Good day and welcome to Sensata Technologies Q3 2022 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Mr. Jacob Sayer, VP, Finance. Please go ahead.

Thank you, Sarah. And good morning, everyone. I'd like to welcome you to Sensata's third quarter 2022 earnings conference call. Joining me on today's call are Jeff Cote, Sensata's CEO and President, and Paul Vasington, Sensata's Chief Financial Officer. In addition to the financial results press releases we issued earlier today, we will be referencing a slide presentation during today's conference call. The PDF of this presentation can be downloaded from Sensata's Investor Relations website. This conference call is being recorded, and we will post a replay webcast on our Investor Relations website shortly after the conclusion of today's call. As we begin, I'd like to reference Sensata's Safe Harbor statement on Slide 2. During this conference call, we will make forward-looking statements regarding future events or the financial performance of the company that involve risks and uncertainties. The company's actual results might differ materially from the projections described in such statements. Factors that might cause these differences include, but are not limited to, those discussed in our Forms 10-Q and 10-K as well as other subsequent filings with the SEC. We encourage you to review our GAAP financial statements in addition to today's presentation. Most of the subsequent information that we will discuss during today's call will relate to non-GAAP financial measures. Our GAAP and non-GAAP financials, including reconciliations, are included in our earnings release and in the appendices of our presentation materials. The company provides details of its segment operating income on Slides 9 and 10 of the presentation, which are the primary measures management uses to evaluate the performance of the business. Jeff will begin today with highlights of our business results during the third quarter. He will then provide updates on several of our growth initiatives. Paul will cover our detailed financials for the third quarter, and also provide financial guidance for the fourth quarter. We'll then take your questions after our prepared remarks. Now, I'd like to turn the call over to Sensata's CEO and President, Jeff Cote.

Thank you, Jacob. And welcome, everyone. I'd like to start with some summary thoughts on our strong performance during the third quarter which is outlined on Slide 3. Our underlying markets returned to growth in the quarter despite continued supply chain disruptions. We produced 650 basis points of market outgrowth and 330 basis points of acquired growth during the quarter. Despite foreign exchange currency exchange rate changes representing 330 basis points of headwind to revenue, we produced solid financial results for shareholders delivering $118 billion [ph] in revenue, up 7.1% from the prior year period, with higher margins sequentially. Excluding greater headwinds related to unfavorable foreign exchange rates, our results are above the high end of the guidance range we provided in July. Quoting activity for new business awards was extremely active during the quarter, as well as year-to-date. And as a result, we have already exceeded the $640 million record level of new business wins w are awarded in all of last year, securing $840 million of new business wins in the first nine months of this year. Approximately 70% of these wins are in our electrification growth factor, which translates into Sensata's future revenue outgrowth and are a direct outcome of our mega trend investments over the past several years. During the quarter, we closed the previously announced acquisition of Dynapower, a leader in mission critical highly engineered power conversion solutions, focused across renewable energy generation, industrial and defense applications. Dynapower is on a runway to generate more than $100 million in annualized revenue and approximately 20% operating margins this year. As we have mentioned, we expect market dynamics and Dynapower's offering to provide 30% revenue growth per year over the next several years. During the third quarter, we benefited from our resilient, flexible and focused organization that…

Thank you, Jeff. Key highlights for the third quarter, as shown on Slide 8, include revenue of $1.18 billion, an increase of 7.1% in the third quarter of 2021. Revenue growth reflected strong outgrowth across the company of 650 basis points, market growth and acquisitions, partly offset by customer inventory movements and foreign currency headwinds. Adjusted operating income was $197.3 million, a decrease of 1.8% compared to the third quarter of 2021. This decreased despite higher revenue was primarily due to unfavorable movements in foreign currency, investment in the megatrends of electrification and insights, customer mix and divestiture of our Qinex semiconductor test and Thermal business during the quarter. Also, global supply chains continue to be constrained. Margins improved sequentially, and we expect this trend to continue in the coming quarters. Excluding unfavorable foreign currency impact, results were above the high end of our financial guidance for the quarter. Now I'd like to comment on the performance of our two business segments in the third quarter of 2022, starting with Performance Sensing on Slide 9. Our Performance Sensing business reported revenues of $754.5 million, an increase of 6.8% compared to the same quarter last year. Automotive revenue increased from higher pricing, new product launches in market growth, lessened by customer inventory movements, all somewhat offset by unfavorable foreign currency. Last year, we estimated approximately $70 million in inventory was built in the third quarter. In this quarter, we estimate approximately $20 million of inventory came out of the channel. Growth in heavy vehicle off-road revenue reflects strong outgrowth and the impact of acquisitions in the Insights megatrend, offset somewhat by declining markets, $5 million in inventory built in the third quarter last year and unfavorable foreign currency. Performance Sensing operating income was $188.6 million, with operating margins of 25%. Segment…

Thanks, Paul. Let me wrap up with a few key messages as we outlined on Slide 14. Sensata's business, organizational model and growth strategy are strong, resilient and reliable, as we deliver mission-critical, highly engineered solutions required by our customers. While we expect markets to be volatile in the near term due to high inflation, rising interest rates and geopolitical events, we have strong management team experience in navigating choppy markets. We are confident in our ability to sustain attractive end market outgrowth based on our strong track record of continuous improvement, our record levels of new business awards, our diversifying customer base and our large and expanding pipeline of new opportunities. We continue to invest in our megatrend-driven growth initiatives as we transform the business to focus on these rapid growth opportunities across all of our end markets. We are making excellent progress in electrification and insights, both organically through strong new business wins and inorganically through bolt-on acquisitions and/or joint ventures. Whatever market volatility we experienced in the coming quarters, we are confident that Sensata will emerge stronger and better positioned in these fast-growing markets because of these investments. We continue to innovate on behalf of our customers, solving their hard-to-do engineering challenges and providing differentiated solutions to a broad array of customers. Solving mission-critical challenges enables Sensata to enhance long-term customer retention and deliver leading industry margins for our shareholders, while also increasing investments in our growth opportunities and our people. And finally, I'm pleased about our efforts in delivering on Sensata's long-standing mission to help create a cleaner, safer and more connected world, not just for our customers' products, but also through our own operations. We believe we are meaningfully contributing to a better world. We are making good progress to achieve targets laid out last year and updated in our most recently published sustainability report, bolstering the long-term sustainability and success of the company for all of its stakeholders. Now let me turn the call back to Jacob.

Thank you, Jeff. We'll now move to Q&A. Given the large number of listeners on the call, please limit yourself to one question each. Sarah, if you introduce the first question, please?

Yes. Thank you. So you noted the margin improvement here sequentially, which has been nice to see – see it come through. But I think you also recently noted an expectation of achieving 21% operating margin next year. Can you talk a little bit about the key drivers that get you there from this exit rate close to 20% in the fourth quarter? And maybe some of the key assumptions that underpin that margin improvement? Thank you.

Hey, Wamsi, it's Paul. Morning. As we've talked about either in material - prepared material or in previous discussions, the drivers of margin improvement come from improved volumes, better pricing execution, which we're seeing and the trends now that we're producing and adjusting our cost structure to what likely will be a more subdued 2023 just given where things are today. But those three things will be the key drivers. We're going to continue to invest in the megatrends at the same level and we're investing today because, obviously, we're seeing great results with the $840 million of new business wins. So those would be the key underpinnings to next year. That will continue to work on over the next quarter and provide guidance in February.

Our next question comes from Mark Delaney with Goldman Sachs. Please go ahead.

Yes. Good morning. And thank you very much for taking the question. You mentioned in your prepared remarks about being in a close dialogue with your customers about the weaker macroeconomic backdrop. Can you elaborate more on what customers are saying on this topic and also clarify whether Sensata has seen macroeconomic impact to its orders either in 3Q or quarter-to-date? Thanks.

Yeah, Mark, I'd be glad to. So all of our customers are monitoring the same metrics we are to make sure that they're prepared for any eventuality. I want to be careful not to temper things too much. We'll see where things land. Obviously, in the third quarter, things ended up better than we had anticipated. And we've always said that we'll be able to deliver on that. So if you look at the individual end markets that we serve during the third quarter, three of the four of them ended up better than we thought. Auto, we expected about a 13% growth. It actually grew about 26%. Again, we delivered on that. HVOR was the only one that was down. We expected it to go down about 8%. It was down 11%. Aero, we expected up about 4% was up about 8%. And then in the industrial side, we expected it to be down about 4%. It was only down 1%. That constant dialogue with our customers is really to get a longer-term view, but it's also to make sure that we can deliver in the near term for them because you know that given how we're designed into their products, if we can't deliver, they can't make product. And we don't want to be the bottleneck in that process. We don't believe we have been a big bottleneck, but we're watching that trend closely. You see in North America that inventory days increased slightly, but our view is there's still significant demand in the larger end markets that we serve that is still not being served. So we'll continue to watch it. Third quarter was a good outcome. We're expecting another $1 billion [ph] fourth quarter, and we'll continue to give you perspective on that as we talk with customers, but also look at the broader macro environment.

Our next question comes from Matt Sheerin with Stifel. Please go ahead.

Yes, thanks. And good morning. I wanted to ask just on the outlook for auto relative to the supply chain issues that your customers have been seeing. I know that's been a headwind and now you have macro concerns as well. Any signs that things are improving in terms of your customers, their supply chains and inventory? And then on inventory, you did talk about still some headwind you're seeing year-over-year in terms of customer inventories. Could you elaborate on that?

Yeah. Let me touch on sort of what we're expecting from a market standpoint, and then maybe Paul can touch on the puts and takes on the inventory balance that we've seen. It's a little complicated given inventory growth last year. So it probably makes sense to touch on that. So specifically in the automotive market, so second quarter was the lowest quarter in terms of overall production rates. But I would actually start with the statement that broadly across the globe, there is more demand for vehicles that can be produced. But we're seeing that start to abate. It has been abating over the past several quarters to be the fact that North American inventory days crept up a little bit, seems to suggest that, that issue is dying [ph] some. But again, we're still in a mode where there's more demand than our customers can produce, which is a great position, obviously, for our customers to be in. But it is getting better. Second quarter was the lowest quarter in terms of production levels at close to $19 million. Third quarter, we had forecasted $19 million. It ended up at about 21. So that was a good outcome, and we delivered on that. Going into the fourth quarter, we would forecast a similar rate around 21. I think IHS is slightly higher than that. But last quarter, you remember that we were guiding to below the pessimistic view of IHS. We're more in line with their base case for fourth quarter, but not tremendous growth, but steady performance third quarter to fourth quarter. You know, yet to be determined what 2023 looks like. But the last point I would leave you with in terms of automotive market is globally - even at these levels, we're still well below the high end of what we've seen historically. I mean, we've seen 17 million units in North America. We've seen much higher levels in Europe and China and we're well within what those peak markets are. So if the consumer stays resilient, our view is that we'll continue to see some growth there, but more to come as we get a better understanding of 2023. Do you want to touch on inventory?

Yes. I would say - I would start with number one, the order book for automotive this quarter was a little bit more stable. We have seen a tremendous amount of drop out at the end of the quarter and previous quarter. We still saw that phenomenon, but it was less, which is good news. It shows a little bit more stability in the orders that are being placed on Sensata to deliver. As it relates to inventory, last year, based on very high market share components that we have, we did analytics to say, you know, what - how much was produced by customers? How much did we ship into that? And last year, that analytic towards [ph] our customers built $70 million of inventory. In this quarter doing the same analysis, it looks like our customers contracted inventory, reduced inventory by about 20. So that's a $90 million swing year-over-year that we've contemplated in our growth profile here. Probably we'll see something similar in Q4. A little bit of contraction is what we're expecting, but nowhere near what we saw last year, but we're seeing some contraction. We think that's problem because production levels are higher, and we're not quite shipping into that level and just be into production. Thanks, Matt.

Thanks, Matt.

Our next question comes from Luke Junk with Baird. Please go ahead.

Morning. Thanks for taking the question. Just a question as it relates to the fourth quarter guidance. If I look at the end market growth, you're looking for markets to be down 2%. The organic growth, however, up about 9 at the midpoint, that's better than the typical outgrowth that you would expect in the business. Just hoping you could unpack what's going on there? Why? And if there's any particular pieces of the business who should be zeroing in on? Thank you.

Yeah. So you've interpreted it, right. We've always said that outgrowth is not constant across quarters. It's something that you should look at over a year or a longer period of time, as platforms launch, as mix of vehicles have higher take rates, it does have some impact on overall outgrowth in our business. But we do expect the fourth quarter to be a strong quarter. We've had over 600 - we've been over the 600 basis points of outgrowth each quarter already this year. For the last 4 years, we've been higher than that. And so we would expect the fourth quarter to be strong. But I think what we're - we continue to be really excited about is the momentum that we see longer term associated with that outgrowth, given the dynamics we have talked about, the new business wins that we have, record new business wins, progress toward two times content electrified vehicles. This all will drive outgrowth to market as this inevitable shift in light vehicle, but also in heavy vehicle markets and in the industrial markets continues to trend. So you're interpreting the guide correctly.

Thanks, Luke.

Thanks.

Our next question comes from Samik Chatterjee with JPMorgan. Please go ahead.

[indiscernible] on for Samik Chatterjee. Thank you for taking my question. You just mentioned that the industrial market declined minus 1% relative to your prior expectations of minus 4%. And also, we are seeing global PMIs are declining. So how exactly do you explain like the market is behaving better than expectations despite the PMI is declining. So what exactly are we missing here, you can please help us understand this? Thank you.

I didn't - you were a little - I think you're at a bad - little bit of a bad connection. I'm not sure. I...

I think the question was around industrial markets, which we're forecasting to be down in the fourth quarter.

Got you. Okay...

And why that's...

I think it's – you know, comparison to strong comps last year when things are going very well. Customers were rebuilding their inventory in their channels. What we're seeing going in from Q3 to Q4 is this normal seasonal decline and a little bit of weakness in the end markets, that is being portrayed by the fact that the PMIs are weaker. What's offsetting that or what would be a weaker market is strong content growth, particularly in our clean energy business. And so we have market weakness, but we've got outgrowth because we're now launching quite a bit of new product into areas like infrastructure, as an example.

Thank you for the question.

Our next question comes from Christopher Glynn with Oppenheimer. Please go ahead.

Thanks. Good morning. So just curious, given the success of your electrification and the wins, particularly with the battery disconnect systems, I'm wondering if that influences your thoughts on capital allocation. If it might cause you to kind of refocus on the core execution, maybe downplay chunkier deals and focus on debt reduction. I'm just thinking out loud, curious your thoughts.

Yeah, Chris. So we're constantly evaluating our success from an organic standpoint and looking at capital allocation. But I don't think there's anything that's changed that would dramatically change our perspective on capital allocation. And the reason is, let me share a lot of the core execution of the business is driving this success. But if you look back at some of the acquisitions that we've done, associated with GIGAVAC back in 2018, the joint venture with Churod in 2021, the acquisition of Sendyne for current sensing, Lithium Balance around battery management, those acquired capabilities dramatically accelerated our ability to gain a better capability in that market. Now we're supplementing that with the $70 million of investment that we're making across the megatrends organically. But we will continue to look at based upon what our customers are looking for, understanding what future architectures look like, we'll continue to look at where to invest that money organically, but also look to what we can complement with acquired capability activity as well. And so we're not done yet, right? I mean, we feel very good about our progress towards this $2 billion target in electrification. We feel really good about our two times content on battery electric vehicles, but there's more opportunity out there. And I think that given our strong cash generation and strong balance sheet, we should continue to look at opportunities to expand that capability. Appreciate the question.

Thanks, Chris.

Our next question comes from Amit Daryanani with Evercore. Please go ahead.

Thanks for taking my question. Jeff, I'm wondering if you could just talk a little bit about how do you think the content growth number shakes out as you go forward for '23 maybe. And then this inventory that's sitting in excess in the channel, which I think are about $50 million at this point, is that the why somewhere [ph] as you go forward? Or could that be a bit more of a headwind in '23 as I get more down. So anything on content by geographies and the inventory number in '22 it would be would be helpful.

Yeah, I'd be glad to address it. So - we're a long cycle business. So it's - the opportunities that we're winning now will see revenue in 3 to 5 years from now, that is accelerating. Our customers are increasing or speeding up their design cycles for sure. So what historically had been a 5 to 7 year design cycles in some of our end markets, that's contracting. But we'll see content growth grow or outgrowth grow as we get to those out years when more of these programs launch for sure. But for now, we're going to stick with our 4 to 600 basis points where we benefit [ph] that, right? So we're - you can interpret that we're sticking with the higher end of that range given that there is some mix dynamic that can happen associated with how vehicles actually get produced, but we're feeling really good about that outgrowth and it's demonstrated in the results and it's demonstrated in the future look in terms of the MBOs [ph] that we've won and how they'll play out. I think that the remaining inventory balance question, I'll share my thoughts, and Paul can jump in. I think we were a little surprised that the inventory came down a little bit in the third quarter. Our expectation would be that our customers would hold on to that inventory. But upon reflection, I mean, we're working to manage our inventory down a little bit as well to make sure we can generate more cash flow. So it logically makes sense. It's an indication to me that not only - are we seeing some lessening of – for rating of the supply chain challenges. But I think folks are starting to go back toward a more normal inventory operating model. That was always our expectation that, that would correct over time. It's just a question of over what period of time it will correct.

I think that's a good way to think about it. I do think we're going to - we're estimating a little bit of contraction, like I said earlier in Q4. I mean we're in unprecedented [ph] time. We've never seen this kind of inventory movement. So I'm trying to model it out is very challenging. But - so the '23, I mean we're going to - we haven't quite got there yet in terms of what we think that will look like. But clearly, we're starting to see it in the current results. So it’s becoming more relevant as we go forward.

Thanks, Amit. Good question.

Our next question comes from Shreyas Patil with Wolfe Research. Please go ahead.

Hey. Thanks so much for taking my question. So just - I think you alluded to it a little bit before. Just in terms of the ability to get back to that 21% margin target, how should we think about the levers that you have to pull if end market demand continues to weaken? As you mentioned, we are seeing - you're indicating pretty sharp declines in industrial and HVOR in Q4. I'm just trying to get a better sense of some of the cost actions that you can take. And should we also assume that megatrend spending will continue to grow into next year? Or are you saying that you'll just maintain a high level of spend? Thanks.

So I'll answer that last piece right away. So in the prepared remarks, we said that for '23, we're going to keep our megatrend spend flat, so $65 million to $70 million of research development, innovation work to continue to intersect these growing trends of Electrification, Insights. So we're going to maintain that. As we think about 2023, we're going to be cautious about the top line, just given the macroeconomic [ph] environment we're operating in. And the levers we can control continue to be more than recovering the input costs that we're seeing in the business, so continuing to drive pricing across the business, not just in automotive, but across all of our end markets. And it's making sure that our cost structure aligns to the demand profile, which we've done as a company for decades. And so if we see weaker end markets, we're going to align the cost structure to support that, which will ultimately take excess costs out of the system. We built the business to be bigger and the support truck [ph] should be bigger, so we'll take those costs out to bring down the cost, improve margins in a weaker environment. That ultimately is what we see going into 2023. We got be mindful of currency rates. They've been very negative here in the second half of this year versus our guide probably $0.20, $0.21 worth soft or $0.10 worth soft in a $0.21 [ph] year-over-year impact on the effects from the second half. So clearly, that's something we're going to have to be very careful and mindful of as we enter 2023 when we provide a perspective what we're going to deliver. But we're locked in on delivering that – you know, our goal is to deliver the 21% as our medium-term target. And we will work the cost side of the equation and pricing to help us get there.

And we're marching towards that, right? Every quarter this year, we've seen increased margin. And even in the third quarter with a slightly lower revenue base that in the second quarter, we increased margin. The guide for the fourth quarter was a lower revenue base with an increase in margin profile. So we're doing the right things to manage that process, and it's many levers, as Paul mentioned.

Appreciate the question.

Thanks, Shreyas for the question.

Our next question comes from Gavin Kennedy with Jefferies. Please go ahead.

Hi, team. Thanks for taking my question. Good to see that your 2022 expectations of 50% growth in Electrification was reiterated. But we were wondering if you still expect more than 100% growth in Insights as well this year? And related, if you could talk about some of those key growth drivers in Insights, that would be great.

Yeah. Insights will grow more than 100%. We're seeing really great order book. I would say the supply chain is a limiting factor there. But even with that limiting factor of weaker supply chain hard to get parked [ph] we'll deliver the 100% growth. So we're very confident about that. It's good growth in all the businesses that we have acquired in that space. So really excited about how they're executing in a tough head market and a tough supply chain.

Thanks, Gavin.

Our next question comes from Joe Giordano with Cowen. Please go ahead.

Hey, guys. Good morning. Can you speak specifically to price within auto and what that was in the quarter? And kind of what the outlook is there? Like the discussions you've had there with your customers to raise prices here, and how long does that last? And when do you have to have like the next round of renegotiations?

Yeah. So we've been - I think we've been very transparent that those discussions have lagged but we're gaining significant steam with our automotive customers. So if I rewind the clock way back to 2021, we didn't get any of the pricing, second half, we got cost recover and really starting in 2022, we started going after that price. It's supported with details around the impact that we're seeing associated with the material inflation, logistics increasing costs and our customers although - always a challenging conversation. Our customers are very understanding in terms of what we're experiencing and the trade-offs we need to make to make sure that we can get the raw material we need to deliver the parts for them. And we'll continue to have that dialogue. And to me, I would say the proof that we're doing that very well is that we do have record new business wins, right? So in an environment where we're having really tough conversations regarding the inflationary pressures that we're seeing, we're continuing to see good achievement. Now year-to-date, I think we'll be about at balance on that, but we have still some work to do because those pressures won't stop as we go into 2023. I think they'll be lower, but they won't stop and we'll continue to have to work this muscle with our teams and also with our customers going forward.

Thanks for the question.

Next question comes from Travis Bucknall with Truist Securities. Please go ahead.

Thanks for taking my question. I'm calling on behalf of Will Stein this morning. My first question, I was just curious if you could provide any clarity on how the fill rate has dipped down to 93%. I think last quarter it was 95% in the second [ph] quarter in '21 was also 95%. I'm just wondering if you could also maybe touch on what you would classify as a optimal level there?

I think that's - it's reflective of two things. One, it's the order pattern is changing a little bit. So we're seeing some - a reversion back to a little bit more of a normal order pattern than in the past. We saw a lot of order early in the quarter because customers were making sure that, that replacing orders to get in line for supply. And so with a more normalized pattern 93%, I feel like a good place to be in terms of delivering $1 billion [ph] of revenue at the midpoint. We are at 95% last quarter. We did a little bit better than the guide. So I think we're right where we need to be. I think it's a good indication that we have confidence to be able to deliver to the midpoint of the guide on revenue in the fourth quarter.

Thanks, Travis for the question.

Our next question comes from Jim Suva with Citigroup. Please go ahead.

Thank you. How do you guys look at and maybe the answer is it's just not that material. When you see news reports about some of the automakers building 99.9% of the car, and then having to wait for that the golden screw or the chip or something? I assume is it your parts they're waiting on. But how do you think about that? And how should we think about it? How should investors be thinking about it, does it impact your outlook materially? Or are those stories just a lot of talk and just the materiality of the numbers don't really impact your production outlook numbers?

Yeah. So on the first part of the question, are we the impact. I'm sure there are instances where we are creating challenges for our customers. But I would say, based upon the conversations I've had with our customers directly, there - I don't think we're their biggest problem on that front. So from a Sensata standpoint, I feel as though we're delivering against the raw demand that they tell us. So the broader question that you're bringing up around vehicles being largely produced but waiting for a final piece, there's no question that, that's happening. But the magnitude of it, I think, is more of a news bullet as opposed to being meaningful. I mean, we're talking about maybe 0.5 million vehicles in a much bigger marketplace. And we're also looking at an instance right now where in North America, which is a dealer inventory model there's 32 days of inventory versus a normal model of 60, right? So it's not as though I think - I don't think there's going to be an abrupt change in terms of what we see in terms of demand for production. I think eventually all of those vehicles that are largely produced will help fill the funnel of the vehicle a lot. It's not just a U.S. phenomenon, of course. So my sense is it's something we should watch, but it's not something that we think is going to have a shock to the system.

The only thing I would add, Jim, is that it just suggests that our customer supply chains are disrupted. And so how they order parts and what it might mean to our revenue, we talk about this the inventory impact. So that disruptive supply chain that they have could be affecting when they buy parts at Sensata. And so anecdotally, I mean, it probably is causing some of this effect just because we don't have an efficient supply chain.

Thanks, Jim.

In the industry.

Thanks, Jim.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jacob Sayer for any closing remarks.

Thanks, Sarah. I'd like to thank everyone for joining us this morning. Sensata will be participating in upcoming investor conferences sponsored by R.W. Baird in early November and Mylers [ph] in early December in the fourth quarter. We look forward to seeing you at one of these events and/or at our fourth quarter earnings call in late January. Thank you for joining the meeting and your interest in Sensata. Sarah, you can now end the call.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.