Sensata Technologies Holding plc [ST] Filings

10-Q 1 st-20240630.htm 10-Q st-20240630

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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 June 30, 2024


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

For the transition period from to

Commission File Number 001-34652

_________________________________________________________________________________

SENSATA TECHNOLOGIES HOLDING PLC

(Exact name of registrant as specified in its charter)

_________________________________________________________________________________

England and Wales

98-1386780

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

529 Pleasant Street

Attleboro, Massachusetts, 02703, United States

(Address of principal executive offices, including zip code)

+1 (508) 236 3800

(Registrant's telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

_____________________________________

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


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

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

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

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

As of July 16, 2024, 150,957,543 ordinary shares were outstanding.

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TABLE OF CONTENTS


PART I
	Item 1.	Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	3
		Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 3 0 , 2024 and 2023	4
		Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 3 0 , 2024 and 2023	5
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2024 and 2023	6
		Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended June 3 0 , 2024 and 2023	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
	Item 4.	Controls and Procedures	36

PART II
	Item 1.	Legal Proceedings	38
	Item 1A.	Risk Factors	38
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
	Item 3.	Defaults Upon Senior Securities	38
	Item 5.	Other Information	38
	Item 6.	Exhibits	39
		Signatures	40

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PART I—FINANCIAL INFORMATION

Item 1.Financial Statements.

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

(unaudited)


	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	1,033,052	$	508,104
Accounts receivable, net of allowances of $18,379 and $28,980 as of June 30, 2024 and December 31, 2023, respectively	809,411		744,129
Inventories	708,299		713,485
Prepaid expenses and other current assets	148,842		136,686

Total current assets	2,699,604		2,102,404
Property, plant and equipment, net	884,155		886,010
Goodwill	3,542,713		3,542,770
Other intangible assets, net of accumulated amortization of $2,600,447 and $2,522,760 as of June 30, 2024 and December 31, 2023, respectively	806,977		883,671
Deferred income tax assets	128,744		131,527
Other assets	127,249		134,605
Total assets	$	8,189,442	$	7,680,987
Liabilities and shareholders' equity
Current liabilities:
Current portion of long-term debt and finance lease obligations	$	702,701	$	2,276
Accounts payable	475,573		482,301
Income taxes payable	22,861		32,139
Accrued expenses and other current liabilities	320,324		307,002

Total current liabilities	1,521,459		823,718
Deferred income tax liabilities	360,437		359,073
Pension and other post-retirement benefit obligations	36,217		38,178
Finance lease obligations, less current portion	21,964		22,949
Long-term debt, net	3,170,804		3,373,988
Other long-term liabilities	67,009		66,805
Total liabilities	5,177,890		4,684,711
Commitments and contingencies (Note 11)
Shareholders’ equity:
Ordinary shares, €0.01 nominal value per share, 177,069 shares authorized, and 176,321 and 175,832 shares issued as of June 30, 2024 and December 31, 2023, respectively	2,254		2,249
Treasury shares, at cost, 25,365 and 25,090 shares as of June 30, 2024 and December 31, 2023, respectively	(1,223,212)		(1,213,160)
Additional paid-in capital	1,846,062		1,901,621
Retained earnings	2,400,196		2,295,604
Accumulated other comprehensive (loss)/income	(13,748)		9,962


Total shareholders' equity	3,011,552		2,996,276
Total liabilities and shareholders' equity	$	8,189,442	$	7,680,987

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

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SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)


	For the three months ended				For the six months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net revenue	$	1,035,535	$	1,062,112	$	2,042,244	$	2,060,287
Operating costs and expenses:
Cost of revenue	724,414		732,108		1,413,674		1,402,579
Research and development	45,325		44,857		90,639		90,796
Selling, general and administrative	93,273		91,312		181,319		177,462
Amortization of intangible assets	39,085		54,563		77,600		95,337
Restructuring and other charges, net	3,491		21,259		4,273		27,258
Total operating costs and expenses	905,588		944,099		1,767,505		1,793,432
Operating income	129,947		118,013		274,739		266,855
Interest expense	(40,863)		(45,759)		(79,258)		(94,550)
Interest income	5,802		7,654		9,540		16,354
Other, net	4,097		(10,924)		(7,447)		(9,532)
Income before taxes	98,983		68,984		197,574		179,127
Provision for income taxes	27,280		19,873		49,850		43,599
Net income	$	71,703	$	49,111	$	147,724	$	135,528
Basic net income per share	$	0.48	$	0.32	$	0.98	$	0.89
Diluted net income per share	$	0.47	$	0.32	$	0.98	$	0.88

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

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SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(unaudited)


	For the three months ended				For the six months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net income	$	71,703	$	49,111	$	147,724	$	135,528
Other comprehensive (loss)/income:
Cash flow hedges	(14,768)		8,686		(5,526)		11,493
Defined benefit and retiree healthcare plans	208		224		435		617
Cumulative translation adjustment	(3,898)		—		(18,619)		—
Other comprehensive (loss)/income	(18,458)		8,910		(23,710)		12,110
Comprehensive income	$	53,245	$	58,021	$	124,014	$	147,638

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

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SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)


	For the six months ended
	June 30, 2024		June 30, 2023
Cash flows from operating activities:
Net income	$	147,724	$	135,528
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	67,016		63,560
Amortization of debt issuance costs	3,193		3,421
Gain on sale of business	—		(5,877)
Share-based compensation	11,944		17,607
Loss on debt financing	—		857
Amortization of intangible assets	77,600		95,337
Deferred income taxes	6,056		13,449
Loss on equity investments, net	14,306		302
Unrealized (gain)/loss on derivative instruments and other	(9,862)		14,674
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net	(69,440)		(30,045)
Inventories	3,158		(19,036)
Prepaid expenses and other current assets	(6,699)		(13,408)
Accounts payable and accrued expenses	11,798		(39,665)
Income taxes payable	(9,099)		(12,067)
Other	2,248		(3,615)
Acquisition-related compensation payments	—		(8,380)
Net cash provided by operating activities	249,943		212,642
Cash flows from investing activities:

Additions to property, plant and equipment and capitalized software	(87,188)		(84,444)
Investment in debt and equity securities	1,994		(390)
Proceeds from the sale of business, net of cash sold	—		19,000


Net cash used in investing activities	(85,194)		(65,834)
Cash flows from financing activities:
Proceeds from exercise of stock options and issuance of ordinary shares	4,605		5,346
Payment of employee restricted stock tax withholdings	(6,980)		(11,470)
Proceeds from borrowings on debt	500,000		—
Payments on debt	(566)		(448,390)
Dividends paid	(36,148)		(35,113)
Payments to repurchase ordinary shares	(10,052)		(25,076)
Purchase of noncontrolling interest in joint venture	(79,393)		—
Payments of debt financing costs	(6,376)		(311)

Net cash provided by/(used in) financing activities	365,090		(515,014)
Effect of exchange rate changes on cash and cash equivalents	(4,891)		—
Net change in cash and cash equivalents	524,948		(368,206)
Cash and cash equivalents, beginning of year	508,104		1,225,518
Cash and cash equivalents, end of period	$	1,033,052	$	857,312

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

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SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Changes in Shareholders' Equity

(In thousands)

(unaudited)


	Ordinary Shares			Treasury Shares			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Shareholders' Equity
	Number	Amount		Number	Amount
Balance as of March 31, 2024	175,839	$	2,249	(25,365)	$	(1,223,212)	$	1,837,647	$	2,353,440	$	4,710	$	2,974,834
Surrender of shares for tax withholding	—	—		(185)	(6,851)		—		—		—		(6,851)
Stock options exercised	119	1		—	—		4,604		—		—		4,605
Vesting of restricted securities	548	6		—	—		—		(6)		—		—
Cash dividends paid	—	—		—	—		—		(18,092)		—		(18,092)

Retirement of ordinary shares	(185)	(2)		185	6,851		—		(6,849)		—		—
Share-based compensation	—	—		—	—		3,811		—		—		3,811

Net income	—	—		—	—		—		71,703		—		71,703
Other comprehensive loss	—	—		—	—		—		—		(18,458)		(18,458)
Balance as of June 30, 2024	176,321	$	2,254	(25,365)	$	(1,223,212)	$	1,846,062	$	2,400,196	$	(13,748)	$	3,011,552





Balance as of December 31, 2023	175,832	$	2,249	(25,090)	$	(1,213,160)	$	1,901,621	$	2,295,604	$	9,962	$	2,996,276
Surrender of shares for tax withholding	—	—		(188)	(6,980)		—		—		—		(6,980)
Stock options exercised	119	1		—	—		4,604		—		—		4,605
Vesting of restricted securities	558	6		—	—		—		(6)		—		—
Cash dividends paid	—	—		—	—		—		(36,148)		—		(36,148)
Repurchase of ordinary shares	—	—		(275)	(10,052)		—		—		—		(10,052)
Retirement of ordinary shares	(188)	(2)		188	6,980		—		(6,978)		—		—
Share-based compensation	—	—		—	—		11,944		—		—		11,944
Purchase of noncontrolling interest in joint venture	—	—		—	—		(72,107)		—		—		(72,107)
Net income	—	—		—	—		—		147,724		—		147,724
Other comprehensive loss	—	—		—	—		—		—		(23,710)		(23,710)
Balance as of June 30, 2024	176,321	$	2,254	(25,365)	$	(1,223,212)	$	1,846,062	$	2,400,196	$	(13,748)	$	3,011,552




Balance as of March 31, 2023	175,298	$	2,243	(22,781)	$	(1,124,713)	$	1,876,168	$	2,452,858	$	(13,064)	$	3,193,492
Surrender of shares for tax withholding	—	—		(231)	(11,347)		—		—		—		(11,347)
Stock options exercised	76	1		—	—		2,665		—		—		2,666
Vesting of restricted securities	650	7		—	—		—		(7)		—		—
Cash dividends paid	—	—		—	—		—		(18,336)		—		(18,336)
Repurchase of ordinary shares	—	—		(590)	(25,125)		—		—		—		(25,125)
Retirement of ordinary shares	(231)	(2)		231	11,347		—		(11,345)		—		—
Share-based compensation	—	—		—	—		10,401		—		—		10,401

Net income	—	—		—	—		—		49,111		—		49,111
Other comprehensive income	—	—		—	—		—		—		8,910		8,910
Balance as of June 30, 2023	175,793	$	2,249	(23,371)	$	(1,149,838)	$	1,889,234	$	2,472,281	$	(4,154)	$	3,209,772





Balance as of December 31, 2022	175,207	$	2,242	(22,781)	$	(1,124,713)	$	1,866,201	$	2,383,341	$	(16,264)	$	3,110,807
Surrender of shares for tax withholding	—	—		(233)	(11,470)		—		—		—		(11,470)
Stock options exercised	158	2		—	—		5,426		—		—		5,428
Vesting of restricted securities	661	7		—	—		—		(7)		—		—
Cash dividends paid	—	—		—	—		—		(35,113)		—		(35,113)
Repurchase of ordinary shares	—	—		(590)	(25,125)		—		—		—		(25,125)
Retirement of ordinary shares	(233)	(2)		233	11,470		—		(11,468)		—		—
Share-based compensation	—	—		—	—		17,607		—		—		17,607

Net income	—	—		—	—		—		135,528		—		135,528
Other comprehensive income	—	—		—	—		—		—		12,110		12,110
Balance as of June 30, 2023	175,793	$	2,249	(23,371)	$	(1,149,838)	$	1,889,234	$	2,472,281	$	(4,154)	$	3,209,772

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

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SENSATA TECHNOLOGIES HOLDING PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements reflect the financial position, results of operations, comprehensive income, 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, 2023, filed with the U.S. Securities and Exchange Commission (the "SEC") on February 29, 2024 (the "2023 Annual Report").

In the three months ended March 31, 2024, we realigned our business as a result of organizational changes that better allocate our resources to support changes to our business strategy. The most significant changes include combining our Automotive and HVOR businesses (with the combined business remaining in Performance Sensing) and moving the Insights business out of Performance Sensing to a new operating segment, which is not aggregated within either of our reportable segments. We combined the Automotive and HVOR businesses to better leverage our core capabilities and prioritize product focus. We also moved certain shorter-cycle businesses from Performance Sensing to Sensing Solutions, which will benefit from organizing these businesses together, by allowing us to scale core capabilities and better serve our customers. Prior year amounts in this Quarterly Report on Form 10-Q have been recast to reflect this realignment. Refer to Note 15: Segment Reporting for additional information

In the three and six months ended June 30, 2024, we presented interest income on the condensed consolidated statements of operations separate from interest expense. In the three and six months ended June 30, 2023, interest income had been included in interest expense, net. Accordingly, we reclassified prior period interest income to a separate caption in the condensed consolidated statements of operations to conform to current period presentation.

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

2. New Accounting Standards

In November 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, to improve disclosures about a public entity's reportable segments. This guidance requires that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss and an amount for "other segment items" included in the determination of segment operating income. The guidance also requires that a public entity provide all annual disclosures about a reportable segment's profit or loss and assets currently required by FASB ASC Topic 280, Segment Reporting, in interim periods, and that a public entity provide the title and position of the chief operating decision maker. There is no change to the guidance for identification or aggregation of operating or reportable segments. FASB ASU No. 2023-07 will be effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The guidance must be applied retrospectively to all prior periods presented. We adopted the guidance in FASB ASU No. 2023-07 on January 1, 2024 and will include the required new annual and quarterly disclosures in our Annual Report on Form 10-K for the period ended December 31, 2024 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2025, respectively.

In December 2023, the FASB issued ASU No. 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures, to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The guidance also includes certain other amendments to improve the effectiveness of income tax disclosures. For public business entities, the standard is effective for annual periods beginning after December 15, 2024. We do not expect the adoption of FASB ASU No. 2023-09 to have an impact on our results of operations or financial condition, but it is expected to increase the amount of disclosures required in the notes to the consolidated financial statements.

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3. Revenue Recognition

The following tables present net revenue disaggregated by segment and end market for the three and six months ended June 30, 2024 and 2023 for our two reportable segments, Performance Sensing ("PS") and Sensing Solutions ("SS"), and other:


	For the three months ended June 30, 2024								For the three months ended June 30, 2023 (1)
	PS		SS		Other		Total		PS		SS		Other (1)		Total
Automotive (1)	$	543,158	$	32,389	$	—	$	575,547	$	511,616	$	28,202	$	—	$	539,818
HVOR (1)(3)	180,763		7,530		—		188,293		181,947		7,740		—		189,687
Industrial	—		126,636		—		126,636		—		185,202		—		185,202
Appliance and HVAC (2)	—		55,003		—		55,003		—		50,952		—		50,952
Aerospace	—		45,371		—		45,371		—		46,832		—		46,832

Other (1)	—		1,142		43,543		44,685		—		12,132		37,489		49,621
Total	$	723,921	$	268,071	$	43,543	$	1,035,535	$	693,563	$	331,060	$	37,489	$	1,062,112


	For the six months ended June 30, 2024								For the six months ended June 30, 2023 (1)
	PS		SS		Other		Total		PS		SS		Other (1)		Total
Automotive (1)	$	1,073,782	$	64,797	$	—	$	1,138,579	$	1,010,711	$	54,125	$	—	$	1,064,836
HVOR (1)	363,457		14,388		—		377,845		350,614		13,494		—		364,108
Industrial	—		250,917		—		250,917		—		333,714		—		333,714
Appliance and HVAC	—		102,058		—		102,058		—		98,426		—		98,426
Aerospace	—		91,524		—		91,524		—		91,158		—		91,158

Other (1)	—		2,226		79,095		81,321		—		23,593		84,452		108,045
Total	$	1,437,239	$	525,910	$	79,095	$	2,042,244	$	1,361,325	$	614,510	$	84,452	$	2,060,287

___________________________________

(1) In the three months ended March 31, 2024, we realigned our segments, as discussed further in Note 1: Basis of Presentation and Note 15: Segment Reporting. As a result, certain revenue in the Automotive and HVOR end markets have been moved from Performance Sensing to Sensing Solutions. In addition, Insights revenue was moved from the HVOR end market (in Performance Sensing) to the other end market in a separate operating segment that is not aggregated within either of our reportable segments. The three and six months ended June 30, 2023 have been retrospectively recast to reflect this change.

(2) Heating, ventilation and air conditioning.

(3) Heavy vehicle and off-road.

4. Share-Based Payment Plans

The following table presents the components of non-cash compensation expense related to our equity awards for the three and six months ended June 30, 2024 and 2023:


	For the three months ended				For the six months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Stock options	$	569	$	(205)	$	569	$	(86)
Restricted securities	3,242		10,606		11,375		17,693
Share-based compensation expense	$	3,811	$	10,401	$	11,944	$	17,607

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Equity Awards

We granted the following restricted stock units ("RSUs" and each, an "RSU") and performance-based restricted stock units ("PRSUs" and each, a "PRSU") under the Sensata Technologies Holding plc 2021 Equity Incentive Plan during the six months ended June 30, 2024:


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

Directors	RSU (1)	41	$	39.08
Various executives	RSU (2)	350	$	37.18
Various executives and employees	RSU (3)	646	$	36.48
Various executives and employees	PRSU (4)	159	$	36.53
Various executives and employees	PRSU (5)	159	$	38.90

____________________________________

(1) These RSUs cliff vest one year from the grant date (various dates between March 2025 and June 2025).

(2) These RSUs vest on various dates over the next 18 months depending on service or performance criteria.

(3) These RSUs vest ratably over three years, one-third per year beginning on the first anniversary of the grant date. These RSUs will fully vest on various dates between February 2027 and June 2027.

(4) These PRSUs vest on various dates between April 2027 and June 2027. The number of units that ultimately vest will be between 0% and 150% and is dependent on the achievement of certain performance criteria.

(5) These awards include certain PRSUs with market performance conditions that will be evaluated relative to the performance of certain peers as defined in the award agreement. The number of units that ultimately vest (in April 2027 and June 2027) will be from 0% to 150%, depending on achievement of these performance criteria. Total grant date value of these PRSUs is approximately $6.2 million and was valued using the Monte Carlo method.

5. Restructuring and Other Charges, Net

Q3 2023 Plan

In the three months ended September 30, 2023, we committed to a plan to reorganize our business (the “Q3 2023 Plan”). The Q3 2023 Plan, consisting of voluntary and involuntary reductions-in-force, site closures, and other cost-savings initiatives, was commenced to adjust our cost structure and business activities to better align with weaker market demand and continued economic uncertainty in many of our end-markets and to take active measures to accelerate our margin recovery.

The reductions-in-force, which are subject to the laws and regulations of the countries in which the actions are planned, are expected to impact 510 positions. Over the life of the Q3 2023 Plan, we incurred restructuring charges of approximately $25.5 million, primarily related to reductions-in-force. The majority of the actions under the Q3 2023 Plan are expected to be completed on or before September 30, 2024.

These restructuring charges impacted our business segments and corporate functions as follows:


(Dollars in thousands)	Positions	Charges
Performance Sensing	160	8,495
Sensing Solutions	150	7,495
Corporate and other	200	9,510
Total	510	25,500

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Restructuring charges, net recognized in the three and six months ended June 30, 2024 resulting from the Q3 2023 Plan are presented by business segment and corporate functions below. No charges were recognized in the three and six months ended June 30, 2023.


	For the three months ended June 30, 2024				For the six months ended June 30, 2024
(In thousands)	Severance		Facility and other exit costs		Severance		Facility and other exit costs
Performance Sensing	$	(181)	$	—	$	347	$	—
Sensing Solutions	215		79		(134)		79
Corporate and other	(416)		—		3		—
Q3 2023 Plan total	$	(382)	$	79	$	216	$	79

Spear Marine Business

On June 6, 2023, we announced that we had made the decision to exit the marine energy storage business (the "Marine Business") of Spear Power Systems (“Spear”). The exit of the Spear Marine Business was the result of a change in strategy with respect to the business and involved ceasing sales, marketing, and business operations. It resulted in the elimination of certain positions, primarily in the U.S. and the closure of operations in Belgium. The Spear Marine Business had been included in the Sensing Solutions reportable segment. Exiting the Spear Marine Business resulted in charges in the three and six months ended June 30, 2024 and 2023, as presented in the table below:


		For the three months ended				For the six months ended
	Location	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Accelerated amortization	Amortization of intangible assets	$	—	$	13,527	$	—	$	13,527
Write-down of inventory	Cost of revenue	—		10,479		—		10,479
Severance charges	Restructuring and other charges, net	(254)		1,168		(328)		1,168
Write-down of property, plant and equipment	Restructuring and other charges, net	—		1,735		5		1,735
Other charges, including contract termination costs	Restructuring and other charges, net	343		11,402		(592)		11,402
Total		$	89	$	38,311	$	(915)	$	38,311

Other

In the three months ended June 30, 2024, we initiated certain actions related to restructuring of our IT operations and product lifecycle management including product line discontinuations, which, for the three and six months ended June 30, 2024, resulted in total costs of $15.9 million, including severance, contract termination costs, and inventory charges. Of the costs recognized, $13.2 million was included within cost of revenue and the remainder was included within restructuring and other charges, net.

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Summary

The following table presents the charges and gains included as components of restructuring and other charges, net for the three and six months ended June 30, 2024, and 2023:


	For the three months ended				For the six months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Q3 2023 Plan charges, net (1)	$	(303)	$	—	$	295	$	—
Other restructuring and other charges, net
Severance charges, net (2)	2,464		4,749		2,455		8,962
Facility and other exit costs	32		310		200		535
Gain on sale of business	—		—		—		(5,877)
Acquisition-related compensation arrangements (3)	955		3,330		1,910		10,602
Other (4)	343		12,870		(587)		13,036
Restructuring and other charges, net	$	3,491	$	21,259	$	4,273	$	27,258

___________________________________

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

(2) Each period presented includes severance charges, net of reversals, that do not represent the initiation of a larger restructuring plan. This includes, for the three and six months ended June 30, 2024, severance related to certain actions to restructure our IT operations. In addition, the three and six months ended June 30, 2024, include certain costs to exit the Spear Marine Business as detailed under the heading Spear Marine Business above.

(3) Acquisition-related compensation arrangements consist of incentive compensation to previous owners of companies we have acquired. Payment is generally tied to technical and/or financial targets termed at the time of acquisition.

(4) Represents charges that are not included in one of the other classifications. The three and six months ended June 30, 2023 primarily include charges related to the exit of the Spear Marine Business, as detailed under the heading Spear Marine Business above. The three and six months ended June 30, 2024, includes contract termination costs related to certain product lifecycle management activities.

The following table presents a rollforward of our severance liability for the six months ended June 30, 2024:


	Q3 2023 Plan		Other		Total
Balance as of December 31, 2023	$	6,017	$	769	$	6,786
Charges, net of reversals	216		2,455		2,671
Payments	(4,419)		(2,125)		(6,544)
Foreign currency remeasurement	(129)		(94)		(223)
Balance as of June 30, 2024	$	1,685	$	1,005	$	2,690

The severance liability as of June 30, 2024 and December 31, 2023 was entirely recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

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6. Other, Net

The following table presents the components of other, net for the three and six months ended June 30, 2024 and 2023:


	For the three months ended				For the six months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Currency remeasurement gain/(loss) on net monetary assets	$	3,398	$	(9,307)	$	4,429	$	(10,566)
(Loss)/gain on foreign currency forward contracts	(1,837)		4,423		(1,157)		4,607
Gain/(loss) on commodity forward contracts	4,977		(6,269)		6,076		(4,370)
Loss on debt financing	—		(372)		—		(857)
Loss on equity investments, net (1)	(1,019)		(302)		(14,306)		(302)
Net periodic benefit cost, excluding service cost	(820)		(810)		(1,661)		(1,781)
Other	(602)		1,713		(828)		3,737
Other, net	$	4,097	$	(10,924)	$	(7,447)	$	(9,532)

___________________________________

(1) The six months ended June 30, 2024 primarily includes a loss on an equity investment that does not have a readily determinable fair value for which we use the measurement alternative prescribed in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments—Equity Securities. Refer to Note 13: Fair Value Measures for additional information.

7. Income Taxes

The following table presents the provision for income taxes for the three and six months ended June 30, 2024 and 2023:


	For the three months ended				For the six months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023


Provision for income taxes	$	27,280	$	19,873	$	49,850	$	43,599

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 carryforwards, and (c) changes in withholding taxes on unremitted earnings. Other items impacting deferred tax expense include changes in tax rates and changes in our assessment of the realizability of our deferred tax assets.

8. Net Income per Share

Basic and diluted net income per share are calculated by dividing net income by the number of basic and diluted weighted-average ordinary shares outstanding during the period. For the three and six months ended June 30, 2024 and 2023 the weighted-average ordinary shares outstanding used to calculate basic and diluted net income per share were as follows:


	For the three months ended		For the six months ended
	June 30, 2024	June 30, 2023	June 30, 2024	June 30, 2023
Basic weighted-average ordinary shares outstanding	150,845	152,700	150,663	152,609
Dilutive effect of stock options	8	55	4	103
Dilutive effect of unvested restricted securities	276	309	358	482
Diluted weighted-average ordinary shares outstanding	151,129	153,064	151,025	153,194

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


	For the three months ended		For the six months ended
	June 30, 2024	June 30, 2023	June 30, 2024	June 30, 2023
Anti-dilutive shares excluded	1,239	1,625	1,501	1,003
Contingently issuable shares excluded	929	1,366	995	1,317

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9. Inventories

The following table presents the components of inventories as of June 30, 2024 and December 31, 2023:


	June 30, 2024		December 31, 2023
Finished goods	$	197,398	$	223,972
Work-in-process	132,818		113,209
Raw materials	378,083		376,304
Inventories	$	708,299	$	713,485

10. Debt

The following table presents the components of long-term debt, net and finance lease obligations as of June 30, 2024 and December 31, 2023:


	Maturity Date	June 30, 2024		December 31, 2023



5.0% Senior Notes (1)	October 1, 2025	$	700,000	$	700,000

4.375% Senior Notes	February 15, 2030	450,000		450,000
3.75% Senior Notes	February 15, 2031	750,000		750,000
4.0% Senior Notes	April 15, 2029	1,000,000		1,000,000
5.875% Senior Notes	September 1, 2030	500,000		500,000
6.625% Senior Notes (1)	July 15, 2032	500,000		—
Less: debt discount, net of premium		(891)		(1,568)
Less: deferred financing costs		(28,305)		(24,444)
Less: current portion (1)		(700,000)		—
Long-term debt, net		$	3,170,804	$	3,373,988

Finance lease obligations		$	24,665	$	25,225
Less: current portion		(2,701)		(2,276)
Finance lease obligations, less current portion		$	21,964	$	22,949

___________________________________

(1) On June 6, 2024, our indirect, wholly-owned subsidiary, Sensata Technologies, Inc. ("STI"), completed the issuance and sale of $500.0 million aggregate principal amount of 6.625% senior notes due 2032 (the "6.625% Senior Notes"). On July 15, 2024, we used the proceeds from this issuance, together with cash on hand, for the redemption in full of the $700.0 million aggregate principal amount of 5.0% senior notes due 2025 (the "5.0% Senior Notes"), which were issued by our indirect, wholly-owned subsidiary, Sensata Technologies B.V. ("STBV"). Accordingly, we have presented the 5.0% Senior Notes within the current portion of long-term debt on our condensed consolidated balance sheet as of June 30, 2024.

Our indebtedness as of June 30, 2024 and December 31, 2023 consists of various tranches of senior unsecured notes, including the 5.0% Senior Notes, $450.0 million aggregate principal amount of 4.375% senior notes due 2030 (the "4.375% Senior Notes), $750.0 million aggregate principal amount of 3.75% senior notes due 2031 (the "3.75% Senior Notes), $1.0 billion aggregate principal amount of 4.0% senior notes due 2029 (the "4.0% Senior Notes"), $500.0 million aggregate principal amount of 5.875% senior notes due 2030 (the "5.875% Senior Notes"), and the 6.625% Senior Notes. We also have secured credit facilities which provide for our $750.0 million revolving credit facility (the "Revolving Credit Facility") and incremental availability under which additional debt can be issued. Refer to Note 14: Debt of our 2023 Annual Report for additional information related to our indebtedness prior to the issuance of the 6.625% Senior Notes.

Revolving Credit Facility

As of June 30, 2024, we had $746.1 million available under the Revolving Credit Facility, net of $3.9 million of obligations in respect of outstanding letters of credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of June 30, 2024, no amounts had been drawn against these outstanding letters of credit.

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Debt Financing Transactions

Issuance of 6.625% Senior Notes

The