~~Our share price may fluctuate significantly.~~

We cannot predict the prices at which nVent ordinary shares may trade. The market price of nVent ordinary shares may fluctuate widely, depending on many factors, some of which may be beyond our control, including:

~~actual or anticipated fluctuations in our results of operations due to factors related to our business~~

~~success or failure of our business strategy;~~

~~our quarterly or annual earnings, or those of other companies in our industry~~

~~our ability to obtain third-party financing as needed~~

~~announcements by us or our competitors of significant acquisitions or dispositions~~

~~changes in accounting standards, policies, guidance, interpretations or principles~~

~~changes in earnings estimates by us or securities analysts or our ability to meet those estimates;~~

~~the operating and share price performance of other comparable companies;~~

~~investor perception of us;~~

~~natural or other environmental disasters that investors believe may affect us;~~

~~overall market fluctuations;~~

~~results from any material litigation, including asbestos claims, government investigations or environmental liabilities;~~

~~changes in laws and regulations affecting our business; and~~

~~general economic conditions and other external factors.~~

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could have a material adverse effect on our share price.

~~Risks Relating to Being a Separate, Stand-Alone Company~~

Our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly-traded company and may not be an accurate indicator of our future results of operations.

The historical information about us prior to April 30, 2018 in this Annual Report on Form 10-K refers to our business as operated by and integrated with Pentair. Our historical financial information for such periods was derived from the consolidated financial statements and accounting records of Pentair. Accordingly, such historical financial information included in this Annual Report on Form 10-K does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly-traded company during the periods presented or those that we will achieve in the future primarily as a result of the factors described below:

Prior to the separation, our business was operated by Pentair as part of its broader corporate organization, rather than as an independent company. Pentair or one of its affiliates performed various corporate functions for us, such as accounting, information technology and finance. Our historical financial results reflect allocations of corporate expenses from Pentair for such functions and may not reflect the expenses we would have incurred had we operated as a separate, publicly-traded company. As a result of the separation, we are responsible for the additional costs associated with being an independent, publicly traded company, including costs related to corporate governance and external reporting.

Generally, our working capital and capital for our general corporate purposes have historically been provided as part of the corporate-wide cash management policies of Pentair. As a stand-alone company, we may need to obtain additional financing from lenders, through public offerings or private placements of debt or equity securities, strategic relationships and the cost of capital for our business may be higher than Pentair’s cost of capital prior to completion of the separation.

Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from Pentair. For additional information about the past financial performance of our business and the basis of presentation of the historical combined financial statements of our business, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Financial Statements and Supplementary Data.”

Pentair may fail to perform under various transaction agreements that have been executed as part of the separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.

In connection with the separation, we and Pentair entered into a separation and distribution agreement and various other agreements, including a tax matters agreement, a transition services agreement and an employee matters agreement. Certain of these agreements provide for the performance of services by each company for the benefit of the other for a period of time after the separation. We rely on Pentair to satisfy its performance and payment obligations under these agreements. If Pentair is unable to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses.

~~Potential indemnification liabilities to Pentair pursuant to the transaction agreements could materially adversely affect us.~~

The separation and distribution agreement with Pentair contains, among other things, provisions governing the relationship between us and Pentair with respect to and resulting from the separation. Among other things, the separation agreement provides for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist relating to its business activities, whether incurred prior to or after the separation. We may be subject to substantial liabilities under these indemnifications.

If the distribution from Pentair fails to qualify as a tax-free transaction for U.S. federal income tax purposes, then we and our shareholders could be subject to significant tax liability or tax indemnity obligations.

Pentair received an IRS Ruling from the IRS substantially to the effect that, among other things, the distribution and certain related transactions qualify as tax-free under Section 355 and related provisions of the Code. The tax-free nature of the distribution was conditioned on the continued validity of the IRS Ruling, as well as on receipt of a tax opinion, substantially to the effect that, among other things, the distribution would qualify as a tax-free transaction under Section 355 and related provisions of the Code, and certain transactions related to the transfer of assets and liabilities to us in connection with the separation and distribution would not result in the recognition of any gain or loss to Pentair, us or our shareholders. The IRS ruling and the tax opinion relied on certain facts and assumptions, certain representations from Pentair and us regarding the past and future conduct of both businesses and other matters, and the tax opinion relies on the IRS Ruling. Notwithstanding the IRS ruling and tax opinion, the IRS could determine on audit that the distribution should be treated as a taxable transaction if it determines that any of these facts, assumptions, representations or undertakings is not correct or has been violated, or that the distribution should be taxable for other reasons, including as a result of a significant change in stock or asset ownership after the distribution, or if the IRS were to disagree with the conclusions of the tax opinion that are not covered by the IRS ruling. If the distribution is ultimately determined to be taxable, the distribution could be treated as a taxable dividend to you for U.S. federal income tax purposes, and you could incur significant U.S. federal income tax liability. In addition, Pentair and/or we could incur significant U.S. federal income tax liabilities or tax indemnification obligations, whether under applicable law or the tax matters agreement that we entered into with Pentair, if it is ultimately determined that certain related transactions undertaken in anticipation of the distribution are taxable. To the extent we incur any tax liability or indemnification obligation under applicable law or the tax matters agreement, there could be a material adverse effect on our business, financial condition and results of operations and cash flows in future reporting periods.

We might not be able to engage in desirable strategic transactions and equity issuances following the distribution because of restrictions relating to U.S. federal income tax requirements for tax-free distributions.

Our ability to engage in significant equity transactions could be limited or restricted after the distribution in order to preserve, for U.S. federal income tax purposes, the tax-free nature of the distribution by Pentair. Even if the distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, it may result in corporate-level taxable gain to Pentair and certain of its affiliates under Section 355(e) of the Code if 50 percent or more, by vote or value, of nVent ordinary shares or Pentair ordinary shares are acquired or issued as part of a plan or series of related transactions that includes the distribution. Any acquisitions or issuances of nVent ordinary shares or Pentair ordinary shares within two years after the distribution will generally be presumed to be part of such a plan, although we or Pentair may be able to rebut that presumption. To preserve the tax-free treatment to Pentair of the distribution, under the tax matters agreement, we expect that we will be prohibited from taking or failing to take any action that prevents the distribution and related transactions from being tax-free. Further, for the two-year period following the distribution, without obtaining the consent of Pentair, a private letter ruling from the IRS or an unqualified opinion of a nationally recognized law firm or accounting firm, we may be prohibited from, among other things:

approving or allowing any transaction that results in a change in ownership of more than a specified percentage of nVent ordinary shares when combined with any other changes in ownership of nVent ordinary shares,

~~redeeming or repurchasing equity securities,~~

~~selling or otherwise disposing of substantially all of our assets, or~~

~~engaging in certain internal transactions.~~

These restrictions may limit our ability to pursue strategic transactions or engage in new business or other transactions that may maximize the value of our business. Moreover, the tax matters agreement also provides that we are responsible for all or a specified portion of any taxes imposed on Pentair or any of its affiliates as a result of the failure of the distribution or the internal transactions to qualify for favorable treatment under the Code unless such failure is attributable to certain actions taken after the distribution by Pentair.

Risks Relating to Financial Markets and Our Debt and Liquidity

Volatility in currency exchange rates could have a material adverse effect on our financial condition, results of operations and cash flows.

Sales outside of the U.S. for the year ended December 31, 2020 accounted for approximately 41% of our net sales. Our financial statements reflect translation of items denominated in non-U.S. currencies to U.S. dollars. Therefore, if the U.S. dollar strengthens in relation to the principal non-U.S. currencies from which we derive revenue as compared to a prior period, our U.S. dollar-reported revenue and income will effectively be decreased to the extent of the change in currency valuations and vice-versa. For the year ended December 31, 2020, foreign currency translations had a 0.2% positive impact on our net sales. Fluctuations in foreign currency exchange rates, most notably the strengthening of the U.S. dollar against the euro, could have a material adverse effect on our reported revenue and income in future periods.

Disruptions in the financial markets could adversely affect us, our customers and our suppliers by increasing funding costs or reducing availability of credit.

In the normal course of our business, we may access credit markets for general corporate purposes, which may include repayment of indebtedness, acquisitions, additions to working capital, repurchase of shares, capital expenditures and investments in our subsidiaries. Although we expect to have sufficient liquidity to meet our foreseeable needs, our access to and the cost of capital could be negatively impacted by disruptions in the credit markets, which have occurred in the past and made financing terms for borrowers unattractive or unavailable. These factors may make it more difficult or expensive for us to access credit markets if the need arises. In addition, these factors may make it more difficult for our suppliers to meet demand for their products or for prospective customers to commence new projects, as customers and suppliers may experience increased costs of debt financing or difficulties in obtaining debt financing. Disruptions in the financial markets in the past have had adverse effects on other areas of the economy and have led to a slowdown in general economic activity that may adversely affect our businesses. One or more of these factors could adversely affect our business, financial condition, results of operations orand cash flows.

Covenants in our debt instruments may adversely affect us.

Our credit agreements and indentures contain customary financial covenants, including those that limit the amount of our debt, which may restrict the operations of our business and our ability to incur additional debt to finance acquisitions. Our ability to meet the financial covenants can be affected by events beyond our control, and we cannot provide assurance that we will meet those tests. A breach of any of these covenants could result in a default under our credit agreements or indentures. Upon the occurrence of an event of default under any of our credit facilities or indentures, the lenders or trustees could elect to declare all amounts outstanding thereunder to be immediately due and payable and, in the case of credit facility lenders, terminate all commitments to extend further credit. If the lenders or trustees accelerate the repayment of borrowings, we cannot provide assurance that we will have sufficient assets to repay our credit facilities and our other indebtedness. Furthermore, acceleration of any obligation under any of our material debt instruments will permit the holders of our other material debt to accelerate their obligations, which could have a material adverse effect on our financial condition.

~~We may~~

Our indebtedness, and any future increase ~~our~~in debt or ~~raise~~raising of additional capital, ~~or our credit ratings may be downgraded in the future, which~~ could affect our financial condition, and may decrease our profitability.

As of December 31, ~~2018,~~2020, we had ~~$0.9~~$1.0 billion of total debt outstanding. WeIf we are not able to repay or refinance our debt as it becomes due, we may be forced to sell assets or take other disadvantageous actions, including (i) reducing financing in the future for working capital, capital expenditures and general corporate purposes or (ii) dedicating an unsustainable level of our cash flow from operations to the payment of principal and interest on our indebtedness. The lenders who hold such debt could also accelerate amounts due, which could potentially trigger a default or acceleration of any of our other debt.

Further, we may increase our debt or raise additional capital in the future, subject to restrictions in our debt agreements. If our cash flow from operations is less than we anticipate, if our cash requirements are more than we expect, or if we intend to finance acquisitions, we may require more financing. However, debt or equity financing may not be available to us on acceptable terms, if at all. If we incur additional debt or raise equity through the issuance of additional capital shares, the terms of the debt or capital shares issued may give the holders rights, preferences and privileges senior to those of holders of our ordinary shares, particularly in the event of liquidation. The terms of the debt may also impose additional and more stringent restrictions on our operations than we currently have. If we raise funds through the issuance of additional equity, the percentage ownership of existing shareholders in our company would decline. If we are unable to raise additional capital when needed, our financial condition could be adversely affected. Unfavorable changes in the ratings that rating agencies assign to our debt may ultimately negatively impact our access to the debt capital markets and increase the costs we incur to borrow funds. If ratings for our debt are downgraded, our access to the debt capital markets may become restricted. Additionally, our credit agreements generally include an increase in interest rates if the ratings for our debt are downgraded.

~~Our leverage could have a material adverse effect on our business, financial condition or results of operations.~~

Our ability to make payments on and to refinance our indebtedness, including our existing debt as well as any future debt that we may incur, will depend on our ability to generate cash in the future from operations, financings or asset sales. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we are not able to repay or refinance our debt as it becomes due, we may be forced to sell assets or take other disadvantageous actions, including (i) reducing financing in the future for working capital, capital expenditures and general corporate purposes or (ii) dedicating an unsustainable level of our cash flow from operations to the payment of principal and interest on our indebtedness. The lenders who hold such debt could also accelerate amounts due, which could potentially trigger a default or acceleration of any of our other debt.

Risks Relating to Our Jurisdiction of Incorporation in Ireland and Tax Residency in the U.K.

We are subject to changes in law and other factors that may not allow us to maintain a worldwide effective corporate tax rate that is competitive in our industry.

While we believe that we should be able to maintain a worldwide effective corporate tax rate that is competitive in our industry, we cannot give any assurance as to what our effective tax rate will be in the future, because of, among other things, uncertainty regarding the tax policies of the jurisdictions where we operate. Our actual effective tax rate may vary from our expectation and that variance may be material. Also, the tax laws of the U.S., the U.K., Ireland and other jurisdictions could change in the future, and such changes could cause a material change in our worldwide effective corporate tax rate. In particular, legislative action could be taken by the U.S., the U.K., Ireland or the European Union which could override tax treaties or modify tax statutes or regulations upon which we expect to rely and adversely affect our effective tax rate. We cannot predict the outcome of any specific legislative proposals. If proposals were enacted that had the effect of disregarding our incorporation in Ireland or limiting our ability as an Irish company to maintain tax residency in the U.K. and take advantage of the tax treaties among the U.S., the U.K. and Ireland, we could be subject to increased taxation, which could materially adversely affect our financial condition, results of operations, cash flows or our effective tax rate in future reporting periods.

A change in our tax residency could have a negative effect on our future profitability, and may trigger taxes on dividends or exit charges.

~~Under current~~We are incorporated in Ireland and we are an Irish ~~legislation, a company is~~tax resident under Irish domestic law unless we are regarded as being resident ~~for~~elsewhere (and not Ireland) under the terms of a double tax ~~purposes in Ireland if it is centrally managed and controlled in Ireland, or, in certain circumstances, if it is incorporated in Ireland.~~treaty. Under ~~current~~domestic U.K. ~~legislation,~~law, a company that is centrally managed and controlled in the U.K. is regarded as resident in the U.K. for taxation purposes unless it is treated as resident in another jurisdiction pursuant to any appropriate double tax treaty with the U.K. Other jurisdictions may also seek to assert taxing jurisdiction over ~~nVent.~~us.

~~Where~~Effective for tax periods beginning on or after November 1, 2019, where a company is treated as tax resident under the domestic laws of both the U.K. and Ireland, ~~article 4(3) of~~ the Double Tax Convention between ~~Ireland and~~ the U.K. and Ireland (the ~~“residence tie-breaker”~~“Convention”) ~~currently~~signed on June 2, 1976, and as modified by paragraph 1 of Article 4 of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “Multilateral Instrument” or “MLI”) provides that the ~~company shall~~residence of a dual-resident entity should be ~~treated as resident only~~determined by way of mutual agreement between the Irish Revenue Commissioners and Her Majesty’s Revenue Commissioners. The tie-breaker test provides that, in ~~one~~cases of those two jurisdictions if its place of effective management is situated in that jurisdiction. The Organisation for Economic Co-operation and Development has proposed a number of measures relating todual residence, the tax treatment of multinationals, some of which are to be implemented by amending double tax treaties through a multilateral instrument (the “MLI”). The MLI has been signed and ratified by a number of countries, including Ireland and the U.K. The MLI allows signatories to opt into or out of certain changes: the effect for a given double tax convention depends on the options chosen by the two contracting states. Ireland and the U.K. have confirmed that they intend to change the residence tie-breaker so that it will depend on a determination by the taxcompetent authorities of the two ~~contracting~~ states ~~instead~~shall determine by mutual agreement the territory of ~~an objective application~~which the person shall be deemed to be resident for purposes of the ~~place~~Convention.

Our application under the Mutual Agreement Procedure provided for in Article 24 of ~~effective management test. The~~the Convention (as amended ~~residence tie-breaker should take effect for nVent from January 1, 2020 and nVent intends~~pursuant to ~~seek a determination~~the MLI) seeking confirmation that we will continue to be tax resident solely in ~~respect of its tax residence from~~ the ~~tax~~U.K. was approved by the competent authorities of the UKU.K. and Ireland ~~in advance of that date. nVent does not expect such a determination to alter its tax residency in the U.K..~~effective December 31, 2019.

It is possible that in the future, whether as a result of a change in law ~~(including the entry into force and effect of the MLI)~~ or the practice of any relevant tax authority or as a result of any change in the conduct of our affairs, ~~nVent~~we could become, or be regarded as having become, resident in a jurisdiction other than the U.K. If ~~nVent ceases~~we cease to be resident in the U.K. and ~~becomes~~become resident in another jurisdiction, itwe may be subject to U.K. exit charges, and could become liable for additional tax charges in the other jurisdiction (including dividend withholding taxes or corporate income tax charges). If ~~nVent~~we were to be treated as resident in more than one jurisdiction, itwe could be subject to taxation in multiple jurisdictions. If, for example, ~~nVent~~we were considered to be a tax resident of Ireland, ~~nVent~~we could become liable for Irish corporation tax and any dividends paid by itus could be subject to Irish dividend withholding tax.

Legislative action in the U.S. could materially adversely affect us.

Legislative or administrative action may be taken by the U.S. Congress or U.S. Treasury which, if ultimately enacted or finalized, could limit the availability of tax benefits or deductions that we currently claim, override tax treaties upon which we rely, or otherwise affect the taxes that the U.S. imposes on our worldwide operations. Such actions include proposed regulations issued by the U.S. Treasury on December 20, 2018 that, when finalized, would limit the availability of tax benefits we currently claim related to the deductibility of interest (the "Proposed Regulations"). It is anticipated that the Proposed Regulations will be finalized during, or prior to, June 2019. As the Proposed Regulations are not yet finalized, the ultimate outcome is not specifically known at this time. Such changes could materially adversely affect our effective tax rate and/or require us to take further action, at potentially significant expense, to seek to preserve our effective tax rate.

Irish law differs from the laws in effect in the U.S. and may afford less protection to holders of our securities.

It may not be possible to enforce court judgments obtained in the U.S. against us in Ireland based on the civil liability provisions of the U.S. federal or state securities laws. In addition, there is some uncertainty as to whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil liabilities provisions of the U.S. federal or state securities laws or hear actions against us or those persons based on those laws. We have been advised that the U.S. currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by any U.S. federal or state court based on civil liability, whether or not based solely on U.S. federal or state securities laws, would not automatically be enforceable in Ireland.

As an Irish company, we are governed by the ~~Irish~~ Companies Act 2014, which differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including, among others, differences relating to interested director and officer transactions and shareholder lawsuits. Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances. Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the U.S.

In addition, our articles of association provide that the Irish courts have exclusive jurisdiction to determine any and all derivative actions in which a holder of nVent ordinary shares asserts a claim in the name of nVent, actions asserting a claim of breach of a fiduciary duty of any of the directors of nVent and actions asserting a claim arising pursuant to any provision of Irish law or our articles of association. Under Irish law, the proper claimant for wrongs committed against nVent, including by our directors, is considered to be nVent itself. Irish law permits a shareholder to initiate a lawsuit on behalf of a company such as nVent only in limited circumstances and requires court permission to do so.

Transfers of nVent ordinary shares may be subject to Irish stamp duty.

Transfers of nVent ordinary shares effected by means of the transfer of book entry interests in the Depository Trust Company ("DTC") will not be subject to Irish stamp duty. However, if you hold your nVent ordinary shares directly, rather than beneficially through DTC, any transfer of your nVent ordinary shares could be subject to Irish stamp duty (currently at the rate of 1 percent of the higher of the price paid or the market value of the shares acquired). Payment of Irish stamp duty is generally a legal obligation of the transferee.

We currently intend to pay (or cause one of our affiliates to pay) stamp duty in connection with share transfers made in the ordinary course of trading by a seller who holds shares directly to a buyer who holds the acquired shares beneficially. In other cases we may, in our absolute discretion, pay (or cause one of our affiliates to pay) any stamp duty. Our constitution provides that, in the event of any such payment, we (i) may seek reimbursement from the buyer, (ii) will have a lien against the shares acquired by such buyer and any dividends paid on such shares and (iii) may set-off the amount of the stamp duty against future dividends on such shares. Parties to a share transfer may assume that any stamp duty arising in respect of a transaction in nVent ordinary shares has been paid unless one or both of such parties is otherwise notified by us.

nVent ordinary shares, received by means of a gift or inheritance, could be subject to Irish capital acquisitions tax.

Irish capital acquisitions tax (“CAT”) could apply to a gift or inheritance of nVent ordinary shares irrespective of the place of residence, ordinary residence or domicile of the parties. This is because nVent ordinary shares will be regarded as property situated in Ireland. The person who receives the gift or inheritance has primary liability for CAT. Gifts and inheritances passing

between spouses are exempt from CAT. Children have a tax-free threshold ~~of €320,000 per lifetime~~which Irish Revenue typically updates annually in respect of taxable gifts or inheritances received from their ~~parents~~parents.

General Risk Factors

Our share price may fluctuate significantly.

•actual or anticipated fluctuations in our results of operations due to factors related to our business;

•success or failure of our business strategy;

•our quarterly or annual earnings, or those of other companies in our industry;

•our ability to obtain third-party financing as needed;

•announcements by us or our competitors of significant acquisitions or dispositions;

•changes in accounting standards, policies, guidance, interpretations or principles;

•changes in earnings estimates by us or securities analysts or our ability to meet those estimates;

•the operating and share price performance of other comparable companies;

•investors' perceptions of us;

•natural or other environmental disasters that investors believe may affect us;

•overall market fluctuations;

•results from any material litigation, including government investigations or environmental liabilities;

•changes in laws and regulations affecting our business; and

•general economic conditions and other external factors.

Our success depends on attracting and retaining qualified personnel.

Our ability to sustain and grow our business requires us to hire, retain and develop a highly skilled and diverse management team and workforce. Failure to ensure that we have the depth and breadth of personnel with the necessary skill set and experience, or the loss of key employees, could impede our ability to deliver our growth objectives and execute our strategy.

Catastrophic and other events beyond our control may disrupt operations at our manufacturing facilities and those of our suppliers, which could cause us to be unable to meet customer demands or increase our costs or reduce customer spending.

If operations at any of our manufacturing facilities or those of our suppliers were to be disrupted as a result of significant equipment failures, natural disasters, earthquakes, power outages, fires, explosions, terrorism, adverse weather conditions, labor disputes, public health epidemics or other catastrophic events or events outside of our control, we may be unable to fill customer orders and otherwise meet customer demand for ~~periods~~our products. In addition, these types of events may negatively impact consumer, commercial and industrial spending in impacted regions or, depending on the severity, globally. As a result, any of such events could have a material adverse effect our business, financial condition, results of operations and cash flows. Interruptions in production, in particular at our manufacturing facilities, could increase our costs and reduce our sales. Any interruption in production capability could require us to make substantial capital expenditures to fill customer orders. We maintain property damage insurance that we believe to be adequate to provide for reconstruction of facilities and equipment, as well as business interruption insurance to mitigate losses resulting from any production interruption or ~~after October 10, 2018.~~

shutdown caused by an insured loss. However, any recovery under our insurance policies may not offset the lost sales or increased costs that may be

experienced during the disruption of operations, which could have a material adverse effect our business, financial condition, results of operations and cash flows.

We may experience material cost and other inflation.

In the past, we have experienced material cost and other inflation in a number of our businesses. We strive for productivity improvements and implement increases in selling prices to help mitigate cost increases in raw materials, freight, energy, wage and other costs such as pension, health care and insurance. We continue to implement operational initiatives, including commodity price lock strategies, in order to mitigate the impact of this inflation and continuously reduce our costs. However, these actions may not be successful in managing our costs or increasing our productivity. Continued cost inflation or failure of our initiatives to generate cost savings or improve productivity could have a material adverse effect on our business, financial condition, results of operations and cash flows.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal office is located in leased premises in London, ~~United Kingdom,~~U.K., and our management office in the ~~United States~~U.S. is located in leased premises in Minneapolis, Minnesota.

Our key operations are conducted in manufacturing and distribution facilities throughout the world. ~~These facilities house~~The following is a summary of our principal manufacturing, distribution, and ~~distribution operations, as well as sales and marketing, engineering and administrative offices.~~service center properties:


		Number of Facilities
	Manufacturing Plant Locations	Manufacturing Plants	Distribution Facilities	Service Centers
Enclosures	U.S. and 8 other countries	13	10	—
Electrical & Fastening Solutions	U.S. and 2 other countries	8	6	—
Thermal Management	U.S. and 2 other countries	4	6	4

We carry out our Enclosures manufacturing operations at 3 plants located in the United States and at 8 plants located in 7 other countries. In addition, Enclosures has 5 distribution facilities and 12 sales offices located in numerous countries throughout the world.

We carry out our Thermal Management manufacturing operations at 2 plants located in the United States and at 6 plants located in 4 other countries. In addition, Thermal Management has 9 distribution facilities, 30 sales offices and 3 service centers located in numerous countries throughout the world.

We carry out our Electrical & Fastening Solutions manufacturing operations at 2 plants located in the United States and at 3 plants located in 2 other countries. In addition, Electrical & Fastening Solutions has 4 distribution facilities and 7 sales offices located in numerous countries throughout the world.

We believe that our production facilities are suitable for their purpose and are adequate to support our businesses.

ITEM 3. LEGAL PROCEEDINGS

We have been made parties to a number of actions filed or have been given notice of potential claims relating to the conduct of our business, including those pertaining to commercial disputes, product liability, asbestos, environmental, safety and health, patent infringement and employment matters.

While we believe that a material impact on our financial position, results of operations or cash flows from any such future claims or potential claims is unlikely, given the inherent uncertainty of litigation, a remote possibility exists that a future adverse ruling or unfavorable development could result in future charges that could have a material adverse impact. We do and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and receivables and make appropriate adjustments to such estimates based on experience and developments in litigation. As a result, the current estimates of the potential impact on our financial position, results of operations and cash flows for the proceedings and claims described in the notes to our consolidated and combined financial statements could change in the future.

Environmental matters

We have been named as defendant, target or a potentially responsible party ("PRP") in a number of environmental clean-ups relating to our current or former business units. We may be named as a PRP at other sites in the future for existing business units, as well as both divested and acquired businesses. In addition to clean-up actions brought by governmental authorities, private parties could bring personal injury or other claims due to the presence of, or exposure to, hazardous substances.

Certain environmental laws impose liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances at their properties or at properties at which they have disposed of hazardous substances. Our accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. It can be difficult to estimate reliably the final costs of investigation and remediation due to various factors. In our opinion, the amounts accrued are appropriate based on facts and circumstances as currently known. As of December 31, ~~2018,~~2020, our recorded reserves for environmental matters were not material. We do not anticipate these environmental conditions will have a material adverse effect on our financial position, results of operations or cash flows. However, unknown conditions, new details about existing conditions or changes in environmental requirements may give rise to environmental liabilities that will exceed the amount of our current reserves and could have a material adverse effect in the future.

Product liability claims

We are subject to various product liability lawsuits and personal injury claims. A substantial number of lawsuits and claims incurred prior to the effective date of the separation on April 30, 2018 are insured and accrued for by ~~Pentair’s~~the former Parent’s captive insurance subsidiary. ~~Pentair’s captive insurance subsidiary records a liability for these claims based on actuarial projections of ultimate losses.~~ Lawsuits and claims incurred after the separation are insured and accrued for by Tonka Bay, a captive insurance subsidiary of nVent. For all other claims, accruals covering the claims are recorded, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The accruals are adjusted periodically as additional information becomes available. We have not experienced significant unfavorable trends in either the severity or frequency of product liability lawsuits or personal injury claims.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS ~~OF THE REGISTRANT~~

~~The following table sets forth information as of December 31, 2018 regarding current~~

Current executive officers of nVent Electric plc, their ages, current position and their business experience during at least the past five years are as follows:

Name

Age

Current Position and Business Experience

Beth A. Wozniak

5456

Chief Executive Officer since 2018; ~~Previously,~~ Ms. Wozniak was the President of Pentair’s Electrical segment during 2017. Ms. Wozniak previously served as President of Pentair’s Flow & Filtration Solutions Global Business Unit from 2015 – 2016. Ms. Wozniak was President of the Environmental and Combustion Controls unit of Honeywell International Inc. (a software-industrial company) from 2011 – 2015 and President of the Sensing and Controls Unit of Honeywell International Inc. from 2006 – 2011, and she held various leadership positions at Honeywell International Inc. and its predecessor AlliedSignal Inc. from 1990 – 2006.

~~Stacy P. McMahan~~Sara E. Zawoyski

5546

Executive Vice President and Chief Financial Officer since ~~2018; Previously,~~2019; Ms. ~~McMahan was the Chief Financial Officer of The Spectranetics Corporation (a developer and manufacturer of single-use medical devices) beginning in September 2015. Ms. McMahan~~Zawoyski was the Senior Vice President Finance and Treasurer of the Company from 2018 – 2019. Ms. Zawoyski previously served in the following roles at Pentair and its predecessors: Chief Financial Officer, Electrical Segment from 2017 – 2018, Chief Financial Officer, Flow and ~~Treasurer of MSA Safety, Inc. (a global industrial company protecting the health and safety of industrial workers)~~Filtration Solutions from ~~2013~~2015 – 2017, Chief Financial Officer Flow Technologies from 2014 – 2015, ~~and the Senior Vice President, Finance of MSA Safety, Inc.~~Chief Financial Officer, Equipment Protection from 2012 – ~~2013. Previously, she served over 20 years~~2014, and Vice President Investor Relations from 2010 – 2012. Ms. Zawoyski also previously held various investor relations and managerial finance leadership positions at PepsiAmericas from 2002 – 2010 and various positions in the ~~life science industry, most recently as~~audit practice of PricewaterhouseCoopers LLP from 1996 – 2002.

Jon D. Lammers

Executive Vice President ~~Finance for the Customer Channels Group of Thermo Fisher Scientific from 2011 to 2012 where she directed the channel finance function supporting research, safety~~ and healthcare customers and suppliers. Ms. McMahan served over six years with the Johnson & Johnson family of companies as the Vice President of Finance and Chief Financial Officer for Johnson & Johnson Customer & Logistics Services and Johnson & Johnson Health Care Systems; the World Wide Vice President of Finance and Chief Financial Officer for DePuy Orthopaedics; and Executive Director of Finance for Ethicon Endo-Surgery.

~~Jon D. Lammers~~

~~Executive Vice President,~~ General Counsel and Secretary since 2018; Mr. Lammers served as Pentair's General Counsel, Electrical from 2017-2018 and was an attorney at Foulston Siefkin LLP (a Kansas-based law firm) from 2016 – 2017. Mr. Lammers previously served as Senior Vice President, General Counsel and Secretary of Spirit Aerosystems Holdings, Inc. (a designer and manufacturer of aerostructures) from 2012 – 2016. He held various senior legal roles, including Deputy North American General Counsel and Asia Pacific General Counsel with Cargill Inc. from 1997 – 2012. Prior to his corporate experience, Mr. Lammers practiced law at Oppenheimer, Wolff & Donnelly (n/k/a Fox Rothschild LLP) from 1993 – 1997 and Paul Hastings LLP from 1991 – 1993.

~~Thomas F. Pettit~~Elizabeth C. Noonan

4961

Executive Vice President and Chief ~~Integrated Supply Chain~~Growth Officer since ~~2018; Previously, Mr. Pettit~~2019; Ms. Noonan was the ~~Operations Vice President of Pentair and served in that role 2015-2017. Mr. Pettit previously served as the~~ Chief ~~Operating~~Marketing Officer ~~for BioScrip,~~at Cree Inc. (a ~~provider of infusion and home care management solutions)~~publicly traded manufacturer in the global lighting industry) from 2014 – ~~2015. He was the Senior Vice President and General Manager for Ryder Supply Chain Solutions~~2019. Ms. Noonan previously held various leadership roles, including Chief Marketing Officer, with Panasonic Corporation North America from ~~2013~~2011 – 2014 ~~(a commercial fleet management, dedicated transportation~~ and ~~supply chain solutions company). Mr. Pettit was~~ the ~~Operations Vice President for Pentair~~Eastman Kodak Company from ~~2008~~1986 – 2013. Mr. Pettit was the Vice President, Finance and Global Supply Chain for ADC Telecommunications, Inc. from 2005 – 2008. He worked for General Electric Company as a Sourcing Leader from 2002 – 2003 and then as a Product General Manager from 2003 – 2005. Mr. Pettit held various consulting positions with Towers Perrin General Management Services and McKinsey & Company, Inc. from 1995 – 2002.2011.

Lynnette R. Heath

5153

Executive Vice President and Chief Human Resources Officer since 2018; Ms. Heath was the Senior Vice President, Global Human Resources of Entrust Datacard (a privately held global security and identity company) from 2009 – 2017. Ms. Heath previously held various human resources roles with General Electric Company from 2000 – 2009, with McKesson Corporation from 1996 – 2000 and with Northern States Power Company (n/k/a Xcel Energy Inc.) from 1992 – 1996.

Aravind Padmanabhan

Executive Vice President and Chief Technology Officer since 2019; Mr. Padmanabhan was the Vice President and Chief Technology Officer of the Honeywell Connected Worker unit of Honeywell International Inc. (a software-industrial company) from 2018 – 2019, and served as Acting Chief Architect of the Honeywell Sentience Platform in 2018. Mr. Padmanabhan previously served as Vice President and Chief Technology Officer of the Home & Building Technologies unit of Honeywell International Inc. from 2016 – 2018 and the Environmental & Energy Solutions unit of Honeywell International Inc. from 2013 – 2016. Mr. Padmanabhan also previously held various other technology and engineering leadership positions at Honeywell International Inc. from 1997 – 2013.

Randolph A. Wacker

5456

Senior Vice President and Chief Accounting Officer since ~~2018;~~2018 and Treasurer since 2019; Mr. Wacker was the Assistant Corporate Controller of Pentair and served in that role from 2005-2017. ~~Previously,~~ Mr. Wacker ~~was~~served as the U.S. Controller of Computer Network Technologies from 2004 – 2005. He served over 10 years in corporate controlling and external reporting roles in various public companies. Mr. Wacker also served as an accountant with the public accounting firm Larson, Allen, Weishair & Co., LLP (n/k/a CliftonLarsonAllen) from 1988 – 1993.

Base Period
2018

INDEXED RETURNS
Quarters ended in 2018
Company / Index April 30 June 30 September 30 December 31
nVent Electric plc 100 113.57
123.69
102.99
S&P Mid Cap 400 Index 100 104.23
107.86
88.82
S&P Mid Cap 400 Industrials Index 100 103.07
111.08
90.13

Purchases of Equity Securities

The following table provides information with respect to purchases we made of our ordinary shares during the fourth quarter of ~~2018:~~2020:


	(a)	(b)		(c)	(d)
	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Dollar value of shares that may yet be purchased under the plans or programs
October 1 – October 24, 2020	857,054	$	19.33	854,900	$	568,604,469
October 25 – November 21, 2020	1,251,491	18.72		1,251,393	545,149,839
November 22 – December 31, 2020	1,450	19.51		—	545,149,839
Total	2,109,995			2,106,293

(a)The purchases in this column includes shares repurchased as part of our publicly announced plans and shares deemed surrendered to us by participants in the nVent Electric plc 2018 Omnibus Incentive Plan (the "2018 Plan") and earlier Pentair stock incentive plans that are now outstanding under the 2018 Plan (collectively the "Plans") to satisfy the exercise price or withholding of tax obligations related to the exercise of stock options, vesting of restricted shares and vesting of performance shares.

(b)The average price paid in this column includes shares repurchased as part of our publicly announced plans and shares deemed surrendered to us by participants in the Plans to satisfy the exercise price of stock options and withholding tax obligations due upon stock option exercises, vesting of restricted shares and vesting of performance shares.

(c)The number of shares in this column represents the number of shares repurchased as part of our publicly announced plans to repurchase our ordinary shares up to a maximum dollar limit authorized by the Board of Directors, discussed below.

(d)In July 2018, our Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $500.0 million (the "2018 Authorization"). In February 2019, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $380.0 million (the "2019 Authorization"). The 2018 and 2019 Authorizations expire on July 23, 2021. As of December 31, 2020, we had $545.1 million available for repurchases under the combined 2018 and 2019 Authorizations.

(a) (b) (c) (d)

Total number of
shares
purchased
Average price
paid per share
Total number of
shares
purchased as
part of publicly
announced
plans or
programs
Dollar value
of
shares that may
yet be purchased
under the plans or
programs
October 1 – October 27, 2018 2,293
$ 27.52
—
$ 500,000,000
October 28 – November 24, 2018 2,018,748
24.86
1,922,799
452,084,142
November 25 – December 31, 2018 510,398
21.88
506,214
441,003,961
Total 2,531,439
2,429,013

~~(a)~~

The purchases in this column include 2,293 shares for the period October 1 – October 27, 2018, 95,949 shares for the period October 28 – November 24, 2018, and 4,184 shares for the period November 25 – December 31, 2018 deemed surrendered to us by participants in the nVent Electric plc 2018 Omnibus Incentive Plan (the "2018 Plan") and earlier Pentair stock incentive plans that are now outstanding under the 2018 Plan (collectively the "Plans") to satisfy the exercise price or withholding of tax obligations related to the exercise of stock options, vesting of restricted shares and vesting of performance shares.


~~(b)~~	The average price paid in this column includes shares repurchased as part of our publicly announced plans and shares deemed surrendered to us by participants in the Plans to satisfy the exercise price of stock options and withholding tax obligations due upon stock option exercises, vesting of restricted shares and vesting of performance shares.


~~(c)~~	The number of shares in this column represents the number of shares repurchased as part of our publicly announced plans to repurchase our ordinary shares up to a maximum dollar limit of $500.0 million under the 2018 authorization.


~~(d)~~	In July 2018, our Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $500.0 million. This authorization expires on July 23, 2021. We have $441.0 million remaining availability for repurchases under the 2018 authorization.

ITEM 6. SELECTED FINANCIAL DATA

The selected historical consolidated and combined financial data presented below should be read in conjunction with the “Risk Factors” in ~~Item~~ITEM 1A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in ~~Item~~ITEM 7, and our consolidated and combined financial statements and accompanying notes thereto in ~~Item~~ITEM 8 of this Annual report on Form 10-K to fully understand factors that may affect the comparability of the information presented below.

For the periods ended December 31, ~~2014 through~~2016 and 2017, and for the first four months of the year ended December 31, 2018, certain expenses of Pentair were allocated to nVent for certain support functions that were provided on a centralized basis prior to the separation from Pentair on April 30, 2018. As a result, the financial information included below may not necessarily reflect what nVent's financial position, results of operations and cash flows would have been had it been a stand-alone company during the periods presented.

Years ended December 31
In millions, except per-share data 2018 2017 2016 2015 2014
Consolidated and combined statements of operations and comprehensive income data
Net sales $ 2,213.6
$ 2,097.9
$ 2,116.0
$ 1,809.3
$ 1,728.0
Income before income taxes 268.7
313.3
315.0
265.9
277.3
Net income 230.8
361.7
259.1
210.1
212.2
Per-share data
Basic:
Earnings per ordinary share $ 1.29
$ 2.02
$ 1.45
$ 1.17
$ 1.19
Weighted average shares ⁽¹⁾
178.6
179.0
179.0
179.0
179.0
Diluted:
Earnings per ordinary share $ 1.28
$ 2.00
$ 1.43
$ 1.16
$ 1.17
Weighted average shares ⁽¹⁾
180.8
181.2
181.2
181.2
181.2
Cash dividends declared and paid per ordinary share $ 0.35
$ —
$ —
$ —
$ —
Cash dividends declared and unpaid per ordinary share 0.175
—
—
—
—
Consolidated and combined balance sheets data
Total assets $ 4,552.7
$ 4,725.0
$ 4,493.8
$ 4,564.4
$ 2,205.9
Total debt 941.7
—
—
—
—
Total equity 2,687.1
3,791.3
3,485.7
3,506.7
1,605.4


	Years ended December 31
In millions, except per-share data	2020		2019		2018		2017		2016
Consolidated and combined statements of operations and comprehensive income (loss) data
Net sales	$	1,998.6	$	2,204.0	$	2,213.6	$	2,097.9	$	2,116.0
Income (loss) before income taxes	(9.5)		257.4		268.7		313.3		315.0
Net income (loss)	(47.2)		222.7		230.8		361.7		259.1
Per-share data
Basic:
Earnings (loss) per ordinary share	$	(0.28)	$	1.30	$	1.29	$	2.02	$	1.45
Weighted average shares (1)	169.6		171.6		178.6		179.0		179.0
Diluted:
Earnings (loss) per ordinary share	$	(0.28)	$	1.29	$	1.28	$	2.00	$	1.43
Weighted average shares (1)	169.6		173.0		180.8		181.2		181.2
Cash dividends declared and paid per ordinary share	$	0.70	$	0.70	$	0.35	$	—	$	—
Cash dividends declared and unpaid per ordinary share	$	0.175	$	0.175	$	0.175	$	—	$	—
Consolidated and combined balance sheets data
Total assets	$	4,366.1	$	4,640.3	$	4,552.7	$	4,725.0	$	4,493.8
Total debt	948.0		1,064.6		941.7		—		—
Total equity	2,409.8		2,592.5		2,687.1		3,791.3		3,485.7



⁽¹⁾			On April 30, 2018, Pentair completed the separation of its Electrical business, distributing to its shareholders one ordinary share of nVent for every ordinary share of Pentair held as of the record date of April 17, 2018. The computations of basic and diluted earnings per share for periods prior to the separation were calculated using the shares that were distributed to Pentair shareholders upon the separation.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations refers to and should be read in conjunction with the audited consolidated and combined financial statements and the corresponding notes included in ~~Item~~ITEM 8.

Forward-looking statements

This report contains statements that we believe to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact are forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets," "plans," "believes," "expects," "intends," "will," "likely," "may," "anticipates," "estimates," "projects," "forecasts," "should," "would," "positioned," "strategy," "future," ~~"forecast"~~"are confident," or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors ~~include;~~include adverse effects on our business operations or financial results, ~~as a result~~including due to the impact of the ~~consummation~~novel coronavirus 2019 ("COVID-19") pandemic and potential impairment of ~~the separation (as defined below); the ability of our business to operate independently following the separation;~~goodwill and trade names; overall global economic and business conditions impacting our business; the ability to achieve the benefits of our restructuring plans; the ability to successfully identify, finance, complete and integrate acquisitions; competition and pricing pressures in the markets we serve, including the impacts of tariffs; ~~the strength of housing and related markets;~~ volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating goals. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission (the "SEC"), including this Annual Report on Form 10-K. All forward-looking statements speak only as of the date of this report. nVent Electric plc assumes no obligation, and disclaims any obligation, to update the information contained in this report.

The following is the discussion and analysis of changes in the financial condition and results of operations for fiscal year 2020 compared to fiscal year 2019. The discussion and analysis of fiscal year 2018 and changes in the financial condition and results of operations for fiscal year 2019 compared to fiscal year 2018 that are not included in this Form 10-K may be found in Part II, ITEM 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 25, 2020.

Overview

The terms "us," "we," "our," "the Company" or "nVent" refer to nVent Electric plc. nVent is a leading global provider of electrical connection and protection solutions. We believe our inventive electrical solutions enable safer systems and ensure a more secure world. We design, manufacture, market, install and service high performance products and solutions that connect and protect some of the ~~world’s~~world's most sensitive equipment, buildings and critical processes. We offer a comprehensive range of enclosures, electrical connections and fastening and thermal management solutions across industry-leading brands that are recognized globally for quality, reliability and innovation.

We classify our operations into business segments based primarily on types of products offered and markets served. We operate across three segments: Enclosures, ~~Thermal Management, and~~ Electrical & Fastening Solutions and Thermal Management, which ~~contributed 46%~~represented approximately 48%, 28% and ~~26%~~24% of total revenues during ~~2018,~~2020, respectively. ~~We classify our operations into business segments based primarily on types of products offered and markets served:~~

•Enclosures - The Enclosures segment provides ~~inventive~~innovative solutions ~~that protect,~~to connect and ~~manage heat in~~protect critical control systems, electronics, ~~communication, control,~~data and ~~power~~electrical equipment. From metallic and non-metallic enclosures to cabinets, subracks and backplanes, it offers the physical infrastructure to host, connect and protect server and network equipment, as well as indoor and outdoor protection for ~~broadband voice, data~~test and ~~video surveillance~~measurement, aerospace and defense applications in industrial, infrastructure, energy and commercial verticals.

•Electrical & Fastening Solutions - The Electrical & Fastening Solutions segment provides solutions that connect and ~~energy verticals.~~

protect electrical and mechanical systems and civil structures. Its engineered electrical and fastening products are innovative cost efficient and time saving connections that are used across a wide range of verticals, including commercial, industrial, infrastructure and energy.

•Thermal Management - The Thermal Management segment provides electric thermal solutions that connect and protect critical buildings, infrastructure, industrial processes and people. Its thermal management systems include heat

tracing, floor heating, fire-rated and specialty wiring, sensing and snow melting and de-icing solutions for use in industrial, ~~energy,~~ commercial & residential, energy and infrastructure verticals. ~~Its~~It's highly reliable and easy to install solutions lower total cost of ownership to building owners, facility managers, operators and end users.

~~Electrical & Fastening Solutions~~ - The Electrical & Fastening Solutions segment provides fastening solutions that connect and protect electrical and mechanical systems and civil structures. Its engineered electrical and fastening products are used across a wide range of verticals, including commercial, industrial, infrastructure and energy.

On April 30, 2018, Pentair plc ("Pentair" or ~~"Parent"~~"former Parent") completed the separation of its Water business and its Electrical business into two independent, publicly-traded companies (the "separation"). To effect the separation, Pentair distributed to its shareholders one ordinary share of nVent for every ordinary share of Pentair held as of the record date of April 17, 2018. As a result of the distribution, nVent is now an independent publicly-traded company and began regular way trading under the symbol "NVT" on the New York Stock Exchange on May 1, 2018.

The Company was incorporated in Ireland on May 30, 2017. Although our jurisdiction of organization is Ireland, we manage our affairs so that we are centrally managed and controlled in the United Kingdom (the "U.K.") and ~~therefore~~ have tax residency in the U.K.

On August 30, 2019, as part of our Enclosures segment, we completed the acquisition of Eldon for $127.8 million, net of cash acquired. Eldon is an innovative European-based manufacturer of enclosures that protect sensitive electrical, electronic and data and telecommunications components.

On February 10, 2020, we acquired substantially all of the assets of WBT LLC ("WBT") for $29.9 million in cash. The U.S. based WBT business manufactures high-quality cable tray systems that will be marketed as part of the nVent CADDY product line within our Electrical & Fastening Solutions segment and nVent HOFFMAN product line within our Enclosures segment.

COVID-19

In March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic has resulted, and is likely to continue to result, in significant economic disruption and has adversely affected, and is likely to continue to adversely affect, our business. Governments around the world have implemented measures to help control the spread of the virus, including business curtailments and shutdowns, isolating residents to their places of residence and restricting travel. Significant uncertainty exists concerning the duration and magnitude of the impact of the COVID-19 pandemic on our business, but the effects of the COVID-19 pandemic have had and may continue to have an unfavorable impact on our business.

Our top priority remains the safety and well-being of our employees. We have implemented safety and hygiene processes at our manufacturing and distribution locations to help keep our employees safe, including separation of shifts and workstations, temperature monitoring in most locations, and other recommended practices. We have also taken actions to help keep our non-manufacturing employees safe, including: directing employees to work from home, wherever possible, limiting and screening visitors to our facilities, travel restrictions, canceling events that involve large groups of people, encouraging social distancing best practices and enhanced cleaning in our facilities. All of our facilities have a COVID-19 readiness plan, and we have also launched updated wellness programs for employees. We expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business, and we may take further actions as government authorities require or recommend, or as we determine to be in the best interests of our employees.

We also remain focused on continuing to serve our customers and support critical industries and essential infrastructure such as medical, data centers and networking solutions, energy and defense, among others. Government mandated measures providing for business curtailments or shutdowns have generally excluded certain essential businesses and services, including businesses that manufacture and sell products or services that are considered essential to daily life, or otherwise operate in essential or critical sectors. While our facilities are considered essential and have remained operational, we have experienced intermittent partial closures at certain facilities as a result of these measures or the need to sanitize the facilities and address employee well-being. All of our manufacturing sites are currently operational and we have not experienced any significant disruptions to our supply chain. We have experienced and expect to continue to experience reductions in customer demand in several end-markets across our business segments. During the second, third and fourth quarters of 2020, organic sales declined by approximately 22%, 14% and 11% compared to the same period of the prior year, respectively, which was primarily attributable to the adverse impacts of the pandemic.

In response to the adverse effects of the pandemic, we have taken, and expect to continue to take as appropriate, actions to lower costs, manage our liquidity and focus on cash flow. These actions have included, but are not limited to:

•Limiting discretionary spending across the organization;

•Reducing payroll costs, which included employee furloughs and temporarily reducing Board of Director fees and salaries for executive officers and other senior leaders in the second and third quarters of 2020;

•Temporarily reducing certain discretionary employee benefits;

•Aligning our cost structure to meet demand;

•Reducing capital expenditures;

•Optimizing working capital through inventory reduction initiatives across business segments and focused actions to optimize customer and vendor payment terms; and

•Deferring payment of income and payroll taxes and utilizing job retention subsidies in certain jurisdictions where such opportunities are available.

In addition to actions taken to lower costs, manage our liquidity and focus on cash flow, we remain focused on enhancing our digital and technological capabilities. Our shift to working virtually where possible is allowing us to accelerate our digital initiatives as we collaborate with customers and distribution partners to enhance our websites and improve our digital product content. We are also continuing to invest in our technological capabilities, with new product launches throughout 2020.

We will continue to actively monitor the impacts of the pandemic and may take further actions that alter our business operations as may be required by governments in the jurisdictions where we operate, or that we determine are in the best interests of our employees, customers, suppliers and shareholders.

Key trends and uncertainties regarding our existing business

The following trends and uncertainties affected our financial performance in ~~2018~~2020 and ~~2017,~~2019, and will likely impact our results in the future:

•There are many uncertainties regarding the COVID-19 pandemic, including the anticipated duration and severity of the pandemic and the extent of worldwide social, political and economic disruption it may cause. The magnitude of the impact of the pandemic on our financial condition, liquidity and results of operations cannot be determined at this time, and ultimately will be affected by a number of evolving factors including the length of time that the pandemic continues, its effect on the demand for the Company’s products and services and the supply chain, as well as the impact of governmental regulations imposed in response to the pandemic including potential business curtailments and shutdowns impacting our factories. In addition, the recent significant volatility in oil and gas prices have led to a potential sustained downturn in the energy industry.

•We have identified specific product, vertical and geographic market opportunities that we find attractive and continue to pursue, both within and outside the U.S. We are ~~reinforcing~~positioning our businesses to more effectively address these opportunities through research and development and additional sales and marketing resources. Unless we successfully penetrate these markets, our organic sales growth will likely be limited or may decline.

•We have experienced material and other cost inflation. We strive for productivity improvements and ~~we implement increases~~increase in our selling prices to help mitigate this inflation. We expect the current economic environment, including the impacts of tariffs, will result in continuing price volatility for many of our raw materials and purchased components and we are uncertain as to the timing and impact of these market changes.

•During ~~2018~~2020 and ~~2017,~~2019, we continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. In 2020, we executed certain initiatives in response to the decrease in demand attributed to the effects of the COVID-19 pandemic.

In ~~2019,~~addition to the actions and objectives discussed in the Overview and COVID-19 sections above, our operating objectives in 2021 also include the following:

•Executing our social responsibility strategy focused on People, Products and Planet;

•Enhancing and supporting employee engagement and development;

•Achieving differentiated revenue growth through new products and solutions and market expansion in higher growth vertical markets and key developing regions;

•Optimizing our technological capabilities to increasingly generate innovative new and connected products and advance digital transformation; and

•Driving operating excellence through lean enterprise initiatives, with specific focus on sourcing and supply management, cash flow management and lean operations;

•Optimizing ~~our technological capabilities~~working capital through inventory reduction initiatives across business segments and focused actions to ~~increasingly generate innovative new~~optimize customer and ~~connected products~~vendor payment terms; and ~~enhance the customer experience;~~

•Deploying capital strategically to drive growth and value creation.

~~Focusing on developing global talent in light of our global presence.~~

The financial statements for periods prior to April 30, 2018 were prepared on a stand-alone basis derived from the consolidated financial statements and records of Pentair as if nVent were operated on a stand-alone basis.

For periods prior to the separation, the consolidated and combined financial statements of nVent include general corporate expenses of Pentair for certain support functions that were provided on a centralized basis, such as expenses related to executive management, finance, audit, legal, information technology, human resources, communications, facilities and employee benefits and compensation. These general corporate expenses are included in the Consolidated and Combined Statements of Income and Comprehensive Income within ~~Selling, general and administrative expense~~ ~~and~~ ~~Other expense~~. These expenses were allocated to nVent on the basis of direct usage when identifiable, with the remainder allocated based on a proportional basis of net sales, headcount or other measures. nVent considers the allocation methodology regarding Pentair’s general corporate expenses to be reasonable for periods presented prior to the separation. Nevertheless, the consolidated and combined financial statements of nVent for periods prior to the separation may not reflect the actual expenses that would have been incurred and may not reflect nVent’s consolidated and combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented.

CONSOLIDATED AND COMBINED RESULTS OF OPERATIONS

The consolidated and combined results of operations were as follows:

Years ended December 31 % / point change
In millions 2018 2017 2016 2018 vs 2017 2017 vs 2016
Net sales $ 2,213.6
$ 2,097.9
$ 2,116.0
5.5 % (0.9 %)
Cost of goods sold 1,337.5
1,256.0
1,280.2
6.5 % (1.9 %)
Gross profit 876.1
841.9
835.8
4.1 % 0.7 %
% of net sales 39.6 % 40.1 % 39.5 % (0.5 pts) 0.6 pts

Selling, general and administrative 519.7
483.3
462.4
7.5 % 4.5 %
% of net sales 23.5 % 23.0 % 21.9 % 0.5 pts 1.1 pts
Research and development 45.6
42.5
40.6
7.3 % 4.7 %
% of net sales 2.1 % 2.0 % 1.9 % 0.1 pts 0.1 pts

Operating income 310.8
316.1
332.8
(1.7 %) (5.0 %)
% of net sales 14.0 % 15.1 % 15.7 % (1.1 pts) (0.6 pts)

Net interest expense 31.2
0.2
1.4
N.M.
N.M.
Other expense 10.9
2.6
16.4
N.M.
N.M.

Income before income taxes 268.7
313.3
315.0
(14.2 %) (0.5 %)
Provision (benefit) for income taxes 37.9
(48.4 ) 55.9
N.M.
N.M.
Effective tax rate 14.1 % (15.4 %) 17.7 % N.M.
N.M.


	Years ended December 31						% / point change
In millions	2020			2019				2020 vs 2019
Net sales	$	1,998.6		$	2,204.0			(9.3	%)
Cost of goods sold	1,249.2			1,338.2				(6.7	%)
Gross profit	749.4			865.8				(13.4	%)
% of net sales	37.5		%	39.3		%		(1.8	pts)

Selling, general and administrative	447.0			484.5				(7.7	%)
% of net sales	22.4		%	22.0		%		0.4	pts
Research and development	43.5			48.2				(9.8	%)
% of net sales	2.2		%	2.2		%		—	pts
Impairment of goodwill and trade names	220.5			—				N.M.



Operating income	38.4			333.1				(88.5	%)
% of net sales	1.9		%	15.1		%		(13.2	pts)




Net interest expense	36.4			44.7				N.M.
Other expense	11.5			31.0				N.M.

Income (loss) before income taxes	(9.5)			257.4				(103.7	%)
Provision for income taxes	37.7			34.7				8.6	%
Effective tax rate	(396.8		%)	13.5		%		N.M.

N.M. Not Meaningful

Net sales

The components of the consolidated net sales change were as follows:

2018 vs 2017 2017 vs 2016
Volume 2.9 % (2.2 %)
Price 1.8
0.1
Organic growth 4.7
(2.1 )
Acquisition —
0.7
Currency 0.8
0.5
Total 5.5 % (0.9 %)


	2020 vs 2019
Volume	(13.5	%)
Price	0.2
Organic growth (decline)	(13.3)
Acquisition	3.8
Currency	0.2
Total	(9.3	%)

The ~~5.5~~9.3 percent ~~increase~~decrease in net sales in ~~2018~~2020 from ~~2017~~2019 was primarily the result of:

•slowdown in capital spending, largely attributable to the COVID-19 pandemic, resulting in organic sales ~~growth~~decline of approximately 6.5%, 3.0% and 2.5% from our industrial, ~~business and 2.0% from our~~ commercial & residential ~~business, which includes selective increases~~and energy businesses, respectively, in ~~selling prices; and~~2020 from 2019.

~~favorable foreign currency effects.~~

~~These increases were~~This decrease was partially offset by:

~~slowdown in capital spending impacting the energy business, driving lower organic~~•increased sales of ~~approximately 1.0%.~~

~~The 0.9 percent decrease~~$83.5 million in ~~net sales in 2017 from 2016 was primarily the result of:~~

~~sales decline from our energy business of approximately 5.0%~~2020 as a result of the ~~impact of three large Canadian Oil Sands projects in our Thermal Management segment in 2016 that did not recur in 2017;~~Eldon and WBT acquisitions.

~~sales decline in our infrastructure business of approximately 1.0% driven by performance in both Enclosures and Electrical & Fastening Solutions.~~

~~These decreases were partially offset by:~~

~~increased sales volume from our industrial business of approximately 3.0%, primarily as a result of increased volumes in the U.S.;~~

~~increased sales related to a business acquisition that occurred in the first quarter of 2017; and~~

~~favorable foreign currency effects.~~

Gross profit

The ~~0.5~~1.8 percentage point decrease in gross profit as a percentage of sales in ~~2018~~2020 from ~~2017~~2019 was primarily the result of:

•lower sales volume resulting in decreased leverage on fixed expenses in cost of goods sold; and

•inflationary increases related to certain raw materials, labor and freight costs.

This decrease was partially offset by:

~~organic sales growth~~•actions taken to lower costs in ~~our industrial~~response to the adverse effects of the COVID-19 pandemic, including temporarily reducing labor costs and ~~commercial & residential businesses, which resulted in increased leverage on fixed expenses included in cost of goods sold;~~limiting discretionary spending; and

~~higher contribution margin as a result of~~ •savings generated from our lean and supply management practices.

~~The 0.6 percentage point increase in gross profit as a percentage of sales in 2017 from 2016 was primarily the result of:~~

~~favorable mix as a result of the decline in lower margin long-cycle energy sales and growth in higher margin product sales; and~~

~~higher contribution margin as a result of savings generated from our lean and supply management practices.~~

~~These increases were partially offset by:~~

~~inflationary increases related to labor costs and certain raw materials; and~~

~~higher cost of sales due to manufacturing footprint rationalization and a new U.S. distribution center.~~

Selling, general and administrative ("SG&A")

The ~~0.5~~0.4 percentage point increase in SG&A expense as a percentage of sales in ~~2018~~2020 from ~~2017~~2019 was driven by:

~~$45.0 million of non-recurring separation related costs incurred~~•lower sales volume resulting in ~~2018 to prepare~~decreased leverage on fixed operating expenses; and ~~establish nVent to operate as an independent stand-alone public company, primarily related to information technology, legal, advisory and other professional fees, compared to $16.1 million in 2017;~~

~~increased investment in sales and marketing to drive growth; and~~•inflationary increases impacting our labor costs.

~~increased corporate expenses incurred to operate as an independent public company.~~

~~These increases were~~This increase was partially offset by:

~~organic sales growth~~•actions taken to lower costs in ~~our industrial~~response to the adverse effects of the COVID-19 pandemic, including temporarily reducing labor costs and ~~commercial & residential businesses, which resulted in increased leverage on operating expenses;~~limiting discretionary spending; and

~~restructuring costs of $7.7 million in 2018, compared to $13.0 million in 2017.~~

~~The 1.1 percentage point increase in SG&A expense as a percentage of sales in 2017 from 2016 was driven by the following:~~

$16.1 million of non-recurring separation costs incurred in 2017 to prepare nVent to operate as an independent stand-alone public company, primarily related to legal, advisory and other professional fees; and

~~lower sales volume in our energy and infrastructure businesses, which resulted in decreased leverage on operating expenses.~~

~~These increases were partially offset by:~~

~~cost control and~~ •savings generated from ~~back-office consolidation, reduction~~restructuring and lean initiatives.

Impairment of goodwill and trade names

During the third quarter of 2020, as a result of the adverse market and economic conditions attributed to the COVID-19 pandemic, combined with significant volatility in ~~personnel~~oil and ~~other lean initiatives; and~~

~~increased sales volume~~gas prices leading to a potential sustained downturn in the ~~industrial business, which resulted~~energy industry, we recognized pre-tax, non-cash impairment expense of $212.3 million related to goodwill in ~~increased leverage on operating expenses.~~the Thermal Management reporting unit and $8.2 million related to trade names.

Provision for income taxes

The ~~29.5 percentage point increase~~difference in the effective tax rate in ~~2018~~2020 from ~~2017~~2019 was primarily ~~due to:~~

the ~~provisional tax benefit of $84.8 million recognized as a result of U.S. tax reform in 2017 that is not recurring in 2018.~~

~~The 33.1 percentage point decrease in the effective tax rate in 2017 from 2016 was primarily due to:~~

~~a net provisional tax benefit of $84.8 million recognized in 2017 as a~~ result of the ~~enactment~~$9.5 million loss before income taxes in 2020 and:

•impairment of ~~U.S.~~goodwill during the third quarter of 2020 of $212.3 million and the related $21.6 million tax ~~reform;~~benefit from deferred tax adjustments;

•a $19.4 million non-cash charge related to the establishment of a valuation allowance on certain foreign deferred tax assets recorded in the first quarter of 2020; and

•the mix of global earnings ~~toward~~towards lower tax ~~jurisdictions.~~rate jurisdictions;

On December 20, 2018, the U.S. Treasury issued proposed regulations that, when finalized, would limit the availability of tax benefits we currently claim related to the deductibility of interest (the “Proposed Regulations”). It is anticipated that the Proposed Regulations will be finalized during, or prior to, June 2019. As the Proposed Regulations are not yet finalized, the ultimate outcome is not specifically known at this time. Such changes could materially adversely affect our effective tax rate and/or require us to take further action to seek to preserve our effective tax rate.

SEGMENT RESULTS OF OPERATIONS

The summary that follows provides a discussion of the results of operations of our three reportable segments (Enclosures, ~~Thermal Management and~~ Electrical & Fastening ~~Solutions)~~Solutions and Thermal Management). Each of these segments comprises various product offerings that serve multiple end ~~markets.~~users.

We evaluate performance based on sales and segment income and use a variety of ratios to measure performance of our reporting segments. Segment income ~~(loss)~~ represents operating income exclusive of intangible amortization, separation costs, ~~net interest expense,~~ costs of restructuring activities, impairments and other unusual non-operating items.

Enclosures

The net sales and segment income for Enclosures were as follows:


	Years ended December 31									% / point change					Years ended December 31				% / point change
In millions	2018			2017			2016			2018 vs 2017		2017 vs 2016		In millions	2020		2019			2020 vs 2019
Net sales	$	1,019.7		$	934.9		$	911.2		9.1	%	2.6	%	Net sales	$	952.9	$	1,033.8		(7.8	%)
Segment income	174.8			164.6			184.4			6.2	%	(10.7	%)	Segment income	148.5		181.3			(18.1	%)
% of net sales	17.1		%	17.6		%	20.2		%	(0.5	pts)	(2.6	pts)	% of net sales	15.6%		17.5%			(1.9	pts)

Net sales

The components of the change in Enclosures net sales were as follows:

2018 vs 2017 2017 vs 2016
Volume 7.1 % 3.0 %
Price 1.2
(0.6 )
Organic growth 8.3
2.4
Currency 0.8
0.2
Total 9.1 % 2.6 %


	2020 vs 2019
Volume	(14.2	%)
Price	(0.5)
Organic growth (decline)	(14.7)
Acquisition	6.6
Currency	0.3
Total	(7.8	%)

The ~~9.1~~7.8 percent ~~increase~~decrease in Enclosures net sales in ~~2018~~2020 from ~~2017~~2019 was primarily the result of:

•slowdown in capital spending, largely attributable to the COVID-19 pandemic, resulting in organic sales ~~growth~~decline of approximately ~~5.0%~~8.0% and 2.5% from our industrial ~~business~~and infrastructure businesses, respectively, and approximately ~~2.5%~~2.0% from each our ~~infrastructure business, which includes selective increases~~energy and commercial & residential businesses in ~~selling prices; and~~2020 from 2019.

~~favorable foreign currency effects.~~This increase was partially offset by:

~~The 2.6 percent increase in Enclosures sales in 2017 from 2016 was primarily the result of:~~

•increased sales ~~volume~~ of ~~approximately 3.5% from the industrial business, primarily~~$68.4 million in 2020 as a result of ~~increased volumes in~~ the ~~U.S.; and~~

~~favorable foreign currency effects.~~

~~These increases were partially offset by:~~

~~continued slowdown in capital spending, particularly in the infrastructure business, driving sales volume decline of approximately 2%.~~Eldon acquisition.

Segment income

The components of the change in Enclosures segment income as a percentage of net sales from the prior period were as follows:

2018 2017
Growth 1.7 pts 2.0 pts
Inflation (3.5 ) (2.4 )
Productivity/Price 1.3
(2.2 )
Total (0.5 pts) (2.6 pts)


	2020 vs 2019
Growth/acquisition	(2.5	pts)

Price	(0.4)
Currency	0.4
Net productivity	0.6
Total	(1.9	pts)

The ~~0.5~~1.9 percentage point decrease in segment income for Enclosures as a percentage of net sales in ~~2018~~2020 from ~~2017~~2019 was primarily the result of:

•lower sales volume resulting in decreased leverage on fixed expenses; and

•inflationary increases related to certain raw materials, labor and freight costs.

This decrease was partially offset by:

~~organic sales growth from our industrial~~•actions taken to lower costs in response to the adverse effects of the COVID-19 pandemic, including temporarily reducing labor costs and ~~infrastructure businesses, including selective increases in selling prices, which resulted in increased leverage on production~~limiting discretionary spending; and ~~operating expenses; and~~

~~higher contribution margin as a result of~~ •savings generated from ~~our~~restructuring and lean ~~and supply management practices.~~

~~The 2.6 percentage point decrease in segment income for Enclosures as a percentage of net sales in 2017 from 2016 was primarily the result of:~~

~~inflationary increases related to labor costs and certain raw materials;~~

~~higher cost of sales due to manufacturing footprint rationalization and a new U.S. distribution center.~~

~~lower sales volume in the infrastructure business, which resulted in decreased leverage on operating expenses.~~

~~These decreases were partially offset by:~~

~~increased sales volume in the industrial business, which resulted in increased leverage on operating expenses.~~

~~Thermal Management~~

~~The net sales and segment income for Thermal Management were as follows:~~initiatives.

Years ended December 31 % / point change
In millions 2018 2017 2016 2018 vs 2017 2017 vs 2016
Net sales $ 623.2
$ 622.2
$ 692.2
0.2 % (10.1 %)
Segment income 154.2
147.3
123.5
4.7 % 19.3 %
% of net sales 24.7 % 23.7 % 17.8 % 1.0 pts 5.9 pts

~~Net sales~~

~~The components of the change in Thermal Management net sales were as follows:~~

2018 vs 2017 2017 vs 2016
Volume (1.0 %) (11.3 %)
Price 0.5
—
Organic growth (0.5 ) (11.3 )
Currency 0.7
1.2
Total 0.2 % (10.1 %)

~~The 0.2 percent increase in Thermal Management sales in 2018 from 2017 was primarily the result of:~~

~~organic sales growth of approximately 4.0% from our commercial & residential business, which includes selective increases in selling prices; and~~

~~favorable foreign currency effects.~~

~~These increases were partially offset by:~~

~~lower project sales volume in the energy business driving lower organic sales of approximately 4.0%.~~

~~The 10.1 percent decrease in Thermal Management sales in 2017 from 2016 was primarily the result of:~~

~~lower project sales volume as a result of the impact of three large Canadian Oil Sands projects in 2016 that did not recur in 2017.~~

~~This decrease was partially offset by:~~

~~increased sales volume of approximately 1.5% from the industrial business, primarily as a result of increased volumes in Western Europe and certain developing regions; and~~

~~favorable foreign currency effects.~~

~~Segment income~~

~~The components of the change in Thermal Management segment income from the prior period were as follows:~~

2018 2017
Growth 1.9 pts 7.6 pts
Inflation (1.3 ) (0.7 )
Productivity/Price 0.4
(1.0 )
Total 1.0 pts 5.9 pts

~~The 1.0 percentage point increase in segment income for Thermal Management as a percentage of net sales in 2018 from 2017was primarily the result of:~~

~~favorable mix as a result of the decline in lower margin long-cycle energy sales and growth in higher margin product sales;~~

~~organic sales growth in our commercial & residential business, which resulted in increased leverage on operating expenses; and~~

~~higher contribution margin as a result of savings generated from our lean and supply management practices.~~

~~These increases were partially offset by:~~

~~inflationary increases related to certain raw materials, labor and freight costs; and~~

~~organic sales decline in our energy business, which resulted in decreased leverage on operating expenses.~~

~~The 5.9 percentage point increase in segment income for Thermal Management as a percentage of sales in 2017 from 2016 was primarily the result of:~~

~~favorable mix as a result of the decline in lower margin long-cycle energy sales and growth in higher margin product sales;~~

~~increased sales volume in the industrial business, which resulted in increased leverage on operating expenses; and~~

~~higher contribution margin as a result of savings generated from our lean and supply management practices.~~

~~These increases were partially offset by:~~

~~inflationary increases related to labor costs and certain raw materials.~~

Electrical & Fastening Solutions

The net sales and segment income for Electrical & Fastening Solutions were as follows:


	Years ended December 31									% / point change					Years ended December 31				% / point change
In millions	2018			2017			2016			2018 vs 2017		2017 vs 2016		In millions	2020		2019			2020 vs 2019
Net sales	$	570.7		$	540.8		$	512.6		5.5	%	5.5	%	Net sales	$	569.1	$	579.6		(1.8	%)
Segment income	144.5			140.7			144.9			2.7	%	(2.9	%)	Segment income	150.2		149.7			0.3	%
% of net sales	25.3		%	26.0		%	28.3		%	(0.7	pts)	(2.3	pts)	% of net sales	26.4%		25.8%			0.6	pts

Net sales

The components of the change in Electrical & Fastening Solutions net sales were as follows:


	2020 vs 2019
Volume	(6.1	%)
Price	1.6
Organic growth (decline)	(4.5)
Acquisition	2.6
Currency	0.1
Total	(1.8	%)

2018 vs 2017 2017 vs 2016
Volume 0.4 % 0.9 %
Price 4.3
1.3
Organic growth 4.7
2.2
Acquisition —
2.8
Currency 0.8
0.5
Total 5.5 % 5.5 %

The ~~5.5~~1.8 percent ~~increase~~decrease in Electrical & Fastening Solutions net sales in ~~2018~~2020 from ~~2017~~2019 was primarily the result of:.

•slowdown in capital spending, largely attributable to the COVID-19 pandemic, resulting in organic sales ~~growth~~decline of approximately ~~3.0%~~5.5% from our commercial & residential business ~~and approximately 1.5%~~in 2020 from ~~our industrial business, which includes selective increases in selling prices; and~~2019.

~~favorable foreign currency effects.~~This decrease was partially offset by:

~~The 5.5 percent increase in Electrical & Fastening Solutions sales in 2017 from 2016 was primarily the result of:~~

•increased sales ~~related to~~of $15.1 million in 2020 as a ~~business acquisition that occurred~~result of the WBT acquisition;

•organic sales growth contribution of approximately 1.0% from each our energy and infrastructure businesses in ~~the first quarter of 2017;~~2020 from 2019; and

•selective increases in selling prices to ~~mitigate~~offset inflationary cost ~~increases;~~

~~increased sales volume of approximately 1.0% in the energy and industrial businesses, primarily as a result of increased volumes in the U.S.; and~~

~~favorable foreign currency effects.~~

increases.

Segment income

The components of the change inElectrical & Fastening Solutionssegment income as a percentage of net sales from the prior period were as follows:


	2020 vs 2019
Growth/acquisition	(2.4	pts)

Price	1.2
Currency	0.1
Net productivity	1.7
Total	0.6	pts

2018 2017
Growth (0.6 pts) (1.9 pts)
Inflation (3.3 ) (3.2 )
Productivity/Price 3.2
2.8
Total (0.7 pts) (2.3 pts)

The ~~0.7~~0.6 percentage point ~~decrease~~increase in segment income for Electrical & Fastening Solutions as a percentage of net sales in ~~2018~~2020 from ~~2017~~2019was primarily the result of:

•actions taken to lower costs in response to the adverse effects of the COVID-19 pandemic, including temporarily reducing labor costs and limiting discretionary spending; and

•selective increases in selling prices to offset inflationary cost increases.

This increase was partially offset by:

•lower sales volume resulting in decreased leverage on fixed expenses; and

•inflationary increases related to certain raw materials, labor and freight ~~costs;~~costs.

Thermal Management

The net sales and segment income for Thermal Management were as follows:

~~impact~~


	Years ended December 31				% / point change
In millions	2020		2019			2020 vs 2019
Net sales	$	476.6	$	590.6		(19.3	%)
Segment income	93.9		145.3			(35.4	%)
% of net sales	19.7%		24.6%			(4.9	pts)

Net sales

The components of ~~unfavorable product mix.~~the change in Thermal Management net sales were as follows:

~~These decreases were partially offset by:~~


	2020 vs 2019
Volume	(19.3	%)
Price	—
Organic growth (decline)	(19.3)
Currency	—
Total	(19.3	%)

The 19.3 percent decrease in Thermal Management net sales in 2020 from 2019 was primarily the result of:

•slowdown in capital spending, attributable to the effects of the COVID-19 pandemic and significant volatility in oil and gas prices, resulting in organic sales ~~growth~~decline of approximately 10.0%, 7.0% and 2.5% from our industrial, energy and commercial & residential ~~and industrial~~ businesses, ~~which resulted~~respectively, in ~~increased leverage on operating expenses;~~2020 from 2019.

~~selective increases~~Segment income

The components of the change in ~~selling prices to offset inflationary cost increases; and~~

~~higher contribution margin~~Thermal Management segment income as a ~~result~~percentage of ~~savings generated~~net sales from ~~our lean and supply management practices.~~the prior period were as follows:


	2020 vs 2019
Growth/acquisition	(6.6	pts)



Net productivity	1.7
Total	(4.9	pts)

The ~~2.3~~4.9 percentage point decrease in segment income for ~~Electrical & Fastening Solutions~~Thermal Management as a percentage of net sales in ~~2017~~2020 from ~~2016~~ 2019was primarily the result of:

•lower sales volume resulting in decreased leverage on fixed expenses;

•the impact of unfavorable product mix; and

•inflationary increases related to ~~labor costs and~~ certain raw ~~materials.~~materials, labor and freight costs.

This decrease was partially offset by:

~~higher contribution margin as a result~~•actions taken to lower costs in response to the adverse effects of the COVID-19 pandemic, including temporarily reducing labor costs and limiting discretionary spending; and

•savings generated from ~~our~~restructuring and lean ~~and supply management practices; and~~initiatives.

~~increased sales volume in the energy and industrial businesses, which resulted in increased leverage on operating expenses.~~

LIQUIDITY AND CAPITAL RESOURCES

The primary source of liquidity for our business is cash flows provided by operations. For periods prior to the separation, transfers of cash to and from the former Parent's cash management system have been reflected in the Net Parent investment in the historical Consolidated and Combined Balance Sheets, Consolidated and Combined Statements of Cash Flows and Consolidated and Combined Statements of Changes in Equity. In connection with the separation, our capital structure and sources of liquidity changed significantly from our historical capital structure. Our businesses no longer participate in cash management and funding arrangements with the former Parent.

We expect to continue to have cash requirements to support working capital needs and capital expenditures, to pay interest and service debt and to pay dividends to shareholders quarterly. We believe we have the ability and sufficient capacity to meet these cash requirements by using available cash, ~~and~~ internally generated funds and borrowing under committed credit facilities. We are focused on increasing our cash flow, ~~and repaying debt,~~ while continuing to fund our research and development, sales and marketing and capital investment initiatives. Our intent is to maintain investment grade metrics and a solid liquidity position.

In March 2020, as a proactive measure to maximize our liquidity in response to the effects of the COVID-19 pandemic, we drew down $150.0 million on our Revolving Credit Facility, as defined below. We repaid this amount, and an additional $100.0 million, on the Revolving Credit Facility in the third and fourth quarters of 2020. As of December 31, 2020, we had $122.5 million of cash on hand, of which $22.4 million is held in certain countries in which the ability to repatriate is limited due to local regulations or significant potential tax consequences.

We experience seasonal cash flows primarily due to increased demand for Electrical & Fastening Solutions products during the spring and summer months in the Northern Hemisphere and increased demand for Thermal Management products and services during the fall and winter months in the Northern ~~Hemisphere and increased demand for Electrical & Fastening Solutions products during the spring and summer months in the Northern~~ Hemisphere.

Operating activities

~~Cash~~Net cash provided by operating activities ~~of continuing operations~~ was ~~$343.5~~$344.0 million in ~~2018. Cash~~2020, compared to $336.3 million in 2019. Net cash provided by ~~Operating Activities~~operating activities in ~~2018~~2020 primarily reflects ~~Net~~net income, of $275.9 million, net of non-cash depreciation, amortization, and ~~amortization, further increased by a~~impairment expenses, and the positive impact of ~~$41.7~~$46.8 million as a result of changes in net working capital.

~~Cash provided by operating activities of continuing operations was $409.7 million in 2017, compared to $364.0 million in 2016.~~ Cash provided by operating activities in ~~2017~~2019 primarily reflects ~~Net~~net income of $319.5 million, net of non-cash depreciation and amortization, ~~remeasurement of deferred income taxes as a result of~~and the ~~enactment of U.S. tax reform and trade name impairment, further increased by a~~ positive impact of ~~$28.4~~$6.3 million as a result of changes in net working capital.

Investing activities

Net cash used for investing activities ~~of continuing operations~~ was ~~$39.1~~$65.0 million in ~~2018,~~2020, compared to net cash used for investing activities of ~~$41.2~~$160.3 million in 2019. Net cash used for investing activities in 2020 primarily related to cash paid for the acquisition of WBT of $27.0 million and ~~$68.6~~capital expenditures of $40.0 million. Net cash used for investing activities in 2019 primarily related to net cash paid for the acquisition of Eldon of $127.8 million ~~in 2017~~ and ~~2016, respectively. The following investing activity impacted our cash flow:~~

~~Capital~~capital expenditures

of $38.8 million. Capital expenditures ~~in 2018, 2017 and 2016 were $39.5 million, $31.8 million and $74.5 million, respectively. We anticipate capital expenditures~~are primarily used for ~~fiscal 2019 to be approximately $55 million, primarily for capacity expansions~~expansion of manufacturing facilities, ~~investments to expand our digital infrastructure and capabilities and~~ developing new products and general maintenance.

Financing activities

Prior to the separation, transfers of cash, both to and from the former Parent’s centralized cash management system are reflected as a financing activity on the Consolidated and Combined Statements of Cash Flows.

Net cash used for financing activities was ~~$166.6~~$272.5 million in ~~2018,~~2020, which primarily ~~relates~~related to ~~$1.0 billion~~share repurchases of ~~proceeds from~~$43.2 million, dividends paid of $119.0 million and net payments of revolving long-term debt ~~described further below, offset by $993.6 million~~ of cash provided at the separation to Pentair as consideration for the contribution of the net assets of the Electrical business to nVent by Pentair. Additionally, we repaid $52.5 million of outstanding principal on the Term Loan Facility, had cash outflows of $56.0 million for shares repurchased and paid $62.9 million of dividends during 2018.

$100.0 million. Net cash used for financing activities was ~~$359.5~~$226.4 million in 2019, which primarily related to share repurchases of $235.7 million and ~~$308.9~~dividends paid of $120.7 million, ~~in 2017 and 2016. Cash used for financing activities in 2017 and 2016 reflect~~partially offset by net ~~transactions with the former Parent during the pre-separation period resulting from operating and investing activities discussed above.~~receipts of revolving long-term debt of $134.6 million.

Senior notes

In March 2018, nVent Finance S.à r.l. (“nVent Finance” or “Subsidiary Issuer”), a 100-percent owned subsidiary of nVent, issued $300.0 million aggregate principal amount of 3.950% senior notes due 2023 (the "2023 Notes") and $500.0 million aggregate principal amount of 4.550% senior notes due 2028 (the "2028 Notes" and, collectively with the 2023 Notes, the "Notes"). Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, beginning October 15, 2018. In August 2018, nVent and nVent Finance filed a Registration Statement on Form S-4 with the Securities and Exchange Commission to exchange the Notes for new, registered Notes. The exchange offer was completed on October 22, 2018, pursuant to which substantially all of the Notes were exchanged for the new, registered Notes. The exchange offer did not impact the aggregate principal amount of the Notes outstanding or any material terms.year.

The Notes are fully and unconditionally guaranteed as to payment by nVent ("the Parent Company Guarantor"). There are no subsidiaries that guarantee the Notes. The Parent Company Guarantor has no independent assets or operations unrelated to its investments in its consolidated subsidiaries. The ~~Parent Company Guarantor’s only direct subsidiary is the Subsidiary Issuer. The~~ Subsidiary Issuer has no independent assets or operations unrelated to its investments in its consolidated subsidiaries and the issuance of the Notes and other external debt. The Parent Company Guarantor’s principal source of cash flow, including cash flow to make payments on the Notes pursuant to the guarantees, is dividends from its subsidiaries. The Subsidiary Issuer’s principal source of cash flow is interest income from its subsidiaries. None of the subsidiaries of the Parent Company Guarantor or the Subsidiary Issuer is under any direct obligation to pay or otherwise fund amounts due on the Notes or the guarantees, whether in the form of dividends, distributions, loans or other payments. In addition, there may be statutory and regulatory limitations on the payment of dividends from certain subsidiaries of the Parent Company Guarantor or the Subsidiary Issuer. If such subsidiaries are unable to transfer funds to the Parent Company Guarantor or the Subsidiary Issuer and sufficient cash or liquidity is not otherwise available, the Parent Company Guarantor or the Subsidiary Issuer may not be able to make principal and interest payments on their outstanding debt, including the Notes or the guarantees.

The Notes constitute general unsecured senior obligations of the Subsidiary Issuer and rank equally in right of payment with all existing and future unsubordinated and unsecured indebtedness and liabilities of the Subsidiary Issuer. The guarantees of the Notes by the Parent Company Guarantor constitute general unsecured obligations of the Parent Company Guarantor and rank equally in right of payment with all existing and future unsubordinated and unsecured indebtedness and liabilities of the Subsidiary Issuer. Subject to certain qualifications and exceptions, the indenture pursuant to which the Notes were issued contains covenants that, among other things, restrict nVent’s, nVent Finance’s and certain subsidiaries’ ability to merge or consolidate with another person, create liens or engage in sale and lease-back transactions.

There are no significant restrictions on the ability of nVent to obtain funds from its subsidiaries by dividend or loan. None of the assets of nVent or its subsidiaries represents restricted net assets pursuant to the guidelines established by the SEC.

Senior credit facilities

In March 2018, nVent Finance entered into a credit agreement with a syndicate of banks providing for a five-year $200.0 million senior unsecured term loan facility (the "Term Loan Facility") and a five-year $600.0 million senior unsecured revolving credit facility (the "Revolving Credit Facility" and, together with the Term Loan Facility, the "Senior Credit Facilities"). We have the option to request to increase the Revolving Credit Facility in an aggregate amount of up to $300.0 million, subject to customary conditions, including the commitment of the participating lenders. ~~There were no outstanding borrowings~~Total availability under the Revolving Credit Facility was $565.4 million as of December 31, ~~2018.~~2020.

Our debt agreements contain certain financial covenants, the most restrictive of which are in the Senior Credit Facilities, including that we may not permit (i) the ratio of our consolidated debt (net of our consolidated unrestricted cash in excess of $5.0 million but not to exceed $250.0 million) to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense ("EBITDA") on the last day of any period of four consecutive fiscal quarters to exceed 3.75 to 1.00 and (ii) the ratio of our EBITDA to our consolidated interest expense for the same period to be less than 3.00 to 1.00. In addition, subject to certain qualifications and exceptions, the Senior Credit Facilities also contain covenants that, among other things, restrict our ability to create liens, merge or consolidate with another person, make acquisitions and incur subsidiary debt. As of December 31, ~~2018,~~2020, we were in compliance with all financial covenants in our debt ~~agreements. As discussed above, we repaid $52.5 million of outstanding principal on~~agreements, and there is no material uncertainty about our ability to meet those covenants.

Dividends

Dividends paid per ordinary share were $0.70 for both the ~~Term Loan Facility during 2018.~~

~~As of~~years ended December 31, ~~2018, we have $10.4 million of cash held in certain countries in which the ability to repatriate is limited due to local regulations or significant potential tax consequences.~~2020 and 2019.

~~Dividends~~

~~We paid dividends in 2018 of $62.9 million, or $0.35 per ordinary share.~~

On December ~~11, 2018,~~14, 2020, the Board of Directors declared a quarterly cash dividend of $0.175 that was paid on February ~~8, 2019~~5, 2021 to shareholders of record at the close of business on January ~~25, 2019.~~22, 2021. The balance of dividends payable included in Other current liabilities on our Consolidated Balance Sheets was $29.4 million and $29.7 million at December 31, 2020 and 2019, respectively.

On February ~~19, 2019,~~22, 2021, the Board of Directors declared a quarterly cash dividend of $0.175 per ordinary share payable on May ~~3, 2019~~7, 2021 to shareholders of record at the close of business on April ~~18, 2019.~~23, 2021.

Under Irish law, the payment of future cash dividends and repurchases of shares may be paid only out of nVent Electric plc's "distributable reserves" on its statutory balance sheet. nVent Electric plc is not permitted to pay dividends out of share capital, which includes share premiums. Distributable reserves may be created through the earnings of the Irish parent company and through a reduction in share capital approved by the Irish High Court. Distributable reserves are not linked to a ~~U.S.~~ generally accepted accounting principles in the United States of America ("GAAP") reported amount (e.g., retained earnings). In June 2018, the Irish High Court approved nVent Electric plc's conversion of approximately $3.8 billion of share premium to distributable ~~reserves. On~~reserves, and in July 9, 2018, ~~following the approval of the Irish High Court,~~ we made the required filing of nVent Electric plc's initial accounts with the Irish Companies Registration Office ~~which completed~~to complete the ~~process to allow us to pay future cash dividends and redeem and repurchase shares out of nVent Electric plc's "distributable reserves."~~process.

Authorized shares

Our authorized share capital consists of 400.0 million ordinary shares with a par value of $0.01 per share.

Share repurchases

On July 23, 2018, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $500.0 ~~million. The authorization expires on July 23, 2021. During the year ended December 31, 2018, we repurchased 2.4~~ million ~~of our ordinary shares for $59.0 million under the 2018 authorization. As of December 31, 2018, we had $441.0 million remaining availability for repurchases under the 2018 authorization.~~

(the "2018 Authorization'"). On February 19, 2019, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $380.0 ~~million. This authorization is in addition to~~million (the "2019 Authorization"). The 2018 and 2019 Authorizations expire on July 23, 2021.

During the ~~authorization approved in July 2018 to repurchase up to $500.0~~year ended December 31, 2020, we repurchased 2.3 million of our ordinary ~~shares. The authorization expires on July 23, 2021.~~shares for $43.2 million under the 2018 Authorization. As of December 31, 2020, we had $545.1 million available for repurchases under the 2018 and 2019 Authorizations, which total $880.0 million.

Contractual obligations

The following summarizes our significant contractual obligations that impact our liquidity:


	Years ended December 31															Years ended December 31
In millions	2019		2020		2021		2022		2023		Thereafter		Total		In millions	2021		2022		2023		2024		2025		Thereafter		Total
Debt obligations	$	12.5	$	17.5	$	20.0	$	20.0	$	377.5	$	500.0	$	947.5	Debt obligations	$	20.0	$	20.0	$	412.1	$	—	$	—	$	500.0	$	952.1
Interest obligations on fixed-rate debt	34.6		34.6		34.6		34.6		28.7		102.6		269.7		Interest obligations on fixed-rate debt	34.6		34.6		28.7		22.8		22.8		57.0		200.5
Operating lease obligations, net of sublease rentals	16.2		12.6		8.0		5.6		2.7		9.6		54.7		Operating lease obligations, net of sublease rentals	16.9		12.0		7.9		5.9		4.6		10.0		57.3
Purchase obligations	29.9		—		—		—		—		—		29.9		Purchase obligations	69.0		—		—		—		—		—		69.0
Pension and other post-retirement plan contributions	5.9		5.7		6.1		6.4		9.0		41.3		74.4		Pension and other post-retirement plan contributions	6.7		7.2		6.9		8.9		7.6		48.0		85.3
Total contractual obligations, net	$	99.1	$	70.4	$	68.7	$	66.6	$	417.9	$	653.5	$	1,376.2	Total contractual obligations, net	$	147.2	$	73.8	$	455.6	$	37.6	$	35.0	$	615.0	$	1,364.2

~~Prior to the separation, transfers of cash, both to and from Pentair’s centralized cash management system were reflected as a component of~~ ~~Net Parent investment~~ in the Consolidated and Combined Balance Sheets and as a financing activity on the Consolidated and Combined Statements of Cash Flows. For periods prior to the separation, the cash and cash equivalents held by Pentair at the corporate level were not attributed to nVent, as legal ownership remained with the former Parent.

nVent Electric plc

Notes to consolidated and combined financial statements

For periods prior to the separation, certain nVent operations were included in ~~Pentair’s~~the former Parent's U.S. federal and state income tax returns and substantially all income taxes on those operations have been paid by ~~Pentair.~~the former Parent. Income tax expense and other income tax related information contained in these consolidated and combined financial statements for periods prior to the separation are presented on a separate return approach as if nVent filed its own tax returns. Under this approach, the provision for income taxes represented income tax paid or payable (or received or receivable) for the current year plus the change in deferred taxes during the year calculated as if nVent was a stand-alone taxpayer filing hypothetical income tax returns where applicable. Current income tax liabilities were assumed to be immediately settled with ~~Pentair~~the former Parent and relieved through the Net Parent investment account and the Net transfers to former Parent in the Consolidated and Combined Statements of Cash Flows.

Fiscal year

Our fiscal year ends on December 31. We report our interim quarterly periods on a calendar quarter basis.

Use of estimates

The preparation of our consolidated and combined financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in these consolidated and combined financial statements and accompanying notes, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates include our accounting for valuation of goodwill and indefinite lived intangible assets, estimated losses on accounts receivable, estimated realizable value on excess and obsolete inventory, percentage of completion revenue recognition, assets acquired and liabilities assumed in acquisitions, contingent liabilities, income taxes and pension and other post-retirement benefits. Actual results could differ from our estimates.

~~Revenue recognition~~

~~See Note 2 for information pertaining to our accounting policies for revenue recognition.~~

~~Research and development~~

~~We conduct research and development (“R&D”) activities in our own facilities, which consist primarily of the development of new products, product applications and manufacturing processes.~~

~~Cash equivalents~~

~~We consider highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents.~~

~~Trade receivables and concentration of credit risk~~

We record an allowance for doubtful accounts, reducing our receivables balance to an amount we estimate is collectible from our customers. Estimates used in determining the allowance for doubtful accounts are based on current trends, aging of accounts receivable, periodic credit evaluations of our customers' financial condition and historical collection experience. We generally do not require collateral. No customer receivable balances exceeded 10% of total net receivable balances as of December 31, 2018 or December 31, 2017.

~~Inventories~~

~~Inventories are stated at the lower of cost or net realizable value with substantially all inventories recorded using the first-in, first-out ("FIFO") cost method.~~

~~Property, plant and equipment, net~~

~~Property, plant and equipment is stated at historical cost. We compute depreciation by the straight-line method based on the following estimated useful lives:~~



	~~Years~~
~~Land improvements~~	~~5 to 20~~
~~Buildings and leasehold improvements~~	~~5 to 50~~
~~Machinery and equipment~~	~~3 to 15~~

Significant improvements that add to productive capacity or extend the lives of properties are capitalized. Costs for repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed of, the recorded cost of the assets and their related accumulated depreciation are removed from the Consolidated and Combined Balance Sheets and any related gains or losses are included in income.

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

We review the recoverability of long-lived assets to be held and used, such as property, plant and equipment, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced for the cost to dispose of the assets. The measurement of impairment requires us to estimate future cash flows and the fair value of long-lived assets. We recorded no material impairment charges in 2018, 2017 or 2016.

~~The following table presents geographic~~ ~~Property, plant and equipment, net~~ ~~by region as of December 31:~~

In millions 2018 2017
U.S. & Canada $ 159.6
$ 159.7
Mexico 39.7
37.3
EMEA ⁽¹⁾
58.1
60.3
Rest of World ⁽²⁾
7.4
8.5
Consolidated $ 264.8
$ 265.8
⁽¹⁾ EMEA includes Europe, Middle East and Africa

⁽²⁾Rest of World includes Latin America and Asia-Pacific

~~Goodwill and identifiable intangible assets~~

~~Goodwill~~

Goodwill represents the excess of the cost of acquired businesses over the net of the fair value of identifiable tangible net assets and identifiable intangible assets purchased and liabilities assumed.

Goodwill is tested annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is performed using a two-step process. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit, including goodwill. If the estimated fair value is less than the carrying amount of the reporting unit there is an indication that goodwill impairment exists and a second step must be completed in order to determine the amount of the goodwill impairment, if any, which should be recorded. In the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.

The fair value of each reporting unit is determined using a discounted cash flow analysis and market approach. Projecting discounted future cash flows requires us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate. Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry. Actual results may differ from those used in our valuations.

In developing our discounted cash flow analysis, assumptions about future revenues and expenses, capital expenditures and changes in working capital are based on our annual operating plan and long-term business plan for each of our reporting units. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, changes in raw material prices and growth expectations for the industries and end markets we participate in.

In estimating fair value using the market approach, we identify a group of comparable publicly-traded companies for each reporting unit that are similar in terms of size and product offering. These groups of comparable companies are used to develop multiples based on total market-based invested capital as a multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”). We determine our estimated values by applying these comparable EBITDA multiples to the operating results of our reporting units. The ultimate fair value of each reporting unit is determined considering the results of both valuation methods.

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

~~Identifiable intangible assets~~

Our primary identifiable intangible assets include: customer relationships, trade names, proprietary technology and patents. Identifiable intangibles with definite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. We complete our annual impairment test during the fourth quarter each year for those identifiable assets not subject to amortization.

The impairment test for trade names consists of a comparison of the fair value of the trade name with its carrying value. Fair value is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below.

During the fourth quarter of 2017, we recorded an impairment charge of $13.0 million related to a trade name in Electrical & Fastening Solutions as a result of lower forecasted sales volume in our annual impairment evaluation. We also recorded an impairment charge of $3.4 million related to certain trade names in Thermal Management as a result of rebranding strategies implemented in the fourth quarter of 2017. An impairment charge of $13.3 million was recorded in 2016 related to a trade name in Thermal Management as a result of a rebranding strategy implemented in the fourth quarter of 2016. The trade name impairment charges were recorded in ~~Selling, general and administrative~~ ~~in our Consolidated and Combined Statements of Income and Comprehensive Income.~~

~~There were no impairment charges recorded in 2018 for identifiable intangible assets.~~

~~Income taxes~~

We use the asset and liability approach to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities (including those attributed to the Company from the Parent for the Consolidated and Combined Balance Sheets) and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. We maintain valuation allowances unless it is more likely than not that all or a portion of the deferred tax assets will be realized. Changes in valuation allowances from period to period are included in our tax provision in the period of change. We recognize the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is more likely than not to be realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

~~Pension and other post-retirement plans~~

We sponsor defined-benefit pension plans and a post-retirement health plan. The pension and other post-retirement benefit costs for these plans are determined from actuarial assumptions and methodologies, including discount rates and expected returns on plan assets. These assumptions are updated annually and are disclosed in Note 12.

For periods prior to the separation, certain nVent employees participated in defined benefit pension plans and post-retirement health plans sponsored by the former Parent which also include the Parent participants. For purposes of these consolidated and combined financial statements, nVent accounts for these plans as multi-employer benefit plans. Accordingly, nVent does not record an asset or liability to recognize the funded status of these plans. However, nVent does record its share of the allocated expense, including net actuarial gains or losses described below.

We recognize changes in the fair value of plan assets and net actuarial gains or losses for pension and other post-retirement benefits annually in the fourth quarter each year (“mark-to-market adjustment”) and, if applicable, in any quarter in which an interim remeasurement is triggered. Net actuarial gains and losses occur when the actual experience differs from any of the various assumptions used to value our pension and other post-retirement plans or when assumptions change, as they may each year. The remaining components of pension expense, including service and interest costs and estimated return on plan assets, are recorded on a quarterly basis.

~~Earnings per ordinary share~~

Basic earnings per share are computed by dividing net income by the weighted-average number of ordinary shares outstanding. Diluted earnings per share are computed by dividing net income by the weighted-average number of ordinary shares outstanding including the dilutive effects of ordinary share equivalents.

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

~~Derivative financial instruments~~

We recognize all derivatives, including those embedded in other contracts, as either assets or liabilities at fair value in our Consolidated and Combined Balance Sheets. If the derivative is designated and is effective as a cash-flow hedge, the effective portion of changes in the fair value of the derivative are recorded in ~~Accumulated other comprehensive income (loss)~~ ("AOCI") as a separate component of equity in the Consolidated and Combined Balance Sheets and are recognized in the Consolidated and Combined Statements of Operations and Comprehensive Income (Loss) when the hedged item affects earnings. For a derivative that is not designated as or does not qualify as a hedge, changes in fair value are reported in earnings immediately.

~~Gains and losses on net investment hedges are included in AOCI as a separate component of equity in the Consolidated and Combined Balance Sheets.~~

We use derivative instruments for the purpose of hedging interest rate and currency exposures, which exist as part of ongoing business operations. We do not hold or issue derivative financial instruments for trading or speculative purposes. All other contracts that contain provisions meeting the definition of a derivative also meet the requirements for the normal purchases and normal sales scope exception. Our policy is not to enter into contracts with terms that cannot be designated as normal purchases or sales. From time to time, we may enter into short duration foreign currency contracts to hedge foreign currency risks.

~~Fair value measurements~~

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

~~Level 1:~~ ~~Valuation is based on observable inputs such as quoted market prices (unadjusted) for identical assets or liabilities in active markets.~~

~~Level 2:~~ Valuation is based on inputs such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

~~Level 3:~~ ~~Valuation is based upon other unobservable inputs that are significant to the fair value measurement.~~

In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

~~Foreign currency translation~~

The financial statements of subsidiaries located outside of the U.S. are generally measured using the local currency as the functional currency, except for certain corporate entities outside of the U.S. which are measured using USD. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resultant translation adjustments are included in AOCI, a separate component of equity.

~~Adoption of new accounting standards~~

On January 1, 2019, we adopted ASU No. 2016-02, “Leases” (“the new lease standard” or “ASC 842”) using the alternative transition method. Adoption of the new standard resulted in the recording of additional right-of-use assets and lease liabilities of approximately $44 million, as of January 1, 2019. The adoption of the standard did not have a material impact on our Consolidated and Combined Statements of Income or our Consolidated and Combined Statement of Cash Flows. Under the alternative method of adoption, comparative information has not been restated and continues to be reported under the standards in effect for those periods.

In addition, we elected to avail of the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. We also elected to apply the practical expedient to not separate non-lease components from the lease components to which they relate and instead account for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. Accordingly, all costs associated with a lease contract are accounted for as lease cost. We implemented internal controls and key system functionality to enable the preparation of financial information upon adoption.

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

On January 1, 2018, we adopted ASU No. 2014-09, "Revenue from Contracts with Customers" and the related amendments ("ASC 606" or "the new revenue standard") using the modified retrospective method. As a result of adoption, the cumulative impact to our beginning equity at January 1, 2018 was $1.8 million. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We expect the impact of the adoption of the new standard to be immaterial to our net income on an ongoing basis.

The adoption of the new standard had an impact on our accounting for certain custom products manufactured by our Enclosures segment. Prior to the adoption of the standard revenue was recognized for these custom products upon shipment. However, as these products have no alternative use to the Company and we have an enforceable right to payment for our performance completed to date, revenue related to these custom products will now be recognized over time. Additionally, the new revenue standard resulted in reclassifications on the Consolidated and Combined Balance Sheets related to accounting for sales returns. The impact of adoption of the new revenue standard on our Consolidated and Combined Statements of Income and Comprehensive Income for the year ended December 31, 2018 and Consolidated and Combined Balance Sheets as of December 31, 2018 was not material.

On January 1, 2018, we adopted Accounting Standards Update ("ASU") No. 2017-07, "Retirement Benefits-Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." As a result of the adoption, the interest cost, expected return on plan assets and net actuarial gain/loss components of net periodic pension and post-retirement benefit cost have been reclassified from S~~elling, general and administrative~~ to ~~Other expense. Only the service cost component remains in~~ ~~Operating income~~ ~~and will be eligible for capitalization in assets on a prospective basis.~~

The effect of the retrospective presentation change related to the net periodic cost of our defined benefit pension and other post-retirement plans on our Consolidated and Combined Statements of Income and Comprehensive Income was a reclassification of $2.6 million and $16.4 million of pension and post-retirement expense for the years ended December 31, 2017 and 2016, respectively, from ~~Selling, general and administrative~~ to ~~Other expense~~.

On January 1, 2018, we adopted ASU No. 2016-16, "Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory" using the modified retrospective method. The ASU requires the tax effects of all intra-entity sales of assets other than inventory to be recognized in the period in which the transaction occurs. The adoption resulted in a $174.5 million cumulative-effect adjustment recorded in equity as of the beginning of 2018 that reflects a $201.5 million reduction of non-current prepaid income tax assets, partially offset by the establishment of $27.0 million of deferred tax assets.

~~The cumulative effect of the changes made to our January 1, 2018 Consolidated and Combined Balance Sheets from the modified retrospective adoption of ASU 2016-16 and ASU 2014-09 was as follows:~~

Consolidated and Combined Balance Sheets
In millions Balance at December 31, 2017 Adjustments due to ASU 2016-16 Adjustments due to ASU 2014-09 Balance at January 1, 2018
Assets

Accounts and notes receivable, net $ 349.3
$ —
$ 3.8
$ 353.1
Inventories 224.1
—
(1.8 ) 222.3
Other current assets 132.3
—
1.8
134.1
Other non-current assets 251.8
(174.5 ) —
77.3
Liabilities
Other current liabilities 141.3
—
3.8
145.1
Deferred tax liabilities 279.4
—
0.4
279.8
Equity
Net Parent investment 3,848.4
(174.5 ) 1.8
3,675.7

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

2.~~Revenue~~

Revenue recognition

Revenue is recognized when control of the promised goods or services ~~are~~is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those goods or providing services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

When determining whether the customer has obtained control of the goods or services, we consider any future performance obligations. Generally, there is no post-shipment obligation on product sold other than warranty obligations in the normal and ordinary course of business. In the event significant post-shipment obligations were to exist, revenue recognition would be deferred until nVent has substantially accomplished what it must do to be entitled to the benefits represented by the revenues.

~~Performance obligations~~

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ~~ASC 606. A contract’s~~Accounting Standards Codification 606 - Revenue from Contracts with Customers. Generally, there is no post-shipment obligation on product sold other than warranty obligations in the normal and ordinary course of business.

Contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, stand-alone selling price is generally readily observable.

Our performance obligations are satisfied at a point in time or over time as work progresses. Revenue from products and services transferred to customers at a point in time accounted for 75%, 73% and 72% of our revenue for the ~~year~~years ended December 31, ~~2018.~~2020, 2019 and 2018, respectively. Revenue on these contracts is recognized when obligations under the terms of the contract with our customer are satisfied; generally this occurs with the transfer of control upon shipment.

Revenue from products and services transferred to customers over time accounted for 25%, 27% and 28% of our revenue for the ~~year~~years ended December 31, ~~2018.~~2020, 2019 and 2018, respectively. For the majority of our revenue recognized over time, we use an input measure to determine progress towards completion. Under this method, sales and gross profit are recognized as work is performed generally based on the relationship between the actual costs incurred and the total estimated costs at completion ("the cost-to-cost method") or based on efforts for measuring progress towards completion in situations in which this approach is more representative of the progress on the contract than the cost-to-cost method. Contract costs include labor, material, overhead and, when appropriate, general and administrative expenses. Changes to the original estimates may be required during the life of the contract and such estimates are reviewed on a regular basis. Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs. These reviews have not resulted in adjustments that were significant to our results of operations. For performance obligations related to long-term contracts, when estimates of total costs to be incurred on a performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.

We use an output method to measure progress towards completion for certain of our Enclosures businesses, as this method appropriately depicts performance towards satisfaction of the performance obligation. Under the output method, revenue is recognized based on number of units produced.

~~On December 31, 2018,~~

nVent Electric plc

Notes to consolidated and combined financial statements

We apply a practical expedient to expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in Selling, general and administrative in the Consolidated and Combined Statements of Operations and Comprehensive Income (Loss). Further, we ~~had $60.0 million~~do not adjust the promised amount of ~~remaining performance obligations on contracts with original expected duration~~consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be less than one ~~year or more. We expect to recognize the majority of our remaining performance obligations on these contracts within the next twelve to eighteen months.~~year.

Sales returns

The right of return may exist explicitly or implicitly with our customers. Our return policy allows for customer returns only upon our authorization. Goods returned must be product we continue to market and must be in salable condition. When the right of return exists, we adjust the transaction price for the estimated effect of returns. We estimate the expected returns based on historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer and a projection of this experience into the future.

Pricing and sales incentives

Our sales contracts may give customers the option to purchase additional goods or services priced at a discount. ~~Options to acquire additional goods or services at a discount~~This can come in many forms, such as customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives.

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

We reduce the transaction price for certain customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives that represent variable consideration. Sales incentives given to our customers are recorded using either the expected value method or most likely amount approach for estimating the amount of consideration to which nVent shall be entitled. The expected value is the sum of probability-weighted amounts in a range of possible consideration amounts. An expected value is an appropriate estimate of the amount of variable consideration when there are a large number of contracts with similar characteristics. The most likely amount is the single most likely amount in a range of possible consideration amounts (that is, the single most likely outcome of the contract). The most likely amount is an appropriate estimate of the amount of variable consideration if the contract has limited possible outcomes (for example, an entity either achieves a performance bonus or does not).

Pricing is established at or prior to the time of sale with our customers and we record sales at the agreed-upon net selling price. However, certain of our businesses allow customers to apply for a refund of a percentage of the original purchase price if they can demonstrate sales to a qualifying end customer. We use the expected value method to estimate the anticipated refund to be paid based on historical experience and ~~reduce sales~~the transaction price is reduced for the probable cost of the discount. ~~The cost of these refunds is recorded as a reduction of transaction price.~~

Volume-based incentives involve rebates that are negotiated at or prior to the time of sale with the customer and are redeemable only if the customer achieves a specified cumulative level of sales or sales increase. Under these incentive programs, at the time of sale, we estimate the anticipated rebate to be paid based on forecasted sales levels. These forecasts are updated at least quarterly for each customer and the transaction price is reduced for the anticipated cost of the rebate. If the forecasted sales for a customer changes, the accrual for rebates is adjusted to reflect the new amount of rebates expected to be earned by the customer.

Shipping and handling costs

Amounts billed to customers for shipping and handling activities after the customer obtains control are treated as a promised service performance obligation and recorded in Net sales in the ~~accompanying~~ Consolidated and Combined Statements of ~~Income~~Operations and Comprehensive ~~Income.~~Income (Loss). Shipping and handling costs incurred by nVent for the delivery of goods to customers are considered a cost to fulfill the contract and are included in Cost of goods sold in the ~~accompanying~~ Consolidated and Combined Statements of ~~Income~~Operations and Comprehensive ~~Income.~~Income (Loss).

Contract assets and liabilities

Contract assets consist of unbilled amounts resulting from sales under long-term contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer, such as when the customer retains a small portion of the contract price until completion of the contract. We typically receive interim payments on sales under long-term contracts as work progresses, although for some contracts, we may be entitled to receive an advance payment. Contract liabilities consist of advanced payments and billings in excess of costs incurred and deferred revenue.

Contract assets are recorded within Other current assets and contract liabilities are recorded within Other current liabilities in the Consolidated ~~and Combined~~ Balance Sheets.

~~Contract assets~~Research and ~~liabilities consisted~~development

We conduct research and development (“R&D”) activities in our own facilities, which consist primarily of the ~~following:~~development of new products, product applications and manufacturing processes.

In millions December 31, 2018 January 1, 2018 $ Change % Change
Contract assets $ 74.4
$ 69.9
$ 4.5
6.4 %
Contract liabilities 13.2
14.3
(1.1 ) (7.7 )%
Net contract assets $ 61.2
$ 55.6
$ 5.6
10.1 %

~~The $5.6 million increase in net contract assets from~~ ~~January 1, 2018~~ ~~to December 31, 2018 was primarily the result of timing of milestone payments. The majority of our contract liabilities at~~ ~~January 1, 2018~~ ~~were recognized in revenue as of December 31, 2018. There were no impairment losses recognized on our contract assets for the twelve months ended December 31, 2018.~~

~~Practical expedients and exemptions~~

We generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in ~~Selling, general and administrative~~ ~~in the Consolidated and Combined Statements of Income and Comprehensive Income.~~

nVent Electric plc

Notes to consolidated and combined financial statements

Cash equivalents

We consider highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents.

Trade receivables and concentration of credit risk

We record an allowance for doubtful accounts to reduce our receivables balance by the amount that is estimated to be uncollectible from our customers, or the expected loss. Estimates used in determining the allowance for doubtful accounts are based on historical collection experience, including write-offs and recoveries, periodic credit evaluations of our customers' financial situation, and current circumstances as well as reasonable and supportable forecasts of future economic conditions. We generally do not require collateral. No customer receivable balances exceeded 10% of total net receivable balances as of December 31, 2020 or 2019.

Inventories

Inventories are stated at the lower of cost or net realizable value with substantially all inventories recorded using the first-in, first-out ("FIFO") cost method.

Property, plant and equipment, net

Property, plant and equipment is stated at historical cost. We compute depreciation by the straight-line method based on the following estimated useful lives:


			Years
Land improvements			5 to 20
Buildings and leasehold improvements			5 to 50
Machinery and equipment			3 to 15

Significant improvements that add to productive capacity or extend the lives of properties are capitalized. Costs for repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed of, the recorded cost of the assets and their related accumulated depreciation are removed from the Consolidated Balance Sheets and any related gains or losses are included in income.

The following table presents geographic Property, plant and equipment, net by region as of December 31:


In millions	2020		2019
U.S. & Canada	$	159.0	$	160.7
Mexico	39.6		42.1
EMEA (1)	78.8		75.0
Rest of World (2)	12.0		6.7
Consolidated	$	289.4	$	284.5
(1) EMEA includes Europe, Middle East and Africa
(2) Rest of World includes Latin America and Asia-Pacific

Goodwill and identifiable intangible assets

Goodwill

nVent Electric plc

Notes to consolidated and combined financial statements

Goodwill is tested annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is performed by comparing the fair value of each reporting unit with its carrying amount, and recognizing an impairment expense for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

As a result of the adverse market and economic conditions attributed to the COVID-19 pandemic, combined with significant volatility in oil and gas prices leading to a potential sustained downturn in the energy industry, we concluded a triggering event occurred during the third quarter of 2020 for our Thermal Management reporting unit requiring an impairment test as of September 30, 2020. In order to perform the goodwill impairment test for the Thermal Management reporting unit, including consideration of market-based inputs such as a market capitalization reconciliation, we determined it was appropriate to measure the fair value of all of our reporting units as of September 30, 2020. There were no significant changes in facts or circumstances that resulted in a change in assumptions between our September 30, 2020 interim impairment assessment date and our October 1, 2020 annual impairment assessment date.

The fair value of each reporting unit is determined using a discounted cash flow analysis and market approach. Determining the fair value of the reporting units required the use of significant judgment, including assumptions about future revenues and expenses, capital expenditures and changes in working capital and discount rates, which are based on our annual operating plan and long-term business plan. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, including the impacts from the COVID-19 pandemic and growth expectations for the industries and end markets in which the reporting unit participates. The level of judgment and estimation is inherently higher in the current environment considering the uncertainty created by the COVID-19 pandemic. We have evaluated numerous factors and made significant assumptions, which include the severity and duration of the business disruption, the potential impact on customer demand, the timing and degree of economic recovery and ultimately, the combined effect of these assumptions on our future operating results and cash flows. Inputs used to estimate these fair values included significant unobservable inputs that reflect the Company’s assumptions about the inputs that market participants would use and, therefore, the fair value assessments are classified within Level 3 of the fair value hierarchy defined by the accounting guidance.

As a result of this analysis, in the third quarter of 2020 we recognized a pre-tax, non-cash goodwill impairment expense of $212.3 million related to the Thermal Management reporting unit. Subsequent to the impairment expense recorded in the quarter, the remaining goodwill for the Thermal Management reporting unit was $712.5 million. The impairment resulted in a $21.6 million income tax benefit associated with the proportionate share of tax deductible goodwill. The impairment expense is included in Impairment of goodwill and trade names on the Consolidated and Combined Statements of Operations and Comprehensive Income (Loss). There was no impairment expense recorded in 2019 and 2018 related to goodwill.

Identifiable intangible assets

Our primary identifiable intangible assets include customer relationships, trade names, proprietary technologies and patents. Identifiable intangibles with definite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. We complete our annual impairment test during the fourth quarter each year for those identifiable assets not subject to amortization.

Due to the adverse market and economic conditions attributed to the COVID-19 pandemic, combined with significant volatility in oil and gas prices leading to a potential sustained downturn in the energy industry discussed above, we determined it was appropriate to measure the fair value of all of our identifiable intangible assets along with our reporting units as of September 30, 2020. There were no significant changes in facts or circumstances that resulted in a change in assumptions between our September 30, 2020 interim impairment assessment date and our October 1, 2020 annual impairment assessment date.

nVent Electric plc

Notes to consolidated and combined financial statements

future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. The non-recurring fair value measurement is a Level 3 measurement under the fair value hierarchy described below.

In 2020, we recognized a pre-tax, non-cash impairment expense of $8.2 million related to trade names. The impairment expense was recorded in Impairment of goodwill and trade names in our Consolidated and Combined Statements of Operations and Comprehensive Income (Loss). There were 0 impairment expense recorded in 2019 or 2018 related to identifiable intangible assets.

Income taxes

We use the asset and liability approach to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. We maintain valuation allowances unless it is more likely than not that all or a portion of the deferred tax assets will be realized. Changes in valuation allowances from period to period are included in our tax provision in the period of change. We recognize the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is more likely than not to be realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Pension and other post-retirement plans

For periods prior to the separation, certain nVent employees participated in defined benefit pension plans and post-retirement health plans sponsored by the former Parent. For purposes of these consolidated and combined financial statements, nVent accounted for these plans as multi-employer benefit plans. Accordingly, nVent did not record an asset or liability to recognize the funded status of these plans. However, nVent did record its share of the allocated expense, including net actuarial gains or losses described below.

Earnings (loss) per ordinary share

Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted-average number of ordinary shares outstanding. Diluted earnings (loss) per share are computed by dividing net income (loss) by the weighted-average number of ordinary shares outstanding including the dilutive effects of ordinary share equivalents.

Derivative financial instruments

We recognize all derivatives, including those embedded in other contracts, as either assets or liabilities at fair value in our Consolidated Balance Sheets. If the derivative is designated and is effective as a cash-flow hedge, the effective portion of changes in the fair value of the derivative are recorded in Accumulated other comprehensive income (loss) ("AOCI") as a separate component of equity in the Consolidated Balance Sheets and are recognized in the Consolidated and Combined Statements of Operations and Comprehensive Income (Loss) when the hedged item affects earnings. For a derivative that is not designated as or does not qualify as a hedge, changes in fair value are reported in earnings immediately.

Gains and losses on net investment hedges are included in AOCI as a separate component of equity in the Consolidated Balance Sheets.

We use derivative instruments for the purpose of hedging interest rate and currency exposures, which exist as part of ongoing business operations. We do not ~~disclose~~hold or issue derivative financial instruments for trading or speculative purposes. All other contracts that contain provisions meeting the definition of a derivative also meet the requirements for the normal purchases and normal sales scope exception. Our policy is not to enter into contracts with terms that cannot be designated as normal purchases or sales. From time to time, we may enter into short duration foreign currency contracts to hedge foreign currency risks.

nVent Electric plc

Notes to consolidated and combined financial statements

Fair value measurements

Level 1: Valuation is based on observable inputs such as quoted market prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Valuation is based on inputs such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3: Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

Foreign currency translation

Adoption of new accounting standards

On January 1, 2019, we adopted Accounting Standards Update ("ASU") No. 2016-02, “Leases” using the alternative transition method and did not recast comparative periods in transition to the new standard. In addition, we elected the package of practical expedients permitted under the transition guidance, which among other things, allowed us to carry forward the historical lease classification. We also elected to apply the practical expedient to not separate non-lease components from the lease components for all leases. Accordingly, all costs associated with a lease contract are accounted for as lease cost. In addition, we did not elect to apply the hindsight practical expedient. Adoption of the new standard resulted in the recording of additional right-of-use assets and lease liabilities of $44.2 million, as of January 1, 2019. The adoption of the standard did not have a material impact on our Consolidated and Combined Statements of Operations and Comprehensive Income (Loss) or our Consolidated and Combined Statements of Cash Flows. We implemented internal controls and key system functionality to enable the preparation of financial information upon adoption.

Effective January 1, 2020, we adopted ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350)". The new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of ~~unsatisfied performance obligations~~a reporting unit with its carrying amount and recognize an impairment expense for ~~contracts with an original expected length~~the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of ~~one year~~goodwill allocated to the reporting unit.

In March 2020, the SEC amended Rule 3-10 of Regulation S-X regarding financial disclosure requirements for registered debt offerings involving subsidiaries as either issuers or ~~less. Further,~~guarantors. This amended rule narrows the circumstances that require separate financial statements or summarized financial disclosures of subsidiary issuers and guarantors and simplifies the summarized disclosures required in lieu of those statements. As a result of this amended rule, we have included narrative disclosures in lieu of separate financial statements and summarized financial disclosures as amounts presented would not be material because the guarantor and subsidiary issuer do not ~~adjust the promised amount~~have material independent assets and operations unrelated to investments in consolidated subsidiaries.

nVent Electric plc

Notes to consolidated and combined financial statements

2.Revenue

Disaggregation of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

~~Revenue by category~~revenue

We disaggregate our revenue from contracts with customers by geographic location and vertical, ~~market,~~ as we believe these best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Geographic net sales information, based on geographic destination of the sale, was as follows:


	Year ended December 31, 2020
In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
U.S. and Canada	$	618.7	$	416.1	$	260.2	$	1,295.0
Developed Europe (1)	238.2		104.8		128.7		471.7
Developing (2)	82.3		33.3		74.1		189.7
Other Developed (3)	13.7		14.9		13.6		42.2
Total	$	952.9	$	569.1	$	476.6	$	1,998.6


	Year ended December 31, 2018									Year ended December 31, 2019
In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
U.S. and Canada	$	704.3	$	351.4	$	397.8	$	1,453.5	U.S. and Canada	$	715.5	$	414.7	$	351.9	$	1,482.1
Developed Europe ⁽¹⁾	202.7		174.4		110.8		487.9		Developed Europe (1)	212.5		109.3		136.3		458.1
Developing ⁽²⁾	101.0		80.9		47.1		229.0		Developing (2)	92.5		42.0		87.7		222.2
Other Developed ⁽³⁾	11.7		16.5		15.0		43.2		Other Developed (3)	13.3		13.6		14.7		41.6
Total	$	1,019.7	$	623.2	$	570.7	$	2,213.6	Total	$	1,033.8	$	579.6	$	590.6	$	2,204.0
⁽¹⁾ Developed Europe - Represents Western Europe and Eastern Europe included in European Union.
⁽²⁾ Developing - Represents China, Eastern Europe not included in European Union, Latin America, Middle East and Southeast Asia.
⁽³⁾ Other Developed - Represents Australia and Japan.


	Year ended December 31, 2018
In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
U.S. and Canada	$	704.3	$	397.8	$	351.4	$	1,453.5
Developed Europe (1)	202.7		110.8		174.4		487.9
Developing (2)	101.0		47.1		80.9		229.0
Other Developed (3)	11.7		15.0		16.5		43.2
Total	$	1,019.7	$	570.7	$	623.2	$	2,213.6
(1) Developed Europe includes Western Europe and Eastern Europe included in European Union.
(2) Developing includes China, Eastern Europe not included in European Union, Latin America, Middle East and Southeast Asia.
(3) Other Developed includes Australia and Japan.

Vertical net sales information was as follows:


	Year ended December 31, 2020
In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
Industrial	$	582.2	$	110.2	$	183.3	$	875.7
Commercial & Residential	111.1		322.0		172.7		605.8
Energy	85.8		60.3		114.3		260.4
Infrastructure	173.8		76.6		6.3		256.7
Total	$	952.9	$	569.1	$	476.6	$	1,998.6

Year ended December 31, 2018
In millions Enclosures Thermal Management Electrical & Fastening Solutions Total
Industrial $ 626.1
$ 263.0
$ 112.7
$ 1,001.8
Commercial & Residential 87.5
187.7
329.7
604.9
Energy 103.4
166.9
52.1
322.4
Infrastructure 202.7
5.6
76.2
284.5
Total $ 1,019.7
$ 623.2
$ 570.7
$ 2,213.6

nVent Electric plc

Notes to consolidated and combined financial statements


	Year ended December 31, 2019
In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
Industrial	$	623.2	$	114.7	$	240.4	$	978.3
Commercial & Residential	113.2		338.1		186.2		637.5
Energy	103.4		55.2		155.5		314.1
Infrastructure	194.0		71.6		8.5		274.1
Total	$	1,033.8	$	579.6	$	590.6	$	2,204.0


3.	~~Earnings Per Share~~

~~On April 30,~~


	Year ended December 31, 2018
In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
Industrial	$	626.1	$	112.7	$	263.0	$	1,001.8
Commercial & Residential	87.5		329.7		187.7		604.9
Energy	103.4		52.1		166.9		322.4
Infrastructure	202.7		76.2		5.6		284.5
Total	$	1,019.7	$	570.7	$	623.2	$	2,213.6

Contract balances

Contract assets and liabilities consisted of the following:


In millions	December 31, 2020		December 31, 2019		$ Change		% Change
Contract assets	$	45.6	$	69.4	$	(23.8)	(34.3	%)
Contract liabilities	11.3		13.7		(2.4)		(17.5	%)

Net contract assets	$	34.3	$	55.7	$	(21.4)	(38.4	%)


In millions	December 31, 2019		December 31, 2018		$ Change		% Change
Contract assets	$	69.4	$	74.4	$	(5.0)	(6.7	%)
Contract liabilities	13.7		13.2		0.5		3.8	%

Net contract assets	$	55.7	$	61.2	$	(5.5)	(9.0	%)

The $21.4 million and the $5.5 million decreases in net contract assets in 2020 and 2019, respectively, were primarily the result of timing of milestone payments. The majority of our contract liabilities at December 31, 2019 and 2018 ~~Pentair completed the separation of its Electrical business, distributing to its shareholders one ordinary share of nVent for every ordinary share of Pentair held~~were recognized in revenue as of December 31, 2020 and December 31, 2019, respectively. There were 0 material impairment losses recognized on our contract assets for the ~~record date~~twelve months ended December 31, 2020 and 2019.

Remaining performance obligations

We have elected the practical expedient to disclose only the value of ~~April 17, 2018. The computations~~remaining performance obligations for contracts with an original expected length of ~~basic and diluted earnings per share for periods prior~~one year or more. On December 31, 2020, we had $86.3 million of remaining performance obligations on contracts with original expected duration of one year or more. We expect to recognize the ~~separation were calculated using~~majority of our remaining performance obligations on these contracts within the ~~shares that were distributed~~next twelve to ~~Pentair shareholders upon the separation.~~eighteen months.

~~Basic and diluted earnings per share were calculated as follows:~~3.Restructuring

Years ended December 31
In millions, except per share data 2018 2017 2016
Net income $ 230.8
$ 361.7
$ 259.1
Weighted average ordinary shares outstanding
Basic 178.6
179.0
179.0
Dilutive impact of stock options, restricted stock units and performance share units 2.2
2.2
2.2
Diluted 180.8
181.2
181.2
Earnings per ordinary share
Basic earnings per ordinary share $ 1.29
$ 2.02
$ 1.45
Diluted earnings per ordinary share $ 1.28
$ 2.00
$ 1.43
Anti-dilutive stock options excluded from the calculation of diluted earnings per share 1.0
0.4
0.4

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~


4.	~~Restructuring~~

During ~~2018, 2017~~2020, 2019 and ~~2016,~~2018, we initiated and continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our ~~business, specifically~~business. Additionally in ~~2018~~2020, we initiated certain actions in response to the decrease in expected demand attributed to the effects of the COVID-19 pandemic and ~~2017~~recent significant volatility in ~~connection with~~oil and gas prices leading to a potential sustained downturn in the ~~separation from Pentair. These~~energy industry. Restructuring initiatives during the years ended December 31, 2020, 2019 and 2018 included a reduction of in hourly and salaried headcount of approximately 500, 400 and 50 ~~250 and 350~~ employees, ~~in 2018, 2017 and 2016,~~ respectively.

~~Restructuring related costs included in~~ ~~Selling, general and administrative~~ ~~expenses in the Consolidated and Combined Statements of Operations and Comprehensive Income included costs for severance and other restructuring costs as follows:~~

Years ended December 31
In millions 2018 2017 2016
Severance and related costs $ 7.3
$ 16.0
$ 11.9
Other 0.4
0.8
0.4
Total restructuring costs $ 7.7
$ 16.8
$ 12.3

~~Restructuring costs by reportable segment were as follows:~~

Years ended December 31
In millions 2018 2017 2016
Enclosures $ 1.3
$ 6.7
$ 3.4
Thermal Management 2.8
7.5
7.1
Electrical & Fastening Solutions 1.9
2.6
1.8
Other 1.7
—
—
Consolidated $ 7.7
$ 16.8
$ 12.3

~~Activity related to accrued severance and related costs recorded in~~ ~~Other current liabilities~~ ~~in the Consolidated and Combined Balance Sheets is summarized as follows:~~

Years ended December 31
In millions 2018 2017
Beginning balance $ 5.1
$ 10.3
Costs incurred 7.3
16.0
Cash payments and other (8.6 ) (21.2 )
Ending balance $ 3.8
$ 5.1

nVent Electric plc

Notes to consolidated and combined financial statements

Restructuring related costs included in Selling, general and administrative in the Consolidated and Combined Statements of Operations and Comprehensive Income (Loss) included costs for severance and other restructuring costs as follows:


5.	~~Goodwill and Other Identifiable Intangible Assets~~


	Years ended December 31
In millions	2020		2019		2018
Severance and related costs	$	15.0	$	19.6	$	7.3
Other	2.7		2.3		0.4
Total restructuring costs	$	17.7	$	21.9	$	7.7

Other restructuring costs primarily consist of asset impairment and various contract termination costs.

Restructuring costs by reportable segment were as follows:


	Years ended December 31
In millions	2020		2019		2018
Enclosures	$	8.5	$	5.3	$	1.3
Electrical & Fastening Solutions	1.0		2.2		1.9
Thermal Management	6.2		6.6		2.8
Other	2.0		7.8		1.7
Consolidated	$	17.7	$	21.9	$	7.7

Activity related to accrued severance and related costs recorded in Other current liabilities in the Consolidated Balance Sheets is summarized as follows:


	Years ended December 31
In millions	2020		2019
Beginning balance	$	9.5	$	3.8

Costs incurred	15.0		19.6
Cash payments and other	(17.9)		(13.9)
Ending balance	$	6.6	$	9.5

4.Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share were calculated as follows:


	Years ended December 31
In millions, except per share data	2020		2019		2018
Net income (loss)	$	(47.2)	$	222.7	$	230.8
Weighted average ordinary shares outstanding
Basic	169.6		171.6		178.6
Dilutive impact of stock options, restricted stock units and performance share units	—		1.4		2.2
Diluted	169.6		173.0		180.8
Earnings (loss) per ordinary share

Basic earnings (loss) per ordinary share	$	(0.28)	$	1.30	$	1.29
Diluted earnings (loss) per ordinary share	$	(0.28)	$	1.29	$	1.28
Anti-dilutive stock options excluded from the calculation of diluted earnings (loss) per share	4.2		2.1		1.0

As a result of the Company’s net loss during the year ended December 31, 2020, 0.7 million of outstanding stock options, restricted stock units and performance share units were not included in the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive.

nVent Electric plc

Notes to consolidated and combined financial statements

5. Acquisitions

On August 30, 2019, we completed the acquisition of Eldon Holding AB ("Eldon") for $127.8 million, net of cash acquired. Eldon, now part of our Enclosures segment, is an innovative European based manufacturer of enclosures that protect sensitive electrical, electronic and data and telecommunications components.

The excess purchase price over tangible net assets and identified intangible assets acquired has been allocated to goodwill in the amount of $51.2 million, none of which is expected to be deductible for income tax purposes. Identifiable intangible assets acquired included $46.7 million of definite-lived customer relationships with an estimated useful life of 17 years.

On February 10, 2020, we acquired substantially all of the assets of WBT LLC ("WBT") for $29.9 million in cash. The U.S. based WBT business manufactures high-quality cable tray systems that will be marketed as part of the nVent CADDY product line within our Electrical and Fastening Solutions segment and nVent HOFFMAN product line within our Enclosures segment.

The excess purchase price over tangible net assets and identified intangible assets acquired has been preliminarily allocated to goodwill in the amount of $13.7 million, substantially all of which is expected to be deductible for income tax purposes. Identifiable intangible assets acquired included $11.3 million of definite-lived customer relationships with an estimated useful life of 12 years.

The pro forma impact of these acquisitions is not material.

nVent Electric plc

Notes to consolidated and combined financial statements

6. Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill ~~for the years ended December 31, 2018 and 2017~~ by reportable segment were as follows:


In millions	December 31, 2019		Acquisitions/ divestitures		Impairment		Foreign currency translation/other		December 31, 2020
Enclosures	$	315.4	$	6.4	$	0	$	10.3	$	332.1
Electrical & Fastening Solutions	1,038.2		13.7		0		0		1,051.9
Thermal Management	925.5		0		(212.3)		1.0		714.2
Total goodwill	$	2,279.1	$	20.1	$	(212.3)	$	11.3	$	2,098.2


In millions	December 31, 2017		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2018		In millions	December 31, 2018		Acquisitions/ divestitures		Impairment		Foreign currency translation/other		December 31, 2019
Enclosures	$	274.8	$	—	$	(2.8	)	$	272.0	Enclosures	$	272.0	$	45.1	$	0	$	(1.7)	$	315.4
Electrical & Fastening Solutions										Electrical & Fastening Solutions	1,038.2		0		0		0		1,038.2
Thermal Management	927.1		—		(3.0		)	924.1		Thermal Management	924.1		0		0		1.4		925.5
Electrical & Fastening Solutions	1,036.3		1.9		—			1,038.2
Total goodwill	$	2,238.2	$	1.9	$	(5.8	)	$	2,234.3	Total goodwill	$	2,234.3	$	45.1	$	0	$	(0.3)	$	2,279.1

In millions December 31, 2016 Acquisitions/
divestitures Foreign currency
translation/other December 31, 2017
Enclosures $ 267.6
$ —
$ 7.2
$ 274.8
Thermal Management 924.2
—
2.9
927.1
Electrical & Fastening Solutions 1,031.0
5.3
—
1,036.3
Total goodwill $ 2,222.8
$ 5.3
$ 10.1
$ 2,238.2
In 2020, we recognized pre-tax, non-cash impairment expense of $212.3 million related to goodwill in the Thermal Management reporting unit. There was 0 impairment expense recorded in 2019 or 2018 related to goodwill.

Identifiable intangible assets consisted of the following at December 31:


	2018							2017								2020						2019
In millions	Cost		Accumulated amortization			Net		Cost		Accumulated amortization			Net		In millions	Cost		Accumulated amortization		Net		Cost		Accumulated amortization		Net
Definite-life intangibles															Definite-life intangibles
Customer relationships	$	1,149.7	$	(266.4	)	$	883.3	$	1,153.0	$	(207.5	)	$	945.5	Customer relationships	$	1,214.5	$	(389.6)	$	824.9	$	1,197.9	$	(326.1)	$	871.8
Proprietary technology and patents	14.8		(6.1		)	8.7		14.6		(4.8		)	9.8

Proprietary technologies and patents															Proprietary technologies and patents	16.3		(8.8)		7.5		14.8		(7.4)		7.4

Total definite-life intangibles	1,164.5		(272.5		)	892.0		1,167.6		(212.3		)	955.3		Total definite-life intangibles	1,230.8		(398.4)		832.4		1,212.7		(333.5)		879.2
Indefinite-life intangibles															Indefinite-life intangibles
Trade names	281.3		—			281.3		281.3		—			281.3		Trade names	273.1		—		273.1		281.3		—		281.3
Total intangibles	$	1,445.8	$	(272.5	)	$	1,173.3	$	1,448.9	$	(212.3	)	$	1,236.6	Total intangibles	$	1,503.9	$	(398.4)	$	1,105.5	$	1,494.0	$	(333.5)	$	1,160.5

Identifiable intangible asset amortization expense in 2020, 2019 and 2018 ~~2017 and 2016~~ was ~~$60.9~~$64.2 million, $61.4 million and ~~$60.8~~$60.9 million, respectively.

In 2020, we recognized pre-tax, non-cash impairment expense of $8.2 million related to trade names. There ~~were no~~was 0 impairment ~~charges~~expense recorded in ~~2018. In 2017 and 2016, we recorded impairment charges for~~2019 or 2018 related to trade ~~name intangible assets of $16.4 million and $13.3 million, respectively.~~names.

Estimated future amortization expense for identifiable intangible assets during the next five years is as follows:


In millions	2021		2022		2023		2024		2025
Estimated amortization expense	$	63.4	$	63.3	$	63.1	$	62.5	$	62.5

In millions 2019 2020 2021 2022 2023
Estimated amortization expense $ 60.4
$ 60.3
$ 59.1
$ 59.1
$ 58.9

nVent Electric plc

Notes to consolidated and combined financial statements

7.Supplemental Balance Sheet Information


6.	~~Supplemental Balance Sheet Information~~


	December 31
In millions	2020		2019
Inventories
Raw materials and supplies	$	67.3	$	67.1
Work-in-process	24.4		25.6
Finished goods	143.5		152.0
Total inventories	$	235.2	$	244.7
Other current assets
Contract assets	$	45.6	$	69.4
Prepaid expenses	29.8		32.5
Prepaid income taxes	13.4		9.0
Other current assets	4.1		2.4
Total other current assets	$	92.9	$	113.3
Property, plant and equipment, net
Land and land improvements	$	41.0	$	40.6
Buildings and leasehold improvements	185.5		181.6
Machinery and equipment	461.4		440.4
Construction in progress	30.3		16.5
Total property, plant and equipment	718.2		679.1
Accumulated depreciation and amortization	428.8		394.6
Total property, plant and equipment, net	$	289.4	$	284.5
Other non-current assets

Deferred compensation plan assets	$	20.0	$	17.3
Lease right-of-use assets	45.6		44.2
Deferred tax assets	29.8		40.9
Other non-current assets	13.2		15.1
Total other non-current assets	$	108.6	$	117.5
Other current liabilities

Dividends payable	$	29.4	$	29.7

Accrued rebates	40.5		44.1
Contract liabilities	11.3		13.7
Accrued taxes payable	32.8		24.8

Current lease liabilities	14.2		14.7
Other current liabilities	60.3		58.7
Total other current liabilities	$	188.5	$	185.7
Other non-current liabilities
Income taxes payable	$	31.7	$	31.9

Deferred compensation plan liabilities	20.0		17.3

Non-current lease liabilities	35.7		33.7
Other non-current liabilities	22.9		10.6
Total other non-current liabilities	$	110.3	$	93.5

December 31
In millions 2018 2017
Inventories
Raw materials and supplies $ 63.1
$ 64.3
Work-in-process 25.3
25.2
Finished goods 139.8
134.6
Total inventories $ 228.2
$ 224.1
Other current assets
Contract assets $ 74.4
$ 69.9
Prepaid expenses 31.7
29.3
Prepaid income taxes 9.1
31.3
Other current assets 3.2
1.8
Total other current assets $ 118.4
$ 132.3
Property, plant and equipment, net
Land and land improvements $ 39.1
$ 39.1
Buildings and leasehold improvements 172.6
170.2
Machinery and equipment 410.8
402.0
Construction in progress 14.6
11.5
Total property, plant and equipment 637.1
622.8
Accumulated depreciation and amortization 372.3
357.0
Total property, plant and equipment, net $ 264.8
$ 265.8
Other non-current assets
Prepaid income taxes $ —
$ 201.5
Deferred compensation plan assets 23.1
25.1
Other non-current assets 10.7
25.2
Total other non-current assets $ 33.8
$ 251.8
Other current liabilities
Dividends payable $ 31.0
$ —
Accrued rebates 46.1
42.9
Contract liabilities 13.2
14.3
Accrued taxes payable 27.4
41.8
Other current liabilities 69.3
42.3
Total other current liabilities $ 187.0
$ 141.3
Other non-current liabilities
Income taxes payable $ 41.9
$ 57.6
Deferred compensation plan liabilities 23.1
25.1
Other non-current liabilities 7.0
4.0
Total other non-current liabilities $ 72.0
$ 86.7

nVent Electric plc

Notes to consolidated and combined financial statements

8. Accumulated Other Comprehensive Income (Loss)


7.	~~Related Party Transactions and Net Parent Investment~~

The former Parent’s business model prior to the separation included a combination of stand-alone and combined business functions between Pentair and nVent, varying by region and country. Sales to Pentair were not material for all periods prior to the separation. During the periods prior to the separation, nVent engaged in cash pooling arrangements with related parties managed centrally by the Parent.

The consolidated and combined financial statements of nVent include allocations of these costs between Pentair and nVent for periods prior to the separation. Such allocations are estimates, and also may not represent the cost of such services if performed on a stand-alone basis. See further description of cost allocations in Note 1.

The Consolidated and Combined Balance Sheets of nVent for periods prior to the separation include certain of the Parent assets and liabilities that are specifically identifiable or otherwise attributable to nVent and were transferred to nVent upon completion of the separation. Transactions between nVent and Pentair prior to the separation are considered to be effectively settled at the time the transaction was recorded. The net effect of these transactions is included in the Consolidated and Combined Statements of Cash Flows as ~~Net transfers to Parent~~.

~~Net Parent investment~~ in the Consolidated and Combined Balance Sheets represents the Parent’s historical investment in the Company, the net effect of cost allocations from transactions with the Parent, net transfers of cash and assets to the Parent and nVent’s accumulated earnings.


8.	~~Accumulated Other Comprehensive Income (Loss)~~

Components of AOCI consist of the ~~following:~~following at December 31:


In millions	2020		2019
Cumulative translation adjustments	$	(104.2)	$	(100.5)
Change in market value of derivative financial instruments, net of tax	9.0		1.9
Accumulated other comprehensive income (loss)	$	(95.2)	$	(98.6)

9.Debt

December 31
In millions 2018 2017
Cumulative translation adjustments $ (105.3 ) $ (57.8 )
Change in market value of derivative financial instruments, net of tax (2.5 ) 0.7
Accumulated other comprehensive loss $ (107.8 ) $ (57.1 )


9.	~~Debt~~

Debt and the average interest rates on debt outstanding were as follows:


In millions	Average interest rate at	Maturity year	December 31					In millions	Average interest rate at		Maturity year		December 31
	December 31, 2018		2018			2017			December 31, 2020				2020		2019
Revolving credit facility								Revolving credit facility	1.520%		2023		$	34.6	$	134.6
Senior notes - fixed rate ⁽¹⁾	3.950%	2023	300.0			—		3.950%		2023		300.0		300.0
Senior notes - fixed rate ⁽¹⁾	4.550%	2028	500.0			—		4.550%		2028		500.0		500.0

Term loan facility	3.795%	2023	147.5					Term loan facility	1.520%		2023		117.5		135.0
Unamortized issuance costs and discounts	N/A		(5.8		)	—		Unamortized issuance costs and discounts	N/A				(4.1)		(5.0)
Total debt			941.7			—		Total debt					948.0		1,064.6
Less: Current maturities and short-term borrowings			(12.5		)	—		Less: Current maturities and short-term borrowings					(20.0)		(17.5)
Long-term debt			$	929.2		$	—	Long-term debt					$	928.0	$	1,047.1
⁽¹⁾Senior notes are fully and unconditionally guaranteed as to payment by nVent Electric plc ("Parent Company Guarantor")

Senior notes

In March 2018, nVent Finance S.à r.l. (“nVent Finance” or "Subsidiary Issuer"), a 100-percent owned subsidiary of nVent, issued $300.0 million aggregate principal amount of 3.950% senior notes due 2023 (the "2023 Notes") and $500.0 million aggregate principal amount of 4.550% senior notes due 2028 (the "2028 Notes" and, collectively with the 2023 Notes, the "Notes"). Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, beginning October 15, 2018. In August 2018, nVent and nVent Finance filed a Registration Statement on Form S-4 with the Securities and Exchange Commission to exchange the Notes for new, registered Notes. The exchange offer was completed on October 22, 2018, pursuant to which substantially all of the Notes were exchanged for the new, registered Notes. The exchange offer did not impact the aggregate principal amount of the Notes outstanding or any material terms.year.

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

The Notes are fully and unconditionally guaranteed as to payment by ~~the Parent~~nVent (the "Parent Company ~~Guarantor.~~Guarantor"). There are no subsidiaries that guarantee the Notes. The Parent Company Guarantor is a holding company that has no independent assets or operations unrelated to its investments in ~~its~~ consolidated subsidiaries. The ~~Parent Company Guarantor’s only direct subsidiary~~Subsidiary Issuer is ~~the Subsidiary Issuer. The Subsidiary Issuer~~a holding company that has no independent assets or operations unrelated to its investments in ~~its~~ consolidated subsidiaries and the issuance of the Notes and other external debt. The Parent Company Guarantor’s principal source of cash flow, including cash flow to make payments on the Notes pursuant to the guarantees, is dividends from its subsidiaries. The Subsidiary Issuer’s principal source of cash flow is interest income from its subsidiaries. None of the subsidiaries of the Parent Company Guarantor or the Subsidiary Issuer is under any direct obligation to pay or otherwise fund amounts due on the Notes or the guarantees, whether in the form of dividends, distributions, loans or other payments. In addition, there may be statutory and regulatory limitations on the payment of dividends from certain subsidiaries of the Parent Company Guarantor or the Subsidiary Issuer. If such subsidiaries are unable to transfer funds to the Parent Company Guarantor or the Subsidiary Issuer and sufficient cash or liquidity is not otherwise available, the Parent Company Guarantor or the Subsidiary Issuer may not be able to make principal and interest payments on their outstanding debt, including the Notes or the guarantees.

nVent Electric plc

Notes to consolidated and combined financial statements

Senior credit facilities

Our debt agreements contain certain financial covenants, the most restrictive of which are in the Senior Credit Facilities, including that we may not permit (i) the ratio of our consolidated debt (net of our consolidated unrestricted cash in excess of $5.0 million but not to exceed $250.0 million) to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense ("EBITDA") on the last day of any period of four consecutive fiscal quarters to exceed 3.75 to 1.00 and (ii) the ratio of our EBITDA to our consolidated interest expense for the same period to be less than 3.00 to 1.00. In addition, subject to certain qualifications and exceptions, the Senior Credit Facilities also contain covenants that, among other things, restrict our ability to create liens, merge or consolidate with another person, make acquisitions and incur subsidiary debt. As of December 31, ~~2018,~~2020, we were in compliance with all financial covenants in our debt ~~agreements.~~ agreements, and there is no material uncertainty about our ongoing ability to meet those covenants.

Debt outstanding at December 31, 2020, excluding unamortized issuance costs and discounts, ~~at December 31, 2018~~ matures on a calendar year basis as follows:


In millions	2021		2022		2023		2024		2025		Thereafter		Total
Contractual debt obligation maturities	$	20.0	$	20.0	$	412.1	$	0	$	0	$	500.0	$	952.1

In millions 2019 2020 2021 2022 2023 Thereafter Total
Contractual debt obligation maturities $ 12.5
$ 17.5
$ 20.0
$ 20.0
$ 377.5
$ 500.0
$ 947.5

~~nVent Electric plc~~

~~Notes to consolidated~~10.Derivatives and ~~combined financial statements~~Financial Instruments


~~10.~~	~~Derivatives and Financial Instruments~~

Derivative financial instruments

We are exposed to market risk related to changes in foreign currency exchange rates. To manage the volatility related to this exposure, we periodically enter into a variety of derivative financial instruments. Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates. The derivative contracts contain credit risk to the extent that our bank counterparties may be unable to meet the terms of the agreements. The amount of such credit risk is generally limited to the unrealized gains, if any, in such contracts. Such risk is minimized by limiting those counterparties to major financial institutions of high credit quality.

Foreign currency contracts

We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. dollar. We manage our economic and transaction exposure to certain market-based risks through the use of foreign currency derivative financial instruments. Our objective in holding these derivatives is to reduce the volatility ofin net earnings and cash flows associated with changes in foreign currency ~~exchange~~ rates. The majority of our foreign currency contracts have an original maturity date of less than one year. The derivative contracts contain credit risk to the extent that our bank counterparties may be unable to meet the terms of the agreements. The amount of such credit risk is generally limited to the unrealized gains, if any, in such contracts. Such risk is minimized by limiting those counterparties to major financial institutions of high credit quality.

~~Foreign currency contracts~~

At December 31, ~~2018~~2020 and ~~2017,~~2019, we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of ~~$129.0~~$41.8 million and ~~$10.7~~$34.5 million, respectively. The impact of these contracts on the Consolidated and Combined Statements of Operations and Comprehensive Income (Loss) was not material for any period presented.

~~Gains or losses on~~Cross currency swaps

At December 31, 2020 and 2019, we had outstanding cross currency swap agreements with a combined notional amount of $329.0 million and $303.5 million, respectively. The agreements are accounted for as either cash flow hedges, to hedge foreign currency ~~contracts designated~~fluctuations on certain intercompany debt, or as net investment hedge, to manage our exposure to fluctuations in the Euro-U.S. Dollar exchange rate. At December 30, 2020 and 2019, we had deferred foreign currency gains of $6.9 million and $1.9 million, respectively, in Accumulated other comprehensive loss associated with our cross currency swap activity.

nVent Electric plc

Notes to consolidated and combined financial statements

Interest rate swaps

We are also exposed to interest rate risk fluctuations in connection with the planned issuance of long-term debt. To manage the volatility related to this exposure, we may use forward starting interest rate swaps to fix a portion of the interest cost associated with anticipated future financings. In 2020, we entered into a forward starting interest rate swap to hedge the variability of cash flows attributable to changes in the benchmark swap interest rate (London Inter-Bank Offer Rate) associated with the anticipated refinancing of the 2023 Notes. The interest rate swap contract has a notional amount of $200 million and is expected to mature in 2023. The interest rates swaps are accounted for as cash flow hedges ~~are reclassified out~~since they hedge the risk of ~~AOCI and into~~ ~~Selling, general and administrative~~an increase in treasury rates for the forecasted interest payments of an anticipated fixed-rate debt issuance. The impact of this contract on the Consolidated and Combined Statements of Operations and Comprehensive Income ~~when the hedged item affects earnings. Such reclassifications during 2018, 2017 and 2016 were not material.~~

~~Net investment hedge~~

We have net investments in foreign subsidiaries that are subject to changes in the foreign currency exchange rate. In October 2018, we designated a cross-currency swap with a gross notional U.S. dollar equivalent amount of $69.1 million as a net investment hedge for a portion of our net investment in our Euro denominated subsidiaries. Gains or losses resulting from the change in fair value of the net investment hedge will be included as a component of the cumulative translation adjustment account within AOCI and offset gains and losses on the underlying foreign currency exposures. As of December 31, 2018, the deferred foreign currency activity in AOCI associated with the net investment hedge(Loss) was not ~~material.~~material for any period presented.

Fair value of financial instruments

The following methods were used to estimate the fair values of each class of financial instrument:

•short-term financial instruments (cash and cash equivalents, accounts and notes receivable, accounts and notes payable and variable-rate debt) — recorded amount approximates fair value because of the short maturity period;

•long-term fixed-rate debt, including current maturities — fair value is based on market quotes available for issuance of debt with similar terms, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance;

•foreign currency contract and interest rate swap agreements — fair values are determined through the use of models that consider various assumptions, including time value, yield curves, as well as other relevant economic measures, which are observable inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance; and

•deferred compensation plan assets (mutual funds, common/collective trusts and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees) — fair value of mutual funds and cash equivalents are based on quoted market prices in active markets that are classified as Level 1 in the valuation hierarchy defined by the accounting guidance; fair value of common/collective trusts are valued at net asset value ("NAV"), which is based on ~~observable inputs that are classified as Level 2 in~~ the ~~valuation hierarchy defined~~fair value of the underlying securities owned by the ~~accounting guidance.~~fund divided by the number of shares outstanding.

nVent Electric plc

Notes to consolidated and combined financial statements

The recorded amounts and estimated fair values of total debt, excluding unamortized issuance costs and discounts, at December 31 were as follows:


	2018				2017					2020				2019
In millions	Recorded Amount		Fair Value		Recorded Amount		Fair Value		In millions	Recorded Amount		Fair Value		Recorded Amount		Fair Value
Variable rate debt	$	147.5	$	147.5	$	—	$	—	Variable rate debt	$	152.1	$	152.1	$	269.6	$	269.6
Fixed rate debt	800.0		793.5		—		—		Fixed rate debt	800.0		915.2		800.0		863.5
Total debt	$	947.5	$	941.0	$	—	$	—	Total debt	$	952.1	$	1,067.3	$	1,069.6	$	1,133.1

Years ended December 31
Percentages 2018 2017 2016
Federal statutory income tax rate ⁽¹⁾
19.0
19.3
20.0
Tax effect of international operations ⁽²⁾
(5.8 ) (5.9 ) (3.4 )
Change in valuation allowances 0.9
(2.2 ) 1.1
Non-deductible transaction costs —
0.5
—
Excess tax benefits on stock-based compensation —
(0.1 ) —
Tax effect of U.S. tax reform —
(27.0 ) —
Effective tax rate 14.1
(15.4 ) 17.7


⁽¹⁾	~~The statutory rate for 2018, 2017 and 2016 reflects the U.K. statutory rate of 19.0%, 19.3% and 20.0%, respectively.~~


⁽²⁾	~~The tax effect of international operations consists of non-U.K. jurisdictions.~~

nVent Electric plc

Notes to consolidated and combined financial statements

Reconciliations of the beginning and ending gross unrecognized tax benefits were as follows:


	Years ended December 31
In millions	2020		2019		2018
Beginning balance	$	17.0	$	16.8	$	24.6
Gross increases for tax positions in prior periods	0.3		0.3		2.3
Gross decreases for tax positions in prior periods	(1.4)		(1.3)		(1.6)
Gross increases based on tax positions related to the current year	1.1		1.8		1.2
Gross decreases related to settlements with taxing authorities	(2.5)		(0.2)		(8.0)
Reductions due to statute expiration	(0.5)		(0.1)		(1.9)
Gross increases (decreases) due to currency fluctuations	0.3		(0.3)		0.2
Gross increases due to acquisitions	2.8		0		0
Ending balance	$	17.1	$	17.0	$	16.8

Years ended December 31
In millions 2018 2017 2016
Beginning balance $ 24.6
$ 26.6
$ 20.5
Gross increases for tax positions in prior periods 2.3
1.2
0.5
Gross decreases for tax positions in prior periods (1.6 ) (2.2 ) (0.5 )
Gross increases based on tax positions related to the current year 1.2
1.3
1.3
Gross decreases related to settlements with taxing authorities (8.0 ) (2.3 ) (0.9 )
Reductions due to statute expiration (1.9 ) (1.3 ) (0.1 )
Gross increases due to currency fluctuations 0.2
1.3
0.5
Gross increases due to acquisitions —
—
5.3
Ending balance $ 16.8
$ 24.6
$ 26.6

We record gross unrecognized tax benefits in Other current liabilities and Other non-current liabilities in the Consolidated ~~and Combined~~ Balance Sheets. Included in the ~~$16.8~~$17.1 million of total gross unrecognized tax benefits as of December 31, ~~2018~~2020 was ~~$15.5~~$15.9 million of tax benefits that, if recognized, would impact the effective tax rate. It is reasonably possible that the gross unrecognized tax benefits as of December 31, ~~2018~~2020 may decrease by a range of ~~zero~~0 to ~~$4.9~~$3.6 million during ~~2019,~~2021, primarily as a result of the resolution of non-U.K. examinations and the expiration of various statutes of limitations. ~~Liabilities for unrecognized tax benefits are recorded in~~ ~~Other non-current liabilities~~ ~~in the Consolidated and Combined Balance Sheets.~~

The $8.0 million gross decrease during 2018 for settlements with taxing authorities is related primarily to resolution of non-US audits. This amount includes $3.1 million that had a favorable impact on our effective tax rate.

Based on the outcome of ~~these~~tax examinations, or as a result of the expiration of statute of limitations for specific jurisdictions, it is reasonably possible that certain unrecognized tax benefits for tax positions taken on previously filed tax returns will materially change from those recorded as liabilities in our financial statements. A number of tax periods from ~~2008~~2009 to present are under audit by tax authorities in various jurisdictions, including Canada, ~~China~~France, Germany and ~~Germany.~~Romania. Certain nVent entities are currently subject to IRS audit in the U.S. for 2018 tax periods prior to the separation. We anticipate that several of these audits may be concluded in the foreseeable future.

We record penalties and interest related to unrecognized tax benefits in Provision ~~(benefit)~~ for income taxes and Net i~~nterest~~interest expense, respectively, in the Consolidated and Combined Statements of Operations and Comprehensive ~~Income.~~Income (Loss). As of December 31, ~~2018~~2020 and ~~2017,~~2019, we have liabilities of ~~$1.7~~$2.3 million and ~~$2.0~~$1.7 million, respectively, for the possible payment of penalties and ~~$2.7~~$3.5 million and ~~$6.6~~$3.0 million, respectively, for the possible payment of interest expense, which are recorded in Other current liabilities in the Consolidated ~~and Combined~~ Balance Sheets.

No additional income taxes have been provided for any undistributed foreign earnings or outside basis difference inherent in subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations.

Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as "temporary differences." We record the tax effect of these temporary differences as "deferred tax assets" (generally items that can be used as a tax deduction or credit in future periods) and "deferred tax liabilities" (generally items for which we received a tax deduction but the tax impact has not yet been recorded in the Consolidated and Combined Statements of ~~Income~~Operations and Comprehensive ~~Income)~~Income (Loss)).

Deferred taxes were recorded in the Consolidated ~~and Combined~~ Balance Sheets at December 31 as follows:


In millions	2020		2019
Other non-current assets	$	29.8	$	40.9
Deferred tax liabilities	230.1		237.8
Net deferred tax liabilities	$	200.3	$	196.9

December 31
In millions 2018 2017
Other non-current assets 4.6
18.6
Deferred tax liabilities 224.8
279.4
Net deferred tax liabilities $ 220.2
$ 260.8

nVent Electric plc

Notes to consolidated and combined financial statements

The tax effects of the major items recorded as deferred tax assets and liabilities at December 31 were as follows:


In millions	2020		2019
Deferred tax assets
Accrued liabilities and reserves	$	8.5	$	10.4
Pension and other post-retirement compensation and benefits	41.4		36.9
Employee compensation and benefits	16.1		11.8
Tax loss and credit carryforwards	137.8		138.1
Interest limitation	15.8		20.0
Other assets	10.1		9.0
Total deferred tax assets	229.7		226.2
Valuation allowance	154.5		125.3
Deferred tax assets, net of valuation allowance	75.2		100.9
Deferred tax liabilities
Property, plant and equipment	17.1		17.6
Goodwill and other intangibles	240.2		262.2
Other liabilities	18.2		18.0
Total deferred tax liabilities	275.5		297.8
Net deferred tax liabilities	$	200.3	$	196.9

December 31
In millions 2018 2017
Deferred tax assets

Accrued liabilities and reserves $ 10.6
$ 10.3
Pension and other post-retirement compensation and benefits 26.8
17.5
Employee compensation and benefits 12.8
14.8
Tax loss and credit carryforwards 143.0
148.5
Interest limitation 7.7
—
Total deferred tax assets 200.9
191.1
Valuation allowance 137.8
143.5
Deferred tax assets, net of valuation allowance 63.1
47.6
Deferred tax liabilities
Property, plant and equipment 15.3
12.3
Goodwill and other intangibles 260.4
290.2
Other liabilities 7.6
5.9
Total deferred tax liabilities 283.3
308.4
Net deferred tax liabilities $ 220.2
$ 260.8

Included in tax loss and credit carryforwards in the table above is a deferred tax asset of $3.1 million as of December 31, ~~2018~~2020 related to foreign tax credit carryover from the tax period ended December 31, 2017 and related to transition taxes. The entire amount is subject to a valuation allowance. The foreign tax credit is eligible for carryforward until the tax period ending December 31, 2027.

As of December 31, ~~2018,~~2020, tax loss carryforwards of ~~$445.1~~$484.6 million were available to offset future income. A valuation allowance of ~~$131.0~~$122.1 million exists for deferred income tax benefits related to the tax loss carryforwards which may not be realized. We believe sufficient taxable income will be generated in the respective jurisdictions to allow us to fully recover the remainder of the tax losses. The tax losses relate to non-U.S. carryforwards which are subject to varying expiration periods. Non-U.S. carryforwards of ~~$405.9~~$400.0 million are located in jurisdictions with unlimited tax loss carryforward periods, while the remainder will begin to expire in ~~2019.~~2021.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017.

12.Benefit Plans

Given the significance of the Act, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. SAB 118 allows registrants to record provisional amounts during a one year “measurement period.” The measurement period is deemed to have ended earlier when the registrant has obtained, prepared, and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared, or analyzed.

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

The Company calculated its best estimate of the impact of the Act in its December 31, 2017 income tax provision in accordance with its understanding of the Act and guidance available as of the date of the filing of the Registration Statement Form 10 (as amended, the "Form 10") and as a result recorded a provisional income tax benefit of $84.8 million in the fourth quarter of 2017, the period in which the legislation was enacted. The provisional amount related to the remeasurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future was a decrease to income tax expense of $122.0 million. We have completed our analysis of the remeasurement of deferred taxes for state tax impacts of the remeasurement, the impact of the Act on the taxation of executive compensation arrangements, changes to tax capitalization provisions and other aspects of the Act that may impact our tax balances. There we no adjustments to the provisional amount recorded at December 31, 2017 as a result of the completion of our analysis.

The amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was an increase to income tax expense of $32.9 million, which represents a decrease of $4.3 million compared to the provisional amount recorded at December 31, 2017.


~~12.~~	~~Benefit Plans~~

Pension and other post-retirement plans

We sponsor U.S. and non-U.S. defined-benefit pension and other post-retirement ~~plans ("Direct Plans").~~plans. The defined benefit pension plans cover certain ~~non-U.S.employees~~non-U.S. employees and retirees, and the pension benefits are based principally on an employee's years of service and/or compensation levels near retirement. In addition, we provide certain post-retirement health care and life insurance benefits. Generally, the post-retirement health care and life insurance plans require contributions from retirees.

For periods prior to the separation, certain nVent employees participated in defined benefit pension plans and post-retirement health plans sponsored by the former Parent, which also include the Parent participants. For purposes of these consolidated and combined financial statements, nVent accounts for these plans as multi-employer benefit plans. Accordingly, the Company does not record an asset or liability to recognize the funded status of these plans. However, for periods prior to the separation, the Company does record expense attributable to its employees who participate in these plans, as well as expense allocated for Pentair’s corporate and shared functional employees. The total expense was $2.7 million, $11.1 million and $2.9 million for the years ended December 31, 2018, 2017 and 2016, respectively.

~~The following information is applicable to only Direct Plans.~~

nVent Electric plc

Notes to consolidated and combined financial statements

Obligations and funded status

The following tables present reconciliations of plan benefit obligations, fair value of plan assets and the funded status of pension plans and other post-retirement plans as of and for the years ended December 31, ~~2018~~2020 and ~~2017:~~2019:


	Pension plans				Post-retirement health plan
In millions	2020		2019		2020		2019
Change in benefit obligations
Benefit obligation beginning of year	$	210.8	$	199.5	$	17.3	$	16.2
Service cost	6.7		5.9		0.1		0.1
Interest cost	3.5		4.0		0.5		0.6

Plan settlements	(0.2)		(0.5)		0		0
Actuarial loss	11.0		27.3		1.6		1.5
Foreign currency translation	20.6		(4.2)		0		0
Benefits paid	(6.8)		(5.0)		(1.0)		(1.1)
Plan curtailment gain	(4.2)		0		0		0
Plan transfer	0		(16.2)		0		0
Benefit obligation end of year	$	241.4	$	210.8	$	18.5	$	17.3
Change in plan assets
Fair value of plan assets beginning of year	$	28.7	$	41.8	$	0	$	0
Actual return on plan assets	1.9		3.0		0		0

Company contributions	5.7		5.2		1.1		1.1
Plan settlements	(0.3)		(0.5)		0		0
Foreign currency translation	2.0		0.4		0		0
Benefits paid	(6.8)		(5.0)		(1.1)		(1.1)
Plan transfer	0		(16.2)		0		0
Fair value of plan assets end of year	$	31.2	$	28.7	$	0	$	0
Funded status
Fair value of plan assets end of year	$	31.2	$	28.7	$	0	$	0
Benefit obligation end of year	241.4		210.8		18.5		17.3
Benefit obligations in excess of the fair value of plan assets	$	(210.2)	$	(182.1)	$	(18.5)	$	(17.3)

Pension plans Post-retirement health plan
In millions 2018 2017 2018 2017
Change in benefit obligations
Benefit obligation beginning of year $ 195.3
$ 173.8
$ 18.2
$ 17.9
Service cost 5.8
6.3
0.1
0.1
Interest cost 4.2
4.0
0.6
0.7
Benefit obligations from new plans 1.6
—
—
—
Actuarial loss (gain) 5.0
(7.1 ) (2.0 ) 0.3
Foreign currency translation (8.0 ) 23.1
—
—
Benefits paid (4.4 ) (4.8 ) (0.7 ) (0.8 )
Benefit obligation end of year $ 199.5
$ 195.3
$ 16.2
$ 18.2
Change in plan assets
Fair value of plan assets beginning of year $ 42.2
$ 35.7
$ —
$ —
Actual return on plan assets (0.6 ) 2.1
—
—
Assets from new plans 0.7
—
—
—
Company contributions 6.1
5.9
0.6
0.8
Foreign currency translation (2.2 ) 3.3
—
—
Benefits paid (4.4 ) (4.8 ) (0.6 ) (0.8 )
Fair value of plan assets end of year $ 41.8
$ 42.2
$ —
$ —
Funded status
Fair value of plan assets end of year 41.8
42.2
—
—
Benefit obligation end of year 199.5
195.3
16.2
18.2
Benefit obligations in excess of the fair value of plan assets $ (157.7 ) $ (153.1 ) $ (16.2 ) $ (18.2 )

In the fourth quarter of 2019, we transferred all of our remaining benefit obligations and plan assets attributed to a pension plan in the U.K. to a third-party insurance company purchased through an annuity contract. The transfer of benefit obligations and plan assets are reflected in the Plan transfer lines in the table above.

In the fourth quarter of 2020, we amended a defined benefit pension plan in Germany to close participation to employees hired after October 1, 2020 and employees more than 10 years from retirement age. These employees are eligible to participate in a defined contribution pension plan starting on October 1, 2020. Benefits to be provided to plan participants remaining in the legacy defined benefit plan are not affected. The amendment of the defined benefit pension plan triggered a curtailment, which required a remeasurement of the benefit obligation. The remeasurement resulted in a curtailment gain (decrease in the benefit obligation) of $4.2 million, which is reflected in Other expense in the Consolidated and Combined Statements of Operations and Comprehensive Income (Loss).

Amounts recorded in the Consolidated ~~and Combined~~ Balance Sheets at December 31 were as follows:


	Pension plans				Post-retirement health plan
In millions	2020		2019		2020		2019
Other non-current assets	$	2.1	$	1.7	$	0	$	0
Current liabilities	(4.3)		(3.7)		(1.2)		(1.2)
Non-current liabilities	(208.0)		(180.1)		(17.3)		(16.1)
Benefit obligations in excess of the fair value of plan assets	$	(210.2)	$	(182.1)	$	(18.5)	$	(17.3)

Pension plans Post-retirement health plan
In millions 2018 2017 2018 2017
Other non-current assets $ 1.0
$ 3.8
$ —
$ —
Current liabilities (3.8 ) (3.5 ) (1.2 ) (1.2 )
Non-current liabilities (154.9 ) (153.4 ) (15.0 ) (17.0 )
Benefit obligations in excess of the fair value of plan assets $ (157.7 ) $ (153.1 ) $ (16.2 ) $ (18.2 )

~~The accumulated benefit obligation for all defined benefit plans was $191.2 million and $185.3 million at December 31, 2018 and 2017, respectively.~~

nVent Electric plc

Notes to consolidated and combined financial statements

The accumulated benefit obligation for all defined benefit plans was $234.9 million and $199.5 million at December 31, 2020 and 2019, respectively.

Information for pension plans with an accumulated benefit obligation or projected benefit obligation in excess of plan assets as of December 31 was as follows:

Projected benefit obligation
exceeds the fair value
of plan assets

Accumulated benefit obligation
exceeds the fair value of
plan assets
In millions 2018 2017
2018 2017
Projected benefit obligation $ 188.7
$ 170.5

$ 185.8
$ 168.1
Fair value of plan assets 30.0
13.6

27.4
11.4
Accumulated benefit obligation N/A
N/A

177.8
158.3


	Projected benefit obligation exceeds the fair value of plan assets				Accumulated benefit obligation exceeds the fair value of plan assets
In millions	2020		2019		2020		2019
Projected benefit obligation	$	227.7	$	198.3	$	227.7	$	198.3
Fair value of plan assets	15.3		14.6		15.3		14.6
Accumulated benefit obligation	N/A		N/A		221.2		187.1

Components of net periodic benefit expense for our pension plans were as follow for the years ended December ~~31 were as follows:~~31:


	Pension plans
In millions	2018			2017			2016			In millions	2020		2019		2018
Service cost	$	5.8		$	6.3		$	5.0		Service cost	$	6.7	$	5.9	$	5.8
Interest cost	4.2			4.0			3.9			Interest cost	3.5		4.0		4.2
Expected return on plan assets	(1.4		)	(1.4		)	(1.3		)	Expected return on plan assets	(1.3)		(1.1)		(1.4)
Net actuarial loss (gain)	7.5			(6.8		)	16.7
Net actuarial loss										Net actuarial loss	10.3		25.4		7.5
Plan curtailment gain										Plan curtailment gain	(4.2)		0		0
Net periodic benefit expense	$	16.1		$	2.1		$	24.3		Net periodic benefit expense	$	15.0	$	34.2	$	16.1

Components of net periodic benefit expense for our post-retirement plan for the years ended December 31, ~~2018, 2017~~2020, 2019 and ~~2016,~~2018, were not material.

Assumptions

Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:


	Pension plans						Post-retirement health plan
Percentages	2020		2019		2018		2020		2019		2018
Discount rate	1.26	%	1.54	%	2.25	%	2.17	%	3.08	%	4.10	%
Rate of compensation increase	2.96	%	2.97	%	2.97	%	0	%	0	%	0	%

Pension plans
Post-retirement health plan
Percentages 2018 2017 2016
2018 2017 2016
Discount rate 2.25 % 2.25 % 2.09 %
4.10 % 3.40 % 3.80 %
Rate of compensation increase 2.97 % 2.98 % 2.98 %
—
—
—

Weighted-average assumptions used to determine net periodic benefit expense for years ended December 31 were as follows:


	Pension plans						Post-retirement health plan							Pension plans						Post-retirement health plan
Percentages	2018		2017		2016		2018		2017		2016		Percentages	2020		2019		2018		2020		2019		2018
Discount rate	2.25	%	2.06	%	2.61	%	3.40	%	3.80	%	3.95	%	Discount rate	1.54	%	2.25	%	2.25	%	3.08	%	4.10	%	3.40	%
Expected long-term return on plan assets	3.45	%	3.38	%	3.75	%	—		—		—		Expected long-term return on plan assets	3.91	%	4.15	%	3.45	%	0	%	0	%	0	%
Rate of compensation increase	2.98	%	2.97	%	2.97	%	—		—		—		Rate of compensation increase	2.97	%	2.97	%	2.98	%	0	%	0	%	0	%

Uncertainty in the securities markets and U.S. economy could result in investment returns less than those assumed. Should the securities markets decline or medical and prescription drug costs increase at a rate greater than assumed, we would expect increasing annual combined net pension and other post-retirement costs for the next several years. Should actual experience differ from actuarial assumptions, the projected pension benefit obligation and net pension cost and accumulated other post-retirement benefit obligation and other post-retirement benefit cost would be affected in future years.

Discount rates

The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year based on our December 31 measurement date. The discount rates on our pension plans ranged from ~~0.50%~~0.00% to ~~4.25%~~2.75%, ~~0.50%~~0.25% to ~~3.50%~~3.25% and 0.50% to ~~4.00%~~4.25% in 2020, 2019 and 2018, ~~2017~~respectively. The discount rates are determined by matching high-quality, fixed-income debt instruments with maturities corresponding to the expected timing of benefit payments as of the annual

nVent Electric plc

Notes to consolidated and ~~2016, respectively.~~combined financial statements

measurement date for each of the various plans. There are no known or anticipated changes in our discount rate assumptions that will materially impact our pension expense in ~~2019.~~2021.

Expected rates of return

The expected rates of return on our pension plan assets ranged from 1.00% to ~~5.50%~~5.00%, 1.00% to ~~5.50%~~5.25% and 1.00% to 5.50% in ~~2018, 2017~~2020, 2019 and ~~2016,~~2018, respectively. The expected rate of return is designed to be a long-term assumption that may be subject to

~~nVent Electric plc~~

~~Notes to consolidated and combined financial statements~~

considerable year-to-year variance from actual returns. In developing the expected long-term rate of return, we considered our historical returns, with consideration given to forecasted economic conditions, our asset allocations, input from external consultants and broader longer-term market indices. Any difference in the expected rate and actual returns will be included with the actuarial gain or loss recorded in the fourth quarter when our plans are remeasured.

Pension plans assets

Objective

The primary objective of our investment strategy is to meet the pension obligation to our employees at a reasonable cost to us. This is primarily accomplished through growth of capital and safety of the funds invested.

Asset allocation

The majority of our pension plan assets are invested in fixed income and equity securities which is consistent with our investment policy goals. Actual investments for our pension plans as of December 31 were as follows:


	Actual
Percentages	2020		2019
Equity securities	43	%	43	%
Fixed income	41	%	42	%
Alternative investments	12	%	11	%
Cash equivalents	4	%	4	%

Actual
Percentages 2018 2017
Equity securities 23 % 27 %
Fixed income 65 % 64 %
Alternative 8 % 5 %
Cash 4 % 4 %

Fair value measurement

The fair values of our pension plan assets ~~each of which is level 2 in the fair value hierarchy,~~ as of December 31 were as follows:


In millions	2020		2019
Cash equivalents	$	1.3	$	1.2
Fixed income:
Corporate and non U.S. government	12.7		11.9





Other investments (alternative investments)	3.8		3.1
Total investments at fair value	$	17.8	$	16.2
Investments measured at net asset value (equity securities)	13.4		12.5
Total	$	31.2	$	28.7

In millions 2018 2017
Cash and cash equivalents $ 1.5
$ 1.7
Fixed income:

Corporate and non U.S. government 27.1
26.9
Global equity securities:

Small cap equity 1.0
1.2
International equity 8.7
10.2
Other investments 3.5
2.2
Total fair value of plan assets $ 41.8
$ 42.2

Valuation methodologies used for investments measured at fair value, each of which is classified as Level 2 in the fair value hierarchy, were as follows:

~~Cash and~~ •cash ~~equivalents:~~equivalents — Cash equivalents consist of investments in commingled funds valued based on observable market data.

~~Fixed income:~~•fixed income— Investments in corporate bonds, government securities, mortgages and asset backed securities were valued based upon quoted market prices for similar securities and other observable market data. Investments in commingled funds were generally valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices or by a pricing service.

~~Global equity securities:~~ ~~Investments in commingled funds were valued at the net asset value of units held at the end of the period based upon the value of the underlying~~•other investments ~~as determined by quoted market prices or by a pricing service.~~

~~Other investments:~~ — Other investments include investments in commingled funds with diversified investment strategies. Investments in commingled funds were valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices or by a pricing service.

nVent Electric plc

Notes to consolidated and combined financial statements

Cash flows

Contributions

Pension and post-retirement plan contributions ~~to the Direct Plans~~ totaled ~~$6.1~~$6.8 million and ~~$5.9~~$5.8 million in ~~2018~~2020 and ~~2017,~~2019, respectively. The ~~2019~~2021 expected contributions will equal or exceed our minimum funding requirements of ~~$7.0~~$7.8 million.

Estimated future benefit payments

The following benefit payments, which reflect expected future service or payout from termination, as appropriate, are expected to be paid by the plans for the years ended December 31 as follows:


In millions	Pension plans		Post-retirement health plan		In millions	Pension plans		Post-retirement health plan
2019	$	4.7	$	1.2
2020	4.5		1.2
2021	4.9		1.2		2021	$	5.5	$	1.2
2022	5.2		1.2		2022	6.0		1.2
2023	7.8		1.2		2023	5.7		1.2
2024					2024	7.7		1.2
2025					2025	6.5		1.1
Thereafter	35.9		5.4		Thereafter	42.9		5.1

Savings plan

~~During 2018, 2017~~Effective January 1, 2019, nVent established and ~~2016, certain U.S. nVent employees were eligible to participate in~~is the plan sponsor of a 401(k) retirement plan ~~(the~~(nVent Management Company Retirement Savings and Incentive Plan or "401(k) plan") ~~with an~~and employee share ownership ~~("ESOP") bonus component, sponsored by the former Parent.~~plan (nVent Electric plc Employee Stock Purchase and Bonus Plan). The 401(k) plan covers certain union and all non-union U.S. employees who met certain age requirements. Under the 401(k) plan, eligible U.S. employees could voluntarily contribute a percentage of their eligible compensation and we match contributions made by employees who met certain eligibility and service requirements.

During 2017 and 2016, the matching contribution was 100% of eligible employee contributions for the first 1% of eligible compensation and 50% of the next 5% of eligible compensation. In addition to the matching contribution, all employees who met certain service requirements received a discretionary ESOP contribution equal to 1.5% of annual eligible compensation. During 2018, the matching contribution was on up to 5% of employee eligible earnings, contributed as before-tax contribution.

Eligible U.S. nVent employees participated in the Parent’s 401(k) plan. Expense was $10.5 million in 2018. The allocated expense for the Company was $7.1 million and $10.5 million in 2017 and 2016, respectively.

Effective January 1, 2019, nVent established and is the plan sponsor of a 401(k) retirement plan (nVent Management Company Retirement Savings and Incentive Plan) and employee share ownership plan (nVent Electric plc Employee Stock Purchase and Bonus Plan). The eligibility criteria and benefits provided by the plans sponsored by nVent are consistent with the provisions of the plans sponsored by the former Parent. During 2019 and the first half of 2020, the matching contribution was 100% of eligible employee contributions for the first 5% of eligible contributions contributed as pre-tax contribution. In response to the adverse effects of the COVID-19 pandemic, effective July 1, 2020, the employer matching contributions were reduced to 50% of the first 5% of eligible compensation contributed as pre-tax contribution. Expense for the 401(k) plan was $8.8 million and $10.9 million in 2020 and 2019, respectively.

During 2018, certain U.S. nVent ~~Electric plc~~employees were eligible to participate in a 401(k) plan with an employee share ownership ("ESOP") bonus component, sponsored by the former Parent. During 2018, the matching contribution was 100% of eligible employee contributions for the first 5% of eligible contributions contributed as pre-tax contribution. Expense was $10.5 million in 2018.

~~Notes to consolidated and combined financial statements~~

13.Shareholders' Equity


~~13.~~	~~Shareholders' Equity~~

Authorized shares

Our authorized share capital consists of 400.0 million ordinary shares with a par value of $0.01 per share.

Share repurchases

(the "2018 Authorization"). On February 19, 2019, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $380.0 ~~million. This authorization is in addition to~~million (the "2019 Authorization"). The 2018 and 2019 Authorizations expire on July 23, 2021.

During the ~~authorization approved in July 2018 to repurchase up to $500.0~~year ended December 31, 2020, we repurchased 2.3 million of our ordinary ~~shares. The authorization expires on July 23, 2021.~~shares for $43.2 million under the 2018 Authorization. During the year ended December 31, 2019, we repurchased 9.0 million of our ordinary shares for $232.7 million under the 2018 Authorization.

As of December 31, 2020, we had $545.1 million available for repurchases under the 2018 and 2019 Authorizations, which totaled $880.0 million.

nVent Electric plc

Notes to consolidated and combined financial statements

Dividends

Dividends paid per ordinary share were $0.70 for both the years ended December 31, 2020 and 2019.

On December ~~11, 2018,~~14, 2020, the Board of Directors declared a quarterly cash dividend of $0.175 that was paid on February ~~8, 2019~~5, 2021 to shareholders of record at the close of business on January ~~25, 2019.~~22, 2021. The balance of dividends payable included in Other current liabilities on our Consolidated ~~and Combined~~ Balance Sheets was ~~$31.0~~$29.4 million and $29.7 million at December 31, ~~2018. Dividends paid per ordinary share were $0.35 for the year ended December 31, 2018.~~2020 and 2019, respectively.


~~14.~~	~~Segment Information~~

14.Segment Information

We classify our operations into the following business segments based primarily on types of products offered and markets served:

•Enclosures —- The Enclosures segment provides ~~inventive~~innovative solutions ~~that protect,~~to connect and ~~manage heat in~~protect critical control systems, electronics, ~~communication, control~~data and ~~power~~electrical equipment. From metallic and non-metallic enclosures to cabinets, subracks and backplanes, it offers the physical infrastructure to host, connect and protect server and network equipment, as well as indoor and outdoor protection for ~~broadband voice, data~~test and ~~video surveillance~~measurement, aerospace and defense applications in industrial, infrastructure, energy and commercial verticals.

•Electrical & Fastening Solutions - The Electrical & Fastening Solutions segment provides solutions that connect and ~~energy verticals.~~

•Thermal Management — - The Thermal Management segment provides electric thermal solutions that connect and protect critical buildings, infrastructure, industrial processes and people. Its thermal management systems include heat tracing, floor heating, fire-rated and specialty wiring, sensing and snow melting and de-icing solutions for use in industrial, ~~energy,~~ commercial & residential, energy and infrastructure verticals. ~~Its~~It's highly reliable and easy to install solutions lower total cost of ownership to building owners, facility managers, operators and end users.

~~Electrical & Fastening Solutions~~ —The Electrical & Fastening Solutions segment provides fastening solutions that connect and protect electrical and mechanical systems and civil structures. Its engineered electrical and fastening products are used across a wide range of verticals, including commercial, industrial, infrastructure, and energy.

•Other — Other is primarily composed of unallocated corporate expenses, our captive insurance subsidiary and intermediate finance companies.

The accounting policies of our reporting segments are the same as those described in the summary of significant accounting policies. We evaluate performance based on the net sales and segment income (loss) and use a variety of ratios to measure performance of our reporting segments. These results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented. Segment income (loss) represents operating income exclusive of intangible amortization, separation costs, ~~net interest expense,~~ costs of restructuring activities, "mark-to-market" gain/loss for pension and other post-retirement plans, impairments and other unusual non-operating items.

nVent Electric plc

Notes to consolidated and combined financial statements

Financial information by reportable segment is included in the following summary:


	Net sales						Segment income (loss)
In millions	2020		2019		2018		2020		2019		2018
Enclosures	$	952.9	$	1,033.8	$	1,019.7	$	148.5	$	181.3	$	174.8
Electrical & Fastening Solutions	569.1		579.6		570.7		150.2		149.7		144.5
Thermal Management	476.6		590.6		623.2		93.9		145.3		154.2
Other	0		0		0		(45.0)		(52.0)		(49.1)
Consolidated	$	1,998.6	$	2,204.0	$	2,213.6	$	347.6	$	424.3	$	424.4

2018 2017 2016 2018 2017 2016
In millions Net sales Segment income (loss)
Enclosures $ 1,019.7
$ 934.9
$ 911.2
$ 174.8
$ 164.6
$ 184.4
Thermal Management 623.2
622.2
692.2
154.2
147.3
123.5
Electrical & Fastening Solutions 570.7
540.8
512.6
144.5
140.7
144.9
Other —
—
—
(49.1 ) (29.6 ) (33.6 )
Consolidated $ 2,213.6
$ 2,097.9
$ 2,116.0
$ 424.4
$ 423.0
$ 419.2
No customer accounted for more than 10% of net sales in 2020, 2019 or 2018.


	Identifiable assets						Depreciation
In millions	2020		2019		2018		2020		2019		2018
Enclosures	$	785.9	$	787.0	$	665.9	$	18.4	$	16.1	$	15.9
Electrical & Fastening Solutions	2,111.8		2,129.3		2,157.7		10.2		9.1		10.1
Thermal Management	1,271.3		1,543.7		1,557.1		7.0		7.9		8.6
Other	197.1		180.3		172.0		2.8		2.3		1.6
Consolidated	$	4,366.1	$	4,640.3	$	4,552.7	$	38.4	$	35.4	$	36.2


	Capital expenditures
In millions	2020		2019		2018
Enclosures	$	17.7	$	15.3	$	13.3
Electrical & Fastening Solutions	10.7		13.3		7.9
Thermal Management	6.2		6.8		5.1
Other	5.4		3.4		13.2
Consolidated	$	40.0	$	38.8	$	39.5

2018 2017 2016 2018 2017 2016
In millions Identifiable assets Depreciation
Enclosures $ 665.9
$ 672.3
$ 616.7
$ 15.9
$ 16.0
$ 14.6
Thermal Management 1,557.1
1,800.9
1,615.3
8.6
8.7
9.3
Electrical & Fastening Solutions 2,157.7
2,189.0
2,210.2
10.1
9.6
7.7
Other 172.0
62.8
51.6
1.6
2.2
2.8
Consolidated $ 4,552.7
$ 4,725.0
$ 4,493.8
$ 36.2
$ 36.5
$ 34.4

2018 2017 2016
In millions Capital expenditures
Enclosures $ 13.3
$ 21.7
$ 43.9
Thermal Management 5.1
4.9
24.7
Electrical & Fastening Solutions 7.9
5.2
5.9
Other 13.2
—
—
Consolidated $ 39.5
$ 31.8
$ 74.5

The following table presents a reconciliation of consolidated and combined segment income to consolidated and combined income (loss) before income ~~taxes:~~taxes for the years ended December 31:


In millions	2020		2019		2018
Segment income	$	347.6	$	424.3	$	424.4

Impairment of goodwill	(212.3)		0		0
Impairment of trade names	(8.2)		0		0
Restructuring and other	(22.0)		(24.2)		(7.7)
Intangible amortization	(64.2)		(61.4)		(60.9)
Pension and other post-retirement mark-to-market (loss) gain	(8.7)		(27.3)		(7.0)
Acquisition transaction and integration costs	(2.5)		(2.4)		0
Inventory step-up amortization	0		(3.2)		0
Separation costs	0		0		(45.0)



Interest expense, net	(36.4)		(44.7)		(31.2)
Other expense	(2.8)		(3.7)		(3.9)
Income (loss) before income taxes	$	(9.5)	$	257.4	$	268.7

In millions 2018 2017 2016
Segment Income $ 424.4
$ 423.0
$ 419.2
Restructuring and other (7.7 ) (13.0 ) (12.3 )
Intangible amortization (60.9 ) (61.4 ) (60.8 )
Pension and other post-retirement mark-to-market (loss) gain (7.0 ) 3.0
(10.8 )
Trade name impairment —
(16.4 ) (13.3 )
Separation costs (45.0 ) (16.1 ) —
Interest expense, net (31.2 ) (0.2 ) (1.4 )
Other expense (3.9 ) (5.6 ) (5.6 )
Income before income taxes $ 268.7
$ 313.3
$ 315.0

We offer a broad array of products and systems to multiple markets and customers for which we do not have the information systems to track revenues by primary product category. However, our net sales by segment are representative of our sales by major product category. We sell our products through various distribution channels including wholesale and retail distributors, original equipment manufacturers and home centers. No customer accounted for more than 10% of net sales in 2018, 2017, or 2016.

nVent Electric plc

Notes to consolidated and combined financial statements

15. Leases


~~15.~~	~~Commitments and Contingencies~~

~~Operating~~We have operating leases for office space, production facilities, distribution centers, warehouses, sales offices, fleet vehicles and equipment. In accordance with our accounting policy, leases with an initial term of 12 months or less are not recognized on the balance sheet; we recognize lease ~~commitments~~expense for these leases on a straight-line basis over the lease term. We elected the practical expedient for all leases to include both lease and non-lease components within our lease assets and lease liabilities.

~~Net rental~~Our lease agreements do not contain any material residual value guarantees, any material bargain purchase options or material restrictive covenants. We have no material sublease arrangements with third parties or lease transactions with related parties.

During the years ended December 31, 2020, 2019 and 2018, rent expense was $20.3 million, $19.8 million and $15.8 million, respectively, primarily related to operating lease costs. Costs associated with short-term leases, variable rent and subleases were immaterial.

Our leases have remaining lease terms ofone to ten years, some of which include options to extend the leases for up to five years. Renewal options that are reasonably certain to be exercised are included in the lease term. The incremental borrowing rate is used in determining the present value of lease payments, unless an implicit rate is specified. Incremental borrowing rates on a collateralized basis are determined based on the economic environment in which leases are denominated and the lease term. The weighted average remaining lease term and weighted average discount rate were as follows:


	December 31, 2020		December 31, 2019
Weighted average remaining lease term
Operating leases	5 years		5 years
Weighted average discount rate
Operating leases	3.5	%	4.0	%

Future lease payments under non-cancelable operating leases as of December 31, 2020 were as follows:


In millions

2021	$	16.9
2022	12.0
2023	7.9
2024	5.9
2025	4.6
Thereafter	10.0
Total lease payments	$	57.3
Less imputed interest	(7.4)
Total reported lease liability	$	49.9

As of December 31, 2020, we have approximately $23 million in future undiscounted cash flows related to a lease of a manufacturing facility and warehouse that has not yet commenced for which we are involved in the design and construction of the assets. The lease has a term of 10 years and is expected to commence in the first half of 2021.

Future lease payments under non-cancelable operating leases as of December 31, 2019 were as follows:


In millions

2020	$	16.7
2021	11.4
2022	7.5
2023	4.4
2024	3.5
Thereafter	10.9
Total lease payments	$	54.4
Less imputed interest	(6.0)
Total reported lease liability	$	48.4

nVent Electric plc

Notes to consolidated and combined financial statements

Supplemental cash flow information related to operating leases was as follows:


	Year ended December 31
In millions	2020		2019
Cash paid for amounts included in the measurement of lease liabilities	$	17.4	$	18.0
Lease right-of-use assets obtained in exchange for new lease liabilities	16.2		15.5

Years ended December 31
In millions 2018 2017 2016
Net rental expense $ 15.8
$ 17.6
$ 14.4

~~Future minimum lease commitments under non-cancelable~~Supplemental balance sheet information related to operating leases ~~principally related to facilities, equipment and vehicles~~ as of December 31 ~~2018 were~~was as follows:


In millions	Classification	2020		2019
Assets
Lease right-of-use assets	Other non-current assets	$	45.6	$	44.2
Liabilities
Current lease liabilities	Other current liabilities	$	14.2	$	14.7
Non-current lease liabilities	Other non-current liabilities	35.7		33.7
Total lease liabilities		$	49.9	$	48.4

In millions 2019 2020 2021 2022 2023 Thereafter Total
Net future minimum lease commitments $ 16.2
$ 12.6
$ 8.0
$ 5.6
$ 2.7
$ 9.6
$ 54.7

~~Other matters~~

~~We are subject to disputes, administrative proceedings~~16.Commitments and other claims arising out of the normal conduct of our business. These matters generally relate to disputes arising out of the use or installation of our products, product liability litigation, personal injury claims, commercial and contract disputes and employment related matters. On the basis of information currently available, management does not believe that existing proceedings and claims will have a material impact on our Consolidated and Combined Financial Statements. However, litigation is unpredictable, and we could incur judgments or enter into settlements for current or future claims that could adversely affect our financial statements.Contingencies

Warranties and guarantees

In connection with the disposition of our businesses or product lines, we may agree to indemnify purchasers for various potential liabilities relating to the sold business, such as pre-closing tax, product liability, warranty, environmental, or other obligations. The subject matter, amounts and duration of any such indemnification obligations vary for each type of liability indemnified and may vary widely from transaction to transaction.

Generally, the maximum obligation under such indemnifications is not explicitly stated and as a result, the overall amount of these obligations cannot be reasonably estimated. Historically, we have not made significant payments for these indemnifications. We believe that if we were to incur a loss in any of these matters, the loss would not have a material effect on our financial position, results of operations or cash flows.

We recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee.

We provide service and warranty policies on our products. Liability under service and warranty policies is based upon a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience warrant. Our liability for service and product warranties as of December 31, ~~2018~~2020 and ~~2017~~2019 was not material.

Stand-by letters of credit, bank guarantees and bonds

In disposing of assets or businesses, we often provide representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not have the ability to reasonably estimate the potential liability due to the inchoate and unknown nature of these potential liabilities. However, we have no reason to believe that these uncertainties would have a material adverse effect on our financial position, results of operations or cash flows.

In the ordinary course of business, we are required to commit to bonds, letters of credit and bank guarantees that require payments to our customers for any non-performance. The outstanding face value of these instruments fluctuates with the value of our projects in process and in our backlog. In addition, we issue financial stand-by letters of credit primarily to secure our performance to third parties under self-insurance programs.

As of December 31, ~~2018~~2020 and ~~2017,~~2019, the outstanding value of bonds, letters of credit and bank guarantees totaled ~~$75.8~~$43.8 million and ~~$72.3~~$70.0 million, respectively.

Other matters

We are subject to disputes, administrative proceedings and other claims arising out of the normal conduct of our business. These matters generally relate to disputes arising out of the use or installation of our products, product liability litigation, personal injury claims, commercial and contract disputes and employment related matters. On the basis of information currently available, management does not believe that existing proceedings and claims will have a material impact on our consolidated and combined financial statements. However, litigation is unpredictable, and we could incur judgments or enter into settlements for current or future claims that could adversely affect our financial statements.

nVent Electric plc

Notes to consolidated and combined financial statements

17. Selected Quarterly Data (Unaudited)


~~16.~~	~~Selected Quarterly Data (Unaudited)~~

The following tables present ~~2018~~2020 and ~~2017~~2019 quarterly financial information:


	2020
In millions, except per-share data	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
Net sales	$	520.9	$	447.2	$	509.3	$	521.2	$	1,998.6
Gross profit	195.3		160.3		196.8		197.0		749.4
Operating income (loss)	60.3		45.3		(141.6)		74.4		38.4
Net income (loss)	18.6		25.8		(138.7)		47.1		(47.2)
Earnings (loss) per ordinary share (1)
Basic	$	0.11	$	0.15	$	(0.82)	$	0.28	$	(0.28)
Diluted	$	0.11	$	0.15	$	(0.82)	$	0.28	$	(0.28)


	2019
In millions, except per-share data	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
Net sales	$	538.0	$	539.5	$	559.8	$	566.7	$	2,204.0
Gross profit	209.9		212.2		224.1		219.6		865.8
Operating income	77.5		87.0		86.1		82.5		333.1
Net income	56.4		60.9		59.9		45.5		222.7
Earnings per ordinary share (1)
Basic	$	0.32	$	0.36	$	0.35	$	0.27	$	1.30
Diluted	$	0.32	$	0.35	$	0.35	$	0.27	$	1.29

(1) Amounts may not total to annual earnings because each quarter and year are calculated separately based on basic and diluted weighted-average ordinary shares outstanding during that period.

2018
In millions, except per-share data
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Full
Year
Net sales $ 538.9
$ 542.7
$ 563.9
$ 568.1
$ 2,213.6
Gross profit 208.9
219.4
229.1
218.7
876.1
Operating income 65.6
65.3
93.7
86.2
310.8
Net income 52.3
43.3
68.2
67.0
230.8
Earnings per ordinary share ⁽¹⁾

Basic $ 0.29
$ 0.24
$ 0.38
$ 0.38
$ 1.29
Diluted $ 0.29
$ 0.24
$ 0.38
$ 0.37
$ 1.28

2017
In millions, except per-share data
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Full
Year
Net sales $ 502.2
$ 513.2
$ 540.6
$ 541.9
$ 2,097.9
Gross profit 198.7
209.7
220.1
213.4
841.9
Operating income 67.6
89.5
99.6
59.4
316.1
Net income 55.3
70.7
79.7
156.0
361.7
Earnings per ordinary share ⁽¹⁾

Basic $ 0.31
$ 0.39
$ 0.45
$ 0.87
$ 2.02
Diluted $ 0.31
$ 0.39
$ 0.44
$ 0.86
$ 2.00


⁽¹⁾	Amounts may not total to annual earnings because each quarter and year are calculated separately based on basic and diluted weighted-average ordinary shares outstanding during that period. The computations of basic and diluted earnings per share for periods prior to the separation were calculated using the shares that were distributed to Pentair shareholders upon the separation.

~~Second~~Third quarter ~~2018~~2020 includes ~~decreases in operating income due to $24.8~~a $220.5 million of separation costs and $2.3 million of restructuring and other costs. First quarter 2018 includes decreases in operating income due to $9.7 million of separation costs and $2.8 million of restructuring and other costs. Fourth quarter of 2017 includes increasesdecrease in net income ~~favorable impact~~related to impairment of ~~U.S. tax reform legislation.~~

goodwill and trade names. 2020 results were impacted by the COVID-19 pandemic.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the year ended December 31, ~~2018,~~2020, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 ("the Exchange Act"). Based upon their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the year ended December 31, ~~2018~~2020 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

Management's Annual Report on Internal Control Over Financial Reporting

The report of management required under this ITEM 9A is contained in ITEM 8 of this Annual Report on Form 10-K under the caption "Management's Report on Internal Control Over Financial Reporting."

Attestation Report of Independent Registered Public Accounting Firm

The attestation report required under this ITEM 9A is contained in ITEM 8 of this Annual Report on Form 10-K under the caption "Report of Independent Registered Public Accounting Firm."

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, ~~2018~~2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On February 18, 2019, our affiliate, nVent Management Company, adopted effective March 1, 2019 a Severance Plan for Executives (the “Severance Plan”) under which our executives, including our current executive officers (the “Named Executive Officers”) who were named in the Information Statement included with our Registration Statement on Form 10 filed with the SEC and declared effective on April 9, 2018, are eligible to receive severance benefits in the event of a qualifying termination of employment to the extent the terms and conditions of the Severance Plan are satisfied. A qualifying termination generally includes an involuntary termination for any reason other than cause, permanent disability or death. “Cause” for purposes of the Severance Plan is defined generally as a material violation of our policies; embezzlement from, or theft of property belonging to, us or one of our affiliates; willful failure to perform, or gross negligence in the performance of, or failure to perform, assigned duties; or other intentional misconduct that has, or has the potential to have, a material adverse effect on our business.None.

In the event of a qualifying termination of the employment of any of our Named Executive Officers and the satisfaction of the Severance Plan’s terms and conditions, the severance benefits would be equal to the product of (1) a severance multiplier and (2) the sum of the Named Executive Officer’s base salary and target annual bonus. The severance multiplier is two for our Chief Executive Officer and one and one-half for our other Named Executive Officers. The affected Named Executive Officer would also continue to be eligible to participate in our health plan at his or her active employee rate for a benefit continuation period of 24 months for our Chief Executive Officer and 12 months for our other Named Executive Officers. We may, in our discretion, pay for the cost of outplacement services for up to 12 months. As a condition for eligibility for the Severance Plan, participants must complete a participation agreement under which they agree to comply with customary restrictive covenants for 24 months, in the case of our Chief Executive Officer, and 18 months, in the case of our other Named Executive Officers.

~~A copy of the Severance Plan is filed as Exhibit 10.18 to this Annual Report on Form 10-K and incorporated herein by reference.~~

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required under this item with respect to directors is contained in our Proxy Statement for our ~~2019~~2021 annual general meeting of shareholders under the captions "Proposal 1 Re-elect Director Nominees" and "Corporate Governance Matters," ~~and "Section 16(a) Beneficial Ownership Reporting Compliance"~~ and is incorporated herein by reference.

Information required under this item with respect to executive officers is contained in Part I of this Form 10-K under the caption ~~"Executive Officers of the Registrant.~~"Information About Our Executive Officers."

Our Board of Directors has adopted nVent's Code of Business Conduct and Ethics and designated it as the code of ethics for the Company's Chief Executive Officer and senior financial officers. The Code of Business Conduct and Ethics also applies to all employees and directors in accordance with New York Stock Exchange Listing Standards. We have posted a copy of nVent's Code of Business Conduct and Ethics on our website at https://investors.nvent.com/corporate-governance/~~default.aspx~~. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding amendments to or waivers from, nVent's Code of Business Conduct and Ethics by posting such information on our website at https://investors.nvent.com/corporate-governance/~~default.aspx~~.

We are not including the information contained on our website as part of, or incorporating it by reference into, this report.

ITEM 11. EXECUTIVE COMPENSATION

Information required under this item is contained in our Proxy Statement for our ~~2019~~2021 annual general meeting of shareholders under the captions "Corporate Governance Matters - Director Compensation," "Compensation Committee Report," "Compensation Discussion and Analysis," and "Executive Compensation Tables" and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required under this item with respect to security ownership is contained in our Proxy Statement for our ~~2019~~2021 annual general meeting of shareholders under the caption "Security Ownership" and is incorporated herein by reference.

The following table summarizes, as of December 31, ~~2018,~~2020, information about compensation plans under which our equity securities are authorized for issuance:


Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders:
2018 Omnibus Incentive Plan	3,699,907	(1)	$	27.62	(2)	12,973,703	(3)



Total	3,699,907		$	27.62		12,973,703

(1)Consists of 2,535,564 shares subject to stock options, 566,481 shares subject to restricted stock units and 597,862 shares subject to performance share awards.

(2)Represents the weighted average exercise price of outstanding stock options and does not take into account outstanding restricted stock units or performance share units.

(3)Represents securities remaining available for issuance under the 2018 Omnibus Incentive Plan.

Plan category
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)

Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)

Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)

Equity compensation plans approved by security holders:
2018 Omnibus Incentive Plan 1,294,548
⁽¹⁾
$ —
⁽²⁾
5,041,088
⁽³⁾
Total 1,294,548
$ —
5,041,088


⁽¹⁾	~~Consists of 851,345 shares subject to stock options, 282,523 shares subject to restricted stock units, and 160,680 shares subject to performance share awards.~~


⁽²⁾	~~Represents the weighted average exercise price of outstanding stock options and does not take into account outstanding restricted stock units or performance share units.~~


⁽³⁾	~~Represents securities remaining available for issuance under the 2018 Omnibus Incentive Plan.~~

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Information required under this item is contained in our Proxy Statement for our ~~2019~~2021 annual general meeting of shareholders under the captions "Proposal 1 Re-elect Director Nominees - Director Independence" and "Corporate Governance Matters - The Board's Role and Responsibilities - Policies and Procedures Regarding Related Person Transactions" and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required under this item is contained in our Proxy Statement for our ~~2019~~2021 annual general meeting of shareholders under the caption "Proposal 4 Ratify, by Non-Binding Advisory Vote, the Appointment of Deloitte & Touche LLP as the Independent Auditor of nVent Electric plc and to Authorize, by Binding Vote, the Audit and Finance Committee of the Board of Directors to Set the Auditor's Remuneration" and is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following information required under this item is filed as part of this report:

(1) Financial Statements

Consolidated Financial Statements filed as part of this report are listed under Part II, ~~Item~~ITEM 8 of this Form 10-K.

Financial Statement Schedules

None.

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

(2) Exhibits

The exhibits of this Annual Report on Form 10-K included herein are set forth below.


Exhibit Number		Exhibit

~~Exhibit~~ ~~Number~~3.1		~~Exhibit~~
~~2.1~~	Separation and Distribution Agreement, dated as of April 27, 2018, by and between Pentair plc and nVent Electric plc (incorporated by reference to Exhibit 2.1 in the Current Report on Form 8-K of nVent Electric plc filed with the Commission on April 30, 2018 (File No. 001-38265)).

~~2.2~~	Tax Matters Agreement, dated as of April 27, 2018, by and between Pentair plc and nVent Electric plc (incorporated by reference to Exhibit 2.2 in the Current Report on Form 8-K of nVent Electric plc filed with the Commission on April 30, 2018 (File No. 001-38265)).

~~2.3~~	Transition Services Agreement, dated as of April 27, 2018, by and between Pentair plc and nVent Electric plc (incorporated by reference to Exhibit 2.3 in the Current Report on Form 8-K of nVent Electric plc filed with the Commission on April 30, 2018 (File No. 001-38265)).

~~2.4~~	Employee Matters Agreement, dated as of April 27, 2018, by and between Pentair plc and nVent Electric plc (incorporated by reference to Exhibit 2.4 in the Current Report on Form 8-K of nVent Electric plc filed with the Commission on April 30, 2018 (File No. 001-38265)).

~~3.1~~	Amended and Restated Memorandum and Articles of Association of nVent Electric plc (incorporated by reference to Exhibit 4.1 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 of nVent Electric plc filed with the Commission on December 31, 2018 (File No. 333-224555)).

4.1		Indenture, dated as of March 26, 2018, among nVent Finance S.à r.l, nVent Electric plc, Pentair plc, Pentair Investments Switzerland GmbH and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to Amendment No. 4 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on March 26, 2018 (File No. 001-38265)).

4.2		First Supplemental Indenture, dated as of March 26, 2018, among nVent Finance S.à r.l, nVent Electric plc, Pentair plc, Pentair Investments Switzerland GmbH and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to Amendment No. 4 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on March 26, 2018 (File No. 001-38265)).

4.3		Second Supplemental Indenture, dated as of March 26, 2018, among nVent Finance S.à r.l, nVent Electric plc, Pentair plc, Pentair Investments Switzerland GmbH and U.S. Bank National Association (incorporated by reference to Exhibit 4.3 to Amendment No. 4 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on March 26, 2018 (File No. 001-38265)).

4.4		Third Supplemental Indenture, dated as of April 30, 2018, among nVent Finance S.à r.l, nVent Electric plc and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of nVent Electric plc filed with the Commission on April 30, 2018 (File No. 001-38265)).

4.5		Credit Agreement, dated as of March 23, 2018, among nVent Electric plc, nVent Finance S.à r.l., Hoffman Schroff Holdings, Inc. (formerly known as Pentair Technical Products Holdings, Inc.) and the lenders and agents party thereto (incorporated by reference to Exhibit 4.4 to Amendment No. 4 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on March 26, 2018 (File No. 001-38265)).

4.6		Amendment No. 1, dated as of December 20, 2019, to Credit Agreement, dated as of March 23, 2018, among nVent Electric plc, nVent Finance S.à r.l., Hoffman Schroff Holdings, Inc. (formerly known as Pentair Technical Products Holdings, Inc) and the lenders and agents party thereto. (incorporated by reference to Exhibit 4.6 in the Annual Report on Form 10-K of nVent Electric plc filed with the Commission on February 25, 2020 (File No. 001-38265)).

4.7		Description of Securities(incorporated by reference to Exhibit 4.7 in the Annual Report on Form 10-K of nVent Electric plc filed with the Commission on February 25, 2020 (File No. 001-38265)).

10.1		nVent Electric plc 2018 Omnibus Incentive Plan (incorporated by reference to ~~Exhibit 10.2 in~~Appendix B to the ~~Current Report~~Definitive Proxy Statement on ~~Form 8-K~~Schedule 14A of nVent Electric plc filed with the Commission on ~~April 30, 2018~~March 31, 2020 (File No. 001-38265)).*




10.2				Form of Executive Officer Stock Option Award Agreement (incorporated by reference to Exhibit 10.2 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on May 8, 2018 (File No. 001-38265)).*


10.3						Form of Executive Officer Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on May 8, 2018 (File No. 001-38265)).*

10.4						Form of Executive Officer Performance Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on May 8, 2018 (File No. 001-38265)).*

10.5						Description of nVent Electric plc Management Incentive Plan (incorporated by reference to Exhibit 10.5 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on ~~May 8, 2018~~July 31, 2020 (File No. 001-38265)).*

10.6						Form of Non-Employee Director Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.6 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on May 8, 2018 (File No. 001-38265)).*

10.7						Form of Key Executive Employment and Severance Agreement for Beth A. Wozniak, Michael B. Faulconer, Lynnette R. Heath, Jon D. Lammers, ~~Stacy P. McMahan, Thomas F. Pettit,~~Elizabeth C. Noonan, Aravind Padmanabhan, Joseph A. Ruzynski, ~~and~~ Randolph A. Wacker, and Sara E. Zawoyski (incorporated by reference to Exhibit 10.6 to Amendment No. 2 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on January 31, 2018 (File No. 001-38265)).*

10.8						nVent Electric plc Employee Stock Purchase and Bonus Plan, as amended and restated January 1, ~~2019.~~2021.*

10.9						nVent Management Company Non-Qualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.4 in the Current Report on Form 8-K of nVent Electric plc filed with the Commission on April 30, 2018 (File No. 001-38265)).*

10.10						nVent Electric plc Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.10 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on May 8, 2018 (File No. 001-38265)).*

10.11						nVent Management Company Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.5 in the Current Report on Form 8-K of nVent Electric plc filed with the Commission on April 30, 2018 (File No. 001-38265)).*

10.12						Flow Control Supplemental Savings and Retirement Plan (incorporated by reference to Exhibit 10.12 to Amendment No. 2 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on January 31, 2018 (File No. 001-38265)).*

10.13						Form of Deed of Indemnification for directors and executive officers of nVent Electric plc (incorporated by reference to Exhibit 10.4 to Amendment No. 2 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on January 31, 2018 (File No. 001-38265)).*

10.14						Form of Indemnification Agreement for directors and executive officers of nVent Electric plc (incorporated by reference to Exhibit 10.5 to Amendment No. 2 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on January 31, 2018 (File No. 001-38265)).*

10.15						Form of Key Executive Employment and Severance Agreement for Robert J. van der Kolk (incorporated by reference to Exhibit 10.15 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on July 26, 2018 (File No. 001-38625)).*

10.16						~~Separation~~Tax Matters Agreement, dated as of April 27, 2018, by and ~~Release, effective December 14, 2018,~~ between ~~Benjamin Sommerness~~Pentair plc and nVent ~~Management Company~~Electric plc (incorporated by reference to Exhibit ~~10.1~~2.2 in the Current Report on Form 8-K of nVent Electric plc filed with the Commission on ~~December 17,~~April 30, 2018 (File No. ~~001-38625)~~001-38265)).

10.17						Description of Amendment to the nVent Management Company Non-Qualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.9 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on July 31, 2020 (File No. 001-38265)).*

~~10.17~~10.18						nVent Electric plc Non-Employee Director Compensation ~~Policy.~~Policy (incorporated by reference to Exhibit 10.17 in the Annual Report on Form 10-K of nVent Electric plc filed with the Commission on February 19, 2019 (File No. 001-38265)).*

~~10.18~~10.19						nVent ~~Electric plc~~Management Company Severance Plan for Executives ~~(the “Severance Plan”~~effective March 1, 2019, as amended effective December 9, 2019 (incorporated by reference to Exhibit 10.19 in the Annual Report on Form 10-K of nVent Electric plc filed with the Commission on February 25, 2020 (File No. 001-38265)).*

21						List of nVent Electric plc subsidiaries.


22		Guarantors and Subsidiary Issuers of Guaranteed Securities (incorporated by reference to Exhibit 22 in the Quarterly Report on Form 10-Q of nVent Electric plc filed with the Commission on April 29, 2020 (File No. 001-38265)).

23		Consent of Independent Registered Public Accounting Firm — Deloitte & Touche LLP.

24	~~Power of attorney.~~

~~31.1~~	~~Certification of Chief Executive Officer.~~

~~31.2~~	~~Certification of Chief Financial Officer.~~



24						Power of attorney.

31.1						Certification of Chief Executive Officer.

31.2						Certification of Chief Financial Officer.

32.1						Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101						The following materials from nVent Electric plc's Annual Report on Form 10-K for the year ended December 31, ~~2018~~2020 are filed herewith, formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated and Combined Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, ~~2018, 2017~~2020, 2019 and ~~2016,~~2018, (ii) the Consolidated ~~and Combined~~ Balance Sheets as of December 31, ~~2018~~2020 and ~~2017,~~2019, (iii) the Consolidated and Combined Statements of Cash Flows for the years ended December 31, ~~2018, 2017~~2020, 2019 and ~~2016,~~2018, (iv) the Consolidated and Combined Statements of Changes in Equity for the years ended December 31, ~~2018, 2017~~2020, 2019 and ~~2016~~2018 and (v) the Notes to the Consolidated and Combined Financial Statements.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).



*			Denotes a management contract or compensatory plan or arrangement.

ITEM 16. FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February ~~19, 2019.~~

23, 2021.


	NVENT ELECTRIC PLC

	~~NVENT ELECTRIC PLC~~By	/s/ Sara E. Zawoyski
		Sara E. Zawoyski
	By	~~/s/ Stacy P. McMahan~~
~~Stacy P. McMahan~~
Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, on February ~~19, 2019.~~

23, 2021.



Signature		Title
/s/ Beth A. Wozniak		Chief Executive Officer and Director
Beth A. Wozniak

/s/ ~~Stacy P. McMahan~~Sara E. Zawoyski		Executive Vice President and Chief Financial Officer
~~Stacy P. McMahan~~Sara E. Zawoyski

~~/s/ Randolph A. Wacker~~	~~Senior Vice President and Chief Accounting Officer~~
~~Randolph A. Wacker~~

*	~~Director~~
~~Brian M. Baldwin~~

*	~~Director~~
~~Jerry W. Burris~~

*	~~Director~~
~~Susan M. Cameron~~

*	~~Director~~
~~Michael L. Ducker~~

*	~~Director~~
~~David H. Y. Ho~~

*	~~Director~~
~~Randall J. Hogan~~

*	~~Director~~
~~Ronald L. Merriman~~

*	~~Director~~
~~William T. Monahan~~

*	~~Director~~
~~Herbert K. Parker~~



/s/ Randolph A. Wacker						Senior Vice President, Chief Accounting Officer and Treasurer
Randolph A. Wacker

*						Director
Jerry W. Burris

*						Director
Susan M. Cameron

*						Director
Michael L. Ducker

*						Director
Randall J. Hogan

*						Director
Ronald L. Merriman

*						Director
Nicola Palmer

*						Director
Herbert K. Parker

*						Director
Jacqueline Wright


*By			/s/ Jon D. Lammers
			Jon D. Lammers
			Attorney-in-fact

8587



Ireland						98-1391970
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification number)



Title of each class	Trading symbol	Name of each exchange on which registered
Ordinary Shares, nominal value $0.01 per share	NVT	New York Stock Exchange



þ☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


~~The Mille, 1000 Great West Road, 8th Floor (East), London, TW8 9DW, United Kingdom~~
(Address of principal executive offices)


	Base Period 2018	INDEXED RETURNS Years ended
Company / Index	April 30	Q4 2018	Q4 2019	Q4 2020
nVent Electric plc	100	102.99	117.30	113.84
S&P Mid Cap 400 Index	100	88.82	110.18	128.87
S&P Mid Cap 400 Industrials Index	100	90.13	118.98	137.03



	Base Period 2018	INDEXED RETURNS Quarters ended in 2018
Company / Index	April 30	June 30	September 30	December 31
nVent Electric plc	100	113.57	123.69	102.99
S&P Mid Cap 400 Index	100	104.23	107.86	88.82
S&P Mid Cap 400 Industrials Index	100	103.07	111.08	90.13



	(a)	(b)		(c)	(d)
	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Dollar value of shares that may yet be purchased under the plans or programs
October 1 – October 27, 2018	2,293	$	27.52	—	$	500,000,000
October 28 – November 24, 2018	2,018,748	24.86		1,922,799	452,084,142
November 25 – December 31, 2018	510,398	21.88		506,214	441,003,961
Total	2,531,439			2,429,013



	2018		2017
Growth	1.7	pts	2.0	pts
Inflation	(3.5	)	(2.4	)
Productivity/Price	1.3		(2.2	)
Total	(0.5	pts)	(2.6	pts)



Beth A. Wozniak						~~Stacy P. McMahan~~Sara E. Zawoyski
Chief Executive Officer						Executive Vice President and Chief Financial Officer


In millions	Ordinary shares				Additional paid-in capital			Retained earnings			Net Parent Investment			Accumulated other comprehensive loss			Total			In millions	Ordinary shares			Additional paid-in capital	Retained earnings		Net Parent Investment		Accumulated other comprehensive loss						Total
	Number		Amount																		Number	Amount									Total
Balance - December 31, 2015	—		$	—	$	—		$	—		$	3,595.6		$	(88.9	)	$	3,506.7
Net Income	—		—		—			—			259.1			—			259.1
Other comprehensive income, net of tax	—		—		—			—			—			28.3			28.3
Net transfers to Parent	—		—		—			—			(308.4		)	—			(308.4		)
Balance - December 31, 2016	—		$	—	$	—		$	—		$	3,546.3		$	(60.6	)	$	3,485.7
Net income	—		—		—			—			361.7			—			361.7
Other comprehensive income, net of tax	—		—		—			—			—			3.5			3.5
Net transfers to Parent	—		—		—			—			(59.6		)	—			(59.6		)
Balance - December 31, 2017	—		$	—	$	—		$	—		$	3,848.4		$	(57.1	)	$	3,791.3		Balance - December 31, 2017	0	$	0		$	0	$	0	$	3,848.4			$	(57.1)				$	3,791.3
Net income	—		—		—			177.3			53.5			—			230.8			Net income	—	—			—		177.3		53.5		—					230.8
Cumulative effect of accounting changes	—		—		—			—			(172.7		)	—			(172.7		)	Cumulative effect of accounting changes	—	—			—		—		(172.7)							(172.7)
Other comprehensive income, net of tax	—		—		—			—			—			(50.7		)	(50.7		)
Net transfers from Parent	—		—		—			—			14.6			—			14.6
Cash provided at separation to Parent	—		—		—			—			(993.6		)	—			(993.6		)
Other comprehensive income (loss), net of tax																				Other comprehensive income (loss), net of tax	—	—			—		—		—		(50.7)					(50.7)
Net transfers from former Parent																				Net transfers from former Parent	—	—			—		—		14.6		—					14.6
Cash provided at separation to former Parent																				Cash provided at separation to former Parent	—	—			—		—		(993.6)		—					(993.6)
Reclassification of Net Parent investment to additional paid-in capital	—		—		2,750.2			—			(2,750.2		)	—			—			Reclassification of Net Parent investment to additional paid-in capital	—	—			2,750.2		—		(2,750.2)		—					0
Issuance of common stock upon separation	178.4		1.8		—			—			—			—			1.8			Issuance of common stock upon separation	178.4	1.8			—		—		—		—					1.8
Dividends declared	—		—		—			(93.9		)	—			—			(93.9		)	Dividends declared	—	—			—		(93.9)		—		—					(93.9)
Share repurchases	(2.4	)	—		(59.0		)	—			—			—			(59.0		)	Share repurchases	(2.4)	—			(59.0)		—		—		—					(59.0)
Exercise of options, net of shares tendered for payment	1.0		—		12.1			—			—			—			12.1			Exercise of options, net of shares tendered for payment	1.0	—			12.1		—		—		—					12.1
Issuance of restricted shares, net of cancellations	0.4		—		—			—			—			—			—			Issuance of restricted shares, net of cancellations	0.4	—			—		—		—		—					—
Shares surrendered by employees to pay taxes	(0.2	)	—		(3.5		)	—			—			—			(3.5		)	Shares surrendered by employees to pay taxes	(0.2)	—			(3.5)		—		—		—					(3.5)
Share-based compensation	—		—		9.9			—			—			—			9.9			Share-based compensation	—	—			9.9		—		—		—					9.9
Balance - December 31, 2018	177.2		$	1.8	$	2,709.7		$	83.4		$	—		$	(107.8	)	$	2,687.1		Balance - December 31, 2018	177.2	$	1.8		$	2,709.7	$	83.4	$	0	$	(107.8)				$	2,687.1
Net income																				Net income	—	—			—		222.7		—		—					222.7

Other comprehensive income, net of tax																				Other comprehensive income, net of tax	—	—			—		—		—		9.2					9.2

Dividends declared																				Dividends declared	—	—			—		(119.4)		—		—					(119.4)
Share repurchases																				Share repurchases	(8.9)	(0.1)			(232.6)		—		—		—					(232.7)
Exercise of options, net of shares tendered for payment																				Exercise of options, net of shares tendered for payment	0.9	—			13.1		—		—		—					13.1
Issuance of restricted shares, net of cancellations																				Issuance of restricted shares, net of cancellations	0.4	—			—		—		—		—					—
Shares surrendered by employees to pay taxes																				Shares surrendered by employees to pay taxes	(0.1)	—			(3.6)		—		—		—					(3.6)
Share-based compensation																				Share-based compensation	—	—			16.1		—		—		—					16.1
Balance - December 31, 2019																				Balance - December 31, 2019	169.5	$	1.7		$	2,502.7	$	186.7	$	0	$	(98.6)				$	2,592.5
Net income (loss)																				Net income (loss)	—	—			—		(47.2)		—		—					(47.2)

Other comprehensive income, net of tax																				Other comprehensive income, net of tax	—	—			—		—		—		3.4					3.4

Dividends declared																				Dividends declared	—	—			—		(118.8)		—		—					(118.8)

Share repurchases																				Share repurchases	(2.3)	0			(43.2)		—		—		—					(43.2)

Exercise of options, net of shares tendered for payment																				Exercise of options, net of shares tendered for payment	0.7	—			11.3		—		—		—					11.3
Issuance of restricted shares, net of cancellations																				Issuance of restricted shares, net of cancellations	0.5	—			—		—		—		—					—
Shares surrendered by employees to pay taxes																				Shares surrendered by employees to pay taxes	(0.2)	—			(4.1)		—		—		—					(4.1)
Share-based compensation																				Share-based compensation	—	—			15.9		—		—		—					15.9

Balance - December 31, 2020																				Balance - December 31, 2020	168.2	$	1.7		$	2,482.6	$	20.7	$	0	$	(95.2)				$	2,409.8


1.	~~Basis of Presentation and Summary of Significant Accounting Policies~~



Consolidated and Combined Balance Sheets
In millions	Balance at December 31, 2017		Adjustments due to ASU 2016-16			Adjustments due to ASU 2014-09			Balance at January 1, 2018
Assets
Accounts and notes receivable, net	$	349.3	$	—		$	3.8		$	353.1
Inventories	224.1		—			(1.8		)	222.3
Other current assets	132.3		—			1.8			134.1
Other non-current assets	251.8		(174.5		)	—			77.3
Liabilities
Other current liabilities	141.3		—			3.8			145.1
Deferred tax liabilities	279.4		—			0.4			279.8
Equity
Net Parent investment	3,848.4		(174.5		)	1.8			3,675.7



In millions	December 31, 2018		January 1, 2018		$ Change			% Change
Contract assets	$	74.4	$	69.9	$	4.5		6.4	%
Contract liabilities	13.2		14.3		(1.1		)	(7.7	)%
Net contract assets	$	61.2	$	55.6	$	5.6		10.1	%



In millions	December 31, 2016		Acquisitions/ divestitures		Foreign currency translation/other		December 31, 2017
Enclosures	$	267.6	$	—	$	7.2	$	274.8
Thermal Management	924.2		—		2.9		927.1
Electrical & Fastening Solutions	1,031.0		5.3		—		1,036.3
Total goodwill	$	2,222.8	$	5.3	$	10.1	$	2,238.2


Recurring fair value measurements	2020
In millions	Level 1		Level 2		Level 3		NAV		Total

Foreign currency contract liabilities	$	0	$	(14.3)	$	0	$	0	$	(14.3)
Foreign currency contract assets	0		0.9		0		0		0.9
Interest rate swap assets	0		2.1		0		0		2.1
Deferred compensation plan assets	15.6		0		0		4.4		20.0
Total recurring fair value measurements	$	15.6	$	(11.3)	$	0	$	4.4	$	8.7


⁽¹⁾ (2)"International" reflects non-U.K. income (loss) before income taxes.	~~"Federal" reflects United Kingdom ("U.K.") income before income taxes.~~


⁽²⁾	~~"International" reflects non-U.K. income before income taxes.~~


⁽¹⁾ (2)"Federal" represents U.K. taxes.	~~"Federal" represents U.K. taxes.~~