Print Page  |  Close Window

Sensata Technologies Holding N.V.'s SEC Filings

S-1/A
SENSATA TECHNOLOGIES HOLDING PLC filed this Form S-1/A on 03/09/2010
Entire Document
 


Table of Contents

We have €177.3 million (equivalent to $254.3 million as of December 31, 2009) of 9.0% fixed rate debt. If market rates relating to this debt increased/(decreased) by 100 basis points, the fair value of the debt would (decrease)/increase by $11.3 million.

 

We have €137.0 million (equivalent to $196.5 million as of December 31, 2009) of 11.25% fixed rate debt. If market rates relating to this debt (decreased)/increased by 1 percentage point, the fair value of the debt would increase/(decrease) by $6.2 million.

 

Foreign Currency Risks

 

We are also exposed to market risk from changes in foreign currency exchange rates which could affect operating results as well as our financial position and cash flows. We monitor our exposures to these market risks and generally employ operating and financing activities to offset these exposures where appropriate. If we do not have operating or financing activities to sufficiently offset these exposures, from time to time, we may employ derivative financial instruments such as swaps, collars, forwards, options or other instruments to limit the volatility to earnings and cash flows generated by these exposures. Derivative financial instruments are executed solely as risk management tools and not for trading or speculative purposes. We may employ derivative contracts in the future which are not designated for hedge accounting treatment under ASC 815 which may result in volatility to earnings depending upon fluctuations in the underlying markets.

 

Our foreign currency exposures include the Euro, Japanese yen, Mexican peso, Chinese renminbi, Korean won, Malaysian ringgit, Dominican Republic peso, British pound and Brazilian real. However, the primary foreign currency exposure relates to the U.S. dollar to Euro exchange rate.

 

Consistent with our risk management objective and strategy to reduce exposure to variability in cash flows on our outstanding debt, in December 2009, we executed a foreign currency call option. This instrument was not designated for hedge accounting treatment in accordance with ASC 815. In accordance with ASC 815, we recognized the change in the fair value of the derivative in the statement of operations as a gain or loss within Currency translation gain/(loss) and other, net. During fiscal year 2009, we recognized a net loss of $0.1 million associated with this derivative.

 

The terms of the Euro call option as of December 31, 2009 are as follows:

 

Current Notional Principal

Amount (Euros in millions)

  

Final Maturity Date

  

    Strike Price    

€100.0

   May 24, 2010    $1.55 to €1.00

The table below presents our Euro-denominated financial instruments and other monetary net assets as of December 31, 2009 and the estimated impact to pre-tax earnings as a result of revaluing these assets and liabilities associated with a 10% increase/(decrease) to the U.S. dollar to Euro currency exchange rate:

 

(Amounts in millions)    Asset (liability) balance
at December 31, 2009
    Increase/(decrease) to pre-tax earnings due to  

Euro-denominated financial instruments

   Euro     $
Equivalent
    10% increase in the
U.S. dollar to Euro
currency exchange rate
    10% (decrease) in the
U.S. dollar to Euro
currency exchange rate
 

Debt

   (698.7   $ (1,002.1   $ (100.2   $ 100.2   

Interest rate collar

   (5.8   $ (8.6   $ (0.9   $ 0.9   

Interest rate cap

   0.1      $ 0.2      $      $ (—

Euro call option

   0.7      $ 1.0      $ 0.1      $ (0.1

Other monetary net assets(1)

   47.5      $ 68.1      $ 6.8      $ (6.8

 

(1)   Includes cash, accounts receivable, other current assets, accounts payable, accrued expenses, income taxes payable, deferred tax liabilities, pension obligations and other long-term liabilities.

 

77