UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~March~~June 3130, 2010

¨	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 333-139739

SENSATA TECHNOLOGIES B.V.

(Exact Name of Registrant as Specified in Its Charter)


THE NETHERLANDS		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Kolthofsingel 8, 7602 EM Almelo The Netherlands		31-546-879-555
(Address of Principal Executive Offices, including Zip Code)		(Registrant’s Telephone Number, Including Area Code)

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

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).


Large accelerated filer ¨	Accelerated filer	¨

Non-accelerated filer x (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

The number of shares outstanding of each of the issuer’s classes of common stock, as of ~~April 23~~July 20, 2010 was ~~200~~220 (all of which are owned by Sensata Technologies Intermediate Holding B.V. and are not publicly traded.)

TABLE OF CONTENTS

PART I
	Item 1.	Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009	4
		Condensed Consolidated Balance Sheets as of June 30, 2010 andDecember 31, 2009	3
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and March 31, 2009	5
		Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2010 and June 30, 2009	4
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and March 31, 2009	6
		Condensed Consolidated Statements of Cash Flows for the Six Months EndedJune 30, 2010 and June 30, 2009	5
		Notes to Condensed Consolidated Financial Statements	76
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4542
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
	Item 4.	Controls and Procedures	51
PART II
	Item 1.	Legal Proceedings	5352
	Item 1A.	Risk Factors	53
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
	Item 3.	Defaults Upon Senior Securities	5453
	Item 5.	Other Information	54
	Item 6.	Exhibits	53
	Item 6.	Exhibits	54
		Signatures	54

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains forward-looking statements within the meaning of the federal securities laws. These statements relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies.

These forward looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “should”, “estimate”, “expect”, “intend”, “may”, “will”, “plan”, “predict”, “project”, and similar terms and phrases or the negative of such terms and phrases, including references to assumptions. However, these words are not the exclusive means of identifying such statements. These statements are contained in many sections of this report, including “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations.

We believe that the following factors, among others (including those described in “Item 1A. Risk Factors” caption in the “Part II—Other Information” section of this report), could affect our future performance and the liquidity and value of our securities and cause our actual results to differ materially from those expressed or implied by forward-looking statements made by us or on our behalf: risks associated with the continued weakness in worldwide economic conditions; adverse developments in the automotive industry; continued fundamental changes in the industries in which we operate, including economic declines that impact the sales of any of the products manufactured by our customers that use our sensors or controls; fluctuations in the cost and/or availability of manufactured components and raw materials; non-performance by our suppliers; competition in our markets; continued pricing and other pressures from our customers; general economic, political, business and market risks; fluctuations in foreign currency exchange and interest rates; risks associated with our ability to comply with our debt covenants, including financial ratios; risks associated with our substantial indebtedness, leverage and debt service obligations; litigation and disputes involving us, including the extent of product liability and warranty claims asserted against us; our ability to realize revenue or achieve anticipated gross operating margins from products subject to existing customer awards; labor costs and disputes; our dependence on third parties for certain transportation, warehousing and logistics services; material disruptions at any of our manufacturing facilities; our ability to develop and implement technology in our product lines; our ability to protect our intellectual property and know-how; our exposure to claims that our products or processes infringe on the intellectual property rights of others; the costs of compliance with various laws affecting our operations, including environmental, health and safety laws and export controls and responding to potential liabilities under these laws; our ability to attract and retain key personnel; risks associated with future acquisitions, joint ventures or asset dispositions, as well as risks associated with integration of acquired companies; risks associated with maintaining internal control over financial reporting in compliance with Section 404 of the Sarbanes-Oxley Act of 2002; our ability to recover damages related to possible disputes covered by the indemnification agreement with Texas Instruments Incorporated; and the possibility that our principal shareholder’s interests will conflict with our interests or the interests of our stakeholders.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. You should carefully read the factors described in the “Risk Factors” section of this report and our Annual Report on Form 10-K for the year ended December 31, 2009 for a description of certain risks that could, among other things, cause our actual results to differ from these forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update this Quarterly Report on Form 10-Q to reflect events or circumstances after the date hereof.

PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements.

SENSATA TECHNOLOGIES B.V.

Condensed Consolidated Balance Sheets

(Thousands of U.S. dollars, except share and per share amounts)

(unaudited)

	March 31,2010			December 31,2009
	June 30,2010			December 31,2009
Assets
Current assets:
Cash and cash equivalents	$	~~195~~221,~~345~~180		$	148,126
Accounts receivable, net of allowances of $11,066 and $12,739 as of March 31, 2010 and December 31, 2009, respectively		208,347			180,839
Accounts receivable, net of allowances of $9,849 and $12,739 as of June 30, 2010 and December 31, 2009, respectively		213,836			180,839
Inventories		~~132~~141,~~849~~627			125,375
Deferred income tax assets		12,~~458~~332			12,419
Prepaid expenses and other current assets		2119,~~258~~727			16,226
Assets held for sale		238			238
Total current assets		~~570~~608,~~495~~940			483,223
Property, plant and equipment at cost		~~404~~415,~~018~~739			400,461
Accumulated depreciation		(~~190~~199,~~652~~555	)		(180,523	)
Property, plant and equipment, net		~~213~~216,~~366~~184			219,938
Goodwill		1,~~530~~528,~~506~~954			1,530,570
Other intangible assets, net		~~830~~794,~~521~~805			865,531
Deferred income tax assets		5,~~573~~502			5,543
Deferred financing costs		3629,~~973~~929			41,147
Other assets		1819,~~922~~929			17,175
Total assets	$	3,~~206~~204,~~356~~243		$	3,163,127
Liabilities and shareholder’s equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	~~244~~17,~~863~~373		$	17,139
Accounts payable		~~128~~134,~~830~~336			121,636
Income taxes payable		79,~~177~~051			8,384
Accrued expenses and other current liabilities		~~105~~85,~~258~~298			89,607
Due to Parent		21,632			—
Due to parent		2,750			—
Accrued profit sharing		~~596~~326			600
Deferred income tax liabilities		~~739~~638			823
Total current liabilities		~~509~~249,~~095~~772			238,189
Deferred income tax liabilities		~~173~~184,~~139~~437			165,477
Pension and post-retirement benefit obligations		48,~~786~~675			49,525
Capital lease and other financing obligations, less current portion		39,~~981~~593			40,001
Long-term debt, less current portion		1,~~856~~781,~~595~~424			2,243,686
Other long-term liabilities		3829,~~378~~321			39,502
Commitments and contingencies
Total liabilities		2,~~665~~333,~~974~~222			2,776,380
Shareholder’s equity:
Ordinary shares, €100 nominal value per share, 900 shares authorized; 200 shares and 180 shares issued and outstanding as of March 31, 2010 and December 31, 2009,respectively		25			22
Ordinary shares, €100 nominal value per share, 900 shares authorized; 220 and 180 shares issued as of June 30, 2010 and December 31, 2009, respectively		28			22
Due from parent		—			(388	)
Additional paid-in capital		1,~~175~~419,~~446~~805			1,051,266
Accumulated deficit		(~~599~~517,~~276~~048	)		(626,954	)
Accumulated other comprehensive loss		(3531,~~813~~764	)		(37,199	)
Total shareholder’s equity		~~540~~871,~~382~~021			386,747
Total liabilities and shareholder’s equity	$	3,~~206~~204,~~356~~243		$	3,163,127

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

SENSATA TECHNOLOGIES B.V.

Condensed Consolidated Statements of Operations

(Thousands of U.S. dollars, except share and per share amounts)

(unaudited)

	For the three months ended						For the six months ended
	March 31,2010			March 31,2009
	June 30,2010			June 30,2009			June 30,2010			June 30,2009
Net revenue	$	~~377~~391,~~137~~806		$	~~239~~255,~~016~~371		$	768,943		$	494,387
Operating costs and expenses:
Cost of revenue		~~232~~240,~~783~~590			~~161~~168,~~344~~902			473,373			330,246
Research and development		46,~~930~~211			53,~~163~~960			11,141			9,123
Selling, general and administrative		7738,~~540~~898			3130,~~614~~051			116,438			61,665
Amortization of intangible assets and capitalized software		36,~~136~~078			38,~~804~~162			72,214			76,966
Impairment of goodwill and intangible assets		—			~~19,867~~—			—			19,867
Restructuring		~~699~~(490	)		112,~~488~~050			209			13,538
Total operating costs and expenses		~~352~~321,~~088~~287			~~268~~243,~~280~~125			673,375			511,405
Profit/(loss) from operations		25,049			(29,264	)
Profit / (loss) from operations		70,519			12,246			95,568			(17,018	)
Interest expense		(3325,~~516~~406	)		(4236,~~484~~349	)		(58,922	)		(78,833	)
Interest income		~~139~~197			~~324~~79			336			403
Currency translation gain and other, net		4751,~~202~~721			6958,~~141~~108			98,923			127,249
Income/(loss) from continuing operations before taxes		38,874			(2,283	)
Income from continuing operations before taxes		97,031			34,084			135,905			31,801
Provision for income taxes		1114,~~196~~803			710,~~641~~876			25,999			18,517
Income/(loss) from continuing operations		27,678			(9,924	)
Income from continuing operations		82,228			23,208			109,906			13,284
Loss from discontinued operations, net of tax of $0		—			(~~261~~134	)		—			(395	)
Net income/(loss)	$	27,678		$	(10,185	)
Net income	$	82,228		$	23,074		$	109,906		$	12,889

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

SENSATA TECHNOLOGIES B.V.

Condensed Consolidated Statements of Cash Flows

(Thousands of U.S. dollars)

(unaudited)

	For the threemonths ended
	For the sixmonths ended
	March 31,2010			March 31,2009
	June 30,2010			June 30,2009
Cash flows from operating activities:
Net income/(loss)	$	27,678		$	(10,185	)
Net income	$	109,906		$	12,889
Net loss from discontinued operations		—			(~~261~~395	)
Net income/(loss) from continuing operations		27,678			(9,924	)
Net income from continuing operations		109,906			13,284
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		1020,~~804~~331			1121,~~072~~961
Amortization of deferred financing costs		24,~~293~~377			24,~~383~~592
Currency translation gain on debt		(60133,~~116~~826	)		(686,~~955~~502	)
Loss on repurchase of outstanding Senior and Senior Subordinated Notes		8,098			—
Loss / (gain) on repurchase of outstanding Senior and Senior Subordinated Notes		22,867			(120,123	)
Share-based compensation		2021,~~064~~689			~~201~~694
Amortization of intangible assets and capitalized software		3672,~~136~~214			3876,~~804~~966
(Gain)/loss on disposition of assets		(135	)		83
(Gain) / loss on disposition of assets		(253	)		358
Deferred income taxes		7,509			7,017
Loss on assets held for sale		—			1,678
Deferred income taxes		18,903			13,667
Impairment of goodwill and intangible assets		—			19,867
Increase/(decrease) from changes in operating assets and liabilities:
Increase / (decrease) from changes in operating assets and liabilities:
Accounts receivable, net		(2732,~~508~~997	)		(18,~~750~~180	)
Inventories		(716,~~474~~252	)		2437,~~095~~226
Prepaid expenses and other current assets		(31,~~652~~299	)		10,~~846~~799
Accounts payable and accrued expenses		181,~~181~~690			3420,~~016~~870
Income taxes payable		~~(1,207~~667	)		(43,~~104~~109	)
Accrued profit sharing and retirement		(~~526~~1,188	)		(1,~~134~~946	)
Due to Parent, net		21,632			—
Due to parent, net		2,750			—
Other		~~3,076~~727			~~468~~3,138
Net cash provided by operating activities from continuing operations		5490,~~853~~306			6285,~~985~~240
Net cash used in operating activities from discontinued operations		—			(~~233~~403	)
Net cash provided by operating activities		5490,~~853~~306			6284,~~752~~837
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		(517,~~684~~902	)		(48,~~319~~862	)
Proceeds from sale of assets		~~232~~364			—
Net cash used in investing activities		(5,452	)		(4,319	)
Net cash used in investing activities from continuing operations		(17,538	)		(8,862	)
Net cash provided by investing activities from discontinued operations		—			372
Net cash used in investing activities		(17,538	)		(8,490	)
Cash flows from financing activities:
Advances to shareholder		—			(19	)
Dividend to parent		—			(133	)
Proceeds from issuance of ordinary shares		103,835			—
Advances to shareholder		—			(25	)
Proceeds from capital contribution from Sensata Technologies Intermediate Holding B.V.		284			—
Proceeds from repayment of advances to shareholder		388			—
Proceeds from revolving credit facility, net		—			48,250
Proceeds from issuance of ordinary shares to, and capital contribution from, Sensata Intermediate Holding		346,856			—
Payments on U.S. term loan facility		(2,375	)		(2,375	)
Proceeds from revolving credit facility, net		—			75,000
Payments on Euro term loan facility		(1,342	)		(1,313	)
Payments on U.S. term loan facility		(4,750	)		(4,750	)
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		(102,105	)		—
Payments on Euro term loan facility		(2,556	)		(2,712	)
Payments on capitalized lease and other financing obligations		(479	)		(408	)
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		(337,517	)		(57,242	)
Net cash (used in)/provided by financing activities		(2,182	)		44,135
Payments on capitalized lease and other financing obligations		(2,135	)		(1,979	)
Net change in cash and cash equivalents		47,219			102,568
Net cash provided by financing activities		286			8,159
Net change in cash and cash equivalents		73,054			84,506
Cash and cash equivalents, beginning of period		148,126			77,716
Cash and cash equivalents, end of period	$	~~195~~221,~~345~~180		$	~~180~~162,~~284~~222

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

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

1. The Company

Sensata Technologies B.V. (“Sensata” or the “Company”) is a direct, wholly-owned ~~subsidiary~~ subsidiary of Sensata Technologies Intermediate Holding B.V. (“Sensata Intermediate Holding”). Sensata Intermediate Holding is a direct, wholly-owned subsidiary of Sensata Technologies Holding Cooperatief U.A. (“Cooperatief”)~~, Cooperatief~~. Cooperatief is owned 1% by Sensata Technologies Coop Holding B.V. and 99% owned by Sensata Technologies Holding N.V. (“Parent”) and the Parent is a majority-owned subsidiary of Sensata Investment Company, SCA (“Sensata Investment Co.”). The share capital of Sensata Investment Co. is 100% owned by entities associated with Bain Capital Partners, LLC (“Bain Capital”), a leading global private investment firm, co-investors (Bain Capital and co-investors are collectively referred to as the “Sponsors”) and certain members of the Company’s senior management.

On April 27, 2006 (inception), investment funds associated with the Sponsors completed the acquisition of the Sensors and Controls business (“S&C” ~~or the “Predecessor”~~) of Texas Instruments Incorporated (“TI”) for aggregate ~~consideration~~ consideration of $3.0 billion in cash and transaction fees and expenses of $31.4 million (the “2006 Acquisition”). The 2006 Acquisition was financed by a cash investment from the Sponsors of approximately $985.0 million and the issuance of ~~approximately~~ approximately $2.1 billion of indebtedness.

OnSensata ~~March~~was ~~16,~~incorporated ~~2010,~~by the ~~Parent~~Sponsors ~~completed~~in the ~~initial~~Netherlands ~~public~~in ~~offering (“IPO”)~~2005 ofand conducts its ~~ordinary~~business through ~~shares~~subsidiary incompanies which itoperate ~~sold~~business ~~26,315,789 shares~~ and ~~its~~product ~~existing~~development ~~shareholders~~centers ~~and~~in ~~certain~~the ~~employees~~United ~~sold~~States 5(“U.S.”),~~284,211~~ ~~shares~~the atNetherlands aand ~~public~~Japan; ~~offering~~and ~~price~~manufacturing ofoperations ~~$18.00~~in ~~per~~Brazil, ~~share.~~China, ~~The~~South ~~net~~Korea, ~~proceeds~~Malaysia, ofMexico, the ~~IPO totaled $435.9 million~~Dominican ~~after~~Republic ~~deducting underwriters’ discounts~~ and ~~commissions~~the ~~and~~U.S. ~~offering~~The ~~expenses,~~Company ~~including~~organizes ~~$2.5~~its ~~million~~operations ofinto ~~proceeds from~~ the ~~exercise~~sensors ofand ~~stock~~controls ~~options~~businesses.

~~Sensata~~The ~~was~~sensors ~~incorporated by the Sponsors in the Netherlands in 2005 and conducts its~~ business ~~through~~is a ~~subsidiary~~manufacturer ~~companies~~of ~~which~~pressure, ~~operate business~~force, and ~~product~~electromechanical ~~development~~sensor ~~centers~~products used in ~~the~~subsystems ~~United~~of ~~States~~automobiles (“Ue.Sg.”), ~~the~~engine, ~~Netherlands~~air-conditioning, ~~and~~ride ~~Japan;~~stabilization) and ~~manufacturing operations~~ in ~~Brazil,~~industrial ~~China,~~products ~~South~~such ~~Korea,~~as ~~Malaysia,~~HVAC ~~Mexico, the Dominican Republic and the U~~systems.S. ~~Many~~These ofproducts ~~these~~improve ~~companies~~operating ~~are~~performance, ~~the~~for ~~successors~~example, toby ~~businesses~~making ~~that~~an ~~have~~automobile’s ~~been~~heating ~~engaged in the sensing~~ and ~~control~~air-conditioning ~~business~~systems ~~since~~work ~~1931~~more efficiently. TIThese ~~first~~products ~~acquired~~also animprove ~~ownership~~safety ~~interest~~and inperformance, ~~S&C~~for inexample, ~~1959~~by ~~through~~reducing avehicle ~~merger~~emissions ~~between TI~~ and ~~the~~improving ~~former~~gas ~~Metals and Controls Corporation~~mileage.

The ~~sensors~~controls business ~~includes~~is ~~pressure~~a ~~sensors~~manufacturer ~~and~~of ~~transducers~~a ~~for~~variety ~~the~~of ~~automotive~~control products used in industrial, ~~heating~~aerospace, ~~ventilation~~military, ~~air-conditioning~~commercial ~~(“HVAC”)~~ and ~~industrial~~residential markets, including motor and compressor protectors, circuit breakers, semiconductor burn-in test sockets, electronic HVAC controls, power inverters, precision switches and thermostats. These products ~~improve~~help ~~operating~~prevent ~~performance,~~damage ~~for~~from overheating ~~example,~~and byfires ~~making~~in a ~~car’s~~wide variety of applications, including commercial heating and air-conditioning systems, ~~work~~refrigerators, ~~more~~aircraft, ~~efficiently~~automobiles, lighting and other industrial applications. ~~Pressure~~The ~~sensors~~controls ~~for~~business ~~vehicle~~also ~~stability~~manufactures ~~and~~DC ~~fuel~~to ~~injection~~AC ~~improve~~power ~~safety~~inverters, ~~and~~which ~~performance~~enable bythe ~~reducing~~operation ~~vehicle~~of ~~emissions~~electronic ~~and~~equipment ~~improving~~when ~~gas~~grid ~~mileage~~power is not available.

~~The~~On ~~controls~~March 16, ~~business~~2010, the ~~includes~~Parent ~~motor protectors,~~completed ~~circuit~~the ~~breakers~~initial ~~and~~public ~~thermostats.~~offering ~~These~~(“IPO”) ~~products~~of ~~help~~its ~~prevent~~ordinary ~~damage~~shares ~~from~~in ~~overheating~~which it sold 26,315,789 shares and ~~fires~~its inexisting shareholders and certain employees sold 5,284,211 shares at a ~~wide~~public ~~variety~~offering price of ~~applications~~$18.00 per share. The net proceeds of the IPO totaled $435.9 million after deducting the underwriters’ discounts and commissions and offering expenses, including ~~commercial~~$2.5 ~~heating~~million ~~and~~of ~~air-conditioning~~proceeds ~~systems~~from the exercise of stock options. On April 12, ~~refrigerators~~2010, ~~aircraft~~the Parent announced that the underwriters of its IPO exercised their option to purchase an additional 4,740,000 ~~cars~~ordinary shares from selling shareholders at a price of $18.00 per share, ~~lighting~~which ~~and~~included 353,465 shares obtained by certain selling shareholders ~~other~~through ~~industrial~~the ~~applications~~exercise of options to purchase ordinary shares. The ~~controls~~sale ~~business~~of ~~also~~the ~~includes~~additional DCshares toclosed ACon ~~power~~April 14, ~~inverters~~2010. The Parent did not receive any proceeds from the sale of the additional shares, ~~which~~other ~~enable~~than the ~~operation~~proceeds from the exercise of ~~electrical~~the ~~equipment~~aforementioned ~~when~~stock ~~grid~~options ~~power~~which istotaled ~~not~~$2.5 ~~available~~million.

~~All~~6 ~~dollar amounts in the financial statements and tables in the notes, except share and per share amounts, are stated in thousands of U.S. dollars unless otherwise indicated.~~

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information

~~SENSATA~~All ~~TECHNOLOGIES~~amounts Bpresented, except share and per share amounts, are stated in thousands of U.VS. dollars, unless otherwise indicated.

~~NOTES~~2. TOBasis ~~CONDENSED~~of ~~CONSOLIDATED~~Presentation ~~FINANCIAL STATEMENTS~~

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (In“U.S. ~~thousands~~GAAP”) ~~except~~for ~~share~~interim financial information and ~~per~~with ~~share~~the ~~amounts~~instructions to Form 10-Q and, ortherefore, ~~unless~~do ~~otherwise~~not ~~noted)~~include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the interim period results. The results of operations for the three and six months ended June 30, 2010 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

(unaudited)

and with the instructions to Form 10-Q and, therefore, do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. The results of operations for the three months ended March 31, 2010 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

The unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany balances and transactions have been eliminated.

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

3. New Accounting Standards

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-13, Multiple-Delivery Revenue Arrangements (“ASU 2009-13”)., ~~ASU~~which ~~2009-13~~ establishes the accounting and reporting guidance for arrangements including multiple deliverable revenue-generating activities, and provides amendments to to the criteria for separating deliverables, and measuring and allocating arrangement consideration to one or more units of accounting. The amendments of ASU 2009-13 also establish a ~~selling price~~ hierarchy for determining the selling price of a deliverable., ~~Significantly~~and require significantly enhanced disclosures ~~are also required~~ to provide information about a vendors’s multiple-deliverable revenue arrangements, including information about ~~the~~their nature and terms, significant deliverables, and ~~its performance~~the ~~within~~general ~~arrangements~~timing of delivery. The amendments also require ~~providing~~disclosure of information about the significant judgments made and changes to those judgments, and about how the application of the relative selling- price method affects the timing or amount of revenue recognition. The amendments inof ASU 2009-13 are effective prospectively for revenue arrangements entered into or materially modified in ~~fiscal~~annual ~~years~~reporting periods beginning on or after June 15, 2010, or January 1, 2011 for the Company. Early application is permitted. The Company is currently evaluating the potential effect, if any, the adoption of ASU 2009-13 will have on its financial position orand results of operations.

The Company adopted the following accounting standards during ~~the three months ended March 31,~~ 2010:

In February 2010, the FASB issued ASU 2010-09, Amendments to Certain Recognition and Disclosure Requirements, as(“ASU 2010-09”), anwhich ~~amendment~~eliminates to the requirement under Accounting Standards Codification (“ASC”) Topic 855, Subsequent Events (“ASC 855”). Asfor ~~a result of ASU 2010-09,~~ SEC registrants ~~will~~to ~~not~~ disclose the date through which ~~management~~they ~~evaluated~~have evaluated subsequent events in the financial statements. ASU 2010-09 iswas effective ~~immediately~~upon ~~for~~issuance, ~~all~~and ~~financial~~the ~~statements~~Company ~~that~~adopted ~~have~~its ~~not~~provisions ~~yet~~as ~~been~~of ~~issued~~the orissuance ~~have~~of ~~not~~the ~~yet~~Quarterly ~~become~~report ~~available~~for tothe beperiod ~~issued,~~ended or March 31, 2010 ~~for the Company~~. The adoption of ASU 2010-09 iswas for disclosure purposes only and did not have any effect on the Company’s financial position or results of operations.

In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements. (“ASU 2010-06”), which amends ASC Topic 820, Fair Value Measurement and Disclosure (“ASC 820”) to require a number of ~~additional~~ additional disclosures regarding fair value measurements. In addition to the new disclosure requirements, ASU 2010-06 ~~also~~ amends ASC 820 to clarify that reporting entities are required to provide fair value measurement disclosures for each class of assets and liabilities. Prior to the issuance of ASU 2010-06, the ~~guidance in ASC 820 required separate fair value disclosures for each major category of assets and liabilities.~~

~~SENSATA~~ guidance ~~TECHNOLOGIES~~in BASC 820 required separate fair value disclosures for each major category of assets and liabilities.V ASU 2010-06 also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. Except for the requirement to disclose information about purchases, sales, issuance and settlements in the reconciliation of recurring Level 3 measurements on a gross basis, all of the provisions of ASU 2010-06 were effective for interim and annual reporting periods beginning after December 15, 2009. The Company adopted these provisions as of January 1, 2010. The requirement to separately disclose purchases, sales, issuances and settlements of recurring Level 3 measurements is effective for annual reporting periods beginning after December 15, 2010, or January 1, 2011 for the Company. The adoption of this portion of ASU 2010-06 will not have any effect on the Company’s financial position or results of operations.

~~NOTES~~In June TO2009, ~~CONDENSED~~the ~~CONSOLIDATED~~FASB ~~FINANCIAL~~issued ~~STATEMENTS~~guidance now codified within ASC Topic 810, Consolidation (“ASC 810”), which requires entities to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as one with the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and obligation to absorb losses of the entity that could potentially be significant to the variable interest. The guidance was effective as of the beginning of the annual reporting period commencing after November 15, 2009, with early adoption prohibited. The Company adopted these provisions as of January 1, 2010. The adoption of the guidance codified within ASC 810 did not have any effect on the Company’s financial position or results of operations.

~~(In~~4. ~~thousands~~Comprehensive ~~except~~Net ~~share~~Income ~~and per share amounts, or unless otherwise noted)~~

~~(unaudited)~~The components of comprehensive net income for the three and six months ended June 30, 2010 and 2009, net of tax of $0, were as follows:

ASU 2010-06 also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. Except for the requirement to disclose information about purchases, sales, issuance and settlements in the reconciliation of recurring Level 3 measurements on a gross basis, all of the provisions of ASU 2010-06 are effective for interim and annual reporting periods beginning after December 15, 2009, or January 1, 2010 for the Company. The requirement to separately disclose purchases, sales, issuances and settlements of recurring Level 3 measurements does not become effective until fiscal years beginning after December 15, 2010, or January 1, 2011 for the Company. The adoption of ASU 2010-06 is for disclosure purposes only and did not have any effect on the Company’s financial position or results of operations.


	For the three months ended					For the six months ended
	June 30, 2010		June 30, 2009			June 30, 2010		June 30, 2009
Net income	$	82,228	$	23,074		$	109,906	$	12,889
Net unrealized gain / (loss) on derivatives		3,329		(1,821	)		4,541		(4,249	)
Net adjustments on defined benefit and retiree healthcare plans		720		2,223			894		2,104

Comprehensive net income	$	86,277	$	23,476		$	115,341	$	10,744

In June 2009, the FASB issued guidance now codified within ASC Topic 810, Consolidation (“ASC 810”). ASC 810 requires entities to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as one with the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and obligation to absorb losses of the entity that could potentially be significant to the variable interest. The guidance is effective as of the beginning of the annual reporting period commencing after November 15, 2009, or January 1, 2010 for the Company, with early adoption prohibited. The adoption of the guidance codified within ASC 810 did not have any effect on the Company’s financial position or results of operations.

4. Comprehensive Net Income/(Loss)

Comprehensive net income/(loss) includes net income/(loss), net unrealized gain/(loss) for the effective portion of the Company’s designated cash flow hedges and the net unrealized gain/(loss) associated with the Company’s defined benefit and retiree healthcare plans. The components of comprehensive net income/(loss), net of tax of $0, as of March 31, 2010 and 2009 are as follows:

	For the three months ended
	March 31,2010		March 31,2009
Net income/(loss)	$	27,678	$	(10,185	)
Net unrealized gain/(loss) on derivatives		1,212		(2,428	)
Net adjustments on defined benefit and retiree healthcare plans		174		(119	)
Comprehensive net income/(loss)	$	29,064	$	(12,732	)

5. Inventories

~~Inventories~~The components of inventories as of ~~March~~June 3130, 2010 and December 31, 2009 ~~consist~~were ofas ~~the following~~follows:

	March 31,2010		December 31,2009
	June 30,2010		December 31,2009
Finished goods	$	3841,~~759~~735	$	41,931
Work-in-process		25,~~500~~171		20,627
Raw materials		6874,~~590~~721		62,817
Total	$	~~132~~141,~~849~~627	$	125,375

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

6. Discontinued Operations

In December 2008, the Company announced its intent to sell the automotive vision sensing business (the “Vision business”), which included the assets and operations of SMaL Camera Technologies, Inc. (“SMaL”)., ~~The~~due ~~Company~~to ~~purchased~~the ~~SMaL for $12.0 million in March 2007. The~~ economic climate and slower than expected demand for ~~these~~its products ~~were the primary factors in the decision to sell the business~~. The Company ~~completed~~purchased ~~the~~SMaL ~~sale of the Vision business during the three months ended June 30, 2009.~~ for

~~Results~~8 ~~of operations of the Vision business included within loss from discontinued operations are as follows for the three months ended March 31, 2009:~~

	For the three months ended
	March 31,2009
Net revenue	$	628
Loss from operations before income tax	$	(261	)

7. Goodwill and Other Intangible Assets

Goodwill

The following table outlines the changes in goodwill, by segment:

	Sensors								Controls							Total
	GrossGoodwill			AccumulatedImpairment		NetGoodwill			GrossGoodwill		AccumulatedImpairment			NetGoodwill		GrossGoodwill			AccumulatedImpairment			NetGoodwill
Balance as of December 31, 2009	$	1,166,358		$	—	$	1,166,358		$	382,678	$	(18,466	)	$	364,212	$	1,549,036		$	(18,466	)	$	1,530,570
Purchase accounting adjustments		(64	)		—		(64	)		—		—			—		(64	)		—			(64	)
Balance as of March 31, 2010	$	1,166,294		$	—	$	1,166,294		$	382,678	$	(18,466	)	$	364,212	$	1,548,972		$	(18,466	)	$	1,530,506

During the three months ended March 31, 2010, the Company revised its accrual related to severance and facility exit and other costs established through purchase accounting for First Technology Automotive and Special Products. As a result, the Company reduced goodwill by a corresponding amount of $64.

The Company evaluates goodwill and other intangible assets for impairment at the reporting unit level in the fourth quarter of each fiscal year, unless an event occurs or circumstances change between annual tests that would more likely than not reduce the fair value below its carrying value. As of March 31, 2010, no such events occurred or circumstances changed which would trigger the need for an earlier impairment review.

~~SENSATA~~ $12.0 ~~TECHNOLOGIES~~million Bin March 2007.V The Company completed the sale of the Vision business in the three months ended June 30, 2009.

~~NOTES~~Results TOof ~~CONDENSED~~operations ~~CONSOLIDATED~~of ~~FINANCIAL~~the ~~STATEMENTS~~Vision business included within loss from discontinued operations were as follows:

(In thousands except share and per share amounts, or unless otherwise noted)


	For the three months ended					For the six months ended
	June 30, 2010		June 30, 2009			June 30, 2010		June 30, 2009
Net revenue	$	—	$	98		$	—	$	726
Loss from operations before income tax	$	—	$	(134	)	$	—	$	(395	)

~~(unaudited)~~7. Restructuring Costs

Other Intangible Assets

Definite-lived intangible assets have been amortized on an accelerated, or economic benefit, basis over their estimated lives. Fully-amortized intangible assets are written off against accumulated amortization. The following table outlines the components of acquisition-related definite-lived intangible assets, excluding goodwill, that are subject to amortization as of March 31, 2010 and December 31, 2009:

	Weighted-AverageLife (years)	March 31, 2010								December 31, 2009
		GrossCarryingAmount		AccumulatedAmortization		AccumulatedImpairment		NetCarryingValue		GrossCarryingAmount		AccumulatedAmortization		AccumulatedImpairment		NetCarryingValue
Completed technologies	16	$	268,170	$	91,217	$	2,430	$	174,523	$	268,170	$	85,233	$	2,430	$	180,507
Customer relationships	10		1,026,840		449,538		12,144		565,158		1,026,840		420,811		12,144		593,885
Non-compete agreements	6		23,400		5,743		—		17,657		23,400		4,711		—		18,689
Tradenames	10		720		363		—		357		720		338		—		382
	11	$	1,319,130	$	546,861	$	14,574	$	757,695	$	1,319,130	$	511,093	$	14,574	$	793,463

Amortization expense on definite-lived intangible assets for the three months ended March 31, 2010 and 2009 was $35,768 and $38,371, respectively. Amortization of these acquisition-related definite-lived intangible assets is estimated to be $107,315 for the remainder of 2010, $131,609 in 2011, $119,983 in 2012, $105,098 in 2013 and $93,323 in 2014.

In connection with the 2006 Acquisition, the Company concluded that its Klixon® tradename is an indefinite-lived intangible asset, as the brand has been in continuous use since 1927 and the Company has no plans to discontinue using the Klixon® name. An amount of $59,100 was assigned to the tradename in the Company’s purchase price allocation.

In connection with the Airpax Acquisition, the Company concluded that its Airpax® tradename is an indefinite-lived intangible asset, as the brand has been in continuous use since 1948 and the Company has no plans to discontinue using the Airpax® name. An amount of $9,370 was assigned to the tradename in the Company’s purchase price allocation.

In addition, other intangible assets recognized on the unaudited condensed consolidated balance sheets include capitalized software licenses with gross carrying amounts of $7,975 and $6,849 and net carrying amounts of $4,356 and $3,598 as of March 31, 2010 and December 31, 2009, respectively. The weighted-average life for the capitalized software is 3.6 years. Amortization expense on capitalized software for the three months ended March 31, 2010 and 2009 was $368 and $433, respectively.

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

8. Restructuring Costs

The Company’s restructuring programs consist of the First Technology Automotive Plan, the Airpax Plan and the 2008 Plan. Each of these restructuring programs is described in more detail below.

First Technology Automotive Plan

In December 2006, the Company acquired First Technology Automotive and Special Products from Honeywell International Inc. (“~~Honeywell~~First Technology Automotive Acquisition”). In January 2007, the Company announced plans (~~the~~ “First Technology Automotive Plan” or the “FTAS Plan”) to close the manufacturing facilities in Standish, Maine and Grand Blanc, Michigan, and to downsize the facility in Farnborough, United Kingdom. Manufacturing at the Maine, Michigan and United Kingdom sites was moved to the Dominican Republic and other ~~Sensata~~ sites. Restructuring liabilities related to these actions ~~relate~~ consist primarily toof exit and related severance ~~costs~~ ~~and affected 143 employees~~costs. The actions described above ~~associated~~affected ~~with~~143 ~~the~~employees ~~First~~and ~~Technology Automotive Plan~~ were completed in 2008,. ~~and~~The ~~the~~ Company anticipates remaining payments to be paid through 2014, due primarily to contractual lease -related obligations.

~~Total~~In ~~cumulative~~connection ~~costs~~with ~~incurred~~the toFirst ~~date~~Technology ~~and~~Automotive ~~expected~~Plan, tothe beCompany has incurred incumulative ~~connection~~costs, ~~with~~excluding the ~~First~~impact ~~Technology~~of ~~Automotive~~changes ~~Plan~~in ~~are~~foreign currency exchange rates, of $108,~~712~~932, (consisting of $4,287 in severance costs and $4,~~287,~~645 in facility exit and other costs. ~~$6,425)~~These costs have been recognized in the Company’s segments in accordance with the degree of impact experienced by the segment. The ~~following~~remaining ~~table~~costs, ~~outlines~~not allocable to the ~~rollforward~~Company’s ofreportable segments, have been shown within the ~~restructuring~~“corporate ~~liabilities~~and ~~associated~~other” ~~with~~caption. Of the ~~First~~cumulative ~~Technology~~cost ~~Automotive~~incurred, ~~Plan:~~$3,314 and $2,413 have been allocated to the sensors and controls segments, respectively, and $3,206 has been allocated to “corporate and other”.

	Severance			FacilityExit andOtherCosts			Total
Balance as of December 31, 2009	$	63		$	2,532		$	2,595
Purchase accounting adjustments		(63	)		(1	)		(64	)
Payments		—			(46	)		(46	)
Balance as of March 31, 2010	$	—		$	2,485		$	2,485
Employees terminated as of March 31, 2010		143

The following tables outline the changes to the restructuring liabilities associated with the First Technology Automotive Plan, since December 31, 2009, by type of liability and segment:

Total cumulative costs incurred to date and expected to be incurred in connection with the First Technology Automotive Plan are $10,712 (sensors $5,093, controls $2,413, corporate $3,206). The following table outlines the rollforward of the restructuring liabilities by segment, as well as corporate, associated with the First Technology Automotive Plan:


	Severance			Facility Exit and Other Costs			Total
Balance as of December 31, 2009	$	63		$	2,532		$	2,595
Purchase accounting adjustments		(63	)		(1,553	)		(1,616	)
Other adjustments		—			(228	)		(228	)
Payments		—			(182	)		(182	)
Impact of changes in foreign currency exchange rates		—			33			33

Balance as of June 30, 2010	$	—		$	602		$	602

	Sensors			Controls			Corporate			Total
Balance as of December 31, 2009	$	2,530		$	63		$	2		$	2,595
Purchase accounting adjustments		1			(63	)		(2	)		(64	)
Payments		(46	)		—			—			(46	)
Balance as of March 31, 2010	$	2,485		$	—		$	—		$	2,485

During the three months ended March 31, 2010, the Company revised its accrual related to severance and facility exit and other costs established through purchase accounting. As a result, the Company reduced goodwill by a corresponding amount of $64.

SENSATA TECHNOLOGIES B.V.


	Sensors			Controls			Corporate and other			Total
Balance as of December 31, 2009	$	2,530		$	63		$	2		$	2,595
Purchase accounting adjustments		(1,551	)		(63	)		(2	)		(1,616	)
Other adjustments		(228	)		—			—			(228	)
Payments		(182	)		—			—			(182	)
Impact of changes in foreign currency exchange rates		33			—			—			33

Balance as of June 30, 2010	$	602		$	—		$	—		$	602

~~NOTES~~During TOthe ~~CONDENSED~~six ~~CONSOLIDATED~~months ~~FINANCIAL~~ended ~~STATEMENTS~~June 30, 2010, the Company revised its accrual related to severance by $63 and its accrual related to facility exit and other costs by $1,781. The reduction to the accrual for facility exit and other costs was primarily related to the execution of a sublease for the Farnborough, United Kingdom facility at terms more favorable to the Company than previously anticipated. The reduction to the accruals resulted in a reduction of goodwill totaling $1,616 for the portion of the accruals that had been established through purchase accounting and a reduction to restructuring expense of $228. The Company does not expect to incur additional costs in the future.

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Airpax Plan

In July 2007, the Company acquired Airpax Holdings, Inc. (“Airpax Acquisition”). In 2007, the Company announced plans (~~the~~ “Airpax Plan”) to close the facility in Frederick, Maryland and to relocate certain manufacturing lines to existing Sensata and Airpax facilities in Cambridge, Maryland; Shanghai, China; and Mexico, and to terminate certain employees at the Cambridge, Maryland facility. In 2008, the Company announced plans to close the Airpax facility in Shanghai, China. Restructuring liabilities related to these actions ~~relate~~consist primarily toof exit and related severance costs ~~and affected 331 employees~~. The actions described above ~~associated~~ ~~with~~affected ~~the~~331 ~~Airpax~~employees ~~Plan~~and were completed in 2009,. ~~and~~The ~~the~~ Company anticipates remaining payments to be ~~paid~~made through 2010, due primarily to facility exit costs, tuition assistance and outplacement services.

~~Total~~In ~~cumulative~~connection ~~costs~~with ~~incurred~~the toAirpax ~~date~~Plan, ~~and~~the ~~expected~~Company tohas be incurred incumulative ~~connection with the Airpax Plan~~costs, excluding the impact of changes in foreign currency exchange rates, isof $6,494, ~~(severance~~consisting ~~costs~~of $5,073 in severance costs and $1,421 in facility exit and other costs. These costs have been recognized in the Company’s segments in accordance with the degree of impact experienced by the segment. The remaining costs, not allocable to the Company’s reportable segments, have been shown within the “corporate and other” caption. Of the total cost incurred, $5,026 has been allocated to the controls segment, and $1,~~421)~~468 has been allocated to “corporate and other”. The ~~following~~Company ~~table~~has ~~outlines~~not ~~the~~incurred ~~rollforward~~additional ofcosts ~~the~~related ~~restructuring~~to ~~liabilities~~this ~~associated~~plan ~~with~~in the ~~Airpax~~three ~~Plan:~~or six months ended June 30, 2010, and does not expect to incur additional costs in the future.

	Severance			FacilityExit andOtherCosts		Total
Balance as of December 31, 2009	$	173		$	526	$	699
Payments		(3	)		—		(3	)
Balance as of March 31, 2010	$	170		$	526	$	696
Employees terminated as of March 31, 2010		331

The following tables outline the changes to the restructuring liabilities associated with the Airpax Plan since December 31, 2009, by type of liability and segment:

Total cumulative costs incurred to date and expected to be incurred in connection with the Airpax Plan, excluding the impact of changes in foreign currency exchange rates, are $6,494 (controls $5,026, corporate $1,468). The following table outlines the rollforward of the restructuring liabilities by segment, as well as corporate, associated with the Airpax Plan:


	Severance			Facility Exit and Other Costs		Total
Balance as of December 31, 2009	$	173		$	526	$	699
Payments		(3	)		—		(3	)

Balance as of June 30, 2010	$	170		$	526	$	696

	Controls			Corporate			Total
Balance as of December 31, 2009	$	696		$	3		$	699
Payments		(2	)		(1	)		(3	)
Balance as of March 31, 2010		694		$	2		$	696


	Controls			Corporate and other			Total
Balance as of December 31, 2009	$	696		$	3		$	699
Payments		(2	)		(1	)		(3	)

Balance as of June 30, 2010	$	694		$	2		$	696

2008 Plan

During fiscal years ~~2008~~2009 and ~~2009~~2008, in response to global economic conditions, the Company announced various actions (“2008 Plan”) to reduce the workforce in several business centers and manufacturing facilities throughout the world and to move certain manufacturing operations to low-cost countries. During ~~the years ended December 31,~~ 2009 and 2008, the Company recognized charges ~~totaling~~ totaling $2341,~~013~~334 ~~and $18,321, respectively,~~ primarily related to severance, pension curtailment, pension settlement and other related charges, and facility exit and other costs. During the ~~three~~six months ended ~~March~~June 3130, 2010, the Company revised its accrual related to severance and facility exit and other costs. As a result, the Company recognized a net reduction to restructuring expense of $~~296~~640. The actions described above ~~associated with the 2008 Plan~~ are expected to cost $4140,~~124~~780, excluding the impact of changes in foreign currency exchange rates,. ~~and~~These actions ~~affect~~affected 1,977 employees. The Company anticipates that these actions towill be completed during 2010 and the remaining payments will be paid through 2014, due primarily to contractual obligations.

13In connection with the 2008 Plan, the Company has incurred cumulative costs to date, excluding the impact of changes in foreign currency exchange rates, of $40,694, consisting of $28,477 in severance costs, $9,716 in pension-related costs and $2,501 in facility exit and other costs. These costs have been recognized in the Company’s segments in accordance with the degree of impact experienced by the segment. The remaining costs, not allocable to the Company’s reportable segments, have been shown within the “corporate and other” caption. Of the total cost incurred, $1,750 and $4,700 has been allocated to the sensors and controls segments, respectively, and $34,244 has been allocated to “corporate and other”.

The following tables outline the changes to the restructuring liabilities, excluding the costs related to pension, associated with the 2008 Plan since December 31, 2009, by type of liability and segment:


	Severance			Facility Exit and Other Costs			Total
Balance as of December 31, 2009	$	2,964		$	109		$	3,073
Adjustments		(664	)		24			(640	)
Payments		(1,333	)		(20	)		(1,353	)
Impact of changes in foreign currency exchange rates		(56	)		(2	)		(58	)

Balance as of June 30, 2010	$	911		$	111		$	1,022

Employees terminated as of June 30, 2010		1,961


	Sensors			Controls			Corporate and other			Total
Balance as of December 31, 2009	$	131		$	115		$	2,827		$	3,073
Adjustments		(51	)		122			(711	)		(640	)
Payments		(32	)		5			(1,326	)		(1,353	)
Impact of changes in foreign currency exchange rates		(2	)		(7	)		(49	)		(58	)

Balance as of June 30, 2010	$	46		$	235		$	741		$	1,022

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Total cumulative costs incurred to date in connection with the 2008 Plan, excluding the impact of changes in foreign currency exchange rates, are $41,038 (severance costs $28,845, pension-related costs $9,716, facility exit and other costs $2,477). The following table outlines the rollforward of the restructuring liabilities, excluding the costs related to pension, associated with the 2008 Plan:

	Severance			FacilityExit andOtherCosts			Total
Balance as of December 31, 2009	$	2,964		$	109		$	3,073
Adjustments		(296	)		—			(296	)
Payments		(603	)		(18	)		(621	)
Impact of changes in foreign currency exchange rates		(38	)		(2	)		(40	)
Balance as of March 31, 2010	$	2,027		$	89		$	2,116
Employees terminated as of March 31, 2010		1,930

Total cumulative costs incurred to date in connection with the 2008 Plan, excluding the impact of changes in foreign currency exchange rates, are $41,038 (sensors $1,726, controls $4,700, corporate $34,612). The following table outlines the rollforward of the restructuring liabilities, excluding the costs related to pension, by segment, as well as corporate, associated with the 2008 Plan:

	Sensors			Controls			Corporate			Total
Balance as of December 31, 2009	$	131		$	115		$	2,827		$	3,073
Adjustments		(75	)		122			(343	)		(296	)
Payments		(33	)		15			(603	)		(621	)
Impact of changes in foreign currency exchange rates		(2	)		(3	)		(35	)		(40	)
Balance as of March 31, 2010	$	21		$	249		$	1,846		$	2,116

Summary of Restructuring Programs

The following tables show ~~amounts~~charges ~~associated~~incurred in association with all of the Company’s restructuring programs ~~described above~~, and other ~~restructuring~~ restructuring activities as applicable, consisting primarily of severance, for the three and six months ended ~~March~~June 3130, 2010 and 2009, and where inwithin the ~~unaudited~~ condensed consolidated statement of operations these amounts were recognized. There were no restructuring costs recognized for the Airpax Plan during any of the periods presented. The “other” restructuring expense of $~~995~~82 and $1,077 during the three and six months ended June 30, 2010, respectively, represents the termination of a limited number of employees located in various business centers and facilities throughout the world, and not the initiation of a larger restructuring program.

	FTAS Plan			Airpax Plan			2008Plan				Other				Total
	For the three months endedJune 30, 2010																For the three months endedJune 30, 2009
For the three months ended March 31, 2010
	FTASPlan				2008Plan				Other				Total				FTASPlan		2008Plan			Other		Total
Restructuring	$	—(228	)	$	—$	(344	$)	~~(296~~	)$	82	$	~~995~~	$	(490	$)	~~699~~	$	—	$	2,050		$	—	$	2,050
Currency translation gain and other, net		—33			—	(18	)	~~(40~~	)	—		~~(13~~	)	15		~~(53~~	)	—		321			—		321
Total	$	—(195	)	$	—$	(362	$)	~~(336~~	)$	82	$	~~982~~	$	(475	$)	~~646~~	$	—	$	2,371		$	—	$	2,371
	For the six months endedJune 30, 2010																For the six months endedJune 30, 2009
	FTASPlan				2008Plan				Other				Total				FTASPlan		2008Plan			Other		Total
Restructuring	$	(228	)		$	(640	)		$	1,077			$	209			$	—	$	13,538		$	—	$	13,538
Currency translation gain and other, net		33				(58	)			(13	)			(38	)			—		(400	)		—		(400	)
Total	$	(195	)		$	(698	)		$	1,064			$	171			$	—	$	13,138		$	—	$	13,138

148. Goodwill and Other Intangible Assets

Goodwill

The following table outlines the changes in goodwill since December 31, 2009, by segment:


	Sensors								Controls									Total
	Gross Goodwill			Accumulated Impairment		Net Goodwill			Gross Goodwill			Accumulated Impairment			Net Goodwill			Gross Goodwill			Accumulated Impairment			Net Goodwill
Balance as of December 31, 2009	$	1,166,358		$	—	$	1,166,358		$	382,678		$	(18,466	)	$	364,212		$	1,549,036		$	(18,466	)	$	1,530,570
Purchase accounting adjustments		(1,553	)		—		(1,553	)		(63	)		—			(63	)		(1,616	)		—			(1,616	)

Balance as of June 30, 2010	$	1,164,805		$	—	$	1,164,805		$	382,615		$	(18,466	)	$	364,149		$	1,547,420		$	(18,466	)	$	1,528,954

The change in goodwill during the six months ended June 30, 2010 primarily related to a reduction in the Company’s restructuring liabilities related to its obligations on the Farnborough, United Kingdom lease acquired in the First Technology Automotive Acquisition. The reduction was due to the execution of a sublease with more favorable terms than originally anticipated. See Note 7, “Restructuring Costs” for further detail.

The Company evaluates the recoverability of goodwill and other intangible assets in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that goodwill or other intangible assets may be impaired. During the six months ended June 30, 2010, no events or changes in circumstances occurred that would have triggered the need for an earlier impairment review.

~~SENSATA~~Other ~~TECHNOLOGIES~~Intangible ~~B.V.~~Assets

~~NOTES~~Definite-lived TOintangible ~~CONDENSED~~assets ~~CONSOLIDATED~~have ~~FINANCIAL~~been ~~STATEMENTS~~amortized on an accelerated, or economic benefit, basis over their estimated lives. The following table outlines the components of acquisition-related definite-lived intangible assets that were subject to amortization as of June 30, 2010 and December 31, 2009:

(In thousands except share and per share amounts, or unless otherwise noted)


	Weighted- Average Life (years)	June 30, 2010								December 31, 2009
	Weighted- Average Life (years)	Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Net Carrying Value
Completed technologies	16	$	268,170	$	97,200	$	2,430	$	168,540	$	268,170	$	85,233	$	2,430	$	180,507
Customer relationships	10		1,026,840		478,264		12,144		536,432		1,026,840		420,811		12,144		593,885
Non-compete agreements	6		23,400		6,775		—		16,625		23,400		4,711		—		18,689
Tradenames	10		720		390		—		330		720		338		—		382

Total	11	$	1,319,130	$	582,629	$	14,574	$	721,927	$	1,319,130	$	511,093	$	14,574	$	793,463

~~(unaudited)~~In addition, other definite lived intangible assets recognized on the condensed consolidated balance sheets include capitalized software licenses with gross carrying amounts of $8,337 and $6,849 and net carrying amounts of $4,408 and $3,598 as of June 30, 2010 and December 31, 2009, respectively. The weighted-average life for the capitalized software in use was approximately 4 years.

	FTAS Plan		Airpax Plan		2008Plan			Other		Total
For the three months ended March 31, 2009
Restructuring	$	—	$	—	$	11,488		$	—	$	11,488
Currency translation gain and other, net		—		—		(721	)		—		(721	)
Total	$	—	$	—	$	10,767		$	—	$	10,767

Amortization expense on definite-lived intangible assets and capitalized software for the three and six months ended June 30, 2010 and 2009 were as follows:


	For the three months ended				For the six months ended
	June 30, 2010		June 30, 2009		June 30, 2010		June 30, 2009
Definite-lived intangible assets	$	35,768	$	37,706	$	71,536	$	76,077
Capitalized software licenses		310		456		678		889

Total amortization expense	$	36,078	$	38,162	$	72,214	$	76,966

Amortization of acquisition-related definite-lived intangible assets is estimated to be $71,547 for the remainder of 2010, $131,609 in 2011, $119,983 in 2012, $105,098 in 2013 and $93,323 in 2014.

In addition to the above, the Company owns the Klixon^® and Airpax^® tradenames, which are indefinite-lived intangible assets, as they have each been in continuous use for over 60 years and the Company has no plans to discontinue using them. The Company has recorded $59,100 and $9,370, respectively, related to these tradenames.

9. Debt

The Company’s debt as of ~~March~~June 3130, 2010 and December 31, 2009 ~~consists~~consisted of the following:

	Weighted-averageinterestrate for the threemonths endedMarch 31, 2010		March 31, 2010			December 31, 2009
	Weighted-averageinterestrate for the six monthsended June 30, 2010		June 30, 2010			December 31, 2009
Senior secured term loan facility (denominated in U.S. dollars)	2.0103	%	$	~~914~~912,~~375~~000		$	916,750
Senior secured term loan facility (€383.4 million)	2.69	%		517,069			551,350
Senior secured term loan facility (€382.4 million)	2.67	%		466,538			551,350
Senior Notes (denominated in U.S. dollars)	8.00	%		~~339~~201,~~731~~181			340,006
Senior Subordinated Notes (€177.1 million)	9.00	%		~~238~~216,~~836~~060			254,303
Senior Subordinated Notes (€65.3 million)	11.25	%		88,057			196,483
Senior Subordinated Notes	11.25	%		—			196,483
Less: current portion				(~~241~~14,~~473~~355	)		(15,206	)
Long-term debt, less current portion			$	1,~~856~~781,~~595~~424		$	2,243,686
Capital lease and other financing obligations	8.2943	%	$	4342,~~371~~611		$	41,934
Less: current portion				(3,~~390~~018	)		(1,933	)
Capital lease and other financing obligations, less current portion			$	39,~~981~~593		$	40,001

Extinguishment of Debt

On February 26, 2010, the Company announced the commencement of cash tender offers related to its 8% Senior Notes due 2014 (the “Dollar Notes”), its 9% Senior Subordinated Notes due 2016 and its 11.25% Senior Subordinated Notes due 2014 (together the “Euro Notes”). The cash tender offers settled during the three months ended March 31, 2010. The aggregate principal amount of the Dollar Notes validly tendered was $0.3 million, representing approximately 0.1% of the outstanding Dollar Notes. The aggregate principal amount of the Euro Notes tendered was €71.9 million, representing approximately 22.8% of the outstanding Euro Notes. The Company paid $102.1 million in principal ($0.3 million for the Dollar Notes and €75.9 million for the Euro Notes) and $2.2 million of accrued interest to settle the tender offers and retire the debt on March 29, 2010.

InOn ~~conjunction~~April 1, ~~with~~2010, ~~these~~the ~~transactions,~~Company ~~during~~announced the ~~three~~redemption ~~months~~of ~~ended~~all ~~March 31,~~of ~~2010,~~its ~~the~~outstanding 11.25% ~~Company~~Senior ~~recorded~~Subordinated aNotes ~~loss~~due in2014 ~~Currency translation~~at ~~gain~~a ~~and~~redemption ~~other,~~price ~~net~~equal to 105.625% of the principal amount, and $8138.16 million, ~~including~~of ~~the~~its ~~write~~outstanding ~~off~~8% ofSenior ~~debt~~Notes ~~issuance~~due ~~costs~~2014 at a redemption price equal to 104.000% of the principal amount. The Company paid $1225.9 0 million in principal, $10.4 million in premium and $8.4 million of accrued interest in May 2010 to complete the redemption.

In connection with these transactions, during the three and six months ended June 30, 2010, the Company recorded losses in currency translation gain and other, net of $15.4 million and $23.5 million, respectively, including the write-off of debt issuance costs of $4.9 million and $6.8 million, respectively.

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

10. Income Taxes

The Company recorded tax provisions for the three months ended ~~March~~June 3130, 2010 and 2009 of $1114,~~196~~803 and $710,~~641~~876, respectively, and for the six months ended June 30, 2010 and 2009 of $25,999 and $18,517, respectively. The Company’s tax provision ~~consists~~consisted of current tax expense, which ~~relates~~related primarily to the Company’s profitable operations in foreign tax jurisdictions, and deferred tax expense, which ~~relates~~related primarily to the amortization of tax deductible goodwill.

11. Pension and Other Post-Retirement Benefits

The Company provides various retirement plans for employees, including defined benefit, defined contribution and retiree healthcare benefit plans.

~~Net~~The components of net periodic benefit cost associated with the Company’s defined benefit and retiree healthcare plans for the three months ended ~~March~~June 3130, 2010 isand 2009 were as follows:

	U.S. Plans						~~Non-U.S. Plans~~					Non-U.S. Plans
	Defined Benefit			~~Retiree Healthcare~~			~~Defined Benefit~~	Retiree Healthcare				Defined Benefit
Service cost	$	538		$	65		$	532
	2010			2009				2010		2009		2010			2009
Interest cost		720			150			233
Service cost	$	538		$	610			$	65	$	70	$	592		$	755
Expected return on plan assets		(625	)		—			(185	)
Interest cost		720			790				150		150		235			252
Amortization of net loss		140			3			31
Expected return on plan assets		(625	)		(650	)			—		—		(184	)		(201	)
Gain on curtailment		—			—			(111	)
Amortization of net loss		140			95				3		—		27			194
Net periodic benefit cost	$	773		$	218		$	500
Amortization of prior service cost		—			—				—		—		9			211
Loss on settlement		—			—				—		—		—			364
Loss on curtailment		—			—				—		—		—			386
Net periodic benefit cost	$	773		$	845			$	218	$	220	$	679		$	1,961

~~Net~~The components of net periodic benefit cost associated with the Company’s defined benefit and retiree healthcare plans for the ~~three~~six months ended ~~March~~June 3130, 2010 and 2009 iswere as follows:

	U.S. Plans						~~Non-U.S. Plans~~					Non-U.S. Plans
	Defined Benefit			~~Retiree Healthcare~~			~~Defined Benefit~~	Retiree Healthcare				Defined Benefit
Service cost	$	610		$	70		$	799
	2010			2009				2010		2009		2010			2009
Interest cost		790			150			256
Service cost	$	1,076		$	1,220			$	130	$	140	$	1,124		$	1,554
Expected return on plan assets		(650	)		—			(207	)
Interest cost		1,440			1,580				300		300		468			508
Amortization of net loss		115			—			200
Expected return on plan assets		(1,250	)		(1,300	)			—		—		(369	)		(408	)
Amortization of prior service cost		—			—			196
Amortization of net loss		280			210				6		—		58			394
Loss on settlement		—			—			152
Amortization of prior service cost		—			—				—		—		9			407
Net periodic benefit cost	$	865		$	220		$	1,396
Loss on settlement		—			—				—		—		—			516
(Gain)/ loss on curtailment		—			—				—		—		(111	)		386
Net periodic benefit cost	$	1,546		$	1,710			$	436	$	440	$	1,179		$	3,357

During the three months ended March 31, 2010, the Company terminated ~~the employment of~~ 7 employees at one of its subsidiaries. In connection with this event ~~and in accordance with ASC Topic 715, Compensation—Retirement Benefits (“ASC 715”),~~ the Company recognized a curtailment gain of $111. ~~during~~There was no related activity in the three months ended ~~March~~ June 3130, 2010.

During the three and six months ended ~~March~~June 3130, 2009, the Company terminated ~~the~~166 ~~employment~~and of786 ~~620~~ employees, respectively, at several of its subsidiaries in connection with the 2008 Plan (see Note 97, “Restructuring Costs”, for further discussion). In connection with these events, ~~and~~the inCompany ~~accordance~~recognized ~~with~~a ~~ASC~~settlement ~~715,~~loss during the ~~Company~~three ~~recognized~~and ~~settlement~~six ~~losses~~months ended June 30, 2009 of $~~152~~364 and $516, respectively, and a curtailment loss during the three months ended ~~March~~June 3130, 2009 of $386.

16The Company intends to contribute amounts to the U.S. qualified defined benefit plan in order to meet the minimum funding requirements of federal laws and regulations, plus additional amounts as the Company deems appropriate. During the six months ended June 30, 2010, the Company made contributions of $1,650 to the U.S. qualified defined benefit plan. The Company expects to contribute approximately $3,250 to the U.S. qualified defined benefit plans during the twelve months ending December 31, 2010.

~~SENSATA~~Funding ~~TECHNOLOGIES~~requirements Bfor the non-U.VS. defined benefit plans are determined on an individual country and plan basis and are subject to local country practices and market circumstances. During the six months ended June 30, 2010, the Company made contributions of $1,471 to the non-U.S. defined benefit plans. The Company expects to contribute approximately $2,361 to the non-U.S. defined benefit plans during the twelve months ending December 31, 2010.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The Company intends to contribute amounts to the U.S. qualified defined benefit plan in order to meet the minimum funding requirements of federal laws and regulations, plus such additional amounts deemed appropriate by the Company. During the three months ended March 31, 2010, the Company made contributions of $850 to the U.S. qualified defined benefit plan. The Company expects to contribute approximately $3,250 to the U.S. qualified defined benefit plans during the twelve months ending December 31, 2010.

Funding requirements for the non-U.S. defined benefit plans are determined on an individual country and plan basis and are subject to local country practices and market circumstances. During the three months ended March 31, 2010, the Company made contributions of $1,172 to the non-U.S. defined benefit plans. The Company expects to contribute approximately $2,508 to the non-U.S. defined benefit plans during the twelve months ending December 31, 2010.

12. Accrued Expenses and Other Current Liabilities

~~Included as a component of~~ Accrued ~~expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheets is accrued~~ interest associated with the Company’s outstanding debt, asis ~~described~~included inas a ~~Note~~component 10of toaccrued ~~the~~expenses ~~consolidated~~and ~~financial~~other ~~statements~~current ~~included~~liabilities in the ~~Company’s~~accompanying ~~Annual~~condensed ~~Report~~consolidated onbalance ~~Form 10-K for the year ended December 31, 2009~~sheets. As of ~~March~~June 3130, 2010 and December 31, 2009, accrued interest totaled $3013,~~345~~670 and $27,595, respectively.

13. Share-Based Payment Plans

In September 2006, inthe ~~connection~~Parent ~~with~~adopted the First Amended and Restated Sensata Technologies Holding B.V. 2006 ~~Acquisition,~~Management Option Plan (“Stock Option Plan”) and the ~~Parent~~First ~~implemented~~Amended ~~management~~and ~~compensation plans~~Restated toSensata ~~align~~Technologies ~~compensation~~Holding ~~for~~B.V. ~~certain~~2006 ~~key~~Management ~~executives~~Securities ~~with~~Purchase Plan. During the ~~performance~~three ofmonths ~~the~~ended ~~Company.~~September 30, ~~The~~2009, ~~objective~~the ofParent amended the ~~plans~~Stock isOption Plan (“Amendment”) to ~~promote~~increase the ~~long-term~~number ~~growth~~of ~~and~~shares ~~profitability~~reserved offor issuance under the ~~Company~~Stock Option Plan to 13,082,236 ordinary shares and ~~its~~to ~~subsidiaries~~change bythe ~~providing~~performance ~~those~~measure ~~persons~~of ~~who~~Tranche ~~are involved~~3 inoptions ~~the~~to ~~Company~~equal ~~with~~that anof ~~opportunity~~Tranche 2 options. In effect, Tranche 3 options were converted to ~~acquire~~Tranche an2 ~~ownership~~options. ~~interest~~Stock awards granted under these plans are in the ~~Company~~equity of the Parent.

~~The~~In ~~following~~connection ~~plans~~with ~~have~~the ~~been~~completion ~~in effect~~of ~~since~~the ~~September~~Parent’s ~~2006:~~IPO 1)in ~~First~~March ~~Amended~~2010, ~~and~~the ~~Restated~~ Sensata Technologies Holding BN.V. ~~2006~~2010 ~~Management~~Employee ~~Option~~Stock Purchase Plan (“2010 Stock ~~Option~~Purchase Plan”) and 2)the ~~First Amended and Restated~~ Sensata Technologies Holding BN.V. ~~2006~~2010 ~~Management~~Equity ~~Securities~~ Incentive Plan (“2010 Equity Plan”) were adopted. The purpose of the 2010 Stock Purchase Plan is to provide an incentive for present and future eligible employees to purchase the Parent’s ordinary shares and acquire a proprietary interest in the Parent. The ~~stock~~purpose ~~awards~~of ~~were~~the ~~granted~~2010 Equity Plan is to promote long-term growth and profitability by providing the Parent’s eligible present and future directors, officers, employees, consultants and advisors with incentives to contribute to and participate in the ~~equity~~Parent’s success. The maximum number of the Parent’s ordinary shares that will be available for sale under the 2010 Stock Purchase Plan is 500,000 ordinary shares. The maximum number of the Parent’s ordinary shares available under the 2010 Equity Plan is 5,000,000 ordinary shares.

~~During~~16 the three months ended September 30, 2009, the Parent amended the Stock Option Plan (the “Amendment”) to increase the number of shares reserved for issuance under the Stock Option Plan to 13,082,236 ordinary shares and to change the performance measure of Tranche 3 options to equal that of Tranche 2 options. In effect, Tranche 3 options were converted to Tranche 2 options.

In connection with the completion of the Parent’s IPO, the Sensata Technologies Holding N.V. 2010 Employee Stock Purchase Plan (“2010 Stock Purchase Plan”) and the Sensata Technologies Holding N.V. 2010 Equity Incentive Plan (“2010 Equity Plan”) were adopted. The purpose of the 2010 Stock Purchase Plan is to provide an incentive for present and future eligible employees to purchase the Parent’s ordinary shares and acquire a proprietary interest in the Parent. The purpose of the 2010 Equity Plan is to promote long-term growth and profitability by providing the Company’s present and future directors, officers, employees, consultants and advisors, who are eligible for grant, with incentives to contribute to and participate in the Company’s success. The maximum number of ordinary shares that will be available for sale under the 2010 Stock Purchase Plan is 500,000 ordinary shares. The maximum number of ordinary shares available under the 2010 Equity Plan is 5,000,000 ordinary shares.

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The Company’s share-based payment plans are described in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Stock Options

A summary of stock option activity for the ~~three~~six months ended ~~March~~June 3130, 2010 is presented below:

	Ordinary Shares		Weighted-AverageExercise Price PerShare		Weighted-AverageRemainingContractual Term(in years)	AggregateIntrinsic Value(in thousands)
Tranche 1 Options
Balance as of December 31, 2009	4,991,716		$	8.96	7.28	$	55,259
Granted	—154,800			—20.60
Forfeited	—			—
Forfeited and canceled	—			—
Canceled	—			—
Exercised	(707,467	)		7.10
Exercised	(354,002	)		7.10
Balance as of June 30, 2010	4,439,049		$	9.66	7.00	$	28,978
Balance as of March 31, 2010	4,637,714		$	9.10	7.09	$	41,082
Vested and exercisable as of June 30, 2010	2,201,594		$	7.03	5.96	$	19,721
Vested and exercisable as of March 31, 2010	1,945,158		$	7.06	6.25	$	21,206
Vested and expected to vest as of June 30, 2010(1)	4,240,387		$	9.54	6.96	$	28,156
Vested and expected to vest as of March 31, 2010 (1)	4,456,080		$	9.04	7.06	$	39,741
	Ordinary Shares		Weighted-AverageExercise Price PerShare		Weighted-AverageRemainingContractual Term(in years)	AggregateIntrinsic Value(in thousands)
Tranche 2 and 3 Options
Balance as of December 31, 2009	7,933,432		$	7.45	6.67	$	99,796
Granted	—			—
Forfeited	—			—
Forfeited and canceled	—			—
Canceled	—			—
Exercised	—			—
Balance as of March 31, 2010	7,933,432		$	7.45	6.42	$	83,373
Balance as of June 30, 2010	7,933,432		$	7.45	6.17	$	68,092
Vested and exercisable as of March 31, 2010	4,598,318		$	7.07	6.27	$	50,099
Vested and exercisable as of June 30, 2010	5,818,122		$	7.05	5.99	$	52,018
Vested and expected to vest as of March 31, 2010 (1)	7,880,613		$	7.45	6.41	$	82,852
Vested and expected to vest as of June 30, 2010(1)	7,899,717		$	7.45	6.16	$	67,840

(1)	The expected to vest options are the result of applying the forfeiture rate assumption, adjusted for cumulative actual forfeitures, to total unvested outstanding options.

18A summary of the status of non-vested options as of June 30, 2010 and of the changes during the six months then ended is presented below. Amounts in the table below have been calculated based on unrounded shares. Because certain grants are divided equally between Tranches 1, 2 and 3, certain amounts may not add to the totals due to the effect of rounding.


	Stock Options						Weighted-Average Grant-Date Fair Value Per Share
	Tranche 1		Tranche 2		Tranche 3		Tranche 1		Tranche 2		Tranche 3
Nonvested as of December 31, 2009	2,796,244		4,083,383		3,850,049		$	5.34	$	1.98	$	1.21
Granted	154,800		—		—		$	7.00		—		—
Vested	(713,589	)	(2,909,061	)	(2,909,061	)	$	2.51	$	1.72	$	1.22

Nonvested as of June 30, 2010	2,237,455		1,174,322		940,988		$	6.36	$	2.65	$	1.14

~~SENSATA~~As ~~TECHNOLOGIES~~of BJune 30, 2010, there were 157,088 shares available for grant under the Stock Option Plan and 4,845,200 shares available for grant under the 2010 Equity Plan.V.

~~NOTES~~Tranche TO1 ~~CONDENSED~~Options: ~~CONSOLIDATED~~A ~~FINANCIAL~~majority ~~STATEMENTS~~of Tranche 1 options vest over a period of 5 years (40% vesting year 2, 60% vesting year 3, 80% vesting year 4 and 100% vesting year 5) provided the participant of the option plan is continuously employed by the Parent or any of its subsidiaries, and vest immediately upon a change-in-control transaction under which the investor group disposes of or sells more than 50% of the total voting power or economic interest in the Parent to one or more independent third parties. Tranche 1 options granted in September 2009 have the same vesting provisions as other Tranche 1 awards, except that they vest 20% per year over five years from the date of grant. Tranche 1 options granted to directors vest over a period of one year. The Company recognizes compensation expense for Tranche 1 awards on a straight-line basis over the requisite service period, which for options issued to date is assumed to be the same as the vesting periods of 1 or 5 years.

~~(In~~A ~~thousands~~total ~~except~~of ~~share~~154,800 ~~and~~Tranche ~~per~~1 ~~share~~options ~~amounts~~were granted under the 2010 Equity Plan in the three months ended June 30, or2010 ~~unless~~to ~~otherwise~~directors of the Parent. As noted) above, these options vest over a period of one year. The grant date fair value per share of these options was $7.00.

Under the fair value recognition provisions of ASC 718, Compensation—Stock Compensation (~~unaudited~~“ASC 718”), the Company recognizes stock-based compensation net of estimated forfeitures and therefore only recognizes compensation cost for those shares expected to vest over the service period of the award. The Company has estimated its forfeitures based on historical experience. During the three months ended March 31, 2009, the Company revised its forfeiture rate from 5% to 11% based upon the actual rate of forfeitures by plan participants. As a result of this revision, the Company recorded a reduction to its non-cash compensation expense of $335 during the six months ended June 30, 2009. There was no adjustment to the estimated forfeiture rate during the three and six months ended June 30, 2010. The remainder of the unrecognized compensation expense of $10,598 will be recognized on a straight-line basis over the remaining requisite service period, through 2014.

ATranche ~~summary~~2 ofand ~~the~~3 ~~status~~Options: ofTranche ~~non-vested~~2 and 3 options asvest based on the passage of ~~March~~time 31(over 5 years with 40% vesting year 2, ~~2010~~60% vesting year 3, 80% vesting year 4 and 100% vesting year 5, similar to a majority of Tranche 1 awards) and the ~~changes~~completion of a liquidity event that results in specified returns on the Sponsors’ investment. Prior to the Amendment to the Stock Option Plan during the three months ~~then~~ ended isSeptember 30, ~~presented~~2009, ~~below.~~the ~~Amounts~~only indifference between the ~~table~~terms ~~below~~of ~~have~~Tranche ~~been~~2 ~~calculated~~and ~~based~~Tranche on3 ~~unrounded~~awards ~~shares.~~was ~~Because~~the ~~each~~amount ~~grant~~of isthe ~~divided~~required ~~equally~~return ~~between~~on ~~Tranches~~the I,Sponsors’ IIinvestment. ~~and~~As ~~III~~a result of the Amendment, all ~~certain~~outstanding ~~amounts~~Tranche ~~may~~3 ~~not~~awards ~~add~~required tothe same specified return on the ~~totals~~equity ~~due~~Sponsor’s to investment as Tranche 2 awards. The Company accounted for the ~~effect~~Amendment as a modification under ASC 718, which resulted in $9,014 of ~~rounding.~~incremental value.

	Stock Options						Weighted-Average Grant-Date FairValue Per Share
	Tranche I		Tranche II		Tranche III		Tranche I		Tranche II		Tranche III
Nonvested as of December 31, 2009	2,796,244		4,083,383		3,850,049		$	5.34	$	1.98	$	1.21
Granted during the period	—		—		—			—		—		—
Vested during the period	(103,688	)	(2,299,159	)	(2,299,159	)	$	2.88	$	1.70	$	1.20
Forfeited during the period	—		—		—			—		—		—
Nonvested as of March 31, 2010	2,692,556		1,784,224		1,550,890		$	5.44	$	2.35	$	1.19

Prior to the first quarter of 2010, the performance and market vesting conditions contained in the Tranche 2 and 3 awards were not considered probable of occurring based on guidance provided by ASC 805, Business Combinations, and no share-based compensation expense was recognized for these awards. These conditions became probable of occurring in the three months ended March 31, 2010, and were satisfied upon the completion of the Parent’s IPO in March 2010. As a result, in the three months ended March 31, 2010, the Company recorded a cumulative catch-up adjustment for previously unrecognized compensation expense associated with the Tranche 2 and 3 awards and the related modification totaling $18,876. The remainder of the unrecognized compensation expense of $2,230 will be recognized on an accelerated basis over the remaining requisite service period.

As of March 31, 2010, there were 157,088 shares available for grant under the Stock Option Plan and 5,000,000 shares available for grant under the 2010 Equity Plan.

Tranche 1 Options: Tranche 1 options, with the exception of those granted during the three months ended September 30, 2009, vest over a period of 5 years (40% vesting year 2, 60% vesting year 3, 80% vesting year 4 and 100% vesting year 5) provided the participant of the option plan is continuously employed by the Company or any of its subsidiaries, and vest immediately upon a change-in-control transaction under which the investor group disposes of or sells more than 50% of the total voting power or economic interest in the Parent to one or more independent third parties. Tranche 1 options granted during the three months ended September 30, 2009 vest 20% per year over five years from the date of grant provided the participant of the option plan is continuously employed by the Company or any of its subsidiaries, and vest immediately upon a change-in-control transaction under which the investor group disposes of or sells more than 50% of the total voting power or economic interest in the Parent to one or more independent third parties. The Company recognizes the compensation charge for Tranche 1 awards on a straight-line basis over the requisite service period, which for options issued to date is assumed to be the same as the vesting period of 5 years. The options expire 10 years from the date of grant. Except as otherwise provided in specific option award agreements, if a participant ceases to be employed by the Company for any reason, options not yet vested expire at the termination date and options that are fully vested expire 60 days after termination of the participant’s employment for any reason other than termination for cause (in which case the options expire on the participant’s termination date) or due to death or disability (in which case the options expire on the date that is as much as six months after the participant’s termination date). In addition, the Parent has a right, but not the obligation, to repurchase all or any portion of award securities issued to a participant at the then current fair value.

There were no grants made during the three months ended March 31, 2010 or 2009.

Under the fair value recognition provisions of ASC 718, the Company recognizes stock-based compensation net of an estimated forfeiture rate and therefore only recognizes compensation cost for those shares expected to vest over the service period of the award. The Company has estimated its forfeitures based on historical experience. During the three months ended March 31, 2009, the Company revised its forfeiture rate from 5% to 11% based upon the actual rate of forfeitures by plan participants. As a result, the Company recorded a reduction to its non-cash compensation expense of $335 during the three months ended March 31, 2009.

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The Company recognized non-cash compensation expense related to Tranche 1 options within selling, general and administrative expense for the three months ended March 31, 2010 and 2009 of $932 and $175, respectively. As of March 31, 2010, there was $10,748 of unrecognized compensation expense related to non-vested Tranche 1 options. The weighted-average recognition period of the unrecognized compensation expense is 3.8 years. The Company did not recognize a tax benefit associated with these expenses during the three months ended March 31, 2010 and 2009.

Tranche 2 and 3 Options: Tranche 2 and 3 options vest based on the passage of time (over 5 years identical to Tranche 1) and the completion of a liquidity event that results in specified returns on the Sponsors’ investment. Prior to the Amendment to the Stock Option Plan during the three months ended September 30, 2009, the only difference between the terms of Tranche 2 and Tranche 3 awards was the amount of the required return on the Sponsors’ investment. As a result of the Amendment to the Stock Option Plan during the three months ended September 30, 2009, all outstanding Tranche 3 awards required the same specified return on the equity Sponsor’s investment as Tranche 2 awards. The Company accounted for the Amendment as a modification under ASC 718, which resulted in $9,014 of incremental value.

These options expire ten years from the date of grant. Except as otherwise provided in specific option award agreements, if a participant ceases to be employed by the Company for any reason, options not yet vested expire at the termination date and options that are fully vested expire 60 days after termination of the participant’s employment for any reason other than termination for cause (in which case the options expire on the participant’s termination date) or due to death or disability (in which case the options expire on the date that is as much as six months after the participant’s termination date). In addition, the Parent has a right, but not the obligation, to repurchase all or any portion of award securities issued to a participant at the then current fair value.

The performance and market vesting conditions contained in the Tranche 2 and 3 awards were satisfied upon the completion of the Parent’s IPO on March 16, 2010. As a result, the Company recorded a cumulative catch-up adjustment for previously unrecognized compensation expense associated with the Tranche 2 and 3 awards and the related modification totaling $18,876. The remainder of the unrecognized compensation expense will be recognized over the remaining requisite service period.

Total compensation expense related to the Tranche 2 and 3 awards recognized during the three months ended March 31, 2010 was $19,022. No compensation expense was recognized during the three months ended March 31, 2009. As of March 31, 2010, there was $2,743 of unrecognized compensation expense related to non-vested Tranche 2 and 3 options. The weighted-average recognition period of the unrecognized compensation expense is 2.3 years.

There were no Tranche 2 or 3 options granted during the three months ended March 31, 2010 and March 31, 2009.

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Restricted Securities

AEmployees ~~summary~~ of the Company held an unvested balance of 433,018 Parent-issued restricted securities ~~activity~~as ~~for~~of June 30, 2010 and December 31, 2009. The remainder of the ~~three~~unrecognized ~~months~~compensation ~~ended~~expense ~~March~~of 31$1,957 ~~2010~~will isbe ~~presented~~recognized ~~below:~~on a straight-line basis over the remaining requisite service period, through 2014.

	Ordinary Shares	Weighted-AverageGrant DateFair Value
Unvested balance as of December 31, 2009	433,018	$	16.20
Granted shares	—		—
Forfeitures	—		—
Vested	—		—
Unvested balance as of March 31, 2010	433,018	$	16.20

TheTable restricted security aggregate intrinsic value information as of March 31, 2010 and 2009 is presented below. The expected to vest restricted securities are the sum of the vested restricted securities and the result of applying the forfeiture rate assumption to total unvested securities. Contents

	March 31,2010		March 31,2009
Vested and outstanding	$	484	$	—
Vested and expected to vest	$	7,405	$	—

Share-Based Compensation Expense

The Company recognized ~~non-cash~~ compensation expense ofrelated ~~$110~~to ~~and~~its ~~$26,~~options ~~respectively,~~and ~~in connection with these~~ restricted securities ~~during~~awards ~~the~~within ~~three months ended March 31~~selling, ~~2010~~general and administrative ~~March~~expense ~~31,~~per ~~2009. At March 31, 2010,~~ the ~~weighted-average~~following ~~remaining~~table: ~~period over which the restrictions will lapse is 4.3 years.~~


	For the three months ended				For the six months ended
	June 30, 2010		June 30, 2009		June 30, 2010		June 30, 2009
Tranche 1 options	$	1,132	$	480	$	2,064	$	655
Tranche 2 and 3 options		563		—		19,585		—
Restricted securities		110		13		220		39

Total share-based compensation expense	$	1,805	$	493	$	21,869	$	694

14. Related Party Transactions

The ~~discussion~~table below ofpresents related party transactions ~~highlights~~recognized in selling, general, and administrative (“SG&A”) expense in the ~~Company’s~~condensed ~~significant~~consolidated ~~related~~statements ~~party~~of ~~relationships~~operations ~~and~~during ~~transactions~~the identified periods.


	For the three months ended				For the six months ended
	June 30, 2010		June 30, 2009		June 30, 2010		June 30, 2009
Sponsors’ fee for Advisory Agreement	$	—	$	1,000	$	833	$	2,000
Advisory Agreement termination fee		—		—		22,352		—
Services provided by Parent		2,032		—		2,032		—
Legal services provided by a shareholder of parent		80		127		120		762

Total included in SG&A expense	$	2,112	$	1,127	$	25,337	$	2,762

Advisory Agreement

In connection with the 2006 Acquisition, the Company entered into an advisory agreement with the Sponsors for ongoing consulting, management advisory and other services (the “Advisory Agreement”). In consideration for ~~ongoing~~ consulting and management advisory services, the Advisory Agreement ~~requires~~required the Company to pay each Sponsor a quarterly advisory fee equal to ~~the~~ the product of $1,000 times such ~~Sponsor~~Sponsors’s Fee Allocation Percentage as defined in the Advisory Agreement. ~~For~~This ~~the~~fee ~~three~~was ~~months ended March 31, 2010 and 2009, the Company~~ recorded ~~$833~~in ~~and $1,000, respectively, within~~ selling, general and administrative expense ~~related~~as toshown in the ~~Advisory~~above ~~Agreement~~table.

At the Sponsors’ option, the Advisory Agreement was terminated in March 2010., Inat ~~connection~~which ~~with~~time the ~~termination, the~~ Company recognized a charge for a termination fee as required by the Advisory Agreement totaling $22,352, of which $22,185 was paid on the Company’s behalf by the Parent. This ~~amount~~termination fee was ~~recognized~~ ~~within Due to Parent on the Company’s condensed consolidated Balance Sheet. The Company~~ recorded ~~this~~in ~~fee within~~ selling, general and administrative expense ~~during~~as ~~the~~shown ~~three~~in ~~months~~the ~~ended March 31, 2010~~above table.

21Services Provided by Parent

~~Table~~The Company recognizes expense for certain activities performed by the Parent for the benefit of ~~Contents~~the Company. These amounts are included in due to parent until paid. The Company records this expense in selling, general and administrative expense as shown in the above table.

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Other Arrangements with the Investor Group and its Affiliates

~~During~~The ~~the~~Company ~~three~~utilizes ~~months~~one ~~ended~~of ~~March 31,~~Sensata ~~2010~~Investment ~~and~~Company ~~2009,~~SCA’s ~~the~~shareholders ~~Company~~for ~~recorded~~legal ~~$40~~services. ~~and~~Expenses ~~$635,~~related ~~respectively,~~to ofsuch ~~expenses~~legal services are recorded in selling, general and administrative expense ~~for~~as ~~legal~~shown ~~services~~in ~~provided~~the bytable ~~one of Sensata Investment Company SCA’s shareholders~~above.

~~During~~19 2009, certain executive officers and other members of management of the Company invested in a limited partnership along with the Sponsors. The limited partnership was formed with the intent to invest in the Company’s bonds among other potential investment opportunities. During 2009, the limited partnership acquired €42,300 aggregate principal amount of 11.25% Senior Subordinated Notes. In connection with the cash tender offer launched on February 26, 2010, the limited partnership validly tendered, and the Company accepted for purchase, all of the 11.25% Senior Subordinated Notes held by the limited partnership. The limited partnership received aggregate consideration of approximately €45,700, including accrued and unpaid interest, in exchange for the tendered notes.

During 2009, certain executive officers and other members of management of the Company invested in a limited partnership along with the Sponsors. The limited partnership was formed with the intent to invest in the Company’s bonds among other potential investment opportunities. As of December 31, 2009, the limited partnership owned €42,300 aggregate principal amount of 11.25% Senior Subordinated Notes. In connection with the cash tender offer launched on February 26, 2010, the limited partnership validly tendered, and the Company accepted for purchase, all of the 11.25% Senior Subordinated Notes held by the limited partnership. The limited partnership received aggregate consideration of approximately €45,700, including accrued and unpaid interest, in exchange for the tendered notes. As of June 30, 2010, management held no investment in the partnership.

15. Commitments and Contingencies

Off-Balance Sheet Commitments

The Company executes contracts involving indemnifications standard in the relevant industry and indemnifications specific to a transaction such as sale of a business. These indemnifications might include claims relating to the following: environmental matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier and other commercial contractual relationships; and financial matters. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third-party claim. Historically, the Company has had only minimal and infrequent losses associated with these indemnities. Consequently, any future liabilities brought about by these indemnities cannot reasonably be estimated or accrued.

OnIn ~~February 4~~May 2009, ~~2010~~Sensata Technologies, ~~STI~~Inc., an indirect and wholly-owned subsidiary of the Company, negotiated ana ~~extension of the~~ transition ~~production~~ production agreement with Engineered Materials Solutions, LLC, ~~a wholly-owned subsidiary of Wickeder Westfalenstahl Gmbh,~~ to ensure the continuation of supply of certain materials. ~~The~~Engineered ~~transition~~Materials ~~production~~Solutions ~~agreement,~~is ~~which~~a ~~was~~wholly-owned ~~scheduled~~subsidiary toof ~~expire on~~Wickeder ~~February 5,~~Westfalenstahl ~~2010, was extended until May 31, 2010~~Gmbh. The Electrical Contact Systems, or “ECS,” business unit of Engineered Materials Solutions iswas the primary supplier to the Company for electrical contacts used in the manufacturing of certain of the Company’s controls products. The Company ~~believes~~entered itinto ~~will~~the ~~have~~transition production ~~one~~agreement orin ~~more~~order ~~alternative~~to ~~suppliers~~support tothe ~~cover~~ECS ~~its~~business ~~electrical~~unit, ~~contacts~~which ~~requirements~~was ~~prior~~at torisk ~~May 31,~~of ~~2010~~closing. The ~~principal~~Company ~~obligations~~extended ~~under~~ the transition production agreement ~~are~~ towith ~~provide silver to~~ Engineered Materials Solutions, toLLC ~~enable~~on ~~the~~February 4, ~~production~~2010, ~~of electrical contacts~~ and toit ~~purchase~~expired ~~these~~on ~~contacts~~May 31, 2010. atThe ~~quantity~~Company ~~and~~has ~~price~~transitioned ~~levels~~to ~~that~~alternative ~~ensure~~suppliers ~~the~~for ~~ECS~~these ~~business unit operates at a break even level~~materials. ~~Specifically,~~The ~~each month~~letter ~~Engineered~~of ~~Materials~~credit ~~Solutions~~issued ~~and~~to the ~~Company~~consignor ~~agree~~under ~~upon~~ the ~~amounts~~silver ~~recorded~~consignment inagreement ~~the~~was ~~profit~~extended ~~and~~to ~~loss~~December 30, ~~statement~~2010 ofand the ~~Engineered~~amount ~~Materials~~of ~~Solutions business based on predetermined accounting principles. Once~~ the ~~applicable~~letter ~~profit~~of ~~and~~credit ~~loss~~was ~~statement~~reduced isfrom ~~agreed~~$7.0 million to by$3.0 ~~both~~million. ~~parties,~~The ~~either~~Company ~~Engineered~~anticipates ~~Materials~~settling ~~Solutions reimburses~~ the ~~Company~~agreements ~~for~~with the ~~amount~~consignor ofand ~~any profit generated or the Company reimburses~~ Engineered Materials Solutions, ~~for~~LLC ~~the~~during ~~amount of any loss incurred. For~~ the three months ended ~~March~~September 3130, 2010,. ~~Engineered~~The ~~Materials Solutions paid the~~ Company ~~$0.5~~does ~~million~~not ~~for~~anticipate ~~profit that was earned through production under~~ the settlement ~~transition~~to ~~production~~be ~~agreement~~material. ~~Under~~See the ~~silver~~Annual ~~consignment~~Report ~~agreement,~~on ~~the~~Form ~~Company~~10-K isfor ~~required to pay~~ the ~~consignor~~year asended ~~the~~December ~~silver is consumed and sold to end customers. Upon termination of this agreement~~31, ~~the~~2009 ~~Company must either pay~~ for ~~the~~further ~~silver~~discussion ~~or return it. The Company has issued a letter~~ of ~~credit~~this tomatter ~~the~~and ~~consignor in~~ the ~~amount~~related ~~of $7~~history.~~0 million~~ ~~which expires on June 30, 2010.~~

22Indemnifications Provided As Part of Contracts and Agreements

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Indemnifications Provided As Part Of Contracts And Agreements

The Company is a party to the following types of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters:

Sponsors: On the closing date of the 2006 Acquisition, the Company entered into customary indemnification agreements with the Sponsors pursuant to which the Company will indemnify the Sponsors, against certain liabilities arising out of performance of a consulting agreement with the Company and each of the Sponsors and certain other claims and liabilities, including liabilities arising out of financing arrangements and securities offerings.

Officers and Directors: The Company’s corporate by-laws require that, except to the extent expressly prohibited by law, the Company must indemnify Sensata’s officers and directors against judgments, fines, penalties and amounts paid in settlement, including legal fees and all appeals, incurred in connection with civil or criminal action or proceedings, as it relates to their services to Sensata and its subsidiaries. Although the by-laws provide no limit on the amount of indemnification, the Company may have recourse against its insurance carriers for certain payments made by the Company. However, certain indemnification payments may not be covered under the Company’s directors’ and officers’ insurance coverage.

criminal action or proceedings, as it relates to their services to Sensata and its subsidiaries. Although the by-laws provide no limit on the amount of indemnification, the Company may have recourse against its insurance carriers for certain payments made by the Company. However, certain indemnification payments may not be covered under the Company’s directors’ and officers’ insurance coverage.

In addition, the Company has a liability insurance policy which insures directors and officers against the cost of defense, settlement or payment of claims and judgments under some circumstances.

Intellectual Property and Product Liability Indemnification: The Company routinely sells products with a limited intellectual property and product liability indemnification included in the terms of sale. Historically, the Company has had only minimal and infrequent losses associated with these indemnities. Consequently, any future liabilities resulting from these indemnities cannot reasonably be estimated or accrued.

Product Warranty Liabilities

The Company’s standard terms of sale provide its customers with a warranty against faulty workmanship and the use of defective materials. These warranties exist for a period of eighteen months after the date wethe ~~ship~~Company ships the product to ~~our~~a customer or for a period of twelve months after the customer resells ~~our~~the product, whichever comes first. The Company does not offer separately priced extended warranty or product maintenance contracts. The Company’s liability associated with this warranty is, at the Company’s option, to repair the product, replace the product or provide the customer with a credit. The Company also sells products to customers under negotiated agreements or where the Company has accepted the customer’s terms of purchase. In these instances, the Company may make additional warranties, for longer durations consistent with differing end-market practices, and where the Company’s liability is not limited. Finally, many sales take place in situations where commercial or civil codes, or other laws, would imply various warranties and restrict limitations on liability. In the event a warranty claim based on defective materials exists, the Company may be able to recover some of the cost of the claim from the vendor from whom the material was purchased. The Company’s ability to recover some of the costs will depend on the terms and conditions to which the Company agreed when the material was purchased. When a warranty claim is made, the only collateral available to the Company is the return of the inventory from the customer making the warranty claim. Historically, when customers make a warranty claim, the Company either replaces the product or provides the customer with a credit. The Company generally does not rework the returned product.

23The Company’s policy is to accrue for warranty claims when a loss is both probable and estimable. This is accomplished by reserving for estimated sales returns and estimated costs to replace the product at the time the related revenue is recognized. Reserves for sales returns and liabilities for warranty claims are not material.

~~Table~~In ofsome ~~Contents~~instances, customers may make claims, and in some cases file lawsuits, for costs they incurred or other damages. Any potentially material liabilities associated with these claims are discussed in this Note under the heading Legal Proceedings.

SENSATA TECHNOLOGIES B.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The Company’s policy is to accrue for warranty claims when both a loss is probable and can be estimated. This is accomplished by reserving for estimated sales returns and estimated costs to rework the product at the time the related revenue is recognized. Reserves for sales returns and liabilities for warranty claims have historically not been material.

In some instances, customers may make claims for costs they incurred or other damages. Any potentially material liabilities associated with these claims are discussed in this Note under the heading Legal Proceedings.

Environmental Remediation Liabilities

The Company’s operations and facilities are subject to U.S. and foreign laws and regulations governing the protection of the environment and the Company’s employees, including those governing air emissions, water discharges, the management and disposal of hazardous substances and wastes, and the cleanup of contaminated sites. The Company could incur substantial costs, including cleanup costs, fines or civil or criminal sanctions, or third-party property damage or personal injury claims, in the event of violations or liabilities under these laws and regulations, or non-compliance with the environmental permits required at the Company’s facilities. Potentially significant expenditures could be required in order to comply with environmental laws that may be adopted or imposed in the future. The Company is, however, not aware of any threatened or pending material environmental investigations, lawsuits or claims involving the Company or its operations.

In21 2001, TI Brazil was notified by the State of São Paolo, Brazil, regarding its potential cleanup liability as a generator of wastes sent to the Aterro Mantovani disposal site, which operated near Campinas from 1972 to 1987. The site is a landfill contaminated with a variety of chemical materials, including petroleum products, allegedly disposed at the site. TI Brazil is one of over fifty companies notified of potential cleanup liability. There have been several lawsuits filed by third parties alleging personal injuries caused by exposure to drinking water contaminated by the disposal site. The Company’s subsidiary, Sensata Technologies Brazil, is the successor in interest to TI Brazil. However, in accordance with the terms of the acquisition agreement entered into in connection with the 2006 Acquisition, Texas Instruments retained these liabilities (subject to the limitations set forth in that agreement) and has agreed to indemnify the Company with regard to these excluded liabilities. Additionally, in 2008, lawsuits were filed against Sensata Technologies Brazil alleging personal injuries suffered by individuals who were exposed to drinking water allegedly contaminated by the Aterro disposal site. These matters are managed and controlled by TI. TI is defending these lawsuits, which are in early stages. Although Sensata Technologies Brazil cooperates with TI in this process, the Company does not anticipate incurring any non-reimbursable expenses related to the matters described above. Accordingly, no amounts have been accrued for these matters as of March 31, 2010.

Control Devices, Inc. (“CDI”), a wholly-owned subsidiary of Sensata Technologies, Inc., our principal U.S. operating subsidiary (“STI”), acquired through our acquisition of First Technology Automotive, holds a post-closure license, along with GTE Operations Support, Inc. (“GTE”), from the Maine Department of Environmental Protection with respect to a closed hazardous waste surface impoundment located on real property at a facility owned by CDI in Standish, Maine. The post-closure license obligates GTE to operate a pump and treatment process to reduce the levels of chlorinated solvents in the groundwater under the property. The post-closure license obligates CDI to maintain the property and provide access to GTE. The Company does not expect the costs to comply with the post-closure license to be material. As a related but separate matter, pursuant to the terms of an Environmental Agreement dated July 6, 1994, GTE retained liability and agreed to indemnify CDI for certain liabilities related to the soil and groundwater contamination from the surface impoundment and an out-of-service leach field at the Standish, Maine facility, and CDI and GTE have certain obligations related to the

~~SENSATA~~In ~~TECHNOLOGIES~~2001, BTI Brazil was notified by the State of São Paolo, Brazil, regarding its potential cleanup liability as a generator of wastes sent to the Aterro Mantovani disposal site, which operated near Campinas from 1972 to 1987.V The site is a landfill contaminated with a variety of chemical materials, including petroleum products, allegedly disposed at the site. TI Brazil is one of over fifty companies notified of potential cleanup liability. There have been several lawsuits filed by third parties alleging personal injuries caused by exposure to drinking water contaminated by the disposal site. The Company’s subsidiary, Sensata Technologies Brazil, is the successor in interest to TI Brazil. However, in accordance with the terms of the acquisition agreement entered into in connection with the 2006 Acquisition, Texas Instruments retained these liabilities (subject to the limitations set forth in that agreement) and has agreed to indemnify the Company with regard to these excluded liabilities. Additionally, in 2008, lawsuits were filed against Sensata Technologies Brazil alleging personal injuries suffered by individuals who were exposed to drinking water allegedly contaminated by the Aterro disposal site. These matters are managed and controlled by TI. TI is defending these lawsuits, which are in early stages. Although Sensata Technologies Brazil cooperates with TI in this process, the Company does not anticipate incurring any non-reimbursable expenses related to the matters described above. Accordingly, no amounts have been accrued for these matters as of June 30, 2010.

~~NOTES~~Control TODevices, ~~CONDENSED~~Inc. ~~CONSOLIDATED~~(“CDI”), ~~FINANCIAL~~a ~~STATEMENTS~~wholly-owned subsidiary of Sensata Technologies, Inc., our principal U.S. operating subsidiary (“STI”), acquired through our acquisition of First Technology Automotive, holds a post-closure license, along with GTE Operations Support, Inc. (“GTE”), from the Maine Department of Environmental Protection with respect to a closed hazardous waste surface impoundment located on real property at a facility owned by CDI in Standish, Maine. The post-closure license obligates GTE to operate a pump and treatment process to reduce the levels of chlorinated solvents in the groundwater under the property. The post-closure license obligates CDI to maintain the property and provide access to GTE. The Company does not expect the costs to comply with the post-closure license to be material. As a related but separate matter, pursuant to the terms of an Environmental Agreement dated July 6, 1994, GTE retained liability and agreed to indemnify CDI for certain liabilities related to the soil and groundwater contamination from the surface impoundment and an out-of-service leach field at the Standish, Maine facility, and CDI and GTE have certain obligations related to the property and each other. The site is contaminated primarily with chlorinated solvents. The Company does not expect the remaining cost associated with addressing the soil and groundwater contamination to be material.

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

property and each other. The site is contaminated primarily with chlorinated solvents. The Company does not expect the remaining cost associated with addressing the soil and groundwater contamination to be material.

The Company is subject to compliance with laws and regulations controlling the export of goods and services. Certain of the Company’s products are subject to International Traffic in Arms Regulation (“ITAR”). These products represent an immaterial portion of the Company’s revenues and the Company has not exported an ITAR-controlled product. However, if in the future the Company decides to export ITAR-controlled products, such transactions would require an individual validated license from the U.S. State Department’s Directorate of Defense Trade Controls. The State Department makes licensing decisions based on type of product, destination of end use, end user and considers national security and foreign policy. The length of time involved in the licensing process varies, but is currently less than three weeks. The license processing time could result in delays in the shipping of products. These laws and regulations are subject to change, and any such change may require the Company to change technology or incur expenditures to comply with such laws and regulations.

Legal Proceedings

The Company accounts for litigation and claims losses in accordance with ASC Topic 450, Contingencies (“ASC 450”). ~~ASC~~Loss ~~450~~contingencies ~~loss contingency provisions~~ are recorded ~~for~~when probable and estimable ~~losses~~ at the Company’s best estimate of a loss, or, when a best estimate cannot be made, at the ~~Company’s~~low ~~estimate~~end of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss. These estimates are refined each accounting period as additional information becomes known. Accordingly, the Company’s ~~is often initially unable to develop a best~~ estimate of ~~loss and therefore~~ the ~~minimum~~range ~~amount,~~of ~~which~~possible ~~could~~outcomes befor ~~zero, is recorded. As information becomes known, either~~ the ~~minimum loss amount is increased, resulting in additional loss provisions, or a best estimate can be made resulting in additional loss provisions~~contingency. ~~Occasionally, a best estimate amount is changed to a lower amount when events result in an expectation of a more favorable outcome than previously expected.~~ The Company has recorded litigation reserves of approximately $76.38 million as of ~~March~~ June 3130, 2010 for various litigation and claims, including the matters described in the Annual Report on Form 10-K for the year ended December 31, 2009 and as updated below.

The Company is regularly involved in a number of claims and litigation matters in the ordinary course of business. Most of the Company’s litigation matters are third-party claims for property damage allegedly caused by the Company’s products, but some involve allegations of personal injury or wrongful death. The Company believes that the ultimate resolution of the current litigation matters that are pending against the Company, except potentially those matters described below, will not have a material effect on the Company’s financial condition or results of operations.

~~Ford~~22 Speed Control Deactivation Switch Litigation: The Company is involved in a number of litigation matters relating to a pressure switch that TI sold to Ford Motor Company (“Ford”) for several years until 2002. Ford incorporated the switch into a cruise control deactivation switch system that it installed in certain vehicles. Due to concerns that, in some circumstances, this system and switch may cause fires, Ford issued seven separate recalls of vehicles in the United States between 1999 and October 23, 2009, which covered approximately fourteen million vehicles in the aggregate. Also, in October 2009, Mazda issued a recall in the United States of 36,000 vehicles that Ford had manufactured for it which contained the system and switch; and in December 2009, Ford China issued a recall of 528 vehicles imported into China by Ford.

InTable 2001, TI received a demand from Ford for reimbursement of costs related to the first recall in 1999, a demand that TI rejected and that Ford has not subsequently pursued against the Company. Ford has never made such a demand to the Company, nor made demands of the Company related to the subsequent recalls. Contents

by the Company’s products, but some involve allegations of personal injury or wrongful death. See the Annual Report on Form 10-K for the year ended December 31, 2009 for historical details of such claims.

Ford Speed Control Deactivation Switch Litigation: The Company is involved in a number of litigation matters relating to a pressure switch that TI sold to Ford Motor Company (“Ford”) for several years until 2002, which was incorporated into a cruise control deactivation switch system. Between 1999 and 2009, Ford and related manufacturers issued nine different recalls in the US and China, due to concerns that in some circumstances this system and switch may cause fires. In 2001, TI received a demand from Ford for reimbursement of costs related to the first recall, and rejected that demand. Ford has not subsequently pursued TI or the Company for any demands related to these recalls.

The Company has been served with various lawsuits related to this matter in which plaintiffs have alleged wrongful death related to fires allegedly caused by the system and switch. During fiscal year 2008, the Company settled all then outstanding wrongful death cases related to these matters for amounts that did not have a material impact on the Company’s financial condition or results of operations. On April 1, 2010, the Company and TI were served in a new lawsuit involving wrongful death claims, Romans v. Texas Instruments Inc. et al, Case # CVH 20100126, Madison County Court of Common Pleas, Ohio. The lawsuit alleges that a 2008 residential fire resulted in the deaths of three people and injuries to a fourth. A separate lawsuit, which arises from the same facts, Romans v. Ford Motor Company, Case #CVC20090074, Madison County Court of Common Pleas, Ohio, has been filed against Ford. On April 9, 2010, the plaintiffs filed a motion to consolidate the two lawsuits. The Company believes that these claims will ultimately be dismissed.

As of June 30, 2010, the Company was a defendant in 24 third party lawsuits in which plaintiffs have alleged property damage and various personal injuries from the system and switch. A majority of these cases seek an unspecified amount of compensatory and exemplary damages. The range of demand where one is specified is from $50 thousand to $3.0 million. Ford and TI are co-defendants in each of these lawsuits. The Company has recorded a $0.6 million reserve in its financial statements for potential losses in these cases.

Whirlpool Recall Litigation: The Company is involved in litigation relating to certain control products that TI sold between 2000 and 2004 to Whirlpool Corporation (“Whirlpool”). The control products were incorporated into the compressors of certain refrigerators in a number of Whirlpool brands. Whirlpool contends that the control products were defective because they allegedly fail at excessive rates, and have allegedly caused property damage, including fires.

On January 28, 2009, Whirlpool filed a lawsuit against TI and one of the Company’s subsidiaries asserting, among other things, contract claims as well as claims for breach of warranty, fraud, negligence, indemnification, and deceptive trade practices. The lawsuit seeks an unspecified amount of compensatory and exemplary damages. The Company and TI have answered the complaint and denied liability. In January 2009, TI elected to become the controlling party for this lawsuit and will manage and defend the litigation on behalf of both TI and the Company.

On June 11, 2010, Whirlpool filed a first amended complaint in the Circuit Court of Cook County, Illinois, Whirlpool Corp. et. al. v. Sensata Technologies, Inc. et. al., Docket No. 2009-L-001022. The amended complaint clarifies many of their contentions, and adds and subtracts certain causes of action. As of June 30, 2010, the Company has recorded a reserve of $5.9 million related to this matter.

Pursuant to the terms of the acquisition agreement entered into in connection with the 2006 Acquisition, and subject to the limitations set forth in that agreement, TI has agreed to indemnify the Company for certain claims and litigation, including the Whirlpool matter, to the extent that the aggregate amount of costs and/or damages from such claims exceeds $30.0 million (up to a cap of $300 million). As of June 30, 2010, the Company had incurred approximately $27.0 million of costs that it believes apply towards the indemnification.

The Company has also been involved in a related but separate proceeding with TI’s insurer, American Alternative Insurance. TI has filed a lawsuit against this insurer seeking reimbursement of its defense costs in the Whirlpool litigation and third party claims. During the three months ended June 30, 2010, TI informed the Company that they have reached a settlement with their insurer in this matter. As of June 30, 2010, the Company has not recorded a reserve for this matter.

Pelonis Appliances: The Company is a co-defendant in a claim against Pelonis Appliances, Inc. resulting from a residential fire allegedly caused by a product sold by Pelonis Appliances, and which incorporates one of the Company’s products. On April 17, 2010, the court granted plaintiff’s notice of non-suit without prejudice. Pelonis and the Company have continued their pending cross claims for at least five months until January 2011 with the intention of dismissing those claims if plaintiffs do not refile their claims before the applicable statute of limitations runs. As of June 30, 2010, the Company has not recorded a reserve for this matter.

Huawei. A Chinese telecommunications equipment customer, Huawei, informed the Company that it was planning to conduct a field replacement campaign for power supply products containing the Company’s circuit breakers. The customer has alleged defects in the Company’s products, which were sold through distributors to two power supply subcontractors. As of the end of the three months ended March 31, 2010, the Company estimated that a 100% field replacement campaign would cost approximately $6.0 million. Based on more recent discussions with the customer, the Company believes that the replacement campaign will involve a smaller percentage of systems with an estimated cost for the campaign of approximately $1.0 million. The Company is contesting the customer’s allegations but working with them to analyze the situation. The Company has included a reserve in its financial statements in the amount of $0.1 million as of June 30, 2010.

European automaker: A European automaker has alleged defects in certain of the Company’s pressure sensor products installed in its vehicles from June 2006 through April 2010. The customer brought this claim in June 2010 claiming costs to date of €2.5 million, and estimated future costs, together, totaling €11.7 million. The Company contests the customer’s allegations. As of June 30, 2010, the Company has not recorded a reserve for this claim.

16. Fair Value Measures

The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with ASC 820, Fair Value Measurements and Disclosures. The levels of the fair value hierarchy are described below:

•

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date.

•

Level 2 inputs utilize inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

•

Level 3 inputs are unobservable inputs for the asset or liability, allowing for situations where there is little, if any, market activity for the asset or liability.

Measured on a Recurring Basis

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell.


	June 30, 2010						December 31, 2009
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Commodity forward contracts	$	—	$	463	$	—	$	—	$	644	$	—
Interest rate caps		—		255		—		—		1,550		—
Euro call option		—		—		—		—		993		—

Total	$	—	$	718	$	—	$	—	$	3,187	$	—

Liabilities
Interest rate collars	$	—	$	4,861	$	—	$	—	$	8,587	$	—
Interest rate swap		—		1,083		—		—		3,157		—
Commodity forward contracts		—		73		—		—		193		—

Total	$	—	$	6,017	$	—	$	—	$	11,937	$	—

The valuations of the derivatives intended to mitigate the Company’s interest rate risk (interest rate caps, collars and swaps) are determined with the assistance of a third party financial institution using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves and interest rate volatility, and reflects the contractual terms of these instruments, including the period to maturity. Specific contractual terms utilized as inputs in determining fair value and a discussion of the nature of the risks being mitigated by these instruments are detailed in Note 17, Derivative Instruments and Hedging Activities, under the caption “Interest Rate Risk”.

The valuations of the commodity forward contracts are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including commodity forward curves, and reflects the contractual terms of these instruments, including the period to maturity. Specific contractual terms utilized as inputs in determining fair value and a discussion of the nature of the risks being mitigated by these instruments are detailed in Note 17, Derivative Instruments and Hedging Activities, under the caption “Commodity Risk”.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to appropriately reflect both its own nonperformance risk and the respective counterparties’ nonperformance risk in the fair value measurement. However, as of June 30, 2010 and December 31, 2009 the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.

~~SENSATA~~Measured ~~TECHNOLOGIES~~on ~~B.V.~~a Non-Recurring Basis

~~NOTES~~The TOCompany ~~CONDENSED~~evaluates ~~CONSOLIDATED~~the ~~FINANCIAL~~recoverability ~~STATEMENTS~~of goodwill and other intangible assets in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that goodwill or other intangible assets may be impaired. As of June 30, 2010, no such events or changes in circumstances occurred that would have triggered the need for an earlier impairment review.

(In ~~thousands~~March ~~except~~2009, ~~share~~the Company determined that goodwill and ~~per~~definite-lived ~~share~~intangible ~~amounts~~assets associated with its Interconnection reporting unit were impaired and recorded a charge totaling $19,867 orin ~~unless~~the ~~otherwise~~condensed ~~noted)~~consolidated statement of operations. The balance of definite-lived intangible assets and goodwill associated with Interconnection as of March 31, 2009, as well as the impairment charges recorded during the three months ended March 31, 2009, were as follows:

(unaudited)


	Fair Value Measurement		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impaired (Losses)
Definite-lived intangible assets	$	10,630	$	—	$	—	$	10,630	$	(14,574	)
Goodwill		3,341		—		—		3,341		(5,293	)

	$	13,971		—		—	$	13,971	$	(19,867	)

InThe ~~August~~fair ~~2006,~~value ~~the~~measures ~~National~~in ~~Highway Traffic Safety Administration (“NHTSA”) issued a closing report based on a multi-year investigation which found that~~ the ~~fire~~table ~~incidents~~above were ~~caused~~measured byusing ~~system-related~~significant ~~factors.~~unobservable Oninputs ~~October 14,~~(level ~~2009,~~3) using ~~NHTSA~~an ~~issued~~income aapproach, ~~closing~~as ~~report~~described ~~associated~~in ~~with~~the aAnnual ~~more~~Report ~~recent~~on ~~recall~~Form ~~which~~10-K ~~modified~~for the ~~findings~~ ofyear ~~the~~ended ~~2006~~December ~~report~~31, ~~but continued to emphasize system factors~~2009.

AsGoodwill ~~of March 31, 2010, the~~and ~~Company~~definite-lived ~~was~~intangible aassets ~~defendant~~are invalued 26primarily ~~lawsuits~~using indiscounted ~~which~~cash ~~plaintiffs~~flow ~~have~~models ~~alleged~~that ~~property~~incorporate ~~damage~~assumptions ~~and~~for ~~various~~a ~~personal~~reporting ~~injuries~~units’ ~~from~~short ~~the system~~ and ~~switch.~~long-term Ofrevenue ~~these~~growth ~~cases~~rates, 17operating ~~are~~margins ~~pending~~and indiscount arates, ~~state~~which ~~multi-district~~represent ~~litigation in~~ the ~~53rd~~Company’s ~~Judicial~~best ~~Court~~estimates of ~~Travis~~current ~~County,~~and ~~Texas,~~forecasted Inmarket reconditions, ~~Ford Motor~~current ~~Company~~cost ~~Speed Control Deactivation Switch Litigation~~structure, ~~Docket~~and ~~No. D-1-GN-08-00091; 4 are pending in a federal multi-district litigation in~~ the ~~United~~implied ~~States~~rate ~~District Court for the Eastern District~~ of ~~Michigan,~~return ~~Ford~~that ~~Motor~~management ~~Co.~~believes ~~Speed Control~~a ~~Deactivation~~market ~~Switch~~participant ~~Products~~would ~~Liability~~require ~~Litigation,~~for ~~Docket~~an ~~No. 05-md-01718.~~investment ~~The remainder is~~ in ~~individual~~a ~~dockets~~Company inhaving ~~various~~similar ~~state~~risks ~~courts of California, Georgia~~ and business ~~Texas,~~characteristics ~~and~~to the ~~federal~~reporting ~~court~~unit ~~for~~being ~~the Southern District of Iowa~~assessed.

~~For~~Financial ~~the~~Instruments ~~most~~Not ~~part,~~Recorded ~~these~~at ~~cases~~Fair ~~seek an unspecified amount of compensatory and exemplary damages. For the plaintiffs that have~~Value ~~requested a specific amount, the range of the demand is $50 thousand to $3.0 million. Ford and TI are co-defendants in each of these lawsuits.~~

InThe ~~accordance~~carrying ~~with~~value ~~terms~~and offair ~~the~~values ~~acquisition~~of ~~agreement~~financial ~~entered~~instruments ~~into~~not inrecorded ~~connection~~at ~~with~~fair ~~the~~value ~~2006~~in ~~Acquisition,~~ the ~~Company~~condensed ~~is managing and~~consolidated ~~defending~~balance ~~these~~sheets ~~lawsuits~~as ~~on behalf~~ of ~~both~~June 30, ~~the~~2010 ~~Company~~ and ~~TI.~~December 31, ~~The~~2009 ~~majority~~were ofas ~~these~~follows: ~~cases are in discovery. Two have been set for trial and one is on appeal.~~

During fiscal year 2008, the Company settled all then outstanding wrongful death cases related to these matters for amounts that did not have a material effect on the Company’s financial condition or results of operations. On April 1, 2010, the Company and TI were served in a new lawsuit involving wrongful death claims, Romans v. Texas Instruments Inc. et al, Case # CVH 20100126, Madison County Court of Common Pleas, Ohio. The lawsuit alleges that a 2008 residential fire resulted in the deaths of three people and injuries to a fourth. A separate lawsuit, which arises from the same facts, Romans v. Ford Motor Company, Case #CVC20090074, Madison County Court of Common Pleas, Ohio, has been filed against Ford. On April 9, 2010, the plaintiffs filed a motion to consolidate the two lawsuits.


	June 30, 2010				December 31, 2009
	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Senior secured term loans	$	1,378,538	$	1,259,425	$	1,468,100	$	1,295,320
Senior Notes and Senior Subordinated Notes		417,241		432,835		790,792		768,079

AsThe ~~for~~fair ~~the~~values ~~cases that are still pending, the Company has included a reserve in its financial statements in the amount~~ of ~~$0.9 million as~~ ~~of March 31, 2010. There can be no assurances, however, that this reserve will be sufficient to cover~~ the ~~extent of the~~ Company’s ~~costs~~long-term ~~and~~obligations ~~potential~~are ~~liability~~determined ~~from~~by ~~these~~using ~~matters.~~a ~~Any~~valuation ~~additional~~model ~~liability~~that indiscounts ~~excess~~estimated offuture ~~this~~cash ~~reserve~~flows ~~could have~~at ~~a material adverse effect on~~ the ~~Company’s~~benchmark ~~financial~~interest ~~condition~~rate orplus ~~results~~an ofestimated ~~operations~~credit spread.

~~Whirlpool~~Cash ~~Recall Litigation: The Company is involved in litigation relating to certain control products that TI sold between 2000~~ and ~~2004~~trade toreceivables ~~Whirlpool~~are ~~Corporation~~carried ~~(“Whirlpool”).~~at ~~The~~their ~~control~~cost ~~products~~which ~~were~~approximates ~~incorporated~~fair ~~into~~value ~~the~~because ~~compressors~~ of ~~certain refrigerators~~their ~~in a number of Whirlpool brands, including Maytag, Jenn~~short-~~Air,~~term ~~Amana, Admiral, Magic Chef, Performa by Maytag, and Crosley~~nature. Whirlpool contends that the control products were defective because they allegedly fail at excessive rates and have allegedly caused property damage, including fires. During fiscal years 2007 and 2008, the Company paid Whirlpool for certain costs associated with third-party claims and other external engineering costs, in amounts that did not have a material adverse effect on the Company’s financial condition or results of operations. During 2009, Whirlpool in conjunction with the Consumer Product Safety Commission (“CPSC”) announced voluntary recalls of approximately 1.8 million refrigerators.

On17. ~~January 28,~~Derivative ~~2009,~~Instruments ~~Whirlpool Corporation, as well as its subsidiaries Whirlpool SA~~ and ~~Maytag Corporation,~~Hedging ~~filed~~Activities ~~a lawsuit against TI and the Company’s subsidiary, STI. The lawsuit was filed in the Circuit~~

As required by ASC Topic 815, Derivatives and Hedging (“ASC 815”), the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the

~~SENSATA~~ intended ~~TECHNOLOGIES~~use Bof the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.V Derivatives designated and qualifying as a hedge on the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though the Company elects not to apply hedge accounting under ASC 815.

~~NOTES~~Interest TORate ~~CONDENSED~~Risk ~~CONSOLIDATED FINANCIAL STATEMENTS~~

~~(In~~The ~~thousands~~Company’s ~~except~~objectives ~~share~~in using interest rate derivatives are to add stability to interest expense and ~~per~~to ~~share~~manage ~~amounts~~its exposure to interest rate movements on its U.S. dollar and Euro-denominated floating rate debt. To accomplish this objective, orthe ~~unless~~Company ~~otherwise~~primarily ~~noted)~~uses interest rate swaps, collars and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve the receipt of variable rate amounts if interest rates rise above the cap strike rate on the contract and payments of variable rate amounts if interest rates fall below the floor strike rate on the contract. Interest rate caps designated as cash flow hedges involve the receipt of variable rate amounts if interest rates rise above the cap strike rate on the contract.

~~(unaudited)~~The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three and six months ended June 30, 2010, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. For the three and six months ended June 30, 2010, the Company recorded no ineffectiveness in earnings and no amounts were excluded from the assessment of effectiveness.

Amounts reported ~~Court~~in ofaccumulated ~~Cook~~other ~~County,~~comprehensive ~~Illinois,~~loss ~~under~~related ~~the~~to ~~name~~derivatives ~~Whirlpool~~will ~~Corp.~~be etreclassified ~~al.~~to v.interest ~~Sensata~~expense ~~Technologies,~~as ~~Inc.~~interest etpayments ~~al.,~~are ~~Docket~~made ~~No. 2009-L-001022.~~on ~~The~~the ~~complaint~~Company’s ~~asserts,~~variable ~~among~~rate ~~other~~debt. ~~things, contract~~As ~~claims as well as claims for breach~~ of ~~warranty~~June 30, ~~fraud~~2010, ~~negligence,~~the ~~indemnification~~Company ~~and~~estimates ~~deceptive~~that ~~trade practices. It seeks~~ an ~~unspecified~~additional ~~amount~~$6,507 will ofbe ~~compensatory~~reclassified ~~and~~from ~~exemplary~~accumulated ~~damages.~~other ~~The~~comprehensive ~~Company~~loss ~~and~~to TIinterest ~~have~~expense ~~answered~~during the ~~complaint~~twelve ~~and denied~~months ~~liability~~ending June 30, 2011.

~~The~~As ~~Company~~of ~~and Texas Instruments subsequently filed a cross claim for indemnification against Empresa Braseila de Compressores~~June 30, ~~S.A.~~2010, ~~n/k/a~~the ~~Whirlpool SA, and Embraco North America, Inc., together “Embraco.” The~~ Company ~~asserts,~~had ~~among other things, that Embraco was responsible for testing~~ the ~~compatibility~~following ofoutstanding ~~the~~interest ~~control~~rate ~~product~~derivatives ~~with its compressors, and~~ that ~~the~~were ~~Company~~designated ~~and~~as TIcash ~~have~~flow ~~become~~hedges ~~exposed to litigation because~~ of interest ~~Embraco’s~~rate ~~actions~~risk: ~~and inactions. The Company believes that Embraco is now a wholly-owned subsidiary of Whirlpool SA.~~

Discovery on all claims and cross-claims is ongoing, and the court has reserved time in April 2011 for a possible trial.


Interest Rate Derivatives	Notional (in millions)		Effective Date	Maturity Date	Index	Strike Rate
Interest rate swap	$	70.0	July 27, 2006	January 27, 2011	3-month LIBOR	5.377%
Interest rate collars	€	220.0	July 28, 2008	April 27, 2011	3-month EURIBOR	3.55% - 4.40%
Interest rate cap	€	100.0	March 5, 2009	April 29, 2013	3-month EURIBOR	5.00%
Interest rate cap	$	600.0	March 5, 2009	April 29, 2013	3-month LIBOR	5.00%

~~In January 2009, TI elected under the acquisition agreement to become the controlling party for this lawsuit and will manage and defend~~Foreign ~~the~~Currency ~~litigation~~Risk on behalf of both TI and the Company. Although the Company is working with TI to defend the litigation, the Company believes that a loss is probable and, as of March 31, 2010, has recorded a reserve of $5.9 million for this matter. There can be no assurances, however, that this reserve will be sufficient to cover the extent of the Company’s costs and potential liability from this or any related matters. Any additional liability in excess of this reserve could have a material adverse effect on the Company’s financial condition or results of operations.

~~Pursuant~~Consistent ~~to the terms of the acquisition agreement entered into in connection~~ with the ~~2006 Acquisition, and subject to the limitations set forth in that agreement, TI has agreed to indemnify the~~ Company’s ~~for~~risk ~~certain~~management ~~claims~~objective and ~~litigation,~~strategy ~~including~~to ~~the~~reduce ~~Whirlpool~~exposure matter, provided that the aggregate amount of costs and/or damages from such claims exceeds $30.0 million. If the aggregate amount of costs and/or damages from these claims exceeds $30.0 million, TI is obligated to ~~indemnify the Company for amounts in~~variability ~~excess~~in ofcash ~~the~~flows ~~$30.0 million threshold up to a cap~~ on ~~TI’s~~its ~~indemnification~~outstanding ~~obligation of $300.0 million. As of March 31~~debt, ~~2010,~~in ~~the~~December ~~Company believes it had incurred approximately $26.9 million of costs that apply towards the indemnification. TI has reserved all rights to contest that claim~~2009, ~~and may dispute all or some portion of~~ the ~~amount the~~ Company ~~claimed.~~executed ~~The~~a ~~Company~~foreign ~~believes~~currency ~~that~~call ~~its costs and/or damages from the Whirlpool Litigation and other claims and litigation matters will ultimately exceed $30~~option.0 ~~million.~~This

The Company is also involved in a related, but separate proceeding with Texas Instrument’s insurer, American Alternative Insurance. On June 3, 2009, Texas Instruments filed a lawsuit against American Alternative seeking reimbursement for its defense costs in the Whirlpool litigation and third party claims. The case, Texas Instruments Incorporated v. American Alternative Ins. Corp., was filed in the 193rd Court of Dallas County, Texas, No. DC-09-07045-L. On October 16, 2009, American Alternative filed a third party claim against STI alleging that STI assumed liability for the Whirlpool matters under the acquisition agreement referred to in the preceding paragraph. On that basis, American Alternative has asserted that the Company owes American Alternative for any amounts that it may ultimately be required to pay to Texas Instruments. Texas Instruments is defending this claim on STI’s behalf, and has filed an answer denying any liability. As of March 31, 2010, the Company has not recorded a reserve for this matter.

Pelonis Appliances: On December 26, 2008, seven individuals filed suit against Pelonis Appliances, Inc., which sells a fan forced heater product, manufactured by GD Midea Environmental Appliances Mfg. Co. Ltd. (“GD Midea”), that incorporates one of our thermal cut-off products, which was purchased from one of our

~~SENSATA~~ instrument ~~TECHNOLOGIES~~was Bnot designated for hedge accounting treatment in accordance with ASC 815.V Changes in the fair value of derivatives not designated in hedging relationships are recorded in the statement of operations as a gain or loss within Currency translation gain and other, net. During the six months ended June 30, 2010, the Company recognized a net loss of $993 associated with this derivative. The contract expired unexercised during the three months ended June 30, 2010. As of June 30, 2010, the Company has no outstanding derivative financial instruments to manage the Company’s exposure to foreign currency risk. The Company continues to monitor exposures to this risk and generally employs operating and financing activities to offset these exposures.

~~NOTES~~Commodity ~~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~ Risk

~~(In~~The ~~thousands~~Company’s ~~except~~objective ~~share~~in using commodity forward contracts is to offset a portion of its exposure to the potential change in prices associated with certain commodities, including silver, gold, nickel, aluminum and ~~per~~copper, ~~share~~used in the manufacturing of its products. The terms of these forward contracts fix the price at a future date for various notional amounts associated with these commodities. These instruments were not designated for hedge accounting treatment in accordance with ASC 815. In accordance with ASC 815, the Company recognizes the change in fair value of these derivatives in the statement of operations as a gain or ~~unless~~loss ~~otherwise~~as ~~noted~~a component of Currency translation gain and other, net. During the three months ended June 30, 2010 and 2009, the Company recognized a net (loss) / gain associated with its commodity forward contracts of $(863) and $703, respectively. During the six months ended June 30, 2010 and 2009 the Company recognized a net gain associated with its commodity contracts of $921 and $1,637, respectively.

~~(unaudited)~~The Company had the following outstanding commodity forward contracts as of June 30, 2010:

distributors. The lawsuit, Cueller v. Pelonis Appliances, Inc., No. 08-16188, 160th Judicial District Court of Dallas County, Texas, arose out of a residential fire that resulted in one death, personal injuries (including burns) to the other plaintiffs, and property damage.


	Notional	Contracted Periods	Weighted- Average Strike Price
Silver	213,322 troy oz	February 2010 - December 2010	$	16.94
Nickel	142,413 pounds	November 2009 - February 2011	$	8.58
Aluminum	1,256,772 pounds	October 2009 - February 2011	$	0.96
Copper	946,083 pounds	February 2010 - December 2010	$	2.92

Pelonis demanded indemnity from the Company in a letter dated May 6, 2009, and the Company rejected that demand. On June 9, 2009, the plaintiffs amended their complaint to include STI as a defendant. The plaintiffs seek an unspecified amount of actual and exemplary damages.

On August 3, 2009, the Company answered the amended complaint, denying any liability. The Company also asserted cross-claims against Pelonis for indemnification and against Pelonis and GD Midea as responsible third parties.

Discovery is ongoing, and a trial has been scheduled for August 2, 2010. As of March 31, 2010, the Company has not recorded a reserve for this matter.

Huawei. Huawei, a Chinese telecommunications equipment customer, has informed the Company that it is planning to conduct a field replacement campaign for power supply products containing the Company’s circuit breakers. The customer has alleged defects in the Company’s products, which are sold through distributors to two power supply subcontractors. There are 24,000 systems in the field and the Company estimates that a 100% field replacement campaign would cost approximately $6.0 million. The customer has not yet determined the percentage of systems that will need to be serviced. The Company is contesting the customer’s allegations but working with them to analyze the situation.

The Company has included a reserve in its financial statements in the amount of $0.2 million as of March 31, 2010. There can be no assurances, however, that this reserve will be sufficient to cover the extent of the Company’s costs and potential liability from these matters. Any additional liability in excess of this reserve could have a material adverse effect on the Company’s financial condition or results of operations.

Audi. Audi, a part of the Volkswagen Auto Group, has alleged defects in certain of the Company’s products installed in its vehicles. The customer first brought the claim in 2008 in the amount €8.1 million in expenses related to replacement of the Company’s products. The customer subsequently expanded its claim to €24.0 million. The Company contested the customer’s allegations, but entered into discussions seeking to resolve the dispute. In March 2010, the parties reached agreement on resolution of the dispute. The Company agreed to accept the prior set-off by Audi of amounts totaling €0.9 million or $1.2 million. The Company believes that Audi will not further pursue its claims related to these products.

Coffeemakers. Certain European small appliance customers have made claims alleging defects in one of the Company’s electro mechanical controls products. One customer has conducted a recall of their products and two customers have reported several third-party fire incidents. One customer has filed a lawsuit against the Company in Sweden, Jede AB v. Stig Wahlström AB and Sensata Technologies Holland B.V., No. 10017-9, Soederfoern district court, Sweden. The suit alleges damages amounting to €1.8 million. The Company filed its answer on December 1, 2009, and denied liability. Discovery has not yet begun. The other customer claims aggregate to a similar amount. The Company is contesting these claims. As of March 31, 2010, the Company has not recorded a reserve for this matter.

~~SENSATA~~Financial ~~TECHNOLOGIES~~Instrument ~~B.V.~~Presentation

~~NOTES~~The TOfollowing ~~CONDENSED~~table ~~CONSOLIDATED~~presents ~~FINANCIAL~~the ~~STATEMENTS~~fair value of the Company’s derivative financial instruments and their classification on the condensed consolidated balance sheet as of June 30, 2010 and December 31, 2009.

(In thousands except share and per share amounts, or unless otherwise noted)


	Asset Derivatives						Liability Derivatives
	June 30, 2010			December 31, 2009			June 30, 2010			December 31, 2009
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments under ASC 815
Interest rate caps	Other assets	$	255	Other assets	$	1,550		$	—		$	—
Interest rate swap			—			—	Accrued expenses and other current liabilities		1,083	Other long-term liabilities		3,157
Interest rate collars			—			—	Accrued expenses and other current liabilities		4,861	Other long-term liabilities		8,587

Total		$	255		$	1,550		$	5,944		$	11,744

Derivatives not designated as hedging instruments under ASC 815
Commodity forward contracts	Prepaid expenses and other current assets	$	463	Prepaid expenses and other current assets	$	644	Accrued expenses and other current liabilities	$	73	Accrued expenses and other current liabilities	$	193
Euro call option			—	Prepaid expenses and other current assets		993			—			—

Total		$	463		$	1,637		$	73		$	193

~~(unaudited)~~The following table presents a roll forward of amounts recognized in accumulated other comprehensive loss related to the Company’s derivative financial instruments as of June 30, 2010:

16. Financial Instruments


	Unrealized loss on derivative instruments
Balance as of December 31, 2009	$	(11,805	)
Amount of net unrealized loss recognized in accumulated other comprehensive loss		(2,019	)
Amount of loss reclassified into interest expense		6,560

Balance as of June 30, 2010	$	(7,264	)

The ~~carrying~~following ~~value~~table ~~and~~presents ~~fair~~the ~~values~~effect of the Company’s derivative financial instruments asand their classification on the condensed consolidated statement of ~~March 31,~~operations ~~2010~~for ~~and~~the ~~December~~three months ended June 3130, ~~2009~~2010 ~~are~~and ~~as follows~~2009:

	March 31, 2010					December 31, 2009
Derivatives in ASC 815Cash Flow HedgingRelationship	Amount ofGain or (Loss)Recognized incomprehensivenet incomeon Derivatives(EffectivePortion)						Location ofLossReclassified fromAccumulatedothercomprehensiveloss into Income(Effective Portion)	Amount ofLossReclassified fromAccumulated othercomprehensive lossinto Income(Effective Portion)
	CarryingValue		Fair Value			CarryingValue		Fair Value
	2010		2009					2010			2009
Assets:
Interest Rate Products	$	320	$	(5,533	)		Interest expense	$	(3,009	)	$	(3,712	)
Cash	$	195,345	$	195,345		$	148,126	$	148,126
Trade receivables		208,347		208,347			180,839		180,839
Commodity forward contracts		1,798		1,798			644		644
Interest rate caps		520		520			1,550		1,550
Euro call option		—		—			993		993
Liabilities
Senior secured term loans	$	1,431,444	$	1,368,153		$	1,468,100	$	1,295,320
Senior Notes and Senior Subordinated Notes		666,624		678,986			790,792		768,079
Interest rate collars		7,440		7,440			8,587		8,587
Interest rate swap		2,073		2,073			3,157		3,157
Commodity forward contracts		17		17			193		193

The estimated fair values of amounts reported in the condensed consolidated financial statements have been determined by using available market information and appropriate valuation methodologies. Cash and trade receivables are carried at their cost which approximates fair value because of their short-term nature.

The fair values of the Company’s long-term obligations are determined by using a valuation model that discounts estimated future cash flows at the benchmark interest rate plus an estimated credit spread.

Fair Value Hierarchy

The Company’s financial assets and financial liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with ASC 820. The levels of the fair value hierarchy are described below:

• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date.

• Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

• Level 3 inputs are unobservable inputs for the asset or liability, allowing for situations where there is little, if any, market activity for the asset or liability.

SENSATA TECHNOLOGIES B.V.


Derivatives not designated as hedging instruments under ASC 815	Amount of (Loss) or Gain Recognized in Income on Derivatives					Location of Gain or (Loss) Recognized in Income on Derivatives
	2010			2009
Commodity forward contracts	$	(863	)	$	703	Currency translation gain and other, net

~~NOTES~~The TOfollowing ~~CONDENSED~~table ~~CONSOLIDATED~~presents ~~FINANCIAL~~the ~~STATEMENTS~~effect of the Company’s derivative financial instruments and their classification on the condensed consolidated statement of operations for the six months ended June 30, 2010 and 2009:

(In thousands except share and per share amounts, or unless otherwise noted)


Derivatives in ASC 815 Cash Flow Hedging Relationship	Amount of Loss Recognized in comprehensive net income on Derivatives (Effective Portion)						Location of Loss Reclassified from Accumulated other comprehensive loss into Income (Effective Portion)	Amount of Loss Reclassified from Accumulated other comprehensive loss into Income (Effective Portion)
	2010			2009				2010			2009
Interest Rate Products	$	(2,019	)	$	(10,551	)	Interest expense	$	(6,560	)	$	(6,302	)

(unaudited)


Derivatives not designated as hedging instruments under ASC 815	Amount of (Loss) or Gain Recognized in Income on Derivatives					Location of Gain or (Loss) Recognized in Income on Derivatives
	2010			2009
Commodity forward contracts	$	921		$	1,637	Currency translation gain and other, net
Euro call option	$	(993	)	$	—	Currency translation gain and other, net

~~Measured~~The onCompany has agreements with its collars and swap derivative counterparties that contain a ~~Recurring~~provision ~~Basis~~where if the Company defaults on any of its indebtedness where repayment of the indebtedness has been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

~~The~~As ~~following~~of ~~table~~June 30, ~~presents~~2010, ~~information about~~ the ~~Company’s~~termination ~~assets~~value ~~and~~of ~~liabilities~~derivatives ~~measured~~in ata ~~fair~~liability ~~value~~position, onwhich aincludes ~~recurring~~accrued ~~basis~~interest asbut ofexcludes any ~~March 31~~adjustment for non-performance risk, ~~2010~~related to the outstanding collar and swap agreements was $8,128. ~~aggregated~~The byCompany has not posted any collateral related to these agreements. If the ~~level~~Company inbreached any of the ~~fair~~default ~~value~~provisions ~~hierarchy~~described ~~within~~above, ~~which~~it would ~~those~~be ~~measurements~~required ~~fall~~to settle its obligations under the agreements at their termination value of $8,128.

	Quoted Prices inActive Marketsfor Identical Assets(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservableInputs(Level 3)		March 31, 2010
Assets
Commodity forward contracts	$	—	$	1,798	$	—	$	1,798
Interest rate caps		—		520		—		520
Total	$	—	$	2,318	$	—	$	2,318
Liabilities
Interest rate collars	$	—	$	7,440	$	—	$	7,440
Interest rate swap		—		2,073		—		2,073
Commodity forward contracts		—		17		—		17
Total	$	—	$	9,530	$	—	$	9,530

18. Currency Translation Gain and Other, net

~~The~~Currency ~~valuations~~translation ofgain ~~these~~and ~~instruments are determined using widely accepted valuation techniques~~other, ~~including~~net ~~discounted~~consisted ~~cash flow analysis on the expected cash flows~~ of ~~each derivative. This analysis reflects~~ the ~~contractual~~following terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, interest rate volatility and commodity forward curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the ~~effect~~three ~~of nonperformance risk, the Company has considered the impact of netting~~ and ~~any~~six ~~applicable~~months ~~credit~~ended ~~enhancements~~June 30, ~~such~~2010 ~~as collateral postings, thresholds, mutual puts,~~ and ~~guarantees.~~2009:

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2010, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.


	For the three months ended						For the six months ended
	June 30, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Currency translation gain / (loss) on debt	$	73,710		$	(62,453	)	$	133,826		$	6,502
Currency translation (loss) / gain on net monetary assets		(6,057	)		1,075			(11,823	)		650
(Loss) / gain on repurchase of outstanding Senior and Senior Subordinated Notes		(15,376	)		120,123			(23,474	)		120,123
Loss on Euro call option		—			—			(993	)		—
(Loss) / gain on commodity forward contracts		(863	)		703			921			1,637
Loss on assets held for sale		—			(1,678	)		—			(1,678	)
Other		307			338			466			15

Total currency translation gain and other expense, net	$	51,721		$	58,108		$	98,923		$	127,249

The Company does not have any fair value measurements using significant unobservable inputs (Level 3) as of March 31, 2010 or 2009.

Measured on a Non-Recurring Basis

For assets and liabilities measured on a non-recurring basis during the period, ASC 820 requires quantitative disclosures about the fair value measurements separately for each major category.

~~SENSATA~~19. ~~TECHNOLOGIES~~Segment ~~B.V.~~Reporting

~~NOTES~~The TOCompany ~~CONDENSED~~organizes ~~CONSOLIDATED~~its ~~FINANCIAL~~business ~~STATEMENTS~~into two reportable segments, sensors and controls, based on differences in products included in each segment. The reportable segments are consistent with how management views the markets served by the Company and the financial information that is reviewed by its chief operating decision maker. The Company manages its sensors and controls businesses as components of an enterprise for which separate information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

~~(In~~An ~~thousands~~operating ~~except~~segment’s performance is primarily evaluated based on segment operating income, which excludes share-based compensation expense, restructuring charges and ~~per~~certain ~~share~~corporate ~~amounts~~costs not associated with the operations of the segment, including a portion of depreciation and amortization expenses associated with assets recorded in connection with the 2006 Acquisition, the First Technology Automotive Acquisition and the Airpax Acquisition. In addition, an operating segment’s performance excludes results from discontinued operations. These corporate costs are separately stated below and also include costs that are related to functional areas such as accounting, treasury, information technology, legal, human resources, and internal audit. The Company believes that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of its segments. However, this measure should be considered in addition to, not a substitute for, or ~~unless~~superior ~~otherwise~~to, ~~noted)~~income from operations or other measures of financial performance prepared in accordance with U.S. GAAP. The other accounting policies of each of the two reporting segments are the same as those in the summary of significant accounting policies as described in Note 2 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

The sensors segment is a manufacturer of pressure, force, and electromechanical sensor products used in subsystems of automobiles (~~unaudited~~e.g., engine, air-conditioning, ride stabilization) and in industrial products such as HVAC systems. These products improve operating performance, for example, by making an automobile’s heating and air-conditioning systems work more efficiently. These products also improve safety and performance, for example, by reducing vehicle emissions and improving gas mileage.

The ~~Company~~controls ~~evaluates~~segment ~~goodwill~~is ~~and~~a ~~other~~manufacturer ~~intangible~~of ~~assets~~a ~~for~~variety ~~impairment~~of atcontrol ~~the~~products used in industrial, aerospace, military, commercial and ~~reporting~~residential ~~unit~~markets, ~~level~~including motor and compressor protectors, circuit breakers, semiconductor burn-in ~~the~~test ~~fourth~~sockets, ~~quarter~~electronic ofHVAC ~~each~~controls, ~~fiscal~~power ~~year~~inverters, ~~unless~~precision ~~events~~switches ~~occur~~and ~~which~~thermostats. ~~trigger~~These ~~the~~products ~~need~~help ~~for~~prevent ~~earlier~~damage ~~impairment~~from ~~review.~~overheating and Asfires in a wide variety of ~~March 31~~applications, ~~2010~~including commercial heating and air-conditioning systems, norefrigerators, ~~such~~aircraft, ~~events~~automobiles, ~~occurred~~lighting and other industrial applications. The controls business also manufactures DC to AC power inverters, which ~~triggered~~enable the ~~need~~operation ~~for~~of anelectronic ~~earlier~~equipment ~~impairment~~when ~~review~~grid power is not available.

In March 2009, the Company determined that goodwill and definite-lived intangible assets associated with its Interconnection reporting unit were impaired and recorded a charge totaling $19,867 in the condensed consolidated statement of operations to reduce its book value to its implied fair value.

The Interconnection assets itemized below were measured at fair value on a non-recurring basis during the three months ended March 31, 2009 using an income approach. The balance of definite-lived intangible assets and goodwill associated with Interconnection as of March 31, 2009, as well as the impairment charges recorded during the three months ended March 31, 2009, were as follows:

	Fair ValueMeasurement		Quoted Prices inActive Marketsfor Identical Assets(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservableInputs(Level 3)		TotalImpaired(Losses)
Definite-lived intangible assets	$	10,630	$	—	$	—	$	10,630	$	(14,574	)
Goodwill		3,341		—		—		3,341		(5,293	)
	$	13,971	$	—	$	—	$	13,971	$	(19,867	)

Derivative Instruments and Hedging Activities

As required by ASC Topic 815, Derivatives and Hedging (“ASC 815”), the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge on the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though the Company elects not to apply hedge accounting under ASC 815.

Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its U.S. dollar and Euro-denominated floating rate debt. To accomplish this objective, the Company primarily uses interest rate swaps, collars and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable- rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve the receipt of variable rate amounts if interest rates rise above the cap strike rate on the contract

~~SENSATA~~The ~~TECHNOLOGIES~~following ~~B.V.~~tables present net revenue and operating income for the reported segments and other operating results not allocated to the reported segments for the three and six months ended June 30, 2010 and 2009:

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	For the three months ended
	June 30, 2010			June 30, 2009
Net revenue:
Sensors	$	240,457		$	147,694
Controls		151,349			107,677

Total net revenue	$	391,806		$	255,371

Segment operating income (as defined above):
Sensors	$	80,754		$	37,173
Controls		52,051			31,139

Total segment operating income		132,805			68,312
Corporate and other		(26,698	)		(15,854	)
Amortization of intangible assets and capitalized software		(36,078	)		(38,162	)
Impairment of goodwill and intangible assets		—			—
Restructuring		490			(2,050	)

Profit from operations		70,519			12,246
Interest expense		(25,406	)		(36,349	)
Interest income		197			79
Currency translation gain and other, net		51,721			58,108

Income from continuing operations before income taxes	$	97,031		$	34,084

(In thousands except share and per share amounts, or unless otherwise noted)


	For the six months ended
	June 30, 2010			June 30, 2009
Net revenue:
Sensors	$	473,050		$	288,022
Controls		295,893			206,365

Total net revenue	$	768,943		$	494,387

Segment operating income (as defined above):
Sensors	$	158,579		$	72,199
Controls		103,227			54,424

Total segment operating income		261,806			126,623
Corporate and other⁽¹⁾		(93,815	)		(33,270	)
Amortization of intangible assets and capitalized software		(72,214	)		(76,966	)
Impairment of goodwill and intangible assets		—			(19,867	)
Restructuring		(209	)		(13,538	)

Profit / (loss) from operations		95,568			(17,018	)
Interest expense		(58,922	)		(78,833	)
Interest income		336			403
Currency translation gain and other, net		98,923			127,249

Income from continuing operations before income taxes	$	135,905		$	31,801

(~~unaudited~~1) During the six months ended June 30, 2010, the Company recognized a termination fee of $22,352 (see Note 14 for further discussion) and a cumulative catch-up adjustment for previously unrecognized share-based compensation expense totaling $18,876 (see Note 13 for further discussion).

and payments of variable rate amounts if interest rates fall below the floor strike rate on the contract. Interest rate caps designated as cash flow hedges involve the receipt of variable rate amounts if interest rates rise above the cap strike rate on the contract.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2010, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. For the three months ended March 31, 2010, the Company recorded no ineffectiveness in earnings and no amounts were excluded from the assessment of effectiveness.

Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. As of March 31, 2010, the Company estimates that an additional $9,683 will be reclassified from accumulated other comprehensive loss to interest expense during the twelve months ending March 31, 2011.

As of March 31, 2010, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

Interest Rate Derivatives	Notional(in millions)		Effective Date	Maturity Date	Index	Strike Rate
Interest rate swap	$	95.0	July 27, 2006	January 27, 2011	3-month LIBOR	5.377%
Interest rate collars	€	230.0	July 28, 2008	April 27, 2011	3-month EURIBOR	3.55% - 4.40%
Interest rate cap	€	100.0	March 5, 2009	April 29, 2013	3-month EURIBOR	5.00%
Interest rate cap	$	600.0	March 5, 2009	April 29, 2013	3-month LIBOR	5.00%

Foreign Currency Risk

Consistent with the Company’s risk management objective and strategy to reduce exposure to variability in cash flows on its outstanding debt, in December 2009, the Company executed a foreign currency call option. This instrument was not designated for hedge accounting treatment in accordance with ASC 815. Changes in the fair value of derivatives not designated in hedging relationships are recorded in the statement of operations as a gain or loss within Currency translation gain and other, net. During the three months ended March 31, 2010, the Company recognized a net loss of $993 associated with this derivative. As of March 31, 2010, the Company had the following outstanding derivative that was not designated as a hedge in qualifying hedging relationships:

Non-Designated Derivative		Notional(in millions)			Effective Date		Maturity Date		Strike Rate
Euro call option		€	100.0		December 21, 2009		May 24, 2010		$1.55 to €1.00

Commodity Risk

The Company’s objective in using commodity forward contracts is to offset a portion of its exposure to the potential change in prices associated with certain commodities, including silver, gold, nickel, aluminum and copper, used in the manufacturing of its products. The terms of these forward contracts fix the price at a future date for various notional amounts associated with these commodities. These instruments were not designated for hedge accounting treatment in accordance with ASC 815. In accordance with ASC 815, the Company recognizes

~~SENSATA~~20. ~~TECHNOLOGIES~~Supplemental ~~B.V.~~Guarantor Condensed Consolidating Financial Statements

~~NOTES~~On TOApril 26, ~~CONDENSED~~2006, ~~CONSOLIDATED~~in ~~FINANCIAL~~connection ~~STATEMENTS~~with the 2006 Acquisition, the Company issued $751,605 aggregate principal amount of the outstanding Senior Notes and the outstanding Senior Subordinated Notes, as described in Note 10 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. The Senior Notes and the outstanding Senior Subordinated Notes are herein referenced to as “the Notes”. The Senior Notes are jointly and severally, fully and unconditionally guaranteed on a senior unsecured basis and the Senior Subordinated Notes are jointly and severally, fully and unconditionally guaranteed on a senior unsecured subordinated basis, in each case, subject to certain exceptions, by the Company and certain of the Company’s direct and indirect wholly-owned subsidiaries in the U.S., (with the exception of those subsidiaries acquired in the First Technology Automotive Acquisition) and certain subsidiaries in the following non-U.S. jurisdictions located in the Netherlands, Mexico, Brazil, Japan, South Korea and Malaysia (with the exception of those subsidiaries acquired in the Airpax Acquisition) (collectively, the “Guarantors”). Each of the Guarantors is 100% owned, directly or indirectly, by the Company. All other subsidiaries of the Company, either direct or indirect, do not guarantee the Senior Notes and Senior Subordinated Notes (“Non-Guarantors”). The Guarantors also unconditionally guarantee the Senior Secured Credit Facility, as described in Note 10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

~~(In~~The ~~thousands~~following ~~except~~unaudited ~~share~~condensed consolidating financial statements are presented for the information of the holders of the Notes and ~~per~~present ~~share~~the ~~amounts~~unaudited Condensed Consolidating Balance Sheets as of June 30, or2010 ~~unless~~and ~~otherwise~~December 31, ~~noted)~~2009, the unaudited Condensed Consolidating Statements of Operations for the three and six months ended June 30, 2010 and 2009 and the unaudited Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2010 and 2009, respectively, of the Company, which is the issuer of the Notes, the Guarantors, the Non-Guarantors and the elimination entries necessary to consolidate the issuer with the Guarantor and Non-Guarantor subsidiaries.

~~(unaudited)~~Investments in subsidiaries are accounted for using the equity method for purposes of the condensed consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. Separate financial statements and other disclosures with respect to the Guarantor subsidiaries have not been provided as management believes the following information is sufficient, as the Guarantor subsidiaries are 100 percent owned by the parent and all guarantees are full and unconditional. Additionally, substantially all of the assets of the Guarantor subsidiaries are pledged under the Notes and, consequently, will not be available to satisfy the claims of Sensata’s general creditors.

~~the~~Intercompany ~~change~~profits infrom ~~fair~~the ~~value~~sale of ~~these~~inventory ~~derivatives~~between inthe Company’s Non-Guarantor subsidiaries and the ~~statement~~Company’s ofGuarantor subsidiaries ~~operations~~have asbeen reflected on a ~~gain~~gross orbasis ~~loss~~within asnet arevenue ~~component~~and cost of ~~Currency~~revenue ~~translation~~in ~~gain~~the Guarantor and ~~other~~Non-Guarantor unaudited Condensed Consolidating Statement of Operations, ~~net~~and are eliminated to arrive at the Sensata unaudited Condensed Consolidated Statement of Operations. ~~During~~It is Sensata’s policy to expense intercompany profit margin through cost of revenue when an intercompany sale occurs. Therefore, in the ~~three~~unaudited ~~months~~Condensed ~~ended~~Consolidating ~~March~~Balance 31Sheets, intercompany ~~2010~~profits are not included in the carrying value of inventories of the Guarantor and ~~2009~~Non-Guarantor subsidiaries. Instead, inventories are stated at the ~~Company~~lower ~~recognized~~of acost ~~gain~~or onestimated ~~its~~net ~~commodity~~realizable ~~forward~~value, ~~contracts~~without ofgiving $1effect to intercompany profits. Sensata believes this presentation best represents the actual revenues earned,~~784~~ costs incurred and ~~$934,~~financial ~~respectively~~position of the Company’s legal entities.

~~The~~Certain ~~Company had~~reclassifications ~~the~~have ~~following~~been ~~outstanding~~made ~~commodity~~to ~~forward~~prior ~~contracts~~period ~~that~~amounts ~~were~~to ~~not~~conform ~~designated~~to ascurrent ~~hedges~~year inpresentations. ~~qualifying hedging relationships as of March 31, 2010:~~

	Notional	Effective Date	Weighted-AverageStrike Price
Silver	353,606 troy oz	December 2009 - February 2010	$	17.17
Gold	933 troy oz	December 2009	$	1,107.50
Nickel	197,958 pounds	November 2009 - March 2010	$	8.52
Aluminum	1,733,098 pounds	October 2009 - March 2010	$	0.96
Copper	1,435,742 pounds	February 2010	$	2.92

Financial Instrument Presentation

The following table presents the fair value of the Company’s derivative financial instruments and their classification on the condensed consolidated balance sheet as of March 31, 2010 and 2009.

	Asset Derivatives						Liability Derivatives
	2010			2009			2010			2009
	Balance SheetLocation	FairValue		Balance SheetLocation	FairValue		Balance SheetLocation	FairValue		Balance SheetLocation	FairValue
Derivatives designated as hedging instruments under ASC 815
Interest rate caps	Other assets	$	520	Other assets	$	744		$	—		$	—
Interest rate swap			—			—	Accruedexpense andother currentliabilities		2,073	Other long-termliabilities		5,520
Interest rate collars			—			—	Other long-termliabilities		7,440	Other long-termliabilities		6,843
Total		$	520		$	744		$	9,513		$	12,363
Derivatives not designated as hedging instruments under ASC 815
Commodity forward contracts	Prepaid expenseand other currentassets	$	1,798	Prepaid expenseand other currentassets	$	1,311
Commodity forward contracts							Accrued expense andother currentliabilities	$	17		$	—
Total		$	1,798		$	1,311		$	17		$	—

~~SENSATA~~Condensed ~~TECHNOLOGIES~~Consolidating ~~B.V.~~Balance Sheet

~~NOTES~~June 30, TO2010 ~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The following table presents the components of accumulated other comprehensive loss related to the Company’s derivative financial instruments as of March 31, 2010:


	Sensata		Guarantor		Non-Guarantor					Sensata
	(Issuer)		Subsidiaries		Subsidiaries		Eliminations			Consolidated

Assets
Current assets:
Cash and cash equivalents	$	10,032	$	191,811	$	19,337	$	—		$	221,180
Accounts receivable, net of allowances		—		196,976		16,860		—			213,836
Intercompany accounts receivable		359,519		433,107		120,249		(912,875	)		—
Inventories		—		112,182		29,445		—			141,627
Deferred income tax assets		—		10,289		2,043		—			12,332
Prepaid expenses and other current assets		670		14,738		4,319		—			19,727
Assets held for sale		—		—		238		—			238

Total current assets		370,221		959,103		192,491		(912,875	)		608,940
Property, plant & equipment, net		—		174,099		42,085		—			216,184
Goodwill		—		1,450,973		77,981		—			1,528,954
Other intangible assets, net		—		769,273		25,532		—			794,805
Investment in subsidiaries		612,455		55,727		—		(668,182	)		—
Advances to subsidiaries		2,136,220		—		—		(2,136,220	)		—
Other assets		29,797		11,372		14,191		—			55,360

Total assets	$	3,148,693	$	3,420,547	$	352,280	$	(3,717,277	)	$	3,204,243


Liabilities and shareholder’s equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	14,356	$	2,903	$	114	$	—		$	17,373
Accounts payable		23		104,381		29,932		—			134,336
Accrued expenses and other current liabilities		10,015		63,065		21,907		—			94,987
Due to Parent		2,542		208		—		—			2,750
Intercompany liabilities		408,792		437,773		66,310		(912,875	)		—
Accrued profit sharing		—		326		—		—			326

Total current liabilities		435,728		608,656		118,263		(912,875	)		249,772

Pension and post-retirement benefit obligations		—		48,111		564		—			48,675
Capital lease and other financing obligations, less current portion		—		38,760		833		—			39,593
Long-term intercompany liabilities		—		2,113,388		22,832		(2,136,220	)		—
Long-term debt, less current portion		1,781,424		—		—		—			1,781,424
Other long-term liabilities		35,370		159,567		18,821		—			213,758
Commitments and contingencies

Total liabilities		2,252,522		2,968,482		161,313		(3,049,095	)		2,333,222
Shareholder’s equity
Shareholder’s equity		896,171		452,065		190,967		(668,182	)		871,021

Total liabilities and shareholder’s equity	$	3,148,693	$	3,420,547	$	352,280	$	(3,717,277	)	$	3,204,243

	Unrealized loss onderivativeinstruments
Balance as of December 31, 2009	$	(11,805)
Amount of net unrealized loss recognized in accumulated other comprehensive loss		(2,339)
Amount of loss reclassified into interest expense		3,551
Balance as of March 31, 2010	$	(10,593)

The following table presents the effect of the Company’s derivative financial instruments and their classification on the condensed consolidated statement of operations for the three months ended March 31, 2010 and 2009:

Derivatives inASC 815Cash Flow HedgingRelationship	Amount ofGain or(Loss)Recognizedin OCIon Derivative(Effective Portion)						Location ofGain or(Loss)Reclassified fromAccumulatedothercomprehensiveloss intoIncome(Effective Portion)	Amount ofGain or(Loss)Reclassified fromAccumulatedothercomprehensiveloss intoIncome(Effective Portion)						Location ofGain or(Loss)Reocgnized inIncome onDerivative(Ineffective Portionand AmountExcluded fromEffectiveTesting)	Amount ofGain or(Loss)Recognized inIncome onDerivative(Ineffective Portionand AmountExcluded fromEffectivenessTesting
	2010			2009				2010			2009
Interest Rate Products	$	(2,339	)	$	(5,018	)	Interest expense	$	(3,551	)	$	(2,590	)	NA	NA

Derivatives not designated as hedging instruments under ASC 815	Amount of Gain or(Loss) Recongizedin Income onDerivative			Location of Gain or (Loss) Recognized in Income on Derivative
	2010	2009
Commodity forward contracts	$1,784	$	934	Currency translation gain / (loss) and other, net
Euro call option	$(993)	$	—	Currency translation gain / (loss) and other, net

The Company has agreements with its collars and swap derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness where repayment of the indebtedness has been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

As of March 31, 2010, the termination value of derivatives in a liability position which includes accrued interest but excludes any adjustment for non-performance risk, related to the outstanding collar and swap agreements was $12,210. The Company has not posted any collateral related to these agreements. If the Company breached any of the default provisions described above, it would be required to settle its obligations under the agreements at their termination value of $12,210.

~~SENSATA~~Condensed ~~TECHNOLOGIES~~Consolidating ~~B.V.~~Balance Sheet

~~NOTES~~December 31, TO2009 ~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

17. Currency Translation Gain and Other


	Sensata (Issuer)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Sensata Consolidated
Assets
Current assets:
Cash and cash equivalents	$	55,290	$	82,187	$	10,649	$	—		$	148,126
Accounts receivable, net of allowances		—		167,314		13,525		—			180,839
Intercompany accounts receivable		273,328		451,867		111,137		(836,332	)		—
Inventories		—		101,252		24,123		—			125,375
Deferred income tax assets		—		10,376		2,043		—			12,419
Prepaid expenses and other current assets		2,656		10,146		3,424		—			16,226
Assets held for sale		—		—		238		—			238


Total current assets		331,274		823,142		165,139		(836,332	)		483,223
Property, plant and equipment, net		—		177,429		42,509		—			219,938
Goodwill		—		1,450,973		79,597		—			1,530,570
Other intangible assets, net		—		837,397		28,134		—			865,531
Investment in subsidiaries		595,097		54,870		—		(649,967	)		—
Advances to subsidiaries		2,196,337		—		—		(2,196,337	)		—
Other assets		42,288		7,831		13,746		—			63,865


Total assets	$	3,164,996	$	3,351,642	$	329,125	$	(3,682,636	)	$	3,163,127


Liabilities and shareholder’s equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	15,208	$	1,822	$	109	$	—		$	17,139
Accounts payable		156		94,882		26,598		—			121,636
Accrued expenses and other current liabilities		17,213		57,987		23,614		—			98,814
Intercompany liabilities		429,148		348,424		58,760		(836,332	)		—
Accrued profit sharing		—		562		38		—			600


Total current liabilities		461,725		503,677		109,119		(836,332	)		238,189
Pension and post-retirement benefit obligations		—		48,980		545		—			49,525
Capital lease and other financing obligations, less current portion		—		39,109		892		—			40,001
Long-term intercompany liabilities		—		2,173,505		22,832		(2,196,337	)		—
Long-term debt, less current portion		2,243,686		—		—		—			2,243,686
Other long-term liabilities		46,759		138,996		19,224		—			204,979
Commitments and contingencies


Total liabilities		2,752,170		2,904,267		152,612		(3,032,669	)		2,776,380
Shareholder’s equity
Shareholder’s equity		412,826		447,375		176,513		(649,967	)		386,747


Total liabilities and shareholder’s equity	$	3,164,996	$	3,351,642	$	329,125	$	(3,682,636	)	$	3,163,127

Currency translation gain and other, net consists of the following for the three months ended March 31, 2010 and 2009:

	For the three months ended
	March 31,2010		March 31,2009
Currency translation gain on debt	$	60,116	$	68,955
Currency translation loss on net monetary assets		(5,766)		(425)
Loss on repurchase of outstanding Senior and Senior Subordinated Notes		(8,098)		—
Loss on Euro call option		(993)		—
Gain on commodity forward contracts		1,784		934
Other		159		(323)
	$	47,202	$	69,141

18. Segment Reporting

The Company organizes its business into two reportable segments, sensors and controls, based on differences in products included in each segment. The reportable segments are consistent with how management views the markets served by the Company and the financial information that is reviewed by its chief operating decision maker. The Company manages its sensors and controls businesses as components of an enterprise for which separate information is available and is evaluated regularly by the 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 share-based compensation expense, restructuring charges and certain corporate costs not associated with the operations of the segment including a portion of depreciation and amortization expenses associated with assets recorded in connection with the Sensata, First Technology Automotive and Airpax acquisitions. In addition, an operating segment’s performance excludes results from discontinued operations. These corporate costs are separately stated below and also include costs that are related to functional areas such as accounting, treasury, information technology, legal, human resources, and internal audit. The Company believes that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of its segments. However, this measure should be considered in addition to, not a substitute for, or superior to, income from operations or other measures of financial performance prepared in accordance with U.S. GAAP. The other accounting policies of each of the two reporting segments are the same as those in the summary of significant accounting policies as described in Note 2 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

The sensors segment is a manufacturer of pressure, force, and electromechanical sensor products used in subsystems of automobiles (e.g., engine, air-conditioning, ride stabilization) and in industrial products such as HVAC systems.

The controls segment manufactures a variety of control applications used in industrial, aerospace, military, commercial and residential markets. The controls product portfolio includes motor and compressor protectors, circuit breakers, semiconductor burn-in test sockets, electronic HVAC controls, power inverters and precision switches and thermostats.

~~SENSATA~~Condensed ~~TECHNOLOGIES~~Consolidating ~~B.V.~~Statements of Operations

~~NOTES~~For TOthe ~~CONDENSED~~Three ~~CONSOLIDATED~~Months ~~FINANCIAL~~Ended ~~STATEMENTS~~June 30, 2010

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The following table presents net revenue and operating income for the reported segments and other operating results not allocated to the reported segments for the three months ended March 31, 2010 and 2009:


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Sensata Consolidated

Net revenue	$	—		$	369,855		$	84,426		$	(62,475	)	$	391,806
Operating costs and expenses:
Cost of revenue		—			236,885			66,180			(62,475	)		240,590
Research and development		—			5,993			218			—			6,211
Selling, general and administrative		3,815			29,950			5,133			—			38,898
Amortization of intangible assets and capitalized software		—			34,778			1,300			—			36,078
Restructuring		—			(288	)		(202	)		—			(490	)

Total operating costs and expenses		3,815			307,318			72,629			(62,475	)		321,287

(Loss)/profit from operations		(3,815	)		62,537			11,797			—			70,519
Interest income/(expense), net		22,098			(46,909	)		(398	)		—			(25,209	)
Currency translation gain/(loss) and other, net		54,527			(4,445	)		1,639			—			51,721

Income from continuing operations before taxes and equity in earnings from continuing operations of subsidiaries		72,810			11,183			13,038			—			97,031
Equity in earnings from continuing operations of subsidiaries before taxes		24,221			202			—			(24,423	)		—
Provision for income taxes		14,803			12,287			2,290			(14,577	)		14,803

Net income/(loss)	$	82,228		$	(902	)	$	10,748		$	(9,846	)	$	82,228

	For the three months ended
	March 31,2010			March 31,2009
Net revenue:
Sensors	$	232,593		$	140,328
Controls		144,544			98,688
Total net revenue	$	377,137		$	239,016
Segment operating income (as defined above):
Sensors	$	77,825		$	35,026
Controls		51,176			23,285
Total segment operating income		129,001			58,311
Corporate and other(1)		(67,117	)		(17,416	)
Amortization of intangible assets and capitalized software		(36,136	)		(38,804	)
Impairment of goodwill and intangible assets		—			(19,867	)
Restructuring		(699	)		(11,488	)
Profit/(loss) from operations		25,049			(29,264	)
Interest expense		(33,516	)		(42,484	)
Interest income		139			324
Currency translation gain and other, net		47,202			69,141
Income/(loss) from continuing operations before income taxes	$	38,874		$	(2,283	)

(1) During the three months ended March 31, 2010, the Company recognized a termination fee of $22,352 (see Note 14 for further discussion) and a cumulative catch-up adjustment for previously unrecognized share-based compensation expense totaling $18,876 (see Note 13 for further discussion).

19. Supplemental Guarantor Condensed Consolidating and Combining Financial Statements

On April 26, 2006, in connection with the Acquisition, the Company issued $751,605 aggregate principal amount of the outstanding Senior Notes and the outstanding Senior Subordinated Notes, as described in Note 10 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. In July 2008, the Company issued Senior Subordinated Notes subject to the same guarantees as described below. The Senior Notes and the outstanding Senior Subordinated Notes are herein referenced to as “the Notes”. The Senior Notes are jointly and severally, fully and unconditionally guaranteed on a senior unsecured basis and the Senior Subordinated Notes are jointly and severally, fully and unconditionally guaranteed on a senior unsecured subordinated basis, in each case, subject to certain exceptions, by the Company and certain of the Company’s direct and indirect wholly-owned subsidiaries in the U.S., (with the exception of those subsidiaries acquired in the FTAS Acquisition) and certain subsidiaries in the following non-U.S. jurisdictions located in the Netherlands, Mexico, Brazil, Japan, South Korea and Malaysia (with the exception of those subsidiaries acquired in the Airpax Acquisition) (collectively, the “Guarantors”). Each of the Guarantors is 100% owned, directly or indirectly, by the Company. All other subsidiaries of the Company, either direct or indirect, do not guarantee the Senior Notes and Senior Subordinated Notes (“Non-Guarantors”). The Guarantors also unconditionally guarantee the Senior Secured Credit Facility, as described in Note 10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

~~SENSATA~~Condensed ~~TECHNOLOGIES~~Consolidating ~~B.V.~~Statements of Operations

~~NOTES~~For TOthe ~~CONDENSED~~Three ~~CONSOLIDATED~~Months ~~FINANCIAL~~Ended ~~STATEMENTS~~June 30, 2009

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The following unaudited condensed consolidating financial statements are presented for the information of the holders of the Notes and present the unaudited Condensed Consolidating Balance Sheets as of March 31, 2010 and December 31, 2009, the unaudited Condensed Consolidating Statements of Operations for the three months ended March 31, 2010 and 2009 and the unaudited Condensed Consolidating Statements of Cash Flows for the three months ended March 31, 2010 and 2009, respectively, of the Company, which is the issuer of the Notes, the Guarantors, the Non-Guarantors and the elimination entries necessary to consolidate the issuer with the Guarantor and Non-Guarantor subsidiaries.


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Sensata Consolidated
Net revenue	$	—		$	237,536		$	46,769		$	(28,934	)	$	255,371
Operating costs and expenses:
Cost of revenue		—			157,593			40,243			(28,934	)		168,902
Research and development		—			3,911			49			—			3,960
Selling, general and administrative		1,786			59,225			7,202			—			68,213
Restructuring		—			1,126			924			—			2,050

Total operating costs and expenses		1,786			221,855			48,418			(28,934	)		243,125

(Loss) / profit from operations		(1,786	)		15,681			(1,649	)		—			12,246
Interest income / (expense), net		9,326			(45,150	)		(446	)		—			(36,270	)
Currency translation gain / (loss) and other, net		58,656			173			(721	)		—			58,108

Income / (loss) from continuing operations before taxes and equity in losses of subsidiaries		66,196			(29,296	)		(2,816	)		—			34,084
Equity in losses of subsidiaries		(32,112	)		(4,977	)		—			37,089			—
Provision for income taxes		10,876			9,050			998			(10,048	)		10,876

Income / (loss) from continuing operations		23,208			(43,323	)		(3,814	)		47,137			23,208
Equity in loss from discontinued operations of subsidiaries		(134	)		—			—			134			—
Loss from discontinued operations		—			(134	)		—			—			(134	)

Net income / (loss)	$	23,074		$	(43,457	)	$	(3,814	)	$	47,271		$	23,074

Investments in subsidiaries are accounted for using the equity method for purposes of the condensed consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. Separate financial statements and other disclosures with respect to the Guarantor subsidiaries have not been provided as management believes the following information is sufficient, as the Guarantor subsidiaries are 100 percent owned by the parent and all guarantees are full and unconditional. Additionally, substantially all of the assets of the Guarantor subsidiaries are pledged under the Notes and, consequently, will not be available to satisfy the claims of Sensata’s general creditors.

Intercompany profits from the sale of inventory between the Company’s Non-Guarantor subsidiaries and the Company’s Guarantor subsidiaries have been reflected on a gross basis within net revenue and cost of revenue in the Guarantor and Non-Guarantor unaudited Condensed Consolidating Statement of Operations, and are eliminated to arrive at the Sensata unaudited Condensed Consolidated Statement of Operations. It is Sensata’s policy to expense intercompany profit margin through cost of revenue when an intercompany sale occurs. Therefore, in the unaudited Condensed Consolidating Balance Sheets, intercompany profits are not included in the carrying value of inventories of the Guarantor and Non-Guarantor subsidiaries. Instead, inventories are stated at the lower of cost or estimated net realizable value, without giving effect to intercompany profits. Sensata believes this presentation best represents the actual revenues earned, costs incurred and financial position of the Company’s legal entities.

Certain reclassifications have been made to prior period amounts to conform to current year presentations.

~~SENSATA~~Condensed ~~TECHNOLOGIES~~Consolidating ~~B.V.~~Statements of Operations

~~NOTES~~For TOthe ~~CONDENSED~~Six ~~CONSOLIDATED~~Months ~~FINANCIAL~~Ended ~~STATEMENTS~~June 30, 2010

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Condensed Consolidating Balance Sheet


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Sensata Consolidated

Net revenue	$	—		$	727,288		$	152,292		$	(110,637	)	$	768,943
Operating costs and expenses:
Cost of revenue		—			459,118			124,892			(110,637	)		473,373
Research and development		—			10,739			402			—			11,141
Selling, general and administrative		47,867			59,305			9,266			—			116,438
Amortization of intangible assets and capitalized software		—			69,614			2,600			—			72,214
Restructuring		—			411			(202	)		—			209

Total operating costs and expenses		47,867			599,187			136,958			(110,637	)		673,375

(Loss)/profit from operations		(47,867	)		128,101			15,334			—			95,568
Interest income/(expense), net		35,974			(93,598	)		(962	)		—			(58,586	)
Currency translation gain/(loss) and other, net		104,187			(8,646	)		3,382			—			98,923

Income from continuing operations before taxes and equity in earnings from continuing operations of subsidiaries		92,294			25,857			17,754			—			135,905
Equity in earnings from continuing operations of subsidiaries before taxes		43,611			1,152			—			(44,763	)		—
Provision for income taxes		25,999			22,564			3,005			(25,569	)		25,999

Net income	$	109,906		$	4,445		$	14,749		$	(19,194	)	$	109,906

March 31, 2010

	Sensata(Issuer)		GuarantorSubsidiaries		Non-GuarantorSubsidiaries		Eliminations			SensataConsolidated
Assets
Current assets:
Cash and cash equivalents	$	82,505	$	101,456	$	11,384	$	—		$	195,345
Accounts receivable, net of allowances		—		192,735		15,612		—			208,347
Intercompany accounts receivable		319,103		518,522		122,979		(960,604	)		—
Inventories		—		106,224		26,625		—			132,849
Deferred income tax assets		—		10,415		2,043		—			12,458
Prepaid expenses and other current assets		1,918		13,742		5,598		—			21,258
Assets held for sale		—		—		238		—			238
Total current assets		403,526		943,094		184,479		(960,604	)		570,495
Property, plant and equipment, net		—		172,091		41,275		—			213,366
Goodwill		—		1,450,973		79,533		—			1,530,506
Other intangible assets, net		—		803,687		26,834		—			830,521
Investment in subsidiaries		603,495		55,525		—		(659,020	)		—
Advances to subsidiaries		2,196,337		—		—		(2,196,337	)		—
Other assets		37,095		10,644		13,729		—			61,468
Total assets	$	3,240,453	$	3,436,014	$	345,850	$	(3,815,961	)	$	3,206,356
Liabilities and shareholder’s equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	241,474	$	3,277	$	112	$	—		$	244,863
Accounts payable		14		101,315		27,501		—			128,830
Accrued expenses and other current liabilities		23,471		65,881		23,822		—			113,174
Due to Parent		21,632		—		—		—			21,632
Intercompany liabilities		488,406		402,024		70,174		(960,604	)		—
Accrued profit sharing		—		558		38		—			596
Total current liabilities		774,997		573,055		121,647		(960,604	)		509,095
Pension and post-retirement benefit obligations		—		48,229		557		—			48,786
Capital lease and other financing obligations, less current portion		—		39,118		863		—			39,981
Long-term intercompany liabilities		—		2,173,505		22,832		(2,196,337	)		—
Long-term debt, less current portion		1,856,595		—		—		—			1,856,595
Other long-term liabilities		42,609		149,176		19,732		—			211,517
Commitments and contingencies
Total liabilities		2,674,201		2,983,083		165,631		(3,156,941	)		2,665,974
Shareholder’s equity
Shareholder’s equity		566,252		452,931		180,219		(659,020	)		540,382
Total liabilities and shareholder’s equity	$	3,240,453	$	3,436,014	$	345,850	$	(3,815,961	)	$	3,206,356

~~SENSATA~~Condensed ~~TECHNOLOGIES~~Consolidating ~~B.V.~~Statements of Operations

~~NOTES~~For TOthe ~~CONDENSED~~Six ~~CONSOLIDATED~~Months ~~FINANCIAL~~Ended ~~STATEMENTS~~June 30, 2009

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Condensed Consolidating Balance Sheet


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Sensata Consolidated
Net revenue	$	—		$	460,112		$	84,722		$	(50,447	)	$	494,387
Operating costs and expenses:
Cost of revenue		—			308,085			72,608			(50,447	)		330,246
Research and development		—			8,922			201			—			9,123
Selling, general and administrative		3,358			119,939			15,334			—			138,631
Impairment of goodwill and intangible assets		—			19,867			—			—			19,867
Restructuring		—			12,060			1,478			—			13,538

Total operating costs and expenses		3,358			468,873			89,621			(50,447	)		511,405

Loss from operations		(3,358	)		(8,761	)		(4,899	)		—			(17,018	)
Interest income / (expense), net		11,876			(89,347	)		(959	)		—			(78,430	)
Currency translation gain / (loss) and other, net		127,048			(1,727	)		1,928			—			127,249

Income / (loss) from continuing operations before taxes and equity in losses of subsidiaries		135,566			(99,835	)		(3,930	)		—			31,801
Equity in losses of subsidiaries		(103,765	)		(5,748	)		—			109,513			—
Provision for income taxes		18,517			15,672			1,172			(16,844	)		18,517

Income / (loss) from continuing operations		13,284			(121,255	)		(5,102	)		126,357			13,284
Equity in loss from discontinued operations of subsidiaries		(395	)		—			—			395			—
Loss from discontinued operations		—			(395	)		—			—			(395	)

Net income / (loss)	$	12,889		$	(121,650	)	$	(5,102	)	$	126,752		$	12,889

December 31, 2009

	Sensata(Issuer)		GuarantorSubsidiaries		Non-GuarantorSubsidiaries		Eliminations			SensataConsolidated
Assets
Current assets:
Cash and cash equivalents	$	55,290	$	82,187	$	10,649	$	—		$	148,126
Accounts receivable, net of allowances		—		167,314		13,525		—			180,839
Intercompany accounts receivable		273,328		451,867		111,137		(836,332	)		—
Inventories		—		101,252		24,123		—			125,375
Deferred income tax assets		—		10,376		2,043		—			12,419
Prepaid expenses and other current assets		2,656		10,146		3,424		—			16,226
Assets held for sale		—		—		238		—			238
Total current assets		331,274		823,142		165,139		(836,332	)		483,223
Property, plant and equipment, net		—		177,429		42,509		—			219,938
Goodwill		—		1,450,973		79,597		—			1,530,570
Other intangible assets, net		—		837,397		28,134		—			865,531
Investment in subsidiaries		595,097		54,870		—		(649,967	)		—
Advances to subsidiaries		2,196,337		—		—		(2,196,337	)		—
Other assets		42,288		7,831		13,746		—			63,865
Total assets	$	3,164,996	$	3,351,642	$	329,125	$	(3,682,636	)	$	3,163,127
Liabilities and shareholder’s equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	15,208	$	1,822	$	109	$	—		$	17,139
Accounts payable		156		94,882		26,598		—			121,636
Accrued expenses and other current liabilities		17,213		57,987		23,614		—			98,814
Intercompany liabilities		429,148		348,424		58,760		(836,332	)		—
Accrued profit sharing		—		562		38		—			600
Total current liabilities		461,725		503,677		109,119		(836,332	)		238,189
Pension and post-retirement benefit obligations		—		48,980		545		—			49,525
Capital lease and other financing obligations, less current portion		—		39,109		892		—			40,001
Long-term intercompany liabilities		—		2,173,505		22,832		(2,196,337	)		—
Long-term debt, less current portion		2,243,686		—		—		—			2,243,686
Other long-term liabilities		46,759		138,996		19,224		—			204,979
Commitments and contingencies
Total liabilities		2,752,170		2,904,267		152,612		(3,032,669	)		2,776,380
Shareholder’s equity
Shareholder’s equity		412,826		447,375		176,513		(649,967	)		386,747
Total liabilities and shareholder’s equity	$	3,164,996	$	3,351,642	$	329,125	$	(3,682,636	)	$	3,163,127

~~SENSATA~~Condensed ~~TECHNOLOGIES~~Consolidating ~~B.V.~~Statements of Cash Flows

~~NOTES~~For TOthe ~~CONDENSED~~Six ~~CONSOLIDATED~~Months ~~FINANCIAL~~Ended ~~STATEMENTS~~June 30, 2010

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Condensed Consolidating Statements of Operations


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Sensata Consolidated
Cash flows from operating activities
Net cash (used in)/provided by operating activities	$	(48,479	)	$	127,122		$	11,663		$	—		$	90,306
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		—			(14,968	)		(2,934	)		—			(17,902	)
Proceeds from sale of assets		—			351			13			—			364
Dividends received by Issuer		800			—			—			(800	)		—

Net cash provided by/(used in) investing activities		800			(14,617	)		(2,921	)		(800	)		(17,538	)
Cash flows from financing activities:
Proceeds from issuance of ordinary shares to, and capital contribution from, Sensata Intermediate Holding		346,856			—			—			—			346,856
Proceeds from repayment of advances to shareholder		388			—			—			—			388
Dividends paid to Issuer		—			(800	)		—			800			—
Payments on U.S. term loan facility		(4,750	)		—			—			—			(4,750	)
Payments on Euro term loan facility		(2,556	)		—			—			—			(2,556	)
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		(337,517	)		—			—			—			(337,517	)
Payments on capitalized lease and other financing obligations		—			(2,081	)		(54	)		—			(2,135	)

Net cash provided by/(used in) financing activities		2,421			(2,881	)		(54	)		800			286

Net change in cash and cash equivalents		(45,258	)		109,624			8,688			—			73,054
Cash and cash equivalents, beginning of period		55,290			82,187			10,649			—			148,126

Cash and cash equivalents, end of period	$	10,032		$	191,811		$	19,337		$	—		$	221,180

For the Month Ended March 31, 2010

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Net revenue	$	—		$	357,433		$	67,866		$	(48,162	)	$	377,137
Operating costs and expenses:
Cost of revenue		—			222,233			58,712			(48,162	)		232,783
Research and development		—			4,746			184			—			4,930
Selling, general and administrative		44,052			29,355			4,133			—			77,540
Amortization of intangible assets and capitalized software		—			34,836			1,300			—			36,136
Restructuring		—			699			—			—			699
Total operating costs and expenses		44,052			291,869			64,329			(48,162	)		352,088
(Loss)/profit from operations		(44,052	)		65,564			3,537			—			25,049
Interest income/(expense), net		13,876			(46,689	)		(564	)		—			(33,377	)
Currency translation gain/(loss) and other, net		49,660			(4,201	)		1,743			—			47,202
Income/(loss) from continuing operations before taxes and equity in earnings/(losses) from continuing operations of subsidiaries		19,484			14,674			4,716			—			38,874
Equity in earnings/(losses) from continuing operations of subsidiaries before taxes		19,390			950			—			(20,340	)		—
Provision/(benefit) for income taxes		11,196			10,277			715			(10,992	)		11,196
Net income / (loss)	$	27,678		$	5,347		$	4,001		$	(9,348	)	$	27,678

~~SENSATA~~Condensed ~~TECHNOLOGIES~~Consolidating ~~B.V.~~Statements of Cash Flows

~~NOTES~~For TOthe ~~CONDENSED~~Six ~~CONSOLIDATED~~Months ~~FINANCIAL~~Ended ~~STATEMENTS~~June 30, 2009

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Condensed Consolidating Statements of Operations


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Sensata Consolidated
Cash flows from operating activities:
Net cash (used in) / provided by operating activities from continuing operations	$	(64,505	)	$	146,678		$	3,067			—		$	85,240
Net cash used in operating activities from discontinued operations		—			(403	)		—			—			(403	)

Net cash (used in) / provided by operating activities		(64,505	)		146,275			3,067			—			84,837
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		—			(7,468	)		(1,394	)		—			(8,862	)
Purchase of debt securities of Issuer		—			(40,698	)		—			40,698			—
Dividends received by Issuer		2,548			—			—			(2,548	)		—

Net cash provided by / (used in) investing activities from continuing operations		2,548			(48,166	)		(1,394	)		38,150			(8,862	)
Net cash provided by investing activities from discontinued operations		—			372			—			—			372

Net cash provided by / (used in) investing activities		2,548			(47,794	)		(1,394	)		38,150			(8,490	)
Cash flows from financing activities:
Proceeds from revolving credit facility, net		75,000			—			—			—			75,000
Dividends to parent		(133	)		—			—			—			(133	)
Advances to shareholder		(25	)		—			—			—			(25	)
Payments on U.S. term loan facility		(4,750	)		—			—			—			(4,750	)
Payments on Euro term loan facility		(2,712	)		—			—			—			(2,712	)
Payments to repurchase Senior and Senior Subordinated Notes		(16,544	)		—			—			(40,698	)		(57,242	)
Payments on capitalized lease and other financing obligations		—			(1,979	)		—			—			(1,979	)
Dividends paid to Issuer		—			(1,606	)		(942	)		2,548			—

Net cash provided by / (used in) financing activities		50,836			(3,585	)		(942	)		(38,150	)		8,159

Net change in cash and cash equivalents		(11,121	)		94,896			731			—			84,506
Cash and cash equivalents, beginning of period		19,180			48,196			10,340			—			77,716

Cash and cash equivalents, end of period	$	8,059		$	143,092		$	11,071		$	—		$	162,222

For the Three Months Ended March 31, 2009

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Net revenue	$	—		$	222,576		$	37,953		$	(21,513	)	$	239,016
Operating costs and expenses:
Cost of revenue		—			150,489			32,368			(21,513	)		161,344
Research and development		—			5,011			152			—			5,163
Selling, general and administrative		1,572			23,888			6,154			—			31,614
Amortization of intangible assets and capitalized software		—			36,827			1,977			—			38,804
Impairment of goodwill and intangible assets		—			19,867			—			—			19,867
Restructuring		—			10,936			552			—			11,488
Total operating costs and expenses		1,572			247,018			41,203			(21,513	)		268,280
(Loss) / profit from operations		(1,572	)		(24,442	)		(3,250	)		—			(29,264	)
Interest expense, net		2,550			(44,197	)		(513	)		—			(42,160	)
Currency translation gain / (loss) and other, net		68,392			(1,900	)		2,649			—			69,141
Income / (loss) from continuing operations before taxes and equity in earnings/(losses) from continuing operations of subsidiaries		69,370			(70,539	)		(1,114	)		—			(2,283	)
Equity in earnings/(losses) from continuing operations of subsidiaries before taxes		(71,653	)		(771	)		—			72,424			—
Provision/(benefit) for income taxes		7,641			6,622			174			(6,796	)		7,641
Net (loss) / income from continuing operations		(9,924	)		(77,932	)		(1,288	)		79,220			(9,924	)
Equity in loss from discontinued operations of subsidiaries		(261	)		—			—			261			—
Loss from discontinued operations		—			(261	)		—			—			(261	)
Net (loss) / income	$	(10,185	)	$	(78,193	)	$	(1,288	)	$	79,481		$	(10,185	)

~~SENSATA~~Item ~~TECHNOLOGIES B~~2.V. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~NOTES~~CAUTIONARY TOSTATEMENT ~~CONDENSED~~FOR ~~CONSOLIDATED~~PURPOSES ~~FINANCIAL~~OF ~~STATEMENTS~~THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

~~(In~~This ~~thousands~~report ~~except~~contains ~~share~~forward-looking statements within the meaning of the federal securities laws. These statements relate to analyses and ~~per~~other ~~share~~information, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, ordevelopments ~~unless~~and ~~otherwise~~business ~~noted)~~strategies.

~~(unaudited)~~These forward looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “should”, “estimate”, “expect”, “intend”, “may”, “will”, “plan”, “predict”, “project”, and similar terms and phrases or the negative of such terms and phrases, including references to assumptions. However, these words are not the exclusive means of identifying such statements. These statements are contained in many sections of this report, including “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations.

~~Condensed~~We ~~Consolidating~~believe ~~Statements~~that the following factors, among others (including those described in the Annual Report on Form 10-K for the year ended December 31, 2009), could affect our future performance and the liquidity and value of ~~Cash~~our ~~Flows~~securities and cause our actual results to differ materially from those expressed or implied by forward-looking statements made by us or on our behalf: risks associated with the continued weakness in worldwide economic conditions; adverse developments in the automotive industry; fluctuations in foreign currency exchange and interest rates; risks associated with our substantial indebtedness, leverage and debt service obligations; litigation and disputes involving us, including the extent of product liability and warranty claims asserted against us; and risks associated with future acquisitions, joint ventures or asset dispositions, as well as risks associated with the integration of acquired companies.

~~For~~There may be other factors that may cause our actual results to differ materially from the ~~Month~~forward-looking ~~Ended~~statements. ~~March~~ Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. You should carefully read the factors described in the “Risk Factors” section of this report and our Annual Report on Form 10-K for the year ended December 31, ~~2010~~2009 for a description of certain risks that could, among other things, cause our actual results to differ from these forward-looking statements.

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations		SensataConsolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	28,918		$	24,277		$	1,658		$	—	$	54,853
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		—			(4,794	)		(890	)		—		(5,684	)
Proceeds from sale of assets		—			232			—			—		232
Net cash used in investing activities		—			(4,562	)		(890	)		—		(5,452	)
Cash flows from financing activities:
Proceeds from common stock issuance		103,835			—			—			—		103,835
Proceeds from capital contribution from Sensata Technologies Intermediate		284											284
Payments on U.S. term loan facility		(2,375	)		—			—			—		(2,375	)
Payments on Euro term loan facility		(1,342	)		—			—			—		(1,342	)
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		(102,105	)		—			—			—		(102,105	)
Payments on capitalized lease and other financing obligations		—			(446	)		(33	)		—		(479	)
Net cash used in financing activities		(1,703	)		(446	)		(33	)		—		(2,182	)
Net change in cash and cash equivalents		27,215			19,269			735			—		47,219
Cash and cash equivalents, beginning of period		55,290			82,187			10,649			—		148,126
Cash and cash equivalents, end of period	$	82,505		$	101,456		$	11,384		$	—	$	195,345

Results of Operations

The tables below present our results of operations in millions of dollars and as a percentage of net revenue for the three and six months ended June 30, 2010 compared to the three and six months ended June 30, 2009. We have derived the statements of operations from the condensed consolidated financial statements, included elsewhere in this report. Amounts and percentages in the tables below have been calculated based on unrounded numbers. Accordingly, certain amounts may not add due to the effect of rounding.

~~SENSATA~~Three ~~TECHNOLOGIES~~Months ~~B.V.~~Ended June 30, 2010 Compared to the Three Months Ended June 30, 2009

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	For the three months ended
	June 30, 2010					June 30, 2009
(Amounts in millions)	Amount			Percent of Revenue		Amount			Percent of Revenue
Net revenue:
Sensors	$	240.5		61.4	%	$	147.7		57.8	%
Controls		151.3		38.6			107.7		42.2

Net revenue		391.8		100.0			255.4		100.0
Operating costs and expenses:
Cost of revenue		240.6		61.4			168.9		66.1
Research and development		6.2		1.6			4.0		1.6
Selling, general and administrative		38.9		9.9			30.1		11.8
Amortization of intangible assets and capitalized software		36.1		9.2			38.2		14.9
Restructuring		(0.5	)	(0.1	)		2.1		0.8

Total operating costs and expenses		321.3		82.0			243.1		95.2

Profit from operations		70.5		18.0			12.2		4.8
Interest expense		(25.4	)	(6.5	)		(36.3	)	(14.2	)
Interest income		0.2		0.1			0.1		0.0
Currency translation gain and other, net		51.7		13.2			58.1		22.8

Income from continuing operations before taxes		97.0		24.8			34.1		13.3
Provision for income taxes		14.8		3.8			10.9		4.3

Income from continuing operations		82.2		21.0			23.2		9.1
Loss from discontinued operations, net of tax of $0		—		—			(0.1	)	(0.1	)

Net income	$	82.2		21.0	%	$	23.1		9.0	%

~~(In~~Net ~~thousands~~revenue. ~~except~~Net ~~share~~revenue ~~and~~for ~~per~~the ~~share~~three ~~amounts~~months ended June 30, 2010 increased $136.4 million, or 53.4%, ~~unless~~to ~~otherwise~~$391.8 ~~noted~~million from $255.4 million for the three months ended June 30, 2009. Net revenue increased 54.5% due to higher volumes, resulting from an increase in production volumes in our mature markets of 33.7%, growth in our emerging markets (primarily China) of 10.4% and growth in content of 10.4%. The increase in volume was partially offset by a decrease of 0.7% due to unfavorable foreign currency exchange rates, primarily the U.S. dollar to Euro, and a decrease of 0.4% due to pricing.

~~(unaudited)~~Sensors business segment net revenue for the three months ended June 30, 2010 increased $92.8 million, or 62.8%, to $240.5 million from $147.7 million for the three months ended June 30, 2009. Sensors net revenue increased 64.7% due to higher volumes, partially offset by the effect of unfavorable foreign exchange rates of 1.0%, primarily the U.S. dollar to Euro exchange rate, and a decrease of 0.9% due to pricing.

~~Condensed~~Controls ~~Consolidating~~business ~~Statements~~segment net revenue for the three months ended June 30, 2010 increased $43.7 million, or 40.6%, to $151.3 million from $107.7 million for the three months ended June 30, 2009. Controls net revenue increased 40.5% due to higher volumes and 0.4% due to pricing, partially offset by the effect of ~~Cash~~unfavorable ~~Flows~~foreign exchange rates of 0.3%, primarily the U.S. dollar to Euro exchange rate.

~~For~~Cost of revenue. Cost of revenue for the ~~Three~~three ~~Months~~months ~~Ended~~ended ~~March~~June 3130, 2010 and 2009 was $240.6 million, or 61.4% of net revenue, and $168.9 million, or 66.1% of net revenue, respectively. Cost of revenue increased primarily due to the increase in unit volumes sold. Depreciation expense for the three months ended June 30, 2010 and 2009 was $9.5 million and $10.9 million, respectively, of which $8.6 million and $10.0 million, respectively, was included in cost of revenue. Cost of revenue as a percentage of net revenue decreased primarily

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Cash flows from operating activities:
Net cash (used in) / provided by operating activities from continuing operations	$	(41,461	)	$	101,499		$	2,947		$	—		$	62,985
Net cash used in operating activities from discontinued operations		—			(233	)		—			—			(233	)
Net cash (used in) / provided by operating activities from discontinued operations		(41,461	)		101,266			2,947			—			62,752
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		—			(3,321	)		(998	)		—			(4,319	)
Dividends received by Issuer		800			—			—			(800	)		—
Net cash provided by / (used in) investing activities		800			(3,321	)		(998	)		(800	)		(4,319	)
Cash flows from financing activities:
Proceeds from revolving credit facility, net		48,250			—			—			—			48,250
Advances to Shareholder		(19	)		—			—			—			(19	)
Payments on U.S. term loan facility		(2,375	)		—			—			—			(2,375	)
Payments on Euro term loan facility		(1,313	)		—			—			—			(1,313	)
Payments on capitalized lease and other financing obligations		—			(408	)		—			—			(408	)
Dividends paid to Issuer		—			(800	)		—			800			—
Net cash provided by / (used in) financing activities		44,543			(1,208	)		—			800			44,135
Net change in cash and cash equivalents		3,882			96,737			1,949			—			102,568
Cash and cash equivalents, beginning of period		19,180			48,196			10,340			—			77,716
Cash and cash equivalents, end of period	$	23,062		$	144,933		$	12,289		$	—		$	180,284

~~SENSATA~~ due ~~TECHNOLOGIES~~to Bcost savings initiatives resulting from the various restructuring activities implemented during the second half of fiscal year 2008 and fiscal year 2009 and the leverage effect of higher revenue on certain fixed manufacturing costs.V.

~~NOTES~~Research TOand ~~CONDENSED~~development ~~CONSOLIDATED~~expense. ~~FINANCIAL~~Research ~~STATEMENTS~~and development (“R&D”) expense for the three months ended June 30, 2010 and 2009 was $6.2 million and $4.0 million, respectively. R&D expense as a percentage of net revenue for the three months ended June 30, 2010 and 2009 was 1.6% in each period.

~~(In~~Selling, ~~thousands~~general ~~except~~and ~~share~~administrative expense. Selling, general and ~~per~~administrative ~~share~~expense ~~amounts~~for the three months ended June 30, 2010 and 2009 was $38.9 million, or ~~unless~~9.9% ~~otherwise~~of ~~noted)~~net revenue, and $30.1 million, or 11.8% of net revenue, respectively. Selling, general and administrative expense increased primarily due to the increase in revenue as discussed above, an increase in stock compensation and an increase in costs associated with being a public company, but decreased as a percentage of revenue primarily due to the cost savings initiatives discussed above.

~~(unaudited)~~Amortization of intangible assets and capitalized software. Amortization expense associated with definite-lived intangible assets and capitalized software for the three months ended June 30, 2010 and 2009 was $36.1 million and $38.2 million, respectively. The decrease resulted from the recognition of amortization on an accelerated basis to appropriately reflect the pattern in which the economic benefits of the intangible assets are being realized.

20Restructuring. ~~Subsequent~~Restructuring expense ~~Events~~for the three months ended June 30, 2010 and 2009 was $(0.5) million and $2.1 million, respectively. The results for the three months ended June 30, 2010, primarily reflected $0.3 million due to expiration of underutilized severance and outplacement benefits, and $0.2 million due to the execution of a sublease for the facility in Farnborough, United Kingdom with terms more favorable than originally estimated. The expense of $2.1 million recorded during the three months ended June 30, 2009 related to the continuation in 2009 of restructuring activities that started in the second half of 2008, including reducing the workforce in our business centers and manufacturing facilities throughout the world and moving certain manufacturing operations to low-cost countries. This expense consisted of $0.9 million related to severance, $1.0 million related to pension settlement, curtailment and other related charges, and $0.2 million related to other costs.

OnInterest ~~April 1,~~expense. ~~2010,~~Interest ~~the~~expense ~~Company~~for ~~announced~~the ~~that~~three itmonths ~~elected~~ended toJune 30, ~~issue~~2010 ~~notices~~and of2009 ~~redemption with respect to (i) all of its~~was ~~outstanding 11.~~$25%.4 ~~Senior~~million ~~Subordinated~~and ~~Notes at a redemption price equal to 105~~$36.~~625%~~3 ~~of the principal amount thereof~~million, ~~which~~respectively. ~~amount~~Interest isexpense ~~equal~~for tothe ~~€1,056.25 per~~three ~~€1,000~~months ~~principal~~ended ~~amount and (ii)~~June ~~$138~~30,~~550,000~~ in2010 ~~aggregate~~consisted ~~principal amount~~primarily of ~~its~~$18.9 ~~outstanding~~million 8%of ~~Senior~~interest ~~Notes~~expense aton aour ~~redemption~~outstanding ~~price~~debt, ~~equal to 104~~$3.~~000%~~0 million of ~~the~~interest ~~principal~~associated ~~amount~~with ~~thereof,~~our ~~which~~outstanding derivative ~~amount is equal to $1~~instruments,~~040.00~~ ~~per~~and $2.1~~,000~~ ~~principal~~million ~~amount.~~of ~~The~~amortization ~~redemption~~of ~~date~~deferred ~~for~~financing ~~the notes is May 1, 2010~~costs. InInterest ~~each~~expense ~~case, holders~~for of the ~~notes~~three ~~subject~~months toended ~~redemption~~June ~~will~~30, ~~also~~2009 ~~receive~~consisted ~~accrued~~primarily ~~and~~of ~~unpaid~~$29.0 million of interest upexpense ~~to,~~on ~~but~~our ~~not~~outstanding ~~including~~debt, ~~the redemption date~~$3.7 ~~The~~million ~~Company~~of interest ~~will~~associated ~~redeem~~with ~~all~~our outstanding ~~11.25%~~derivative ~~Senior~~instruments ~~Subordinated Notes~~ and ~~will~~$2.2 ~~redeem~~million ~~the~~of 8%amortization ~~Senior~~of ~~Notes~~deferred onfinancing ~~a pro rata basis~~costs. The ~~Company~~decrease ~~expects~~in tointerest ~~pay~~expense ~~$245.6~~was ~~million~~due ~~for~~primarily ~~the~~to ~~redemption of~~ the ~~notes,~~tender ~~including accrued interest,~~ and ~~recognize~~redemption aof ~~loss~~our onSenior ~~the~~Notes ~~extinguishment~~and ofSenior ~~debt,~~Subordinated Notes ~~including~~during the ~~write-off~~six ofmonths ~~deferred~~ended ~~financing~~June 30, ~~costs of $5~~2010.0 ~~million.~~

Currency translation gain and other, net. Currency translation gain and other, net for the three months ended June 30, 2010 and 2009 was $51.7 million and $58.1 million, respectively. Currency translation gain and other, net for the three months ended June 30, 2010 consisted primarily of currency gains of $73.7 million resulting from the re-measurement of our foreign currency denominated debt, partially offset by losses of $15.4 million resulting from the redemption of the Senior Notes and Senior Subordinated Notes and net currency losses of $6.1 million resulting from the re-measurement of net monetary assets denominated in foreign currencies. Currency translation gain and other, net for the three months ended June 30, 2009 consisted primarily of the gain resulting from the extinguishment of debt of $120.1 million, partially offset by the currency loss of $62.5 million resulting from the re-measurement of our foreign currency denominated debt.

Provision for income taxes. Provision for income taxes for the three months ended June 30, 2010 and 2009 totaled $14.8 million and $10.9 million, respectively. Our tax provision consisted of current tax expense which related primarily to our profitable operations in foreign tax jurisdictions and deferred tax expense which related primarily to amortization of tax-deductible goodwill.

~~Item~~Six 2.Months ~~Management’s~~Ended ~~Discussion~~June 30, ~~and~~2010 ~~Analysis~~Compared ofto ~~Financial~~the ~~Condition~~Six ~~and~~Months ~~Results~~Ended ofJune 30, 2009 ~~Operations.~~

Results of Operations


	For the six months ended
	June 30, 2010					June 30, 2009
(Amounts in millions)	Amount			Percent of Revenue		Amount			Percent of Revenue
Net revenue:
Sensors	$	473.1		61.5	%	$	288.0		58.3	%
Controls		295.9		38.5			206.4		41.7

Net revenue		768.9		100.0			494.4		100.0
Operating costs and expenses:
Cost of revenue		473.4		61.6			330.2		66.8
Research and development		11.1		1.4			9.1		1.8
Selling, general and administrative		116.4		15.1			61.7		12.5
Amortization of intangible assets and capitalized software		72.2		9.4			77.0		15.6
Impairment of goodwill and intangible assets		—		—			19.9		4.0
Restructuring		0.2		0.0			13.5		2.7

Total operating costs and expenses		673.4		87.6			511.4		103.4

Profit / (loss) from operations		95.6		12.4			(17.0	)	(3.4	)
Interest expense		(58.9	)	(7.7	)		(78.8	)	(15.9	)
Interest income		0.3		0.1			0.4		0.1
Currency translation gain and other, net		98.9		12.9			127.2		25.7

Income from continuing operations before taxes		135.9		17.7			31.8		6.4
Provision for income taxes		26.0		3.4			18.5		3.7

Income from continuing operations		109.9		14.3			13.3		2.7
Loss from discontinued operations, net of tax of $0		—		—			(0.4	)	(0.1	)

Net income	$	109.9		14.3	%	$	12.9		2.6	%

~~The~~Net ~~table~~revenue. ~~below~~Net ~~presents~~revenue ~~our~~for ~~results~~the ofsix ~~operations~~months inended ~~millions~~June 30, of2010 ~~dollars~~increased ~~and~~$274.6 asmillion, aor 55.5%, ~~percent~~to ~~of net revenue~~$768.9 Wemillion ~~have~~from ~~derived~~$494.4 ~~the~~million ~~statements of operations~~ for the ~~three~~six months ended ~~March~~June 3130, ~~2010~~2009. Net revenue increased 55.5% due to higher volumes and ~~2009~~0.6% ~~from~~due ~~the~~to ~~unaudited~~favorable ~~condensed~~foreign ~~consolidated~~currency ~~financial~~exchange ~~statements~~rates, ~~included~~primarily ~~elsewhere~~the inU.S. ~~this~~dollar ~~report~~to Euro exchange rate. The ~~Amounts~~increases related to volumes and ~~percentages~~foreign inexchange ~~the~~rates ~~table~~were ~~below~~partially ~~have~~offset ~~been~~by ~~calculated~~a ~~based~~decrease ~~on unrounded~~of ~~numbers~~0.6% ~~Accordingly,~~due ~~certain~~to ~~amounts~~pricing. ~~may~~The ~~not~~increase ~~add~~in volumes was due to ~~the~~an ~~effect~~increase in production volumes in our mature markets of ~~rounding~~31.9%, growth in our emerging markets (primarily China) of 12.2% and growth in content of 11.4%.

	For the three months ended
	March 31,2010					March 31,2009
(Amounts in millions)	Amount			Percent ofRevenue		Amount			Percent ofRevenue
Net revenue:
Sensors	$	232.6		61.7	%	$	140.3		58.7	%
Controls		144.5		38.3			98.7		41.3
Net revenue		377.1		100.0			239.0		100.0
Operating costs and expenses:
Cost of revenue		232.8		61.7			161.3		67.5
Research and development		4.9		1.3			5.2		2.2
Selling, general and administrative		77.5		20.6			31.6		13.2
Amortization of intangible assets and capitalized software		36.1		9.6			38.8		16.2
Impairment of goodwill and intangible assets		—		—			19.9		8.3
Restructuring		0.7		0.2			11.5		4.8
Total operating costs and expenses		352.1		93.4			268.3		112.2
Profit/(loss) from operations		25.0		6.6			(29.3	)	(12.2	)
Interest expense		(33.5	)	(8.9	)		(42.5	)	(17.8	)
Interest income		0.1		0.0			0.3		0.1
Currency translation gain and other, net		47.2		12.5			69.1		28.9
Income/(loss) from continuing operations before taxes		38.9		10.3			(2.3	)	(1.0	)
Provision for income taxes		11.2		3.0			7.6		3.2
Income/(loss) from continuing operations		27.7		7.3			(9.9	)	(4.2	)
Loss from discontinued operations, net of tax of $0		—		—			(0.3	)	(0.1	)
Net income/(loss)	$	27.7		7.3	%	$	(10.2	)	(4.3	)%

Sensors business segment net revenue for the six months ended June 30, 2010 increased $185.0 million, or 64.2%, to $473.1 million from $288.0 million for the six months ended June 30, 2009. Sensors net revenue increased 65.1% due to higher volumes and 0.4% due to favorable foreign exchange rates, primarily the U.S. dollar to Euro exchange rate. The increases related to volumes and foreign exchange rates were partially offset by a decrease of 1.3% due to pricing.

~~Three~~Controls ~~Months~~business ~~Ended~~segment ~~March~~net revenue for the six months ended June 3130, 2010 ~~Compared~~increased $89.5 million, or 43.4%, to $295.9 million from $206.4 million for the ~~Three~~six ~~Months~~months ~~Ended~~ended ~~March~~June 3130, 2009. Controls net revenue increased 42.1% due to higher volumes, 0.8% due to favorable foreign exchange rates, primarily the U.S. dollar to Euro exchange rate, and 0.5% due to pricing.

~~Net~~Cost of revenue. ~~Net~~Cost of revenue for the ~~three~~six months ended ~~March~~June 3130, 2010 ~~increased~~and 2009 was $~~138~~473.14 million, or 5761.86%, ~~to $377.1~~of ~~million~~net ~~from~~revenue, and $~~239~~330.02 million ~~for the three months ended March 31~~, ~~2009.~~or ~~Net revenue increased 56~~66.68% ~~due~~of tonet

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Filing Compare · Sensata Technologies B.V.