ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
THE NETHERLANDS | 98-0641254 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Jan Tinbergenstraat 80, 7559 SP Hengelo The Netherlands | 31-74-357-8000 | |
(Address of Principal Executive Offices, including Zip Code) | (Registrant’s Telephone Number, Including Area Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
PART I | |||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
PART II | |||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 3. | |||
Item 6. | |||
Item 1. | Financial Statements. |
September 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 612,972 | $ | 351,428 | |||
Accounts receivable, net of allowances of $12,561 and $11,811 as of September 30, 2017 and December 31, 2016, respectively | 569,881 | 500,211 | |||||
Inventories | 447,486 | 389,844 | |||||
Prepaid expenses and other current assets | 100,935 | 100,002 | |||||
Total current assets | 1,731,274 | 1,341,485 | |||||
Property, plant and equipment, net | 735,924 | 724,046 | |||||
Goodwill | 3,005,464 | 3,005,464 | |||||
Other intangible assets, net of accumulated amortization of $1,727,644 and $1,607,269 as of September 30, 2017 and December 31, 2016, respectively | 958,972 | 1,075,431 | |||||
Deferred income tax assets | 26,678 | 20,695 | |||||
Other assets | 79,625 | 73,855 | |||||
Total assets | $ | 6,537,937 | $ | 6,240,976 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt, capital lease and other financing obligations | $ | 13,176 | $ | 14,643 | |||
Accounts payable | 324,119 | 299,198 | |||||
Income taxes payable | 27,031 | 23,889 | |||||
Accrued expenses and other current liabilities | 263,611 | 245,566 | |||||
Total current liabilities | 627,937 | 583,296 | |||||
Deferred income tax liabilities | 404,575 | 392,628 | |||||
Pension and other post-retirement benefit obligations | 36,192 | 34,878 | |||||
Capital lease and other financing obligations, less current portion | 29,990 | 32,369 | |||||
Long-term debt, net | 3,224,684 | 3,226,582 | |||||
Other long-term liabilities | 32,034 | 29,216 | |||||
Total liabilities | 4,355,412 | 4,298,969 | |||||
Commitments and contingencies (Note 10) | |||||||
Shareholders’ equity: | |||||||
Ordinary shares, €0.01 nominal value per share, 400,000 shares authorized; 178,437 shares issued | 2,289 | 2,289 | |||||
Treasury shares, at cost, 7,140 and 7,557 shares as of September 30, 2017 and December 31, 2016, respectively | (290,894 | ) | (306,505 | ) | |||
Additional paid-in capital | 1,658,574 | 1,643,449 | |||||
Retained earnings | 862,954 | 636,841 | |||||
Accumulated other comprehensive loss | (50,398 | ) | (34,067 | ) | |||
Total shareholders’ equity | 2,182,525 | 1,942,007 | |||||
Total liabilities and shareholders’ equity | $ | 6,537,937 | $ | 6,240,976 |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||
Net revenue | $ | 819,054 | $ | 789,798 | $ | 2,466,199 | $ | 2,413,892 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of revenue | 527,432 | 508,944 | 1,601,190 | 1,574,763 | |||||||||||
Research and development | 34,002 | 31,601 | 97,032 | 95,240 | |||||||||||
Selling, general and administrative | 75,972 | 75,046 | 227,256 | 224,637 | |||||||||||
Amortization of intangible assets | 40,317 | 50,562 | 121,578 | 151,572 | |||||||||||
Restructuring and special charges | 1,329 | 837 | 18,768 | 3,167 | |||||||||||
Total operating costs and expenses | 679,052 | 666,990 | 2,065,824 | 2,049,379 | |||||||||||
Profit from operations | 140,002 | 122,808 | 400,375 | 364,513 | |||||||||||
Interest expense, net | (40,263 | ) | (41,176 | ) | (120,578 | ) | (125,201 | ) | |||||||
Other, net | 3,112 | (726 | ) | 7,190 | 4,892 | ||||||||||
Income before taxes | 102,851 | 80,906 | 286,987 | 244,204 | |||||||||||
Provision for income taxes | 14,816 | 11,121 | 47,759 | 48,297 | |||||||||||
Net income | $ | 88,035 | $ | 69,785 | $ | 239,228 | $ | 195,907 | |||||||
Basic net income per share: | $ | 0.51 | $ | 0.41 | $ | 1.40 | $ | 1.15 | |||||||
Diluted net income per share: | $ | 0.51 | $ | 0.41 | $ | 1.39 | $ | 1.14 |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||
Net income | $ | 88,035 | $ | 69,785 | $ | 239,228 | $ | 195,907 | |||||||
Other comprehensive loss, net of tax: | |||||||||||||||
Deferred loss on derivative instruments, net of reclassifications | (6,784 | ) | (8,485 | ) | (17,820 | ) | (25,010 | ) | |||||||
Defined benefit and retiree healthcare plans | 274 | 24 | 1,489 | 291 | |||||||||||
Other comprehensive loss | (6,510 | ) | (8,461 | ) | (16,331 | ) | (24,719 | ) | |||||||
Comprehensive income | $ | 81,525 | $ | 61,324 | $ | 222,897 | $ | 171,188 |
For the nine months ended | |||||||
September 30, 2017 | September 30, 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 239,228 | $ | 195,907 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 82,014 | 77,649 | |||||
Amortization of deferred financing costs and original issue discounts | 5,528 | 5,501 | |||||
Gain on sale of assets | (1,180 | ) | — | ||||
Share-based compensation | 15,106 | 13,279 | |||||
Amortization of inventory step-up to fair value | — | 2,319 | |||||
Amortization of intangible assets | 121,578 | 151,572 | |||||
Deferred income taxes | 11,836 | 15,706 | |||||
Unrealized loss on hedges and other non-cash items | 5,844 | 660 | |||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||
Accounts receivable, net | (69,670 | ) | (65,373 | ) | |||
Inventories | (58,476 | ) | (20,624 | ) | |||
Prepaid expenses and other current assets | (19,251 | ) | 2,320 | ||||
Accounts payable and accrued expenses | 40,144 | 33,371 | |||||
Income taxes payable | 3,142 | (6,361 | ) | ||||
Other | (3,564 | ) | (9,575 | ) | |||
Net cash provided by operating activities | 372,279 | 396,351 | |||||
Cash flows from investing activities: | |||||||
Acquisition of CST, net of cash received | — | 4,688 | |||||
Additions to property, plant and equipment and capitalized software | (103,536 | ) | (94,584 | ) | |||
Investment in equity securities | — | (50,000 | ) | ||||
Proceeds from the sale of assets | 8,862 | 751 | |||||
Other | (3,000 | ) | — | ||||
Net cash used in investing activities | (97,674 | ) | (139,145 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from exercise of stock options and issuance of ordinary shares | 5,332 | 3,306 | |||||
Payments on debt | (14,459 | ) | (297,698 | ) | |||
Payments to repurchase ordinary shares | (2,817 | ) | (4,672 | ) | |||
Payments of debt issuance costs | (137 | ) | (518 | ) | |||
Other | (980 | ) | — | ||||
Net cash used in financing activities | (13,061 | ) | (299,582 | ) | |||
Net change in cash and cash equivalents | 261,544 | (42,376 | ) | ||||
Cash and cash equivalents, beginning of period | 351,428 | 342,263 | |||||
Cash and cash equivalents, end of period | $ | 612,972 | $ | 299,887 |
September 30, 2017 | December 31, 2016 | ||||||
Finished goods | $ | 191,165 | $ | 169,304 | |||
Work-in-process | 91,569 | 74,810 | |||||
Raw materials | 164,752 | 145,730 | |||||
Inventories | $ | 447,486 | $ | 389,844 |
Cash Flow Hedges | Defined Benefit and Retiree Healthcare Plans | Accumulated Other Comprehensive Loss | ||||||||||
Balance as of December 31, 2016 | $ | 23 | $ | (34,090 | ) | $ | (34,067 | ) | ||||
Other comprehensive loss before reclassifications, net of tax | (25,078 | ) | — | (25,078 | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 7,258 | 1,489 | 8,747 | |||||||||
Net current period other comprehensive (loss)/income | (17,820 | ) | 1,489 | (16,331 | ) | |||||||
Balance as of September 30, 2017 | $ | (17,797 | ) | $ | (32,601 | ) | $ | (50,398 | ) |
Amount of Loss/(Gain) Reclassified from Accumulated Other Comprehensive Loss | Affected Line in Condensed Consolidated Statements of Operations | |||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||
Component | September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||||
Derivative instruments designated and qualifying as cash flow hedges | ||||||||||||||||||
Foreign currency forward contracts | $ | 4,075 | $ | (2,771 | ) | $ | (3,678 | ) | $ | (15,075 | ) | Net revenue (1) | ||||||
Foreign currency forward contracts | 1,953 | 4,834 | 13,356 | 14,857 | Cost of revenue (1) | |||||||||||||
Total, before taxes | 6,028 | 2,063 | 9,678 | (218 | ) | Income before taxes | ||||||||||||
Income tax effect | (1,507 | ) | (514 | ) | (2,420 | ) | 55 | Provision for income taxes | ||||||||||
Total, net of taxes | $ | 4,521 | $ | 1,549 | $ | 7,258 | $ | (163 | ) | Net income | ||||||||
Defined benefit and retiree healthcare plans | $ | 297 | $ | (5 | ) | $ | 1,557 | $ | 324 | Various (2) | ||||||||
Income tax effect | (23 | ) | 29 | (68 | ) | (33 | ) | Provision for income taxes | ||||||||||
Total, net of taxes | $ | 274 | $ | 24 | $ | 1,489 | $ | 291 | Net income |
(1) | See Note 12, "Derivative Instruments and Hedging Activities," for additional details on amounts to be reclassified in the future from Accumulated other comprehensive loss. |
(2) | Amounts related to defined benefit and retiree healthcare plans reclassified from Accumulated other comprehensive loss affect the Cost of revenue, Research and development, and Selling, general and administrative ("SG&A") expense line items in the condensed consolidated statements of operations. The amounts reclassified are included in the computation of net periodic benefit cost. See Note 8, "Pension and Other Post-Retirement Benefits," for additional details of net periodic benefit cost. |
Severance | ||||
Balance at December 31, 2016 | $ | 17,350 | ||
Charges, net of reversals | 11,747 | |||
Payments | (20,072 | ) | ||
Impact of changes in foreign currency exchange rates | 1,529 | |||
Balance at September 30, 2017 | $ | 10,554 |
Maturity Date | September 30, 2017 | December 31, 2016 | ||||||||
Term Loan | October 14, 2021 | $ | 927,794 | $ | 937,794 | |||||
4.875% Senior Notes | October 15, 2023 | 500,000 | 500,000 | |||||||
5.625% Senior Notes | November 1, 2024 | 400,000 | 400,000 | |||||||
5.0% Senior Notes | October 1, 2025 | 700,000 | 700,000 | |||||||
6.25% Senior Notes | February 15, 2026 | 750,000 | 750,000 | |||||||
Less: discount | (15,812 | ) | (17,655 | ) | ||||||
Less: deferred financing costs | (29,971 | ) | (33,656 | ) | ||||||
Less: current portion | (7,327 | ) | (9,901 | ) | ||||||
Long-term debt, net | $ | 3,224,684 | $ | 3,226,582 | ||||||
Capital lease and other financing obligations | $ | 35,839 | $ | 37,111 | ||||||
Less: current portion | (5,849 | ) | (4,742 | ) | ||||||
Capital lease and other financing obligations, less current portion | $ | 29,990 | $ | 32,369 |
U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||||||||||||
Defined Benefit | Retiree Healthcare | Defined Benefit | Total | ||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | 21 | $ | 25 | $ | 661 | $ | 697 | $ | 682 | $ | 722 | |||||||||||||||
Interest cost | 385 | 332 | 80 | 94 | 273 | 298 | 738 | 724 | |||||||||||||||||||||||
Expected return on plan assets | (527 | ) | (659 | ) | — | — | (230 | ) | (249 | ) | (757 | ) | (908 | ) | |||||||||||||||||
Amortization of net loss | 291 | 118 | 8 | 46 | 64 | 42 | 363 | 206 | |||||||||||||||||||||||
Amortization of prior service (credit) | — | — | (334 | ) | (334 | ) | (1 | ) | (18 | ) | (335 | ) | (352 | ) | |||||||||||||||||
Loss on settlement | 269 | 140 | — | — | — | 1 | 269 | 141 | |||||||||||||||||||||||
Net periodic benefit cost/(credit) | $ | 418 | $ | (69 | ) | $ | (225 | ) | $ | (169 | ) | $ | 767 | $ | 771 | $ | 960 | $ | 533 |
U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||||||||||||
Defined Benefit | Retiree Healthcare | Defined Benefit | Total | ||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | 64 | $ | 76 | $ | 1,917 | $ | 2,003 | $ | 1,981 | $ | 2,079 | |||||||||||||||
Interest cost | 1,214 | 1,109 | 239 | 283 | 784 | 887 | 2,237 | 2,279 | |||||||||||||||||||||||
Expected return on plan assets | (1,617 | ) | (2,006 | ) | — | — | (677 | ) | (714 | ) | (2,294 | ) | (2,720 | ) | |||||||||||||||||
Amortization of net loss | 854 | 355 | 32 | 142 | 202 | 89 | 1,088 | 586 | |||||||||||||||||||||||
Amortization of prior service (credit)/cost | — | — | (1,001 | ) | (1,001 | ) | (3 | ) | 8 | (1,004 | ) | (993 | ) | ||||||||||||||||||
Loss on settlement | 1,473 | 730 | — | — | — | 1 | 1,473 | 731 | |||||||||||||||||||||||
Net periodic benefit cost/(credit) | $ | 1,924 | $ | 188 | $ | (666 | ) | $ | (500 | ) | $ | 2,223 | $ | 2,274 | $ | 3,481 | $ | 1,962 |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||
Stock options | $ | 1,575 | $ | 1,621 | $ | 5,055 | $ | 5,547 | |||||||
Restricted securities | 3,522 | 3,136 | 10,051 | 7,732 | |||||||||||
Share-based compensation expense | $ | 5,097 | $ | 4,757 | $ | 15,106 | $ | 13,279 |
Options Granted to | Number of Options Granted (in thousands) | Weighted- Average Grant Date Fair Value | Vesting Period | |||
Various executives and employees | 387 | $14.50 | 25% per year over four years |
Awards Granted to | Type of Award | Number of Units Granted (in thousands) | Percentage of PRSUs Awarded That May Vest | Weighted- Average Grant Date Fair Value | ||||
Various executives and employees | RSU (1) | 147 | N/A | $43.67 | ||||
Directors | RSU (1) | 34 | N/A | $41.10 | ||||
Various executives and employees | PRSU (2) | 183 | 0.0% - 172.5% | $43.67 | ||||
Various executives and employees | PRSU (2) | 53 | 0.0% - 200.0% | $43.33 |
(1) | RSUs granted during the nine months ended September 30, 2017 vest on various dates between June 2018 and July 2020. |
(2) | PRSUs granted during the nine months ended September 30, 2017 vest on various dates between April and May 2020, with the amount ultimately vesting within the range shown in the table above, dependent on the extent to which certain performance criteria are met. |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Foreign currency forward contracts | $ | — | $ | 8,869 | $ | — | $ | — | $ | 32,757 | $ | — | |||||||||||
Commodity forward contracts | — | 4,847 | — | — | 2,639 | — | |||||||||||||||||
Total | $ | — | $ | 13,716 | $ | — | $ | — | $ | 35,396 | $ | — | |||||||||||
Liabilities | |||||||||||||||||||||||
Foreign currency forward contracts | $ | — | $ | 31,911 | $ | — | $ | — | $ | 27,201 | $ | — | |||||||||||
Commodity forward contracts | — | 1,666 | — | — | 3,790 | — | |||||||||||||||||
Total | $ | — | $ | 33,577 | $ | — | $ | — | $ | 30,991 | $ | — |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
Carrying Value (1) | Fair Value | Carrying Value (1) | Fair Value | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Term Loan | $ | 927,794 | $ | — | $ | 932,433 | $ | — | $ | 937,794 | $ | — | $ | 942,483 | $ | — | |||||||||||||||
4.875% Senior Notes | $ | 500,000 | $ | — | $ | 525,000 | $ | — | $ | 500,000 | $ | — | $ | 514,375 | $ | — | |||||||||||||||
5.625% Senior Notes | $ | 400,000 | $ | — | $ | 440,000 | $ | — | $ | 400,000 | $ | — | $ | 417,752 | $ | — | |||||||||||||||
5.0% Senior Notes | $ | 700,000 | $ | — | $ | 736,750 | $ | — | $ | 700,000 | $ | — | $ | 686,000 | $ | — | |||||||||||||||
6.25% Senior Notes | $ | 750,000 | $ | — | $ | 819,375 | $ | — | $ | 750,000 | $ | — | $ | 786,098 | $ | — |
Notional (in millions) | Effective Date(s) | Maturity Date(s) | Index | Weighted- Average Strike Rate | Hedge Designation | |||||
65.0 EUR | September 27, 2017 | October 31, 2017 | Euro to U.S. Dollar Exchange Rate | 1.18 USD | Not designated | |||||
461.6 EUR | Various from April 2015 to September 2017 | Various from October 2017 to December 2019 | Euro to U.S. Dollar Exchange Rate | 1.14 USD | Designated | |||||
500.0 CNY | September 26, 2017 | October 31, 2017 | U.S. Dollar to Chinese Renminbi Exchange Rate | 6.68 CNY | Not designated | |||||
132.0 CNY | Various in February 2017 | Various from October to December 2017 | U.S. Dollar to Chinese Renminbi Exchange Rate | 7.05 CNY | Designated | |||||
110.0 JPY | September 27, 2017 | October 31, 2017 | U.S. Dollar to Japanese Yen Exchange Rate | 112.80 JPY | Not designated | |||||
237.0 JPY | January 5, 2017 | Various from October to December 2017 | U.S. Dollar to Japanese Yen Exchange Rate | 113.71 JPY | Designated | |||||
45,258.3 KRW | Various from April 2015 to September 2017 | Various from October 2017 to August 2019 | U.S. Dollar to Korean Won Exchange Rate | 1,140.77 KRW | Designated | |||||
36.5 MYR | Various from April 2015 to November 2016 | Various from October 2017 to October 2018 | U.S. Dollar to Malaysian Ringgit Exchange Rate | 4.19 MYR | Designated | |||||
182.0 MXN | September 27, 2017 | October 31, 2017 | U.S. Dollar to Mexican Peso Exchange Rate | 18.24 MXN | Not designated | |||||
2,166.8 MXN | Various from April 2015 to September 2017 | Various from October 2017 to August 2019 | U.S. Dollar to Mexican Peso Exchange Rate | 19.94 MXN | Designated | |||||
44.5 GBP | Various from April 2015 to September 2017 | Various from October 2017 to August 2019 | British Pound Sterling to U.S. Dollar Exchange Rate | 1.33 USD | Designated |
Commodity | Notional | Remaining Contracted Periods | Weighted-Average Strike Price Per Unit | |||
Silver | 1,109,455 troy oz. | October 2017 - August 2019 | $17.69 | |||
Gold | 12,150 troy oz. | October 2017 - August 2019 | $1,269.40 | |||
Nickel | 287,659 pounds | October 2017 - August 2019 | $4.68 | |||
Aluminum | 5,554,370 pounds | October 2017 - August 2019 | $0.84 | |||
Copper | 7,394,018 pounds | October 2017 - August 2019 | $2.54 | |||
Platinum | 8,036 troy oz. | October 2017 - August 2019 | $996.80 | |||
Palladium | 1,927 troy oz. | October 2017 - August 2019 | $759.11 |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||
Balance Sheet Location | September 30, 2017 | December 31, 2016 | Balance Sheet Location | September 30, 2017 | December 31, 2016 | ||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||
Foreign currency forward contracts | Prepaid expenses and other current assets | $ | 6,909 | $ | 24,796 | Accrued expenses and other current liabilities | $ | 23,838 | $ | 20,990 | |||||||||
Foreign currency forward contracts | Other assets | 1,956 | 5,693 | Other long-term liabilities | 7,327 | 3,814 | |||||||||||||
Total | $ | 8,865 | $ | 30,489 | $ | 31,165 | $ | 24,804 | |||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Commodity forward contracts | Prepaid expenses and other current assets | $ | 4,173 | $ | 2,097 | Accrued expenses and other current liabilities | $ | 1,400 | $ | 2,764 | |||||||||
Commodity forward contracts | Other assets | 674 | 542 | Other long-term liabilities | 266 | 1,026 | |||||||||||||
Foreign currency forward contracts | Prepaid expenses and other current assets | 4 | 2,268 | Accrued expenses and other current liabilities | 746 | 2,397 | |||||||||||||
Total | $ | 4,851 | $ | 4,907 | $ | 2,412 | $ | 6,187 |
Derivatives designated as hedging instruments | Amount of Deferred (Loss)/Gain Recognized in Other Comprehensive Loss | Location of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income | Amount of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income | |||||||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | |||||||||||||||
Foreign currency forward contracts | $ | (16,688 | ) | $ | (6,929 | ) | Net revenue | $ | (4,075 | ) | $ | 2,771 | ||||||
Foreign currency forward contracts | $ | 1,614 | $ | (6,450 | ) | Cost of revenue | $ | (1,953 | ) | $ | (4,834 | ) |
Derivatives not designated as hedging instruments | Amount of Gain/(Loss) Recognized in Net Income | Location of Gain/(Loss) Recognized in Net Income | ||||||||
September 30, 2017 | September 30, 2016 | |||||||||
Commodity forward contracts | $ | 2,956 | $ | 1,318 | Other, net | |||||
Foreign currency forward contracts | $ | (3,865 | ) | $ | (3,827 | ) | Other, net |
Derivatives designated as hedging instruments | Amount of Deferred (Loss)/Gain Recognized in Other Comprehensive Loss | Location of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income | Amount of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income | |||||||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | |||||||||||||||
Foreign currency forward contracts | $ | (56,479 | ) | $ | (12,810 | ) | Net revenue | $ | 3,678 | $ | 15,075 | |||||||
Foreign currency forward contracts | $ | 23,041 | $ | (20,319 | ) | Cost of revenue | $ | (13,356 | ) | $ | (14,857 | ) |
Derivatives not designated as hedging instruments | Amount of Gain/(Loss) Recognized in Net Income | Location of Gain/(Loss) Recognized in Net Income | ||||||||
September 30, 2017 | September 30, 2016 | |||||||||
Commodity forward contracts | $ | 6,439 | $ | 12,049 | Other, net | |||||
Foreign currency forward contracts | $ | (10,542 | ) | $ | (7,912 | ) | Other, net |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||
Currency remeasurement gain on net monetary assets | $ | 3,989 | $ | 1,707 | $ | 11,010 | $ | 550 | |||||||
Loss on foreign currency forward contracts | (3,865 | ) | (3,827 | ) | (10,542 | ) | (7,912 | ) | |||||||
Gain on commodity forward contracts | 2,956 | 1,318 | 6,439 | 12,049 | |||||||||||
Other | 32 | 76 | 283 | 205 | |||||||||||
Other, net | $ | 3,112 | $ | (726 | ) | $ | 7,190 | $ | 4,892 |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||
Net revenue: | |||||||||||||||
Performance Sensing | $ | 603,932 | $ | 584,650 | $ | 1,825,904 | $ | 1,797,395 | |||||||
Sensing Solutions | 215,122 | 205,148 | 640,295 | 616,497 | |||||||||||
Total net revenue | $ | 819,054 | $ | 789,798 | $ | 2,466,199 | $ | 2,413,892 | |||||||
Segment profit (as defined above): | |||||||||||||||
Performance Sensing | $ | 162,655 | $ | 155,228 | $ | 483,491 | $ | 453,540 | |||||||
Sensing Solutions | 72,372 | 67,314 | 209,911 | 198,737 | |||||||||||
Total segment profit | 235,027 | 222,542 | 693,402 | 652,277 | |||||||||||
Corporate and other | (53,379 | ) | (48,335 | ) | (152,681 | ) | (133,025 | ) | |||||||
Amortization of intangible assets | (40,317 | ) | (50,562 | ) | (121,578 | ) | (151,572 | ) | |||||||
Restructuring and special charges | (1,329 | ) | (837 | ) | (18,768 | ) | (3,167 | ) | |||||||
Profit from operations | 140,002 | 122,808 | 400,375 | 364,513 | |||||||||||
Interest expense, net | (40,263 | ) | (41,176 | ) | (120,578 | ) | (125,201 | ) | |||||||
Other, net | 3,112 | (726 | ) | 7,190 | 4,892 | ||||||||||
Income before taxes | $ | 102,851 | $ | 80,906 | $ | 286,987 | $ | 244,204 |
For the three months ended | For the nine months ended | ||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||
Basic weighted-average ordinary shares outstanding | 171,269 | 170,840 | 171,116 | 170,656 | |||||||
Dilutive effect of stock options | 618 | 431 | 567 | 504 | |||||||
Dilutive effect of unvested restricted securities | 358 | 207 | 340 | 199 | |||||||
Diluted weighted-average ordinary shares outstanding | 172,245 | 171,478 | 172,023 | 171,359 |
For the three months ended | For the nine months ended | ||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||
Anti-dilutive shares excluded | 1,584 | 1,355 | 1,635 | 1,418 | |||||||
Contingently issuable shares excluded | 884 | 735 | 783 | 632 |
• | conditions affecting demand for our products in the industries we serve, particularly the automotive industry; |
• | competition and pricing pressure; |
• | raw material availability, quality, and cost; |
• | financial condition of, and relationships with, customers and vendors; |
• | reliance on third-party suppliers; |
• | changes to current policies by the U.S. government; |
• | changes in tax rates; |
• | conditions in the global markets we operate in and serve, including the impact of the anticipated exit of the United Kingdom from the European Union; |
• | risks associated with current and future acquisitions and divestitures; |
• | labor disputes or increased labor costs; |
• | global risks of business interruptions, such as natural disasters and political, economic, and military instability; |
• | risks associated with security breaches and other disruptions to our information technology infrastructure; |
• | risks related to compliance with current and future laws and regulations; |
• | our ability to protect our intellectual property rights; |
• | risks of litigation; |
• | our level of indebtedness and ability to operate within the limitations imposed by our debt instruments; and |
• | various risks associated with being a Dutch corporation. |
For the three months ended | |||||||||||||
September 30, 2017 | September 30, 2016 | ||||||||||||
($ in millions) | Amount | Percent of Net Revenue | Amount | Percent of Net Revenue | |||||||||
Net revenue: | |||||||||||||
Performance Sensing | $ | 603.9 | 73.7 | % | $ | 584.7 | 74.0 | % | |||||
Sensing Solutions | 215.1 | 26.3 | 205.1 | 26.0 | |||||||||
Net revenue | 819.1 | 100.0 | 789.8 | 100.0 | |||||||||
Operating costs and expenses: | |||||||||||||
Cost of revenue | 527.4 | 64.4 | 508.9 | 64.4 | |||||||||
Research and development | 34.0 | 4.2 | 31.6 | 4.0 | |||||||||
Selling, general and administrative | 76.0 | 9.3 | 75.0 | 9.5 | |||||||||
Amortization of intangible assets | 40.3 | 4.9 | 50.6 | 6.4 | |||||||||
Restructuring and special charges | 1.3 | 0.2 | 0.8 | 0.1 | |||||||||
Total operating costs and expenses | 679.1 | 82.9 | 667.0 | 84.5 | |||||||||
Profit from operations | 140.0 | 17.1 | 122.8 | 15.5 | |||||||||
Interest expense, net | (40.3 | ) | (4.9 | ) | (41.2 | ) | (5.2 | ) | |||||
Other, net | 3.1 | 0.4 | (0.7 | ) | (0.1 | ) | |||||||
Income before taxes | 102.9 | 12.6 | 80.9 | 10.2 | |||||||||
Provision for income taxes | 14.8 | 1.8 | 11.1 | 1.4 | |||||||||
Net income | $ | 88.0 | 10.7 | % | $ | 69.8 | 8.8 | % |
For the nine months ended | |||||||||||||
September 30, 2017 | September 30, 2016 | ||||||||||||
($ in millions) | Amount | Percent of Net Revenue | Amount | Percent of Net Revenue | |||||||||
Net revenue: | |||||||||||||
Performance Sensing | $ | 1,825.9 | 74.0 | % | $ | 1,797.4 | 74.5 | % | |||||
Sensing Solutions | 640.3 | 26.0 | 616.5 | 25.5 | |||||||||
Net revenue | 2,466.2 | 100.0 | 2,413.9 | 100.0 | |||||||||
Operating costs and expenses: | |||||||||||||
Cost of revenue | 1,601.2 | 64.9 | 1,574.8 | 65.2 | |||||||||
Research and development | 97.0 | 3.9 | 95.2 | 3.9 | |||||||||
Selling, general and administrative | 227.3 | 9.2 | 224.6 | 9.3 | |||||||||
Amortization of intangible assets | 121.6 | 4.9 | 151.6 | 6.3 | |||||||||
Restructuring and special charges | 18.8 | 0.8 | 3.2 | 0.1 | |||||||||
Total operating costs and expenses | 2,065.8 | 83.8 | 2,049.4 | 84.9 | |||||||||
Profit from operations | 400.4 | 16.2 | 364.5 | 15.1 | |||||||||
Interest expense, net | (120.6 | ) | (4.9 | ) | (125.2 | ) | (5.2 | ) | |||||
Other, net | 7.2 | 0.3 | 4.9 | 0.2 | |||||||||
Income before taxes | 287.0 | 11.6 | 244.2 | 10.1 | |||||||||
Provision for income taxes | 47.8 | 1.9 | 48.3 | 2.0 | |||||||||
Net income | $ | 239.2 | 9.7 | % | $ | 195.9 | 8.1 | % |
For the nine months ended | |||||||
(in millions) | September 30, 2017 | September 30, 2016 | |||||
Net cash provided by/(used in): | |||||||
Operating activities: | |||||||
Net income adjusted for non-cash items | $ | 480.0 | $ | 462.6 | |||
Changes in operating assets and liabilities, net of effects of acquisitions | (107.7 | ) | (66.2 | ) | |||
Operating activities | 372.3 | 396.4 | |||||
Investing activities | (97.7 | ) | (139.1 | ) | |||
Financing activities | (13.1 | ) | (299.6 | ) | |||
Net change | $ | 261.5 | $ | (42.4 | ) |
(in thousands) | Maturity Date | September 30, 2017 | |||
Term Loan | October 14, 2021 | $ | 927,794 | ||
4.875% Senior Notes | October 15, 2023 | 500,000 | |||
5.625% Senior Notes | November 1, 2024 | 400,000 | |||
5.0% Senior Notes | October 1, 2025 | 700,000 | |||
6.25% Senior Notes | February 15, 2026 | 750,000 | |||
Less: discount | (15,812 | ) | |||
Less: deferred financing costs | (29,971 | ) | |||
Less: current portion | (7,327 | ) | |||
Long-term debt, net | $ | 3,224,684 | |||
Capital lease and other financing obligations | $ | 35,839 | |||
Less: current portion | (5,849 | ) | |||
Capital lease and other financing obligations, less current portion | $ | 29,990 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Period | Total Number of Shares Purchased (in shares) | Weighted-Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs (in millions) | ||||||||||
July 1 through July 31, 2017 | 2,117 | (1) | $ | 45.03 | — | $ | 250.0 | |||||||
August 1 through August 31, 2017 | — | $ | — | — | $ | 250.0 | ||||||||
September 1 through September 30, 2017 | — | $ | — | — | $ | 250.0 | ||||||||
Total | 2,117 | $ | 45.03 | — | $ | 250.0 |
(1) | Pursuant to the "withhold to cover" method for collecting and paying withholding taxes for our employees upon the vesting of restricted securities, we withheld from certain employees the shares noted in the table above to cover such tax withholdings. These transactions took place outside of a publicly-announced repurchase plan. The weighted-average price per share listed in the above table is the weighted-average of the fair market prices at which we calculated the number of shares withheld to cover tax for the employees. |
Item 3. | Defaults Upon Senior Securities. |
Item 6. | Exhibits. |
Exhibit No. | Description | |
3.1 | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | ||
31.1 | ||
31.2 | ||
32.1 | ||
101 | The following materials from the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements. | |
/s/ Martha Sullivan |
(Martha Sullivan) President and Chief Executive Officer (Principal Executive Officer) |
/s/ Paul Vasington |
(Paul Vasington) Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
1.1 | In these Articles of Association, the following terms are defined as follows: |
1.2 | A message in writing means a message transmitted by letter, by telecopy, by e-mail or by any other means of electronic communication provided the relevant message or document is legible and reproducible, and the term written shall be construed accordingly. |
1.3 | References to Articles refer to Articles which are part of these Articles of Association, except where expressly indicated otherwise. |
2.1 | The name of the Company is: Sensata Technologies Holding N.V. |
2.2 | The official seat of the Company is in Hengelo, the Netherlands. |
3.1 | The Company's objects are: |
(a) | to participate or to acquire interests in any other way in enterprises, to manage or exercise supervision of enterprises and to provide services to enterprises, with special reference to enterprises engaged in the production of sensors and controls for manufacturers in the automotive, appliance, aircraft and industrial business or rendering other services to such enterprises; |
(b) | to perform all acts which directly or indirectly may be conductive to such objects. |
3.2 | In realising its objects the Company shall exercise management directed at promoting in the best way possible and in a well balanced manner the interests of those who are directly or indirectly interested in the Company. |
4.1 | The authorised capital amounts to eight million euro (EUR 8,000,000), divided into: |
(a) | four hundred million (400,000,000) Ordinary Shares of one euro cent (EUR 0.01) each; and |
(b) | four hundred million (400,000,000) Preference Shares of one euro cent (EUR 0.01) each. |
4.2 | The Shares are registered. The Shares shall be numbered in such a manner that they can be distinguished from each other at any time. |
4.3 | The Board shall, at the request of a Shareholder, issue or cause to be issued Share certificates (aandeelbewijzen) in respect of Shares in such denominations as the Board shall determine which certificates are exchangeable at the request of the Shareholder. |
4.4 | Share certificates shall not be provided with a set of dividend coupons and a talon. |
4.5 | Each Share certificate shall be identified by numbers and/or letters in such manner as determined by the Board. |
4.6 | Share certificates shall be signed by or on behalf of a member of the Board. In addition all Share certificates may be validly signed by one or more persons designated by the Board for that purpose.The Board may resolve that the signature shall be provided by a facsimile signature. |
4.7 | The Board may determine that for the purpose of trading and transfer of shares at a foreign stock exchange, Share certificates shall be issued in such form as shall comply with the requirements of such foreign stock exchange. |
4.8 | At the written request by the party concerned and upon provision of satisfactory evidence as to title, replacement Share certificates may be issued of Share certificates which have been mislaid, stolen or damaged, on such conditions, including, without limitation, the provision of indemnity to the Company as the Board shall determine. The costs of the issue of replacement Share certificates may be charged to the applicant. By the issue of replacement Share certificates the original Share certificates will become void and the Company will have no further obligation with respect to such original Share certificates. Replacement Share certificates will bear the numbers and letters of the documents they replace. |
4.9 | The General Meeting may, but only pursuant to a proposal of the Board, resolve that the Company cooperates in the issuance of Depositary Receipts for its Shares. Holders of Depositary Receipts issued for Shares in the Company with the Company's cooperation shall have the rights conferred to them by law, also to the extent such rights are not expressly referred to in these Articles of Association. |
5.1 | The Company shall keep a register in which the names and addresses of holders of Ordinary Shares and Preference Shares are recorded, showing the date on which the Shares were acquired, the date of acknowledgement by or serving on the Company and the amount paid up on each Share. |
5.2 | Each Shareholder, each pledgee of Shares and each usufructuary of Shares is required to give his address to the Company in writing as well as each amendment thereto. |
5.3 | All entries and notes in a register of Shareholders shall be signed by an Executive Director of the Board, an officer of the Company or another person authorised to do so by the Board. |
5.4 | On application by a Shareholder or a pledgee or usufructuary of Shares, the Board shall furnish an extract from the register of Shareholders, free of charge, insofar as it relates to the applicant's right in respect of a Share. |
5.5 | Section 2:85 of the Dutch Civil Code also applies to the register. |
5.6 | If a Shareholder, usufructuary, pledgee, or Holder of Depositary Receipts provided the Company with an electronic address in order to record this electronic address in the register, jointly with the other details specified in Article 5.1, this electronic address is considered to be provided with the purpose of electronically receiving all notifications, announcements and statements as well as, in respect of Shareholders and Holders of Depositary Receipts, notices to convene a General Meeting. A notification sent electronically must be legible and reproducible. |
5.7 | The Board shall be authorised to keep a part of the register outside the Netherlands if required to comply with applicable foreign legislation or the rules of the stock exchange where the Shares of the Company are listed. |
5.8 | The Board shall determine the form and contents of the register with due observance of the provisions of this Article. |
5.9 | The Board shall be authorised to provide the authorities with information and data contained in the register or have the same inspected to the extent that this is requested to comply with applicable foreign legislation or rules of the stock exchange where the Company’s shares are listed. |
6.1 | The General Meeting may pass resolutions to issue Shares, unless the Board is designated thereto by the Articles of Association or pursuant to a resolution of the General Meeting. If and in so far as the Board is designated as the competent body, the General Meeting may not pass resolutions to issue, as long as the designation is in force. |
6.2 | The General Meeting or the Board shall determine the price and further conditions of issuance, in accordance with the relevant provisions in these Articles of Association. |
6.3 | If the Board is designated as being competent to resolve on the issue of Shares, on such designation the number of Shares of each class which may be issued must be specified. This may be expressed in a percentage of the issued capital. On such designation the term of the designation shall be determined, which may not exceed five years. The designation may be extended, from time to time, for a period not exceeding five years. Unless the designation provides otherwise, it may not be withdrawn. |
6.4 | A resolution of the General Meeting to issue (including the determination of the price and further conditions) or to designate the Board, can only be adopted on the proposal of the Board. |
6.5 | Within eight days of a resolution of the General Meeting to issue Shares or to designate the Board, the Board shall file a full text thereof at the offices of the Commercial Register, where the Company has been registered. |
6.6 | The provisions of the Articles 6.1 to 6.5 shall apply by analogy to the granting of rights to subscribe to Shares, but shall - with the exception of the last sentence of Article 6.5 - not apply to the issue of Shares to persons exercising a previously granted right to subscribe to Shares. |
6.7 | In the event of an issue of Preference Shares by a body other than the General Meeting, a General Meeting shall be convened, to be held not later than twenty months after the date on which Preference Shares were issued for the first time. The agenda for that meeting shall include a resolution relating to the repurchase of the Preference Shares in accordance with the provisions of Article 11 or the cancellation of the Preference Shares in accordance with the provisions of Article 12. If the resolution to be adopted in respect of this item on the agenda does not result in the repurchase or cancellation of the Preference Shares, a General Meeting shall be convened and held, in each case within six months of the previous meeting, the agenda of which meetings shall include a resolution relating to the repurchase or cancellation of the Preference Shares, until such time as no more Preference Shares remain outstanding. |
6.8 | lf it has been announced what amount will be issued and only a lower amount will be subscribed, such lower amount will only be subscribed if this is explicitly determined by the conditions of the issue. |
7.1 | Upon issuance of Ordinary Shares, each holder of Ordinary Shares shall have a right of pre-emption in proportion to the aggregate nominal value of its Ordinary Shares. He shall not have a pre-emptive right upon the issuance of Preference Shares. |
7.2 | On the proposal of the Board and with due observance to the provisions of this Article 7, the General Meeting shall at the time of the resolution to issue Shares determine the manner in which and the period during which the pre-emptive right may be exercised. If the Board is designated as the body competent to issue Shares, such shall be determined by the Board. |
7.3 | The Company shall announce the issue with pre-emptive rights, and the period in which it can be exercised, in the Government Gazette (Staatscourant) and in a national daily newspaper. |
7.4 | On the proposal of the Board pre-emptive rights may be limited or excluded pursuant to a resolution of the General Meeting. In the proposal in respect thereof, the reasons for the proposal and the selection of the intended issue price shall be explained in writing. |
7.5 | Within eight days of such resolution, the Board shall file a full text thereof with the offices of the Commercial Register. |
7.6 | If rights are granted to subscribe for Shares, the Shareholders shall have a right of pre-emption; the provisions above in this Article 7 shall apply by analogy. Shareholders shall not have a pre-emptive right on Shares issued to a person exercising a previously acquired right to subscribe for Shares. |
8.1 | Notwithstanding the provisions of Section 2:80 subsection 2 of the Dutch Civil Code, upon subscription of each Ordinary Share, the full nominal value thereof must be paid up, and, in addition, if the Share is issued at a higher amount, the difference between such amounts. |
8.2 | Upon issuance of a Preference Share, at least one fourth of the nominal amount shall be paid. Additional payment on Preference Shares will be made after such additional payment has been claimed by the Company. Additional payments will be claimed by virtue of a resolution of the Board. |
9.1 | Payment on an Ordinary Share shall be made in cash, unless a different contribution has been agreed upon. |
9.2 | Payment on Preference Shares may only be made in cash. |
9.3 | Payment in foreign currency can only be made subject to the consent of the Company. |
10.1 | The Board is entitled to enter into legal acts regarding contribution on Shares other than in cash and into the other legal acts specified in Section 2:94 of the Dutch Civil Code, without the prior approval of the General Meeting. |
10.2 | Sections 2:80b and 2:94b of the Dutch Civil Code are applicable to contribution on Shares other than in cash. |
11.1 | When issuing Shares, the Company may not subscribe for its own Shares. |
11.2 | The Company may acquire fully paid-up Shares or Depositary Receipts thereof, provided either no valuable consideration is given, or: |
(a) | the Distributable Equity is at least equal to the purchase price; and |
(b) | the nominal amount of the Shares in its capital or Depositary Receipts thereof to be acquired, held or held in pledge by the Company and of the Shares or Depositary Receipts thereof held by its Subsidiaries, does not exceed half of the issued capital. |
11.3 | Acquisition in a way other than for no consideration can only take place if the General Meeting has authorised the Board to this effect. This authorisation will apply during a maximum period of eighteen months. In this authorisation the General Meeting shall determine how many Shares or Depositary Receipts thereof can be acquired, how they can be acquired and between what limits the price must be. |
11.4 | The Company may acquire its own Shares or Depositary Receipts thereof in order to transfer them, pursuant to a regulation to that effect, to staff employed by the Company or by a Group Company. |
11.5 | The foregoing provisions of this Article 11 shall not apply to Shares or Depositary Receipts thereof which the Company acquires by universal title of succession. |
11.6 | The Board shall resolve to alienate the Shares acquired by the Company in its own capital. No pre-emptive right shall exist in respect of such alienation. |
11.7 | The Company cannot derive any right to any distribution from Shares in its own capital; nor shall it derive any right to such distribution from Shares for which it holds the Depositary Receipts. |
11.8 | No voting rights may be exercised for any Share held by the Company or a Subsidiary, unless the Shares are subject to the right of usufruct or a pledge in favour of a company other than the Company or a Subsidiary and the other company is entitled to the voting rights on the Shares and the right of pledge has been created by a company other than the Company or Subsidiary. Nor may the Company or a Subsidiary exercise voting rights for Shares in the capital of the Company in respect of which the Company or Subsidiary has a right of usufruct or a pledge. |
11.9 | The Company may only take in pledge its own Shares or Depositary Receipts thereof if: |
(a) | the relevant Shares have been fully paid up; |
(b) | the nominal value of its own Shares and Depositary Receipts for Shares to be taken in pledge and those already held or already taken in pledge does not exceed half of the issued capital; and |
(c) | the General Meeting has approved the pledge agreement. |
12.1 | The General Meeting may resolve, but only pursuant to a proposal of the Board, to reduce the Company's issued capital: |
(a) | by cancellation of Shares; or |
(b) | by reducing the nominal value of Shares, to be effected by an amendment of these Articles of Association, provided that the issued capital or the paid up part thereof does not become less than prescribed in Section 2:67 of the Dutch Civil Code. |
12.2 | A resolution to cancel Shares can only relate to: |
(a) | Shares held by the Company itself or of which it holds the Depositary Receipts; or |
(b) | all Preference Shares, with repayment. |
12.3 | Reduction of the amount of the Shares without repayment and without release from the obligation to pay up the Shares shall take place proportionately on all Shares of the same class. The requirement of proportion may be deviated from with the consent of all Shareholders concerned. |
12.4 | Partial repayment on Shares or release from the obligation to make payments will only be possible for the purpose of execution of a resolution to reduce the nominal amount of the Shares. Such repayment or release shall take place: |
(a) | with regard to all Shares; or |
(b) | with regard to all Preference Shares or all Ordinary Shares. |
12.5 | Preference Shares shall be cancelled against repayment of the amounts paid up on these Preference Shares and of any dividend still lacking, if any, to be calculated time-proportionately up to and including the day of payment with due observance to the provisions of Article 37, after deduction of interim dividend. |
12.6 | No approval by the meeting of holders of Preference Shares is required for a resolution regarding the cancellation of Preference Shares. |
12.7 | Furthermore the provision of the Sections 2:99 and 2:100 of the Dutch Civil Code are applicable to capital reduction. |
13.1 | Unless the law provides otherwise and except as provided by the following provisions of this article 13, a transfer of a registered Share or of a restricted right (beperkt recht) thereto shall require a deed of transfer drawn up for that purpose and, save when the Company itself is a party to the legal act, acknowledgement in writing by the Company of the transfer. |
13.2 | In cases whereby a Share for which a Share certificate has been issued is transferred, the Share certificate must be submitted to the Company, provided that an instrument of transfer as referred to in Article 13.1, printed on the back of the Share certificate, has been duly completed and signed by or on behalf of the transferor, or a separate instrument in substantially the same form is submitted together with the Share certificate. |
13.3 | If a transfer of a Share has been effected by service of an instrument of transfer to the Company, the Company shall, at the discretion of the Board, either endorse the transfer on the Share certificate or cancel the Share certificate and issue to the transferee one or more Share certificates registered in his name up to an equal nominal amount. |
13.4 | The Company’s written acknowledgement of a transfer of a Share shall, at the discretion of the Board, be effected either by endorsement of the transfer on the Share certificate as proof of acknowledgement or by the issuance to the transferee of one or more Share certificates registered in his name up to an equal nominal amount. |
14.1 | For every transfer of Preference Shares the approval will be required of the Board. The approval will be issued in writing, and stipulate the name and the address of the intended acquirer. |
14.2 | If the approval is refused, the Board will be obligated to simultaneously designate one or more prospective buyers who will be prepared and able to buy all Preference Shares to which the request refers against payment in cash at a price to be set in mutual consultation by the alienator and the Board within two months after that designation. |
14.3 | If within three months after receipt by the Company of the request for approval of the intended transfer the alienator has not received from the Company a written notification or a timely refusal of approval has not been accompanied simultaneously by the designation of one or more prospective buyers as referred to in Article 14.2, the approval will be deemed to have been granted after the end of the period specified or after receipt of the notification of refusal respectively. |
14.4 | If within two months after the refusal of the approval no agreement has been reached between the alienator and the Board about the price referred to in Article 14.2, this price will be set by (a) an expert to be designated by the alienator, (b) an expert to be designated by the Board and (c) an expert to be designated by the experts referred to afore under sub (a) and (b). |
14.5 | The alienator will have the right to refrain from the transfer, provided he informs the Board about this in writing within one month after both the name of the designated prospective buyer(s) and the fixed price have been brought to his knowledge. |
14.6 | In case of approval for transfer in the sense of Article 14.1 or Article 14.3 the alienator shall be authorised to transfer all Preference Shares, to which his request referred, to the acquirer named in the request for a period of three months after this approval, provided that if a price fixing as referred to in Article 14.4 has been effected and the alienator and the acquirer named in the request agree then upon a lower price than set on the basis of Article 14.4, the alienator should inform the Company about this within one month after which the Board may yet designate one or more prospective buyers who are able and prepared to purchase all the Preference Shares to which the request referred against cash payment at that lower price. |
15.1 | The Shareholder shall have the right to vote on Shares subject to a usufruct or pledge. However, the usufructuary or the pledgee shall have the right to vote if so determined upon the establishment of the usufruct or |
15.2 | The Shareholder shall have the rights attached to the Share on which a usufruct has been established with respect to the acquisition of Shares, provided that he shall compensate the usufructuary for the value of these rights to the extent that the latter is entitled thereto under his right of usufruct. |
15.3 | Preference Shares can not be pledged. |
16.1 | The management of the Company shall be conducted by the Board. |
16.2 | The Board shall consist of one or more Executive Directors and Non-Executive Directors. |
16.3 | Only natural persons can be Non-Executive Directors. |
16.4 | The Board shall determine the number of Executive Directors and the number of Non-Executive Directors. Pending one or more vacancies, the Board remains properly constituted. |
16.5 | The Board may appoint one of the Executive Directors as Chief Executive Officer (CEO) for such period as the Board may decide. |
16.6 | The Executive Directors and Non-Executive Directors shall be appointed by the General Meeting from a binding nomination of at least one person, or such higher number of persons as required by law for the nomination to have binding effect, for each vacancy, to be drawn up by the Board. |
16.7 | If the Board should fail to draw up a list of nominees within three months after the vacancy has occurred, the General Meeting may appoint a member of the Board at its own discretion. A list of nominees drawn up in time by the Board shall be binding. However, the General Meeting may at all times deprive the list of nominees of its binding character by a resolution adopted with a majority of not less than two thirds of the votes cast, representing more than half of the issued capital. |
16.8 | The General Meeting may at any time remove or suspend any member of the Board. The resolution referred to in the preceding sentence shall state the reasons therefor. A resolution of the General Meeting to suspend or dismiss a Board member other than on the proposal of the Board, may only be adopted with a majority of two thirds of the votes cast, representing more than half of the issued capital. |
16.9 | Any suspension may be extended one or more times, but may not last longer than six months in the aggregate. If, at the end of that period, no decision has been taken on termination of the suspension or on dismissal, the suspension shall end. |
16.10 | The approval of the General Meeting will be required for resolutions of the Board relating to a major change to the identity or the nature of the Company or the enterprise, including in any case: |
(a) | transfer of the enterprise or almost the entire enterprise to a third party; |
(b) | entering into or termination of a long-lasting cooperation between the Company or a Subsidiary with another legal entity or company or as fully liable partner of a general or limited partnership, if this cooperation or termination is of far-reaching consequence to the Company; and/or |
(c) | acquisition or divestment of a participation in the capital of a company with a value of at least one-third of the amount of the assets reflected in the balance sheet and explanatory notes or, if the Company prepares a consolidated balance sheet, reflected in the consolidated balance sheet and explanatory notes, according to the lastly adopted annual accounts of the Company, by it or a Subsidiary. |
16.11 | The approval of the General Meeting will be required for the Board to enter into discussions with an Interested Shareholder regarding entering into a Business Combinations between the Company and an Interested Shareholder provided that such a resolution of the General Meeting shall |
16.12 | Article 16.11 shall not apply if: |
(i) | a majority of the members of the Board approved either the Business Combination or the transaction that resulted in the shareholder becoming an Interested Shareholder, and those members of the Board were appointed as members of the Board prior to the transaction that resulted in the shareholder becoming an Interested Shareholder; or |
(ii) | upon completion of the transaction that resulted in the shareholder becoming an Interested Shareholder, the Interested Shareholder owned a number of Shares representing at least eighty-five per cent (85%) of the issued and outstanding Shares when the transaction was commenced, whereby the Shares owned by the Directors and officers of the Company are not taken into account in calculating this percentage. |
16.13 | The absence of an approval of the General Meeting as prescribed by this Article 16 of a resolution of the Board will not affect the representative authority of the Board or its members. |
17.1 | The Board shall be entrusted with the management of the Company and shall for such purpose have all the powers within the limits of the law that are not granted by these Articles of Association to others. |
17.2 | The Board may entrust the Executive Directors with the operational management of the Company and the business enterprise connected therewith. The Board may entrust the Executive Directors furthermore with the preparation of the decision making process of the Board and the implementation of the decisions taken by the Board to the extent that the Board has not instructed a committee to do so or has not decided otherwise. |
17.3 | The Chief Executive Officer shall determine which duties regarding the operational management of the Company and the business enterprises connected therewith will be carried out under his responsibility by one or more other Executive Directors, officers of the Company or by one or more other persons. |
17.4 | The Non-Executive Directors shall supervise the policy and the fulfilment of duties of the Chief Executive Officer or of the Executive Directors, respectively, and the general affairs of the Company and they shall be furthermore entrusted with such duties as are and shall be determined by or pursuant to these Articles of Association. |
17.5 | Timely the chairman of the Board (as stated below) shall procure that the Non-Executive Directors will be provided with all information which is required for the exercise of their duties. |
18.1 | The Board shall appoint one of its Non-Executive Directors to be its chairman for such period as the Board may decide. |
18.2 | The Board may appoint one or more of its Non-Executive Directors as vice-chairman of the Board for such period as the Board may decide. If the chairman is absent or unwilling to take the chair, a vice-chairman shall be |
18.3 | If no chairman has been appointed or if the chairman is absent or unwilling to take the chair, a meeting of the Board shall be presided over by a vice-chairman or in the event of his absence or unwillingness to take the chair, by a member of the Board or another person present designated for such purpose by the meeting. |
19.1 | Meetings of the Board may be called at any time, either by one or more members of the Board or, on his or their instructions, by a Secretary. |
19.2 | The Secretaries may attend the meetings of the Board. The Board may decide to permit others to attend a meeting as well. |
19.3 | With due observance of these Articles of Association, the Board may adopt one or more sets of Board regulations dealing with such matters as its internal organisation, the manner in which decisions are taken, the composition, the duties and organisation of committees and any other matters concerning the Board, the Chief Executive Officer (if appointed), the Executive Directors and the committees established by the Board. |
19.4 | Regulations dealing with matters concerning General Meetings will be placed on the Company’s website. |
20.1 | The Board shall represent the Company. The authority to represent the Company is also vested in the Chief Executive Officer (if appointed) as well as in two other Executive Directors when acting jointly. |
20.2 | The Non-Executive Directors have no power to represent the Company. |
20.3 | The Board may appoint officers with general or limited power to represent the Company. Each officer shall be competent to represent the Company, subject to the restrictions imposed on him. The Board shall determine each officer's title. |
20.4 | In the event of a conflict of interest between the Company and a member of the Board, the provisions of Article 20.1 hereof shall continue to apply unimpaired, provided that as long as Section 2:146 of the Dutch Civil Code grants this authority, the Shareholders’ Body shall be authorized to appoint one or more other persons to represent the Company in the case at hand or in general in the event of such a conflict. |
20.5 | A document which persons, solely or jointly empowered to represent the Company in pursuance of Article 20.1 hereof, have signed as a certified true copy of or extract from the minutes of a General Meeting, of a meeting of holders of a class of shares or of a meeting of the Board shall as between the Company and third parties be proof of a valid resolution by such meetings in accordance with the contents of such copy or extract. |
22.1 | The Board may appoint one or more Secretaries from outside its members. |
22.2 | A Secretary shall have such powers as are assigned to him by these Articles of Association and, subject to these Articles of Association, by the Board on or after his appointment. |
22.3 | A Secretary may be removed from office at any time by the Board. |
23.1 | The Company shall have a policy in respect of the remuneration of the Board. The policy shall be proposed by the Board and adopted by the General Meeting. The remuneration policy shall at least include the subjects referred to in Sections 2:383c through 2:383e of the Dutch Civil Code, to the extent they relate to the Board. The remuneration policy shall be presented to the works council (if any) for examination as referred to in Section 2:135 subsection 2 of the Dutch Civil Code, which shall be done in writing and simultaneously with the presentation to the General Meeting. |
23.2 | The remuneration of the Executive Directors shall be determined by the Board, with due observance to the policy referred to in Article 23.1. |
23.3 | Each of the Non-Executive Directors shall be paid a fee at such rate as may from time to time be determined by the Board provided that the aggregate of all fees so paid per annum to Non-Executive Directors shall not exceed the amount per annum decided by the General Meeting. |
23.4 | With regard to Share plans or rights to subscribe for Shares, the Board shall submit a proposal to the General Meeting for approval. Such proposal shall at least determine the number of Shares or rights to subscribe for Shares that may be awarded to the Board and what criteria apply to any award or change. |
24.1 | The Board may establish such permanent and/or ad hoc committees as it may deem necessary which committees may consist of one or more members of the Board or of other persons. The Board appoints the members of each committee and determines the tasks of each committee. The Board may at any time change the duties and the composition of each committee. |
24.2 | The Board shall in any case appoint from its members an audit committee, a compensation committee and a governance and nominating committee. The task of the committees is to prepare the decision-taking of the Board. The Board shall formulate regulations for each committee, indicating the task and responsibility of the committee concerned, its composition and in what manner the committee will exercise its task. |
25.1 | The Company shall, to the fullest extent permitted by applicable law, as it now exists or may hereinafter be amended (but, in the case of an amendment, only to the extent such amendment permits broader indemnification rights than permitted prior thereto), indemnify any person who is or was (i) a director, (ii) appointed to the executive team or management team, designated by title as "officers" of the Company and/or appointed as a proxyholder (procuratiehouder), (iii) an employee or agent of the Company or a Group Company, or (iv) otherwise serving at the request of the Company as a member of the Board, executives or |
25.2 | No indemnification pursuant to Article 25.1 shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for gross negligence or wilful misconduct in the performance of his duty to the Company, unless and only to the extent that the court in which such action or proceeding was brought or any other court having appropriate jurisdiction shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnification against such expenses which the court in which such action or proceeding was brought or such other court having appropriate jurisdiction shall deem proper. |
25.3 | Expenses (including, without limitation, attorneys’ fees, any expenses resulting from an appeal and any taxes imposed as a result of any indemnification payments) incurred by an Indemnitee in defending a civil or criminal action, suit or proceeding may be paid by the Company in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of an Indemnitee to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Company as authorized in this Article. |
25.4 | The indemnification provided for by this Article shall not be deemed exclusive of any other right to which a person seeking indemnification or advancement of expenses may be entitled under the laws of the Netherlands as from time to time amended or under any by-laws, agreement, resolution of the General Meeting or of the disinterested members of the Board or otherwise, both as to actions in his official capacity and as to actions in another capacity while holding such position, and shall continue as to a person who has ceased to be a director or proxyholder, officer, employee, trustee or agent and shall also inure to the benefit of the heirs, executors, administrators and the estate of such a person. |
25.5 | The Company may purchase and maintain insurance on behalf of any Indemnitee, whether or not the Company would have the power to indemnify him against such liability under the provisions of this Article. |
25.6 | Whenever in this Article reference is made to the Company, this shall include, in addition to the resulting or surviving Company also any constituent Company (including any constituent Company of a constituent Company) absorbed in a consolidation or merger which, if its separate existence had continued, would have had the power to indemnify its members of the Board, proxyholders, officers, employees and agents, so that any person who is or was a member of the Board, proxyholder, officer, employee or agent of such constituent company, or is or was serving at the request of such constituent Company as a member of the Board, proxyholder, officer, employee, trustee or agent of another company, partnership, joint venture, trust or other entity, shall stand in the same position under the provisions of this Article with respect to the resulting or surviving company as he would have with respect to such constituent company if its separate existence had continued. |
25.7 | To the fullest extent permitted by applicable law, as it now exists or may hereinafter be amended (but, in the case of an amendment, only to the extent such amendment permits broader indemnification rights than permitted prior thereto), no person shall be personally liable to the Company or its shareholders for monetary damages for breach of fiduciary duty as a member of the Board, provided, however that to the extent required by applicable law, the foregoing shall not eliminate or limit the liability of a member of the Board (1) for any breach of such individual’s duty of loyalty to the Company or its shareholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) for any transaction from which the member of the Board derived an improper personal benefit or (4) for personal liability which is imposed by Dutch law, as from time to time amended. |
25.8 | No amendment, repeat or modification of this Article shall adversely affect any right or protection of any person entitled to indemnification or advancement of expenses under this Article in respect of any action taken or omitted prior to such amendment, repeal or modification. To the extent that a change in the laws of the Netherlands, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under this Article, the Company shall provide the greater benefits so afforded by such change. In the event of any changes in any applicable law, statute, or rule which narrow the right of the Company to provide |
26.1 | Annually, at the latest in the month June, a General Meeting shall be held at which inter alia the following matters shall be dealt with: |
(a) | the annual report; |
(b) | adoption of the annual accounts; |
(c) | release of the members of the Board from liability; |
(d) | reservations and dividend policy; |
(e) | distribution of dividend; |
(f) | announcements on intended appointments of members of the Board; |
(g) | any other proposals brought up for discussion by the Board such as proposals to designate a body authorised to issue Shares and to authorise the Board to procure the Company's acquisition of Shares in its own capital; |
(h) | any topics proposed by Shareholders or Holders of Depositary Receipts with due observance to the provisions in the Articles of Association. |
26.2 | Extraordinary General Meetings shall be held whenever the Board deems such meetings to be necessary and convenes them. |
26.3 | Within three months of it becoming apparent to the Board that the equity of the Company has decreased to an amount equal to or lower than half of the paid-up and called-up part of the capital, a General Meeting shall be held to discuss any requisite measures. |
27.1 | Shareholders and Holders of Depositary Receipts are sent a convening notice for the General Meeting by the Board. |
27.2 | The convening notice shall be sent with due observance to the terms prescribed by the provisions of law. |
27.3 | The convening notice shall specify (a) the topics to be discussed, (b) the location and the time of the meeting, (c) the procedure for attending a General Meeting by a written attorney, (d) the procedure for attending General Meetings, including the provisions of Article 31.8, and the exercise of voting rights by any means of electronic communication in the event this right can be exercised pursuant to Article 31.6, and if relevant conditions determined for the use of electronic communication means, as well as (e) the address of the web site. |
27.4 | Items, for which a written request for discussion has been filed with the Board, by one or more Shareholders and/or Holders of Depositary Receipts, who represent, alone or jointly, the threshold as referred to by law, will be included in the convening notice or will be announced in the same manner, provided that the Board has received the request accompanied with the reasons therefore in writing or the proposal for a |
27.5 | A Shareholder and/or Holder of Depositary Receipts shall exercise the right of filing a written request with the Board as referred to in Article 27.4 only after he consulted the Board about this. If one or more Shareholders and/or Holder of Depositary Receipts intend to request that an item be put on the agenda that may result in a change in the Company’s strategy, for example through the dismissal of one or more Board members, the Board shall be given the opportunity to stipulate a reasonable period in which to respond (Response Time). This shall also apply to an intention as referred to above for judicial leave to call a General Meeting pursuant to Section 2:110 of the Dutch Civil Code. |
27.6 | If the Board invokes a Response Time, such period may not exceed one hundred eighty (180) days from the moment the Board is informed by one or more Shareholders and/or Holders of Depositary Receipts of their intention to put an item on the agenda to the day of the General Meeting at which the item is to be dealt with. The Board shall use the Response Time for further deliberation and constructive consultation. The Response Time may be invoked only once for any given General Meeting and may not apply to an item in respect of which the Response Time has been previously invoked or meetings where a Shareholder holds at least three quarters of the issued capital as a consequence of a successful public bid. The Shareholder and/or Holder of Depositary Receipts shall respect the Response Time stipulated by the Board. |
27.7 | If a Shareholder and/or Holder of Depositary Receipts has arranged for an item to be put on the agenda, he shall explain this at the General Meeting and, if necessary, answer questions about it, unless he is not entitled to participate in the meeting pursuant to Article 27.9. |
27.8 | At the time one or more Shareholders and/or Holders of Depositary Receipts file a written request with the Board as referred to in Article 27.4, each Shareholder shall be required to notify the Company in writing whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such Shareholder or any Shareholder Associated Person of such Shareholder with respect to any Ordinary Share. |
27.9 | If the Company becomes aware that a Shareholder has failed to comply with any obligation imposed by Article 27.8, the Company may demand, by means of a written notice, that the Shareholder complies with such obligation within a reasonable period of at most fourteen (14) days after the date of said notice as stipulated by the Company in such notice. For as long as the Shareholder has not complied with this obligation following said notice, such Shareholder shall not be entitled to exercise the voting rights or profit rights attached to his Shares, nor the right to participate in a General Meeting. |
27.10 | Without prejudice to Article 1.2, for the purpose of Article 27.9 the reference to "written" also includes the posting of a notice on the Company's website to the relevant Shareholder, also if the address of the relevant Shareholder is known to the Company. |
27.11 | All announcements for General Meetings, all notifications concerning dividend and other payments and all other communications to |
29.1 | The General Meeting shall be presided over by the chairman of the Board who, however, even if present at the meeting, may appoint someone else to chair the meeting instead. |
29.2 | Without the chairman of the Board having appointed someone else to chair the meeting in his absence, the Board members present will appoint one of their members as chairman. In the absence of all Board members, the meeting itself shall appoint its chairman. The chairman shall appoint the secretary. |
30.1 | Minutes of the meeting shall be taken, unless a notarial record is made of the proceedings at the meeting. The (draft) minutes shall be provided upon request to those present at the meeting no later than three months after the meeting, after which they have three month's time to respond to the report. Minutes shall be adopted, as is evidenced by the signatures of the chairman and the secretary of that meeting or adopted by a subsequent meeting. In the latter case, the adoption shall be evidenced by the signatures of the chairman and secretary of that subsequent meeting. |
30.2 | The chairman of the meeting or every member of the Board can, at any time, order the preparation of a notarial record at the Company's expense. |
30.3 | All matters concerning admission to the General Meeting, exercising the voting rights and the results of the votes, as well as all other matters related to the meeting proceedings are decided by the chairman of the meeting in question, without prejudice to the provisions in Section 2:13 subsection 4 of the Dutch Civil Code. |
30.4 | The chairman of the meeting in question is authorised to admit persons to the meeting other than Shareholders, Holders of Depositary Receipts and their representatives. |
31.1 | Each Shareholder entitled to vote and each usufructuary and pledgee to whom the right to vote accrues, shall be authorised to attend the General Meeting, to address the meeting and to exercise his voting right. Each Shareholder who is not entitled to vote and each Holder of Depositary Receipts is authorised to attend the General Meeting and to address the meeting, but not to vote. Furthermore, the Auditors as referred to in Article 36 are authorised to attend the General Meeting and to address the meeting. |
31.2 | Those entitled to attend the meeting may be represented at a meeting by a proxy authorised in writing. |
31.3 | Before being admitted to a meeting, a Shareholder, a Holder of Depositary Receipts or his proxy must sign an attendance list, stating his name and the number of votes he may cast, if any. If it concerns the proxy of a Shareholder or a Holder of Depositary Receipts, the name (names) of the person(s) on behalf of whom the proxy is acting shall also be given. The names of the persons who, pursuant to Article 31.6, participate in the meeting or have voted in the manner referred to in Article 32.3 shall be added to the attendance list. |
31.4 | Holders of Ordinary Shares must inform the Board in writing of their intention to attend the meeting. This information must be received by the Board at the latest on the date to be announced in the convening notice. Also a proxy granted pursuant to Article 31.3 must be received at the latest on the date to be announced in the convening notice. This date can be no earlier than the seventh day before the date of the meeting. |
31.5 | The Board decides, with due observation of the provisions of the law to schedule a record date for a General Meeting for purposes of determining which Shareholders are entitled to attend the General Meeting. The voting rights and the right to attend the meeting shall accrue to those holding such entitlements, and registered as such in a register designated for that purpose by the Board, on this record date, irrespective of to whom these rights accrue at the time of the General Meeting. |
31.6 | The Board may decide that the right to attend the meeting referred to in Article 31.1 can be exercised by using any electronic means of communication. To do so, it must always be possible that the person entitled to attend the meeting can be identified through the electronic means of communication, that he must be able to directly follow the discussions at the meeting and that he can exercise his right to vote, if he is entitled to do so. Moreover, the Board may also decide that the person entitled to attend the meeting can participate in the discussion via the electronic means of communication. |
31.7 | The Board may give further requirements with respect to the use of the electronic means of communication as referred to in Article 31.6. These requirements shall be announced in the convening notice. |
31.8 | The convening notice will state the requirements for admission to the meeting as described above in this Article 31. |
32.1 | In the General Meeting, each Share confers the right to cast one (1) vote. |
32.2 | Blank votes and invalid votes are deemed not to have been cast. |
32.3 | The Board may, in the event that it makes use of the authority referred to in Article 31.6, decide that votes that are cast before the General Meeting via electronic means of communication are the equivalent of votes that are cast during the meeting. These votes cannot be cast before the record date announced in the convening notice as referred to in Article 31.5. Without prejudice to the other provisions in Article 31, the convening notice announces the manner in which those entitled to vote and attend the meeting can exercise their rights prior to the meeting. |
33.1 | Resolutions shall be passed by an absolute majority of the votes cast, unless the law or these Articles of Association explicitly prescribe a larger majority. |
33.2 | The chairman shall determine the method of voting, it being understood that, if any of the persons entitled to vote so desires, voting on appointing, suspending and dismissing persons will be done electronically, or if an electronic system is lacking, by sealed, unsigned ballot. |
33.3 | If a majority of the votes cast is not obtained in an election of a person, a second free vote shall be taken. |
33.4 | If again no absolute majority of the votes cast is reached, another vote shall be held to decide between the two persons who received the most votes in the second free vote. |
33.5 | In the event of a tie in voting on topics other than the election of persons, the proposal shall be rejected. |
33.6 | The members of the Board have as such an advisory role in the General Meeting. |
33.7 | Resolutions may also be passed in writing without holding a meeting, provided they are adopted by the unanimous vote of all relevant Shareholders entitled to vote. |
34.1 | Meetings of holders of Preference Shares shall be held whenever a resolution oif a meeting of holders of Preference Shares should be necessary according to these Articles of Association. |
34.2 | The Articles 28 through 33 shall apply by analogy to the resolutions of the meetings of holders of Preference Shares, provided that the meeting itself provide for its chairmanship. |
34.3 | In deviation of the provisions of Article 27.5 notices of meetings of holders of Preference Shares may be sent to the addresses of the Shareholders concerned shown in the register of Shareholders. However, if a Shareholder has provided the Company with another address for the |
34.4 | Holders of Preference Shares may adopt resolutions of the Meetings of Preference Shares in writing without holding a meeting, provided they are adopted by the unanimous vote of all relevant Shareholders entitled to vote. |
35.1 | The Company's financial year shall coincide with the calendar year. |
35.2 | Annually, within four months after the end of the financial year, the Board shall prepare annual accounts. |
35.3 | The annual accounts shall be signed by the members of the Board, if the signature of one or more of them is missing, this shall be stated and reasons of this omission shall be given. |
35.4 | The annual accounts and the annual report shall furthermore be subject to the provisions of Book 2, Title 9 of the Dutch Civil Code. |
35.5 | The Company shall ensure that the annual accounts, the annual report and other information to be added pursuant to Section 2:392 subsection 1 of the Dutch Civil Code and by virtue of the law are present at the offices of the Company, as from the day the General Meeting is convened until the day of the General Meeting in which they will be discussed. |
35.6 | At the General Meeting at which it is resolved to adopt the annual accounts, a proposal concerning release of the members of the Board from liability for the management pursued, insofar as the exercise of their duties is reflected in the annual accounts or otherwise disclosed to the General Meeting prior to the adoption of the annual accounts, shall be brought up separately for discussion. |
36.1 | The General Meeting or, if it fails to do so, the Board, shall instruct an Auditor to audit the annual accounts drawn up by the Board in accordance with the provisions of Section 2:393 subsection 3 of the Dutch Civil Code. |
36.2 | The Auditor shall report to the Board with regard to his audit and present the result of his audit in an opinion. |
36.3 | The Board may grant assignments to the Auditor referred to in Article 36.1 or another Auditor at the Company's expense. |
37.1 | From the profit as shown in the profit and loss account for the most recently ended financial year, at first a distribution shall be made, where possible, on the Preference Shares of a percentage equal to the average one monthly EURIBOR (EURO Interbank Offered Rate) - weighted to reflect the number of days for which the payment is made - plus a premium, to be determined by the Board, of at least one percentage point and at most four percentage points, depending on the prevailing market conditions. The |
37.2 | Out of the profit that has not been distributed in accordance with the provisions of the Article 37.1, such reservations will be made as the Board will determine. |
37.3 | The profit that remains after application of the Articles 37.1 and 37.2 shall be at the disposal of the General Meeting provided that no further distributions will be made on the Preference Shares. |
37.4 | Profit will be distributed after adoption of the annual accounts from which it appears that it is permitted. |
37.5 | The Board may resolve to distribute an interim dividend on Ordinary Shares and/or Preference Shares. |
37.6 | The General Meeting may, but only pursuant to a proposal of the Board, resolve to distribute at the expense of a distributable reserve. |
37.7 | Distributions on Shares may only occur to a maximum of the amount of the Distributable Equity and, if an interim distribution is concerned, this requirement is met as appears from an interim statement of assets and liabilities as referred to in Section 2:105 subsection 4 of the Dutch Civil Code. The Company shall file the statement of assets and liabilities at the office of the Commercial Register within eight days after the day the distribution is divulged. |
37.8 | The General Meeting may, but only pursuant to a proposal of the Board, resolve that a distribution on Ordinary Shares shall take place, in whole or in part, not in money but in Shares in the Company. |
38.1 | Dividends and other distributions shall be made payable within four weeks after adoption, unless the General Meeting determines another date at the proposal of the Board. Different payment release dates may be designated for the Ordinary Shares and the Preference Shares. |
38.2 | A claim of a Shareholder for payment of a distribution shall be barred after five years have elapsed after the day of payment. |
39.1 | A resolution to amend the Articles of Association, to merge or to demerge within the meaning of Title 7, Book 2 of the Dutch Civil Code or to dissolve the Company can only be passed by the General Meeting on proposal of the Board. |
39.2 | When a proposal to amend the Articles of Association or to dissolve the Company is to be made to the General Meeting, the notice convening the General Meeting must state so and, at the same time, if it concerns an amendment of the Articles of Association, a copy of the proposal including the verbatim text thereof, shall be deposited and kept available at the Company's office, for inspection by the Shareholders and holders of a |
40.1 | In case of dissolution of the Company by virtue of a resolution of the General Meeting, the Board will be charged with the liquidation of the Company's affairs without prejudice to the provisions of Section 2:23 subsection 2 of the Dutch Civil Code. |
40.2 | During the liquidation process the provisions of the Articles of Association shall as far as possible remain in force. |
40.3 | From the balance of the Company's assets after payment of all debts and the costs of the liquidation shall be distributed first, to the extent possible, to the holders of Preference Shares, the amount paid on their Preference Shares, increased with a percentage equal to the percentage referred to in Article 36.1, calculated over each year or part of a year of the period commencing on the first day following the period over which the last dividend on the Preference Shares was paid and ending on the day of the distribution on Preference Shares referred to in this Article. |
40.4 | The liquidators are authorised, if the statement of assets indicates there is reason to do so, to make distributions in advance. |
40.5 | After liquidation, the Company's books and documents shall remain in the possession of the person designated for this purpose by the General Meeting for the period prescribed by law. |
"4.1 | The authorised capital amounts to seven million euro (EUR 7,000,000), divided into: |
(a) | three hundred fifty million (350,000,000) Ordinary Shares of one euro cent (EUR 0.01) each; and |
(b) | three hundred fifty million (350,000,000) Preference Shares of one euro cent (EUR 0.01) each." |
/s/ Martha Sullivan |
Martha Sullivan President and Chief Executive Officer |
/s/ Paul Vasington |
Paul Vasington Executive Vice President and Chief Financial Officer |
/s/ Martha Sullivan | ||
Martha Sullivan President and Chief Executive Officer | ||
Date: | October 24, 2017 | |
/s/ Paul Vasington | ||
Paul Vasington Executive Vice President and Chief Financial Officer | ||
Date: | October 24, 2017 |
Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 13, 2017 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Sensata Technologies Holding N.V. | |
Entity Central Index Key | 0001477294 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 171,296,417 |
Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands |
Sep. 30, 2017
€ / shares
|
Sep. 30, 2017
USD ($)
shares
|
Dec. 31, 2016
€ / shares
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Dec. 31, 2016
USD ($)
shares
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Current assets: | ||||
Accounts receivable, allowances | $ | $ 12,561 | $ 11,811 | ||
Accumulated amortization | $ | $ 1,727,644 | $ 1,607,269 | ||
Shareholders’ equity: | ||||
Ordinary shares, nominal value per share (in euros per share) | € / shares | € 0.01 | € 0.01 | ||
Ordinary shares, shares authorized | 400,000,000 | 400,000,000 | ||
Ordinary shares, shares issued | 178,437,000 | 178,437,000 | ||
Treasury stock, shares | 7,140,000 | 7,557,000 |
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Income Statement [Abstract] | ||||
Net revenue | $ 819,054 | $ 789,798 | $ 2,466,199 | $ 2,413,892 |
Operating costs and expenses: | ||||
Cost of revenue | 527,432 | 508,944 | 1,601,190 | 1,574,763 |
Research and development | 34,002 | 31,601 | 97,032 | 95,240 |
Selling, general and administrative | 75,972 | 75,046 | 227,256 | 224,637 |
Amortization of intangible assets | 40,317 | 50,562 | 121,578 | 151,572 |
Restructuring and special charges | 1,329 | 837 | 18,768 | 3,167 |
Total operating costs and expenses | 679,052 | 666,990 | 2,065,824 | 2,049,379 |
Profit from operations | 140,002 | 122,808 | 400,375 | 364,513 |
Interest expense, net | (40,263) | (41,176) | (120,578) | (125,201) |
Other, net | 3,112 | (726) | 7,190 | 4,892 |
Income before taxes | 102,851 | 80,906 | 286,987 | 244,204 |
Provision for income taxes | 14,816 | 11,121 | 47,759 | 48,297 |
Net income | $ 88,035 | $ 69,785 | $ 239,228 | $ 195,907 |
Basic net income per share (in dollars per share) | $ 0.51 | $ 0.41 | $ 1.40 | $ 1.15 |
Diluted net income per share (in dollars per share) | $ 0.51 | $ 0.41 | $ 1.39 | $ 1.14 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||
Net income | $ 88,035 | $ 69,785 | $ 239,228 | $ 195,907 |
Other comprehensive loss, net of tax: | ||||
Deferred loss on derivative instruments, net of reclassifications | (6,784) | (8,485) | (17,820) | (25,010) |
Defined benefit and retiree healthcare plans | 274 | 24 | 1,489 | 291 |
Other comprehensive loss | (6,510) | (8,461) | (16,331) | (24,719) |
Comprehensive income | $ 81,525 | $ 61,324 | $ 222,897 | $ 171,188 |
Business Description and Basis of Presentation |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation | Business Description and Basis of Presentation Description of Business The accompanying unaudited condensed consolidated financial statements reflect the financial position, results of operations, comprehensive income, and cash flows of Sensata Technologies Holding N.V. ("Sensata N.V.") and its wholly-owned subsidiaries, collectively referred to as the "Company," "Sensata," "we," "our," or "us." Sensata N.V. is incorporated under the laws of the Netherlands and conducts its operations through subsidiary companies that operate business and product development centers primarily in the United States (the "U.S."), the Netherlands, Belgium, China, Germany, Japan, South Korea, and the United Kingdom (the "U.K."); and manufacturing operations primarily in China, Malaysia, Mexico, Bulgaria, France, Germany, the U.K., and the U.S. We organize our operations into two businesses, Performance Sensing and Sensing Solutions. On September 28, 2017, the board of directors of Sensata N.V. unanimously approved a plan to change our parent company’s location of incorporation from the Netherlands to the U.K. To effect this change, the shareholders of Sensata N.V. will be asked to approve a cross-border merger between Sensata N.V. and Sensata Technologies Holding plc (“Sensata U.K.”), a newly formed, public limited company incorporated under the laws of England and Wales, with Sensata U.K. being the surviving entity (the “Merger”). If approved by our shareholders, we would expect to complete the Merger during the first quarter of 2018, which would result in Sensata U.K. becoming the publicly-traded parent of the subsidiary companies that are currently controlled by Sensata N.V. 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 the instructions to Form 10-Q. Accordingly, these interim financial statements do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year, nor were the results of operations of the comparable periods in 2016 necessarily representative of those actually experienced for the full year 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. All intercompany balances and transactions have been eliminated. All U.S. dollar and share amounts presented, except per share amounts, are stated in thousands, unless otherwise indicated. Certain reclassifications have been made to prior periods to conform to current period presentation. |
New Accounting Standards |
9 Months Ended |
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Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Standards | New Accounting Standards In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606), which creates one Accounting Standards Codification ("ASC") Topic (FASB ASC 606, Revenue from Contracts with Customers) that replaces the current guidance found in FASB ASC 605, Revenue Recognition, and various other revenue accounting standards for specialized transactions and industries. FASB ASU No. 2014-09 outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. FASB ASU No. 2014-09 may be applied using either a full retrospective approach, under which all years included in the financial statements will be presented under the revised guidance, or a modified retrospective approach, under which financial statements will be prepared under the revised guidance for the year of adoption, but not for prior years. Under the latter method, entities will recognize a cumulative catch-up adjustment to the opening balance of retained earnings at the effective date for contracts that still require performance by the entity. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, which defers the effective date of FASB ASU No. 2014-09 by one year. FASB ASU No. 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. We have developed an implementation plan to adopt this new guidance. As part of this plan, we are currently assessing the impact of the new guidance on our financial position and results of operations. Based on our procedures performed to date, nothing has come to our attention that would indicate that the adoption of FASB ASU No. 2014-09 will have a material impact on our financial position or results of operations. However, we will continue to evaluate this assessment through the remainder of 2017. In addition, the adoption of FASB ASU No. 2014-09 requires new disclosures related to revenue recognition, which we are continuing to evaluate. We intend to adopt FASB ASU No. 2014-09 on January 1, 2018 using the modified retrospective transition method. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes new accounting and disclosure requirements for leases. FASB ASU No. 2016-02 requires lessees to classify most leases as either finance or operating leases and to initially recognize a lease liability and right-of-use asset. Entities may elect to account for certain short-term leases (with a term of 12 months or less) using a method similar to the current operating lease model. The statements of operations will include, for finance leases, separate recognition of interest on the lease liability and amortization of the right-of-use asset and for operating leases, a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. At December 31, 2016, we were contractually obligated to make future payments of $69.8 million under our operating lease obligations in existence as of that date, primarily related to long-term facility leases. While we are in the early stages of our implementation process for FASB ASU No. 2016-02, and have not yet determined its impact on our consolidated financial statements, these leases would potentially be required to be presented on the balance sheet in accordance with the requirements of FASB ASU No. 2016-02. FASB ASU No. 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual reporting periods, with early adoption permitted. FASB ASU No. 2016-02 must be applied using a modified retrospective approach, which requires recognition and measurement of leases at the beginning of the earliest period presented, with certain practical expedients available. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), which changes both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results, in order to better align an entity’s risk management activities and financial reporting for hedging relationships. The amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. FASB ASU No. 2017-12 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual reporting periods, with early adoption permitted. We are still evaluating the impact that this guidance will have on our consolidated financial statements, and we have not yet determined whether we will early adopt FASB ASU No. 2017-12. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The components of inventories as of September 30, 2017 and December 31, 2016 were as follows:
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Shareholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders' Equity Treasury Shares Ordinary shares repurchased by us are recorded at cost, as treasury shares, and result in a reduction of shareholders' equity. We reissue treasury shares as part of our share-based compensation programs. The cost of reissued shares is determined using the first-in, first-out method. During the nine months ended September 30, 2017, we reissued 0.5 million treasury shares, and as a result, we recognized a reduction in Retained earnings of $13.1 million. Accumulated Other Comprehensive Loss The following is a roll forward of the components of Accumulated other comprehensive loss for the nine months ended September 30, 2017:
The details of the amounts reclassified from Accumulated other comprehensive loss for the three and nine months ended September 30, 2017 and 2016 are as follows:
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Restructuring and Special Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Restructuring and Special Charges | Restructuring and Special Charges Restructuring and special charges for the three and nine months ended September 30, 2017 were $1.3 million and $18.8 million, respectively, which related primarily to the closing of our facility in Minden, Germany that was part of the acquisition of certain subsidiaries of Custom Sensors & Technologies Ltd. ("CST"), facility exit costs related to a limited number of other line moves and exit activities, and severance costs related to the termination of a limited number of employees. Charges related to the closing of our facility in Minden, Germany for the three and nine months ended September 30, 2017 consisted of (i) severance charges of $0.0 million and $8.4 million, respectively, and (ii) facility exit costs of $1.3 million and $2.4 million, respectively. Restructuring and special charges for the three and nine months ended September 30, 2016 were $0.8 million and $3.2 million, respectively, which consisted primarily of facility exit costs related to the relocation of manufacturing lines from our facility in the Dominican Republic to a manufacturing facility in Mexico, and severance charges recorded in connection with acquired businesses and the termination of a limited number of employees. We completed the cessation of manufacturing in our Dominican Republic facility in the third quarter of 2016. Changes to the severance portion of our restructuring liability during the nine months ended September 30, 2017 were as follows:
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Debt |
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Debt | Debt Our long-term debt and capital lease and other financing obligations as of September 30, 2017 and December 31, 2016 consisted of the following:
As of September 30, 2017, there was $415.3 million of availability under our $420.0 million revolving credit facility, net of $4.7 million in letters of credit. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of September 30, 2017, no amounts had been drawn against these outstanding letters of credit, which are scheduled to expire on various dates in 2017 and 2018. Accrued Interest Accrued interest associated with our outstanding debt is included as a component of Accrued expenses and other current liabilities in the condensed consolidated balance sheets. As of September 30, 2017 and December 31, 2016, accrued interest totaled $45.7 million and $36.8 million, respectively. |
Income Taxes |
9 Months Ended |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We recorded a Provision for income taxes for the three months ended September 30, 2017 and 2016 of $14.8 million and $11.1 million, respectively, and for the nine months ended September 30, 2017 and 2016 of $47.8 million and $48.3 million, respectively. The Provision for income taxes consists of current tax expense, which relates primarily to our profitable operations in non-U.S. tax jurisdictions, and deferred tax expense, which relates to adjustments in book-to-tax basis differences primarily due to the step-up in fair value of fixed and intangible assets, including goodwill, acquired in connection with business combination transactions, and the utilization of net operating losses. During the three and nine months ended September 30, 2016, we recognized a benefit from income taxes of $5.1 million and $3.7 million, respectively, related to the change in our U.S. valuation allowance associated with the acquisition of CST, for which deferred tax liabilities were established related primarily to the step-up of tangible assets for book purposes. |
Pension and Other Post-Retirement Benefits |
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Pension and Other Post-Retirement Benefits | Pension and Other Post-Retirement Benefits We provide various pension and other post-retirement benefit plans for current and former employees, including defined benefit, defined contribution, and retiree healthcare benefit plans. The components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the three months ended September 30, 2017 and 2016 were as follows:
The components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the nine months ended September 30, 2017 and 2016 were as follows:
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Share-Based Payment Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Plans | Share-Based Payment Plans Share-Based Compensation Expense The table below presents non-cash compensation expense related to our equity awards, which is recorded within SG&A expense in the condensed consolidated statements of operations, during the identified periods:
Share-Based Compensation Awards We grant share-based compensation awards for which vesting is subject only to continued employment and the passage of time (options and restricted stock units ("RSUs" and each an "RSU")), as well as those for which vesting also depends on the attainment of certain performance criteria (performance-based options and performance-based restricted stock units ("PRSUs" and each a "PRSU")). We granted the following options under the Sensata Technologies Holding N.V. 2010 Equity Incentive Plan (the "2010 Equity Plan") during the nine months ended September 30, 2017:
We granted the following RSUs and PRSUs under the 2010 Equity Plan during the nine months ended September 30, 2017:
Option Exercises During the nine months ended September 30, 2017, 266 stock options were exercised, all of which were settled with shares reissued from treasury. |
Commitments and Contingencies |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings and Claims We are regularly involved in a number of claims and litigation matters in the ordinary course of business. Most of our litigation matters are third-party claims for property damage allegedly caused by our products but some involve allegations of personal injury or wrongful death. Although it is not feasible to predict the outcome of these matters, based upon our experience and current information known to us, we do not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on our result of operations, financial position, or cash flows. |
Fair Value Measures |
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Fair Value Measures | Fair Value Measures Our assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with FASB ASC 820, Fair Value Measurement. Measured on a Recurring Basis The following table presents information about our assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, aggregated by the level in the fair value hierarchy within which those measurements fell:
Measured on a Nonrecurring Basis We evaluated our goodwill and other indefinite-lived intangible assets for impairment as of October 1, 2016 and determined that these assets were not impaired. As of September 30, 2017, no events or changes in circumstances occurred that would have triggered the need for an additional impairment review of goodwill or indefinite-lived intangible assets. A long-lived asset, which includes Property, plant, and equipment ("PP&E"), is considered held for sale when it meets certain criteria described in FASB ASC 360, Property, Plant, and Equipment. A long-lived asset classified as held for sale is initially measured at the lower of its carrying amount or fair value less cost to sell, and a loss is recognized for any initial adjustment of the asset's carrying amount to its fair value less cost to sell in the period the held for sale criteria are met. In the period that a long-lived asset is considered held for sale it is presented within Prepaid expenses and other current assets on our balance sheet where it remains until it is either sold or no longer meets the held for sale criteria. For comparative purposes, the prior year carrying amount of a long-lived asset considered held for sale is presented within Other assets on our balance sheet. In the first quarter of 2017, we determined that one of our facilities met the held for sale criteria and recorded it at its fair value less costs to sell of $1.7 million (which approximated its net carrying value at that time). In the third quarter of 2017, we sold the asset for an immaterial gain. The fair value of assets held for sale is considered to be a Level 3 fair value measurement and is determined based on the use of appraisals, input from market participants, our experience selling similar assets, internally developed cash flow models, or a combination thereof. Financial Instruments Not Recorded at Fair Value The following table presents the carrying values and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016:
(1) Carrying value excludes discounts and deferred financing costs. The fair values of the Term Loan and senior notes are primarily determined using observable prices in markets where these instruments are generally not traded on a daily basis. Cash and cash equivalents, accounts receivable, and accounts payable are carried at their cost, which approximates fair value, because of their short-term nature. In March 2016, we acquired $50.0 million of Series B Preferred Stock of Quanergy Systems, Inc., which we recognized as a cost method investment on our balance sheet. As of September 30, 2017, the fair value of this asset has not been estimated, as there are no indicators of impairment, and it is not practicable to estimate its fair value due to the restricted marketability of this investment. |
Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Hedges of Foreign Currency Risk We are exposed to fluctuations in various foreign currencies against our functional currency, the U.S. dollar. We use foreign currency forward agreements to manage this exposure. We currently have outstanding foreign currency forward contracts that qualify as cash flow hedges intended to offset the effect of exchange rate fluctuations on forecasted sales and certain manufacturing costs. We also have outstanding foreign currency forward contracts that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities; these instruments are not designated for hedge accounting treatment in accordance with FASB ASC 815, Derivatives and Hedging. Foreign currency forward contracts not designated as hedges are not speculative and are used to manage our exposure to foreign exchange movements. For the three and nine months ended September 30, 2017 and 2016, the ineffective portion of the changes in the fair value of our foreign currency forward agreements that are designated as cash flow hedges was not material and no amounts were excluded from the assessment of effectiveness. As of September 30, 2017, we estimate that $18.4 million of net losses will be reclassified from Accumulated other comprehensive loss to earnings during the twelve-month period ending September 30, 2018. As of September 30, 2017, we had the following outstanding foreign currency forward contracts:
The notional amounts above represent the total quantities we have outstanding over the remaining contracted periods. 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 used in the manufacturing of our products, including silver, gold, nickel, aluminum, copper, platinum, and palladium. The terms of these forward contracts fix the price at a future date for various notional amounts associated with these commodities. These instruments are not designated for hedge accounting treatment in accordance with FASB ASC 815. Commodity forward contracts not designated as hedges are not speculative and are used to manage our exposure to commodity price movements. We had the following outstanding commodity forward contracts, none of which were designated as derivatives in qualifying hedging relationships, as of September 30, 2017:
The notional amounts above represent the total quantities we have outstanding over the remaining contracted periods. Financial Instrument Presentation The following table presents the fair values of our derivative financial instruments and their classification in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016:
These fair value measurements are all categorized within Level 2 of the fair value hierarchy. The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three months ended September 30, 2017 and 2016:
The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations for the nine months ended September 30, 2017 and 2016:
Credit Risk Related Contingent Features We have agreements with certain of our derivative counterparties that contain a provision whereby if we default on our indebtedness, and where repayment of the indebtedness has been accelerated by the lender, then we could also be declared in default on our derivative obligations. As of September 30, 2017, the termination value of outstanding derivatives in a liability position, excluding any adjustment for non-performance risk, was $33.8 million. As of September 30, 2017, we have not posted any cash collateral related to these agreements. If we breach any of the default provisions on any of our indebtedness, as described above, we could be required to settle our obligations under the derivative agreements at their termination values. |
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Other, Net | Other, Net Other, net consisted of the following gains/(losses) for the three and nine months ended September 30, 2017 and 2016:
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Segment Reporting |
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Segment Reporting | Segment Reporting We organize our business into two reportable segments, Performance Sensing and Sensing Solutions, each of which is also an operating segment. Our operating segments are businesses that we manage as components of an enterprise, for which separate financial information is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and assess performance. An operating segment’s performance is primarily evaluated based on Segment profit, which excludes amortization expense, restructuring and special charges, and certain corporate costs/credits not associated with the operations of the segment, including share-based compensation expense and a portion of depreciation expense associated with assets recorded in connection with acquisitions. In addition, an operating segment’s performance excludes results from discontinued operations, if any. 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 finance, information technology, legal, and human resources. We believe that Segment profit, as defined above, is an appropriate measure for evaluating the operating performance of our segments. However, this measure should be considered in addition to, and not as a substitute for, or superior to, profit from operations or other measures of financial performance prepared in accordance with U.S. GAAP. The accounting policies of each of our reporting segments are materially consistent with those in the summary of significant accounting policies as described in Note 2, "Significant Accounting Policies," included in our Annual Report on Form 10-K for the year ended December 31, 2016. The following table presents Net revenue and Segment profit for the reported segments and other operating results not allocated to the reported segments for the three and nine months ended September 30, 2017 and 2016:
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Share | Net Income per Share Basic and diluted net income per share are calculated by dividing Net income by the number of basic and diluted weighted-average ordinary shares outstanding during the period. For the three and nine months ended September 30, 2017 and 2016, the weighted-average ordinary shares outstanding for basic and diluted net income per share were as follows:
Net income and net income per share are presented in the condensed consolidated statements of operations. Certain potential ordinary shares were excluded from our calculation of diluted weighted-average ordinary shares outstanding because they would have had an anti-dilutive effect on net income per share or because they related to share-based awards that were contingently issuable, for which the contingency had not been satisfied. These potential ordinary shares are as follows:
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New Accounting Standards (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Basis of Presentation | 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 the instructions to Form 10-Q. Accordingly, these interim financial statements do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year, nor were the results of operations of the comparable periods in 2016 necessarily representative of those actually experienced for the full year 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. All intercompany balances and transactions have been eliminated. All U.S. dollar and share amounts presented, except per share amounts, are stated in thousands, unless otherwise indicated. |
Reclassification | Certain reclassifications have been made to prior periods to conform to current period presentation |
New Accounting Standards | New Accounting Standards In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606), which creates one Accounting Standards Codification ("ASC") Topic (FASB ASC 606, Revenue from Contracts with Customers) that replaces the current guidance found in FASB ASC 605, Revenue Recognition, and various other revenue accounting standards for specialized transactions and industries. FASB ASU No. 2014-09 outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. FASB ASU No. 2014-09 may be applied using either a full retrospective approach, under which all years included in the financial statements will be presented under the revised guidance, or a modified retrospective approach, under which financial statements will be prepared under the revised guidance for the year of adoption, but not for prior years. Under the latter method, entities will recognize a cumulative catch-up adjustment to the opening balance of retained earnings at the effective date for contracts that still require performance by the entity. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, which defers the effective date of FASB ASU No. 2014-09 by one year. FASB ASU No. 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. We have developed an implementation plan to adopt this new guidance. As part of this plan, we are currently assessing the impact of the new guidance on our financial position and results of operations. Based on our procedures performed to date, nothing has come to our attention that would indicate that the adoption of FASB ASU No. 2014-09 will have a material impact on our financial position or results of operations. However, we will continue to evaluate this assessment through the remainder of 2017. In addition, the adoption of FASB ASU No. 2014-09 requires new disclosures related to revenue recognition, which we are continuing to evaluate. We intend to adopt FASB ASU No. 2014-09 on January 1, 2018 using the modified retrospective transition method. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes new accounting and disclosure requirements for leases. FASB ASU No. 2016-02 requires lessees to classify most leases as either finance or operating leases and to initially recognize a lease liability and right-of-use asset. Entities may elect to account for certain short-term leases (with a term of 12 months or less) using a method similar to the current operating lease model. The statements of operations will include, for finance leases, separate recognition of interest on the lease liability and amortization of the right-of-use asset and for operating leases, a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. At December 31, 2016, we were contractually obligated to make future payments of $69.8 million under our operating lease obligations in existence as of that date, primarily related to long-term facility leases. While we are in the early stages of our implementation process for FASB ASU No. 2016-02, and have not yet determined its impact on our consolidated financial statements, these leases would potentially be required to be presented on the balance sheet in accordance with the requirements of FASB ASU No. 2016-02. FASB ASU No. 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual reporting periods, with early adoption permitted. FASB ASU No. 2016-02 must be applied using a modified retrospective approach, which requires recognition and measurement of leases at the beginning of the earliest period presented, with certain practical expedients available. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), which changes both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results, in order to better align an entity’s risk management activities and financial reporting for hedging relationships. The amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. FASB ASU No. 2017-12 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual reporting periods, with early adoption permitted. We are still evaluating the impact that this guidance will have on our consolidated financial statements, and we have not yet determined whether we will early adopt FASB ASU No. 2017-12. |
Inventories (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of inventories | The components of inventories as of September 30, 2017 and December 31, 2016 were as follows:
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Shareholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Roll forward of components of Accumulated other comprehensive loss, net of tax | The following is a roll forward of the components of Accumulated other comprehensive loss for the nine months ended September 30, 2017:
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Amounts reclassified from Accumulated other comprehensive loss | The details of the amounts reclassified from Accumulated other comprehensive loss for the three and nine months ended September 30, 2017 and 2016 are as follows:
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Restructuring and Special Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Changes to restructuring liability | Changes to the severance portion of our restructuring liability during the nine months ended September 30, 2017 were as follows:
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Debt (Tables) |
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Schedule of long-term debt and capital lease and other financing obligations | Our long-term debt and capital lease and other financing obligations as of September 30, 2017 and December 31, 2016 consisted of the following:
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Pension and Other Post-Retirement Benefits (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit cost | The components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the three months ended September 30, 2017 and 2016 were as follows:
The components of net periodic benefit cost/(credit) associated with our defined benefit and retiree healthcare plans for the nine months ended September 30, 2017 and 2016 were as follows:
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Share-Based Payment Plans (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of non-cash compensation expense related to equity awards | The table below presents non-cash compensation expense related to our equity awards, which is recorded within SG&A expense in the condensed consolidated statements of operations, during the identified periods:
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Schedule of options granted | We granted the following options under the Sensata Technologies Holding N.V. 2010 Equity Incentive Plan (the "2010 Equity Plan") during the nine months ended September 30, 2017:
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Schedule of RSUs and PSUs | We granted the following RSUs and PRSUs under the 2010 Equity Plan during the nine months ended September 30, 2017:
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Fair Value Measures (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table presents information about our assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, aggregated by the level in the fair value hierarchy within which those measurements fell:
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Information about carrying values and fair values of financial instruments not recorded at fair value | The following table presents the carrying values and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016:
(1) Carrying value excludes discounts and deferred financing costs. |
Derivative Instruments and Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of outstanding derivative instruments | As of September 30, 2017, we had the following outstanding foreign currency forward contracts:
We had the following outstanding commodity forward contracts, none of which were designated as derivatives in qualifying hedging relationships, as of September 30, 2017:
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Schedule of fair values of derivative financial instruments and their classification in balance sheets | The following table presents the fair values of our derivative financial instruments and their classification in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016:
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Schedule of effect of derivative financial instruments on statements of operations | The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three months ended September 30, 2017 and 2016:
The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations for the nine months ended September 30, 2017 and 2016:
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Other, Net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other, net | Other, net consisted of the following gains/(losses) for the three and nine months ended September 30, 2017 and 2016:
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Segment Reporting (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information by segment | The following table presents Net revenue and Segment profit for the reported segments and other operating results not allocated to the reported segments for the three and nine months ended September 30, 2017 and 2016:
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Net Income per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted-average ordinary shares outstanding | For the three and nine months ended September 30, 2017 and 2016, the weighted-average ordinary shares outstanding for basic and diluted net income per share were as follows:
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Schedule of antidilutive securities | These potential ordinary shares are as follows:
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Business Description and Basis of Presentation (Details) |
9 Months Ended |
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Sep. 30, 2017
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of businesses | 2 |
New Accounting Standards (Details) $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Future payments | $ 69.8 |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory, Net [Abstract] | ||
Finished goods | $ 191,165 | $ 169,304 |
Work-in-process | 91,569 | 74,810 |
Raw materials | 164,752 | 145,730 |
Inventories | $ 447,486 | $ 389,844 |
Shareholders' Equity - Narrative (Details) shares in Millions, $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
shares
| |
Equity [Abstract] | |
Reissued treasury shares (in shares) | shares | 0.5 |
Treasury stock, loss from reissuances | $ | $ 13.1 |
Restructuring and Special Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and special charges | $ 1,329 | $ 837 | $ 18,768 | $ 3,167 |
Severance | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 17,350 | |||
Charges, net of reversals | 11,747 | |||
Payments | (20,072) | |||
Impact of changes in foreign currency exchange rates | 1,529 | |||
Ending Balance | 10,554 | 10,554 | ||
Facility Closing, Minden, Germany | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance charges | 0 | 8,400 | ||
Facility exit costs | $ 1,300 | $ 2,400 |
Debt - Debt Schedule (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Less: discount | $ (15,812) | $ (17,655) |
Less: deferred financing costs | (29,971) | (33,656) |
Less: current portion | (7,327) | (9,901) |
Long-term debt, net | 3,224,684 | 3,226,582 |
Capital lease and other financing obligations | 35,839 | 37,111 |
Less: current portion | (5,849) | (4,742) |
Capital lease and other financing obligations, less current portion | 29,990 | 32,369 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | 927,794 | 937,794 |
4.875% Senior Notes | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | $ 500,000 | 500,000 |
Stated interest rate | 4.875% | |
5.625% Senior Notes | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | $ 400,000 | 400,000 |
Stated interest rate | 5.625% | |
5.0% Senior Notes | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | $ 700,000 | 700,000 |
Stated interest rate | 5.00% | |
6.25% Senior Notes | ||
Debt Instrument [Line Items] | ||
Gross long-term debt | $ 750,000 | $ 750,000 |
Stated interest rate | 6.25% |
Debt - Narrative (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Accrued interest | $ 45,700,000 | $ 36,800,000 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Amount available under revolving credit facility | 415,300,000 | |
Maximum borrowing capacity | 420,000,000.0 | |
Letters of credit outstanding, amount | 4,700,000 | |
Letter of Credit | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding, amount | $ 0 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Valuation Allowance [Line Items] | ||||
Provision for income taxes | $ 14,816 | $ 11,121 | $ 47,759 | $ 48,297 |
CST | ||||
Valuation Allowance [Line Items] | ||||
Recognized benefit from income taxes | $ 5,100 | $ 3,700 |
Share-Based Payment Plans - Schedule of Non-Cash Compensation Expense Related to Equity Awards (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5,097 | $ 4,757 | $ 15,106 | $ 13,279 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,575 | 1,621 | 5,055 | 5,547 |
Restricted securities | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 3,522 | $ 3,136 | $ 10,051 | $ 7,732 |
Share-Based Payment Plans - Schedule of Options Granted (Details) - Various executives and employees - Stock options - 25% per year over four years shares in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options Granted (in shares) | shares | 387 |
Weighted- Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 14.50 |
Vesting period | 4 years |
Vesting percent | 25.00% |
Share-Based Payment Plans - Narrative (Details) shares in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
shares
| |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Option exercised, shares | 266 |
Fair Value Measures - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2017 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Facility recorded as held for sale | $ 1.7 | |
Quanergy | Series B Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Value of Series B Preferred Stock acquired | $ 50.0 |
Derivative Instruments and Hedging Activities - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Amounts excluded from foreign currency cash flow ineffectiveness assessment | $ 0 | $ 0 | $ 0 | $ 0 |
Foreign currency cash flow loss to be reclassified during next 12 months | 18,400,000 | 18,400,000 | ||
Termination value of outstanding derivatives in a liability position | 33,800,000 | 33,800,000 | ||
Collateral already posted, aggregate fair value | $ 0 | $ 0 |
Other, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Other Income and Expenses [Abstract] | ||||
Currency remeasurement gain on net monetary assets | $ 3,989 | $ 1,707 | $ 11,010 | $ 550 |
Loss on foreign currency forward contracts | (3,865) | (3,827) | (10,542) | (7,912) |
Gain on commodity forward contracts | 2,956 | 1,318 | 6,439 | 12,049 |
Other | 32 | 76 | 283 | 205 |
Other, net | $ 3,112 | $ (726) | $ 7,190 | $ 4,892 |
Net Income per Share - Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||
Basic weighted-average ordinary shares outstanding (in shares) | 171,269 | 170,840 | 171,116 | 170,656 |
Dilutive effect of stock options (in shares) | 618 | 431 | 567 | 504 |
Dilutive effect of unvested restricted securities (in shares) | 358 | 207 | 340 | 199 |
Diluted weighted-average ordinary shares outstanding (in shares) | 172,245 | 171,478 | 172,023 | 171,359 |
Net Income per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Anti-dilutive shares excluded | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,584 | 1,355 | 1,635 | 1,418 |
Contingently issuable shares excluded | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 884 | 735 | 783 | 632 |