassifications from accumulated other comprehensive loss, net of tax(6,185)393 (5,792)
Other comprehensive incomeOther comprehensive income2,850 428 3,278 Other comprehensive income2,807 393 3,200 
Balance as of March 31, 2022$19,681 $(35,963)$(16,282)
Balance as of March 31, 2023Balance as of March 31, 2023$18,472 $(31,536)$(13,064)
The following table presents the amounts reclassified from accumulated other comprehensive loss for the three months ended March 31, 20222023 and 2021:2022:
For the three months ended March 31,Affected Line in Condensed Consolidated Statements of OperationsFor the three months ended March 31,Affected Line in Condensed Consolidated Statements of Operations
ComponentComponent20222021Component20232022Affected Line in Condensed Consolidated Statements of Operations
Derivative instruments designated and qualifying as cash flow hedges:Derivative instruments designated and qualifying as cash flow hedges:Derivative instruments designated and qualifying as cash flow hedges:
Foreign currency forward contractsForeign currency forward contracts$(4,264)$4,407 
Net revenue (1)
Foreign currency forward contracts$(6,639)$(4,264)
Net revenue (1)
Foreign currency forward contractsForeign currency forward contracts(2,629)(743)
Cost of revenue (1)
Foreign currency forward contracts(1,697)(2,629)
Cost of revenue (1)
Total, before taxesTotal, before taxes(6,893)3,664 Income before taxesTotal, before taxes(8,336)(6,893)Income before taxes
Income tax effectIncome tax effect1,778 (916)Provision for income taxesIncome tax effect2,151 1,778 Provision for income taxes
Total, net of taxesTotal, net of taxes$(5,115)$2,748 Net incomeTotal, net of taxes$(6,185)$(5,115)Net income
Defined benefit and retiree healthcare plansDefined benefit and retiree healthcare plans$611 $2,269 
Other, net (2)
Defined benefit and retiree healthcare plans$537 $611 Other, net
Income tax effectIncome tax effect(183)(557)Provision for income taxesIncome tax effect(144)(183)Provision for income taxes
Total, net of taxesTotal, net of taxes$428 $1,712 Net incomeTotal, net of taxes$393 $428 Net income
__________________________

(1)    Refer to Note 15:14: 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).
12

Table of Contents

14.13. Fair Value Measures
Measured on a Recurring Basis
The fair values of our derivative assets and liabilities measured at fair value on a recurring basis as of March 31, 20222023 and December 31, 20212022 are shown in the below table. All fair value measures presented in the table below are categorized in Level 2 of the fair value hierarchy.
March 31, 2022December 31, 2021 March 31,
2023
December 31,
2022
AssetsAssetsAssets
Foreign currency forward contractsForeign currency forward contracts$29,063 $25,112 Foreign currency forward contracts$33,583 $31,126 
Commodity forward contractsCommodity forward contracts8,474 2,979 Commodity forward contracts5,091 4,181 
TotalTotal$37,537 $28,091 Total$38,674 $35,307 
LiabilitiesLiabilitiesLiabilities
Foreign currency forward contractsForeign currency forward contracts$3,682 $3,073 Foreign currency forward contracts$10,438 $9,866 
Commodity forward contractsCommodity forward contracts1,752 4,492 Commodity forward contracts2,734 4,671 
TotalTotal$5,434 $7,565 Total$13,172 $14,537 
Refer to Note 15:14: Derivative Instruments and Hedging Activities for additional information related to our forward contracts.
Quanergy
As of December 31, 2021, we held a $50.0 million investment in Quanergy Systems, Inc. ("Quanergy") Series B Preferred Stock. This equity investment did not have a readily determinable fair value and it was held using the measurement alternative prescribed in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments - Equity Securities. Such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.
On June 22, 2021, Quanergy announced that it had entered into a definitive business combination agreement with CITIC Capital Acquisition Corp ("CITIC") (NYSE: CCAC). On July 16, 2021, CITIC filed a Registration Statement on Form S-4 with the SEC, the effectiveness of which was a condition to closing of the business combination. At December 31, 2021, we assessed our investment in Quanergy based on the proposed terms of the business combination agreement and concluded that there were no indicators of impairment.
On January 6, 2022, the related Registration Statement on Form S-4 was declared effective by the SEC. An Extraordinary General Meeting of shareholders of CITIC was held on January 31, 2022, at which time the business combination was approved. The business combination closed on February 8, 2022. Beginning on February 9, 2022, the combined company, which retained the name "Quanergy Systems, Inc.," was listed on the New York Stock Exchange (the "NYSE") under the ticker symbol QNGY.
Upon closing of the business combination, our investment in Quanergy comprised the following:
5.0 million common shares, which represented the conversion of our $50 million Series B Preferred Stock investment (at a $10 per share implied valuation);
750,000 unregistered common shares, representing a $7.5 million private investment in public equity ("PIPE") contribution; and
2.5 million common shares (the "Warrant Shares"), representing the conversion of 2.5 million warrants provided by Quanergy as up-front consideration for a four-year technical and marketing support agreement (the "Support Agreement").
The 5.75 million common share investment in Quanergy (excluding the Warrant Shares) have a historical cost basis of $57.5 million. The Warrant Shares were converted at a share price of $7.05 per share (the closing market price on February 8, 2022), or approximately $17.6 million, which was recorded as deferred income. Refer to below discussion for additional details on the Support Agreement. Refer to the below table for a summary of our investment in Quanergy as of March 31, 2022,
13

Table of Contents

February 8, 2022,2023 and December 31, 2021, which is presented2022, we also held cash equivalents of $653.3 million and $860.0 million, respectively, consisting of U.S. Government Treasury money market funds that are categorized in other assets on our consolidated balance sheets as of March 31, 2022 and December 31, 2021.
As of
March 31, 2022February 8, 2022December 31, 2021
Series B Preferred Stock$— $— $50,000 
Common shares9,200 50,000 — 
PIPE investment1,380 7,500 — 
Warrant Shares4,575 17,600 — 
Total equity investment in Quanergy$15,155 $75,100 $50,000 
For the three months ended March 31, 2022
Mark-to-market loss$59,945 
The mark-to-market loss presented in the table above is presented in other, net, and is the resultLevel 1 of the decline in Quanergy share price to $1.84 per share on March 31, 2022.
In exchange for the Warrant Shares, we entered into the Support Agreement, whereby we agreed to provide technical and marketing assistance to Quanergy for a term of four years from the effective date of February 8, 2022. We will recognize the consideration ($17.6 million) for the Support Agreement on a straight-line basis over the term of the agreement. We recognized approximately $0.7 million of income in the three months ended March 31, 2022 and will recognize approximately $1.1 million of income each quarter through the end of the term of the Support Agreement.fair value hierarchy.
Measured on a Nonrecurring Basis
We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 20212022 and determined that they were not impaired. DuringNo events or changes in circumstances occurred in the three months ended March 31, 2022, no events or changes in circumstances occurred2023 that would have triggered the need for an additional impairment review of theseour goodwill and other indefinite-lived intangible 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, 20222023 and December 31, 2021.2022. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.
March 31, 2022December 31, 2021 March 31, 2023December 31, 2022
Carrying Value (1)
Fair Value
Carrying Value (1)
Fair Value
Carrying Value(1)
Fair Value
Carrying Value(1)
Fair Value
LiabilitiesLiabilitiesLiabilities
Term LoanTerm Loan$450,308 $449,182 $451,465 $450,901 Term Loan$196,834 $196,343 $446,834 $443,483 
4.875% Senior Notes$500,000 $512,500 $500,000 $526,250 
5.625% Senior Notes5.625% Senior Notes$400,000 $416,000 $400,000 $438,000 5.625% Senior Notes$400,000 $398,000 $400,000 $398,000 
5.0% Senior Notes5.0% Senior Notes$700,000 $714,875 $700,000 $759,500 5.0% Senior Notes$700,000 $685,125 $700,000 $684,250 
4.375% Senior Notes4.375% Senior Notes$450,000 $432,000 $450,000 $479,250 4.375% Senior Notes$450,000 $408,375 $450,000 $400,500 
3.75% Senior Notes3.75% Senior Notes$750,000 $690,938 $750,000 $747,188 3.75% Senior Notes$750,000 $648,750 $750,000 $626,250 
4.0% Senior Notes4.0% Senior Notes$1,000,000 $942,500 $1,000,000 $1,022,500 4.0% Senior Notes$1,000,000 $897,500 $1,000,000 $875,000 
5.875% Senior Notes5.875% Senior Notes$500,000 $490,625 $500,000 $473,750 

(1)    Excluding any related debt discounts, premiums, 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 Topic 321. There were no impairments or changes resulting from observable transactions for any321, Investments—Equity Securities. As of these investmentsMarch 31, 2023 and no adjustments were made to their carrying values.
14

Table of Contents

Refer to the table below for the carrying values ofDecember 31, 2022, we held a $15.0 million equity investmentsinvestment using the measurement alternative, which areis presented as a component of other assets in the condensed consolidated balance sheets.
March 31, 2022December 31, 2021
Quanergy Systems, Inc. (1)
$— $50,000 
Other15,000 15,000 
Total$15,000 $65,000 

(1)    As There were no impairments or changes resulting from observable transactions for this investment in the three months ended March 31, 2023 and 2022 and no adjustments have been made to its carrying value as of March 31, 2022, Quanergy is no longer classified as an equity investment without a readily determinable fair value. See additional discussion under the heading Quanergy elsewhere in this Note.2023 and December 31, 2022.
13
15.

Table of Contents

14. Derivative Instruments and Hedging Activities
Hedges of Foreign Currency Risk
For the three months ended March 31, 20222023 and 2021,2022, amounts excluded from the assessment of effectiveness of our foreign currency forward contracts that are designated as cash flow hedges were not material. As of March 31, 2022,2023, we estimated that $23.7$21.8 million of net gains will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending March 31, 2023.2024.
As of March 31, 2022,2023, we had the following outstanding foreign currency forward contracts:
Notional
(in millions)
Effective Date(s)Maturity Date(s)Index (Exchange Rates)Weighted-Average Strike Rate
Hedge
Designation (1)
15.020.0 EURMarch 29, 20222023April 29, 202228, 2023Euro ("EUR") to USD1.111.09 USDNot designated
349.6364.3 EURVarious from May 2020April 2021 to March 20222023Various from April 20222023 to March 20242025EUR to USD1.191.10 USDCash flow hedge
1,170.0474.0 CNYVarious in March 202228, 2023Various in April 202228, 2023USD to Chinese Renminbi ("CNY")6.386.85 CNYNot designated
1,134.3530.0 CNYVarious from October 2021 to March 2022in January 2023Various from April 20222023 to December 2022September 2023USD to CNY6.446.76 CNYCash flow hedge
684.0 JPYMarch 29, 2022April 28, 2022USD to Japanese Yen ("JPY")122.02 JPYNot designated
24,400.0609.0 JPYMarch 29, 2023April 28, 2023USD to Japanese Yen ("JPY")131.83 JPYNot designated
19,364.0 KRWVarious from May 2020June 2021 to March 20222023Various from April 20222023 to February 20242025USD to Korean Won ("KRW")1,170.981,248.39 KRWCash flow hedge
24.025.0 MYRMarch 28, 20222023April 29, 202228, 2023USD to Malaysian Ringgit ("MYR")4.214.37 MYRNot designated
259.020.0 MXNMarch 29, 20222023April 29, 202228, 2023USD to Mexican Peso ("MXN")20.0518.23 MXNNot designated
3,477.33,616.3 MXNVarious from May 2020April 2021 to March 20222023Various from April 20222023 to March 20242025USD to MXN22.1121.76 MXNCash flow hedge
52.46.3 GBPVarious from May 2020 to March 202229, 2023Various from April 2022 to March 202428, 2023British Pound Sterling ("GBP") to USD1.361.23 USDNot Designated
57.6 GBPVarious from April 2021 to March 2023Various from April 2023 to March 2025GBP to USD1.24 USDCash flow hedge
_________________________

(1)    Derivative financial instruments not designated as hedges are used to manage our exposure to currency exchange rate risk. They are intended to preserve economic value, and they are not used for trading or speculative purposes.
15

Table of Contents

Hedges of Commodity Risk
As of March 31, 2022,2023, we had the following outstanding commodity forward contracts, none of which were designated for hedge accounting treatment in accordance with FASB ASC Topic 815, Derivatives and Hedging:
CommodityNotionalRemaining Contracted PeriodsWeighted-Average Strike Price Per Unit
Silver1,109,868869,069 troy oz.April 2022 - February 20242023 to January 2025$24.7222.84
Gold8,3807,119 troy oz.April 2022 - February 20242023 to January 2025$1,833.551,875.71
Nickel250,238207,887 poundsApril 2022 - February 20242023 to January 2025$8.6911.24
Aluminum3,851,2103,904,000 poundsApril 2022 - February 20242023 to January 2025$1.171.21
Copper7,740,8387,591,333 poundsApril 2022 - February 20242023 to January 2025$4.304.03
Platinum11,5889,563 troy oz.April 2022 - February 20242023 to January 2025$1,045.40969.95
Palladium1,4081,237 troy oz.April 2022 - February 20242023 to January 2025$2,383.122,100.68
14

Table of Contents

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, 20222023 and December 31, 2021:2022:
Asset DerivativesLiability Derivatives Asset DerivativesLiability Derivatives
Balance Sheet LocationMarch 31, 2022December 31, 2021Balance Sheet LocationMarch 31, 2022December 31, 2021 Balance Sheet LocationMarch 31,
2023
December 31,
2022
Balance Sheet LocationMarch 31,
2023
December 31,
2022
Derivatives designated as hedging instrumentsDerivatives designated as hedging instrumentsDerivatives designated as hedging instruments
Foreign currency forward contractsForeign currency forward contractsPrepaid expenses and other current assets$24,946 $20,562 Accrued expenses and other current liabilities$2,656 $1,981 Foreign currency forward contractsPrepaid expenses and other current assets$28,404 $27,114 Accrued expenses and other current liabilities$7,023 $6,586 
Foreign currency forward contractsForeign currency forward contractsOther assets4,063 4,391 Other long-term liabilities683 904 Foreign currency forward contractsOther assets5,057 3,763 Other long-term liabilities3,247 3,280 
TotalTotal$29,009 $24,953 $3,339 $2,885 Total$33,461 $30,877 $10,270 $9,866 
Derivatives not designated as hedging instrumentsDerivatives not designated as hedging instrumentsDerivatives not designated as hedging instruments
Commodity forward contractsCommodity forward contractsPrepaid expenses and other current assets$6,298 $2,583 Accrued expenses and other current liabilities$1,490 $3,422 Commodity forward contractsPrepaid expenses and other current assets$3,328 $2,542 Accrued expenses and other current liabilities$2,504 $4,066 
Commodity forward contractsCommodity forward contractsOther assets2,176 396 Other long-term liabilities262 1,070 Commodity forward contractsOther assets1,763 1,639 Other long-term liabilities230 605 
Foreign currency forward contractsForeign currency forward contractsPrepaid expenses and other current assets54 159 Accrued expenses and other current liabilities343 188 Foreign currency forward contractsPrepaid expenses and other current assets122 249 Accrued expenses and other current liabilities168 — 
TotalTotal$8,528 $3,138 $2,095 $4,680 Total$5,213 $4,430 $2,902 $4,671 
These fair value measurements were all categorized within Level 2 of the fair value hierarchy.
The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income for the three months ended March 31, 20222023 and 2021:2022:
Derivatives designated as
hedging instruments
Derivatives designated as
hedging instruments
Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive IncomeLocation of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Net IncomeAmount of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Net IncomeDerivatives designated as
hedging instruments
Amount of Deferred (Loss)/Gain Recognized in Other Comprehensive IncomeLocation of Net Gain Reclassified from Accumulated Other Comprehensive Loss into Net IncomeAmount of Net Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income
20222021202220212023202220232022
Foreign currency forward contractsForeign currency forward contracts$5,586 $18,799 Net revenue$4,264 $(4,407)Foreign currency forward contracts$(3,588)$5,586 Net revenue$6,639 $4,264 
Foreign currency forward contractsForeign currency forward contracts$5,145 $(3,425)Cost of revenue$2,629 $743 Foreign currency forward contracts$15,708 $5,145 Cost of revenue$1,697 $2,629 
Derivatives not designated as
hedging instruments
Amount of Gain/(Loss) Recognized in Net IncomeLocation of Gain/(Loss) Recognized in Net Income
20222021
Commodity forward contracts$9,424 $(1,153)Other, net
Foreign currency forward contracts$(1,243)$(958)Other, net
16

Table of Contents

Derivatives not designated as
hedging instruments
Amount of Gain/(Loss) Recognized in Net IncomeLocation of Gain/(Loss) Recognized in Net Income
20232022
Commodity forward contracts$1,899 $9,424 Other, net
Foreign currency forward contracts$184 $(1,243)Other, net
Credit Risk Related Contingent Features
We have agreements with our derivative counterparties that contain a provision whereby if we default on our indebtedness and repayment of the indebtedness has been accelerated by the lender, then we could also be declared in default on our derivative obligations.
As of March 31, 2022,2023, the termination value of outstanding derivatives in a liability position, excluding any adjustment for non-performance risk, was $5.5$13.3 million. As of March 31, 2022,2023, we had not 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.
16.15. Acquisitions and Divestitures
Spear Power Systems
On November 19, 2021, we acquired all of the equity interests of Spear, a leader in electrification solutions that supports our newly-established Clean Energy Solutions business unit, for an aggregate purchase price of $113.7 million, subject to certain post-closing items, including the discounted present value of contingent consideration. As of March 31, 2022, the present value of this contingent consideration was $2.3 million. Any gains or losses resulting from adjustments to contingent consideration are recorded in restructuring and other charges, net. We are integrating Spear into the Sensing Solutions reportable segment.
As of March 31, 2022, the allocation of purchase price of Spear is preliminary and is based on management’s judgments after evaluating several factors, including preliminary valuation assessments of tangible and intangible assets. The final allocation of the purchase price to the assets acquired will be completed when the final valuations are completed. Refer to Note 21: Acquisitions of the audited consolidated financial statements and notes thereto included in our 2021 Annual Report for detailed information regarding the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of December 31, 2021.
SmartWitness Holdings, Inc.
On November 19, 2021, we acquired all of the equity interests of SmartWitness Holdings, Inc. ("SmartWitness"), a privately held innovator of video telematics technology for heavy- and light-duty fleets, for an aggregate cash purchase price of $204.2 million, subject to certain post-closing items. In addition to the aggregate purchase price, we paid $8.6 million of cash at closing related to an employee retention arrangement, which was reflected as an operating cash outflow on our consolidated statement of cash flows for the year ended December 31, 2021. We are integrating SmartWitness into the Performance Sensing reportable segment.
As of March 31, 2022, the allocation of purchase price of SmartWitness is preliminary and is based on management’s judgments after evaluating several factors, including preliminary valuation assessments of tangible and intangible assets. The final allocation of the purchase price to the assets acquired will be completed when the final valuations are completed. Refer to Note 21: Acquisitions of the audited consolidated financial statements and notes thereto included in our 2021 Annual Report for detailed information regarding the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of December 31, 2021.
Elastic M2M Inc.
On February 11, 2022, we acquired all of the equity interests of Elastic M2M Inc. ("Elastic M2M") for an aggregate cash purchase price of $51.2$51.6 million, subject to certain post-closing items. In addition to the aggregate cash purchase price, the previous shareholders of Elastic M2M are entitled to up to $30.0 million of additional acquisition-related incentive
15

Table of Contents

compensation, which was pending the completion of certain technical milestones in fiscal year 2022 and achievement of revenuefinancial targets in fiscal years 2022 and 2023. In the first quarter of 2022, we determined that $15.0 million of that acquisition-related incentive compensation was earned as all of theAll technical milestones were achieved.completed in fiscal year 2022. As of December 31, 2022, we had recognized $24.7 million of this acquisition-related incentive compensation. In three months ended March 31, 2023, we recognized an additional $3.3 million of this acquisition-related incentive compensation. This amountincentive compensation is recorded in restructuring and other charges, net. We paid $7.5 million of this acquisition-related incentive compensation in the three months ended March 31, 2022, which is reflected as an operating cash outflow on our condensed consolidated statement of cash flows for the three months ended March 31, 2022.
Elastic M2M iswas a privately-held innovator of connected intelligence for operational assets across heavy-duty transport, warehouse, supply chain and logistics, industrial, light-duty passenger car, and a variety of other industry segments. Elastic M2M primarily serves telematics service providers and resellers, enabling them to leverage Elastic M2M’s cloud platform and analytics capabilities to deliver sensor-based operational insights to their end users. This acquisition augments our cloud capabilities critical to delivering actionable sensor-based insights, an increasingly important capability in this fast-growing industry segment. We are integrating Elastic M2M into the Performance Sensing reportable segment.
The allocation of the purchase price related to this acquisition was finalized in the three months ended March 31, 2023. The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed:
Net working capital, excluding cash$35 
Goodwill28,211 
Other intangible assets27,700 
Deferred income tax liabilities(5,925)
Fair value of net assets acquired, excluding cash and cash equivalents50,021 
Cash and cash equivalents1,597 
Fair value of net assets acquired$51,618 
The goodwill recognized as a result of this acquisition represents future economic benefits expected to arise from synergies from combining operations and the extension of existing customer relationships. The goodwill recognized in this acquisition will not be deductible for tax purposes.
In connection with the allocation of purchase price to the assets acquired and liabilities assumed, we identified certain definite-lived intangible assets. The following table presents the acquired intangible assets, their estimated fair values, and weighted-average lives:
Acquisition Date Fair ValueWeighted-Average Lives (years)
Acquired definite-lived intangible assets
Customer relationships$17,500 13
Completed technologies10,200 10
Total definite-lived intangible assets acquired$27,700 12
The definite-lived intangible assets were valued using the income approach. We primarily used the relief-from-royalty method to value completed technologies, and we used the multi-period excess earnings method to value customer relationships. These valuation methods incorporate assumptions including expected discounted future net cash flows resulting from either the future estimated after-tax royalty payments avoided as a result of owning the completed technologies or the future earnings related to existing customer relationships.
Dynapower
On July 12, 2022, we completed the acquisition of all of the outstanding equity interests of DP Acquisition Corp ("Dynapower"), a leader in power conversion systems including inverters, converters, and rectifiers for renewable energy generation, green hydrogen production, electric vehicle charging stations, and microgrid applications, as well as industrial and defense applications, for an aggregate cash purchase price of $577.5 million, subject to certain post-closing items. Dynapower also provides aftermarket sales and service to maintain its equipment in the field.
Dynapower is a foundational addition to our Clean Energy Solutions strategy and complements our recent acquisitions of GIGAVAC, Lithium Balance, and Spear. We are integrating Dynapower into our Sensing Solutions reportable segment.
17
16

Table of Contents

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed:
Net working capital, excluding cash$13,487 
Property, plant and equipment1,846 
Goodwill418,257 
Other intangible assets164,400 
Other assets1,656 
Deferred income tax liabilities(25,548)
Other long-term liabilities(1,035)
Fair value of net assets acquired, excluding cash and cash equivalents573,063 
Cash and cash equivalents4,410 
Fair value of net assets acquired$577,473 
The allocation of purchase price of Elastic M2M has been primarily allocated to goodwill. TheDynapower is preliminary and is based on management’s judgments after evaluating several factors, including preliminary valuation assessments of intangible assets is not yet available. We expect the preliminary valuation to be complete in the second quarter of 2022, at which time we will adjust the allocation to include definite-lived intangible assets. The final allocation of the purchase price to the assets acquired will be completed when the final valuations are completed. The preliminary goodwill recognized as a result of this acquisition represents future economic benefits expected to arise from synergies from combining operations and the extension of existing customer relationships. The goodwill recognized in this acquisition will not be deductible for tax purposes.
In connection with the preliminary allocation of purchase price to the assets acquired and liabilities assumed, we identified certain definite-lived intangible assets. The following table presents the acquired intangible assets, their estimated fair values, and weighted-average lives:
Acquisition Date Fair ValueWeighted-Average Lives (years)
Acquired definite-lived intangible assets
Customer relationships$37,000 13
Backlog7,100 2
Completed technologies86,100 12
Tradenames34,200 18
Total definite-lived intangible assets acquired$164,400 13
The definite-lived intangible assets were valued using the income approach. We primarily used the relief-from-royalty method to value completed technologies and tradenames, and we used the multi-period excess earnings method to value customer relationships. These valuation methods incorporate assumptions including expected discounted future net cash flows resulting from either the future estimated after-tax royalty payments avoided as a result of owning the completed technologies or the future earnings related to existing customer relationships.
Divestiture - Qinex Business
On May 27, 2022, we executed an asset purchase agreement (the "APA") whereby we agreed to sell various assets and liabilities comprising our semiconductor test and thermal business (collectively, the "Qinex Business") to LTI Holdings, Inc. ("LTI") in exchange for consideration of approximately $219.0 million, subject to working capital and other adjustments. Concurrent with the execution of the APA, the parties entered into a Contract Manufacturing Agreement ("CMA") and a Transition Services Agreement ("TSA"), each for nominal consideration.
The CMA commenced at closing of the transaction ("Closing") and had a term of either six or nine months, depending on the manufacturing site. LTI also had the option of extending each contract for an additional three months. The period from Closing to the end of the CMA term (including extensions, if any) is referred to as the "Transition Period." The terms of the CMA required that we provide manufacturing and distribution services for the Transition Period. The TSA commenced at Closing and had a term that varied depending on the nature of the support services, ranging from one month to the entirety of the Transition Period. The terms of the TSA required that we provide various forms of commercial, operational, and back-office support to LTI. As of March 31, 2023, the Transition Period has ended.
Closing occurred in July 2022, at which time assets of approximately $70 million (including allocated goodwill of $45 million) and liabilities of approximately $2 million transferred to LTI. Transferred assets and liabilities excluded inventories and accounts payable, which transferred to LTI at the end of the Transition Period. We received cash consideration of
17

Table of Contents

$198.8 million at Closing and recognized a pre-tax gain of $135.1 million. Cash consideration received at Closing excluded amounts held in escrow until various milestones were met through the Transition Period.
The Qinex Business manufactures semiconductor burn-in test sockets and thermal control solutions and was formed through the combination of Sensata’s semiconductor interconnect business with Wells-CTI in 2012. The Qinex Business was included in our Sensing Solutions segment (and Industrial Solutions reporting unit). We allocated goodwill to the Qinex Business based on its fair value relative to the total fair value of the Industrial Solutions reporting unit.
17.16. Segment Reporting
We present financial information for 2two reportable segments, Performance Sensing and Sensing Solutions. The Performance Sensing reportable segment consists of 2two operating segments, Automotive and HVOR, which meet the criteria for aggregation in FASB ASC Topic 280, Segment Reporting. The Sensing Solutions reportable segment is also an operating segment.
Our operating segments are businesses that we manage as components of an enterprise, for which separate financial information is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and assess performance.
An operating segment’s performance is primarily evaluated based on segment operating income, which excludes amortization of intangible assets, restructuring and other charges, net, certain costs associated with our strategic megatrend initiatives, and certain corporate costs or credits not associated with the operations of the segment, including share-based compensation expense and a portion of depreciation expense associated with assets recognized in connection with acquisitions. Corporate and other costs excluded from an operating (and reportable) segment’s performance are separately stated below and also include costs that are related to functional areas such as finance, information technology, legal, and human resources. We 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 operating and reportable segments are materially consistent with those described in Note 2: Significant Accounting Policies of the audited consolidated financial statements and notes thereto included in our 20212022 Annual Report.
The following table presents net revenue and segment operating income for our reportable segments and other operating results not allocated to our reportable segments for the three months ended March 31, 20222023 and 2021:2022:
 For the three months ended
 March 31, 2022March 31, 2021
Net revenue:
Performance Sensing$717,697 $714,512 
Sensing Solutions258,073 228,016 
Total net revenue$975,770 $942,528 
Segment operating income (as defined above):
Performance Sensing$180,638 $195,844 
Sensing Solutions72,515 66,894 
Total segment operating income253,153 262,738 
Corporate and other(76,123)(68,638)
Amortization of intangible assets(37,367)(32,064)
Restructuring and other charges, net(13,733)(4,582)
Operating income125,930 157,454 
Interest expense, net(45,445)(44,043)
Other, net(50,456)(39,397)
Income before taxes$30,029 $74,014 
18. Subsequent Events
On April 22, 2022, we signed a stock purchase agreement to acquire Dynapower Company, LLC ("Dynapower"), a leading provider of high-voltage power conversion solutions for clean energy segments, for an aggregate cash purchase price of $580 million, subject to working capital and other adjustments. We expect to complete the acquisition in the third quarter of 2022, subject to regulatory approvals and other customary closing conditions. We intend to fund the transaction using available cash on hand.
Dynapower is a leader in power conversion systems including inverters, converters, and rectifiers for renewable energy generation, green hydrogen production, electric vehicle charging stations, and microgrid applications, as well as industrial and
 For the three months ended
 March 31, 2023March 31, 2022
Net revenue:
Performance Sensing$751,525 $717,697 
Sensing Solutions246,650 258,073 
Total net revenue$998,175 $975,770 
Segment operating income (as defined above):
Performance Sensing$188,377 $180,638 
Sensing Solutions69,679 72,515 
Total segment operating income258,056 253,153 
Corporate and other(62,441)(76,123)
Amortization of intangible assets(40,774)(37,367)
Restructuring and other charges, net(5,999)(13,733)
Operating income148,842 125,930 
Interest expense, net(40,091)(45,445)
Other, net1,392 (50,456)
Income before taxes$110,143 $30,029 
18

Table of Contents

defense applications. Dynapower also provides aftermarket sales and service to maintain its equipment in the field. We are acquiring Dynapower as a foundational addition to our Clean Energy Solutions strategy and complement to our recent acquisitions of GIGAVAC, Lithium Balance, and Spear.
On April 26, 2022, we announced that our Board had declared a quarterly dividend of $0.11 per share, payable on May 25, 2022 to shareholders of record as of May 11, 2022.
19

Table of Contents

Cautionary Statements Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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," "potential," "opportunity," "guidance," and similar terms or phrases. Forward-looking statements involve, among other things, expectations, projections, and assumptions about future financial and operating results, objectives, business and market outlook, megatrends, priorities, growth, shareholder value, capital expenditures, cash flows, demand for products and services, share repurchases, and Sensata’s strategic initiatives, including those relating to acquisitions and dispositions and the impact of such transactions on our strategic and operational plans and financial results. These statements are subject to risks, uncertainties, and other important factors relating to our operations and business environment, and we can give no assurances that these forward-looking statements will prove to be correct.
A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements, including, but not limited to, risks related to public health crises, instability and changes in the global markets, supplier interruption or non-performance, the acquisition ofor disposition of businesses, adverse conditions or competition in the industries upon which we are dependent, intellectual property, product liability, warranty and recall claims, market acceptance of new product introductions and product innovations, labor disruptions or increased labor costs, and changes in existing environmental or safety laws, regulations, and programs.
Investors and others should carefully consider the foregoing factors and other uncertainties, risks, and potential events including, but not limited to, those described in Item 1A: Risk Factors included in our 20212022 Annual Report and as may be updated from time to time in Item 1A: Risk Factors included in our quarterly reports on Form 10-Q or other subsequent filings with the SEC.United States Securities and Exchange Commission. All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law.
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 supplements, and should be read in conjunction with, the discussion in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 20212022 Annual Report. The following discussion should also be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Amounts and percentages in the following discussions have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.
Overview
In the first quarter of 2022, our netNet revenue increased 3.5% from the first quarter of 2021. This revenue growth was primarily driven by outgrowth to market and revenue from acquisitions completed in 2021, offset somewhat by market declines. In addition, we continued to drive new business wins, most of which were in areas representing our megatrend initiatives, and which will help drive future revenue growth.
Operating income decreased $31.5 million to $125.9 million (12.9% of net revenue)2.3% in the first quarter of 2022,three months ended March 31, 2023 compared to $157.5 million (16.7% of net revenue) in the prior year period. ReferNet revenue increased 4.7% on an organic basis, which excludes a decrease of 2.3% attributed to discussion underchanges in foreign currency exchange rates and a decrease of 0.1% due to the heading Resultsnet effect of Operations elsewhereacquisitions and divestitures. This reflects organic revenue growth of 7.0% in Performance Sensing and organic revenue decline of 1.5% in Sensing Solutions. Organic revenue growth (or decline), discussed throughout this Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD(this "MD&A"), is a financial measure not presented in accordance with U.S. generally accepted accounting principles ("GAAP"). Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information related to our use of organic revenue growth (or decline).
Income before taxes decreasedOperating income for the three months ended March 31, 2023, increased $22.9 million, or 18.2%, to $30.0$148.8 million (14.9% of net revenue) compared to $125.9 million (12.9% of net revenue) in the prior year period. This increase was primarily due to (1) lower selling, general and administrative ("SG&A") expense, primarily related to reduced compensation in the first quarter of 2023 as a result of restructuring actions taken in fiscal year 2022, (2) margin improvements driven by organic revenue growth partially offset by the unfavorable effect of changes in foreign currency exchange rates, and (3) lower restructuring and other charges, net. These increases were partially offset by an increase in amortization expense as a result of intangibles recently acquired. Refer to Results of Operations included elsewhere in this MD&A for additional discussion of our earnings results for the three months ended March 31, 2023 compared to $74.0the prior year period.
We have sufficient cash to operate the business effectively. We generated $96.9 million of operating cash flow in the firstthree months ended March 31, 2023, ending the quarter with $1.0 billion in cash and cash equivalents. In the three months ended March 31, 2023, we used approximately $16.8 million for payment of 2021. Much of this decline related to a mark-to-market loss on our investment in Quanergy as discussed further under the heading Quanergy below. Global supply chain disruptionscash dividends and shortages continue to pressure our margins; however, we have made progressannounced an increase in recovering some of these additional costs from our customers through increased pricing.
Acquisitions
cash dividends for the second quarter to $0.12 per share. In the first quarter of 2022,2023, we completedprepaid $250.0 million of principal on the strategic acquisitionbalance outstanding of Elastic M2M for $51.2 million. Elastic M2M is a privately-held innovatorthe Term Loan and we intend to pay down the remaining principal balance on the Term Loan in the second quarter of connected intelligence for operational assets across heavy-duty transport, warehouse, supply chain2023. In fiscal year 2023, we will continue to return capital to shareholders through our dividend and logistics, industrial, light-duty passenger car, and a variety of other industry segments. Elastic M2M primarily serves telematics service providers and resellers, enabling them to leverage Elastic M2M’s cloud platform and analytics capabilities to deliver sensor-based operational insights to their end users. This acquisition augments our cloud capabilities critical to delivering actionable sensor-based insights, an increasingly important capability in this fast-growing industry segment.
On April 22, 2022, we signed a stock purchase agreement to acquire Dynapower, a leading provider of high-voltage power conversion solutions for clean energy segments, for an aggregate cash purchase price of $580 million, subject to working
2019

Table of Contents
capital and other adjustments. Dynapower's revenue is expected to exceed $100 million on an annualized basis in 2022 with projected revenue growth in excess of 30% over the next several years.opportunistic share repurchases. We expect improving free cash flow will naturally allow leverage to complete the acquisition in the third quarter of 2022, subjectdecline and returns on invested capital to regulatory approvals and other customary closing conditions.
Dynapower is a leader in power conversion systems including inverters, converters, and rectifiers for renewable energy generation, green hydrogen production, electric vehicle charging stations, and microgrid applications, as well as industrial and defense applications. Dynapower also provides aftermarket sales and service to maintain its equipment in the field. We are acquiring Dynapower as a foundational addition to our Clean Energy Solutions strategy and complement to our recent acquisitions of GIGAVAC, Lithium Balance, and Spear.
Quanergy
Since fiscal year 2016, we have held a $50.0 million investment in Quanergy Series B Preferred Stock, which was classified as an equity investment without a readily determinable fair value. As discussed in Note 14: Fair Value Measures included elsewhere in this Quarterly Report on Form 10-Q, in the first quarter of 2022, Quanergy became a public company traded on the NYSE, as a result of a business combination with CITIC. Upon closing of the business combination, our $50 million investment in Quanergy Series B Preferred stock was converted to 5.0 million common shares of Quanergy (at a $10 per share implied valuation). We also contributed $7.5 million to a PIPE investment to Quanergy in exchange for 750,000 unregistered common shares. Our investment in these two instruments was $57.5 million at February 8, 2022.
Effective as of the date of the business combination (February 8, 2022), we entered into the Support Agreement with Quanergy in exchange for 2.5 million warrants, converted to common stock on that date, valued at $17.6 million as of close of business February 8, 2022. This additional investment of $17.6 million was recorded as deferred income and will be recognized on a straight-line basisimprove over the four-year term of the agreement.
Accordingly, we held 8.25 million common shares of Quanergy on March 31, 2022, with a carrying value of $75.1 million. The share price of Quanergy on March 31, 2022 was $1.84 per share, representing a market value of $15.2 million. As a result, we recorded a $59.9 million mark-to-market adjustment loss on this investment in the first quarter of 2022, which was recorded in other, net.
On April 26, 2022, we announced that our Board had declared a quarterly dividend of $0.11 per share, payable on May 25, 2022 to shareholders of record as of May 11, 2022.time.
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, 20222023 compared to the three months ended March 31, 2021.2022. 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.
For the three months ended For the three months ended
March 31, 2022March 31, 2021 March 31, 2023March 31, 2022
AmountMargin*AmountMargin*AmountMargin*AmountMargin*
Net revenue:Net revenue:Net revenue:
Performance SensingPerformance Sensing$717.7 73.6 %$714.5 75.8 %Performance Sensing$751.5 75.3 %$717.7 73.6 %
Sensing SolutionsSensing Solutions258.1 26.4 228.0 24.2 Sensing Solutions246.7 24.7 258.1 26.4 
Net revenueNet revenue975.8 100.0 942.5 100.0 Net revenue998.2 100.0 975.8 100.0 
Operating costs and expensesOperating costs and expenses849.8 87.1 785.1 83.3 Operating costs and expenses849.3 85.1 849.8 87.1 
Operating incomeOperating income125.9 12.9 157.5 16.7 Operating income148.8 14.9 125.9 12.9 
Interest expense, netInterest expense, net(45.4)(4.7)(44.0)(4.7)Interest expense, net(40.1)(4.0)(45.4)(4.7)
Other, netOther, net(50.5)(5.2)(39.4)(4.2)Other, net1.4 0.1 (50.5)(5.2)
Income before taxesIncome before taxes30.0 3.1 74.0 7.9 Income before taxes110.1 11.0 30.0 3.1 
Provision for income taxesProvision for income taxes7.6 0.8 20.3 2.2 Provision for income taxes23.7 2.4 7.6 0.8 
Net incomeNet income$22.4 2.3 %$53.7 5.7 %Net income$86.4 8.7 %$22.4 2.3 %
__________________________

*     Represents the amount presented divided by total net revenue.
21

Table of Contents
Net Revenue
Net revenue for the three months ended March 31, 20222023 increased 3.5%2.3% compared to the three months ended March 31, 2021. Excluding2022. Net revenue for the three months ended March 31, 2023 increased 4.7% on an organic basis, which excludes a decrease of 0.6%2.3% attributed to changes in foreign currency exchange rates and an increasea decrease of 4.1%0.1% due to the net effect of acquisitions net revenue for the three months ended March 31, 2022 was flat on an organic basis. However, we achievedand divestitures. This represents market outgrowth of 79020 basis pointspoints. 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 above external market growth. It is only loosely correlated to normal unit demand fluctuations in the three months ended March 31, 2022. Organic revenue growth (or decline), discussed throughout this MD&A, is a financial measure not presented in accordance with U.S. GAAP. Refer to the section entitled Non-GAAP Financial Measures below for additional information related to our use of organic revenue growth (or decline).markets we serve.
Performance Sensing
Performance Sensing net revenue for the three months ended March 31, 20222023 increased 0.4%4.7% compared to the three months ended March 31, 2021.2022. Excluding a decrease of 0.7%2.7% attributed to changes in foreign currency exchange rates and an increase of 4.8%0.4% due to the effect of acquisitions, Performance Sensing net revenue for the three months ended March 31, 2022 decreased 3.7%2023 increased 7.0% on an organic basis, representing market outgrowth of 650 basis points.basis. Both automotive and HVOR contributed to these results as discussed below.
Automotive net revenue for the three months ended March 31, 2022 declined 6.4%2023 grew 2.9% compared to the three months ended March 31, 2021.2022. Excluding a decline of 0.6%3.1% attributed to changes in foreign currency exchange rates, Automotive net revenue for the three months ended March 31, 2022 declined 5.8%2023 grew 6.0% on an organic basis, representingprimarily due to improved market outgrowth of 410 basis points.performance. HVOR net revenue for the three months ended March 31, 20222023 grew 21.1%9.0% compared to the three months ended March 31, 2021.2022. Excluding a decline of 0.6%1.7% attributed to changes in foreign currency exchange rates and growthan increase of 19.2%1.3% due to the effect of acquisitions, HVOR net revenue for the three months ended March 31, 20222023 grew 2.5%9.4% on an organic basis, representing 1,340 basis points ofprimarily due to market outgrowth in the quarter.outgrowth.
Sensing Solutions
Sensing Solutions net revenue for the three months ended March 31, 2022 increased 13.2%2023 decreased 4.4% compared to the three months ended March 31, 2021.2022. Excluding a decline of 0.5%1.5% attributed to changes in foreign currency exchange rates and growtha decline of 2.1%1.4% due to the net effect of acquisitions and divestitures, Sensing Solutions net revenue for the three months ended March 31, 2022 increased 11.6%2023 declined 1.5% on an organic basis. The organic revenue growthbasis, which primarily reflects the launch of newmarket declines in our industrial electrification applications, somewhatbusiness, partially offset by declinesimprovements in the Industrial and Aerospaceaerospace markets.
20

Table of Contents
Operating costs and expenses
Operating costs and expenses for the three months ended March 31, 20222023 and 20212022 are presented, in millions of dollars and as a percentage of net revenue, in the following table. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.
For the three months ended For the three months ended
March 31, 2022March 31, 2021 March 31, 2023March 31, 2022
AmountMargin*AmountMargin*AmountMargin*AmountMargin*
Operating costs and expenses:Operating costs and expenses:Operating costs and expenses:
Cost of revenueCost of revenue$657.1 67.3 %$635.3 67.4 %Cost of revenue$670.5 67.2 %$657.1 67.3 %
Research and developmentResearch and development46.0 4.7 36.0 3.8 Research and development45.9 4.6 46.0 4.7 
Selling, general and administrativeSelling, general and administrative95.7 9.8 77.1 8.2 Selling, general and administrative86.2 8.6 95.7 9.8 
Amortization of intangible assetsAmortization of intangible assets37.4 3.8 32.1 3.4 Amortization of intangible assets40.8 4.1 37.4 3.8 
Restructuring and other charges, netRestructuring and other charges, net13.7 1.4 4.6 0.5 Restructuring and other charges, net6.0 0.6 13.7 1.4 
Total operating costs and expensesTotal operating costs and expenses$849.8 87.1 %$785.1 83.3 %Total operating costs and expenses$849.3 85.1 %$849.8 87.1 %
__________________________

*     Represents the amount presented divided by total net revenue.
Cost of revenue
For the three months ended March 31, 2022,2023, cost of revenue as a percentage of net revenue decreased slightly from the three months ended March 31, 2021. The most significant drivers2022, as the net impacts of cost of revenue as a percentage of net revenue in the first quarter of 2022, which(1) pricing recoveries from customers, (2) inflation on material and logistics costs, and (3) volume leverage was largely offset wereby (1) product mix and (2) the favorableunfavorable effect of changes in foreign currency exchange rates and productivity headwinds. Increased costs related to industry-wide supply chain shortages were largely offset by recovery from customers in the form of pricing increases.
22

Table of Contents
rates.
Research and development expense
For the three months ended March 31, 2022,2023, research and development ("R&D") expense increaseddecreased slightly from the three months ended March 31, 2021 primarily2022, due to lower costs as a result of (1) higher spend to support megatrend growth initiativesrepositioning activities in fiscal year 2022 and (1) incremental R&D expense related to acquired businesses. R&D expense related to megatrends during the three months ended March 31, 2022 was $16.4 million, an increase of $5.1 million from the three months ended March 31, 2021.
Selling, general and administrative expense
For the three months ended March 31, 2022, selling, general and administrative ("SG&A") expense increased from the three months ended March 31, 2021, primarily as a result of (1) incremental SG&A expense related to acquired businesses, including related transaction costs, (2) higher selling costs, and (3) higher share-based compensation, partially offset by the favorable impacteffect of changes in foreign currency exchange rates.
Amortization of intangible assetsSelling, general and administrative expense
For the three months ended March 31, 2023, SG&A expense decreased from the three months ended March 31, 2022, primarily as a result of (1) reduced compensation in the first quarter of 2023, primarily the result of restructuring actions taken in fiscal year 2022, (2) the favorable effect of changes in foreign currency exchange rates, and (3) lower costs related to mergers and acquisitions activity. Refer to Note 15: Acquisitions and Divestitures of our condensed consolidated financial statements, included elsewhere in this Quarterly Report on Form 10-Q, for additional information related to acquired businesses.
Amortization of intangible assets
For the three months ended March 31, 2023, amortization expense increased from the three months ended March 31, 20212022, primarily due to increased intangibles from recent acquisitions partially offset by the effectacquisitions. Refer to Note 15: Acquisitions and Divestitures of the economic benefit amortization method.our condensed consolidated financial statements, included elsewhere in this Quarterly Report on Form 10-Q, for additional information related to recent acquisitions.
Restructuring and other charges, net
For the three months ended March 31, 2022,2023, restructuring and other charges, net increaseddecreased from the three months ended March 31, 2021. This increase is2022 primarily due to (1) a reduction in expense for acquisition-related incentive compensation arrangements and (2) the gain on sale of $15.0 million related to Elastic M2M milestones which were meta business in the first quarter of 2023, partially offset by (1) the impact of the non-recurrence of a $6.2 milliongain recognized in the first quarter of 2022 related to the reduction inof the liability for contingent consideration for Spear.Spear and (2) an increase in severance charges that were not the result of initiation of a larger restructuring plan. Refer to Note 5: Restructuring and Other Charges, Net of our condensed consolidated financial statements, included elsewhere in this Quarterly Report on Form 10-Q, for additional information on ourthe components of restructuring and other charges, net.
Operating income
InFor the three months ended March 31, 2022,2023, operating income decreasedincreased compared to the three months ended March 31, 2021,2022, primarily due to (1) increasedlower SG&A expense, primarily related to reduced compensation in the first quarter of 2023 as a result of restructuring and other charges as described above,actions taken in fiscal year 2022, (2) higher selling costs, (3) increased amortization expense as described above, (4) higher spend to support our megatrends initiatives, and (5) higher share-based compensation,margin improvements driven by organic revenue growth partially offset by
21

Table of Contents
the favorableunfavorable effect of changes in foreign currency exchange rates.
Acquired businesses hadrates, and (3) lower restructuring and other charges, net. These increases were partially offset by an increase in amortization expense as a minor net impact on our operating income in the first quarterresult of 2022 compared to the first quarter of 2021.intangibles recently acquired.
Interest expense, net
For the three months ended March 31, 2022,2023, interest expense, net increaseddecreased $5.4 million from the three months ended March 31, 2021,2022 primarily due to increased interest income as a result of increasing interest rates partially offset by (1) increased interest expense on the 4.0% Senior Notes, which were issued on March 29, 2021 and April 8, 2021 partially offsetTerm Loan (partially mitigated by the reduced interest expense resulting from our March 5, 2021$250.0 million prepayment on the Term Loan in the first quarter of 2023) and (2) the net impact of the early redemption of the 6.25%4.875% Senior Notes.Notes and the issuance of the 5.875% Senior Notes in the third quarter of 2022.
Other, net
Other, net primarily includes currency remeasurement gains and losses on net monetary assets, gains and losses on foreign currency and commodity forward contracts not designated as hedging instruments, mark-to-market gains and losses on investments, losses related to debt refinancing, and the portion of our net periodic benefit cost excluding service cost. InRefer to Note 6: Other, Net of our condensed consolidated financial statements, included elsewhere in this Quarterly Report on Form 10-Q, for more details related to the components of other, net.
For the three months ended March 31, 2022,2023, other, net represented a net lossgain of $50.5$1.4 million, an increasea favorable impact on earnings of $11.1$51.8 million compared to a net loss of $39.4$50.5 million in the three months ended March 31, 2021.2022. This increaseimpact was primarily due to $59.3 million inthe non-recurrence of mark-to-market losses on equity investments, primarily related to our investment in Quanergy partially offset by the non-recurrence of $30.1 million loss on debt financing related to the redemption of our 6.25% Senior NotesSystems Inc., in the first quarter of 2021 and increased2022, partially offset by lower gains from ouron commodity forward contracts.
Provision for income taxes
For the three months ended March 31, 2022,2023, the provision for income taxes decreased $12.7increased $16.1 million from the three months ended March 31, 2021,2022, predominantly relateddue to the overall decreaseincrease in incomeprofit before tax driven in partas impacted by a $59.9 million mark-to-market loss on our investment in Quanergy.the jurisdictional mix of profits.
The provision for income taxes consists of (1) current tax expense, which relates primarily to our profitable operations in tax jurisdictions with limited or no net operating loss carryforwards and withholding taxes related to management fees, royalties,
23

Table of Contents
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 (a) book versus tax basis in intangible assets, (b) changes in net operating loss carryforwards, and (c) changes in withholding taxes on unremitted earnings. Other items impacting deferred tax expense include changes in tax rates and (d) changes in our assessment of the realizability of our deferred tax assets.
Non-GAAP Financial Measures
This 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 are used by our management, Board of Directors, and investors. We use these non-GAAP financial 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 has 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, net cash provided by operating cash flows,activities, or 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).
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
22

Table of Contents
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.
Adjusted operating income, adjusted operating margin, adjusted net income, and adjusted EPS
We define adjusted operating income as operating income, determined in accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are described under the heading Non-GAAP adjustmentsbelow. Adjusted operating margin is calculated by dividing adjusted operating income by net revenue determined in accordance with U.S. GAAP. We define adjusted net income as follows: net income (or loss) determined in accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are described inunder the heading 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.
Management uses adjusted operating income, adjusted operating margin, adjusted net income, and adjusted EPS as measures of operating performance, for planning purposes (including the preparation of our annual operating budget), to allocate resources to enhance the financial performance of our business, to evaluate the effectiveness of our business strategies, in communications with our Board of Directors and investors concerning our financial performance, and as factors in determining compensation for certain employees. We believe investors and securities analysts also use these non-GAAP financial measures in their evaluation of our performance and the performance of other similar companies. These non-GAAP financial measures are not measures of liquidity.
Free cash flow
Free cash flow is defined as net cash provided by operating activities less additions to property, plant and equipment and capitalized software. We believe free cash flow is useful to management and investors as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to, among other things, fund acquisitions, repurchase ordinary shares, and (or) accelerate the repayment of debt obligations.
Adjusted EBITDA
Adjusted EBITDA is defined as net income (or loss), determined in accordance with U.S. GAAP, excluding interest expense, net, provision for (or benefit from) income taxes, depreciation expense, amortization of intangible assets, and the following non-GAAP adjustments, if applicable: (1) restructuring related and other, (2) financing and other transaction costs, and (3) deferred
24

Table of Contents
loss or gain on derivative instruments, and (4) step-up inventory amortization.instruments. Refer to Non-GAAP Adjustments below for additional discussion of these adjustments. We believe that this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.
Net leverage ratio
Net leverage ratio represents net debt (total debt, finance lease and other financing obligations less cash and cash equivalents) divided by last twelve months ("LTM") adjusted EBITDA. We believe that the net leverage ratio is a useful measure to management and investors in understanding trends in our overall financial condition.
Non-GAAP adjustments
Many of our non-GAAP adjustments relate to a series of strategic initiatives developed by our management aimed at better positioning us for future revenue growth and an improved cost structure. These initiatives have been modified from time to time to reflect changes in overall market conditions and the competitive environment facing our business. These initiatives include, among other items, acquisitions, divestitures, restructurings of certain business, supply chain or corporate activities, and various financing transactions. We describe these adjustments in more detail below, each of which is net of current tax impacts, as applicable.
Restructuring related and other: includes net charges net related to certain restructuring and other exit activities as well as other costs (or income) that we believe are either unique or unusual to the identified reporting period, and that we believe impact comparisons to prior period operating results. Such costs include charges related to optimization of our manufacturing processes to increase productivity. This type of activity occurs periodically, however each action is unique, discrete, and driven by various facts and circumstances. Such amounts are excluded from internal financial statements and analyses that management uses in connection with financial planning and in its review and assessment of our operating and financial performance, including the performance of our segments.
Financing and other transaction costs: includes losses or gains related to debt financing transactions, losses or gains related to the divestiture of a business, and costs incurred, including for legal, accounting, and other professional services, that are directly related to an acquisition, divestiture, or equity financing transaction.transaction, mark-to-market losses or gains on
23

Table of Contents
our equity investments, expenses related to compensation arrangements entered into concurrent with the closing of an acquisition, and gains related to changes in the fair value of acquisition-related contingent consideration amounts.
Deferred loss or gain on derivative instruments: includes unrealized losses or gains on derivative instruments that do not qualify for hedge accounting as well as the impact of commodity prices on our raw material costs relative to the strike price on our commodity forward contracts.
Step-up depreciation and amortization: includes depreciation and amortization expense associated with the step-up in fair value of assets acquired in connection with a business combination (e.g., property, plant and equipment, definite-lived intangible assets, and inventories).
Deferred taxes and other tax related: includes adjustments for book-to-tax basis differences due primarily to the step-up in fair value of fixed and intangible assets and goodwill, the utilization of net operating losses, and adjustments to our valuation allowance in connection with certain acquisitions and tax law changes. Other tax related items include certain adjustments to unrecognized tax benefits and withholding tax on repatriation of foreign earnings.
Amortization of debt issuance costscosts:. We adjust our results recorded in accordance with U.S. GAAP byrepresents interest expense related to the amortization of deferred financing costs as well as debt issuance costs, which are deferred as a contra-liability against our long-term debt,discounts, net on the consolidated balance sheets and which are reflected in interest expense on the consolidated statements of operations.premiums.
Where applicable, the current income tax effect of non-GAAP adjustments.
Our definition of adjusted net income excludes the deferred provision for (or benefit from) income taxes and other tax related items described above. As we treat deferred income taxes as an adjustment to compute adjusted net income, the deferred income tax effect associated with the reconciling items presented below would not change adjusted net income for any period presented.
25

Table of Contents
Non-GAAP reconciliations
The following tables present reconciliations of certain financial measures calculated in accordance with U.S. GAAP to the related non-GAAP financial measures for the periods presented. Refer to Non-GAAP Adjustmentsadjustments section above for additional information related to these adjustments. Amounts and percentages in the tables below have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding.
For the three months ended March 31, 2022For the three months ended March 31, 2021 For the three months ended March 31, 2023
(Dollars in millions, except per share amounts)(Dollars in millions, except per share amounts)Operating IncomeOperating MarginNet IncomeDiluted EPSOperating IncomeOperating MarginNet IncomeDiluted EPS(Dollars in millions, except per share amounts)Operating IncomeOperating MarginIncome TaxesNet IncomeDiluted EPS
Reported (GAAP)Reported (GAAP)$125.9 12.9 %$22.4 $0.14 $157.5 16.7 %$53.7 $0.34 Reported (GAAP)$148.8 14.9 %$23.7 $86.4 $0.56 
Non-GAAP adjustments:Non-GAAP adjustments:Non-GAAP adjustments:
Restructuring related and otherRestructuring related and other4.1 0.4 4.0 0.03 4.5 0.5 7.3 0.05 Restructuring related and other2.9 0.3 (0.7)2.3 0.01 
Financing and other transaction costsFinancing and other transaction costs15.8 1.6 74.6 0.47 4.6 0.5 32.8 0.21 Financing and other transaction costs4.2 0.4 2.9 7.6 0.05 
Step-up depreciation and amortizationStep-up depreciation and amortization35.9 3.7 35.9 0.23 29.7 3.2 29.7 0.19 Step-up depreciation and amortization39.1 3.9 — 39.1 0.26 
Deferred loss/(gain) on derivative instruments0.7 0.1 (7.0)(0.04)1.8 0.2 2.2 0.01 
Deferred gain on derivative instrumentsDeferred gain on derivative instruments(2.3)(0.2)0.9 (3.3)(0.02)
Amortization of debt issuance costsAmortization of debt issuance costs— — 1.7 0.01 — — 1.7 0.01 Amortization of debt issuance costs— — — 1.7 0.01 
Deferred taxes and other tax relatedDeferred taxes and other tax related— — (8.3)(0.05)— — 10.1 0.06 Deferred taxes and other tax related— — 6.8 6.8 0.04 
Total adjustmentsTotal adjustments56.6 5.8 101.0 0.64 40.6 4.3 83.9 0.53 Total adjustments44.1 4.4 9.8 54.2 0.35 
Adjusted (non-GAAP)Adjusted (non-GAAP)$182.5 18.7 %$123.4 $0.78 $198.1 21.0 %$137.6 $0.86 Adjusted (non-GAAP)$192.9 19.3 %$13.9 $140.7 $0.92 
 For the three months ended March 31, 2022
(Dollars in millions, except per share amounts)Operating IncomeOperating MarginIncome TaxesNet IncomeDiluted EPS
Reported (GAAP)$125.9 12.9 %$7.6 $22.4 $0.14 
Non-GAAP adjustments:
Restructuring related and other4.1 0.4 (0.1)4.0 0.03 
Financing and other transaction costs15.8 1.6 (0.5)74.6 0.47 
Step-up depreciation and amortization35.9 3.7 — 35.9 0.23 
Deferred loss/(gain) on derivative instruments0.7 0.1 1.8 (7.0)(0.04)
Amortization of debt issuance costs— — — 1.7 0.01 
Deferred taxes and other tax related— — (8.3)(8.3)(0.05)
Total adjustments56.6 5.8 (7.2)101.0 0.64 
Adjusted (non-GAAP)$182.5 18.7 %$14.8 $123.4 $0.78 
24

Table of Contents
The following table provides a reconciliation of net cash provided by operating activities in accordance with U.S. GAAP to free cash flow.
For the three months ended March 31,For the three months ended March 31,
(in millions)(in millions)20222021(in millions)20232022
Net cash provided by operating activities$47.4 $104.5 
Net cash provided by operating activities (GAAP)Net cash provided by operating activities (GAAP)$96.9 $47.4 
Additions to property, plant and equipment and capitalized softwareAdditions to property, plant and equipment and capitalized software(35.7)(27.2)Additions to property, plant and equipment and capitalized software(36.9)(35.7)
Free cash flow$11.7 $77.3 
Free cash flow (non-GAAP)Free cash flow (non-GAAP)$60.0 $11.6 
The following table provides a reconciliation of corporate and other expenses in accordance with U.S. GAAP to adjusted corporate and other expenses.
For the three months ended March 31,
(in millions)20232022
Corporate and other expenses (GAAP)$(62.4)$(76.1)
Restructuring related and other(1.4)2.5 
Financing and other transaction costs2.6 3.7 
Step-up depreciation and amortization0.1 0.3 
Deferred (gain)/loss on derivative instruments(2.3)0.7 
Total adjustments(1.0)7.2 
Adjusted corporate and other expenses (non-GAAP)$(63.4)$(68.9)
The following table provides a reconciliation of net income in accordance with U.S. GAAP to Adjusted EBITDA.
For the three months ended March 31,
(in millions)LTM20222021
Net income$332.3 $22.4 $53.7 
Interest expense, net180.7 45.4 44.0 
Provision for income taxes37.6 7.6 20.3 
Depreciation expense125.3 31.5 31.2 
Amortization of intangible assets139.4 37.4 32.1 
EBITDA815.4 144.4 181.3 
Non-GAAP Adjustments
Restructuring related and other20.4 4.1 7.4 
Financing and other transaction costs80.2 75.1 35.9 
Deferred (gain)/loss on derivative instruments(0.5)(8.8)3.0 
Adjusted EBITDA$915.5 $214.9 $227.6 
26

Table of Contents
For the three months ended March 31,
(in millions)LTM20232022
Net income$374.7 $86.4 $22.4 
Interest expense, net173.5 40.1 45.4 
Provision for income taxes102.2 23.7 7.6 
Depreciation expense126.6 30.9 31.5 
Amortization of intangible assets157.2 40.8 37.4 
EBITDA934.1 222.0 144.4 
Non-GAAP adjustments
Restructuring related and other36.8 2.9 4.1 
Financing and other transaction costs(62.9)4.7 75.1 
Deferred loss/(gain) on derivative instruments6.5 (4.1)(8.8)
Adjusted EBITDA$914.5 $225.5 $214.9 
The following table provides a reconciliation of total debt, finance lease and other financing obligations in accordance with U.S. GAAP to net leverage ratio.
(Dollars in millions)(Dollars in millions)March 31, 2022December 31, 2021(Dollars in millions)March 31,
2023
December 31,
2022
Current portion of long-term debt, finance lease and other financing obligationsCurrent portion of long-term debt, finance lease and other financing obligations$6.7 $6.8 Current portion of long-term debt, finance lease and other financing obligations$198.7 $256.5 
Finance lease and other financing obligations, less current portionFinance lease and other financing obligations, less current portion26.3 26.6 Finance lease and other financing obligations, less current portion24.5 24.7 
Long-term debt, netLong-term debt, net4,215.5 4,214.9 Long-term debt, net3,768.6 3,958.9 
Total debt, finance lease and other financing obligationsTotal debt, finance lease and other financing obligations4,248.5 4,248.3 Total debt, finance lease and other financing obligations3,991.8 4,240.1 
Less: discount, net of premiumLess: discount, net of premium(4.8)(5.2)Less: discount, net of premium(2.8)(3.4)
Less: deferred financing costsLess: deferred financing costs(25.4)(26.7)Less: deferred financing costs(28.5)(29.9)
Total gross indebtednessTotal gross indebtedness4,278.7 4,280.2 Total gross indebtedness4,023.2 4,273.4 
Less: cash and cash equivalentsLess: cash and cash equivalents1,608.5 1,709.0 Less: cash and cash equivalents1,034.1 1,225.5 
Net debtNet debt$2,670.2 $2,571.3 Net debt$2,989.0 $3,047.9 
Adjusted EBITDA (LTM)Adjusted EBITDA (LTM)$915.5 $928.3 Adjusted EBITDA (LTM)$914.5 $903.9 
Net leverage ratioNet leverage ratio2.92.8Net leverage ratio3.33.4
25

Table of Contents
Liquidity and Capital Resources
As of March 31, 20222023 and December 31, 2021,2022, we held cash and cash equivalents in the following regions (amounts have been calculated based on unrounded numbers; accordingly, certain amounts may not appear to recalculate due to the effect of rounding):regions:
(In millions)(In millions)March 31, 2022December 31, 2021(In millions)March 31,
2023
December 31,
2022
United KingdomUnited Kingdom$17.3 $20.4 United Kingdom$17.0 $15.7 
United StatesUnited States17.3 25.0 United States16.0 16.1 
The NetherlandsThe Netherlands1,180.5 1,304.3 The Netherlands669.7 861.3 
ChinaChina336.3 293.8 China228.9 210.0 
OtherOther57.1 65.4 Other102.5 122.5 
TotalTotal$1,608.5 $1,709.0 Total$1,034.1 $1,225.5 
The amount of cash and cash equivalents held in these geographic regions fluctuates throughout the year due to a variety of factors, such as our use of intercompany loans and dividends and the timing of cash receipts and disbursements in the normal course of business. Our earnings are not considered to be permanently reinvested in certain jurisdictions in which they were earned. We recognize a deferred tax liability on these unremitted earnings to the extent the remittance of such earnings cannot be recovered in a tax-free manner.
In certain jurisdictions, our cash balances are subject to withholding taxes immediately upon withdrawal of funds to a different jurisdiction. In addition, in order to take advantage of incentive programs offered by various jurisdictions, including tax incentives, we are required to maintain minimum cash balances in these jurisdictions. The transfer of cash from these jurisdictions could result in loss of incentives or higher cash tax expense, but those impacts are not expected to be material.
Our cash and cash equivalent balances are held in the following significant currencies (amounts in the tables below have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):
As of March 31, 2023
(In millions)USDEURGBPCNYOther
United Kingdom$0.1 0.0 £12.9 ¥— 
United States15.8 0.2 — — 
The Netherlands660.2 7.7 0.4 — 
China84.0 — — 997.0 
Other75.2 2.3 — — 
Total$835.3 10.2 £13.4 ¥997.0 
USD Equivalent$11.1 $16.5 $144.9 $26.4 
As of December 31, 2022
(In millions)USDEURGBPCNYOther
United Kingdom$2.7 0.0 £10.7 ¥— 
United States16.1 — — — 
The Netherlands848.6 10.9 0.2 — 
China95.0 — — 794.4 
Other99.9 2.3 — — 
Total$1,062.3 13.2 £10.9 ¥794.4 
USD Equivalent$14.0 $13.2 $115.2 $20.8 
26

Table of Contents
Cash Flows:
The table below summarizes our primary sources and uses of cash for the three months ended March 31, 20222023 and 2021.2022. We have derived thisthese summarized statements of cash flows from the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. 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.
 For the three months ended
(In millions)March 31, 2022March 31, 2021
Net cash provided by/(used in):
Operating activities:
Net income adjusted for non-cash items$150.5 $162.8 
Changes in operating assets and liabilities, net(103.2)(58.3)
Operating activities47.4 104.5 
Investing activities(90.9)(49.0)
Financing activities(57.0)(23.5)
Net change$(100.5)$31.9 
27

Table of Contents
 For the three months ended
(In millions)March 31, 2023March 31, 2022
Net cash provided by/(used in):
Operating activities:
Net income adjusted for non-cash items$168.3 $150.5 
Changes in operating assets and liabilities, net(71.4)(103.2)
Operating activities96.9 47.4 
Investing activities(22.9)(90.9)
Financing activities(265.4)(57.0)
Net change$(191.4)$(100.5)
Operating activities. Net cash provided by operating activities decreasedfor the three months ended March 31, 2023 increased compared to the corresponding period of the prior year, primarily due to higher net income and timing of supplier payments and customer receipts. We also paid approximately $17.0 million in additional interest in the three months ended March 31, 20222023 compared to the three months ended March 31, 2021, primarily due to increased raw material purchases in order to maximize production flexibility given widespread parts shortages in our supply chain and in anticipation of volume increases later in the year, a cash payment of $7.5 million for earned acquisition-related incentive compensation related to Elastic M2M, and timing of supplier payments and customer receipts.2022.
Investing activities. Net cash used in investing activities increasedfor the three months ended March 31, 2023 decreased compared to the corresponding period of the prior year, primarily due to no cash paid for acquisitions (compared to $48.4 million paid for Elastic M2M in the three months ended March 31, 2022 primarily due to2022) and no cash paid for investments in debt and equity securities (compared to $6.9 million in the acquisitionsthree months ended March 31, 2022), partially offset by cash proceeds of Elastic M2M and$14.0 million from the $7.5 million PIPE investmentdivestiture of a business in Quanergy. Inthe three months ended March 31, 2023. For fiscal year 2022,2023, we anticipate capital expenditures of approximately $165.0$170.0 million to $175.0$180.0 million, which we expect to be funded fromfund with cash on hand.
Financing activities. InNet cash used in financing activities for the three months ended March 31, 2022, net cash used in financing activities2023 increased primarily due to $67.3the $250.0 million cash paid for share repurchases followingpayment on the resumption of our program in the fourth quarter of 2021, partially offset by the nonrecurrence of $31.1 million of payments related to debt financingTerm Loan made in the three months ended March 31, 2021.2023 and $16.8 million paid to shareholders in the form of cash dividends paid, partially offset by lower cash paid to repurchase ordinary shares as part of our share repurchase program. On April 25, 2023, we announced that we intended to pay down $196.8 million (the remaining outstanding balance) on the Term Loan in the second quarter of 2023, which will be presented as a cash outflow within financing activities.
Indebtedness and Liquidity
As of March 31, 2022,2023, we had $4.3$4.0 billion in gross indebtedness, which includes finance lease and other financing obligations and excludes debt discounts, premiums, and deferred financing costs.
Capital Resources
Senior Secured Credit Facilities
The credit agreement governing our secured credit facility (as amended, the "Credit Agreement")Credit Agreement provides for the Senior Secured Credit Facilities consisting of the Term Loan, the Revolving Credit Facility, and incremental availability (the "Accordion") under which additional secured credit facilities could be issued under certain circumstances. In the first quarter of 2023, we paid $250 million on the Term Loan. We intend to repay the remaining outstanding balance in the second quarter of 2023.
Sources of liquidity
Our sources of liquidity include cash on hand, cash flows from operations, and available capacity under the Revolving Credit Facility. As of March 31, 2022,2023, we had $416.1$746.1 million available under the Revolving Credit Facility, net of $3.9 million of obligations in respect of outstanding letters of credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of March 31, 2022,2023, no amounts had been drawn against these outstanding letters of credit. Availability under the Accordion varies each period based on our attainment of certain financial metrics as set forth in the terms of the Credit Agreement and the indentures under which our senior notes were issued (the "Senior Notes Indentures"). As of March 31, 2022,2023, availability under the Accordion was approximately $1.0 billion.
27

Table of Contents
We believe, based on our current level of operations and taking into consideration the restrictions and covenants included in the Credit Agreement and Senior Notes Indentures, that the sources of liquidity described above will be sufficient to fund our operations, capital expenditures, dividend payments, ordinary share repurchases, and debt service for at least the next twelve months. However, we cannot make assurances that our business will generate sufficient cash flows from operations or that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Further, our highly-leveraged nature may limit our ability to procure additional financing in the future.
Our ability to raise additional financing, and our borrowing costs, may be impacted by short- and long-term debt ratings assigned by independent rating agencies, which are based, in significant part, on our performance as measured by certain credit metrics such as interest coverage and leverage ratios. As of April 20, 2022,21, 2023, Moody’s Investors Service’s corporate credit rating for STBV was Ba2 with a stable outlook, and Standard & Poor’s corporate credit rating for STBV was BB+ with a stable outlook. Any future downgrades to STBV's credit ratings may increase our future borrowing costs but will not reduce availability under the Credit Agreement.
Restrictions and Covenants
The Credit Agreement provides that if our senior secured net leverage ratio exceeds a specified level we are required to use a portion of our excess cash flow, as defined in the Credit Agreement, generated by operating, investing, or financing activities to prepay some or all of the outstanding borrowings under the Senior Secured Credit Facilities. The Credit Agreement also requires mandatory prepayments of the outstanding borrowings under the Senior Secured Credit Facilities upon certain asset dispositions and casualty events, in each case subject to certain reinvestment rights, and upon the incurrence of certain indebtedness (excluding any permitted indebtedness). These provisions were not triggered during the three months ended March 31, 2022.
28

Table of Contents
2023.
The Credit Agreement and the Senior Notes Indentures contain restrictions and covenants that limit the ability of our wholly-owned subsidiary, STBV, and certain of its subsidiaries to, among other things, incur subsequent indebtedness, sell assets, pay dividends, and make other restricted payments. For a full discussion of these restrictions and covenants, refer to Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources included in our 20212022 Annual Report. These restrictions and covenants, which are subject to important exceptions and qualifications set forth in the Credit Agreement and Senior Notes Indentures, were taken into consideration when we established our share repurchase programs and will be evaluated periodically with respect to future potential funding of those programs. As of March 31, 2022,2023, we believe we were in compliance with all covenants and default provisions under our credit arrangements.
Share repurchase programs
From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by our Board at any time. We currently have an authorized $500.0 million share repurchase program (the "January 2022 Program") under which approximately $449.5$224.5 million remained available as of March 31, 2022.2023. We did not repurchase any ordinary shares under this program in the three months ended March 31, 2023. In the three months ended March 31, 2022, we repurchased 1.1 million ordinary shares under the January 2022 Program.
Dividends
On February 22, 2023, we paid a cash dividend of $0.11 per share, or $16.8 million in aggregate, to shareholders of record as of February 8, 2023. On April 13, 2023, we announced that our Board of Directors approved a quarterly dividend of $0.12 per share, payable on May 24, 2023 to shareholders of record as of May 10, 2023.
Recently Issued Accounting Pronouncements
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.
Critical Accounting Policies and Estimates
For a discussion of the critical accounting policies that require the use of significant judgments and estimates by management, refer to Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates included in our 20212022 Annual Report.
Item 3.Quantitative and Qualitative Disclosures About Market Risk.
No significant changes to our market risk have occurred since December 31, 2021.2022. For a discussion of market risks affecting us, refer to Part II, Item 7A: Quantitative and Qualitative Disclosures About Market Risk included in our 20212022 Annual Report.
28

Table of Contents
Item 4.Controls and Procedures.
The required certifications of our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer are included as exhibits to this Quarterly Report on Form 10-Q. The disclosures set forth in this Item 4 contain information concerning the evaluation of our disclosure controls and procedures and changes in internal control over financial reporting referred to in these certifications. These certifications should be read in conjunction with this Item 4 for a more complete understanding of the matters covered by the certifications.
Evaluation of Disclosure Controls and Procedures
With the participation of our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2022.2023. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2022,2023, our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended March 31, 20222023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
29

Table of Contents
Inherent Limitations on Effectiveness of Controls
There are inherent limitations to the effectiveness of any system of internal control over financial reporting. Accordingly, even an effective system of internal control over financial reporting can only provide reasonable assurance with respect to financial statement preparation and presentation in accordance with U.S. GAAP. Our internal controls over financial reporting are subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time.
29

Table of Contents
PART II—OTHER INFORMATION
Item 1.Legal Proceedings.
We are regularly involved in a number of claims and litigation matters that arise in the ordinary course of business. Although it is not feasible to predict the outcome of these matters, based upon our experience and current information known to us, we do not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on our results of operations, financial condition, and/or cash flows.
Item 1A.Risk Factors.
Information regarding risk factors appears in Part I, Item 1A: Risk Factors, included in our 20212022 Annual Report. There have been no material changes to the risk factors disclosed therein.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
Period
Total Number of Shares Purchased (in shares) (1)
Weighted-Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plan or Programs (2)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs
(in millions)
January 1 through January 31, 2022453,441 $61.89 452,643 $488.8 
February 1 through February 28, 2022594,667 $57.11 593,207 $454.9 
March 1 through March 31, 202292,539 $58.11 92,485 $449.5 
Quarter total1,140,647 $59.09 1,138,335 $449.5 
Period
Total Number of Shares Purchased (in shares) (1)
Weighted-Average Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plan or ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs
(in millions)
January 1 through January 31, 2023701 $43.37 — $224.5 
February 1 through February 28, 20231,361 $52.64 — $224.5 
March 1 through March 31, 2023399 $50.78 — $224.5 
Quarter total2,461 $49.70 — $224.5 
__________________________

(1)     The number of ordinary shares presented includes ordinary shares that were withheld upon the vesting of restricted securities to cover payment of employee withholding tax. These withholdings took place outside of a publicly announced repurchase plan. There were 798 ordinary shares withheld in January 2022, 1,460 ordinary shares withheld in February 2022, and 54 ordinary shares withheld in March 2022, representing a total aggregate fair value of $135 thousand based on the closing price of our ordinary shares on the date of withholdings.
(2)     With the exception of $16.9 million aggregate fair value of ordinary shares repurchased in January 2022 under a $500.0 million share repurchase program authorized by our Board of Directors and publicly announced on July 30, 2019 (the "July 2019 Program"), all purchases during the three months ended March 31, 2021 were conducted pursuant to a $500.0 million share repurchase program authorized by our Board of Directors and publicly announced on January 20, 2022 (the “January 2022 Program”), which replaced the July 2019 Program. The January 2022 Program does not have an established expiration date.
Item 3.Defaults Upon Senior Securities.
None.
30

Table of Contents
Item 5.Other Information.
On April 22, 2022,28, 2023, Sensata Technologies, Inc. (“STI”), a wholly-owned subsidiary of Sensata Technologies Holding plc (the "Company") signed a stock purchase agreement to acquire Dynapower Company, LLC ("Dynapower"“Company”), entered into a leading providermutually agreed Separation and Release of high-voltage power conversion solutions for clean energy segments, forClaims Agreement (the “Separation Agreement”) with Hans Lidforss, Senior Vice President, Chief Strategy and Corporate Development Officer, which amends Mr. Lidforss’s Amended and Restated Employment Agreement with STI, dated as of March 5, 2020 (the “Employment Agreement”). Pursuant to the terms of the Separation Agreement, Mr. Lidforss will serve in his current position through June 30, 2023, during which period he will be eligible to continue to receive his regular salary and benefits. He will then transition to an aggregate cash purchase priceAdvisor role beginning July 1, 2023 through August 31, 2023, or such earlier date as may be agreed between Mr. Lidforss and the Company (the “Separation Date”). In connection with his continued service as Advisor, Mr. Lidforss will be eligible to receive a monthly base salary of $580 million, subject$40,937 and may continue to working capital and other adjustments. Dynapower's annualized revenue is expectedparticipate in the Company’s benefits programs, with the exception of accruing vacation pay.
Under the terms of the Separation Agreement, Mr. Lidforss will receive the following payments (collectively, the “Separation Payments”): (1) a lump sum payment in the amount of $409,368 (an amount equal to exceed $100 million10 months of his annual base salary); (2) a lump sum payment in the amount of $359,176 (an amount equal to the average annual bonus paid to Mr. Lidforss in 2022 with projected revenue growth in excess of 30% overand 2023 for the next several years. The Company expects to completetwo completed fiscal years immediately preceding the acquisitiondate hereof )); and (3) a lump sum payment in the third quarteramount of 2022, subject$28,467 (an amount to regulatory approvalsassist Mr. Lidforss with replacing health and other customary closing conditions.dental benefits in fulfillment of his Employment Agreement). The Company intendsSeparation Payments are to fundbe made within 30 days following the transaction using available cash on hand.
Dynapower is a leader in power conversion systems including inverters, converters, and rectifiers for renewable energy generation, green hydrogen production, electric vehicle charging stations, and microgrid applications, as well as industrial and defense applications. Dynapower also provides aftermarket sales and service to maintain its equipment in the field. The Company is acquiring DynapowerSeparation Date. Mr. Lidforss’s separation will be treated as a foundational addition to its Clean Energy Solutions strategy“Covered Retirement” under the terms of his equity award agreements. Under the Separation Agreement and complement to its recent acquisitionsconsistent with the Employment Agreement, Mr. Lidforss has granted a general release of GIGAVAC, Lithium Balance,claims in favor of STI and Spear.
The foregoing description of the stock purchase agreement is qualified in its entirety by reference to the full text of the stock purchase agreement, which is attached to this Quarterly Report on Form 10-Q as Exhibit 10.1 and is incorporated in this report by reference. A copy of the press release announcing entry into the stock purchase agreement is attached as Exhibit 99.1 and is incorporated in this report by reference.
On April 26, 2022, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.11 per share, payable May 25, 2022and has agreed to shareholders of record as of May 11, 2022. The press release is attached hereto as Exhibit 99.2certain cooperation, confidentiality, non-competition, and is incorporated by reference herein.
The Company will include a discussion of the acquisition and dividend at its earnings call on April 26, 2022 at 8:00 AM eastern time. The dial-in numbers for the call are 1-844-784-1726 or 1-412-380-7411. Callers should reference the "Sensata Q1 2022 Financial Results Conference Call." A live webcast of the conference call will also be available on the investor relations page of Sensata’s website at http://investors.sensata.com. Additionally, a replay of the call will be available until May 3, 2022. To access the replay, dial 1-877-344-7529 or 1-412-317-0088 and enter confirmation code: 8713067.non-solicitation covenants.
3130

Table of Contents
Item 6.Exhibits.
Exhibit No.Description
3.1
10.1
10.2
10.3
10.310.4
10.5
10.6
31.1
31.2
31.3
32.1
99.1
99.2
101.INSInline 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.SCHInline XBRL Taxonomy Extension Schema Document. *
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document. *
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document. *
101.LABInline XBRL Taxonomy Extension Label Linkbase Document. *
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document. *
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
___________________________

*    Filed herewith
†    Indicates management contract or compensatory plan, contract, or arrangement


3231

Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 26, 2022May 2, 2023
SENSATA TECHNOLOGIES HOLDING PLC
/s/ JeffreyJeff Cote
(JeffreyJeff Cote)
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)

3332