The following discussion and analysis of our financial condition and results of
operations supplements, and should be read in conjunction with, the discussion
in Item 7: Management's Discussion and Analysis of Financial Condition and
Results of Operations included in our 2021 Annual Report. The following
discussion should also be read in conjunction with the unaudited condensed
consolidated financial statements and the notes thereto included elsewhere in
this Quarterly Report on Form 10-Q. Amounts and percentages in the following
discussions have been calculated based on unrounded numbers. Accordingly,
certain amounts may not appear to recalculate due to the effect of rounding.

Insight

For the three and six months ended June 30, 2022, net revenue increased 2.8% and
3.2%, respectively, from the corresponding periods of fiscal year 2021. This
revenue growth was primarily driven by outgrowth to market and revenue from
recent acquisitions. In addition, we continued to drive new business wins, with
a significant portion coming in areas representing our megatrend initiatives of
Electrification and Insights, and which will help drive future revenue growth.

For the three and six months ended June 30, 2022, operating income decreased
15.7% and 17.8%, respectively, to $138.9 million (13.6% of net revenue) and
$264.9 million (13.3% of net revenue), respectively, compared to $164.8 million
(16.6% of net revenue) and $322.2 million (16.7% of net revenue), respectively,
in the corresponding periods of fiscal year 2021. For the three and six months
ended June 30, 2022, income before taxes decreased to $54.9 million and $84.9
million, respectively, compared to $120.6 million and $194.6 million,
respectively, in the corresponding periods of fiscal year 2021.

See the discussion of the factors for these changes under the heading Results of operations included elsewhere in this Section 2: MD&A and Discussion of Financial Condition and Results of Operations (“MD&A”).

Acquisitions and disposals

In the first quarter of 2022, we completed the strategic acquisition of Elastic
M2M for $51.4 million. Elastic M2M is a privately-held innovator of connected
intelligence for operational assets across heavy-duty transport, warehouse,
supply chain and logistics, industrial, light-duty passenger car, and a variety
of other industry segments. Elastic M2M primarily serves telematics service
providers and resellers, enabling them to leverage Elastic M2M's cloud platform
and analytics capabilities to deliver sensor-based operational insights to their
end users. This acquisition augments our cloud capabilities critical to
delivering actionable sensor-based insights, an increasingly important
capability in this fast-growing industry segment.

On July 12, 2022, we completed the acquisition of Dynapower, a leading provider
of high-voltage power conversion solutions for clean energy segments, for an
aggregate cash purchase price of $580 million, subject to working capital and
other

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adjustments. Dynapower is a leader in power conversion systems including
inverters, converters, and rectifiers for renewable energy generation, green
hydrogen production, electric vehicle charging stations, and microgrid
applications, as well as industrial and defense applications. Dynapower also
provides aftermarket sales and service to maintain its equipment in the field.
We acquired Dynapower as a foundational addition to our Clean Energy Solutions
strategy and complement to our recent acquisitions of GIGAVAC, Lithium Balance,
and Spear. Dynapower's revenue is expected to exceed $100 million on an
annualized basis in 2022 with projected revenue growth in excess of 30% over the
next several years.

In July 2022, we sold the Qinex Business to Boyd Corporation for total
consideration of approximately $219.0 million, subject to working capital and
other adjustments. The Qinex Business manufactures semiconductor burn-in test
sockets and thermal control solutions and was formed through the combination of
Sensata's semiconductor interconnect business with Wells-CTI in 2012. The Qinex
Business is included in our Sensing Solutions segment (and Industrial Solutions
reporting unit). We have not finalized the calculation of gain on the
transaction but preliminarily expect it to be between approximately $125 million
and $150 million.

Results of Operations

The table below presents our historical results of operations, in millions of
dollars and as a percentage of net revenue, for the three and six months ended
June 30, 2022 compared to the three and six months ended June 30, 2021. We have
derived the results of operations from the condensed consolidated financial
statements included elsewhere in this Quarterly Report on Form 10-Q. Amounts and
percentages in the table below have been calculated based on unrounded numbers.
Accordingly, certain amounts may not appear to recalculate due to the effect of
rounding.

                                                         For the three months ended                                                             For the six months ended
                                           June 30, 2022                             June 30, 2021                              June 30, 2022                               June 30, 2021
                                    Amount               Margin*              Amount               Margin*                Amount                Margin*               Amount               Margin*
Net revenue:
Performance Sensing             $      746.9                73.2  %       $      741.9                74.7  %       $    1,464.6                   73.4  %       $     1,456.4                75.3  %
Sensing Solutions                      273.7                26.8                 250.8                25.3                 531.7                   26.6                  478.8                24.7
Net revenue                          1,020.5               100.0                 992.7               100.0               1,996.3                  100.0                1,935.2               100.0

Operating costs and expenses           881.6                86.4                 827.9                83.4               1,731.4                   86.7                1,613.0                83.3
Operating income                       138.9                13.6                 164.8                16.6                 264.9                   13.3                  322.2                16.7
Interest expense, net                  (44.8)               (4.4)                (45.2)               (4.6)                (90.3)                  (4.5)                 (89.3)               (4.6)
Other, net                             (39.2)               (3.8)                  1.0                 0.1                 (89.7)                  (4.5)                 (38.4)               (2.0)
Income before taxes                     54.9                 5.4                 120.6                12.1                  84.9                    4.3                  194.6                10.1
Provision for income taxes              20.0                 2.0                   7.6                 0.8                  27.6                    1.4                   27.9                 1.4
Net income                      $       34.8                 3.4  %       $      112.9                11.4  %       $       57.3                    2.9  %       $       166.6                 8.6  %

___________________________________

* Represents the amount presented divided by the total net income.

Net revenue

Net revenue for the three months ended June 30, 2022 increased 2.8% compared to
the three months ended June 30, 2021. Excluding a decrease of 2.2% attributed to
changes in foreign currency exchange rates and an increase of 2.8% due to the
effect of acquisitions, net revenue for the three months ended June 30, 2022
increased 2.2% on an organic basis, representing market outgrowth of 650 basis
points.

Net revenue for the six months ended June 30, 2022 increased 3.2% compared to
the six months ended June 30, 2021. Excluding a decrease of 1.3% attributed to
changes in foreign currency exchange rates and an increase of 3.4% due to the
effect of acquisitions, net revenue for the six months ended June 30, 2022
increased 1.1% on an organic basis, representing market outgrowth of 720 basis
points.

Organic revenue growth (or decline) discussed throughout this MD&A is a financial measure that is not presented in accordance with WE GAAP. See the section titled Non-GAAP Financial Measures below for more information on our use of organic revenue growth (or decline).

Performance detection

Performance Sensing net revenue for the three months ended June 30, 2022
increased 0.7% compared to the three months ended June 30, 2021. Excluding a
decrease of 2.2% attributed to changes in foreign currency exchange rates and an
increase of

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3.0% due to the effect of acquisitions, Performance Sensing net revenue for the
three months ended June 30, 2022 was flat on an organic basis. Both automotive
and HVOR contributed to these results as discussed below.

Automotive net revenue for the three months ended June 30, 2022 declined 2.3%
compared to the three months ended June 30, 2021. Excluding a decline of 2.4%
attributed to changes in foreign currency exchange rates, Automotive net revenue
for the three months ended June 30, 2022 grew 0.1% on an organic basis. HVOR net
revenue for the three months ended June 30, 2022 grew 7.7% compared to the three
months ended June 30, 2021. Excluding a decline of 1.7% attributed to changes in
foreign currency exchange rates and an increase of 10.0% due to the effect of
acquisitions, HVOR net revenue for the three months ended June 30, 2022 declined
0.6% on an organic basis.

Performance Sensing net revenue for the six months ended June 30, 2022 increased
0.6% compared to the six months ended June 30, 2021. Excluding a decrease of
1.4% attributed to changes in foreign currency exchange rates and an increase of
3.9% due to the effect of acquisitions, Performance Sensing net revenue for the
six months ended June 30, 2022 decreased 1.9% on an organic basis. Both
automotive and HVOR contributed to these results as discussed below.

Automotive net revenue for the six months ended June 30, 2022 declined 4.4%
compared to the six months ended June 30, 2021. Excluding a decrease of 1.5%
attributed to changes in foreign currency exchange rates, automotive net revenue
for the six months ended June 30, 2022 declined 2.9% on an organic basis,
primarily as a result of the impacts of original equipment manufacturer efforts
to replenish inventory channels in 2021. HVOR net revenue for the six months
ended June 30, 2022 grew 13.6% compared to the six months ended June 30, 2021.
Excluding a decrease of 1.2% attributed to changes in foreign currency exchange
rates and an increase of 14.0% due to the effect of acquisitions, HVOR net
revenue for the six months ended June 30, 2022 grew 0.8% on an organic basis.

Detection solutions

Sensing Solutions net revenue for the three months ended June 30, 2022 increased
9.1% compared to the three months ended June 30, 2021. Excluding a decline of
1.9% attributed to changes in foreign currency exchange rates and an increase of
2.0% due to the effect of acquisitions, Sensing Solutions net revenue for the
three months ended June 30, 2022 grew 9.0% on an organic basis. The organic
revenue growth primarily reflects the launch of new industrial electrification
applications, partially offset by declines in the Industrial market.

Sensing Solutions net revenue for the six months ended June 30, 2022 increased
11.1% compared to the six months ended June 30, 2021. Excluding a decline of
1.2% attributed to changes in foreign currency exchange rates and an increase of
2.0% due to the effect of acquisitions, Sensing Solutions net revenue for the
six months ended June 30, 2022 grew 10.3% on an organic basis. The organic
revenue growth primarily reflects the launch of new industrial electrification
applications, partially offset by declines in the Aerospace market.

Operating costs and expenses

Operating costs and expenses for the three and six months ended June 30, 2022
and 2021 are presented, in millions of dollars and as a percentage of net
revenue, in the following table. Amounts and percentages in the table below have
been calculated based on unrounded numbers. Accordingly, certain amounts may not
appear to recalculate due to the effect of rounding.

                                                            For the three months ended                                                             For the six months ended
                                              June 30, 2022                             June 30, 2021                              June 30, 2022                               June 30, 2021
                                       Amount               Margin*              Amount               Margin*                Amount                Margin*               Amount               Margin*
Operating costs and expenses:
Cost of revenue                    $      686.6                67.3  %       $      658.3                66.3  %       $    1,343.7                   67.3  %       $     1,293.6                66.8  %
Research and development                   48.0                 4.7                  42.9                 4.3                  94.0                    4.7                   78.9                 4.1
Selling, general and                       97.3                 9.5                  86.8                 8.7                 193.0                    9.7                  163.9                 8.5
administrative
Amortization of intangible assets          36.8                 3.6                  34.9                 3.5                  74.2                    3.7                   66.9                 3.5
Restructuring and other charges,           12.9                 1.3                   5.0                 0.5                  26.6                    1.3                    9.6                 0.5

report

Total operating costs and expenses $      881.6                86.4  %       $      827.9                83.4  %       $    1,731.4                   86.7  %       $     1,613.0                83.3  %


___________________________________

* Represents the amount presented divided by the total net income.

Revenue cost

For the three months ended June 30, 2022, cost of revenue as a percentage of net
revenue increased from the three months ended June 30, 2021, primarily due to
the impacts of inflation on material and logistics costs.

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For the six months ended June 30, 2022, cost of revenue as a percentage of net
revenue increased from the six months ended June 30, 2021, primarily due to the
impacts of inflation on material and logistics costs, partially offset by the
favorable effect of changes in foreign currency exchange rates.

Research and development costs

For the three and six months ended June 30, 2022, research and development
("R&D") expense increased from the three and six months ended June 30, 2021,
primarily as a result of higher spend to support megatrend growth initiatives
and incremental R&D expense related to acquired businesses, partially offset by
the favorable effect of foreign currency exchange rates.

R&D expenditure related to megatrends during the quarters and six months ended June 30, 2022 has been $17.6 million and $34.0 millionrespectively, increases of
$5.0 million and $10.1 millionrespectively, periods of three and six months ended June 30, 2021.

Selling, general and administrative expenses

For the three and six months ended June 30, 2022, selling, general and
administrative ("SG&A") expense increased from the three and six months ended
June 30, 2021, primarily as a result of (1) incremental SG&A expense related to
acquired businesses, including related transaction costs, (2) higher selling
costs to support growth and our ability to execute for our customers, and (3)
higher share-based compensation, partially offset by the favorable effect of
changes in foreign currency exchange rates. Refer to Note 4: Share-Based Payment
Plans of our condensed consolidated financial statements, included elsewhere in
this Quarterly Report on Form 10-Q, for additional information related to our
share-based compensation.

Amortization of intangible assets

For the three and six months ended June 30, 2022, amortization expense increased
from the three and six months ended June 30, 2021, primarily due to increased
intangibles from recent acquisitions partially offset by the effect of the
economic benefit amortization method. Refer to Note 16: Acquisitions and
Divestitures of our condensed consolidated financial statements, included
elsewhere in this Quarterly Report on Form 10-Q, for additional information
related to recent acquisitions.

Restructuring and other charges, net

For the three and six months ended June 30, 2022, restructuring and other
charges, net increased from the three and six months ended June 30, 2021,
primarily due to acquisition-related incentive compensation partially offset by
a gain resulting from reduction of the liability for contingent consideration
for Spear. In addition, we did not incur restructuring charges related to the Q2
2020 Global Restructure Program in the three and six months ended June 30, 2022,
compared to $3.8 million and $5.7 million in the three and six months ended
June 30, 2021, respectively. Refer to Note 5: Restructuring and Other Charges,
Net of our condensed consolidated financial statements, included elsewhere in
this Quarterly Report on Form 10-Q, for additional information on the components
of restructuring and other charges, net.

Operating result

For the three months ended June 30, 2022, operating income decreased compared to
the three months ended June 30, 2021, primarily due to (1) increased
acquisition-related incentive compensation, (2) higher spend to support our
megatrends initiatives, (3) the impacts of lower volume, (4) increased
transaction-related costs, (5) higher amortization due to acquired intangibles,
(6) higher selling costs to support growth and our ability to execute for our
customers, and (7) higher share-based compensation, partially offset by (1) a
reduction in restructuring charges related to the Q2 2020 Global Restructure
Program and (2) a gain recorded as a result of a reduction in the liability for
contingent consideration due to Spear.

For the six months ended June 30, 2022, operating income decreased compared to
the six months ended June 30, 2021, primarily due to (1) increased
acquisition-related incentive compensation, (2) higher amortization due to
acquired intangibles, (3) the impacts of inflation, (4) higher spend to support
our megatrends initiatives, (5) the impacts of lower volume, (6) higher selling
costs to support growth and our ability to execute for our customers, (7)
increased transaction-related costs, and (8) higher share-based compensation,
partially offset by (1) a gain recorded as a result of a reduction in the
liability for contingent consideration due to Spear, (2) a reduction in
restructuring charges related to the Q2 2020 Global Restructure Program, and (3)
the favorable effect of changes in foreign currency exchange rates.

Interest expense, net

For the three months ended June 30, 2022, interest expense, net decreased $0.4
million from the three months ended June 30, 2021, as increased interest rates
impacted interest income earned on our cash equivalents balances slightly more
than interest expense on our variable rate debt (the Term Loan).

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For the six months ended June 30, 2022, interest expense, net increased $1.0
million from the six months ended June 30, 2021, primarily as a result of (1) a
full six months of interest expense on the 4.0% Senior Notes in the six months
ended June 30, 2022, which were issued on March 29, 2021 and April 8, 2021, and
(2) increased interest expense on our variable rate debt resulting from higher
interest rates in the period, partially offset by (1) reduced interest expense
resulting from our March 5, 2021 redemption of the 6.25% Senior Notes and (2)
increased interest income earned on our cash equivalents balances.

Other, net

Other, net primarily includes currency remeasurement gains and losses on net
monetary assets, gains and losses on foreign currency and commodity forward
contracts not designated as hedging instruments, mark-to-market gains and losses
on investments, losses related to debt refinancing, and the portion of our net
periodic benefit cost excluding service cost. Refer to Note 6: Other, Net of our
condensed consolidated financial statements, included elsewhere in this
Quarterly Report on Form 10-Q, for more details related to the components of
other, net.

For the three months ended June 30, 2022, other, net represented a net loss of
$39.2 million, an unfavorable impact on earnings of $40.3 million compared to a
net gain of $1.0 million in the three months ended June 30, 2021. This was
primarily due to (1) increased losses on commodity forward contracts, (2)
increased currency remeasurement losses on net monetary assets, primarily
related to CNY, and (3) $11.8 million in mark-to-market losses on equity
investments, primarily related to Quanergy. Refer to Note 14: Fair Value
Measures of our condensed consolidated financial statements, included elsewhere
in this Quarterly Report on Form 10-Q, for detailed information on our
investment in Quanergy.

For the six months ended June 30, 2022, other, net represented a net loss of
$89.7 million, an unfavorable impact on earnings of $51.3 million compared to a
net loss of $38.4 million in the six months ended June 30, 2021. This was
largely due to (1) $71.1 million in mark-to-market losses on equity investments,
primarily related to Quanergy, (2) increased losses on net monetary assets,
primarily related to CNY, and (3) increased losses on commodity forward
contracts, partially offset by the non-recurrence of a $30.1 million loss on
debt financing related to the redemption of our 6.25% Senior Notes on March 5,
2021.

Provision for income taxes

For the three months ended June 30, 2022, the provision for income taxes
increased $12.4 million from the three months ended June 30, 2021, predominantly
related to the jurisdictional mix of profits, the impacts of nondeductible
earnout and compensation expenses resulting from recent acquisitions, and the
inability to benefit the mark-to market loss on our investment in Quanergy.

For the six months ended June 30, 2022, the provision for income taxes decreased
$0.3 million from the six months ended June 30, 2021, predominantly related to
the overall decrease in income before tax as impacted by the mix of profits in
the various jurisdictions in which we operate, offset by the impacts of
nondeductible expenses resulting from our recent acquisitions and the inability
to benefit the mark-to-market loss on our investment in Quanergy.

The provision for income taxes consists of (1) current tax expense, which
relates primarily to our profitable operations in tax jurisdictions with limited
or no net operating loss carryforwards and withholding taxes related to
management fees, royalties, and the repatriation of foreign earnings; and (2)
deferred tax expense (or benefit), which represents adjustments in book-to-tax
basis differences primarily related to (a) book versus tax basis in intangible
assets, (b) changes in net operating loss carryforwards, and (c) changes in
withholding taxes on unremitted earnings. Other items impacting deferred tax
expense include changes in tax rates and changes in our assessment of the
realizability of our deferred tax assets.

Non-GAAP Financial Measures

This section provides additional information regarding certain non-GAAP
financial measures, including organic revenue growth (or decline), adjusted
operating income, adjusted operating margin, adjusted net income, adjusted
earnings per share ("EPS"), free cash flow, net leverage ratio, and adjusted
earnings before interest, taxes, depreciation, and amortization ("EBITDA"),
which are used by our management, Board of Directors, and investors. We use
these non-GAAP financial measures internally to make operating and strategic
decisions, including the preparation of our annual operating plan, evaluation of
our overall business performance, and as a factor in determining compensation
for certain employees.

The use of our non-GAAP financial measures has limitations. They should be
considered as supplemental in nature and are not intended to be considered in
isolation from, or as an alternative to, reported net revenue growth (or
decline), operating income, operating margin, net income, diluted EPS, net cash
provided by operating activities, total debt, finance lease and other financing
obligations, respectively, calculated in accordance with U.S. GAAP. In addition,
our measures of organic revenue growth (or decline), adjusted operating income,
adjusted operating margin, adjusted net income, adjusted EPS, free cash flow,

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the net leverage ratio and Adjusted EBITDA may not be the same or comparable to similar non-GAAP financial measures presented by other companies.

Organic revenue growth (or decline)

Organic revenue growth (or decline) is defined as the reported percentage change
in net revenue, calculated in accordance with U.S. GAAP, excluding the
period-over-period impact of foreign currency exchange rate differences as well
as the net impact of material acquisitions and divestitures for the 12-month
period following the respective transaction date(s).

We believe that organic revenue growth (or decline) provides investors with
helpful information with respect to our operating performance, and we use
organic revenue growth (or decline) to evaluate our ongoing operations as well
as for internal planning and forecasting purposes. We believe that organic
revenue growth (or decline) provides useful information in evaluating the
results of our business because it excludes items that we believe are not
indicative of ongoing performance or that we believe impact comparability with
the prior-year period.

Adjusted operating profit, adjusted operating margin, adjusted net profit and adjusted EPS

We define adjusted operating income as operating income, determined in
accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are
described below. Adjusted operating margin is calculated by dividing adjusted
operating income by net revenue determined in accordance with U.S. GAAP. We
define adjusted net income as follows: net income (or loss) determined in
accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are
described in Non-GAAP Adjustments below. Adjusted EPS is calculated by dividing
adjusted net income by the number of diluted weighted-average ordinary shares
outstanding in the period.

Management uses adjusted operating income, adjusted operating margin, adjusted
net income, and adjusted EPS as measures of operating performance, for planning
purposes (including the preparation of our annual operating budget), to allocate
resources to enhance the financial performance of our business, to evaluate the
effectiveness of our business strategies, in communications with our Board of
Directors and investors concerning our financial performance, and as factors in
determining compensation for certain employees. We believe investors and
securities analysts also use these non-GAAP financial measures in their
evaluation of our performance and the performance of other similar companies.
These non-GAAP financial measures are not measures of liquidity.

Free movement of capital

Free cash flow is defined as net cash provided by operating activities less
additions to property, plant and equipment and capitalized software. We believe
free cash flow is useful to management and investors as a measure of cash
generated by business operations that will be used to repay scheduled debt
maturities and can be used to, among other things, fund acquisitions, repurchase
ordinary shares, and (or) accelerate the repayment of debt obligations.

Adjusted EBITDA

Adjusted EBITDA is defined as net income (or loss), determined in accordance
with U.S. GAAP, excluding interest expense, net, provision for (or benefit from)
income taxes, depreciation expense, amortization of intangible assets, and the
following non-GAAP adjustments, if applicable: (1) restructuring related and
other, (2) financing and other transaction costs, (3) deferred gain or loss on
derivative instruments, and (4) step-up inventory amortization. Refer to
Non-GAAP Adjustments below for additional discussion of these adjustments.

Net leverage ratio

Net leverage ratio represents net debt (total debt, finance leases and other financing obligations less cash and cash equivalents) divided by trailing twelve month (“LTM”) adjusted EBITDA. We believe the net leverage ratio is a useful measure for management and investors to understand trends in our overall financial condition.

Non-GAAP adjustments

Many of our non-GAAP adjustments relate to a series of strategic initiatives
developed by our management aimed at better positioning us for future revenue
growth and an improved cost structure. These initiatives have been modified from
time to time to reflect changes in overall market conditions and the competitive
environment facing our business. These initiatives include, among other items,
acquisitions, divestitures, restructurings of certain business, supply chain, or
corporate activities, and

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various financing transactions. We describe these adjustments in more detail below, each of which is net of current tax consequences, if any.

•Restructuring related and other: includes charges, net related to certain
restructuring and other exit activities as well as other costs (or income) that
we believe are either unique or unusual to the identified reporting period, and
that we believe impact comparisons to prior period operating results. Such costs
include charges related to optimization of our manufacturing processes to
increase productivity. This type of activity occurs periodically, however each
action is unique, discrete, and driven by various facts and circumstances. Such
amounts are excluded from internal financial statements and analyses that
management uses in connection with financial planning, and in its review and
assessment of our operating and financial performance, including the performance
of our segments.

•Financing and other transaction costs: includes losses or gains related to debt
financing transactions, losses or gains related to the divestiture of a
business, costs incurred, including for legal, accounting, and other
professional services, that are directly related to an acquisition, divestiture,
or equity financing transaction, mark-to-market losses or gains on our equity
investments, expenses related to compensation arrangements entered into
concurrent with the closing of an acquisition, and gains related to changes in
the fair value of acquisition-related contingent consideration amounts.

•Deferred loss or gain on derivative instruments: includes unrealized losses or
gains on derivative instruments that do not qualify for hedge accounting as well
as the impact of commodity prices on our raw material costs relative to the
strike price on our commodity forward contracts.

•Step-up depreciation and amortization: includes depreciation and amortization
expense associated with the step-up in fair value of assets acquired in
connection with a business combination (e.g., property, plant and equipment,
definite-lived intangible assets, and inventories).

•Deferred taxes and other tax related: includes adjustments for book-to-tax
basis differences due primarily to the step-up in fair value of fixed and
intangible assets and goodwill, the utilization of net operating losses, and
adjustments to our valuation allowance in connection with certain acquisitions
and tax law changes. Other tax related items include certain adjustments to
unrecognized tax benefits and withholding tax on repatriation of foreign
earnings.

•Amortization of debt issue costs: represents debit interest related to the amortization of deferred financing costs as well as debt discounts, net of premiums.

• If applicable, the ongoing tax effect of non-GAAP adjustments.

Our definition of adjusted net income excludes the deferred provision for (or
benefit from) income taxes and other tax related items described above. As we
treat deferred income taxes as an adjustment to compute adjusted net income, the
deferred income tax effect associated with the reconciling items presented below
would not change adjusted net income for any period presented.

Non-GAAP reconciliations

The following tables present reconciliations of certain financial measures
calculated in accordance with U.S. GAAP to the related non-GAAP financial
measures for the periods presented. Refer to Non-GAAP adjustments section above
for additional information related to these adjustments. Amounts and percentages
in the tables below have been calculated based on unrounded numbers,
accordingly, certain amounts may not appear to recalculate due to the effect of
rounding.

                                                             For the three months ended June 30, 2022                                                 For the three months ended June 30, 2021
(Dollars in millions, except per                                   Operating                                                                                Operating
share amounts)                          Operating Income            Margin              Net Income           Diluted EPS         Operating Income            Margin              Net Income           Diluted EPS
Reported (GAAP)                         $        138.9                 

13.6% $34.8 $0.22 $164.8

              16.6  %       $     112.9          $       0.71
Non-GAAP adjustments:
Restructuring related and other                    3.9                   0.4                  4.3                  0.03                     5.7                   0.6                  6.9                  0.04
Financing and other transaction                   14.4                   1.4                 28.3                  0.18                     2.5                   0.3                  1.3                  0.01
costs
Step-up depreciation and                          35.3                   3.5                 35.3                  0.22                    33.7                   3.4                 33.7                  0.21
amortization
Deferred loss on derivative                        1.2                   0.1                 15.4                  0.10                     2.6                   0.3                  1.1                  0.01
instruments
Amortization of debt issuance                        -                     -                  1.7                  0.01                       -                     -                  1.7                  0.01
costs
Deferred taxes and other tax                         -                     -                  9.7                  0.06                       -                     -                 (6.2)                (0.04)
related
Total adjustments                                 54.8                   5.4                 94.7                  0.60                    44.6                   4.5                 38.4                  0.24
Adjusted (non-GAAP)                     $        193.8                  19.0  %       $     129.5          $       0.83          $        209.3                  21.1  %       $     151.4          $       0.95


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                                                             For the six months ended June 30, 2022                                                  For the six months ended June 30, 2021
(Dollars in millions, except per                                  Operating                                                                             

Operating

share amounts)                          Operating Income           Margin              Net Income           Diluted EPS         Operating Income           Margin              Net Income           Diluted EPS
Reported (GAAP)                         $       264.9                  13.3 

% $57.3 $0.36 $322.2

16.7% $166.6 $1.05
Non-GAAP adjustments: restructuring and other

                   8.0                   0.4                  8.3                  0.05                   10.3                   0.5                 14.2                  0.09
Financing and other transaction                  30.3                   1.5                102.8                  0.65                    7.1                   0.4                 34.1                  0.21
costs
Step-up depreciation and                         71.3                   3.6                 71.3                  0.45                   63.4                   3.3                 63.4                  0.40
amortization
Deferred loss on derivative                       1.8                   0.1                  8.5                  0.05                    4.4                   0.2                  3.3                  0.02

instruments

Amortization of debt issuance                       -                     -                  3.4                  0.02                      -                     -                  3.4                  0.02

costs

Deferred taxes and other tax                        -                     -                  1.3                  0.01                      -                     -                  3.9                  0.02
related
Total adjustments                               111.4                   5.6                195.7                  1.24                   85.2                   4.4                122.3                  0.77
Adjusted (non-GAAP)                     $       376.3                  18.8  %       $     253.0          $       1.60          $       407.4                  21.1  %       $     289.0          $       1.81

The following table provides a reconciliation of net cash provided by operating activities in accordance with WE GAAP to free cash flow.

                                                                     For the six months ended June 30,
(in millions)                                                             2022                2021
Net cash provided by operating activities (GAAP)                     $     141.9          $   267.9
Additions to property, plant and equipment and capitalized
software                                                                   (74.1)             (63.6)
Free cash flow (non-GAAP)                                            $      67.8          $   204.4

The following table presents a reconciliation of net income in accordance with
WE GAAP to Adjusted EBITDA.

                                                         For the three months ended June        For the six months ended June
                                                                       30,                                   30,
(in millions)                            LTM (1)             2022               2021               2022               2021
Net income                             $  254.2          $     34.8          $  112.9          $     57.3          $  166.6
Interest expense, net                     180.3                44.8              45.2                90.3              89.3
Provision for income taxes                 50.0                20.0               7.6                27.6              27.9
Depreciation expense                      125.0                31.4              31.6                62.9              62.8
Amortization of intangible
assets                                    141.4                36.8              34.9                74.2              66.9
EBITDA                                    750.9               167.9             232.3               312.2             413.6
Non-GAAP adjustments
Restructuring related and other            17.7                 4.3               7.0                 8.5              14.4
Financing and other transaction
costs                                     107.3                28.7               1.7               103.8              37.6
Deferred loss on derivative
instruments                                17.6                19.4               1.4                10.7               4.4
Adjusted EBITDA                        $  893.5          $    220.4          $  242.4          $    435.2          $  470.0

___________________________________

(1) Last twelve months

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The following table provides a reconciliation of total debt, finance leases and other financing obligations in accordance with WE GAAP/net debt ratio.

                                                                       June 30,           December 31,
(Dollars in millions)                                                    2022                 2021

Current portion of long-term debt, finance leases and other financing obligations

                                                $     

$6.6 6.8 Finance leases and other financing obligations, less current portion

                                                                   25.6                   26.6
Long-term debt, net                                                    4,213.5                4,214.9
Total debt, finance lease and other financing obligations              4,245.7                4,248.3
Less: discount, net of premium                                            (4.3)                  (5.2)
Less: deferred financing costs                                           (26.7)                 (26.7)
Total gross indebtedness                                               4,276.7                4,280.2
Less: cash and cash equivalents                                        1,558.6                1,709.0
Net debt                                                             $ 

2,718.1 $2,571.3

Adjusted EBITDA (LTM)                                                $   893.5          $       928.3
Net leverage ratio                                                            3.0                    2.8

Cash and capital resources

As of June 30, 2022 and December 31, 2021, we held cash and cash equivalents in
the following regions (amounts have been calculated based on unrounded numbers;
accordingly, certain amounts may not appear to recalculate due to the effect of
rounding):

                     (In millions)      June 30,       December 31,
                                          2022             2021
                     United Kingdom    $    23.9      $        20.4
                     United States         598.8               25.0
                     The Netherlands       607.1            1,304.3
                     China                 261.6              293.8
                     Other                  67.2               65.5
                     Total             $ 1,558.6      $     1,709.0


The amount of cash and cash equivalents held in these geographic regions
fluctuates throughout the year due to a variety of factors, such as our use of
intercompany loans and dividends and the timing of cash receipts and
disbursements in the normal course of business. Our earnings are not considered
to be permanently reinvested in certain jurisdictions in which they were earned.
We recognize a deferred tax liability on these unremitted earnings to the extent
the remittance of such earnings cannot be recovered in a tax-free manner.

In certain jurisdictions, our cash balances are subject to withholding taxes
immediately upon withdrawal of funds to a different jurisdiction. In addition,
in order to take advantage of incentive programs offered by various
jurisdictions, including tax incentives, we are required to maintain minimum
cash balances in these jurisdictions. The transfer of cash from these
jurisdictions could result in loss of incentives or higher cash tax expense, but
those impacts are not expected to be material.

Our cash and cash equivalent balances are held in the following significant
currencies:

                                      As of June 30, 2022
(In millions)         USD          EUR         GBP          CNY        Other
United Kingdom    $    (0.6)     €  0.0      £ 15.5      ¥     -
United States         598.8         0.0           -            -
The Netherlands       588.1        17.8           -            -
China                 147.2           -           -        766.2
Other                  44.9         3.1           -            -
Total             $ 1,378.4      € 20.9      £ 15.5      ¥ 766.2
USD Equivalent                   $ 22.0      $ 18.9      $ 114.5      $ 24.8


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                                     As of December 31, 2021
(In millions)         USD          EUR         GBP           CNY         Other
United Kingdom    $     1.8      €  0.0      £ 13.2      ¥       -
United States          25.0           -           -              -
The Netherlands     1,294.2         8.9           -              -
China                  50.8           -           -        1,549.4
Other                  51.0         1.7           -              -
Total             $ 1,422.8      € 10.6      £ 13.2      ¥ 1,549.4
USD Equivalent                   $ 12.0      $ 17.8      $   243.1      $ 13.3


Cash Flows:

The table below summarizes our primary sources and uses of cash for the six
months ended June 30, 2022 and 2021. We have derived this summarized statements
of cash flows from the condensed consolidated financial statements included
elsewhere in this Quarterly Report on Form 10-Q. Amounts in the table below have
been calculated based on unrounded numbers. Accordingly, certain amounts may not
appear to recalculate due to the effect of rounding.

                                                                               For the six months ended
(In millions)                                                            June 30, 2022           June 30, 2021
Net cash provided by/(used in):
Operating activities:
Net income adjusted for non-cash items                                 $        285.1          $        347.0
Changes in operating assets and liabilities, net                               (143.2)                  (79.1)
Operating activities                                                            141.9                   267.9
Investing activities                                                           (129.8)                 (489.1)
Financing activities                                                           (162.5)                  221.0
Net change                                                             $       (150.4)         $         (0.2)


Operating activities. Net cash provided by operating activities for the six
months ended June 30, 2022 decreased compared to the corresponding period of the
prior year, primarily due to increased raw material purchases in order to
maximize production flexibility given widespread parts shortages in our supply
chain and in anticipation of volume increases later in the year, a cash payment
of $15.0 million for earned acquisition-related incentive compensation related
to Elastic M2M, and timing of supplier payments and customer receipts.

Investing activities. Net cash used in investing activities for the six months
ended June 30, 2022 decreased compared to the corresponding period of the prior
year, primarily due to lower cash paid for acquisitions, which included Elastic
M2M in the six months ended June 30, 2022 and Xirgo Technologies, LLC in the six
months ended June 30, 2021. This impact was partially offset by higher capital
expenditures. For fiscal year 2022, we anticipate capital expenditures of
approximately $135.0 million to $145.0 million, which we expect to fund with
cash on hand.

Financing activities. In the six months ended June 30, 2022, net cash used in
financing activities was primarily driven by $144.3 million cash paid for share
repurchases and $17.2 million paid for cash dividends, each of which did not
have a comparable payment in the prior year. In the six months ended June 30,
2021, cash provided by financing activities was primarily the result of the
issuance of $1.0 billion of the 4.0% Senior Notes, partially offset by the
redemption of $750.0 million of the 6.25% Senior Notes. In addition, in fiscal
year 2021 we used $33.0 million in cash related to debt financing transactions.

Indebtedness and liquidity

From June 30, 2022we have had $4.3 billion gross debt, which includes finance leases and other financing obligations and excludes discounts, premiums and deferred financing costs on debt.

Capital resources

Senior secured credit facilities

The Credit Agreement provides for senior secured credit facilities consisting of
the Term Loan, the Revolving Credit Facility, and incremental availability (the
"Accordion") under which additional secured credit facilities could be issued
under certain circumstances.

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On June 23, 2022, certain of our indirect, wholly-owned subsidiaries, including
STI, STIHBV, and STBV, entered into the Eleventh Amendment to the Credit
Agreement and the Foreign Guaranty, dated as of May 12, 2011. Among other
changes to the Credit Agreement, the Eleventh Amendment (i) increased the
aggregate principal amount of the Revolving Credit Facility to $750.0 million;
(ii) extended the maturity date of the Revolving Credit Facility to June 23,
2027 (which could be accelerated to June 22, 2026 if, prior to June 22, 2026,
the Term Loan is not refinanced with a maturity date that is on or after
June 23, 2027); (iii) released the Foreign Guarantors (as defined in the Credit
Agreement), excluding STBV, from their obligations to guarantee the obligations
of STI and the other Loan Parties (as defined in the Credit Agreement) relating
to the Revolving Credit Facility and certain related obligations, subject to an
obligation to reinstate such guaranties under certain conditions; (iv) replaced
the LIBOR-based interest rates referenced by the Credit Agreement regarding
revolving credit loans to (a) for revolving credit loans denominated in U.S.
dollars, an interest rate based on the SOFR published by the Federal Reserve
Bank of New York and (b) for revolving credit loans denominated in pounds
sterling, an interest rate based on the SONIA; and (v) certain of the
operational and restrictive covenants and other terms and conditions of the
Credit Agreement were modified to provide STI and its affiliates increased
flexibility and permissions thereunder.

Sources of liquidity

Our sources of liquidity include cash on hand, cash flows from operations, and
available capacity under the Revolving Credit Facility. As of June 30, 2022, we
had $746.1 million available under the Revolving Credit Facility, net of $3.9
million of obligations in respect of outstanding letters of credit issued
thereunder. Outstanding letters of credit are issued primarily for the benefit
of certain operating activities. As of June 30, 2022, no amounts had been drawn
against these outstanding letters of credit. Availability under the Accordion
varies each period based on our attainment of certain financial metrics as set
forth in the terms of the Credit Agreement and the indentures under which our
senior notes were issued (the "Senior Notes Indentures"). As of June 30, 2022,
availability under the Accordion was approximately $0.6 billion.

We believe, based on our current level of operations and taking into
consideration the restrictions and covenants included in the Credit Agreement
and Senior Notes Indentures, that the sources of liquidity described above will
be sufficient to fund our operations, capital expenditures, dividend payments,
ordinary share repurchases, and debt service for at least the next twelve
months. However, we cannot make assurances that our business will generate
sufficient cash flows from operations or that future borrowings will be
available to us in an amount sufficient to enable us to pay our indebtedness or
to fund our other liquidity needs. Further, our highly-leveraged nature may
limit our ability to procure additional financing in the future.

Our ability to raise additional financing, and our borrowing costs, may be
impacted by short- and long-term debt ratings assigned by independent rating
agencies, which are based, in significant part, on our performance as measured
by certain credit metrics such as interest coverage and leverage ratios. As of
July 20, 2022, Moody's Investors Service's corporate credit rating for STBV was
Ba2 with a stable outlook, and Standard & Poor's corporate credit rating for
STBV was BB+ with a stable outlook. Any future downgrades to STBV's credit
ratings may increase our future borrowing costs but will not reduce availability
under the Credit Agreement.

Restrictions and Covenants

The Credit Agreement provides that if our senior secured net leverage ratio
exceeds a specified level we are required to use a portion of our excess cash
flow, as defined in the Credit Agreement, generated by operating, investing, or
financing activities to prepay some or all of the outstanding borrowings under
our senior secured credit facilities. The Credit Agreement also requires
mandatory prepayments of the outstanding borrowings under our senior secured
credit facilities upon certain asset dispositions and casualty events, in each
case subject to certain reinvestment rights, and upon the incurrence of certain
indebtedness (excluding any permitted indebtedness). These provisions were not
triggered during the six months ended June 30, 2022. We do not expect that the
sale of the Qinex Business, which occurred subsequent to June 30, 2022, will
trigger these provisions.

The Credit Agreement and the Senior Notes Indentures contain restrictions and
covenants that limit the ability of our wholly-owned subsidiary, STBV, and
certain of its subsidiaries to, among other things, incur subsequent
indebtedness, sell assets, pay dividends, and make other restricted payments.
For a full discussion of these restrictions and covenants, refer to Part II,
Item 7: Management's Discussion and Analysis of Financial Condition and Results
of Operations-Capital Resources included in our 2021 Annual Report. These
restrictions and covenants, which are subject to important exceptions and
qualifications set forth in the Credit Agreement and Senior Notes Indentures,
were taken into consideration when we established our share repurchase programs
and will be evaluated periodically with respect to future potential funding of
those programs. As of June 30, 2022, we believe we were in compliance with all
covenants and default provisions under our credit arrangements.

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Share buyback programs

From time to time, our Board of Directors has authorized various share
repurchase programs, which may be modified or terminated by our Board at any
time. We currently have an authorized $500.0 million share repurchase program
(the "January 2022 Program") under which approximately $370.6 million remained
available as of June 30, 2022.

Dividends

On May 25, 2022, we paid a cash dividend of $0.11 per share, or $17.2 million in
aggregate, to shareholders of record as of May 11, 2022. On July 21, 2022, we
announced that our Board had declared a quarterly dividend of $0.11 per share,
payable on August 24, 2022 to shareholders of record as of August 10, 2022.

Recently issued accounting pronouncements

There are no recently issued accounting standards that have been adopted in the
current period or will be adopted in future periods that have had or are
expected to have a material impact on our consolidated financial position or
results of operations.

Significant Accounting Policies and Estimates

For a discussion of the critical accounting policies that require the use of
significant judgments and estimates by management, refer to Part II, Item 7:
Management's Discussion and Analysis of Financial Condition and Results of
Operations-Critical Accounting Policies and Estimates included in our 2021
Annual Report.

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