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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
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customers have reported several third-party fire incidents. One customer has filed a lawsuit against the Company, Jede AB v. Stig Wahlström AB and Sensata Technologies Holland B.V., No. 10017-9, Soederfoern district court, Sweden. The suit alleges damages amounting to €1.8 million. The Company filed its answer on December 1, 2009, and denied liability. Discovery has not yet begun. The other customer claims aggregate to a similar amount. The Company is contesting these claims. As of December 31, 2009, the Company has not recorded a reserve for this matter.

 

18. Financial Instruments

 

The carrying values and fair values of financial instruments as of December 31, 2009 and 2008 are as follows:

 

     December 31, 2009    December 31, 2008
     Carrying
Value
   Fair Value    Carrying
Value
   Fair
Value

Assets:

           

Cash

   $ 148,468    $ 148,468    $ 77,716    $ 77,716

Trade receivables

     180,839      180,839      145,759      145,759

Commodity forward contracts

     644      644      554      554

Interest rate caps

     1,550      1,550      —        —  

Euro call option

     993      993      —        —  

Liabilities

           

Senior secured term loans

   $ 1,468,100    $ 1,295,320    $ 1,473,915    $ 611,043

Senior Notes and Senior Subordinated Notes

     790,792      768,079      969,749      337,565

Revolving credit facility

     —        —        25,000      19,569

Interest rate collars

     8,587      8,587      4,221      4,221

Interest rate swap

     3,157      3,157      6,585      6,585

Commodity forward contracts

     193      193      —        —  

 

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

 

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

 

Fair Value Hierarchy

 

ASC 820 establishes a framework for measuring fair value in accordance with U.S. GAAP and expands disclosures about fair value measurements. ASC 820 emphasizes that fair value is a market-based measure which should be evaluated based on applicable assumptions for pricing an asset or liability as well as consideration of ongoing performance. ASC 820 clarifies that a fair value measurement for a liability should reflect the risk that the obligation will not be fulfilled (i.e., non-performance risk). A reporting entity’s credit risk is a component of the non-performance risk associated with its obligations and, therefore, should be considered in measuring fair value of its liabilities. Effective January 1, 2008, the Company adopted reporting requirements for financial assets and financial liabilities and effective January 1, 2009, the Company adopted similar provisions for nonfinancial assets and nonfinancial liabilities. This adoption did not have a material effect on the Company’s financial position or results of operations.

 

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