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 ~~September~~March 3031, ~~2010~~2011

¨	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		98-0528648
(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~~As ~~number~~ of ~~shares~~April 15, ~~outstanding~~2011, of220 ~~each~~ordinary ofshares ~~the~~were ~~issuer’s classes of common stock~~outstanding, ~~as of October 15, 2010 was 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 September 30, 2010 and December 31, 2009	3
		Condensed Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010	3
		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2010 and September 30, 2009	4
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2011 and March 31, 2010	4
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and September 30, 2009	5
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011 and March 31, 2010	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4338
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5345
	Item 4.	Controls and Procedures	5345
PART II
	Item 1.	Legal Proceedings	5447
	Item 1A.	Risk Factors	5547
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5647
	Item 3.	Defaults Upon Senior Securities	5648
	Item 6.	Exhibits	5648
		Signatures	5749

PART I—FINANCIAL INFORMATION

Item 1. Financial ~~Statements~~statements.

SENSATA TECHNOLOGIES B.V.

Condensed Consolidated Balance Sheets

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

(unaudited)

	September 30,2010			December 31,2009
	March 31,2011			December 31,2010
Assets
Current assets:
Cash and cash equivalents	$	~~312~~308,~~149~~323		$	~~148~~386,~~126~~155
Accounts receivable, net of allowances of $11,443 and $12,739 as of September 30, 2010 and December 31, 2009, respectively		202,361			180,839
Accounts receivable, net of allowances of $11,726 and $10,655 as of March 31, 2011 and December 31, 2010, respectively		269,489			198,245
Inventories		~~142~~155,~~298~~823			~~125~~140,~~375~~949
Deferred income tax assets		126,~~471~~645			126,~~419~~566
Prepaid expenses and other current assets		2136,~~017~~116			1624,~~226~~787
Assets held for sale		238			~~238~~559
Total current assets		~~690~~776,~~534~~634			~~483~~757,~~223~~261
Property, plant and equipment at cost		~~432~~494,~~301~~810			~~400~~450,~~461~~922
Accumulated depreciation		(~~207~~223,~~440~~816	)		(~~180~~216,~~523~~109	)
Property, plant and equipment, net		~~224~~270,~~861~~994			~~219~~234,~~938~~813
Goodwill		1,~~528~~576,~~954~~895			1,~~530~~528,~~570~~954
Other intangible assets, net		~~759~~731,~~092~~065			~~865~~723,~~531~~144
Deferred income tax assets		54,~~563~~364			54,~~543~~526
Deferred financing costs		2723,~~794~~656			4125,~~147~~742
Other assets		116,~~535~~963			175,~~175~~831
Total assets	$	3,~~248~~390,~~333~~571		$	3,~~163~~280,~~127~~271
Liabilities and shareholder’s equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	17,~~519~~081		$	1716,~~139~~779
Accounts payable		~~125~~165,~~329~~331			~~121~~131,~~636~~975
Income taxes payable		97,~~270~~446			86,~~384~~855
Accrued expenses and other current liabilities		~~103~~119,~~171~~178			9092,~~207~~046
Due to parent		4,144			—
Due to Parent		4,374			2,974
Deferred income tax liabilities		~~749~~4,671			~~823~~4,608
Total current liabilities		~~260~~318,~~182~~081			~~238~~255,~~189~~237
Deferred income tax liabilities		~~194~~198,~~021~~656			~~165~~179,~~477~~089
Pension and post-retirement benefit obligations		4734,~~262~~760			4942,~~525~~757
Capital lease and other financing obligations, less current portion		4039,~~022~~314			4039,~~001~~544
Long-term debt, less current portion		1,~~856~~875,~~143~~328			21,~~243~~833,~~686~~370
Other long-term liabilities		2429,~~743~~337			3930,~~502~~092
Commitments and contingencies
Total liabilities		2,~~422~~495,~~373~~476			2,~~776,~~380,089
Shareholder’s equity:
Ordinary shares, €100 nominal value per share, 900 shares authorized; 220 and 180 shares issued as of September 30, 2010 and December 31, 2009, respectively		28			22
Ordinary shares, €100 nominal value per share, 900 shares authorized; 220 shares issued as of March 31, 2011 and December 31, 2010		28			28
Due from parent		—			(388	)
Additional paid-in capital		1,425,135			1,423,099
Additional paid-in capital		1,421,333			1,051,266
Accumulated deficit		(504,500	)		(495,569	)
Accumulated deficit		(565,474	)		(626,954	)
Accumulated other comprehensive loss		(25,568	)		(27,376	)
Accumulated other comprehensive loss		(29,927	)		(37,199	)
Total shareholder’s equity		895,095			900,182
Total shareholder’s equity		825,960			386,747
Total liabilities and shareholder’s equity	$	3,390,571		$	3,280,271
Total liabilities and shareholder’s equity	$	3,248,333		$	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~~dollars)

(unaudited)

	For the three months ended						~~For the nine months ended~~
	September 30,2010			September 30,2009			September 30,2010			September 30,2009
	March 31,2011			March 31,2010
Net revenue	$	~~383~~444,~~294~~229		$	~~302~~377,~~468~~137		$	~~1,152,237~~		$	~~796,855~~
Operating costs and expenses:
Cost of revenue		~~238~~277,~~646~~245			~~190~~232,~~908~~783			~~712,019~~			~~521,154~~
Research and development		68,~~112~~767			34,~~569~~930			~~17,253~~			~~12,692~~
Selling, general and administrative		3943,~~356~~829			3377,~~178~~540			~~155,794~~			~~94,843~~
Amortization of intangible assets and capitalized software		3634,~~095~~252			3836,~~094~~136			~~108,309~~			~~115,060~~
Impairment of goodwill and intangible assets		—			—			—			19,867
Restructuring		647			699
Restructuring		(13	)		4,495			196			18,033
Total operating costs and expenses		364,740			352,088
Total operating costs and expenses		320,196			270,244			993,571			781,649
Profit from operations		79,489			25,049
Profit from operations		63,098			32,224			158,666			15,206
Interest expense		(23,454	)		(33,516	)
Interest expense		(23,248	)		(36,540	)		(82,170	)		(115,373	)
Interest income		219			139
Interest income		184			68			520			471
Currency translation (loss)/gain and other, net		(40,631	)		47,202
Currency translation (loss) / gain and other, net		(78,463	)		(33,128	)		20,460			94,121
Income before taxes		15,623			38,874
(Loss) / income from continuing operations before taxes		(38,429	)		(37,376	)		97,476			(5,575	)
Provision for income taxes		24,554			11,196
Provision for income taxes		9,997			16,648			35,996			35,165
Net (loss)/income	$	(8,931	)	$	27,678
(Loss) / income from continuing operations		(48,426	)		(54,024	)		61,480			(40,740	)
Loss from discontinued operations, net of tax of $0		—			—			—			(395	)
Net (loss) / income	$	(48,426	)	$	(54,024	)	$	61,480		$	(41,135	)

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 ninemonths ended
	For the threemonths ended
	September 30,2010			September 30,2009
	March 31,2011			March 31,2010
Cash flows from operating activities:
Net income / (loss)	$	61,480		$	(41,135	)
Net (loss)/income	$	(8,931	)	$	27,678
Net loss from discontinued operations		—			(395	)
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Net income / (loss) from continuing operations		61,480			(40,740	)
Depreciation		10,802			10,804
Adjustments to reconcile net income / (loss) to net cash provided by operating activities:
Amortization of deferred financing costs		2,086			2,293
Depreciation		29,472			34,005
Currency translation loss/(gain) on debt		46,781			(60,116	)
Amortization of deferred financing costs		6,512			6,775
Loss on repurchase of outstanding Senior and Senior Subordinated Notes		—			8,098
Currency translation (gain) / loss on debt		(53,750	)		28,482
Share-based compensation		2,036			20,064
Loss / (gain) on repurchase of outstanding Senior and Senior Subordinated Notes		23,474			(120,123	)
Amortization of inventory step-up to fair value		524			—
Share-based compensation		23,217			1,174
Amortization of intangible assets and capitalized software		34,252			36,136
Amortization of intangible assets and capitalized software		108,309			115,060
Gain on disposition of assets		(197	)		(135	)
Loss on disposition of assets		12			1,159
Deferred income taxes		18,701			7,509
Loss on assets held for sale		—			1,661
(Decrease)/increase from changes in operating assets and liabilities, net of effects of acquisitions:
Deferred income taxes		28,398			25,783
Accounts receivable, net		(39,279	)		(27,508	)
Impairment of goodwill and intangible assets		—			19,867
Inventories		(4,217	)		(7,474	)
(Decrease) / increase from changes in operating assets and liabilities:
Prepaid expenses and other current assets		(6,056	)		(3,652	)
Accounts receivable, net		(21,522	)		(39,090	)
Accounts payable and accrued expenses		35,423			18,181
Inventories		(16,923	)		34,503
Income taxes payable		591			(1,207	)
Prepaid expenses and other current assets		(2,431	)		11,725
Accrued retirement		(9,268	)		(526	)
Accounts payable and accrued expenses		11,191			44,648
Due to Parent, net		1,400			21,632
Income taxes payable		886			(1,699	)
Other		120			3,076
Accrued retirement		(795	)		(3,413	)
Net cash provided by operating activities		84,768			54,853
Due to parent, net		4,144			—
Other		2,403			8,508
Net cash provided by operating activities from continuing operations		204,077			128,285
Net cash used in operating activities from discontinued operations		—			(403	)
Net cash provided by operating activities		204,077			127,882
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		(35,089	)		(11,527	)
Acquisition of Magnetic Speed and Position, net of cash received		(136,872	)		—
Proceeds from sale of assets		364			525
Additions to property, plant and equipment and capitalized software		(22,061	)		(5,684	)
Net cash used in investing activities from continuing operations		(34,725	)		(11,002	)
Proceeds from sale of assets		600			232
Net cash provided by investing activities from discontinued operations		—			372
Net cash used in investing activities		(158,333	)		(5,452	)
Net cash used in investing activities		(34,725	)		(10,630	)
Cash flows from financing activities:
Dividend to parent		—			(133	)
Proceeds from issuance of ordinary shares to, and capital contributions from, Sensata Intermediate Holding		—			104,119
Advances to shareholder		—			(25	)
Payments on U.S. term loan facility		(2,375	)		(2,375	)
Proceeds from repayment of advances to shareholder		388			—
Payments on Euro term loan facility		(1,402	)		(1,342	)
Proceeds from issuance of ordinary shares to, and capital contributions from, Sensata Intermediate Holding		346,856			—
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		—			(102,105	)
Proceeds from revolving credit facility, net		—			75,000
Payments on capitalized lease and other financing obligations		(490	)		(479	)
Payments on U.S. term loan facility		(7,125	)		(7,125	)
Net cash provided/(used in) by financing activities		(4,267	)		(2,182	)
Payments on Euro term loan facility		(3,910	)		(4,160	)
Net change in cash and cash equivalents		(77,832	)		47,219
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		(338,343	)		(57,242	)
Cash and cash equivalents, beginning of period		386,155			148,126
Payments on capitalized lease and other financing obligations		(3,195	)		(3,131	)
Cash and cash equivalents, end of period	$	308,323		$	195,345
Net cash (used in) / provided by financing activities		(5,329	)		3,184
Net change in cash and cash equivalents		164,023			120,436
Cash and cash equivalents, beginning of period		148,126			77,716
Cash and cash equivalents, end of period	$	312,149		$	198,152

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~~The accompanying unaudited condensed consolidated financial statements presented herein reflect the financial position, results of operations and cash flows of Sensata Technologies B.V. (“Company,” “Sensata,” or“we,” ~~the~~“our,” or “~~Company~~us”). isWe are a direct, wholly-owned subsidiary of Sensata Technologies Intermediate Holding B.V. (“Sensata Intermediate Holding”). Sensata Intermediate Holding is an indirect, wholly-owned subsidiary of Sensata Technologies Holding N.V. (“Parent”) and the Parent is a majority-owned subsidiary of Sensata Investment Company ~~SCA~~S.C.A. (“~~Sensata Investment Co.~~SCA”). The share capital of ~~Sensata~~SCA ~~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~~our ~~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”)~~ of Texas Instruments Incorporated (“TI”) for aggregate 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 $2.1 billion of indebtedness.

~~Sensata~~We ~~was~~are incorporated byunder the ~~Sponsors~~laws inof the Netherlands, and were purchased as a shelf company by the Sponsors in February ~~2005~~2006 ~~and~~in ~~conducts~~order ~~its~~to facilitate the 2006 Acquisition. We conduct our business through subsidiary companies which operate business and product development centers in the United States (“U.S.”), the Netherlands and Japan; and manufacturing operations in ~~Brazil,~~ China, South Korea, Malaysia, Mexico, Czech Republic, the Dominican Republic and the U.S. ~~The~~Many ~~Company~~of ~~organizes~~these ~~its~~companies are the successors to businesses that have been engaged in the sensing and control business since 1931. We organize our operations into the sensors and controls businesses.

~~The~~Our sensors business is a manufacturer of pressure, force, ~~and~~ electromechanical, speed and position sensor products used in subsystems of automobiles (e.g., engine, air-conditioning and ride stabilization), heavy off-road vehicles, and in industrial products such as heating, ventilation and air conditioning (“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~~Our controls business is a manufacturer of a variety of control products used in industrial, aerospace, military, commercial and residential markets. These products include motor and compressor protectors, circuit breakers, semiconductor burn-in test sockets, electronic HVAC controls, power inverters, precision switches and thermostats. These products help prevent damage from overheating and fires in a wide variety of applications, including commercial heating and air-conditioning systems, refrigerators, aircraft, automobiles, lighting and other industrial applications. The controls business also manufactures direct current (“DC”) to alternating current (“AC ”) power inverters, which enable the operation of electronic equipment when grid power is not available.

On March 16, 2010, ~~the~~ our Parent completed the initial public offering (“IPO”) of its ordinary shares in which it sold 26,315,789 ordinary shares and its existing shareholders and certain employees sold 5,284,211 ordinary shares at a public offering price of $18.00 per share. The net proceeds of the IPO ~~totaled~~to our Parent, excluding $~~435~~2.9 5 million ~~after~~of ~~deducting~~proceeds ~~underwriters’~~from ~~discounts~~the exercise ~~and~~of ~~commissions~~stock ~~and offering expenses~~options, ~~including~~totaled approximately $2433.5 million ofafter ~~proceeds~~deducting ~~from~~ the ~~exercise~~underwriters’ ofdiscounts ~~stock~~and ~~options~~commissions and offering expenses. On April 12, 2010, ~~the~~our Parent announced that the underwriters of its IPO exercised their option to purchase an additional 4,740,000 ordinary shares from the selling shareholders at a price of $18.00 per share, which included 353,465 ordinary shares obtained by certain selling shareholders through the exercise of options to purchase ordinary shares. The sale of the additional shares closed on April 14, 2010. The Parent did not receive any proceeds from the sale of the additional shares, other than the proceeds from the exercise of the aforementioned stock options which totaled $2.5 million.

selling shareholders through the exercise of options to purchase ordinary shares. The sale of the additional ordinary shares closed on April 14, 2010. Our Parent did not receive any proceeds from the sale of the additional ordinary shares, other than the proceeds from the exercise of the aforementioned stock options which totaled $2.5 million.

On November 17, 2010, our Parent completed a secondary public offering of its ordinary shares in which its existing shareholders and certain employees sold 23,000,000 ordinary shares at an offering price of $24.10 per share. The net proceeds to our Parent of this secondary public offering were limited to the proceeds received from the exercise of stock options, which totaled $3.7 million.

On February 24, 2011, our Parent completed a secondary public offering of its ordinary shares in which its existing shareholders and certain employees sold 20,000,000 ordinary shares at an offering price of $33.15 per share. The net proceeds to our Parent of this secondary public offering were limited to the proceeds received from the exercise of stock options, which totaled $2.1 million. On March 2, 2011, the underwriters of this secondary public offering exercised their option to purchase an additional 3,000,000 ordinary shares from the selling shareholders at a price of $33.15 per share, which included ordinary shares obtained by certain selling shareholders through the exercise of options to purchase ordinary shares. The net proceeds to our Parent of this underwriters’ option were limited to the proceeds received from the exercise of stock options, which totaled $0.3 million. After this offering, SCA owned approximately 51.4% of our Parent’s ordinary shares.

All amounts presented, 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 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~~ 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~~ ~~nine~~ months ended ~~September~~March 3031, ~~2010~~2011 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~~our ~~Company’s~~ Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010.

~~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~~standards ~~(“FASB”)~~adopted ~~issued~~during ~~Accounting Standards Update (“ASU”) No. 2009-13, Multiple-Delivery Revenue Arrangements (“ASU 2009-13”), which establishes~~ the ~~accounting and reporting guidance for~~ ~~arrangements~~quarter ~~including~~ended multiple deliverable revenue-generating activities, and provides amendments 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 hierarchy for determining the selling price of a deliverable, and require significantly enhanced disclosures to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about their nature and terms, significant deliverables, and the general timing of delivery. The amendments also require 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 of ASU 2009-13 are effective prospectively for revenue arrangements entered into or materially modified in annual reporting periods beginning on or after JuneMarch 1531, ~~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 and results of operations.

~~The~~In ~~Company~~October ~~adopted~~2009, the ~~following~~Financial Accounting Standards Board issued Accounting Standards Update No. 2009-13, Multiple-Delivery Revenue Arrangements (“ASU 2009-13”), which establishes the accounting ~~standards~~and ~~during~~reporting ~~2010:~~guidance for arrangements including multiple deliverable revenue-generating activities, and provides amendments 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 hierarchy for determining the selling price of a deliverable, and require significantly enhanced disclosures to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about their nature and terms, significant deliverables, and the general timing of delivery. The amendments also require 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 of

In February 2010, the FASB issued ASU 2010-09, Amendments to Certain Recognition and Disclosure Requirements, (“ASU 2010-09”), which eliminates the requirement under Accounting Standards Codification (“ASC”) Topic 855, Subsequent Events (“ASC 855”) for SEC registrants to disclose the date through which they have evaluated subsequent events in the financial statements. ASU 2010-09 was effective upon issuance, and the Company adopted its provisions as of the issuance of the Quarterly Report for the period ended March 31, 2010. The adoption of ASU 2010-09 was for disclosure purposes only and did not have any effect on the Company’s financial position or results of operations.

~~guidance in ASC 820 required separate fair value disclosures for each major category of assets and liabilities.~~ ASU ~~2010~~2009-0613 ~~also~~are ~~clarifies~~effective ~~the~~prospectively ~~requirement~~ for ~~entities~~revenue toarrangements ~~disclose~~entered ~~information about~~into ~~both~~or ~~the~~materially ~~valuation~~modified ~~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 on or after ~~December~~June 15, ~~2009.~~2010, ~~The~~or ~~Company adopted these provisions as of~~ January 1, ~~2010. The~~2011 ~~requirement~~for tous. ~~separately~~We ~~disclose~~adopted ~~purchases,~~these ~~sales,~~provisions ~~issuances~~as ~~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~~2009-0613 ~~will~~did not have ~~any~~a ~~effect~~material impact on ~~the~~our ~~Company’s~~ financial position or results of operations.

~~In June~~4. ~~2009,~~Comprehensive ~~the~~Net ~~FASB issued guidance now codified within ASC Topic 810, Consolidation~~ (~~“ASC 810”~~Loss),/Income 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. 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.

4.The ~~Comprehensive~~components ~~Net~~of comprehensive net (~~Loss~~loss) /income ~~Income~~for the three months ended March 31, 2011 and 2010 were as follows:

The components of comprehensive net (loss) / income for the three and nine months ended September 30, 2010 and 2009 were as follows:


	For the three months ended
	March 31, 2011			March 31, 2010
Net (loss)/income	$	(8,931	)	$	27,678
Net unrealized gain on derivatives		1,607			1,212
Net adjustments on defined benefit and retiree healthcare plans		201			174

Comprehensive net (loss)/income	$	(7,123	)	$	29,064

	For the three months ended						For the nine months ended
	September 30,2010			September 30,2009			September 30,2010		September 30,2009
Net (loss) / income	$	(48,426	)	$	(54,024	)	$	61,480	$	(41,135	)
Net unrealized gain / (loss) on derivatives		1,852			460			6,393		(3,789	)
Net adjustments on defined benefit and retiree healthcare plans		303			3,578			879		5,682
Comprehensive net (loss) / income	$	(46,271	)	$	(49,986	)	$	68,752	$	(39,242	)

5. Inventories

The components of inventories as of ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010 were as follows:

	September 30,2010		December 31,2009
	March 31,2011		December 31,2010
Finished goods	$	4244,~~941~~883	$	4145,~~931~~397
Work-in-process		2531,~~128~~743		2025,~~627~~353
Raw materials		7479,~~229~~197		6270,~~817~~199
Total	$	~~142~~155,~~298~~823	$	~~125~~140,~~375~~949

6. Acquisitions

On January 28, 2011, we completed the acquisition of the Automotive on Board sensors business of Honeywell International Inc. for estimated total consideration of $152.5 million (including $136.9 million paid in cash, net of cash acquired), subject to a working capital adjustment and certain transfer taxes. As of March 31, 2011, we accrued a liability of approximately $8.4 million of purchase consideration that has not yet been remitted to the seller related to acquired cash, estimated working capital adjustments and transfer taxes. We will refer to this acquisition as Magnetic Speed and Position (“MSP”), which is being integrated into our sensors segment. We acquired MSP in order to complement the existing operations of our sensors segment, provide new capabilities in light vehicle speed and position sensing, and expand our presence in emerging markets, particularly in China.

6MSP manufactures, develops and sells certain sensor products, and has operations in the U.S., ~~Discontinued~~South ~~Operations~~Korea, the Czech Republic and China. This acquisition was structured as a purchase of assets for the operations in the U.S., South Korea and the Czech Republic and as a purchase of 100% of the outstanding shares of entities in the Czech Republic and in China. The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed:

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”), due to the economic climate and slower than expected demand for its products. The Company purchased SMaL for $12.0 million in March 2007. The Company completed the sale of the Vision business during the three months ended June 30, 2009. Accordingly, there are no results of operations for the three months ended September 30, 2010 or 2009.


Accounts and notes receivable	$	31,965
Inventories		11,181
Prepaid expenses and other current assets		5,272
Property, plant and equipment		27,235
Other intangible assets		42,100
Goodwill		47,941
Other assets		529
Accounts payable and accrued expenses		(19,911	)
Other long term liabilities		(1,051	)

Fair value of net assets acquired, excluding cash and cash equivalents		145,261
Cash and cash equivalents		7,218

Fair value of net assets acquired	$	152,479

~~Results~~The allocation of ~~operations~~purchase price is preliminary and is based on management’s judgments after evaluating several factors, including preliminary valuation assessments of tangible and intangible assets, and preliminary estimates of the ~~Vision~~fair ~~business~~value ~~included~~of ~~within~~liabilities ~~loss~~assumed. The final allocation of the purchase price to the assets acquired and liabilities assumed will be completed when the working capital adjustment is finalized, final valuations are completed and estimates of the fair value of liabilities assumed are finalized. The preliminary goodwill of $47.9 million represents future economic benefits expected to arise from ~~discontinued~~our ~~operations~~presence ~~were~~in asemerging ~~follows:~~markets, the assembled workforce acquired, and the extension of existing platforms. Approximately $39.0 million of goodwill recorded is expected to be deductible for tax purposes.

	For the nine months ended
	September 30,2010		September 30,2009
Net revenue		—	$	726
Loss from operations before income tax		—	$	(395	)

In connection with the allocation of purchase price to the assets acquired and liabilities assumed, we identified certain intangible assets with determinable lives, including estimates of completed technologies and customer relationships. The following table presents the intangible assets with definite lives acquired.

7. Restructuring Costs


	Acquisition Date Fair Value		Weighted average lives (years)
Intangible Assets with Determinable Lives:
Completed Technologies	$	25,500		6
Customer Relationships		16,600		7

	$	42,100

~~The~~See ~~Company’s~~Note ~~restructuring programs consist of the First Technology Automotive Plan~~8, ~~the~~“Goodwill ~~Airpax~~and ~~Plan~~Other ~~and~~Intangible ~~the~~Assets” ~~2008~~for ~~Plan.~~further ~~Each~~discussion of goodwill ~~these~~and ~~restructuring~~other ~~programs~~intangibles ~~is described in more detail below~~assets.

~~First~~Net ~~Technology~~revenue ~~Automotive~~for ~~Plan~~MSP included in our condensed consolidated statements of operations for the period ended March 31, 2011 was $25,949. We do not believe the first quarter earnings of MSP were significant to our consolidated earnings.

In December 2006, the Company acquired First Technology Automotive and Special Products from Honeywell International Inc. (“First Technology Automotive Acquisition”). In January 2007, the Company announced plans (“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 sites. Restructuring liabilities related to these actions consist primarily of exit and related severance costs. The actions described above affected 143 employees and were completed in 2008. The Company anticipates remaining payments to be made through 2014, due primarily to contractual lease-related obligations.

In connection with the First Technology Automotive Plan, the Company has incurred cumulative costs, excluding the impact of changes in foreign currency exchange rates, of $8,952, consisting of $4,287 in severance costs and $4,665 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 cumulative cost incurred, $3,333 and $2,413 have been allocated to the sensors and controls segments, respectively, and $3,206 has been allocated to “corporate and other”.

The following ~~tables outline~~table presents the ~~changes~~proforma tonet ~~the~~revenue ~~restructuring~~and ~~liabilities~~earnings ~~associated~~for ~~with~~ the ~~First~~following ~~Technology~~periods of ~~Automotive~~the ~~Plan~~combined ~~since~~entity ~~December 31,~~had ~~2009,~~we byacquired ~~type~~MSP ofon ~~liability~~January 1, ~~and~~2010. ~~segment:~~

	Severance			FacilityExit andOtherCosts			Total
	For the threemonths ended			For the threemonths ended
Balance as of December 31, 2009	$	63		$	2,532		$	2,595
	March 31,2011			March 31,2010
Purchase accounting adjustments		(63	)		(1,553	)		(1,616	)
Proforma Net Revenue	$	456,019		$	410,664
Other adjustments		—			(208	)		(208	)
Proforma Net (Loss)/Income	$	(7,312	)	$	27,189
Payments		—			(455	)		(455	)
Impact of changes in foreign currency exchange rates		—			(81	)		(81	)
Balance as of September 30, 2010	$	—		$	235		$	235

	Sensors			Controls			Corporateand 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		(208	)		—			—			(208	)
Payments		(455	)		—			—			(455	)
Impact of changes in foreign currency exchange rates		(81	)		—			—			(81	)
Balance as of September 30, 2010	$	235		$	—		$	—		$	235

Proforma net income for the three months ended March 31, 2010 includes nonrecurring adjustments of $2.5 million for transaction costs and $0.5 million related to the step up adjustment to record inventory at fair value which would have turned during the period.

~~During the nine months ended September 30, 2010, the Company revised its accrual related to severance by $63 and its accrual related to facility exit and other costs by $1,761~~7. ~~The~~Restructuring ~~reduction~~Costs 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 during the three months ended June 30, 2010. 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 $208. The Company does not expect to incur additional costs in the future.

Our restructuring programs consist of the MSP Plan, the 2008 Plan, the Airpax Plan and the FTAS Plan (plans as defined below). Each of these restructuring programs is described in more detail below.

InMSP ~~July 2007, the Company acquired Airpax Holdings, Inc. (“Airpax Acquisition”). In 2007, the Company announced plans (“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 consist primarily of exit and related severance costs. The actions described above affected 331 employees and were completed in 2009. The Company anticipates remaining payments to be made through 2011, due primarily to facility exit costs, tuition assistance and outplacement services.

InOn ~~connection~~January 28, ~~with~~2011, ~~the~~we ~~Airpax~~acquired ~~Plan,~~MSP ~~the~~from ~~Company~~Honeywell ~~has~~International ~~incurred~~Inc. ~~cumulative~~On ~~costs~~January 31, ~~excluding~~ ~~the~~2011, ~~impact~~we ofannounced ~~changes~~a inplan ~~foreign~~(“MSP ~~currency~~Plan”) ~~exchange~~to ~~rates,~~close ofthe ~~$6,494,~~manufacturing ~~consisting~~facilities ofin $5Freeport,~~073~~ ~~in severance costs~~ Illinois and $1Brno,~~421~~ inCzech ~~facility exit and other costs~~Republic. ~~These~~Restructuring ~~costs~~charges ~~have~~related ~~been~~to ~~recognized~~these inactions ~~the~~will ~~Company’s~~consist ~~segments~~primarily ~~in accordance with the degree~~ of ~~impact~~severance ~~experienced~~and byother ~~the segment~~costs. The ~~remaining~~actions ~~costs,~~are ~~not~~expected ~~allocable~~ to ~~the~~affect ~~Company’s~~210 ~~reportable~~employees ~~segments, have been shown within the “corporate~~ and ~~other” caption. Of the total~~ cost ~~incurred,~~approximately $5,~~026~~150, ~~has~~excluding ~~been~~the ~~allocated to~~impact ~~the~~of ~~controls~~changes ~~segment~~in ~~and~~foreign currency $1exchange rates,~~468~~ ~~has~~and ~~been~~will be allocated to ~~“corporate~~the ~~and~~sensors ~~other”~~segment. ~~The~~No ~~Company~~employees ~~has~~were ~~not~~severed ~~incurred~~in ~~additional~~the ~~costs~~first ~~related~~quarter toof ~~this~~2011. ~~plan~~We inanticipate ~~the~~these ~~three~~actions orwill ~~nine~~be ~~months~~completed ~~ended September 30, 2010~~ and ~~does~~payments ~~not~~will ~~expect~~be tomade ~~incur additional~~through ~~costs~~the inend ~~the~~of ~~future~~2012.

The following table outlines the changes to the restructuring liability associated with the MSP Plan since December 31, 2010:


	Severance		Total
Balance as of December 31, 2010	$	—	$	—
Charges		767		767

Balance as of March 31, 2011	$	767	$	767

2008 Plan

During fiscal years 2009 and 2008, in response to global economic conditions, we 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. As of March 31, 2011, 1,976 employees have been severed in connection with this plan, which will ultimately affect 1,982 employees. We anticipate that these actions will be completed during 2011. We do not expect to incur additional charges in the future. The liability remaining at March 31, 2011 is $286, due primarily to contractual obligations, for which we expect payments will be completed in 2014.

In connection with the 2008 Plan, we have incurred cumulative costs to date, excluding the impact of changes in foreign currency exchange rates, of $40,397, consisting of $28,200 in severance costs, $9,716 in pension-related costs and $2,481 in facility exit and other costs. Of the cumulative costs incurred, $1,750 and $4,567 has been allocated to the sensors and controls segments, respectively, and $34,080 has been allocated to corporate.

~~The~~Changes ~~following tables outline the changes~~ to the ~~restructuring~~2008 ~~liabilities~~Plan ~~associated~~liability ~~with~~during the ~~Airpax~~three ~~Plan~~months ~~since~~ended ~~December~~March 31, ~~2009,~~2011 primarily byconsist ~~type~~ of ~~liability~~severance ~~and~~payments ~~segment:~~of $321.

	Severance			FacilityExit andOtherCosts		Total
Balance as of December 31, 2009	$	173		$	526	$	699
Payments		(3	)		—		(3	)
Balance as of September 30, 2010	$	170		$	526	$	696

Airpax Plan

	Controls			Corporateand Other			Total
Balance as of December 31, 2009	$	696		$	3		$	699
Payments		(2	)		(1	)		(3	)
Balance as of September 30, 2010	$	694		$	2		$	696

In July 2007, we acquired Airpax Holdings, Inc. (“Airpax Acquisition”). In 2007 and 2008, we announced a series of plans (“Airpax Plan”) to close certain facilities, to relocate certain manufacturing lines to other sites, and to terminate certain employees. These actions affected 331 employees and were completed in 2009. The liability remaining at March 31, 2011 is $526, related to facility exit costs, for which we expect payments will be completed in 2011.

~~2008~~In connection with the Airpax Plan, we have incurred cumulative costs, excluding the impact of changes in foreign currency exchange rates, of $6,324, consisting of $4,903 in severance costs and $1,421 in facility exit and other costs. Of the cumulative costs incurred, $4,858 has been allocated to the controls segment and $1,466 has been allocated to corporate.

~~During~~In ~~fiscal years 2009 and 2008, in response to global economic conditions,~~ the ~~Company announced various actions (“2008 Plan”) to reduce the workforce in several business centers and~~three manufacturing facilities throughout the world and to move certain manufacturing operations to low-cost countries. During 2009 and 2008, the Company recognized charges totaling $41,334 primarily related to severance, pension curtailment, pension settlement and other related charges, and facility exit and other costs. During the nine months ended ~~September~~March 3031, ~~2010~~2011, ~~the~~we ~~Company~~reversed ~~revised~~an ~~its~~ accrual ~~related~~of to$170 ~~severance~~due ~~and facility exit and other costs. As a result, the Company recognized a net reduction~~ to ~~restructuring~~underutilized ~~expense~~tuition ~~of $673~~benefits. ~~The~~We ~~actions~~do ~~described~~not ~~above~~expect ~~are expected~~ to ~~cost~~incur ~~$40,747,~~additional ~~excluding~~costs ~~the impact of changes~~ in ~~foreign currency exchange rates. These actions affected 1,977 employees. The Company anticipates that these actions will be completed during 2011 and~~ the ~~remaining payments will be paid through 2014, due primarily to contractual obligations~~future.

InFTAS ~~connection with the 2008~~ Plan, the Company has incurred cumulative costs to date, excluding the impact of changes in foreign currency exchange rates, of $40,661, consisting of $28,464 in severance costs, $9,716 in pension-related costs and $2,481 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, $1,730 and $4,624 has been allocated to the sensors and controls segments, respectively, and $34,307 has been allocated to “corporate and other”.

In December 2006, we acquired First Technology Automotive and Special Products from Honeywell International Inc. (“First Technology Automotive Acquisition”). In January 2007, we announced plans (“FTAS Plan”) to close or downsize certain facilities and relocate the related manufacturing to other sites. These actions affected 143 employees and were completed in 2008. The liability remaining at March 31, 2011 is $144, due primarily to contractual lease-related obligations, for which we expect payments will be completed in 2014.

In connection with the FTAS Plan, we have incurred cumulative costs, excluding the impact of changes in foreign currency exchange rates, of $8,932, consisting of $4,287 in severance costs and $4,645 in facility exit and other costs. Of the cumulative costs incurred, $3,313 and $2,413 have been allocated to the sensors and controls segments, respectively, and $3,206 has been allocated to corporate.

We have not incurred additional costs related to this plan in the three months ended March 31, 2011 and do not expect to incur additional costs in the future.

Summary of Restructuring Programs

The following tables outline amounts recorded within the condensed consolidated statement of operations associated with our restructuring programs and other restructuring activities, including costs related to pension, and where these amounts were recognized for the three months ended March 31, 2011 and 2010. There were no restructuring costs recognized for the MSP Plan, Airpax Plan or FTAS Plan during the first quarter of 2010. The “other” restructuring expense of $995 during the three months ended March 31, 2010 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.


	For the three months ended March 31, 2011											For the three months ended March 31, 2010
	FTAS Plan		Airpax Plan			2008 Plan		MSP Plan		Total		2008 Plan			Other			Total
Restructuring	$	—	$	(170	)	$	50	$	767	$	647	$	(296	)	$	995		$	699
Currency translation (loss)/gain and other, net		11		—			2		1		14		(40	)		(13	)		(53	)

Total	$	11	$	(170	)	$	52	$	768	$	661	$	(336	)	$	982		$	646

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			FacilityExit andOtherCosts			Total
Balance as of December 31, 2009	$	2,964		$	109		$	3,073
Adjustments		(677	)		4			(673	)
Payments		(1,375	)		(24	)		(1,399	)
Impact of changes in foreign currency exchange rates		(21	)		(2	)		(23	)
Balance as of September 30, 2010	$	891		$	87		$	978
Employees terminated as of September 30, 2010		1,961

	Sensors			Controls			Corporateand other			Total
Balance as of December 31, 2009	$	131		$	115		$	2,827		$	3,073
Adjustments		(71	)		46			(648	)		(673	)
Payments		(32	)		1			(1,368	)		(1,399	)
Impact of changes in foreign currency exchange rates		(2	)		(3	)		(18	)		(23	)
Balance as of September 30, 2010	$	26		$	159		$	793		$	978

Summary of Restructuring Programs

The following tables show charges incurred in association with all of the Company’s restructuring programs and other restructuring activities as applicable, consisting primarily of severance, for the three and nine months ended September 30, 2010 and 2009, and where within the 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 $1,077 during the nine months ended September 30, 2010 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.

	For the three months endedSeptember 30, 2010												For the three months endedSeptember 30, 2009
	FTASPlan			2008Plan			Other			Total			FTASPlan		2008Plan			Other		Total
Restructuring	$	20		$	(33	)	$	—		$	(13	)	$	—	$	4,495		$	—	$	4,495
Currency translation loss / (gain) and other, net		(114	)		35			—			(79	)		—		139			—		139
Total	$	(94	)	$	2		$	—		$	(92	)	$	—	$	4,634		$	—	$	4,634
	For the nine months endedSeptember 30, 2010												For the nine months endedSeptember 30, 2009
	FTASPlan			2008Plan			Other			Total			FTASPlan		2008Plan			Other		Total
Restructuring	$	(208	)	$	(673	)	$	1,077		$	196		$	—	$	18,033		$	—	$	18,033
Currency translation loss / (gain) and other, net		(81	)		(23	)		(13	)		(117	)		—		(261	)		—		(261	)
Total	$	(289	)	$	(696	)	$	1,064		$	79		$	—	$	17,772		$	—	$	17,772

8. Goodwill and Other Intangible Assets

Goodwill

The following table outlines the changes in goodwill since December 31, ~~2009~~2010, 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
Balance as of December 31,2010	$	1,164,805		$	—	$	1,164,805		$	382,615		$	(18,466	)	$	364,149		$	1,547,420		$	(18,466	)	$	1,528,954
Purchase accounting adjustments		(1,553	)		—		(1,553	)		(63	)		—			(63	)		(1,616	)		—			(1,616	)
MSP Acquisition		47,941			—		47,941			—			—			—			47,941			—			47,941
Balance as of September 30, 2010	$	1,164,805		$	—	$	1,164,805		$	382,615		$	(18,466	)	$	364,149		$	1,547,420		$	(18,466	)	$	1,528,954
Balance as of March 31, 2011	$	1,212,746		$	—	$	1,212,746		$	382,615		$	(18,466	)	$	364,149		$	1,595,361		$	(18,466	)	$	1,576,895

The change in goodwill during the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 related ~~primarily~~ to aour ~~reduction in~~acquisition the Company’s restructuring liabilities associated with 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~~MSP. See Note 76, “~~Restructuring Costs~~Acquisitions” for further detail.

~~The~~We ~~Company evaluates~~evaluate 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 ~~nine~~ three months ended ~~September~~March 3031, ~~2010~~2011, no events or changes in circumstances occurred that would have triggered the need for an earlier impairment review.

Other Intangible Assets

Definite-lived intangible assets have been 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 ~~September~~March 3031, ~~2010~~ 2011 and December 31, ~~2009~~2010:

	Weighted-AverageLife (years)		~~September~~March 3031, ~~2010~~2011								December 31, ~~2009~~2010
			GrossCarryingAmount		AccumulatedAmortization		AccumulatedImpairment		NetCarryingValue		GrossCarryingAmount		AccumulatedAmortization		AccumulatedImpairment		NetCarryingValue
Completed technologies		1615	$	~~268~~293,~~170~~670	$	~~103~~115,~~183~~796	$	2,430	$	~~162~~175,~~557~~444	$	268,170	$	85109,~~233~~115	$	2,430	$	~~180~~156,~~507~~625
Customer relationships		1011		1,~~026~~043,~~840~~440		~~507~~561,~~009~~417		12,144		~~507~~469,~~687~~879		1,026,840		~~420~~535,~~811~~795		12,144		~~593~~478,~~885~~901
Non-compete agreements		67		23,400		710,~~807~~318		—		1513,~~593~~082		23,400		48,~~711~~825		—		1814,~~689~~575
Tradenames		10		720		~~414~~460		—		~~306~~260		720		~~338~~440		—		~~382~~280
Total		11	$	1,319,130	$	618,413	$	14,574	$	686,143	$	1,319,130	$	511,093	$	14,574	$	793,463
Capitalized software licenses		4		9,046		5,116		—		3,930		8,973		4,680		—		4,293
Total		12	$	1,370,276	$	693,107	$	14,574	$	662,595	$	1,328,103	$	658,855	$	14,574	$	654,674

InAmortization ~~addition,~~expense ~~other~~on definite -lived intangible assets ~~recognized~~and ~~on the condensed consolidated balance sheets include~~ capitalized software ~~licenses~~for ~~with~~the ~~gross~~three ~~carrying~~months ~~amounts of $8~~ended March 31,~~719~~ ~~and~~2011 ~~$6,849~~ and ~~net~~2010 ~~carrying~~were ~~amounts of $4,479 and $3,598~~ as offollows: ~~September 30, 2010 and December 31, 2009, respectively. The weighted-average life for the capitalized software in use was approximately 4 years.~~


	For the three months ended
	March 31, 2011		March 31, 2010
Definite-lived intangible assets	$	33,816	$	35,768
Capitalized software licenses		436		368

Total amortization expense	$	34,252	$	36,136

Amortization ~~expense on~~of acquisition-related definite-lived intangible assets ~~and~~is ~~capitalized~~estimated ~~software~~to be $102,815 for the ~~three~~remainder ~~and~~of ~~nine~~2011, ~~months~~$129,495 ~~ended~~in ~~September 30~~2012, ~~2010~~$116,017 ~~and~~in ~~2009~~2013, ~~were~~$102,788 asin ~~follows:~~2014 and $89,554 in 2015.

	For the three months ended				For the nine months ended
	September 30,2010		September 30,2009		September 30,2010		September 30,2009
Definite-lived intangible assets	$	35,784	$	37,684	$	107,320	$	113,761
Capitalized software licenses		311		410		989		1,299
Total amortization expense	$	36,095	$	38,094	$	108,309	$	115,060

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

Amortization of acquisition-related definite-lived intangible assets is estimated to be $35,762 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~~Our ~~Company’s~~ debt as of ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010 consisted of the following:

	Weighted- averageinterestrate for the ninemonths endedSeptember 30, 2010			September 30, 2010			December 31, 2009
	Weighted-averageinterestrate for the threemonths endedMarch 31, 2011			March 31, 2011			December 31, 2010
Senior secured term loan facility (denominated in U.S. dollars)		2.0805	%	$	~~909~~904,~~625~~875		$	~~916~~907,~~750~~250
Senior secured term loan facility (€381.5 million)		2.72	%		519,182			551,350
Senior secured term loan facility (€379.5 million)		3.03	%		534,772			504,741
Senior Notes (denominated in U.S. dollars)		8.00	%		201,181			~~340~~201,~~006~~181
Senior Subordinated Notes (€177.1 million)		9.00	%		~~241~~249,~~072~~608			~~254~~234,~~303~~978
Senior Subordinated Notes		11.25	%		—			196,483
Less: current portion					(15,108	)		(14,780	)
Less: current portion					(14,917	)		(15,206	)
Long-term debt, less current portion				$	1,875,328		$	1,833,370
Long-term debt, less current portion				$	1,856,143		$	2,243,686
Capital lease and other financing obligations		8.63	%	$	41,287		$	41,543
Capital lease and other financing obligations		8.54	%	$	42,624		$	41,934
Less: current portion					(1,973	)		(1,999	)
Less: current portion					(2,602	)		(1,933	)
Capital lease and other financing obligations, less current portion				$	39,314		$	39,544
Capital lease and other financing obligations, less current portion				$	40,022		$	40,001

Debt Maturities

The final maturity of the revolving credit facility is on April 27, 2012. The final maturity of the term loan facility is on April 27, 2013. The term loan must be repaid during the final year of the term loan facility in equal quarterly payments, subject to amortization of approximately 1% per year prior to such final year. The Senior Notes mature on May 1, 2014. The 9% Senior Subordinated Notes mature on May 1, 2016.

Extinguishment of Debt

On February 26, 2010, ~~the~~we ~~Company~~ announced the commencement of cash tender offers related to ~~its~~the 8% Senior Notes due 2014 (~~the~~ “~~Dollar~~Senior Notes”), ~~its~~our 9% Senior Subordinated Notes due 2016 and ~~its~~our 11.25% Senior Subordinated Notes due 2014 (the 9% and 11.25% Senior Subordinated Notes are together referred to as the “~~Euro~~Senior Subordinated Notes”). The cash tender offers settled during the three months ended March 31, 2010. The ~~aggregate~~ aggregate principal amount of the ~~Dollar~~Senior Notes validly tendered was $0.3 million, representing approximately 0.1% of the outstanding ~~Dollar~~Senior Notes. The aggregate principal amount of the ~~Euro~~Senior Subordinated Notes tendered was €71.9 million, ~~representing~~ representing approximately 22.8% of the outstanding ~~Euro~~Senior Subordinated Notes. ~~The~~We ~~Company~~ paid $~~102~~96.17 million in principal ($0.3 million for the ~~Dollar~~Senior Notes and €7571.9 million for the ~~Euro~~Senior Subordinated Notes), $5.4 million in premiums (€4.0 million on the Senior Subordinated Notes) and $2.2 million of accrued interest to settle the tender offers and retire the debt on March 29, 2010.

14In connection with these transactions, during the three months ended March 31, 2010, we recorded a loss in Currency translation (loss)/gain and other, net of $8.1 million including the write-off of debt issuance costs of $1.9 million.

OnIn addition, on April 1, 2010, ~~the~~ ~~Company~~we announced the redemption of all of ~~its~~the outstanding 11.25% Senior Subordinated Notes due 2014 at a redemption price equal to 105.625% of the principal amount, and $138.6 million of ~~its~~the outstanding 8% Senior Notes ~~due 2014~~ at a redemption price equal to 104.000% of the principal amount. ~~The~~We ~~Company~~ paid $225.0 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 nine months ended September 30, 2010, the Company recorded losses in Currency translation (loss) / gain and other, net of $23.5 million including the write-off of debt issuance costs of $6.8 million.

10. Income Taxes

~~The~~We ~~Company~~ recorded tax provisions for the three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009 of $9,997 and $16,648, respectively, and for the nine months ended September 30,~~ 2010 ~~and 2009~~ of $3524,~~996~~554 and $3511,~~165~~196, respectively. Our ~~The Company’s~~ tax provision consisted of current tax expense, which related primarily to ~~the~~our ~~Company’s~~ profitable operations in foreign tax jurisdictions, and deferred tax expense, which related primarily to the amortization of tax deductible goodwill and the use of net operating losses.

During the three months ended September 30, 2010, the Company recognized a tax benefit of $3,347 in connection with the reduction of liabilities for unrecognized tax benefits. This amount includes a decrease of $3,903 related to the lapse of the applicable statute of limitations related to certain liabilities assumed in acquisitions that were fully indemnified by the sellers. During the three months ended September 30, 2010, the Company also reversed the related indemnification receivable in Currency translation (loss) / gain and other, net in the condensed consolidated statements of operations.

11. Pension and Other Post-Retirement Benefits

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

The components of net periodic benefit cost associated with ~~the~~our ~~Company’s~~ defined benefit and retiree healthcare plans for the three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010 were as follows:

	U.S. Plans										Non-U.S. Plans
	Defined Benefit						Retiree Healthcare				Defined Benefit						Total
	2010			2009			2010		2009		2010			2009
	2011			2010			2011		2010		2011			2010			2011			2010
Service cost	$	~~477~~570		$	~~285~~538		$	6563	$	7065	$	~~605~~619		$	~~603~~532		$	1,252		$	1,135
Interest cost		~~546~~671			~~740~~720			~~150~~149		150		~~230~~253			~~262~~233			1,073			1,103
Expected return on plan assets		(~~517~~677	)		(~~650~~625	)		—		—		(~~193~~188	)		(185	)		(865	)		(810	)
Amortization of net (gain) / loss		(35	)		5			2		—		37			135
Amortization of net loss		103			140			4		3		91			31			198			174
Amortization of prior service cost		—			—			—		—		(43	)		~~212~~—			3			—
Loss on settlement		—			1,283			—		—		—			1,893
Gain on curtailment		—			—			—		—		—			(111	)		—			(111	)
Loss on curtailment		—			—			—		—		—			5
Net periodic benefit cost	$	667		$	773		$	216	$	218	$	778		$	500		$	1,661		$	1,491
Net periodic benefit cost	$	471		$	1,663		$	217	$	220	$	675		$	2,925

15During the three months ended March 31, 2010, we terminated 7 employees at one of our subsidiaries. In connection with this event we recognized a curtailment gain of $111.

~~Table~~We intend to contribute amounts to the U.S. qualified defined benefit plan in order to meet the minimum funding requirements of ~~Contents~~federal laws and regulations, plus additional amounts as we deem appropriate. During the three months ended March 31, 2011, we made contributions of $8,600 to the U.S. qualified defined benefit plan. Including these contributions, we expect to contribute approximately $18,500 to the U.S. qualified defined benefit plan during the twelve months ending December 31, 2011.

~~The~~Funding ~~components~~requirements offor ~~net periodic~~the non-U.S. defined benefit ~~cost~~plans ~~associated~~are ~~with~~determined ~~the~~on ~~Company’s~~an ~~defined~~individual ~~benefit~~country and ~~retiree~~plan ~~healthcare~~basis ~~plans~~and ~~for~~are subject to local country practices and market circumstances. During the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011, ~~and~~we ~~2009~~made ~~were~~contributions asof ~~follows:~~$911 to the non-U.S. defined benefit plans. Including these contributions, we expect to contribute approximately $1,698 to the non-U.S. defined benefit plans during the twelve months ending December 31, 2011.

	U.S. Plans										Non-U.S. Plans
	Defined Benefit						Retiree Healthcare				Defined Benefit
	2010			2009			2010		2009		2010			2009
Service cost	$	1,553		$	1,505		$	195	$	210	$	1,729		$	2,157
Interest cost		1,986			2,320			450		450		698			770
Expected return on plan assets		(1,767	)		(1,950	)		—		—		(562	)		(593	)
Amortization of net loss		245			215			8		—		95			529
Amortization of prior service cost		—			—			—		—		5			619
Loss on settlement		—			1,283			—		—		—			2,409
(Gain) / loss on curtailment		—			—			—		—		(111	)		391
Net periodic benefit cost	$	2,017		$	3,373		$	653	$	660	$	1,854		$	6,282

During the three months ended March 31, 2010, the Company terminated 7 employees at one of its subsidiaries. In connection with this event the Company recognized a curtailment gain of $111. There was no related activity in the six months ended September 30, 2010.

During the three and nine months ended September 30, 2009, the Company terminated 666 and 1,452 employees, respectively, at several of its subsidiaries in connection with the 2008 Plan (see Note 7, “Restructuring Costs”, for further discussion). In connection with these events, during the three and nine months ended September 30, 2009, the Company recognized settlement losses of $3,176 and $3,692, respectively, and curtailment losses of $5 and $391, respectively.

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 additional amounts as the Company deems appropriate. During the nine months ended September 30, 2010, the Company made contributions of $2,610 to the U.S. qualified defined benefit plan. The Company expects to contribute approximately $3,410 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 nine months ended September 30, 2010, the Company made contributions of $2,154 to the non-U.S. defined benefit plans. The Company expects to contribute approximately $2,596 to the non-U.S. defined benefit plans during the twelve months ending December 31, 2010.

12. Accrued Expenses and Other Current Liabilities

Accrued interest associated with ~~the~~our ~~Company’s~~ outstanding debt is included as a component of accrued expenses and ~~other~~ other current liabilities in the accompanying condensed consolidated balance sheets. As of ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010, accrued interest totaled $2322,~~746~~807 and $2713,~~595~~533, respectively.

~~13.~~14 ~~Share-Based Payment Plans~~

In September 2006, the Parent adopted the First Amended and Restated Sensata Technologies Holding B.V. 2006 Management Option Plan (“Stock Option Plan”) and the First Amended and Restated Sensata Technologies Holding B.V. 2006 Management Securities Purchase Plan. During the three months ended September 30, 2009, the Parent amended the Stock Option Plan (“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. Stock awards granted under these plans are in the equity of the Parent.

~~In connection with the completion of the Parent’s IPO in March 2010, the Sensata Technologies Holding N~~13.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 longShare-~~term~~Based ~~growth~~Payment ~~and~~Plans profitability by providing the Parent’s and Company’s eligible present and future directors, officers, employees, consultants and advisors with incentives to contribute to and participate in the Parent’s and Company’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 ordinary shares available under the 2010 Equity Plan is 5,000,000 ordinary shares.

In September 2006, our Parent adopted the First Amended and Restated Sensata Technologies Holding B.V. 2006 Management Option Plan (“2006 Option Plan”) and the First Amended and Restated Sensata Technologies Holding B.V. 2006 Management Securities Purchase Plan.

In connection with the completion of our Parent’s IPO in March 2010, 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 our Parent’s ordinary shares and acquire a proprietary interest in them. The purpose of the 2010 Equity Plan is to promote long-term growth and profitability by providing our eligible present and future directors, officers, employees, consultants and advisors with incentives to contribute to and participate in our success. There are a maximum of 500,000 ordinary shares available for sale under the 2010 Stock Purchase Plan. There are a maximum of 5,000,000 ordinary shares available under the 2010 Equity Plan.

Stock Options

AThe table below presents a summary of stock option activity for the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011. ~~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
Outstanding as of December 31, 2010		3,543,003		$	11.22		7.03	$	66,939
Granted		~~330~~78,~~900~~700			1933.6802
Forfeited and canceled		(20,000	)		7.50
Forfeited		(41,500	)		11.75
Exercised		(~~852~~439,~~971~~803	)		7.0924
Balance as of September 30, 2010		4,449,645		$	10.12		6.91	$	43,018
Outstanding as of March 31, 2011		3,140,400			12.31		7.03	$	70,397
Vested and exercisable as of September 30, 2010		2,271,091		$	7.73		6.00	$	27,313
Vested and exercisable as of March 31, 2011		1,037,509			8.55		5.84	$	27,165
Vested and expected to vest as of September 30, 2010(1)		4,288,011		$	10.03		6.88	$	41,852
Vested and expected to vest as of March 31, 2011(1)		3,017,556			12.21		6.98	$	66,204

	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
Outstanding as of December 31, 2010		6,545,391		$	7.51		5.69	$	147,905
Granted		—			—
Forfeited		(40,000	)		7.50
Forfeited and canceled		(40,000	)		7.50
Exercised		(446,270	)		7.06
Exercised		(100,745	)		7.29
Outstanding as of March 31, 2011		6,059,121			7.55		5.44	$	164,707
Balance as of September 30, 2010		7,792,687		$	7.45		5.90	$	95,907
Vested and exercisable as of March 31, 2011		4,374,383			7.09		5.29	$	120,904
Vested and exercisable as of September 30, 2010		5,737,377		$	7.05		5.73	$	72,942
Vested and expected to vest as of March 31, 2011(1)		6,057,359			7.55		5.44	$	164,663
Vested and expected to vest as of September 30, 2010(1)		7,777,951		$	7.45		5.90	$	95,758

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

1715

AThe table below presents a summary of the status of nonvested options as of ~~September~~March 3031, 2011 ~~2010~~ and of the changes during the ~~nine~~three 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-AverageGrant-Date FairValue Per Share			~~Weighted-Average Grant-Date FairValue Per Share~~
	Tranche 1			Tranche 22and 3			Tranche 31			Tranche 12and 3		~~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
Nonvested as of December 31, 2010		2,161,379			1,916,114		$	6.14		$	3.93
Granted		~~330~~78,~~900~~700			—		$	—10.70		$	~~6.66~~—		—		—
Forfeited		(2041,~~000~~500	)		(2040,000	)	$	~~(20,000~~6.26	)	$	20.6894	$	~~0.92~~	$	~~0.48~~
Vested		(~~928~~95,~~590~~688	)		(2191,~~919,061~~376	)	$	(2~~,919,061~~.80	)	$	31.9908	$	~~1.71~~	$	~~1.22~~
Nonvested as of September 30, 2010		2,178,554			1,144,322			910,988		$	5.95	$	2.69	$	1.19
Nonvested as of March 31, 2011		2,102,891			1,684,738		$	6.46		$	2.20

As of ~~September~~March 3031, ~~2010~~2011, there were ~~217~~398,~~088~~845 shares available for grant under the ~~Stock Option~~2006 Option Plan and 4,~~638~~492,~~500~~800 shares available for grant under the 2010 Equity Plan.

Tranche 1 Options: ~~The majority of~~ Tranche 1 options ~~vest~~granted under ~~over~~the a2006 ~~period~~Option ofPlan 5vest ~~years (~~40% ~~vesting~~on ~~year~~the 2,second ~~60%~~anniversary ~~vesting~~of ~~year~~the 3,grant 80and 20% ~~vesting~~per year 4thereafter. ~~and~~Vesting ~~100%~~occurs ~~vesting year 5)~~ provided the participant of the option plan is continuously employed by ~~the~~us, our Parent or any of ~~its~~our subsidiaries, and vest immediately upon a change-in-control transaction under which (i) the investor group disposes of or sells more than 50% of the total voting power or economic interest in ~~the~~our Parent to one or more independent third parties and (ii) disposes of or sells all or substantially all of our Parent’s assets. Tranche 1 options granted into ~~September~~employees ~~2009~~under the 2010 Equity Plan have the same vesting provisions as other Tranche 1 awards, except that they vest 2025% per year over ~~five~~four years from the date of grant., ~~Vesting~~and ~~provisions~~they ~~for~~do ~~awards~~not ~~granted~~include the change-in-control provisions. Options granted to our Parent’s directors under the 2010 ~~are~~Equity ~~discussed~~Plan ~~further~~vest ~~below~~after one year. ~~The Company~~We ~~recognizes~~recognize compensation expense for Tranche 1 awards on a straight-line basis over the requisite service period, which is assumed to be the same as the vesting period.

~~The~~ Our Parent granted ~~154~~78,~~800~~ 700 Tranche 1 options under the 2010 Equity Plan in the three months ended ~~June~~March 3031, ~~2010~~2011 to directors of ~~the~~Sensata ~~Parent~~Technologies Holding N.V. These options vest after one year. ~~There~~of ~~are~~service with no performance conditions ~~related to these options~~. The grant date fair value per share of these options was $710.0070.

~~The~~Under ~~Parent~~the ~~granted~~fair ~~176,100~~value ~~Tranche~~recognition 1provisions ~~options~~of ~~under~~Accounting ~~the~~Standards ~~2010~~Codification (“ASC”) ~~Equity~~Topic ~~Plan in~~718, ~~the~~Compensation—Stock ~~three~~Compensation, ~~months~~we ~~ended~~recognize ~~September 30~~share-based compensation net of estimated forfeitures and, ~~2010~~therefore, only recognize compensation cost for those shares expected to ~~certain~~vest ~~employees~~over the service period of the ~~Company~~award. ~~These~~We ~~options~~have ~~vest~~estimated ~~over~~our aforfeiture ~~period~~rates based on historical experience. Most of ~~four~~our ~~years~~Parent’s atawards 25assume a forfeiture rate of 11% ~~per~~ ~~year~~based upon the historical actual and estimated rate of forfeitures by plan participants. There ~~are~~ was no ~~performance~~adjustment ~~conditions~~to ~~related~~the toestimated ~~these~~forfeiture ~~options~~rate during the three months ended March 31, 2011. ~~The~~However, ~~grant~~awards ~~date~~issued ~~fair~~to ~~value~~our ~~per~~Parent’s directors in 2010 and 2011 were estimated to have a 0% forfeiture rate, as the service period is only one ~~share~~year ofand ~~these~~our ~~options~~Parent’s ~~was~~directors $6are not expected to terminate in that period.~~37.~~

~~Under~~Tranche ~~the~~2 ~~fair~~and ~~value~~3 ~~recognition~~Options: ~~provisions of ASC 718, Compensation—Stock~~These ~~Compensation~~options ~~(“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~~40% ~~the service period of the award. The Company has estimated its forfeitures based~~ on ~~historical experience. During~~ the ~~three~~second ~~months~~anniversary ~~ended~~of ~~March 31, 2009,~~ the ~~Company~~grant ~~revised~~and ~~its forfeiture rate from 5~~20% toper ~~11%~~year ~~based~~thereafter and upon the ~~actual~~completion ~~rate~~ of ~~forfeitures by plan participants. As~~ a ~~result~~ ofliquidity ~~this~~event ~~revision,~~that ~~the~~results ~~Company~~in ~~recorded~~specified areturns reduction to its non-cash compensation expense of $335 during the nine months ended September 30, 2009. There was no adjustment to the estimated forfeiture rate during the three and nine months ended September 30, 2010. The remainder of the unrecognized compensation expense of $10,437 will be recognized on ~~a straight-line basis over~~ the ~~remaining~~Sponsors’ ~~requisite service period, through 2014~~investment.

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 Topic 805, Business Combinations, and no share-based compensation expense was recognized for these awards. These conditions became probable of occurring during the three months ended March 31, 2010, and were satisfied upon the completion of our Parent’s IPO in March 2010. As a result, during the three months ended March 31, 2010, we 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.

Tranche 2 and 3 Options: Tranche 2 and 3 options vest based on the passage of time (over 5 years with 40% vesting year 2, 60% vesting year 3, 80% vesting year 4 and 100% vesting year 5, similar to a majority of Tranche 1 awards) 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, 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.

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 during the three months ended March 31, 2010, and were satisfied upon the completion of the Parent’s IPO in March 2010. As a result, during 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 $1,809 will be recognized on an accelerated basis over the remaining requisite service period, through 2013.

Restricted Securities

The ~~Parent~~table ~~granted~~below ~~30,600~~presents ~~restricted~~a ~~securities~~summary ~~to certain~~ of the ~~employees~~unvested ofsecurities ~~the~~activity ~~Company under the 2010 Equity Plan~~ during the three months ended ~~September~~March 3031, ~~2010~~2011. These restricted securities vest on September 1, 2013. The number of shares that vest will depend on the extent to which certain performance criteria are met and could range between 0% and 150% of the amount granted. As of September 30, 2010, the Company considers it probable that 100% of the awards will vest. The grant date fair value of these securities was $18.88.

A summary of the unvested Parent-issued restricted securities activity during the nine months ended September 30, 2010 is presented below:


	Ordinary Shares			Weighted- Average Grant Date Fair Value
Unvested balance as of December 31, 2010		399,698		$	16.47
Forfeited		(7,740	)		17.87

Unvested balance as of March 31, 2011		391,958		$	16.44

	Ordinary Shares			Weighted-Average GrantDate Fair Value
Unvested balance as of December 31, 2009		433,018		$	16.20
Granted		30,600		$	18.88
Forfeited		—
Vested		(74,320	)	$	17.48
Unvested balance as of September 30, 2010		389,298		$	16.17

Unrecognized compensation expense of $2,382 will be recognized on a straight-line basis over the remaining requisite period of each grant, through 2014.

Share-Based Compensation Expense

The table below presents non-cash compensation expense related to ~~the~~our Parent’s options and restricted securities awards within selling, general and administrative (“SG&A”) expense in the condensed consolidated statements of operations during the identified periods.

For the three months ended

~~For the nine months ended~~

September 30,2010

September 30,2009

September 30,2010

September 30,2009

March 31,2011

March 31,2010

Tranche 1 options

1,~~238~~510

~~480~~932

~~3,302~~

~~1,135~~

Tranche 2 and 3 options

~~371~~357

—19,022

~~19,956~~

—

Restricted securities

~~181~~169

—110

~~401~~

Total share-based compensation expense

12,~~790~~036

~~480~~20,064

~~23,659~~

~~1,174~~

Unrecognized Compensation Expense

The table below presents unrecognized compensation expense as of March 31, 2011 for each class of award, and the remaining expected term for this expense to be recognized.


	Unrecognized Compensation Expense		Expected Recognition (years)
Tranche 1 options	$	9,076		2.03
Tranche 2 and 3 options		1,177		0.98
Restricted securities		2,159		3.25

Total unrecognized compensation expense	$	12,412

14. Related Party Transactions

The table below presents related party transactions recognized in SG&A expense in the condensed consolidated statements of operations during the identified periods.

For the three months ended

~~For the nine months ended~~

September 30,2010

September 30,2009

September 30,2010

September 30,2009

March 31,2011

March 31,2010

Sponsors’ fee for Advisory Agreement

—

~~1,000~~833

~~833~~

~~3,000~~

Advisory Agreement termination fee

—

—22,352

~~22,352~~

—

Services provided by Parent

~~1,372~~987

—

~~3,404~~

—

Legal services provided by a shareholder of Parent

~~1,687~~231

~~100~~40

~~1,807~~

~~862~~

Total included in SG&A expense

31,~~059~~218

123,~~100~~225

~~28,396~~

~~3,862~~

Advisory Agreement

In connection with the 2006 Acquisition, ~~the~~we ~~Company~~ entered into an advisory agreement with the Sponsors for ongoing consulting, management advisory and other services (the “Advisory Agreement”). In consideration for consulting and management advisory services, the Advisory Agreement required ~~the~~us ~~Company~~ to pay each Sponsor a quarterly advisory fee equal to the product of $1,000 times such Sponsors’ Fee Allocation Percentage as defined in the Advisory Agreement. This fee was recorded in ~~selling,~~SG&A ~~general and administrative~~ expense as shown in the above table.

AtIn addition, in the ~~Sponsors’~~event ~~option,~~of services ~~the~~provided ~~Advisory~~in ~~Agreement~~connection ~~was~~with ~~terminated~~any infuture ~~March~~acquisition, ~~2010~~disposition, ator ~~which~~financing ~~time~~transactions involving us, the ~~Company~~Advisory ~~recognized~~Agreement arequired ~~charge~~us ~~for~~to apay ~~termination~~the Sponsors an aggregate fee asof ~~required~~one bypercent of the ~~Advisory~~gross ~~Agreement~~transaction ~~totaling $22,352,~~value of ~~which~~each ~~$22,185~~such transaction. ~~was~~In ~~paid~~connection onwith the ~~Company~~completion of our Parent’s ~~behalf~~IPO byduring the ~~Parent.~~first ~~This~~quarter ~~termination~~of ~~fee~~2010, ~~was~~our ~~recorded~~Parent inpaid ~~SG&A~~the ~~expense~~Sponsors asa ~~shown~~transaction infee ~~the~~of ~~above~~$4,737 ~~table~~on our behalf.

~~Administrative~~At ~~Services~~the Sponsors’ option, the Advisory Agreement was terminated in March 2010, at which time we recognized a charge for a termination fee paid to the Sponsors as required by the Advisory Agreement totaling $22,352, of which $22,185 was paid on our behalf by our Parent. This termination fee was recorded in SG&A expense as shown in the above table.

In 2009, the Parent entered into a fee for service arrangement with Sensata Investment Co. for ongoing consulting, management advisory and other services (the “Administrative Services Agreement”), effective January 1, 2008. During the nine months ended September 30, 2010 and 2009, the Parent paid $244 and $133, respectively, related to the Administrative Services Agreement. There were no payments made during the three months ended September 30, 2010 and 2009.

Services Provided by Parent

~~The~~We ~~Company~~recognize ~~recognizes~~ expense for certain activities performed by ~~the~~our Parent for ~~the~~our benefit ~~of the Company~~. These amounts are included in ~~due~~Due to ~~parent~~Parent until paid. ~~The~~We ~~Company~~record ~~records~~ this expense in ~~selling,~~ ~~general~~SG&A ~~and administrative~~ expense as shown in the above table.

Other Arrangements with the Investor Group and its Affiliates

~~The~~We ~~Company~~utilize ~~utilizes~~ one of ~~Sensata Investment Company~~ SCA’s shareholders for legal services. Expenses related to such legal services are recorded in ~~selling,~~SG&A ~~general and administrative~~ expense as shown in the above table. During the three ~~and nine~~ months ended ~~September 30~~March 31, ~~2010,~~2011 ~~the~~we ~~Parent~~ made payments of $2,478 to this shareholder. ofIn ~~$349~~addition, ~~and~~during 2010, our Parent made additional payments of $2,~~949~~600, ~~respectively.~~in ~~During~~connection ~~the~~with ~~nine~~its ~~months~~IPO, ~~ended~~which ~~September~~were ~~30,~~charged against ~~2009,~~ the ~~Parent~~gross ~~made~~proceeds ~~payments~~of toits ~~this~~offering. ~~shareholder~~As ~~totaling~~of $1March 31,~~548.~~ ~~There~~2011 ~~were~~and noDecember ~~payments~~31, ~~made~~2010, ~~during~~we ~~the~~recorded ~~three~~an ~~months~~amount ~~ended~~due ~~September~~to 30this shareholder of $34 and $2, ~~2009~~281, respectively.

During 2009, certain executive officers and other members of our 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~~ our 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~~we ~~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 September 30, 2010,~~ ~~management held no investment in the partnership.~~

aggregate consideration of approximately €45,700, including accrued and unpaid interest, in exchange for the tendered notes. As of March 31, 2011, the partnership did not hold any of our Senior Notes or Senior Subordinated Notes.

15. Commitments and Contingencies

Off-Balance Sheet Commitments

~~The~~We ~~Company~~execute ~~executes~~ contracts involving indemnifications standard in the relevant industry and indemnifications specific to certain transactions such as the 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~~ Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third-party claim. Historically, ~~the~~we ~~Company~~have ~~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.

In May 2009, Sensata Technologies, Inc., an indirect and wholly-owned subsidiary of the Company, negotiated a transition production agreement with Engineered Materials Solutions, LLC (“EMS”) to ensure the continuation of supply of certain materials. EMS is a wholly-owned subsidiary of Wickeder Westfalenstahl Gmbh. The Electrical Contact Systems, or “ECS,” business unit of EMS was the primary supplier to the Company for electrical contacts used in the manufacturing of certain of the Company’s controls products. The Company entered into the transition production agreement in order to support the ECS business unit, which was at risk of closing. The Company extended the transition production agreement with EMS on February 4, 2010, and it expired on May 31, 2010. The Company has transitioned to alternative suppliers for these materials. The letter of credit issued to the consignor under the silver consignment agreement was cancelled in August 2010. The Company settled the agreements with the consignor and EMS during the three months ended September 30, 2010.

Indemnifications Provided As Part of Contracts and Agreements

~~The~~We ~~Company~~are ~~is a~~ party to the following types of agreements pursuant to which itwe may be obligated to indemnify ~~the~~a ~~other~~third party with respect to certain matters:

Sponsors: On the closing date of the 2006 Acquisition, ~~the Company~~ we entered into customary indemnification agreements with the Sponsors pursuant to which ~~the~~we ~~Company~~indemnify ~~indemnifies~~them ~~the Sponsors~~ against certain liabilities arising out of performance of a consulting agreement between ~~the~~us ~~Company~~ and each of the Sponsors and certain other claims and liabilities, including liabilities arising out of financing arrangements and securities offerings. At the Sponsors’ option, this agreement was terminated in March 2010. See Note 14, “Related Party Transactions” for further discussion.

21Officers and Directors: Our corporate by-laws require that, except to the extent expressly prohibited by law, we must indemnify our 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 us and our subsidiaries. Although the by-laws provide no limit on the amount of indemnification, we may have recourse against our insurance carriers for certain payments made by us.

~~Table~~In addition, we have a liability insurance policy which insures directors and officers against the cost of ~~Contents~~defense, settlement or payment of claims and judgments under some circumstances. Certain indemnification payments may not be covered under our directors’ and officers’ insurance coverage.

~~Officers~~Intellectual ~~and Directors:~~Property ~~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~~Product ~~against~~Liability ~~judgments,~~Indemnification: ~~fines,~~We ~~penalties~~routinely ~~and~~sell ~~amounts~~products ~~paid in settlement, including legal fees and all appeals incurred in connection~~ with ~~civil~~a orlimited ~~criminal~~intellectual ~~action~~property ~~or proceedings, as it relates to their services to Sensata~~ and ~~its~~product ~~subsidiaries.~~liability ~~Although~~indemnification ~~the~~included ~~by-laws~~in ~~provide no limit on~~ the ~~amount~~terms of ~~indemnification~~sale. Historically, ~~the Company~~we ~~may~~ have ~~recourse~~had ~~against~~only ~~its~~minimal ~~insurance~~and ~~carriers~~infrequent ~~for~~losses ~~certain~~associated ~~payments~~with ~~made~~these ~~by the Company~~indemnities. ~~However~~Consequently, ~~certain~~any ~~indemnification~~future ~~payments~~liabilities ~~may~~resulting ~~not~~from bethese ~~covered~~indemnities ~~under~~cannot ~~the~~reasonably ~~Company’s~~be ~~directors’~~estimated ~~and~~or ~~officers’ insurance coverage~~accrued.

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~~Our ~~Company’s~~ standard terms of sale provide ~~its~~our 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 ~~the~~we ship ~~Company ships~~ the product to aour customer or for a period of twelve months after the customer resells ~~the~~our product, whichever comes first. ~~The~~We ~~Company~~do ~~does~~ not offer separately priced extended warranty or product maintenance contracts. ~~The~~Our ~~Company’s~~ liability associated with this warranty is, at ~~the Company’s~~our option, to repair the product, replace the product or provide the customer with a credit. ~~The~~We ~~Company~~ also ~~sells~~sell products to customers under negotiated agreements or where ~~the~~we ~~Company~~have ~~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.

In19 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.

TheTable Company’sof 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. Contents

purchase. In ~~some~~these instances, ~~customers~~we may make ~~claims~~additional warranties, ~~and~~for inlonger ~~some~~durations ~~cases~~consistent ~~file~~with ~~lawsuits~~differing end-market practices, ~~for~~and ~~costs~~where ~~they~~our ~~incurred~~liability oris ~~other~~not ~~damages~~limited. ~~Any~~Finally, ~~potentially~~many sales ~~material~~take ~~liabilities~~place ~~associated~~in ~~with~~situations ~~these~~where ~~claims~~commercial ~~are~~or ~~discussed~~civil incodes, ~~this~~or ~~Note~~other ~~under~~laws, ~~the~~would ~~heading~~imply ~~Legal~~various ~~Proceedings~~warranties and ~~Claims~~restrict limitations on liability.

In the event a warranty claim based on defective materials exists, we may be able to recover some of the cost of the claim from the vendor from whom the material was purchased. Our ability to recover some of the costs will depend on the terms and conditions to which we agreed when the material was purchased. When a warranty claim is made, the only collateral available to us is the return of the inventory from the customer making the warranty claim. Historically, when customers make a warranty claim, we either replace the product or provide the customer with a credit. We generally do not rework the returned product.

Our 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 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 and Claims.

Environmental Remediation Liabilities

~~The~~Our ~~Company’s~~ operations and facilities are subject to U.S. and foreign laws and regulations governing the protection of the environment and ~~the~~our ~~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. We 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 our facilities. Potentially significant expenditures could be required in order to comply with environmental laws that may be adopted or imposed in the future. We are, however, not aware of any threatened or pending material environmental investigations, lawsuits or claims involving us or our operations.

22In 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 50 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. Our 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, (“Acquisition Agreement”) Texas Instruments retained these liabilities (subject to the limitations set forth in that agreement) and has agreed to indemnify us 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, we do not anticipate incurring any non-reimbursable expenses related to the matters described above. No amounts have been accrued or recorded as receivables for these matters as of March 31, 2011 or December 31, 2010.

Control Devices, Inc. (“CDI”), a wholly-owned subsidiary of Sensata Technologies, Inc. (“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 and 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

~~sites.~~the ~~The~~property ~~Company~~and ~~could~~provide ~~incur~~access ~~substantial~~to ~~costs,~~GTE. ~~including~~We ~~cleanup~~do ~~costs,~~not ~~fines~~expect orthe ~~civil~~costs orto ~~criminal~~comply ~~sanctions,~~with orthe ~~third~~post-~~party~~closure ~~property~~license ~~damage~~to orbe ~~personal~~material. ~~injury~~As ~~claims~~a related but separate matter, inpursuant to the ~~event~~terms of an ~~violations~~Environmental orAgreement ~~liabilities~~dated ~~under~~July 6, ~~these~~1994, ~~laws~~GTE retained liability and ~~regulations,~~agreed orto ~~non-compliance~~indemnify ~~with~~CDI ~~the~~for ~~environmental~~certain ~~permits~~liabilities ~~required~~related atto the ~~Company’s~~soil ~~facilities.~~and ~~Potentially~~groundwater ~~significant~~contamination ~~expenditures~~from ~~could~~the besurface ~~required~~impoundment inand ~~order~~an toout-of-service ~~comply~~leach ~~with~~field ~~environmental~~at ~~laws~~the ~~that~~Standish, ~~may~~Maine befacility, ~~adopted~~and orCDI ~~imposed~~and inGTE have certain obligations related to the ~~future~~property and each other. The ~~Company~~site is, ~~however,~~contaminated ~~not~~primarily ~~aware~~with ofchlorinated ~~any~~solvents. ~~threatened~~We ordo ~~pending~~not ~~material~~expect ~~environmental~~the ~~investigations,~~remaining ~~lawsuits~~cost orassociated ~~claims~~with ~~involving~~addressing the ~~Company~~soil orand groundwater ~~its~~contamination ~~operations~~to be material.

In 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 their 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 September 30, 2010.

Control Devices, Inc. (“CDI”), a wholly-owned subsidiary of Sensata Technologies, Inc. (“STI”), the Company’s principal U.S. operating subsidiary, acquired through its 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.

Legal Proceedings and Claims

~~The~~We ~~Company~~account ~~accounts~~ for litigation and claims losses in accordance with ASC Topic 450, Contingencies, (“ASC 450”). ~~Loss~~ASC ~~contingencies~~450 loss contingency provisions are recorded ~~when~~for probable and estimable, losses at ~~the~~our ~~Company’s~~ best estimate of a loss, or when a best estimate cannot be made, at ~~the~~ ~~low~~our ~~end~~estimate of the ~~Company’s~~minimum ~~estimate~~loss. ofThese ~~the~~estimates ~~range~~are ofoften ~~possible~~developed ~~outcomes~~prior ~~for~~to knowing the ~~contingency.~~amount of ~~The~~the ~~Company~~ultimate ~~has~~loss. ~~recorded~~These ~~litigation~~estimates ~~reserves~~are ofrefined ~~approximately~~each ~~$6.8~~accounting ~~million~~period as ofadditional ~~September 30~~information becomes known. Accordingly, ~~2010~~we ~~for~~are ~~various~~often ~~litigation~~initially unable to develop a best estimate of loss and ~~claims~~therefore the minimum amount, ~~including~~which could be zero, is recorded. As information becomes known, either the ~~matters~~minimum ~~described~~loss amount is increased, resulting in ~~the~~additional ~~Annual~~loss ~~Report~~provisions, onor ~~Form~~a ~~10-K~~best ~~for~~estimate ~~the~~can ~~year~~be ~~ended~~made ~~December~~resulting ~~31,~~in ~~2009~~additional loss provisions. Occasionally, ~~and~~a asbest ~~updated~~estimate ~~below~~amount is changed to a lower amount when events result in an expectation of a more favorable outcome than previously expected.

~~The Company~~We isare regularly involved in a number of claims and litigation matters in the ordinary course of business. Most of ~~the~~our ~~Company’s~~ litigation matters are third-party claims for property damage allegedly caused by ~~the~~our ~~Company’s~~ products, but some involve allegations of personal injury or wrongful death. ~~See~~We believe that the ultimate resolution of the current litigation matters pending against us, except potentially those matters described below, will not have a material effect on our financial condition or results of operations. See our Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010, Note 13, “Commitments and Contingencies” for historical details of such claims.

23Pending Litigation and Claims

Ford Speed Control Deactivation Switch Litigation: We are 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 and related companies issued numerous separate recalls of vehicles between 1999 and 2009, which covered approximately fourteen million vehicles in the aggregate.

As of March 31, 2011 we are a defendant in one case that involves wrongful death allegations. This case, Romans vs. Ford et al, Case No. CVH 20100126, Court of Common Pleas, Madison County, Ohio, involves claims for property damage, personal injury, and three fatalities resulting from an April 5, 2008 residential fire alleged to involve a Ford vehicle. As of March 31, 2011, we were a defendant in 19 lawsuits in which plaintiffs have alleged property damage and various personal injuries from the system and switch. For the most part, these cases seek an unspecified amount of compensatory and exemplary damages. For the plaintiffs that have requested a specific amount, the range of the demand is $0.1 million to $3.0 million. In aggregate, we believe that the claims total between $5 million and $6 million. Ford and TI are co-defendants in each of these lawsuits. In accordance with terms of the Acquisition Agreement, we are managing and defending these lawsuits on behalf of both parties. For the cases that are still pending, we have included a reserve in our financial statements in the amount of $0.2 million as of March 31, 2011. There can be no assurances, however, that this reserve will be sufficient to cover the extent of our costs and potential liability from these matters. Any additional liability in excess of this reserve could have a material adverse effect on our financial condition or results of operations.

~~Ford~~Whirlpool ~~Speed~~Recall ~~Control Deactivation Switch~~ Litigation: ~~The~~We ~~Company~~are is involved in ~~a number of~~ litigation ~~matters~~ relating to acertain control ~~pressure~~products ~~switch~~ that TI sold tobetween ~~Ford~~2000 ~~Motor~~and ~~Company~~2004 to Whirlpool Corporation (“~~Ford~~Whirlpool”). ~~for~~The ~~several~~control ~~years~~products ~~until~~were ~~2002,~~incorporated ~~which~~into ~~was~~the ~~incorporated~~compressors ~~into~~of certain refrigerators in a ~~cruise control~~number ~~deactivation~~of ~~switch~~Whirlpool ~~system.~~brands, ~~Between~~including ~~1999~~Maytag, ~~and~~Jenn-Air, Amana, ~~2009~~Admiral, ~~Ford~~Magic ~~and~~Chef, ~~related~~Performa ~~manufacturers~~by ~~issued~~Maytag, ~~nine~~and ~~different~~Crosley. ~~recalls~~Whirlpool incontends that the UScontrol ~~and~~products ~~China,~~were ~~due~~defective tobecause ~~concerns~~they ~~that~~allegedly infail ~~some~~at ~~circumstances~~excessive ~~this~~rates, ~~system~~ and ~~switch~~have ~~may~~allegedly ~~cause~~caused property damage, including fires. InDuring ~~2001,~~fiscal TIyears 2007 ~~received~~and ~~a demand~~2008, ~~from~~we ~~Ford~~paid Whirlpool for ~~reimbursement~~certain of costs ~~related~~associated towith ~~the~~third-party ~~first~~claims ~~recall,~~ and ~~rejected~~other ~~that~~external ~~demand.~~engineering ~~Ford~~costs ~~has~~in amounts that did not ~~subsequently~~have ~~pursued~~a TImaterial adverse effect on our financial condition or ~~the~~results ~~Company~~of ~~for~~operations. ~~any~~During ~~demands~~2009, Whirlpool, ~~related~~in toconjunction ~~these~~with the Consumer Product Safety Commission announced voluntary recalls of approximately 1.8 million refrigerators.

~~The~~On ~~Company~~January 28, ~~has~~2009, ~~been~~Whirlpool ~~served~~Corporation, ~~with~~as ~~various~~well ~~lawsuits~~as ~~related~~its tosubsidiaries ~~this~~Whirlpool ~~matter~~SA inand ~~which~~Maytag ~~plaintiffs~~Corporation, ~~have~~filed ~~alleged~~a ~~wrongful~~lawsuit ~~death~~against ~~related~~TI toand ~~fires~~our subsidiary, STI, and we, along with TI, subsequently ~~allegedly~~filed ~~caused~~a bycross ~~the~~claim ~~system~~for ~~and~~indemnification ~~switch.~~against ~~During~~Empresa ~~fiscal~~Braseila ~~year~~de ~~2008~~Compressores, ~~the~~S.A., ~~Company~~n/k/a ~~settled~~Whirlpool ~~all~~SA, ~~then~~and ~~outstanding~~Embraco ~~wrongful~~North ~~death~~America, ~~cases~~Inc., ~~related~~together to“Embraco.” ~~these~~The ~~matters~~lawsuit ~~for~~is ~~amounts~~pending ~~that~~in ~~did~~the ~~not~~Circuit ~~have~~Court aof ~~material~~Cook ~~impact~~County, onIllinois, under the ~~Company’s~~name ~~financial~~Whirlpool ~~condition~~Corp. ~~or results~~et ofal. ~~operations~~v. OnSensata ~~April 1~~Technologies, ~~2010~~Inc. et al., ~~the~~Docket ~~Company~~No. 2009-L-001022. ~~and~~Discovery TIon ~~were~~all ~~served~~claims inand across-claims ~~new~~is ~~lawsuit~~ongoing, ~~involving~~with ~~wrongful~~fact ~~death~~witness ~~claims,~~depositions ~~Romans~~expected vthrough May 2011. ~~Texas~~The ~~Instruments~~court ~~Inc~~has reserved time in October 2011 for a possible trial. etIn alJanuary 2009, ~~Case~~TI #elected ~~CVH~~under ~~20100126,~~the ~~Madison~~Acquisition ~~County~~Agreement ~~Court~~to ofbecome ~~Common~~the ~~Pleas,~~controlling ~~Ohio.~~party ~~The~~for this lawsuit ~~alleges~~ ~~that~~and ahas ~~2008~~managed ~~residential~~and ~~fire~~defended ~~resulted~~the inlitigation ~~the~~on ~~deaths~~behalf of ~~three~~both ~~people~~parties. ~~and~~Although ~~injuries~~we toare aworking ~~fourth.~~with ATI ~~separate~~to defend ~~lawsuit~~the litigation, ~~which~~we ~~arises~~believe ~~from~~that ~~the~~a ~~same~~loss ~~facts,~~is ~~Romans~~probable v.and, ~~Ford~~as ~~Motor~~of ~~Company~~March 31, ~~Case #CVC20090074~~2011, ~~Madison~~have ~~County~~recorded ~~Court~~a reserve of ~~Common~~$5.9 ~~Pleas,~~million ~~Ohio, has~~for ~~been~~this ~~filed~~matter. ~~against~~There ~~Ford.~~can Onbe ~~April 9~~no assurances, ~~2010~~however, ~~the~~that ~~plaintiffs~~this ~~filed~~reserve awill ~~motion~~be sufficient to ~~consolidate~~cover the ~~two~~extent ~~lawsuits~~of our costs and potential liability from this or any related matters. ~~The~~Any ~~Company~~additional ~~believes~~liability ~~that~~in ~~these~~excess ~~claims~~of ~~will~~this ~~ultimately~~reserve becould ~~dismissed~~have a material adverse effect on our financial condition or results of operations.

AsPursuant ofto ~~September 30,~~the ~~2010,~~terms of the ~~Company~~Acquisition ~~was~~Agreement, aand ~~defendant~~subject into 23the ~~third~~limitations ~~party~~set ~~lawsuits~~forth in ~~which~~that ~~plaintiffs~~agreement, ~~have~~TI ~~alleged~~has ~~property~~agreed ~~damage~~to indemnify us for certain claims and ~~various~~litigation, ~~personal~~including ~~injuries~~this ~~from~~matter. Provided that the ~~system~~aggregate amount of costs and/or ~~switch~~damages from such claims exceeds $30.0 Amillion, ~~majority~~TI ofwill ~~these~~reimburse ~~cases~~us ~~seek~~for anamounts ~~unspecified~~incurred ~~amount~~in excess of ~~compensatory~~that ~~and~~threshold ~~exemplary~~up ~~damages~~to a cap of $300.0 ~~Where~~million. aIn ~~demand~~January is2011, ~~specified~~we ~~the~~notified ~~range~~TI isthat, ~~from~~as ~~$50~~of ~~thousand~~December 31, to2010, we believed we had incurred approximately $327.04 million. ~~Ford~~of ~~and~~costs that apply towards the indemnification. TI ~~are~~has reserved all rights to contest that claim, and ~~co-defendants~~may indispute ~~each~~all or some portion of ~~these~~the ~~lawsuits~~amount we claimed. ~~The~~We ~~Company~~believe ~~has~~that ~~recorded~~our acosts ~~$0.6~~and/or ~~million~~damages ~~reserve~~from inthe ~~its~~Whirlpool ~~financial~~litigation ~~statements~~and ~~for~~other ~~potential~~claims ~~losses~~and inlitigation ~~these~~matters ~~cases~~subject to the indemnification will ultimately exceed $30.0 million.

~~Whirlpool~~We ~~Recall~~are ~~Litigation:~~also ~~The~~involved ~~Company~~in isa ~~involved~~related, inbut ~~litigation~~separate ~~relating~~proceeding towith ~~certain~~TI’s ~~control~~insurer, ~~products~~American ~~that~~Alternative Insurance (“American Alternative”). On June 3, 2009, TI ~~sold~~filed ~~between~~a ~~2000~~lawsuit ~~and~~against ~~2004~~American toAlternative ~~Whirlpool~~seeking ~~Corporation~~reimbursement (“for our defense costs in the Whirlpool”) litigation and certain other third party claims. The case, Texas Instruments ~~control~~Incorporated ~~products~~v. ~~were~~American ~~incorporated~~Alternative ~~into~~Ins. Corp., was filed in the ~~compressors~~193rd Court of ~~certain~~Dallas ~~refrigerators~~County, inTexas, No. DC-09-07045-L. On October 16, 2009, American Alternative filed a ~~number~~third ofparty claims against STI alleging that STI assumed liability for the Whirlpool ~~brands~~matters under the Acquisition Agreement. ~~Whirlpool~~On ~~contends~~that basis, American Alternative has asserted that ~~the~~we ~~control~~owe ~~products~~American ~~were~~Alternative ~~defective~~for ~~because~~any ~~they~~amounts ~~allegedly~~that ~~fail~~it atmay ~~excessive~~ultimately ~~rates~~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. During 2010, TI informed us that they have ~~allegedly~~reached ~~caused property~~a ~~damage~~settlement with American Alternative in this matter. As of March 31, ~~including~~2011, ~~fires~~we have not recorded a reserve for this matter.

OnCoffeemakers. ~~January 28,~~Certain ~~2009,~~European ~~Whirlpool~~small ~~filed~~appliance acustomers ~~lawsuit~~have ~~against~~made TIclaims ~~and~~alleging defects in one of ~~the Company’s~~our ~~subsidiaries~~electro ~~asserting,~~mechanical controls ~~among~~products. ~~other~~Two ~~things,~~customers ~~contract~~have ~~claims~~conducted asrecalls ~~well~~of astheir ~~claims~~products ~~for~~and ~~breach~~reported ofseveral ~~warranty,~~third-party ~~fraud,~~fire ~~negligence,~~incidents. ~~indemnification,~~One ~~and~~customer ~~deceptive~~has ~~trade~~filed ~~practices.~~a ~~The~~ lawsuit ~~seeks~~against anus, ~~unspecified~~Jede ~~amount~~AB ofv. ~~compensatory~~Stig Wahlström AB and Sensata Technologies Holland B.V., ~~exemplary~~No. 10017-9, ~~damages~~Soederfoern district court, Sweden. The ~~Company~~suit ~~and~~alleges TIdamages ~~have~~amounting ~~answered~~to ~~the~~€1.8 million. ~~complaint~~We filed our answer on December 1, 2009, and denied liability. Another Incustomer, ~~January~~N&W ~~2009~~Global Vending S.p.A., TIhas threatened ~~elected~~litigation toand ~~become~~alleges ~~the~~damages ~~controlling~~in ~~party~~amount ~~for~~of ~~this~~€4.25 million ~~lawsuit~~plus additional charges and ~~will~~expenses. ~~manage~~We ~~and~~have ~~defend~~also ~~the~~denied ~~litigation~~liability onin ~~behalf~~this matter. As of ~~both~~March 31, TI2011, ~~and~~we ~~the~~have ~~Company~~not recorded a reserve for this matter.

On22 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. The court has scheduled a trial setting for October 2011 and the parties continue in the discovery process. As of September 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 September 30, 2010, the Company had incurred approximately $27.2 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

European automaker: A European automaker has alleged defects in certain of our ~~Whirlpool~~pressure ~~litigation~~sensor ~~and~~products ~~third~~installed ~~party~~in ~~claims~~its vehicles from June 2006 through April 2010. ~~During~~The ~~the~~customer ~~three~~brought ~~months~~this ~~ended~~claim in June 2010 claiming costs to date of €2.5 30million, ~~2010~~and estimated future costs, TItogether, ~~informed~~totaling ~~the~~€11.7 ~~Company~~million. We ~~that~~contest ~~they~~the ~~have~~customer’s ~~reached~~allegations aand ~~settlement~~do ~~with~~not ~~their~~believe ~~insurer~~a inloss ~~this~~is ~~matter~~probable. AsAccordingly, as of ~~September~~ March 3031, ~~2010~~2011, ~~the~~we ~~Company~~have ~~has~~ not recorded a reserve for this ~~matter~~claim.

~~Pelonis~~FCPA ~~Appliances:~~Voluntary ~~The~~Disclosure 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 September 30, 2010, the Company has not recorded a reserve for this matter.

~~Huawei:~~An Ainternal ~~Chinese~~investigation ~~telecommunications~~has ~~equipment~~been conducted ~~customer,~~under ~~Huawei,~~the ~~informed~~direction of the ~~Company~~Audit ~~that~~Committee itof ~~was~~our ~~planning~~Board of Directors to ~~conduct~~determine awhether ~~field~~any ~~replacement~~laws, ~~campaign~~including ~~for~~the ~~power~~Foreign ~~supply~~Corrupt ~~products~~Practices ~~containing~~Act ~~the Company’s~~(“FCPA”), ~~circuit~~may ~~breakers.~~have ~~The~~been ~~customer~~violated ~~has~~in ~~alleged~~connection ~~defects~~with ina ~~the~~certain ~~Company’s~~business ~~products,~~relationship entered ~~which~~into ~~were~~by ~~sold~~one ~~through~~of ~~distributors~~our tooperating ~~two~~subsidiaries ~~power~~involving ~~supply~~business ~~subcontractors~~in China. AsWe ofbelieve the ~~end~~amount of ~~the~~payments ~~three~~and ~~months~~the ~~ended~~business ~~March 31,~~involved ~~2010,~~was ~~the~~immaterial. ~~Company estimated~~We ~~that~~discontinued athe ~~100%~~specific ~~field~~business ~~replacement~~relationship ~~campaign~~and ~~would~~our ~~cost~~investigation ~~approximately~~has ~~$6.0 million.~~not ~~Based~~identified any onother ~~more~~suspect ~~recent~~transactions. ~~discussions~~We ~~with~~contacted the ~~customer,~~United ~~the~~States ~~Company~~Department ~~believes~~of ~~that~~Justice and the ~~replacement~~Securities ~~campaign~~and ~~will~~Exchange ~~involve~~Commission to make a ~~smaller~~voluntary ~~percentage~~disclosure of ~~systems~~the ~~with~~possible ~~an estimated~~violations, ~~cost~~the ~~for~~investigation, and the ~~campaign~~initial offindings. ~~approximately~~We ~~$1.0~~are ~~million~~continuing to cooperate fully with their review. The ~~Company~~FCPA is(and ~~contesting~~related ~~the~~statutes ~~customer’s~~and ~~allegations~~regulations) ~~but~~provides ~~working~~for ~~with~~potential ~~them~~monetary topenalties, ~~analyze~~criminal ~~the~~and ~~situation.~~civil ~~The~~sanctions, ~~Company~~and ~~has~~other ~~included~~remedies. aWe ~~reserve~~are inunable ~~its~~to ~~financial~~estimate ~~statements~~the inpotential ~~the~~penalties ~~amount~~and/or ofsanctions, if ~~$0.1~~any, ~~million~~that asmight ofbe ~~September 30~~assessed and, ~~2010~~accordingly, no provision has been made in the accompanying consolidated financial statements.

~~European automaker: A European automaker has alleged defects in certain of~~Matters ~~the~~Resolved ~~Company’s~~during ~~pressure~~2011 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 September 30, 2010, the Company has not recorded a reserve for this claim.

~~Other~~Pelonis ~~Matters~~Appliances: In December 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 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. Subsequently, the plaintiffs amended their complaint to include STI as a defendant. In April 2010, the court granted plaintiff’s notice of non-suit without prejudice. In the first quarter of 2011, the applicable statute of limitations expired without the plaintiffs refiling their claims. As such, we believe this matter to be resolved.

An internal investigation has been conducted under the direction of the Audit Committee of the Parent’s Board of Directors to determine whether any laws, including the Foreign Corrupt Practices Act (“FCPA”), may have been violated in connection with a certain business relationship entered into by one of the Parent’s and the Company’s operating subsidiaries involving business in China. The Parent believes the amount of payments and the business involved was immaterial. The Company discontinued the specific business relationship and its investigation has not identified any other suspect transactions. The Parent has contacted the United States Department of Justice and the Securities and Exchange Commission to begin the process of making a voluntary disclosure of the possible violations, the investigation, and the initial findings. The Parent will cooperate fully with their review. The FCPA (and related statutes and regulations) provides for potential monetary penalties, criminal and civil sanctions, and other remedies. The Parent is unable to estimate the potential penalties, if any, that might be assessed and, accordingly, no provision has been made in the accompanying condensed consolidated financial statements.

16. Fair Value Measures

~~The~~Our ~~Company’s~~ assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with ASC Topic 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~~we ~~Company~~have ~~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~~23 ~~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.

	September 30, 2010						December 31, 2009
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Commodity forward contracts	$	—	$	1,844	$	—	$	—	$	644	$	—
Interest rate caps		—		85		—		—		1,550		—
Euro call option		—		—		—		—		993		—
Total	$	—	$	1,929	$	—	$	—	$	3,187	$	—
Liabilities
Interest rate collars	$	—	$	3,499	$	—	$	—	$	8,587	$	—
Interest rate swap		—		477		—		—		3,157		—
Commodity forward contracts		—		4		—		—		193		—
Total	$	—	$	3,980	$	—	$	—	$	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~~Measured and the respective counterparties nonperformance risk in the fair value measurement. However, as of September 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~~Recurring ~~Company~~Basis ~~has determined that its derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.~~

The following table presents information about our 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.


	March 31, 2011						December 31, 2010
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Commodity forward contracts	$	—	$	9,317	$	—	$	—	$	7,199	$	—
Interest rate caps		—		102		—		—		149		—

Total	$	—	$	9,419	$	—	$	—	$	7,348	$	—

Liabilities
Interest rate collars	$	—	$	407	$	—	$	—	$	1,822	$	—
Interest rate swap		—		—		—		—		91		—

Total	$	—	$	407	$	—	$	—	$	1,913	$	—

The valuations of the derivatives intended to mitigate our 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. The 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 “Cash Flow Hedges of 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. The 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 “Non-designated Hedges of Commodity Risk”.

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

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to appropriately reflect both our own nonperformance risk and the respective counterparties nonperformance risk in the fair value measurement. However, as of March 31, 2011 and December 31, 2010, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.

Measured on a Non-Recurring Basis

~~The~~We ~~Company~~evaluate ~~evaluates~~ the recoverability of 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 ~~September~~March 3031, ~~2010~~2011, no such events or changes in circumstances occurred that would have triggered the need for an earlier impairment review.

In24 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. The balance of definite-lived intangible assets and goodwill associated with the Interconnection reporting unit 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	)

The fair value measures in the table above were measured using significant unobservable inputs (level 3) using an income approach, as described in the Annual Report on Form 10-K for the year ended December 31, 2009.

Goodwill and definite-lived intangible assets are valued primarily using discounted cash flow models that incorporate assumptions for a reporting units’ short and long-term revenue growth rates, operating margins and discount rates, which represent the Company’s best estimates of current and forecasted market conditions, current cost structure, and the implied rate of return that management believes a market participant would require for an investment in a Company having similar risks and business characteristics to the reporting unit being assessed.

Financial Instruments Not Recorded at Fair Value

The carrying value and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of September 30, 2010 and December 31, 2009 were as follows:

	September 30, 2010				December 31, 2009
	CarryingValue		Fair Value		CarryingValue		Fair Value
Liabilities:
Senior secured term loans	$	1,428,807	$	1,355,847	$	1,468,100	$	1,295,320
Senior Notes and Senior Subordinated Notes		442,253		458,259		790,792		768,079

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.

Goodwill and definite-lived intangible assets are valued primarily using discounted cash flow models that incorporate assumptions for a reporting units’ short and long-term revenue growth rates, operating margins and discount rates, which represent our best estimates of current and forecasted market conditions, current cost structure, and the implied rate of return that management believes a market participant would require for an investment in a company having similar risks and business characteristics to the reporting unit being assessed.

Financial Instruments Not Recorded at Fair Value

The carrying value and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of March 31, 2011 and December 31, 2010 were as follows:


	March 31, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Senior secured term loans	$	1,439,647	$	1,422,769	$	1,411,991	$	1,366,723
Senior Notes and Senior Subordinated Notes		450,789		470,282		436,159		455,480

The fair values of our 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.

Cash and trade receivables are carried at their cost which approximates fair value because of their short-term nature.

17. Derivative Instruments and Hedging Activities

As required by ASC Topic 815, Derivatives and Hedging (“ASC 815”), ~~the~~we ~~Company~~record ~~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~~we ~~Company has~~ have 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 of 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~~We ~~Company~~ may enter into derivative contracts that are intended to economically hedge certain of ~~its~~our risks, even though ~~the~~we ~~Company~~elect ~~elects~~ not to apply hedge accounting under ASC 815. Specific information ~~about~~ about the valuations of derivatives and classification in the fair value hierarchy are described in Note 16, “Fair Value Measures.”

Cash Flow Hedges of Interest Rate Risk

~~The~~Our ~~Company’s~~ objectives in using interest ~~rate~~ rate derivatives are to add stability to interest expense and to manage ~~its~~our exposure to interest rate movements on ~~its~~our U.S. dollar and Euro-denominated floating rate debt. To accomplish this objective, ~~the~~we ~~Company~~ primarily ~~uses~~use interest rate swaps, ~~collars~~ collars and caps as part of ~~its~~our 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~~us ~~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.~~

~~The~~25 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 nine months ended September 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 nine months ended September 30, 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 September 30, 2010, the Company estimates that an additional $4,558 will be reclassified from accumulated other comprehensive loss to interest expense during the twelve months ending September 30, 2011.

~~As of~~ ~~September 30,~~hedges ~~2010,~~involve the ~~Company~~receipt ~~had~~of ~~the~~variable ~~following~~rate ~~outstanding~~amounts if interest rates rise above the cap strike rate ~~derivatives~~on ~~that~~the contract. During the three months ended March 31, 2011, such derivatives were ~~designated~~used to ashedge the variable cash ~~flow~~flows ~~hedges~~associated ofwith ~~interest~~existing variable rate ~~risk:~~debt.

Interest Rate Derivatives

Notional(in millions)

Effective Date

Maturity Date

Index

Strike Rate

Interest rate swap

45.0

July 27, 2006

January 27, 2011

3-month LIBOR

5.377%

Interest rate collars

€

205.0

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%

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. For the three months ended March 31, 2011 and 2010, we recorded no ineffectiveness in earnings and no amounts were excluded from the assessment of effectiveness.

~~Foreign~~Amounts ~~Currency~~reported in accumulated other comprehensive loss related to derivatives are reclassified ~~Risk~~to interest expense as interest payments are made on our variable rate debt. As of March 31, 2011, we estimate that an additional $1,144 will be reclassified from accumulated other comprehensive loss to interest expense during the twelve months ending March 31, 2012.

~~Consistent~~As 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 (loss) / gain and other, net. During the nine months ended SeptemberMarch 3031, ~~2010~~2011, ~~the~~we ~~Company~~had ~~recognized a net loss of $993 associated with this derivative. The contract expired unexercised during~~ the ~~three~~following ~~months ended June 30, 2010. As of September 30, 2010, the Company has no~~ outstanding ~~derivative~~interest ~~financial~~rate ~~instruments~~derivatives tothat ~~manage the Company’s~~were ~~exposure~~designated toas ~~foreign~~cash ~~currency~~flow ~~risk.~~hedges ~~The~~of ~~Company~~interest ~~continues~~rate ~~to monitor exposures to this~~ risk: ~~and generally employs operating and financing activities to offset these exposures.~~

Commodity Risk

Interest Rate Derivatives

Notional
(in millions)

Effective Date

Maturity Date

Index

Strike Rate

Interest rate collars

€

160.0

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%

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 Non-designated ~~for~~Hedges ~~hedge accounting treatment in accordance with ASC 815. In accordance with ASC 815, the Company recognizes the change in fair value~~ of ~~these~~Foreign ~~derivatives in the statement of operations as a gain or loss as a component of~~ Currency ~~translation~~Risk (loss) / gain and other, net. During the three months ended September 30, 2010 and 2009, the Company recognized a net gain associated with its commodity forward contracts of $1,676 and $775, respectively. During the nine months ended September 30, 2010 and 2009 the Company recognized a net gain associated with its commodity contracts of $2,597 and $2,412, respectively.

~~The~~We ~~Company~~are ~~had~~exposed to fluctuations in various foreign currencies against our functional currency, the ~~following~~U.S. ~~outstanding~~dollar. ~~commodity~~We use foreign currency derivatives, including currency forward ~~contracts~~agreements to manage our exposure to fluctuations in the U.S. dollar to Euro exchange rate. In December 2009 we executed a foreign currency call option. This instrument was not designated for hedge accounting treatment in accordance with ASC 815. Derivatives not designated as hedges are not speculative and are used to manage our exposure to foreign exchange movements, but do not meet the strict hedge accounting requirements. In accordance with ASC 815, changes in the fair value of derivatives not designated in hedging ~~September~~relationships are recorded in the statement of operations as a gain or loss as a component of Currency translation (loss)/gain and other, net. During the three months ended March 31, 2010, we recognized a net loss of $993 associated with this derivative. The contract expired unexercised during the three months ended June 30, 2010:. As of March 31, 2011, we have no outstanding derivative financial instruments to manage our exposure to foreign currency risk. We continue to monitor exposures to this risk and generally employ operating and financing activities to offset these exposures.

	Notional		Remaining Contracted Periods	Weighted-AverageStrike Price
Silver		246,346 troy oz	October 2010 - March 2011	$	20.45
Gold		12,435 troy oz	January 2011 - December 2011	$	1,291.80
Nickel		248,646 pounds	October 2010 - December 2011	$	9.91
Aluminum		1,973,610 pounds	October 2010 - December 2011	$	1.00
Copper		2,670,579 pounds	October 2010 - December 2011	$	3.39

Non-designated Hedges of Commodity Risk

Our objective in using commodity forward contracts is to offset a portion of our exposure to the potential change in prices associated with certain commodities, including silver, gold, nickel, aluminum and copper, used in the manufacturing of our products. The ~~notional~~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. Derivatives not designated as hedges are not speculative and are used to manage our exposure to foreign ~~above~~exchange ~~represent~~movements, but do not meet the ~~total~~strict ~~volume~~hedge ~~hedged~~accounting byrequirements. In accordance with ASC 815, changes in the ~~Company~~fair ~~over~~value of these derivatives not designated in hedging relationships are recorded in the ~~remaining~~statement ~~contracted~~of ~~periods~~operations as a gain or loss as a component of Currency translation (loss)/gain and other, net. During the three months ended March 31, 2011 and 2010, we recognized a net gain associated with our commodity forward contracts of $4,224 and $1,784, respectively.

2926

We had the following outstanding commodity forward contracts as of March 31, 2011:


	Notional		Remaining Contracted Periods	Weighted- Average Strike Price
Silver		659,642 troy oz	April 2011 - March 2012	$	28.55
Gold		4,396 troy oz	April 2011 - March 2012	$	1,424.79
Nickel		176,368 pounds	April 2011 - February 2012	$	10.83
Aluminum		1,332,344 pounds	April 2011 - February 2012	$	1.05
Copper		2,034,468 pounds	April 2011 - February 2012	$	3.66

The notional amounts above represent the total volume we hedged over the remaining contracted periods.

Financial Instrument Presentation

The following table presents the fair value of ~~the~~our ~~Company’s~~ derivative financial instruments and their classification on the condensed consolidated balance sheet as of ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010.

	Asset Derivatives						Liability Derivatives
	September 30, 2010			December 31, 2009			September 30, 2010			December 31, 2009
	March 31, 2011			December 31, 2010			March 31, 2011			December 31, 2010
	Balance SheetLocation	FairValue		Balance SheetLocation	FairValue		Balance SheetLocation	FairValue		BalanceSheetLocation	FairValue
Derivatives designated as hedging instruments under ASC 815
Derivatives designated as hedging instrumentsunder ASC 815
Interest rate caps	Other assets	$	85102	Other assets	$	~~1,550~~149		$	—		$	—
Interest rate swap			—			—	~~Accrued expensesand other currentliabilities~~		~~477~~—	~~Other~~Accrued ~~long-termliabilities~~expenses and other current liabilities		~~3,157~~91
Interest rate collars			—			—	Accrued ~~expensesand~~expenses and other ~~currentliabilities~~current liabilities		~~3,499~~407	~~Other~~Accrued ~~long-termliabilities~~expenses and other current liabilities		81,~~587~~822
Total		$	85102		$	~~1,550~~149		$	~~3,976~~407		$	111,~~744~~913
Derivatives not designated as hedging instruments under ASC 815
Derivatives not designated as hedging instrumentsunder ASC 815
Commodity forward contracts	Prepaid ~~expensesand~~expenses and other ~~currentassets~~current assets	$	19,~~660~~317	Prepaid ~~expensesand~~expenses and other ~~currentassets~~current assets	$	~~644~~7,199	~~Accrued expensesand other currentliabilities~~	$	—	~~Accrued expensesand other currentliabilities~~	$	~~193~~—
Commodity forward contracts	Other assets		184			—	Other long-termliabilities		4			—
Total		$	9,317		$	7,199		$	—		$	—
Euro call option			—	Prepaid expensesand other currentassets		993			—			—
Total		$	1,844		$	1,637		$	4		$	193

The following table presents a roll forward of amounts recognized in accumulated other comprehensive loss related to ~~the~~our ~~Company’s~~ derivative financial instruments as of ~~September~~March 3031, ~~2010~~2011:

	Unrealized loss onderivativeinstruments
Balance as of December 31, 2009	$	(11,805	)
Balance as of December 31, 2010	$	(3,190	)
Amount of net unrealized loss recognized in accumulated other comprehensive loss		(~~2,940~~110	)
Amount of loss reclassified into interest expense		91,~~333~~717
Balance as of September 30, 2010	$	(5,412	)
Balance as of March 31, 2011	$	(1,583	)

3027

The following table presents the effect of ~~the~~our ~~Company’s~~ derivative financial instruments and their classification on the condensed consolidated statement of operations for the three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010:

Derivatives designated as hedging instruments under ASC 815	Amount ofLossRecognized inComprehensiveNet (Loss)/Income onDerivatives(EffectivePortion)						Location ofLossReclassified fromAccumulatedOtherComprehensiveLoss into Income(Effective Portion)		Amount ofLossReclassified fromAccumulated OtherComprehensive Lossinto Income(Effective Portion)
	2010			2009					2010			2009
	2011			2010					2011			2010
Interest Rate Products	$	~~(921~~110	)	$	(32,~~821~~339	)		Interest expense	$	(21,~~773~~717	)	$	(43,~~111~~551	)

Derivatives not designated as hedging instruments under ASC 815	Amount ofGainRecognized inIncome onDerivatives					Location of Gain Recognized in Income on Derivatives
	2010		2009
	2011		2010
Commodity forward contracts	$	14,~~676~~224	$	~~775~~1,784		Currency translation (loss) / gain and other, net
Euro call option	$	—	$	(993	)	Currency translation (loss)/gain and other, net

~~The~~We ~~following~~have ~~table~~agreements ~~presents~~with ~~the~~our ~~effect~~collar ofand ~~the~~swap ~~Company’s~~ derivative ~~financial~~counterparties ~~instruments~~that ~~and~~contain ~~their~~a ~~classification~~provision onwhereby ~~the~~if ~~condensed~~we ~~consolidated~~default ~~statement~~on any of ~~operations~~our ~~for~~indebtedness in the ~~nine~~event ~~months~~that ~~ended~~repayment of the indebtedness has been ~~September 30~~accelerated by the lender, ~~2010~~then ~~and~~we ~~2009:~~could also be declared in default on our derivative obligations.

Derivatives designated as hedging instruments under ASC 815	Amount ofLossRecognized inComprehensive Net(Loss)/Income onDerivatives(Effective Portion)						Location ofLossReclassified fromAccumulatedOtherComprehensiveLoss into Income(Effective Portion)		Amount ofLossReclassified fromAccumulated OtherComprehensive Lossinto Income(Effective Portion)
	2010			2009					2010			2009
Interest Rate Products	$	(2,940	)	$	(14,202	)		Interest expense	$	(9,333	)	$	(10,413	)

As of March 31, 2011, 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 $1,491. We have not posted any collateral related to these agreements. If we breached any of the default provisions described above, we could be required to settle our obligations under the agreements at their termination value.

Derivatives not designated as hedging instruments under ASC 815	Amount ofGain or (Loss)Recognized inIncome onDerivatives					Location of Gain or (Loss) Recognized in Income on Derivatives
	2010			2009
Commodity forward contracts	$	2,597		$	2,412	Currency translation (loss) / gain and other, net
Euro call option	$	(993	)	$	—	Currency translation (loss) / gain and other, net

18. Currency Translation (Loss)/Gain and Other, net

~~The~~Currency ~~Company~~translation ~~has~~(loss)/gain ~~agreements with its collar~~ and ~~swap~~other, ~~derivative~~net ~~counterparties~~consisted ~~that contain a provision whereby if the Company were to default on any~~ of ~~its indebtedness in~~ the ~~event~~following ~~that~~for ~~repayment of~~ the ~~indebtedness~~ ~~has~~three ~~been~~months ~~accelerated~~ended ~~by the lender~~March 31, ~~then~~2011 ~~the~~and ~~Company~~2010: ~~could also be declared in default on its derivative obligations.~~

As of September 30, 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 $5,793. The Company has not posted any collateral related to these agreements. If the Company breaches any of the default provisions described above, it will be required to settle its obligations under the agreements at their termination value.


	For the three months ended
	March 31, 2011			March 31, 2010
Currency translation (loss)/gain on debt	$	(46,781	)	$	60,116
Currency translation gain/(loss) on net monetary assets		1,898			(5,766	)
Loss on repurchase of outstanding Senior and Senior Subordinated Notes		—			(8,098	)
Loss on Euro call option		—			(993	)
Gain on commodity forward contracts		4,224			1,784
Other		28			159

Total currency translation (loss)/gain and other, net	$	(40,631	)	$	47,202

3128

18. Currency Translation (Loss) / Gain and Other, net

Currency translation (loss) / gain and other, net consisted of the following for the three and nine months ended September 30, 2010 and 2009:

	For the three months ended						For the nine months ended
	September 30,2010			September 30,2009			September 30,2010			September 30,2009
Currency translation (loss) / gain on debt	$	(80,076	)	$	(34,984	)	$	53,750		$	(28,482	)
Currency translation gain / (loss) on net monetary assets		5,306			1,543			(6,517	)		2,193
(Loss) / gain on repurchase of outstanding Senior and Senior Subordinated Notes		—			—			(23,474	)		120,123
Loss on Euro call option		—			—			(993	)		—
Gain on commodity forward contracts		1,676			775			2,597			2,412
Gain / (loss) on assets held for sale		—			17			—			(1,661	)
Loss on tax indemnification assets and other non-cash tax items(1)		(5,221	)		—			(5,221	)		—
Other		(148	)		(479	)		318			(464	)
Total currency translation (loss) / gain and other expense, net	$	(78,463	)	$	(33,128	)	$	20,460		$	94,121

(1) During the three and nine months ended September 30, 2010, the Company recognized amounts associated with the reduction of tax indemnification assets and other non-cash tax items (See Note 10 for further discussion).

19. Segment Reporting

~~The~~We ~~Company~~organize ~~organizes~~our ~~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~~us ~~Company~~ and the financial information that is reviewed by ~~its~~our chief operating decision maker. ~~The~~We ~~Company~~manage ~~manages~~our ~~its~~ sensors and controls businesses as components of an enterprise, for which separate information is available and is evaluated regularly by ~~the~~our chief operating decision maker, in deciding how to allocate resources and assess performance.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes 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 2006 Acquisition, the First Technology Automotive Acquisition ~~and~~ the Airpax Acquisition, and the MSP acquisition, and amortization expense. In addition, an operating segment’s performance excludes results from discontinued operations. ~~These~~Corporate ~~corporate~~ costs excluded from an operating segment’s performance 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~~We ~~Company~~believe ~~believes~~ that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of ~~its~~our segments. However, this measure should be considered in addition to, and not as 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~~our ~~Company’s~~ Annual Report on Form 10-K for the year ended December 31, ~~2009~~ 2010.

The sensors segment is a manufacturer of pressure, force, electromechanical, speed and ~~electromechanical~~position sensor products used in subsystems of automobiles (e.g., engine, air-conditioning and ride stabilization), heavy off-road vehicles, 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 assets of the sensors segment increased approximately $173.4 million, based on the preliminary purchase price allocation, during the first quarter of 2011 due to the MSP acquisition.

The controls segment is a manufacturer of a variety of control products used in industrial, aerospace, military, commercial and residential markets. These products include motor and compressor protectors, circuit breakers, semiconductor burn-in test sockets, electronic HVAC controls, power inverters, precision switches and thermostats. These products help prevent damage from overheating and fires in a wide variety of applications, including commercial heating and air-conditioning systems, refrigerators, aircraft, automobiles, lighting and other industrial applications. The controls business also manufactures DC to AC power inverters, which enable the operation of electronic equipment when grid power is not available.

~~The~~29 following 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 nine months ended September 30, 2010 and 2009:

	For the three months ended
	September 30,2010			September 30,2009
Net revenue:
Sensors	$	243,722		$	182,222
Controls		139,572			120,246
Total net revenue	$	383,294		$	302,468
Segment operating income (as defined above):
Sensors	$	81,663		$	58,956
Controls		45,579			39,955
Total segment operating income		127,242			98,911
Corporate and other		(28,062	)		(24,098	)
Amortization of intangible assets and capitalized software		(36,095	)		(38,094	)
Impairment of goodwill and intangible assets		—			—
Restructuring		13			(4,495	)
Profit from operations		63,098			32,224
Interest expense		(23,248	)		(36,540	)
Interest income		184			68
Currency translation (loss) / gain and other, net		(78,463	)		(33,128	)
Loss from continuing operations before income taxes	$	(38,429	)	$	(37,376	)
	For the nine months ended
	September 30,2010			September 30,2009
Net revenue:
Sensors	$	716,771		$	470,244
Controls		435,466			326,611
Total net revenue	$	1,152,237		$	796,855
Segment operating income (as defined above):
Sensors	$	240,242		$	131,155
Controls		148,806			94,379
Total segment operating income		389,048			225,534
Corporate and other(1)		(121,877	)		(57,368	)
Amortization of intangible assets and capitalized software		(108,309	)		(115,060	)
Impairment of goodwill and intangible assets		—			(19,867	)
Restructuring		(196	)		(18,033	)
Profit from operations		158,666			15,206
Interest expense		(82,170	)		(115,373	)
Interest income		520			471
Currency translation (loss) / gain and other, net		20,460			94,121
Income / (loss) from continuing operations before income taxes	$	97,476		$	(5,575	)

(1) During the nine months ended September 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).

The following tables present 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, 2011 and 2010:


	For the three months ended
	March 31, 2011			March 31, 2010
Net revenue:
Sensors	$	301,378		$	232,593
Controls		142,851			144,544

Total net revenue	$	444,229		$	377,137

Segment operating income (as defined above):
Sensors	$	95,986		$	77,825
Controls		49,357			51,176

Total segment operating income		145,343			129,001
Corporate and other⁽¹⁾		(30,431	)		(67,117	)
Amortization of intangible assets and capitalized software		(34,252	)		(36,136	)
Restructuring		(647	)		(699	)
Amortization of inventory step-up to fair value		(524	)		—

Profit from operations		79,489			25,049
Interest expense		(23,454	)		(33,516	)
Interest income		219			139
Currency translation (loss)/gain and other, net		(40,631	)		47,202

Income before income taxes	$	15,623		$	38,874

⁽¹⁾

During the three months ended March 31, 2010, we recognized a termination fee of $22,352 (see Note 14, “Related Party Transactions” for further discussion) and a cumulative catch-up adjustment for previously unrecognized share-based compensation expense totaling $18,876 (see Note 13, “Share-Based Payment Plans” for further discussion).

20. Supplemental Guarantor Condensed Consolidating Financial Statements

On April 26, 2006, in connection with the 2006 Acquisition, ~~the~~we ~~Company~~ issued $751,605 aggregate principal amount of the outstanding Senior Notes and the outstanding Senior Subordinated Notes, as described in Note 107 in ~~the~~our ~~Company’s~~ Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010. 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~~us ~~Company~~ and certain of ~~the Company’s~~ our direct and indirect wholly-owned subsidiaries in the U.S., (with the exception of those subsidiaries acquired in the First Technology Automotive ~~Acquisition~~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~~us. All our 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 107 to ~~the Company’s Annual~~our Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010.

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 ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010, the unaudited Condensed Consolidating Statements of Operations ~~for the three~~ and ~~nine months ended September 30, 2010 and 2009 and the unaudited Condensed Consolidating~~ Statements of Cash Flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010, respectively, of ~~the Company~~Sensata, 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.

~~Investments~~30 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 the buyer’s 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.

Investments in subsidiaries are accounted for using the equity method for purposes of the consolidated 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 subsidiary Guarantors have not been provided as we believe the following information is sufficient, as the Guarantor subsidiaries are 100% owned by us 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 our general creditors.

Intercompany profits from the sale of inventory between our Non-Guarantor subsidiaries and Guarantor subsidiaries have been reflected on a gross basis within net revenue and cost of revenue in the Guarantor and Non-Guarantor statements of operations, and are eliminated to arrive at our consolidated statements of operations. It is our policy to expense intercompany profit margin through cost of revenue when an intercompany sale takes place. Therefore, in the condensed consolidating balance sheets, intercompany profits are not included in the carrying value of inventories of our 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. We believe that this presentation best represents the actual revenue earned, costs incurred and financial position of our legal entities.

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

Condensed Consolidating Balance Sheet

~~September~~March 3031, ~~2010~~2011

(unaudited)


	Sensata (Issuer)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Sensata Consolidated
Assets
Current assets:
Cash and cash equivalents	$	37,150	$	235,730	$	35,443	$	—		$	308,323
Accounts receivable, net of allowances		—		235,056		34,433		—			269,489
Intercompany accounts receivable		439,460		379,062		125,705		(944,227	)		—
Inventories		—		124,908		30,915		—			155,823
Deferred income tax assets		—		3,531		3,114		—			6,645
Prepaid and other current assets		9,478		18,511		8,127		—			36,116
Assets held for sale		—		—		238		—			238

Total current assets		486,088		996,798		237,975		(944,227	)		776,634
Property, plant & equipment, net		—		197,252		73,742		—			270,994
Goodwill		—		1,484,587		92,308		—			1,576,895
Other intangible assets, net		—		705,349		25,716		—			731,065
Investment in subsidiaries		684,357		54,199		—		(738,556	)		—
Advance to subsidiaries		1,996,226		—		—		(1,996,226	)		—
Other assets		23,404		5,169		6,410		—			34,983

Total assets	$	3,190,075	$	3,443,354	$	436,151	$	(3,679,009	)	$	3,390,571

Liabilities and shareholder’s equity
Current liabilities:
Current portion of long term debt, capital lease and other financing obligations	$	15,120	$	1,845	$	116	$	—		$	17,081
Accounts payable		8		126,763		38,560		—			165,331
Accrued expenses and other current liabilities		44,861		60,943		25,491		—			131,295
Due to Parent		2,124		2,250		—		—			4,374
Intercompany liabilities		346,184		520,682		77,361		(944,227	)		—

Total current liabilities		408,297		712,483		141,528		(944,227	)		318,081
Pension and other post-retirement benefit obligations		—		34,123		637		—			34,760
Capital lease and other financing obligations, less current portion		—		38,574		740		—			39,314
Long-term intercompany liabilities		—		1,973,394		22,832		(1,996,226	)		—
Long-term debt, less current portion		1,875,328		—		—		—			1,875,328
Other long-term liabilities		11,355		194,563		22,075		—			227,993
Commitments and contingencies

Total liabilities		2,294,980		2,953,137		187,812		(2,940,453	)		2,495,476
Shareholder’s equity
Shareholder’s equity		895,095		490,217		248,339		(738,556	)		895,095

Total liabilities and shareholder’s equity	$	3,190,075	$	3,443,354	$	436,151	$	(3,679,009	)	$	3,390,571

	Sensata(Issuer)		GuarantorSubsidiaries		Non-GuarantorSubsidiaries		Eliminations			SensataConsolidated
Assets
Current assets:
Cash and cash equivalents	$	11,057	$	280,566	$	20,526	$	—		$	312,149
Accounts receivable, net of allowances		—		186,611		15,750		—			202,361
Intercompany accounts receivable		390,910		429,280		124,615		(944,805	)		—
Inventories		—		112,990		29,308		—			142,298
Deferred income tax assets		—		10,428		2,043		—			12,471
Prepaid expenses and other current assets		1,835		13,900		5,282		—			21,017
Assets held for sale		—		—		238		—			238
Total current assets		403,802		1,033,775		197,762		(944,805	)		690,534
Property, plant & equipment, net		—		182,797		42,064		—			224,861
Goodwill		—		1,450,973		77,981		—			1,528,954
Other intangible assets, net		—		734,860		24,232		—			759,092
Investment in subsidiaries		621,579		55,740		—		(677,319	)		—
Advances to subsidiaries		2,136,220		—		—		(2,136,220	)		—
Other assets		27,686		8,852		8,354		—			44,892
Total assets	$	3,189,287	$	3,466,997	$	350,393	$	(3,758,344	)	$	3,248,333
Liabilities and shareholder’s equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	14,918	$	2,485	$	116	$	—		$	17,519
Accounts payable		127		96,893		28,309		—			125,329
Accrued expenses and other current liabilities		17,900		75,674		19,616		—			113,190
Due to Parent		4,144		—		—		—			4,144
Intercompany liabilities		409,543		471,181		64,081		(944,805	)		—
Total current liabilities		446,632		646,233		112,122		(944,805	)		260,182
Pension and post-retirement benefit obligations		—		46,671		591		—			47,262
Capital lease and other financing obligations, less current portion		—		39,219		803		—			40,022
Long-term intercompany liabilities		—		2,113,388		22,832		(2,136,220	)		—
Long-term debt, less current portion		1,856,143		—		—		—			1,856,143
Other long-term liabilities		35,387		169,769		13,608		—			218,764
Commitments and contingencies
Total liabilities		2,338,162		3,015,280		149,956		(3,081,025	)		2,422,373
Shareholder’s equity
Shareholder’s equity		851,125		451,717		200,437		(677,319	)		825,960
Total liabilities and shareholder’s equity	$	3,189,287	$	3,466,997	$	350,393	$	(3,758,344	)	$	3,248,333

Condensed Consolidating Balance Sheet

December 31, ~~2009~~2010

(unaudited)


	Sensata (Issuer)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Sensata Consolidated
Assets
Current assets:
Cash and cash equivalents	$	127,690	$	231,938	$	26,527	$	—		$	386,155
Accounts receivable, net of allowances		—		179,929		18,316		—			198,245
Intercompany accounts receivable		333,640		354,635		126,035		(814,310	)		—
Inventories		—		115,686		25,263		—			140,949
Deferred income tax assets		—		3,482		3,084		—			6,566
Prepaid expenses and other current assets		7,377		11,997		5,413		—			24,787
Assets held for sale		—		—		559		—			559

Total current assets		468,707		897,667		205,197		(814,310	)		757,261
Property, plant and equipment, net		—		182,555		52,258		—			234,813
Goodwill		—		1,450,973		77,981		—			1,528,954
Other intangible assets, net		—		700,213		22,931		—			723,144
Investment in subsidiaries		636,359		53,999		—		(690,358	)		—
Advances to subsidiaries		1,996,226		—		—		(1,996,226	)		—
Other assets		25,526		4,491		6,082		—			36,099

Total assets	$	3,126,818	$	3,289,898	$	364,449	$	(3,500,894	)	$	3,280,271

Liabilities and shareholder’s equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	14,791	$	1,875	$	113	$	—		$	16,779
Accounts payable		8		105,562		26,405		—			131,975
Accrued expenses and other current liabilities		34,662		52,566		16,281		—			103,509
Due to Parent		2,974		—		—					2,974
Intercompany liabilities		330,115		420,072		64,123		(814,310	)		—

Total current liabilities		382,550		580,075		106,922		(814,310	)		255,237
Pension and post-retirement benefit obligations		—		42,139		618		—			42,757
Capital lease and other financing obligations, less current portion		—		38,772		772		—			39,544
Long-term intercompany liabilities		—		1,973,394		22,832		(1,996,226	)		—
Long-term debt, less current portion		1,833,370		—		—		—			1,833,370
Other long-term liabilities		10,716		180,378		18,087		—			209,181
Commitments and contingencies

Total liabilities		2,226,636		2,814,758		149,231		(2,810,536	)		2,380,089
Shareholder’s equity
Shareholder’s equity		900,182		475,140		215,218		(690,358	)		900,182

Total liabilities and shareholder’s equity	$	3,126,818	$	3,289,898	$	364,449	$	(3,500,894	)	$	3,280,271

	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		58,549		23,652		—			99,414
Intercompany liabilities		429,148		348,424		58,760		(836,332	)		—
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

Condensed Consolidating Statements of Operations

For the Three Months Ended ~~September~~March 3031, ~~2010~~2011

(unaudited)


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Sensata Consolidated
Net revenue	$	—		$	409,817		$	91,609		$	(57,197	)	$	444,229
Operating costs and expenses:
Cost of revenue		—			257,665			76,777			(57,197	)		277,245
Research and development		—			8,400			367			—			8,767
Selling, general and administrative		3,144			35,758			4,927			—			43,829
Amortization of intangible assets and capitalized software		—			33,078			1,174			—			34,252
Restructuring		—			647			—			—			647

Total operating costs and expenses		3,144			335,548			83,245			(57,197	)		364,740

(Loss)/profit from operations		(3,144	)		74,269			8,364			—			79,489
Interest income (expense), net		19,821			(42,541	)		(515	)		—			(23,235	)
Currency translation (loss)/gain and other, net		(44,464	)		1,510			2,323			—			(40,631	)

(Loss)/income before taxes and equity in earnings/(losses) of subsidiaries		(27,787	)		33,238			10,172			—			15,623
Equity in earnings (losses) of subsidiaries before taxes		43,410			120			—			(43,530	)		—
Provision/(benefit) for income taxes		24,554			18,658			5,203			(23,861	)		24,554

Net (loss)/income	$	(8,931	)	$	14,700		$	4,969		$	(19,669	)	$	(8,931	)

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Net revenue	$	—		$	360,399		$	79,648		$	(56,753	)	$	383,294
Operating costs and expenses:
Cost of revenue		—			231,157			64,242			(56,753	)		238,646
Research and development		—			5,886			226			—			6,112
Selling, general and administrative		3,083			31,668			4,605			—			39,356
Amortization of intangible assets and capitalized software		—			34,795			1,300			—			36,095
Restructuring		—			(215	)		202			—			(13	)
Total operating costs and expenses		3,083			303,291			70,575			(56,753	)		320,196
(Loss)/profit from operations		(3,083	)		57,108			9,073			—			63,098
Interest income/(expense), net		22,638			(46,272	)		570			—			(23,064	)
Currency translation (loss)/gain and other, net		(77,100	)		2,318			(3,681	)		—			(78,463	)
(Loss)/income from continuing operations before taxes and equity in earnings from continuing operations of subsidiaries		(57,545	)		13,154			5,962			—			(38,429	)
Equity in earnings from continuing operations of subsidiaries before taxes		19,116			13			—			(19,129	)		—
Provision for income taxes		9,997			13,500			(3,508	)		(9,992	)		9,997
Net (loss)/income	$	(48,426	)	$	(333	)	$	9,470		$	(9,137	)	$	(48,426	)

Condensed Consolidating Statements of Operations

For the Three Months Ended ~~September 30~~March 31, ~~2009~~2010

(unaudited)


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Sensata Consolidated
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(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Net revenue	$	—		$	285,737		$	59,046		$	(42,315	)	$	302,468
Operating costs and expenses:
Cost of revenue		—			186,780			46,443			(42,315	)		190,908
Research and development		—			3,546			23			—			3,569
Selling, general and administrative		1,863			63,914			5,495			—			71,272
Restructuring		—			3,257			1,238			—			4,495
Total operating costs and expenses		1,863			257,497			53,199			(42,315	)		270,244
(Loss)/profit from operations		(1,863	)		28,240			5,847			—			32,244
Interest income/(expense), net		9,841			(45,744	)		(569	)		—			(36,472	)
Currency translation (loss)/gain and other, net		(34,558	)		16,914			(15,484	)		—			(33,128	)
Loss from continuing operations before taxes and equity in losses of subsidiaries		(26,580	)		(590	)		(10,206	)		—			(37,376	)
Equity in losses of subsidiaries		(10,796	)		(18,318	)		—			29,114			—
Provision for income taxes		16,648			13,831			2,859			(16,690	)		16,648
Net Loss	$	(54,024	)	$	(32,739	)	$	(13,065	)	$	45,804		$	(54,024	)

Condensed Consolidating Statements of Operations

For the Nine Months Ended September 30, 2010

(unaudited)

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Net revenue	$	—		$	1,087,687		$	231,940		$	(167,390	)	$	1,152,237
Operating costs and expenses:
Cost of revenue		—			690,275			189,134			(167,390	)		712,019
Research and development		—			16,625			628			—			17,253
Selling, general and administrative		50,950			90,973			13,871			—			155,794
Amortization of intangible assets and capitalized software		—			104,409			3,900			—			108,309
Restructuring		—			196			—			—			196
Total operating costs and expenses		50,950			902,478			207,533			(167,390	)		993,571
(Loss)/profit from operations		(50,950	)		185,209			24,407			—			158,666
Interest income/(expense), net		58,612			(139,870	)		(392	)		—			(81,650	)
Currency translation gain/(loss) and other, net		27,087			(6,328	)		(299	)		—			20,460
Income from continuing operations before taxes and equity in earnings from continuing operations of subsidiaries		34,749			39,011			23,716			—			97,476
Equity in earnings from continuing operations of subsidiaries before taxes		62,727			1,165			—			(63,892	)		—
Provision/(benefit) for income taxes		35,996			36,064			(503	)		(35,561	)		35,996
Net income	$	61,480		$	4,112		$	24,219		$	(28,331	)	$	61,480

Condensed Consolidating Statements of Operations

For the Nine Months Ended September 30, 2009

(unaudited)

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Net revenue	$	—		$	745,849		$	143,768		$	(92,762	)	$	796,855
Operating costs and expenses:
Cost of revenue		—			494,865			119,051			(92,762	)		521,154
Research and development		—			12,468			224			—			12,692
Selling, general and administrative		5,221			183,853			20,829			—			209,903
Impairment of goodwill and intangible assets		—			19,867			—			—			19,867
Restructuring		—			15,317			2,716			—			18,033
Total operating costs and expenses		5,221			726,370			142,820			(92,762	)		781,649
Loss from operations		(5,221	)		19,479			948			—			15,206
Interest income/(expense), net		21,717			(135,091	)		(1,528	)		—			(114,902	)
Currency translation gain / (loss) and other, net		92,490			15,187			(13,556	)		—			94,121
Income/(loss) from continuing operations before taxes and equity in losses of subsidiaries		108,986			(100,425	)		(14,136	)		—			(5,575	)
Equity in losses of subsidiaries		(114,561	)		(24,066	)		—			138,627			—
Provision for income taxes		35,165			29,503			4,031			(33,534	)		35,165
Loss from continuing operations		(40,740	)		(153,994	)		(18,167	)		172,161			(40,740	)
Equity in loss from discontinued operations of subsidiaries		(395	)		—			—			395			—
Loss from discontinued operations		—			(395	)		—			—			(395	)
Net Loss	$	(41,135	)	$	(154,389	)	$	(18,167	)	$	172,556		$	(41,135	)

Condensed Consolidating Statements of Cash Flows

For the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2010~~2011

(unaudited)


	Sensata (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Sensata Consolidated
Cash flows from operating activities:
Net cash (used in)/provided by operating activities	$	(52,542	)	$	131,471		$	5,839		$	—	$	84,768

Cash flows from investing activities:
Acquisition of Magnetic Speed and Position, net of cash received		(34,221	)		(109,561	)		6,910			—		(136,872	)
Additions to property, plant and equipment		—			(17,657	)		(4,404	)		—		(22,061	)
Proceeds from sale of assets		—			—			600			—		600

Net cash (used in)/provided by investing activities:		(34,221	)		(127,218	)		3,106			—		(158,333	)

Cash Flows From financing activities:
Payments on US term loan facility		(2,375	)		—			—			—		(2,375	)
Payments on Euro term loan facility		(1,402	)		—			—			—		(1,402	)
Payments on capitalized lease and other financing obligations		—			(461	)		(29	)		—		(490	)

Net cash used in financing activities		(3,777	)		(461	)		(29	)		—		(4,267	)

Net change in cash and cash equivalents		(90,540	)		3,792			8,916			—		(77,832	)
Cash and cash equivalents, beginning of period		127,690			231,938			26,527			—		386,155

Cash and cash equivalents, end of period	$	37,150		$	235,730		$	35,443		$	—	$	308,323

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Cash flows from operating activities
Net cash (used in)/provided by operating activities	$	(42,899	)	$	232,431		$	14,545		$	—		$	204,077
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		—			(30,489	)		(4,600	)		—			(35,089	)
Proceeds from sale of assets		—			351			13			—			364
Dividends received by Issuer		800			—			—			(800	)		—
Net cash provided by/(used in) investing activities		800			(30,138	)		(4,587	)		(800	)		(34,725	)
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		(7,125	)		—			—			—			(7,125	)
Payments on Euro term loan facility		(3,910	)		—			—			—			(3,910	)
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		(338,343	)		—			—			—			(338,343	)
Payments on capitalized lease and other financing obligations		—			(3,114	)		(81	)		—			(3,195	)
Net cash used in financing activities		(2,134	)		(3,914	)		(81	)		800			(5,329	)
Net change in cash and cash equivalents		(44,233	)		198,379			9,877			—			164,023
Cash and cash equivalents, beginning of period		55,290			82,187			10,649			—			148,126
Cash and cash equivalents, end of period	$	11,057		$	280,566		$	20,526		$	—		$	312,149

Condensed Consolidating Statements of Cash Flows

For the ~~Nine~~Three Months Ended ~~September 30~~March 31, ~~2009~~2010

	Sensata(Issuer)			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations			SensataConsolidated
Cash flows from operating activities:
Net cash (used in) / provided by operating activities from continuing operations	$	(42,368	)	$	164,406		$	6,247		$	—		$	128,285
Net cash provided by operating activities	$	28,918		$	24,277		$	1,658		$	—		$	54,853
Net cash used in operating activities from discontinued operations		—			(403	)		—			—			(403	)
Net cash (used in) / provided by operating activities		(42,368	)		164,003			6,247			—			127,882
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		—			(94,~~703~~794	)		(~~1,824~~890	)		—			(115,~~527~~684	)
Proceeds on sale of assets		—			—			525			—			525
Proceeds from sale of assets		—			232			—			—			232
Purchase of debt securities of Issuer		—			(40,698	)		—			40,698			—
Net cash used in investing activities		—			(4,562	)		(890	)		—			(5,452	)
Dividends received by Issuer		4,222			—			—			(4,222	)		—
Net cash provided by / (used in) investing activities from continuing operations		4,222			(50,401	)		(1,299	)		36,476			(11,002	)
Net cash provided by financing activities from discontinued operations		—			372			—			—			372
Net cash provided by / (used in) investing activities		4,222			(50,029	)		(1,299	)		36,476			(10,630	)
Cash flows from financing activities:
Dividend to parent		(133	)		—			—			—			(133	)
Proceeds from common stock issuance		103,835			—			—			—			103,835
Advances to shareholder		(25	)		—			—			—			(25	)
Proceeds from capital contribution from Sensata Technologies Intermediate		284												284
Proceeds from revolving credit facility, net		75,000			—			—			—			75,000
Payments on U.S. term loan facility		(2,375	)		—			—			—			(2,375	)
Payments on U.S. term loan facility		(7,125	)		—			—			—			(7,125	)
Payments on Euro term loan facility		(1,342	)		—			—			—			(1,342	)
Payments on Euro term loan facility		(4,160	)		—			—			—			(4,160	)
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		(102,105	)		—			—			—			(102,105	)
Payments to repurchase Senior and Senior Subordinated Notes		(16,544	)		—			—			(40,698	)		(57,242	)
Payments on capitalized lease and other financing obligations		—			(446	)		(33	)		—			(479	)
Payments on capitalized lease and other financing obligations		—			(3,131	)		—			—			(3,131	)
Net cash used in financing activities		(1,703	)		(446	)		(33	)		—			(2,182	)
Dividends paid to Issuer		—			(3,280	)		(942	)		4,222			—
Net change in cash and cash equivalents		27,215			19,269			735			—			47,219
Net cash provided by / (used in) financing activities		47,013			(6,411	)		(942	)		(36,476	)		3,184
Cash and cash equivalents, beginning of period		55,290			82,187			10,649			—			148,126
Net change in cash and cash equivalents		8,867			107,563			4,006			—			120,436
Cash and cash equivalents, end of period	$	82,505		$	101,456		$	11,384		$	—		$	195,345
Cash and cash equivalents, beginning of period		19,180			48,196			10,340			—			77,716
Cash and cash equivalents, end of period	$	28,047		$	155,759		$	14,346		$	—		$	198,152

4237

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 our Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010 and those described in Part II, Item 1A of this Quarterly Report on Form 10-Q), 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~~continued ~~associated~~fundamental ~~with~~changes in the industries in which we operate; continued pricing ~~weakness~~and inother ~~worldwide~~pressures ~~economic~~from ~~conditions~~our customers; ~~adverse~~general ~~developments~~conditions in the automotive industry; ~~fluctuations~~our inability ~~foreign~~to ~~currency~~attract ~~exchange rates, interest rates~~ and ~~commodity~~retain ~~prices~~key personnel; ~~risks~~our ~~associated~~ability ~~with~~to ~~our~~maintain ~~substantial~~existing ~~indebtedness,~~relationships ~~leverage~~with customers and ~~debt~~our ~~service~~exposure ~~obligations;~~to ~~litigation~~industry and customer-specific ~~disputes~~demand ~~involving~~fluctuations; ~~us,~~risks ~~including~~associated ~~the~~with ~~extent~~our ofnon-U.S. ~~product~~operations; ~~liability~~ and ~~warranty~~competitive ~~claims~~pressures ~~asserted~~in ~~against~~the ~~us;~~markets ~~and~~in ~~risks associated~~which ~~with~~we ~~future acquisitions~~compete, ~~joint~~which ~~ventures~~could orrequire ~~asset~~us ~~dispositions,~~to aslower ~~well~~our asprices ~~risks~~or ~~associated~~result ~~with~~in ~~the~~reduced ~~integration~~demand offor ~~acquired~~our ~~companies~~products.

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 in our Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010 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.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC on February 1, 2011 and the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. All percentage amounts and ratios were calculated using the underlying data in whole dollars and may reflect rounding adjustments.

Acquisitions

On January 28, 2011, we completed the acquisition of the Automotive on Board sensors business of Honeywell International Inc. for an estimated total consideration of $152.5 million (including $136.9 million

paid in cash to date, net of cash acquired), subject to a working capital adjustment and certain transfer taxes. We will refer to this acquisition as Magnetic Speed and Position (“MSP”), which is being integrated into our sensors segment. We acquired MSP in order to complement the existing operations of our sensors segment, provide new capabilities in light vehicle speed and position sensing, and expand our presence in emerging markets, particularly in China.

MSP manufactures, develops and sells certain sensor products, and has operations in the U.S., South Korea, the Czech Republic and China. This acquisition was structured as a purchase of assets for the operations in the U.S., South Korea and the Czech Republic and as a purchase of 100% of the outstanding shares of entities in the Czech Republic and in China. See Note 6, “Acquisitions” for more details.

Results of Operations

The ~~tables~~table below ~~present~~presents our results of operations in millions of dollars and as a percentage of net revenue for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2010~~2011 compared to the three ~~and nine~~ months ended ~~September~~March 3031, ~~2009~~2010. 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.

43Three Months Ended March 31, 2011 Compared to the Three Months Ended March 31, 2010


	For the three months ended
	March 31, 2011						March 31, 2010
(Amounts in millions)	Amount			Percent of Revenue			Amount			Percent of Revenue
Net revenue:
Sensors	$	301.4			67.8	%	$	232.6			61.7	%
Controls		142.9			32.2			144.5			38.3

Net revenue		444.2			100.0			377.1			100.0
Operating costs and expenses:
Cost of revenue		277.2			62.4			232.8			61.7
Research and development		8.8			2.0			4.9			1.3
Selling, general and administrative		43.8			9.9			77.5			20.6
Amortization of intangible assets and capitalized software		34.3			7.7			36.1			9.6
Restructuring		0.6			0.1			0.7			0.2

Total operating costs and expenses		364.7			82.1			352.1			93.4

Profit from operations		79.5			17.9			25.0			6.6
Interest expense, net		(23.2	)		(5.2	)		(33.4	)		(8.9	)
Currency translation (loss)/gain and other, net		(40.6	)		(9.1	)		47.2			12.5

Income before taxes		15.6			3.5			38.9			10.3
Provision for income taxes		24.6			5.5			11.2			3.0

Net (loss)/income	$	(8.9	)		(2.0	)%	$	27.7			7.3	%

Net revenue. Net revenue for the three months ended March 31, 2011 increased $67.1 million, or 17.8%, to $444.2 million from $377.1 million for the three months ended March 31, 2010. Net revenue increased 18.5% due to higher volumes and 0.3% due to the effect of favorable foreign currency exchange rates, primarily the U.S. dollar to Euro, partially offset by a decrease of 1.0% due to pricing. The increase in volumes was due to 6.9% growth related to the acquisition of MSP, 4.9% growth in content, 4.2% growth in our mature markets and 2.5% growth in our emerging markets (primarily China).

~~Three~~Sensors ~~Months~~business segment net revenue for the three months ended March 31, 2011 ~~Ended~~increased ~~September~~$68.8 million, or 29.6%, to $301.4 million from $232.6 million for the three months ended March 3031, 2010. ~~Compared~~Sensors net revenue increased 30.8% due to higher volumes and 0.4% due to the ~~Three~~effect ~~Months~~of ~~Ended~~favorable ~~September~~foreign currency exchange rates, primarily the U.S. 30dollar to Euro, ~~2009~~partially offset by a decrease of 1.6% due to pricing.

	For the three months ended
	September 30,2010						September 30,2009
(Amounts in millions)	Amount			Percent ofRevenue			Amount			Percent ofRevenue
Net revenue:
Sensors	$	243.7			63.6	%	$	182.2			60.2	%
Controls		139.6			36.4			120.2			39.8
Net revenue		383.3			100.0			302.5			100.0
Operating costs and expenses:
Cost of revenue		238.6			62.3			190.9			63.1
Research and development		6.1			1.6			3.6			1.2
Selling, general and administrative		39.4			10.3			33.2			11.0
Amortization of intangible assets and capitalized software		36.1			9.4			38.1			12.6
Restructuring		(0.0	)		(0.0	)		4.5			1.5
Total operating costs and expenses		320.2			83.5			270.2			89.3
Profit from operations		63.1			16.5			32.2			10.7
Interest expense		(23.2	)		(6.1	)		(36.5	)		(12.1	)
Interest income		0.2			0.0			0.1			0.0
Currency translation (loss) / gain and other, net		(78.5	)		(20.5	)		(33.1	)		(11.0	)
Loss from continuing operations before taxes		(38.4	)		(10.0	)		(37.4	)		(12.4	)
Provision for income taxes		10.0			2.6			16.6			5.5
Loss from continuing operations		(48.4	)		(12.6	)		(54.0	)		(17.9	)
Net loss	$	(48.4	)		(12.6	)%	$	(54.0	)		(17.9	)%

Controls business segment net revenue for the three months ended March 31, 2011 decreased $1.7 million, or 1.2%, to $142.9 million from $144.5 million for the three months ended March 31, 2010. Controls net revenue decreased 1.3% due to lower volumes and 0.1% due to pricing, partially offset by an increase of 0.2% due to the effect of favorable foreign exchange rates, primarily the U.S. dollar to Euro.

~~Net~~Cost of revenue. ~~Net~~Cost of revenue for the three months ended ~~September~~March 3031, 2011 and 2010 ~~increased~~was $80277.82 million~~, or~~ 26(62.74%, toof ~~$383.3~~net ~~million~~revenue), ~~from~~and $~~302~~232.58 million ~~for~~(61.7% ~~the~~of ~~three~~net ~~months ended September 30~~revenue), ~~2009~~respectively. ~~Net~~Cost of revenue increased ~~28.8%~~primarily due to ~~higher~~the ~~volumes,~~increase ~~partially~~in ~~offset~~unit byvolumes ~~a decrease of 1.1% due to unfavorable foreign currency exchange rates~~sold, ~~primarily~~ ~~the~~increased ~~U.S. dollar~~materials toprices ~~Euro,~~ and athe ~~decrease~~MSP ~~of 1~~acquisition.0% ~~due~~Depreciation toexpense ~~pricing.~~for ~~The~~the ~~increase~~three inmonths ~~volumes~~ended ~~was~~March 31, ~~due~~2011 toand ~~growth~~2010 inwas ~~our~~$10.8 ~~mature~~million ~~markets~~for ofboth ~~16.3%~~periods, ~~growth in content~~ of which $9.8%, million and ~~growth~~$9.9 million, inrespectively, ~~our~~was ~~emerging~~included ~~markets~~in ~~(primarily~~cost ~~China)~~ of 3revenue.~~5% partially~~ ~~offset~~Cost byof arevenue ~~0.8%~~as ~~reduction~~a ~~due~~percentage toof ~~other~~net ~~miscellaneous~~revenue ~~factors.~~increased ~~The~~primarily ~~increase in volumes was partially~~ due to ~~the~~increased ~~extended~~materials ~~production schedules by certain OEM’s in the Americas and Europe~~prices.

~~Sensors~~Research ~~business~~and ~~segment~~development ~~net~~expense. ~~revenue~~Research and development (“R&D”) expense for the three months ended ~~September~~March 3031, 2011 and 2010 ~~increased~~was $618.58 million, ~~or 33~~(2.80%, toof ~~$243.7 million~~net ~~from~~revenue), and $~~182~~4.29 million ~~for the three months ended September 30, 2009~~(1.3% ~~Sensors~~of net revenue), ~~increased 37~~respectively.0% ~~due~~R&D toexpense ~~higher~~increased ~~volumes,~~as ~~partially~~we ~~offset~~continue byto ~~the~~strive ~~effect of unfavorable foreign exchange rates of 1.6%, primarily the U.S. dollar~~ to ~~Euro~~ ~~exchange~~develop ~~rate,~~innovative ~~and~~solutions afor ~~decrease~~our ~~of 1~~customers.6% ~~due to pricing.~~

~~Controls~~Selling, ~~business~~general ~~segment~~and ~~net~~administrative ~~revenue~~expense. Selling, general and administrative (“SG&A”) expense for the three months ended ~~September~~ March 3031, 2011 and 2010 ~~increased~~was $1943.38 million, ~~or 16~~(9.19% of net revenue), toand $~~139~~77.65 million ~~from~~(20.6% ~~$120~~of net revenue), respectively.2 ~~million~~SG&A ~~for~~expense decreased primarily due to costs incurred in the three months ended ~~September~~March 3031, ~~2009.~~2010 related ~~Controls~~to ~~net~~the ~~revenue~~initial ~~increased~~public ~~16.5%~~offering ~~due~~of toSensata ~~higher~~Technologies ~~volumes~~Holding N.V. (“Parent”), ~~partially~~specifically ~~offset~~$22.4 bymillion related to the ~~effect~~termination of ~~unfavorable~~ ~~foreign~~the ~~exchange~~Advisory ~~rates~~Agreement of(as ~~0.3%,~~defined ~~primarily~~in the ~~U.S.~~accompanying ~~dollar~~unaudited tocondensed ~~Euro~~consolidated financial ~~exchange rate~~statements), and 0$18.1%9 ~~due~~million cumulative catch-up adjustment related to ~~pricing~~the vesting of the Tranche 2 and 3 option awards.

~~Cost~~ Amortization of ~~revenue~~intangible assets and capitalized software. ~~Cost~~Amortization ofexpense ~~revenue~~associated with definite-lived intangible assets and capitalized software for the three months ended ~~September~~March 3031, 2011 ~~2010~~ and ~~2009~~2010 was $~~238~~34.6 3 million, ~~or 62.3% of net revenue,~~ and $~~190~~36.91 million, ~~or 63.1% of net revenue,~~ respectively. ~~Cost~~The ofdecrease ~~revenue~~results ~~increased~~from ~~primarily due to~~ the ~~increase~~ inrecognition ~~unit~~of ~~volumes~~amortization ~~sold. Depreciation~~ expense ~~for~~on ~~the~~an ~~three~~accelerated ~~months~~basis ~~ended~~to ~~September 30,~~appropriately ~~2010~~reflect ~~and~~the ~~2009~~pattern ~~was~~in ~~$9.1~~which ~~million~~the ~~and~~economic ~~$12.0~~benefits ~~million, respectively,~~ of ~~which~~the ~~$8.2~~intangible assets ~~million~~are ~~and~~being ~~$11.2 million~~realized, ~~respectively,~~partially ~~was~~offset ~~included~~by inincreased ~~cost~~amortization offrom ~~revenue. Cost~~the ofacquisition ~~revenue as a percentage~~ of ~~net~~MSP. ~~revenue decreased~~

44Restructuring. Restructuring expense for the three months ended March 31, 2011 and 2010 was $0.6 million and $0.7 million, respectively.

Interest expense, net. Interest expense, net for the three months ended March 31, 2011 and 2010 was $23.2 million and $33.4 million, respectively. Interest expense for the three months ended March 31, 2011 consisted primarily of $18.2 million in interest expense on our outstanding debt, $2.1 million in amortization of deferred financing costs, $1.7 million in interest associated with our outstanding derivative instruments, and $0.9 million in interest associated with our capital lease and other financing obligations. Interest expense for the three months ended March 31, 2010 consisted primarily of $25.4 million in interest expense on our outstanding debt, $3.6 million in interest associated with our outstanding derivative instruments, $2.3 million in amortization of deferred financing costs, $1.1 million in interest related to uncertain tax positions and $0.9 million in interest associated with our capital lease and other financing obligations.

Currency translation (loss)/gain and other, net. Currency translation (loss)/gain and other, net for the three months ended March 31, 2011 and 2010 was $(40.6) million and $47.2 million, respectively. Currency translation (loss)/gain and other, net for the three months ended March 31, 2011 consisted primarily of $(46.8) million in currency losses resulting from the re-measurement of our foreign currency denominated debt, partially

~~primarily~~offset ~~due~~by to$4.2 million in net gains associated with our commodity forward contracts and $1.9 million in net currency gains resulting from the ~~leverage~~re-measurement ~~effect~~of net monetary assets denominated in foreign currencies. Currency translation (loss)/gain and other, net for the three months ended March 31, 2010 consisted primarily of ~~higher~~$60.1 ~~revenue~~million onin ~~certain~~currency ~~fixed~~gains ~~manufacturing~~resulting ~~costs~~from the re-measurement of our foreign currency denominated debt and $1.8 million in net gains associated with our commodity forward contracts, apartially ~~reduction~~offset by $8.1 million in ~~depreciation~~losses ~~expense~~resulting from the extinguishment of debt and ~~cost~~$6.8 ~~savings~~million ~~initiatives~~in net currency losses resulting from the ~~various~~re-measurement of net monetary ~~restructuring~~assets ~~activities~~denominated ~~implemented~~in ~~during~~foreign currencies, including the ~~second~~$1.0 ~~half~~million ofin ~~fiscal~~loss ~~years~~on ~~2008~~the ~~and~~Euro ~~2009~~call option.

~~Research~~Provision ~~and~~for ~~development~~income ~~expense~~taxes. ~~Research~~Provision ~~and~~for ~~development~~income ~~(“R&D”)~~taxes ~~expense~~ for the three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010 ~~was~~totaled $624.16 million and $311.62 million, respectively. ~~R&D~~Our tax provision consisted of current tax expense asdue aprimarily ~~percentage~~to our profitable operations in foreign tax jurisdictions and deferred tax expense which related primarily to amortization of tax deductible goodwill and the use of net ~~revenue~~operating ~~for~~losses. The provision increase primarily results from the ~~three~~utilization ~~months~~of net operating losses that ~~ended~~were ~~September 30,~~subject ~~2010~~to ~~and~~a ~~2009~~valuation ~~was~~allowance ~~1.6%~~in the prior year and ~~1.2%,~~an ~~respectively~~increase in profits before tax.

Selling, general and administrative expense. Selling, general and administrative (“SG&A”) expense for the three months ended September 30, 2010 and 2009 was $39.4 million, or 10.3% of net revenue, and $33.2 million, or 11.0% of net revenue, respectively. SG&A expense increased primarily due to the increase in revenue as discussed above, an increase in stock compensation expense and an increase in management services provided by our Parent, but decreased as a percentage of revenue primarily due to the cost savings initiatives discussed above. The increase in stock compensation expense is due to additional option grants since September 30, 2009 and the impact of Tranche II and Tranche III options expense, which was not recorded until the Parent’s initial public offering in March 2010. See Note 13, “Share-Based Payment Plans” for further discussion.

Amortization of intangible assets and capitalized software. Amortization expense associated with definite-lived intangible assets and capitalized software for the three months ended September 30, 2010 and 2009 was $36.1 million and $38.1 million, respectively. The decrease resulted from the recognition of amortization expense on an accelerated basis to appropriately reflect the pattern in which the economic benefits of the intangible assets are being realized.

Restructuring. Restructuring expense for the three months ended September 30, 2009 was $4.5 million. There was no significant restructuring expense for the three months ended September 30, 2010. The expense recorded during the three months ended September 30, 2009 related to activities associated with the 2008 Plan and consisted of $1.1 million related to severance and $3.4 million related to pension settlement, curtailment and other related charges.

Interest expense. Interest expense for the three months ended September 30, 2010 and 2009 was $23.2 million and $36.5 million, respectively. Interest expense for the three months ended September 30, 2010 consisted primarily of $17.9 million of interest expense on our outstanding debt, $2.8 million of interest associated with our outstanding derivative instruments, $2.1 million of amortization of deferred financing costs, and $0.9 million of interest associated with our capital lease and other financing obligations, partially offset by $0.8 million in net reversal of interest expense related to the reduction of liabilities for unrecognized tax benefits during the three months ended September 30, 2010. Interest expense for the three months ended September 30, 2009 consisted primarily of $28.5 million of interest expense on our outstanding debt, $4.1 million of interest associated with our outstanding derivative instruments, $2.3 million of amortization of deferred financing costs and $0.9 million of interest associated with our capital lease and other financing obligations. The decrease in interest expense was due primarily to the tender and redemption of our Senior Notes and Senior Subordinated Notes during the six months ended June 30, 2010.

Currency translation (loss) / gain and other, net. Currency translation loss and other, net for the three months ended September 30, 2010 and 2009 was $78.5 million and $33.1 million, respectively. Currency translation loss and other, net for the three months ended September 30, 2010 consisted primarily of currency losses of $80.1 million resulting from the re-measurement of our foreign currency denominated debt and a loss of $5.2 million related to the reversal of tax indemnification assets and other non-cash tax items, partially offset by net currency gains of $5.3 million resulting from the re-measurement of net monetary assets denominated in foreign currencies, and a net gain of $1.7 million associated with our commodity forward contracts. The reversal of the indemnification assets were related to a liability for unrecognized tax benefits for which the applicable statute of limitations expired during the three months ended September 30, 2010. Currency translation loss and other, net for the three months ended September 30, 2009 consisted primarily of the currency losses of $35.0

million resulting from the re-measurement of our foreign currency denominated debt, partially offset by net currency gains of $1.5 million resulting from the re-measurement of net-monetary assets denominated in foreign currencies, and a net gain of $0.8 million associated with our commodity forward contracts.

Provision for income taxes. Provision for income taxes for the three months ended September 30, 2010 and 2009 totaled $10.0 million and $16.6 million, respectively. Our tax provision consisted of current tax expense due primarily to our operations in foreign tax jurisdictions and deferred tax expense which related primarily to amortization of tax deductible goodwill. The provision decreased primarily as a result of the reduction of $3.9 million in a liability for unrecognized tax benefits during the three months ended September 30, 2010, due to the expiration of the applicable statute of limitations.

Deferred taxes, in part, involve accounting for differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis. The future related consequences of these differences result in deferred tax assets and liabilities. We assess the recoverability of deferred tax assets by assessing whether it is more likely than not that some or all of the deferred tax asset will be realized. To the extent we believe that a more likely than not standard cannot be met, we record a valuation allowance. Significant management judgment is required in determining the need for a valuation allowance against deferred tax assets. We review the need for valuation allowances jurisdictionally during each reporting period based on information available to us at that time. We have significant valuation allowances in certain jurisdictions where our businesses have historically incurred operating losses. Should our judgment change about the need for a valuation allowance, it may result in the recognition of a valuation allowance or the reduction of some or all of the previously recognized valuation allowances, possibly resulting in a material tax provision or benefit in the period of such change.

~~Nine~~If ~~Months~~we ~~Ended~~were ~~September 30~~to have a change of ownership within the meaning of Section 382 of the Internal Revenue Code, ~~2010~~under ~~Compared~~certain conditions, our annual U.S. federal net operating loss utilization could be limited to an amount equal to the ~~Nine~~market ~~Months~~capitalization ~~Ended~~of ~~September 30,~~our ~~2009~~U.S. subsidiaries at the time of the ownership change multiplied by the federal long-term tax exempt rate. A change of ownership under Section 382 of the Internal Revenue Code is defined as a cumulative change of fifty percentage points or more in the ownership positions of certain stockholders owning five percent or more of our common stock over a three year rolling period.

	For the nine months ended
	September 30,2010						September 30,2009
(Amounts in millions)	Amount			Percent ofRevenue			Amount			Percent ofRevenue
Net revenue:
Sensors	$	716.8			62.2	%	$	470.2			59.0	%
Controls		435.5			37.8	%		326.6			41.0
Net revenue		1,152.2			100.0			796.9			100.0
Operating costs and expenses:
Cost of revenue		712.0			61.8			521.2			65.4
Research and development		17.3			1.5			12.7			1.6
Selling, general and administrative		155.8			13.5			94.8			11.9
Amortization of intangible assets and capitalized software		108.3			9.4			115.1			14.4
Impairment of goodwill and intangible assets		—			—			19.9			2.5
Restructuring		0.2			0.0			18.0			2.3
Total operating costs and expenses		993.6			86.2			781.6			98.1
Profit from operations		158.7			13.8			15.2			1.9
Interest expense		(82.2	)		(7.1	)		(115.4	)		(14.5	)
Interest income		0.5			0.0			0.5			0.1
Currency translation (loss) / gain and other, net		20.5			1.8			94.1			11.8
Income / (loss) from continuing operations before taxes		97.5			8.5			(5.6	)		(0.7	)
Provision for income taxes		36.0			3.1			35.2			4.4
Income / (loss) from continuing operations		61.5			5.3			(40.7	)		(5.1	)
Loss from discontinued operations, net of tax of $0		—			—			(0.4	)		(0.0	)
Net income / (loss)	$	61.5			5.3	%	$	(41.1	)		(5.2	)%

Net revenue. Net revenue for the nine months ended September 30, 2010 increased $355.4 million, or 44.6%, to $1,152.2 million from $796.9 million for the nine months ended September 30, 2009. Net revenue increased 45.4% due to higher volumes, partially offset by a decrease of 0.7% due to pricing and 0.1% due to unfavorable foreign currency exchange rates, primarily the U.S. dollar to Euro. The increase in volumes was due to an increase in production volumes in our mature markets of 26.1%, growth in content of 11.1% and growth in our emerging markets (primarily China) of 8.8%, partially offset by a 0.6% reduction due to other miscellaneous factors.

Sensors business segment net revenue for the nine months ended September 30, 2010 increased $246.5 million, or 52.4%, to $716.8 million from $470.2 million for the nine months ended September 30, 2009. Sensors net revenue increased 54.2% due to higher volumes, partially offset by a decrease of 1.4% due to pricing and 0.4% due to unfavorable foreign exchange rates, primarily the U.S. dollar to Euro exchange rate.

Controls business segment net revenue for the nine months ended September 30, 2010 increased $108.9 million, or 33.3%, to $435.5 million from $326.6 million for the nine months ended September 30, 2009. Controls net revenue increased 32.6% due to higher volumes, 0.4% due to favorable foreign exchange rates, primarily the U.S. dollar to Euro exchange rate, and 0.3% due to pricing.

Cost of revenue. Cost of revenue for the nine months ended September 30, 2010 and 2009 was $712.0 million, or 61.8% of net revenue, and $521.2 million, or 65.4% of net revenue, respectively. Cost of revenue increased primarily due to the increase in unit volumes sold. Depreciation expense for the nine months ended September 30, 2010 and 2009 was $29.5 million and $34.0 million, respectively, of which $26.7 million and $31.2 million, respectively, was included in cost of revenue. Cost of revenue as a percentage of net revenue decreased primarily due to cost savings initiatives discussed above the leverage effect of higher revenue on certain fixed manufacturing costs, and the reduction in depreciation expense.

Research and development expense. R&D expense for the nine months ended September 30, 2010 and 2009 was $17.3 million and $12.7 million, respectively. R&D expense as a percentage of net revenue for the nine months ended September 30, 2010 and 2009 was 1.5% and 1.6%, respectively.

Selling, general and administrative expense. SG&A expense for the nine months ended September 30, 2010 and 2009 was $155.8 million, or 13.5% of net revenue, and $94.8 million, or 11.9%, of net revenue, respectively. Selling, general and administrative expenses increased primarily due to expenses of $22.4 million associated with the termination of the Advisory Agreement with the Sponsors at their election upon completion of the Parent’s initial public offering, and $18.9 million of stock compensation expense associated with the performance vesting of the Tranche 2 and 3 option awards, both of which occurred in March 2010. SG&A expense as a percentage of net revenue increased due to the reasons described for the three months ended September 30, 2010, partially offset by the leverage effect of higher revenue on certain fixed costs and our cost savings initiatives resulting from the restructuring plans implemented in 2008 and 2009.

Amortization of intangible assets and capitalized software. Amortization expense associated with definite-lived intangible assets and capitalized software for the nine months ended September 30, 2010 and 2009 was $108.3 million and $115.1 million, respectively. The decrease resulted from recognition of amortization expense on an accelerated basis to appropriately reflect the pattern in which the economic benefits of the intangible assets are being realized.

Impairment of goodwill and intangible assets. During the three months ended March 31, 2009, we performed a review of goodwill and definite-lived intangible assets for potential impairment. As a result of this analysis, we determined that goodwill and definite-lived intangible assets associated with our Interconnection reporting unit were impaired and recorded a charge of $19.9 million, of which $5.3 million related to goodwill and $14.6 million related to definite-lived intangible assets. We attributed the impairment charge to the deterioration in the global economy, including capital spending in the semiconductor market, which occurred during the first quarter of 2009.

Restructuring. Restructuring expense for the nine months ended September 30, 2010 and 2009 was $0.2 million and $18.0 million, respectively. Restructuring expense for the nine months ended September 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 $12.7 million related to severance, $4.7 million related to pension settlement, curtailment, and other related charges, and $0.6 million related to other exit costs.

Interest expense. Interest expense for the nine months ended September 30, 2010 and 2009 was $82.2 million and $115.4 million, respectively. Interest expense for the nine months ended September 30, 2010 consisted primarily of $62.3 million of interest expense on our outstanding debt, $9.4 million of interest associated with our outstanding derivative instruments, $6.5 million of amortization of deferred financing costs and $2.7 million of interest associated with our capital lease and other financing obligations. Interest expense for the nine months ended September 30, 2009 consisted primarily of $93.3 million of interest expense on our outstanding debt, $10.4 million of interest associated with our outstanding derivative instruments, $6.8 million of amortization of deferred financing costs and $2.8 million of interest associated with our capital lease and other financing obligations. The decrease in interest expense was due primarily to the tender and redemption of our Senior Notes and Senior Subordinated Notes during the six months ended June 30, 2010.

Currency translation (loss) / gain and other, net. Currency translation gain and other, net for the nine months ended September 30, 2010 and 2009 was $20.5 million and $94.1 million, respectively. Currency translation gain and other, net for the nine months ended September 30, 2010 consisted primarily of currency gains of $53.8 million resulting from the re-measurement of our foreign currency denominated debt and a net gain of $2.6 million associated with our commodity forward contracts, partially offset by losses of $23.5 million resulting from the tender and redemption of the Senior Notes and Senior Subordinated Notes, net currency losses of $6.5 million resulting from the re-measurement of net monetary assets denominated in foreign currencies and a loss of $5.2 million related to the reversal of indemnification assets and other non-cash tax items as discussed elsewhere. Currency translation gain and other, net for the nine months ended September 30, 2009 consisted primarily of the gain of $120.1 million resulting from the tender of certain Senior Notes and Senior Subordinated Notes, a net gain of $2.4 million associated with our commodity forward contracts, $2.2 million of net currency gains due to the re-measurement of net-monetary assets denominated in foreign currencies partially offset by net currency losses of $28.5 million resulting from the re-measurement of our foreign currency denominated debt, and an impairment loss of $1.6 million associated with our manufacturing facilities classified as held for sale.

Provision for income taxes. Provision for income taxes for the nine months ended September 30, 2010 and 2009 totaled $36.0 million and $35.2 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.

Liquidity and Capital Resources

Cash Flows:

The table below summarizes our primary sources and uses of cash for the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010. We have derived the summarized statements of cash flows for the ~~nine~~three months ~~ended~~ ~~September~~ended March 3031, ~~2010~~2011 and ~~2009~~2010 from the condensed consolidated financial statements, included elsewhere in this report. Amounts in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not add due to the effect of rounding.

	For the nine months ended
(Amounts in millions)	September 30,2010			September 30,2009
Net cash provided by / (used in):
Operating activities:
Continuing operations:
Net income / (loss) adjusted for non-cash items	$	227.1		$	73.1
Changes in operating assets and liabilities		(23.0	)		55.2
Continuing operations		204.1			128.3
Discontinued operations		—			(0.4	)
Operating activities		204.1			127.9
Investing activities		(34.7	)		(10.6	)
Financing activities		(5.3	)		3.2
Net change	$	164.0		$	120.4

Operating activities. Net cash provided by operating activities for the nine months ended September 30, 2010 was $204.1 million compared to $127.9 million for the nine months ended September 30, 2009. This increase was primarily due to cash provided by the increase in revenue, offset by decreases in cash due to changes in operating assets and liabilities.

Changes in operating assets and liabilities for the nine months ended September 30, 2010 and 2009 totaled $(23.0) million and $55.2 million, respectively. The most significant components of the decrease in cash resulting from changes in operating assets and liabilities for the nine months ended September 30, 2010 were an increase in accounts receivable of $21.5 million and inventories of $16.9 million. The increase in accounts receivable was due to higher revenue during the quarter ended September 30, 2010 compared to December 31, 2009. In addition, we raised inventory levels from the December 31, 2009 balances in response to the increase in orders and to manage certain supplier capacity constraints, while continuing our initiative to maintain or reduce our days of inventory on hand.

The most significant components to the change in operating assets and liabilities of $55.2 million for the nine months ended September 30, 2009 were an increase in accounts payable and accrued expenses of $44.6 million and a decrease in inventories of $34.5 million, partially offset by an increase in accounts receivable of $39.1 million. The increase in accounts payable and accrued expenses was due to our initiative to migrate certain strategic vendors to 60 day payment terms. The increase in account receivable was due to higher sales due in part to improved conditions from government incentive programs, such as the “Car Allowance Rebate System” in the U.S. and the “New Countryside Initiative” in China. The decrease in inventory was due to initiatives we implemented to minimize the days of inventory on hand given the rapid decline in net revenues during the fourth quarter of fiscal year 2008.

Investing activities. Net cash used in investing activities for the nine months ended September 30, 2010 was $34.7 million compared to $10.6 million for the nine months ended September 30, 2009. Net cash used for investing activities consists primarily of capital expenditures. The increase in capital expenditures was due to investments associated with increasing our manufacturing capacity.

In 2010, we anticipate spending approximately $55 million on capital expenditures, which will be funded with cash flows from operations.


	For the three months ended
(Amounts in millions)	March 31, 2011			March 31, 2010
Net cash provided by/(used in):
Operating activities:
Continuing operations:
Net (loss)/income adjusted for non-cash items	$	106.1		$	52.3
Changes in operating assets and liabilities		(21.3	)		2.5

Operating activities		84.8			54.9
Investing activities		(158.3	)		(5.5	)
Financing activities		(4.3	)		(2.2	)

Net change	$	(77.8	)	$	47.2

~~Financing~~Operating activities. Net cash ~~used~~provided inby ~~financing~~operating activities for the ~~nine~~three months ended ~~September~~ March 3031, ~~2010~~2011 was $584.38 million compared to ~~net cash provided by financing activities of~~ $354.29 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2009~~2010. ~~For~~This ~~the~~increase ~~nine~~was ~~months ended September 30, 2010, net cash used in financing activities consisted~~ primarily ofdue ~~payments~~ to ~~repurchase~~ outstanding Senior and Senior Subordinated Notes of $338.3 million in addition to principal payments totaling $11.0 million on the U.S. dollar term loan and Euro term loan facilities partially offset by proceeds of $346.9 million from the issuance of 40 ordinary shares to, and capital contributions from, Sensata Intermediate Holding. Net cash provided by ~~financing activities during~~ the ~~nine~~increase ~~months~~in ~~ended September 30~~revenue, ~~2009 consisted primarily of $75.0 million of borrowings under the revolving credit facility partially~~ offset by ~~payments~~decreases toin ~~purchase~~cash ~~outstanding~~due ~~debt~~to ofchanges ~~$57.2 million~~ in ~~addition~~operating assets ~~to principal payments totaling $11.3 million on the U.S. dollar term loan~~ and ~~Euro term loan facilities~~liabilities.

Changes in operating assets and liabilities for the three months ended March 31, 2011 and 2010 totaled $(21.3) million and $2.5 million, respectively. The most significant components of the decrease in cash resulting from changes in operating assets and liabilities for the three months ended March 31, 2011 were an increase in accounts receivable of $(39.3) million, a decrease in accrued retirement of $(9.3) million and an increase in prepaid expenses and other current assets of $(6.1) million, partially offset by an increase in accounts payable and accrued expenses of $35.4 million. The increase in accounts receivable was due to higher revenue during the quarter ended March 31, 2011 compared to the quarter ended December 31, 2010. The decrease in accrued retirement resulted primarily from contributions to the U.S. qualified pension plan. The increase in prepaid expenses and other current assets resulted primarily from an increase in VAT receivables related to our purchase of certain assets in connection with the acquisition of MSP. The increase in accounts payable and accrued expenses was due to higher revenue and the corresponding increase in purchases to meet the demand and higher accrued interest.

The most significant components to the change in operating assets and liabilities of $2.5 million for the three months ended March 31, 2010 was an increase in accounts receivable of $27.5 million and an increase in inventories of $7.5 million, partially offset by an increase in accounts payable and accrued expenses of $18.2 million and a due to Parent of $21.6 million. The increase in account receivable was due to an increase in net revenue. The increase in inventories was due to restocking given the increase in net revenue. The increase in accounts payable and accrued expenses was due to the increase in operating costs and accrued interest expense associated with the 8% Senior Notes due 2014 (“Senior Notes”) and 9% Senior Subordinated Notes. The Due to Parent results primarily from amounts paid by the Parent associated with the termination of the Advisory Agreement.

Investing activities. Net cash used in investing activities for the three months ended March 31, 2011 was $158.3 million compared to $5.5 million for the three months ended March 31, 2010. Net cash used for investing activities consisted primarily of $136.9 million related to the acquisition of MSP and $22.1 million in capital expenditures. The acquisition of MSP is described further in Note 6, “Acquisitions”. The capital expenditures made during the quarter related to investments associated with increasing our manufacturing capacity.

Net cash used in investing activities for the three months ended March 31, 2010 was due primarily to capital expenditures.

In 2011, we anticipate spending approximately $70 million to $75 million on capital expenditures (including capital expenditures of acquired businesses), which we plan to fund with cash flows from operations.

Financing activities. Net cash used in financing activities for the three months ended March 31, 2011 was $4.3 million compared to $2.2 million for the three months ended March 31, 2010. For the three months ended March 31, 2011, net cash used in financing activities consisted primarily of principal payments totaling $3.8 million on the U.S. dollar term loan and Euro term loan facilities. Net cash used in financing activities during the three months ended March 31, 2010 consisted primarily of proceeds of $104.1 million from the issuance of 20 ordinary shares to Sensata Intermediate Holding B.V. offset by payments to repurchase outstanding Senior and Senior Subordinated Notes of $102.1 million in addition to principal payments totaling $3.7 million on the U.S. dollar term loan and Euro term loan facilities.

Indebtedness and Liquidity:

Our liquidity requirements are significant due to ~~the~~our highly leveraged nature ~~of our Company~~. As of ~~September~~March 3031, ~~2010~~2011, we had $1,~~913~~931.7 million in outstanding indebtedness, including our outstanding capital lease and other financing obligations.

A summary of our indebtedness as of ~~September~~March 3031, ~~2010~~2011 is as follows:

(Dollars in thousands)	Weighted- averageinterestrate for the ~~nine~~three monthsended ~~September~~March 3031, ~~2010~~2011			~~September~~March 3031, ~~2010~~2011
Senior secured term loan facility (denominated in U.S. dollars)		2.0805	%	$	~~909~~904,~~625~~875
Senior secured term loan facility (€381.5 million)		2.72	%		519,182
Senior secured term loan facility (€379.5 million)		3.03	%		534,772
Senior Notes (denominated in U.S. dollars)		8.00	%		201,181
Senior Subordinated Notes (€177.1 million)		9.00	%		~~241~~249,~~072~~608
Less: current portion					(1415,~~917~~108	)
Long-term debt, less current portion				$	1,~~856~~875,~~143~~328
Capital lease and other financing obligations		8.5463	%	$	4241,~~624~~287
Less: current portion					(21,~~602~~973	)
Long-term portion of capital lease and other financing obligations				$	4039,~~022~~314

We have a Senior Secured Credit Facility under which we and ~~our subsidiary~~ Sensata Technologies Finance Company, LLC, are the borrowers and certain of our other subsidiaries are guarantors. The Senior Secured Credit Facility includes a $150.0 million multi-currency revolving credit facility, a $950.0 million U.S. dollar-denominated term loan facility, and a €325.0 million Euro-denominated term loan facility ($400.1 million, at issuance). As of ~~September~~March 3031, ~~2010~~2011, after adjusting for outstanding letters of credit with an aggregate value of $6.9 million, we had $143.1 million of ~~borrowing~~ borrowing capacity available under the revolving credit facility. The outstanding letters of credit were issued primarily for various operating activities. As of ~~September~~March 3031, ~~2010~~2011, no amounts had been drawn against these outstanding letters of credit. These outstanding letters of credit are scheduled to expire in the next twelve months. Upon expiration, we intend to renew these letters of credit and do not anticipate difficulty in this regard.

The Senior Secured Credit Facility also provides for an incremental term loan facility and/or incremental revolving credit facility in an aggregate principal amount of $250.0 million under certain conditions at the option of our bank group. During fiscal year 2006, to finance the purchase of First Technology Automotive, we borrowed €73.0 million ($95.4 million, at issuance), reducing the available borrowing capacity of this incremental facility to $154.6 million. The incremental borrowing facilities may be activated at any time up to a maximum of three times during the term of the Senior Secured Credit Facility with consent required only from

5043

incremental facility to $154.6 million. The incremental borrowing facilities may be activated at any time up to a maximum of three times during the term of the Senior Secured Credit Facility with consent required only from those lenders that agree, at their sole discretion, to participate in such incremental facility and subject to certain conditions, including pro forma compliance with all financial covenants as of the date of incurrence and for the most recent determination period after giving effect to the incurrence of such incremental facility.

On February 26, 2010, we announced the commencement of cash tender offers related to our 8% Senior Notes ~~due 2014 (the “Dollar Notes”)~~, our 9% Senior Subordinated Notes due 2016 and our 11.25% Senior Subordinated Notes due 2014 (together , the “~~Euro~~Senior Subordinated Notes”). The cash tender offers settled during the three months ended March 31, 2010. The aggregate principal amount of the ~~Dollar~~Senior Notes validly tendered was $0.3 million, representing approximately 0.1% of the outstanding ~~Dollar~~ Senior Notes. The aggregate principal amount of the ~~Euro~~Senior Subordinated Notes tendered was €71.9 million, representing approximately 22.8% of the outstanding ~~Euro~~Senior Subordinated Notes. We paid $~~102~~96.17 million in principal ($0.3 million for the ~~Dollar~~Senior Notes and €7571.9 million for the ~~Euro~~Senior Subordinated Notes), $5.4 million in premiums (€4.0 million on the Senior Subordinated Notes) and $2.2 million of accrued interest to settle the tender offers and retire the debt on March 29, 2010.

OnIn ~~April 1,~~connection ~~2010,~~with wethese ~~announced~~transactions, during the ~~redemption~~three ofmonths ~~all~~ended March 31, of2010, ~~our~~we ~~outstanding~~recorded ~~11.25% Senior Subordinated Notes due 2014 at~~ a ~~redemption~~loss ~~price~~in ~~equal~~Currency totranslation ~~105.625%~~(loss)/gain ofand ~~the principal amount~~other, ~~and~~net of $~~138~~8.61 million of ~~our~~including ~~outstanding~~the 8%write-off ~~Senior~~of ~~Notes~~debt ~~due~~issuance ~~2014~~costs ~~at a redemption price equal to 104.000%~~ of ~~the principal amount. We paid~~ $~~225~~1.09 million ~~in principal, $10~~.4 ~~million in premiums and $8.4 million of accrued interest in May 2010 to complete the redemption.~~

InOur ~~connection~~sources ~~with~~of ~~these~~liquidity ~~transactions~~include cash on hand, ~~during~~cash flow from operations and amounts available under the ~~nine~~Senior ~~months~~Secured ~~ended~~Credit ~~September 30,~~Facility. ~~2010~~We believe, webased ~~recorded~~on aour ~~loss~~current inlevel ~~Currency~~of operations as reflected ~~translation~~in ~~(loss)~~our /results ~~gain~~of ~~and~~operations ~~other~~for the three months ended March 31, ~~net~~2011, these sources of ~~$23.5~~liquidity ~~million~~will ~~including~~be ~~the~~sufficient ~~write-off~~to offund our operations, capital expenditures, and debt ~~issuance~~service ~~costs~~for ofat ~~$6.8~~least ~~million~~the next twelve months.

Our ~~sources~~ ofability ~~liquidity~~to ~~include~~raise ~~cash~~additional onfinancing ~~hand,~~and ~~cash~~our ~~flow~~borrowing ~~from~~costs ~~operations~~may ~~and~~be ~~amounts~~impacted ~~available~~by ~~under~~short- ~~our~~and ~~Senior~~long-term ~~Secured~~debt ~~Credit~~ratings ~~Facility.~~assigned Weby independent ~~believe~~rating agencies, ~~based~~which onare ~~our~~based, ~~current~~in ~~level~~part, ofon ~~operations~~our performance as ~~reflected~~measured inby ~~our~~certain ~~results~~credit ofmetrics ~~operations~~such ~~for~~as ~~the~~interest ~~three~~coverage and ~~nine~~ ~~months~~leverage ~~ended~~ratios. ~~September~~As of April 3018, ~~2010~~2011, ~~these~~Moody’s ~~sources~~Investors ofService’s ~~liquidity~~corporate ~~will~~credit berating for ~~sufficient~~Sensata toTechnologies ~~fund~~B.V. ~~our~~was ~~operations,~~B2 ~~capital~~with ~~expenditures,~~positive outlook and ~~debt~~Standard & ~~service~~Poor’s corporate credit rating for atSensata ~~least~~Technologies ~~the~~B.V. ~~next~~was ~~twelve~~BB- ~~months~~with stable outlook.

~~Our~~We ~~ability~~cannot tomake ~~raise~~assurances ~~additional~~that ~~financing~~our ~~and~~business ~~its~~will ~~borrowing~~generate ~~costs~~sufficient ~~may~~cash beflow ~~impacted~~from byoperations ~~short-~~or ~~and~~that ~~long-term~~future ~~debt~~borrowings ~~ratings~~will ~~assigned by~~be ~~independent~~available ~~rating~~to ~~agencies,~~us ~~which~~under ~~are~~our ~~based,~~revolving credit facility in ~~part,~~an onamount ~~our~~sufficient ~~performance~~to asenable ~~measured~~us byto ~~certain~~pay ~~credit~~our ~~metrics~~indebtedness, ~~such~~including asthe ~~interest~~Senior ~~coverage~~Notes and ~~leverage~~9% ~~ratios.~~Senior AsSubordinated ~~of October 21~~Notes, ~~2010,~~or to fund our ~~Moody’s~~other ~~Investors~~liquidity ~~Service’s~~needs. ~~corporate~~We ~~credit~~may experience delays in ~~rating~~accessing ~~was~~a B2portion ~~with~~of ~~positive~~our ~~outlook~~cash ~~and~~balances that are held in subsidiaries operating in foreign jurisdictions due to foreign government regulations regarding cash movement across its borders. Further, our ~~Standard &~~highly ~~Poor’s~~leveraged ~~corporate~~nature ~~credit~~may ~~rating~~limit ~~was~~our B+ability ~~with~~to procure ~~positive~~additional ~~outlook~~financing in the future.

WeAs ~~cannot~~of ~~make~~March 31, ~~assurances~~2011, ~~that~~we ~~our~~were ~~business~~in ~~will~~compliance ~~generate~~with ~~sufficient~~all ~~cash~~the ~~flow~~covenants ~~from~~and default ~~operations~~provisions ~~or that future borrowings will be available to us~~ under our ~~revolving~~ credit ~~facility~~arrangements. inFor anmore ~~amount~~information ~~sufficient to~~on ~~enable us to pay~~ our indebtedness, ~~including~~and ~~the~~related ~~Senior~~covenants ~~Notes~~ and ~~Senior~~default ~~Subordinated Notes~~provisions, orsee tothe ~~fund~~notes to our ~~other~~audited ~~liquidity~~consolidated ~~needs.~~financial Westatements ~~may~~included ~~experience delays~~ in ~~accessing~~the aAnnual ~~portion~~Report ofon ~~our~~Form ~~cash~~10-K ~~balances that are held in subsidiaries operating in~~for ~~foreign~~the ~~jurisdictions~~year ~~due~~ended ~~to foreign government regulations regarding cash movement across its borders. Further~~December 31, ~~our highly leveraged nature may limit our ability to procure additional financing in the future~~2010.

As of September 30, 2010, we were in compliance with all the covenants and default provisions under our credit arrangements. For more information on our indebtedness and related covenants and default provisions, see the notes to our audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2009.

New Accounting Standards

InWe ~~October~~adopted ~~2009,~~ the ~~Financial~~following ~~Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-13, Multiple-Delivery Revenue Arrangements (“ASU 2009-13”), which establishes the~~ accounting ~~and~~standards ~~reporting~~during ~~guidance for arrangements including multiple deliverable revenue-generating activities, and provides amendments to~~ the ~~criteria~~first ~~for~~quarter ~~separating~~of ~~deliverables,~~2011: ~~and measuring and allocating arrangement~~

51In October 2009, the Financial Accounting Standards Board issued Accounting Standards Update No. 2009-13, Multiple-Delivery Revenue Arrangements (“ASU 2009-13”), which establishes the accounting and reporting guidance for arrangements including multiple deliverable revenue-generating activities, and provides amendments 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 hierarchy for determining the selling price of a deliverable, and require significantly enhanced disclosures to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about their nature and terms, significant deliverables, and the general timing of delivery. The amendments also require disclosure of

consideration to one or more units of accounting. The amendments of ASU 2009-13 also establish a hierarchy for determining the selling price of a deliverable, and require significantly enhanced disclosures to provide information about ~~a vendor’s multiple-deliverable revenue arrangements, including information about their nature and terms, significant deliverables, and~~ the ~~general timing of delivery. The amendments also require 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 of ASU 2009-13 are effective prospectively for revenue arrangements entered into or materially modified in annual reporting periods beginning on or after June 15, 2010, or January 1, 2011 for us. ~~Early application is permitted.~~ We ~~are currently evaluating~~adopted ~~the~~these ~~potential~~provisions ~~effect,~~as ifof ~~any~~January 1, ~~the~~2011. The adoption of ASU 2009-13 ~~will~~did not have a material impact on our financial position ~~and~~or results of operations.

We adopted the following accounting standards during 2010:

In February 2010, the FASB issued ASU 2010-09, Amendments to Certain Recognition and Disclosure Requirements, (“ASU 2010-09”), which eliminates the requirement under Accounting Standards Codification (“ASC”) Topic 855, Subsequent Events (“ASC 855”) for SEC registrants to disclose the date through which they have evaluated subsequent events in the financial statements. ASU 2010-09 was effective upon issuance, and we adopted its provisions as of the issuance of the Quarterly Report for the period ended March 31, 2010. The adoption of ASU 2010-09 was for disclosure purposes only and did not have any effect on our 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 disclosures regarding fair value measurements. In addition to the new disclosure requirements, ASU 2010-06 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. 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. We 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 us. The adoption of this portion of ASU 2010-06 will not have any effect on our financial position or results of operations.

In June 2009, the FASB issued 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. We adopted these provisions as of January 1, 2010. The adoption of the guidance codified within ASC 810 did not have any effect on our financial position or results of operations.

Critical Accounting Policies and Estimates

For a discussion of the critical accounting policies that require the use of significant judgments and estimates by management, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” included in the Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes to our market risk since December 31, ~~2009~~2010. For a discussion of market risk affecting us, refer to ~~“Management’s~~Part ~~Discussion~~II, ~~and~~Item ~~Analysis~~7A ~~of Financial Condition and Results of Operations—~~“Quantitative and Qualitative Disclosures About Market Risk” included in ~~the~~our Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010.

Item 4.

Controls and Procedures.

The required certifications of our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer are included as exhibits to this Quarterly Report on Form 10-Q. The disclosures set forth in this Item 4 contain information concerning the evaluation of our disclosure controls and procedures, internal control over financial reporting and change in internal controls over financial reporting referred to in those certifications. Those certifications should be read in conjunction with this Item 4 for a more complete understanding of the matters covered by the certifications.

Evaluation of disclosure controls and procedures

~~Our~~With ~~management, with~~ the participation of our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures as of ~~September~~March 3031, ~~2010~~2011. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other ~~procedures~~ procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of ~~September~~March 3031, ~~2010~~2011, our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

In45 evaluating the effectiveness of the Company’s disclosure controls and procedures, the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer considered, among other things, the matters discussed in Note 15 to the condensed consolidated financial statements presented herein, “Commitments and Contingencies,” in the section titled “Other Matters.”

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended ~~September~~March 3031, ~~2010~~2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

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

5346

PART II—OTHER INFORMATION

Item 1.

Legal Proceedings.

~~Information~~There have ~~regarding~~been ~~legal~~no ~~proceedings~~material ~~appears~~changes ~~under~~to the ~~caption~~matters ~~“Business—Legal~~discussed ~~Proceedings”~~ in ~~the~~Part ~~Annual Report on Form 10-K for the year ended December 31~~I, ~~2009.~~Item 3—“Legal ~~The~~Proceedings” ~~following information updates, and should be read~~ in ~~conjunction~~our ~~with, the information disclosed in the~~ Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010.

Ford Speed Control Deactivation Switch Litigation: We are 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 us for any demands related to these recalls.

We have 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, we settled all then outstanding wrongful death cases related to these matters for amounts that did not have a material impact on our financial condition or results of operations. On April 1, 2010, we were served (along with TI) 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. We believe that these claims will ultimately be dismissed.

As of September 30, 2010, we were a defendant in 23 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. Where a demand is specified the range is from $50 thousand to $3.0 million. Ford and TI are co-defendants in each of these lawsuits. We have recorded a $0.6 million reserve in our financial statements for potential losses in these cases.

Whirlpool Recall Litigation: We are 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 our 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. We 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 us.

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. The court has scheduled a trial setting for October 2011 and the parties continue in the discovery process. As of September 30, 2010, we have recorded a reserve of $5.9 million related to this matter.

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 September 30, 2010, we have incurred approximately $27.2 million of costs that we believe apply towards the indemnification.

We have 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 us that they have reached a settlement with their insurer in this matter. As of September 30, 2010, we have not recorded a reserve for this matter.

Item 1A.

Risk Factors.

Information regarding risk factors appears in ~~the~~Part I, Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010. The information presented below updates and should be read in connection with the risk factors and information disclosed in ~~the~~our Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010.

WeCertain ~~are~~natural ~~subject~~disasters, tosuch ~~risks~~as ~~associated~~coastal ~~with~~flooding, ~~our~~earthquakes ~~non-U.S.~~or ~~operations~~volcanic eruptions, ~~which~~may ~~could~~negatively ~~adversely~~ impact ~~the reported results of operations from~~ our ~~international businesses~~business.

~~Our~~Natural ~~subsidiaries~~disasters, ~~outside~~such ofas the ~~Americas~~recent ~~generated~~earthquake ~~approximately~~and ~~55%~~tsunami ofin Japan, could negatively impact our ~~net~~business by either ~~revenue~~damaging ~~for~~or ~~fiscal~~destroying ~~year~~our ~~2009~~production facilities, the production facilities of our suppliers or customers or the production facilities of our customers’ suppliers, as well as logistics facilities and wesystems ~~expect~~need ~~sales~~to ~~from~~transport ~~non-U~~our products.S. ~~markets~~If coastal toflooding, ~~continue~~an earthquake, a volcanic eruption or other natural disaster were to ~~represent~~directly damage, destroy or disrupt our manufacturing facilities, it could materially disrupt our operations, delay new production and shipments of existing inventory or result in costly repairs, replacements or other costs, all of which would adversely impact our business. Even if our manufacturing facilities are not directly damaged, a natural disaster may result in disruptions in distribution or supply channels. The impact of such occurrences depends on the specific geographic circumstances but could be significant, ~~portion~~as some of our ~~total~~factories ~~sales~~are located in islands with known earthquake fault zones, including our Japanese facilities, or flood or hurricane risk zones, including facilities in China and the Dominican Republic. We cannot accurately predict the impact on our business or results of operations of natural disasters.

~~International~~We ~~sales~~may ~~and~~be ~~operations~~adversely ~~are~~affected ~~subject~~by ~~to changes in local government regulations and policies~~environmental, ~~including~~safety ~~those related to tariffs~~ and ~~trade~~governmental ~~barriers,~~regulations ~~investments,~~or ~~taxation, exchange controls and repatriation of earnings~~concerns.

AWe ~~significant~~are ~~portion~~subject to the requirements of ~~our~~environmental ~~revenue,~~and ~~expenses,~~occupational ~~receivables~~safety and ~~payables~~health ~~are~~laws ~~denominated~~and regulations in ~~currencies~~ the United States and other countries, ~~than~~as ~~U.S.~~well ~~dollars~~as product performance standards established by quasi governmental and industrial standards organizations. We ~~are,~~cannot ~~therefore,~~assure ~~subject~~you tothat ~~foreign~~we ~~currency~~have ~~risks~~been and ~~foreign~~will ~~exchange~~continue ~~exposure.~~to ~~Changes~~be in ~~the~~compliance ~~relative~~with ~~values~~all of ~~currencies~~these ~~occur~~requirements ~~from~~on ~~time~~account toof circumstances ~~time~~or ~~and~~events ~~could~~that ~~affect~~have ~~our~~occurred ~~operating~~or ~~results.~~exist ~~For~~but ~~financial reporting~~that ~~purposes,~~we ~~the~~are ~~functional~~unaware ~~currency~~of, or that we ~~use~~will isnot ~~the~~incur ~~U.S.~~material ~~dollar~~costs ~~because~~or ofliabilities ~~the~~in ~~significant~~connection ~~influence~~with ofthese ~~the~~requirements ~~U.S.~~in ~~dollar~~excess onof ~~our~~amounts ~~operations~~we have reserved. In ~~certain instances~~addition, wethese ~~enter~~requirements ~~into~~are complex, ~~transactions~~change ~~that~~frequently ~~are~~and ~~denominated~~have intended ato ~~currency~~become ~~other~~more ~~than~~stringent ~~the U.S.~~over ~~dollar~~time. AtThese ~~the~~requirements ~~date~~may change in the ~~transaction~~future isin ~~recognized,~~a ~~each~~manner ~~asset,~~that ~~liability,~~could ~~revenue,~~have ~~expense,~~a ~~gain~~material oradverse ~~loss~~effect ~~arising~~on ~~from~~our ~~the~~business, ~~transaction~~results isof ~~measured~~operations and ~~recorded~~financial ~~in U~~condition.S. ~~dollars~~In addition, ~~using~~certain provisions of the ~~exchange~~Dodd-Frank ~~rate~~Wall inStreet ~~effect~~Reform atand ~~that~~Consumer ~~date.~~Protection AtAct ~~each~~may ~~balance~~soon ~~sheet date,~~require ~~recorded~~us ~~monetary~~to ~~balances~~report ~~denominated~~on in“conflict ametals” ~~currency~~used ~~other~~in ~~than~~our products and the ~~U.S.~~due ~~dollar~~diligence ~~are~~plan ~~adjusted~~we put in place to ~~the~~track ~~U.S.~~whether ~~dollar~~such ~~using~~metals originate from the ~~current~~Democratic ~~exchange~~Republic ~~rate~~of ~~with~~Congo ~~gains~~and oradjoining ~~losses~~countries. The ~~recorded~~implementation inof ~~Currency~~these ~~translation~~requirements ~~(loss)/gain~~could ~~and~~affect ~~other,~~the ~~net.~~sourcing ~~During~~and ~~times~~availability of ~~a weakening~~minerals ~~U.S.~~used ~~dollar,~~in certain of our ~~reported~~products. ~~international~~We ~~sales~~have made and ~~earnings~~may ~~will~~be ~~increase~~required ~~because~~in the future ~~non-U.S.~~to ~~currency~~make ~~will~~capital ~~translate~~and ~~into~~other ~~more~~expenditures ~~U.S.~~to ~~dollars~~comply with environmental requirements. ~~Conversely~~In addition, ~~during~~certain ~~times~~ of aour ~~strengthening~~subsidiaries ~~U.S.~~are ~~dollar,~~subject ~~our~~to ~~reported~~pending ~~international~~litigation ~~sales~~raising various environmental and human health and safety claims. We cannot assure ~~earnings~~you ~~will~~that beour ~~reduced~~costs ~~because~~to ~~the~~defend ~~local~~and ~~currency~~settle ~~will~~these ~~translate~~claims ~~into~~will ~~fewer~~not ~~U.S.~~be ~~dollars~~material.

There are other risks that are inherent in our non-U.S. operations, including the potential for changes in socio-economic conditions and/or monetary and fiscal policies, intellectual property protection difficulties and disputes, the settlement of legal disputes through certain foreign legal systems, the collection of receivables through certain foreign legal systems, exposure to possible expropriation or other government actions, unsettled political conditions and possible terrorist attacks against American interests. Our international business is subject to U.S. and local government regulations and procurement policies and practices, which may change from time to time, including regulations relating to import-export control, anti-bribery, environmental, health and safety, investments, exchange controls and repatriation of earnings or cash settlement challenges. These international risks may be especially significant with respect to sales of aerospace and defense products and sales to government entities. We also are exposed to risks associated with using foreign representatives and consultants for international sales and operations and teaming with international subcontractors and suppliers in connection with international programs. These and other factors may have a material adverse effect on our non-U.S. operations and, therefore, on our business and results of operations.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

~~On March 26, 2010, the Company issued 20 ordinary shares, par value €100 per share to its immediate parent company, Sensata Intermediate Holding, in exchange for consideration of approximately $5~~None.~~2 million~~ per share, or aggregate consideration of approximately $103.8 million. On April 29, 2010 the Company issued an additional 20 ordinary shares, par value €100 per share to Sensata Intermediate Holding, in exchange for consideration of approximately $4.7 million per share, or aggregate consideration of approximately $93.1 million. The issuance of these shares was exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, as an issuance not involving a public offering.

Item 3.

Defaults Upon Senior Securities.

None.

Item 6.

Exhibits.

Exhibit No.		Description
10.1		Amended and Restated Employment Agreement, dated March 22, 2011, between Sensata Technologies, Inc. and Thomas Wroe, Jr. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Sensata Technologies Holding N.V., filed on April 22, 2011).
10.2		Amended and Restated Employment Agreement, dated March 22, 2011, between Sensata Technologies, Inc. and Jeffrey Cote (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Sensata Technologies Holding N.V., filed on April 22, 2011).
10.3		Amended and Restated Employment Agreement, dated March 22, 2011, between Sensata Technologies, Inc. and Martha Sullivan (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of Sensata Technologies Holding N.V., filed on April 22, 2011).
10.4		Amended and Restated Employment Agreement, dated March 22, 2011, between Sensata Technologies, Inc. and Steven M. Major (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Sensata Technologies Holding N.V., filed on April 22, 2011).
10.5		Amended and Restated Employment Agreement, dated March 22, 2011, between Sensata Technologies Inc. and Martin Carter (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q of Sensata Technologies Holding N.V., filed on April 22, 2011).
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3		Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Section 1350 Certification of Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer.

5648

SIGNATURES

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

Date: ~~October~~April 22, ~~2010~~2011

SENSATA TECHNOLOGIES B.V. /s/ Thomas Wroe (Thomas Wroe) Chairman and Chief Executive Officer (Principal Executive Officer) /s/ Jeffrey Cote (Jeffrey Cote) Executive Vice President and Chief Administrative and Financial Officer (Principal Financial Officer) /s/ Robert Hureau (Robert Hureau) Vice President and Chief Accounting Officer (Principal Accounting Officer)

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Filing Compare · Sensata Technologies B.V.