Good morning and welcome to the Sensata Technologies Holding N.V. Second Quarter 2015 Earnings Conference Call. At this time I would like to inform you that this conference call is being recorded and that all participants are in a listen-only mode. For opening remarks and introductions I will turn the call over to Jacob Sayer, Vice President of Treasury and Investor Relations. Mr. Sayer, you may begin.

Thank you Steve and good morning everyone. Earlier today Sensata issued a press release describing its financial performance for their second quarter 2015. If you did not receive a copy, you may obtain it from the Investor Relations section of our website at sensata.com. As a reminder, this call is being webcast live and a replay will be available in the Investor Relations section of our website. Today’s discussion will contain forward-looking statements based on the business environment as we currently see it, and as such it does include certain risks and uncertainties. Please refer to our press release and our 10-Q and 10-K filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today’s discussion. In addition to U.S. GAAP reporting we reported certain financial measures that do not confirm to Generally Accepted Accounting Principles. We believe these non-GAAP measures enhance the understanding of our performance. Reconciliations between these GAAP and non-GAAP measures are included in the tables found in today’s press release, as well as in the Investor Relations section of our website under Financial Reports. Comments made during today’s call will primarily refer to our non-GAAP financial results. On the call with me today are Martha Sullivan, our President and Chief Executive Officer and Paul Vasington, our Chief Financial Officer. We’ll hold questions until after our prepared remarks, but if you’d like to get in the queue, please do so by pressing the star key followed by the number one. I’ll now turn the call over to Martha to review highlights from the quarter and trends in the end markets we serve. Martha.

Thanks Jacob and thank you all for joining our second quarter 2015 conference call. Our strategic imperative to win in sensing and drive long term secular growth for Sensata remains strong and Sensata continues to deliver on promised double digit revenue and earnings growth for our shareholders. Key highlights for the second quarter include record net revenue of $770 million, an increase of 34% from the second quarter of 2014, including 16% organic revenue growth in the European automotive end market. Net revenue and performance sensing grew 51% in the quarter from the prior year, driven by acquired revenue from Schrader and DeltaTech and by 6% organic growth. Net revenue in sensing solutions shrink by 6% compared to a strong prior year quarter and by 8% organically, due primary to a weakening market in China, as indicated by the fourth consecutive month of weak manufacturing PMI data and inventory destocking, primarily impacting the industrial and appliance and HVAC markets. Record adjusted net income of $125 million or $0.73 per diluted share in line with our expectations and adjusted net income margins in our core business continue to expand year-over-year and Schrader’s margins exceeded expectations. New sensor program launches driving content growth remain on schedule and while certain markets were weaker than expected, primarily China in off-road vehicles, content growth enabled us to deliver 2% organic growth in the quarter. Given the market backdrop, we have taken action to improve our cost position and deliver profits in line with our expectations for the quarter. Our revenue from the European automotive end market grew 52% in the second quarter as compared to the year ago quarter, primarily as a result of the impact of the acquisition of Schrader, as well as content and market growth in line with our expectations, offset somewhat…

Thank you, Martha. Second quarter 2015 net revenue of $770.4 million, increased 33.8% compared to the second quarter of 2014. Of this acquisitions contributed 35.2% and organic revenue growth contributed 8%. Changes in foreign currency exchange rates, primarily the euro represented a net revenue headwind of 3.1%. Second quarter adjusted net income was $124.6 million or 16.2% of net revenue. Adjusted EBITDA for the second quarter was $184.2 million or 23.9% of net revenue. When compared to the prior year, profitability indices are lower in the second quarter, primarily due to the impact of acquisitions which included integration costs of $4.2 million. Productivity gains for operating efficiencies more than offset investments in research, development and engineering, which are critical to the development and execution of our expanding pipeline and new business wins and opportunities. Core adjusted net income margins expanded in the second quarter up 70 basis points for the prior year. In addition to the closing of Schrader Brazil, structuring and special changes were recorded in the quarter reflecting activities management is undertaking in response to weaker end markets and to resolve pre-acquisition loss contingencies. Restructuring activities include organizational and process changes to align our structure with our strategy and help enable us to continue to grow margin. Included in special charges is approximately $5 million of charges to resolve pre-acquisition loss contingencies which have been disclosed in our 10-Q under pending litigation in clients. Cash taxes in the second quarter were approximately $8.2 million or 5.1% of adjusted EBIT. We expect cash taxes for the full year 2015 to be in the range of 5% to 6% of adjusted EBIT. Sensata hedge was a significant portion of its net earnings exposure to foreign currencies. As a result, the impact of exchange rates on earnings represents the weighted average…

Thank you, Mr. Vasington. [Operator Instructions]. Your first question comes from Wamsi Mohan from Bank of America. Your line is open.

Yes, thank you. Good morning. Paul or Martha when you take the midpoint of revenue guidance for the third quarter, it seems the lowered full year guidance is almost entirely from the weaker trends in the third quarter. Just wondering, what gives you the confidence that 4Q will be up so much stronger sequentially. And I have a follow-up.

Yes, hi Wamsi. Thanks for the question. The way we’re thinking about the second half, we expect that this inventory destocking that’s impacting the controls portfolio within sensing solutions will continue through the third quarter. When we look at half trends we’ve seen the phenomena before and roughly we’re talking about between two to three quarters of destocking typically when there’s a market correction on that business and so looking at those past trends, we expect that to have that behind us in the fourth quarter and so that’s one element of our overall assumption. When we look at where our production rates land throughout the fourth quarter, that’s an additional piece. When we look at the fact that we’re all in by the time we get to the fourth quarter on Euro 6, that’s also something that drives our expectation for the fourth quarter revenue.

Okay, thank you. Thanks Martha. And then on the auto side, can you help us sort of think through the magnitude and I know you don’t report it this way, but can you talk about the magnitude of the revenue impact from weaker exports from Europe to China versus the true production slowdown in China on the auto side. Thanks.

Yes, I don’t think we can help you with that one Wamsi, because we don’t have our content laid out inside Europe between stays in country or exploits, so unfortunately can’t help you a lot with that. I would say, if it’s helpful, our content per vehicle is roughly similar to the cars that stay in Europe versus go to China, maybe somewhat weaker because you have less diesel content there. So if you look at overall exports from Europe to China and you think about high 20’s to low 30’s, you might get a sense for Sensata’s content.

Okay, thanks. If I could just sneak one more and Paul mentioned corporate and other costs lower in the second half, can you give us the magnitude of that versus on a like half on half basis? Thanks.

Sure Wamsi. The way I think about it, $56 million this and most of that increase, nearly $20 million of that $56 million is related to the Brazil shutdown, the restructuring activities and special charges which we are adding back. So I think we’ll get back in to the $40 million range, $35 million to $40 million range on a run rate basis.

Great, thank you.

Thank you. Your next question comes from the line of Craig Hettenbach with Morgan Stanley. Your line is open.

Yes, thank you. Just a question on the Q3 guidance as you look between segments, between the performance sensing. If you look at today versus a quarter ago, just curious, how much is more of the destocking effect in the kind of controls type business versus the China slowdown on the auto side; just to kind of give some context in terms of where the provisions are coming from.

It’s primarily on the sensing solution side of the business; the point being that we continue to perform very, very well with sensing content growth in China. So if you look at performance sensing in the quarter, in the second quarter when we were at a 10% overall growth, actually 13% overall growth rate organically there, so the primarily correction for us is on the sensing solution side.

Got it. And then on the sensing solution Martha, we’ve seen a number of these kind of corrections, not just for you guys, but just for the overall component space in the last couple of years. I’m just curious to get your take in terms of how you see the supply chain react in times like this and maybe a follow to the first question in terms of visibility like the types of forecasts your getting kind in Q2 into Q3 and kind of confidence that this is being, you know they kind of run this course in Q3.

Yes, it’s absolutely volatile, particularly for this controlled portfolio within the sensing solution where we sit farther back in the supply chain. It’s not unfamiliar. We’ve been through these kinds of corrections in the past. Visibility typically pulls in, so that’s not surprising to us and so we’re very much relying on patterns from the past to call the second half of the year and we do expect more of this inventory destocking in the third quarter.

Okay, I appreciate it. Thank you.

Thanks a lot.

Thank you. Your next question comes from the line of Amit Daryanani with RBC Capital Markets. Your line is open.

Thanks a lot. Good afternoon guys, good morning guys; it’s too early for me. I just want to go back to Wamsi’s question. When I look at the December quarter guide, just on the EBITDA basis, it looks like you guys are implying low double digits kind of EBITDA growth sequentially September to December. I get the comforter on sales growth, but can you just walk through how you got double digit EBITDA growth in December?

We talked to the revenue trends on that pace. Let’s take you through some of the things that are improving our margins as we go through the year and Paul, what don’t you get to that?

There’s a couple of key things and we continue to see greater operating efficiencies in our business, both on the manufacturing side and also on the back office. And same where we’ll be seeing greater traction in our sourcing initiatives. So we are improvement there, that’s driving to improve profitability. We’re clearly controlling costs and being very thoughtful on our investments and we’re seeing better performance within the acquisitions. They are performing better, Schrader is performing better and so that is definitely offsetting some of the weakness we are seeing on the top line.

Keep in mind a big part of the margin improvement over time in performance sensing is driven by the pace of our integrations. So when we closed on Schrader you actually saw our index come down; that’s not unusual. We acquire businesses that are rarely ever at the margins of Sensata and then we spend time integrating to improve our overall margin. So as the year progresses and the close dates of those acquisitions become more in the rear view mirror, you will see our margins improve.

Got it. And as a follow up I was wondering, can you just talk about what you’re seeing in China, both from a senor and industrial sensing basis. Is your expectation that the softness we’re seeing is going to be a one, two quarter blip or do you think it’s going to sustain perhaps in the calendar ’16, especially in the auto production side. And then broadly, just how much is China as a percent of sales for you.

Yes, so a few things to unpack there. I believe that China is currently sitting at about 17% of our overall revenue.

Altogether it’s a little bit less and our total comes down.

Yes, okay. So we’re at about 12%. There is enough volatility there now that it’s difficult to know what’s going to happen as we enter into 2016. At this point what I would characterize is we’re seeing a production slowdown on the auto side. We’re not seeing the same level of volatility in auto as we’re seeing in other end markets in China. So a little more disciplined than the other end markets, so at this point a bit early for us to call 2016.

Thank you.

Thanks Amit.

Your next question comes from Mark Delaney with Goldman Sachs.

Yes, good morning and thanks very much for taking the questions. First question is I’m going to follow up on some of the cost reductions that the company has just talked about implementing. Can you just help us understand how sustainable some of these actions are, especially into 2016 and naturally some of them are permanent reductions, especially the actions in Brazil and Paul you mentioned doing some stuff around sensing solutions and it has been slower. Any of these are sort of kind of cup cost cuts that are only in the second half and yet – or it can that be sustained into next year.

I think they can be sustained at next year, a large portion. Brazil certainly was losing money, so there is definite savings there. We’ve had some markets that have underperformed. We need to take action and restructure it and reduce headcount and resources and that’s a sustainable saving. We’re restructuring some of our resource development activities in Europe, so we’re recognizing that, so we have a headwind next year and so we’re taking cost actions there. We’re also moving production to Europe, the local lines and keep it as a lower cost point so we can optimize in our best delivery costs. So these are things that we’re doing. Now we’re often getting very – we’re very aggressive on the sourcing side and continue to push to maximize our entitled opportunity on that front as well.

Just one comment on the product investment side, the R&D - we call it RD&E side of the work that we’re doing. One of the things that Sensata benefits from is an extremely effective global footprint, including low cost country and we are constantly looking at ways to optimize what we do in those locations. So Paul mentioned Europe and our RD&E efforts in Europe. It’s a really important market to us. We have a strong growing engineering team in Bulgaria, so we’re actually moving some of what we do to Bulgaria and that’s the kind of optimization that sensate is constantly doing and we do it in a way to make sure that it is sustainable.

That’s helpful, thanks and then as a follow on to that question. Can you just update us on how profitable on the EPS line Schrader is now for 2015 and irrelative to the prior guidance, I think it was $0.18 to $0.20. And then given the cost actions the company is taking, any sort of comments you can provide to how accretive Schrader will be in 2016?

I would say that we are certainly better than the range that we gave before. We’re probably $0.03, $0.04, maybe $0.05 better than what we originally anticipated and the business continues to perform very well and we’re seeing – the top line is where we expect it, but they are certainly delivering much better on the gross margin than on the A&I level. So that’s certainly a tailwind for us.

Yes, and I think the thing we’re always balancing is that we actually are spending money on the integration, so we’ll tend to net all of that out, so those are the two parts. Now that business is actually performing and what we’re spending on the overall integration and we’re continuing to look at that budget, both on the near term and the long term as we moved into 2016.

Okay. I mean, I think there is three to four years originally to fully integrate Schrader and get to the EPS accretion target. I mean that’s still the rough timeframe to think about or is there any thoughts about implementing…

I mean the plan itself is still intact and we’re still on track.

Okay, thank you.

Thanks Mark.

The next question comes from William Stein with SunTrust.

Good morning and thanks for taking my question. Can you please remind us of the commodity percent of your costs? Copper and gold are certainly down quite a bit from your prior peaks. It looks like they continue to decline today and I’m wondering to what degree that’s benefitting the margins as part of this higher margin we’re looking for later in the year?

We’ve said before, it’s about 2% of our revenue. Well, we have a hedging program so we’re going to be really transparent here. We’ve been hedging similar to our foreign exchange program, so we’re not currently seeing the benefit, the complete benefit of the local mining cost because we average into that lower cost environment, so it’s not as helpful as you would have expected.

Great, that’s helpful, thank you. And maybe one more, can you remind us of your view of acceptable leverage and what level we look for you to achieve before you would contemplate another acquisition.

Our long term goal of two or three times that leverage hasn’t changed, but we have to reiterate that M&A is our priority for capital deployment. We are comfortable at operating at higher leverage for a period of time, but our overall strategic goal has not changed.

If I can squeeze one more in, I think in the past you’ve talked about some orders for TPMS in China, while it hasn’t been mandated yet. That would of course be a much bigger potential upside. Can you talk about both of those orders and then the potential for a mandate for TPMS in China?

Sure. We have seen some orders come in; some design that’s come in well ahead of regulation and that is encouraging. It’s not a terribly material part of the overall business at this point, but for example early in year we geared a win with a local producer that was worth about $30 million in revenue. I think we’ve had an additional $15 million or so and these are design-ins that will play out over the three or four year horizon as we see in other parts of the automotive landscape. In terms of the regulation we’re really encouraged about what’s happening there. We have seen the rule making now come out. We’ve actually – we’re at the point now where it’s very high confidence. There will be regulation and so the next phases that are underway are actually refining that regulation to take the specific thresholds for inflation and which OEMs have to comply, the timing. So some of the specific specifications are important and we continue to keep our eye on those, but we’ve seen great development on that front and remain confident that this will be regulated equipment in China.

Thanks.

Thanks Will.

The next question comes from Christopher Glynn with Oppenheimer.

Thank you. Good morning. Just wondering if you could clarify if the range of potential destocking activity in markets and geographies other than China that you’re seeing.

We haven’t seen a lot of it elsewhere, though I guess one place I would point to and I know it’s more of a one off in the second quarter. We saw some distributor destocking that happened in the aftermarket for the aerospace business. Not typically something that’s all that impactful to us, but in this particular case we had a distributor who was overstocked and it had about a $3 million or $4 million impact on the business. Other than that there is not a lot of destocking activity that we see in our business.

Yes, that certainly seems to qualify as one off and peculiar; that’s interesting. And then I just wanted to clarify was performance sensing 8% organic and total company was 6%?

No, performance sensing was 8% on unit for organic and 6% if you include price impact.

Got you. Okay, and then I just wanted to understand one of the add backs a little bit better. On the taxes it was $0.4 million differed in other income tax expense. But the add back was $5.4 million. Could you help me reconcile that?

Sure. We had an indemnification related to a pre-acquisition effect liability and during the second quarter we were able to favorably resolve that, we no longer require the indemnification. So that was part of selling expense and added back.

Where was it in the GAAP P&L.?

Some of the indemnification was in selling expense, we had offsetting liability and that ran through the tax provision. So they net each other off. You see in taxes and SG&A in the two tables, which provide us slight benefit but what you are talking about is the identification piece.

Okay got it. Thank you.

Thanks Chris.

The next question comes from Rich Kwas with Wells Fargo.

Hi, good morning. Just wanted to check in and see on the outlook for the year. In terms of going from 6 to 3.5 at the mid-point on organic revenue growth if you take that 250, it seems like a good chunk of that is weighted towards sensing solutions versus performance sensing. But I don’t know if Martha or Paul. if you can give us a breakdown on that adjustment for the entire year, that 250.

You’re correct Rich. It is primary waited on content solutions because that’s where we are seeing the headwind on organic growth, particularly late in the first and through the second quarter, so that’s primary what the drive is. In prior quarters we would have been able to count on end mark in China in auto for example to offset that. So we are not seeing a decline certainly on the performance sensing side, we are just not seeing any help from the end markets that would have helped us offset the kind of correction we are seeing on the sensing solution side.

And then for the balance of the year, what are you assuming for production for China or I guess for the full year at this point?

Yes, I believe for the balance of the year we are about flat.

About flat

About flat in our production assumption.

But we are assuming sequentially production get stronger from Q3 to Q4 as you normally expect, just year-over-year we are thinking about flat growth.

Okay, okay. And then you said 13% growth in China in performance sensing in the second quarter, correct year-over-year.

That’s right.

Organic, okay. All right, and then if you take a look at the outlook for the balance of the year, I mean what are the risks here at this point. There is certainly a fair amount of concern around China auto. I mean, do you think you have that fully captured at this point or how confident are you about the back half.

Yes, I think the risk areas are the ones you would expect if you look at what’s been a challenge for us year-to-date. Its primary this whole area on the sensing solutions, call it control products, just given there is a lot more volatility than just on the end market. So our base case has the demand at the same low point that we’ve seen and the destocking behind us as we enter the fourth quarter, that’s an important assumption for Sensata as we look ahead. I think the other elements of this, we don’t have a secret sauce on China. We are looking at the same data everybody is looking at and overall production rate. We think we have reflected a fairly extreme slowdown there. It has less impact on our business than it does for many, given that we do have strong content growth in China, but it is also an important element as we look at the second half of the year. The only other third dimension, again it’s the down markets you have to watch out for. We talk a lot about the off-road portion of heavy vehicle and off-road. So you think about OEMs who make tractors and construction equipment are dealing with, that’s been a volatile part of the business. On the flip side I will tell you, volatility goes both ways. We continue to look at the GAAP between production rates and registrations in Europe and so we really think we’ve put together a middle on the fairway guide here just recognizing there is volatility on both sides of the equation.

Martha, do you have one to two still for European light vehicle production for the year, is it?

We do.

Okay. So there is potential that that could come in a little bit better and help out.

That’s right.

Should we think of that as if it’s three or four then, that’s helped to the guide, that’s not part of the guide.

That’s correct.

Okay. All right and then just quickly last one Paul on FX, the $0.12 to $0.20 impact that you talked about last quarter for 2016, any update there and then in terms of the cost activities and natural hedging. Any updated views there?

Well, we continue on our normal hedging program. The $0.12 to $0.20 is still or estimate basis on where the changes are and where we’ve been hedging into and the pace at which we’ve been hedging. The things I mentioned earlier, the actions we are taking its Brazil, its RD&E transition from one location to Bulgaria; it’s restructuring and underperforming markets. All those things are things we are doing to improve our cost structure, which will help us in ‘16 and help the mitigating factor against that foreign exchange headwind. And our work is not done here. We have a little more do with, but we are aggressive.

Okay. Thank you.

Thanks Rick.

Thank you. Your next question comes from the line of Jim Suva with Citi. Your line is open.

Great, thank you very much. You had mentioned a Bridgestone litigation. Can you help us understand what’s the maximum exposure there if there is anything and kind of a little bit of a background? I assume this is related to Schrader in some regards or maybe I’m wrong on that. And if so was it all pre or post acquisition and do you have any type of protection from that. And then second question I have is on M&A. Some of the rest of the industry, such as the connector companies have been acquiring their way into sensors and are now talking about the merger of being able to sell solutions of sensors plus connectors together. Do you see this as something that over time is going to be a bit of a collision for Sensata, a way to react or is it simply that those things that they are talking about are more on the peripheral bumper side or infotainment side of things and you don’t see that in the harsh engines or over time do you see that these two areas will kind of come together more tightly. Thank you.

Yes, so I’ll take the first one. I’m sure Martha will want to handle the second. But on Bridgestone the first things would be, to refer to you our disclosures in our 10-Q. You will find a lot of detail in there regarding Bridgestone and Schrader. So Bridgestone sued Schrader for infringement. The short story here is that we had a trial in the U.S. and Schrader, Sensata, the result was favorable. That we did not infringe on the Bridgestone pact. The cost is to defend ourselves, but the outcome in the U.S. was stable for us. They are trying to appeal, but they have not appealed. They also have an action in Germany which is still ongoing what we are still defending.

Hey Jim, your comment relative to connector companies buying sensor, this has been a phenomenon that folks have asked ask about now for over a year. It’s a little perplexing having been in the sensors business now for close to 30 eyras. We’ve never once been asked to provide a connector with our sensor. When we look at what’s important relative to the applications that we serve, it really is to have the best sensor and the best sensing capabilities. We don’t see a tremendous amount of synergies between that level of component treats. I think to mean it’s a reflection more of what’s available for growth in the connector space than anything else.

Okay. Thank you very much.

Thanks.

Thank you. Your next question comes from the line of Ambrish Srivastava with BMO. Your line is opened.

Hi, thank you. Two questions my friend Paul. First one, just a block and tackling one. There have been several acquisitions. How should we be thinking about normal seasonality on a quarterly basis and we all understand there is no normal, but when we model out, how should we be thinking about the quarter over quarter. The second question on the HVOR side Martha, this has been a very good growth driver and I might have missed this. Did you refer to the weakness only in China or elsewhere as well, and then my assumption, is it correct that the content is higher than the higher end for this segment of the market. Thank you.

Yes, the content is higher. The weakness in HVOR, it stems from two issues. One is the off-road part of the heavy vehicle markets. So you can think of it as on-road and off-road and there are two very different market dynamics underway. The off-road piece has been, had seen some real headwinds if you look at the end market alone. So we talk about the large equipment associated with off-roads. So mining equipment, construction equipment, Ag equipment. We are feeling the cyclical downturn on that equipment. Having said that, we are seeing substantial increases in sensors going in that equipment. So we are not feeling it to the extent that the end market is down. The truck side, or the on-road side at this point is operating at sort of low single digit product rate improvements with the big exception of China. So China has been down substantially on commercial truck, not a huge part of our business but again an area where we’ve seen a lot of content growth. So we think that these markets are really going to be important, continue to be important. There is a lot of regulations driving sensing content growth in those markets and so we are holding the course in terms of our investments into that end market and view the current environment in the areas that I talked about it as just being a cyclical phenomenon.

Martha if I may, on the mining side, given what’s going on with commodities, just do you expect this to be a prolonged cyclical downturn?

Well, mining is a very, very small part of what we do. So it’s kind of an academic to pay from our perspective. So when you look at how much of our overall equipment we are talking about it, it’s not all that important. I think that’s probably going to be the one that takes a longest to play and the longest to come back. So perhaps a little bit more than cyclic. And we look at the other elements like Ag, like construction, I think we are really looking at a cyclical phenomenon.

Okay and then seasonality.

I would just say that the largest acquisition is Schrader. It performs like the rest of our auto business. The seasonality is very similar and it weighs heavily. So I would say the acquisitions don’t materially impact our normal historical seasonality.

So perhaps the best way to look at that is take a look at performance sensing, historical quarter-to-quarter and we’ll see the same pattern in Schrader.

Okay, thanks for all the details.

Thanks.

Thank you. Your next question comes from the line of Jeremie Capron with CLSA. Your line is open.

Thanks. Good morning. I wanted to ask you about the free cash flow outlook for the year. It looks like you’ve reduced it by $25 million or so. Just wondering what’s behind that. It looks like working capital is actually trending better than initially expected. So some more color here would be appreciated.

I appreciate the question. Two things to consider, so we’ve had these restructuring and special charges, we’ve added those back, but some of that will result in cash outlays and so funding those restructurings will have a bit of a negative impact on free cash flow, so we are taking that into account. And then I think the second thing is the linearity of our revenue, depending on how revenue plays out in the quarter, can affect our receivables and given the fact that the fourth quarter is now looking higher, it’s ramping up. Later in the quarter we are assuming that we are not going to get our receivables down as well as we originally expected that will flow into 2000.

Okay and on the CapEx side, any change here and if you could give us an idea of what to expect going into next year. My understanding is we are basically at [indiscernible] CapEx in 2015.

Yes, the percentage of revenue, I would say that’s probably right. We are on track. We give a range of 175 to 200 and we are in that range and as we continue to progress, as we continue to grow when we build capacity and new product launches and we are going to continue investing capital. But we expect that the percentages, the percent of revenue to gradually come down over time here.

Thanks very much.

Thanks Jeremie.

Thank you. Your next question comes from the line of [Indiscernible] with Longbow. Your line is opened.

Hi, good morning. I’m calling on behalf of Shawn Harrison. Just two questions from me. First relative to the 250 basis point change in the organic, how should we now think about the OWS headwind? Is there any change to how you are thinking about that rolling-off?

That’s the headwind we expect to be behind a tier in the second half. So our outlook on that has not change and that’s one of the reasons we expect to have a stronger organic performance on the second half of the year, than we’ve had in the first half.

Great, thank you. And then secondly regarding M&A, you’ve highlighted about $0.02 to $0.04 of upside with Schrader. What about [indiscernible] and Delta, is there any color you can provide on potential upside?

They are performing as expected. No change there.

Okay, great. Thank you very much.

Thanks.

Thank you. As there are no more questions, I’d like to turn the conference call back over to Mr. Sayer for closing remarks. Mr. Sayer.

Thanks Steve. I would now to thank you all for joining our second quarter 2015 financial results call today. Sensata will be participating in Citigroup’s Technology Investor Conference in New York on September 8. This event will be webcast like and available for replay from the Investor Section of our website at sensata.com. We appreciate your continued interest in and support of Sensata and look forward to speaking with you on the road and again next quarter. Thank you and good bye.

That concludes the call for today. You may now disconnect.