Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2018	Jun. 29, 2018
Document Information [Line Items]
Entity Registrant Name	nVent Electric PLC
Entity Central Index Key	0001720635
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false
Trading Symbol	NVT
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Common Stock, Shares Outstanding	177,224,202
Entity Public Float		$ 4,418,013,345

Consolidated and Combined Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Net sales	$ 2,213.6	$ 2,097.9	$ 2,116.0
Cost of goods sold	1,337.5	1,256.0	1,280.2
Gross profit	876.1	841.9	835.8
Selling, general and administrative	519.7	483.3	462.4
Research and development	45.6	42.5	40.6
Operating income	310.8	316.1	332.8
Net interest expense	31.2	0.2	1.4
Other expense	10.9	2.6	16.4
Income before income taxes	268.7	313.3	315.0
Provision (benefit) for income taxes	37.9	(48.4)	55.9
Net income	230.8	361.7	259.1
Comprehensive income, net of tax
Net income	230.8	361.7	259.1
Changes in cumulative translation adjustment	(48.2)	2.4	31.6
Changes in market value of derivative financial instruments, net of tax	(2.5)	1.1	(3.3)
Comprehensive income	$ 180.1	$ 365.2	$ 287.4
Earnings per ordinary share
Basic earnings per ordinary share (in dollars per share)			$ 1.45
Diluted (dollars per share)	$ 1.28	$ 2.00
Diluted earnings per ordinary share (in dollars per share)			$ 1.43
Weighted average ordinary shares outstanding
Basic (shares)	178.6	179.0	179.0
Diluted (shares)	180.8	181.2	181.2

Consolidated and Combined Balance Sheets - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 159.0	$ 26.9
Accounts and notes receivable, net of allowances of $6.1 and $8.4, respectively	340.9	349.3
Inventories	228.2	224.1
Other current assets	118.4	132.3
Total current assets	846.5	732.6
Property, plant and equipment, net	264.8	265.8
Other assets
Goodwill	2,234.3	2,238.2
Intangibles, net	1,173.3	1,236.6
Other non-current assets	33.8	251.8
Total other assets	3,441.4	3,726.6
Total assets	4,552.7	4,725.0
Current liabilities
Current maturities of long-term debt and short-term borrowings	12.5	0.0
Accounts payable	186.4	174.1
Employee compensation and benefits	75.8	75.5
Other current liabilities	187.0	141.3
Total current liabilities	461.7	390.9
Other liabilities
Long-term debt	929.2	0.0
Pension and other post-retirement compensation and benefits	177.9	176.7
Deferred tax liabilities	224.8	279.4
Other non-current liabilities	72.0	86.7
Total liabilities	1,865.6	933.7
Equity
Net Parent investment	0.0	3,848.4
Ordinary shares $0.01 par value, 400.0 authorized, 177.2 issued at December 31, 2018	1.8	0.0
Additional paid-in capital	2,709.7	0.0
Retained earnings	83.4	0.0
Accumulated other comprehensive loss	(107.8)	(57.1)
Total equity	2,687.1	3,791.3
Total liabilities and equity	$ 4,552.7	$ 4,725.0

Consolidated and Combined Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accounts and notes receivable, allowances	$ 6.1	$ 8.4
Common stock, par value (per share)	$ 0.01
Common stock, shares authorized (in shares)	400,000,000
Common stock, shares issued	177,200,000

Consolidated and Combined Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Operating activities
Net income	$ 230.8	$ 361.7	$ 259.1
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Depreciation	36.2	36.5	34.4
Amortization	60.9	61.4	60.8
Deferred income taxes	(23.6)	(158.0)	(1.7)
Share-based compensation	12.8	14.6	13.4
Impairment of trade names	0.0	16.4	13.3
Pension and other post-retirement expense	14.9	14.3	27.8
Pension and other post-retirement contributions	(6.7)	(6.7)	(4.7)
Changes in assets and liabilities, net of effects of business acquisitions
Accounts and notes receivable	(1.3)	(18.2)	6.1
Inventories	(12.0)	(8.9)	0.4
Other current assets	7.3	5.6	(40.0)
Accounts payable	13.4	17.0	15.0
Employee compensation and benefits	6.8	11.6	(19.7)
Other current liabilities	27.5	21.3	(9.4)
Other non-current assets and liabilities	(23.5)	41.1	9.2
Net cash provided by (used for) operating activities of continuing operations	343.5	409.7	364.0
Investing activities
Capital expenditures	(39.5)	(31.8)	(74.5)
Proceeds from sale of property and equipment	2.4	4.2	5.9
Acquisitions, net of cash acquired	(2.0)	(13.6)	0.0
Net cash provided by (used for) investing activities	(39.1)	(41.2)	(68.6)
Financing activities
Net repayments of short-term borrowings	(0.3)	0.0	0.0
Proceeds from long-term debt	1,000.0	0.0	0.0
Repayment of long-term debt	(52.5)	0.0	0.0
Debt issuance costs	(9.9)	0.0	0.0
Cash provided at separation to Parent	(993.6)	0.0	0.0
Dividends paid	(62.9)	0.0	0.0
Net transfers to Parent prior to separation	0.0	(359.5)	(308.9)
Shares issued to employees, net of shares withheld	8.6	0.0	0.0
Repurchases of ordinary shares	(56.0)	0.0	0.0
Net cash provided by (used for) financing activities	(166.6)	(359.5)	(308.9)
Effect of exchange rate changes on cash and cash equivalents	(5.7)	(3.6)	12.3
Change in cash and cash equivalents	132.1	5.4	(1.2)
Cash and cash equivalents, beginning of year	26.9	21.5	22.7
Cash and cash equivalents, end of year	159.0	26.9	21.5
Cash paid for interest, net	34.7	0.0	0.0
Cash paid for income taxes, net	$ 57.4	$ 0.0	$ 0.0

Consolidated and Combined Statements of Changes in Equity - USD ($) shares in Millions, $ in Millions	Total	Ordinary shares	Additional paid-in capital	Retained earnings	Net Parent Investment	Accumulated other comprehensive loss
Balance (in shares) at Dec. 31, 2015		0.0
Beginning Balance at Dec. 31, 2015	$ 3,506.7	$ 0.0	$ 0.0	$ 0.0	$ 3,595.6	$ (88.9)
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 (in shares) at Dec. 31, 2016		0.0
Ending Balance at Dec. 31, 2016	3,485.7	$ 0.0	0.0	0.0	3,546.3	(60.6)
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 (in shares) at Dec. 31, 2017		0.0
Ending Balance at Dec. 31, 2017	3,791.3	$ 0.0	0.0	0.0	3,848.4	(57.1)
Net income	230.8			177.3	53.5
Other comprehensive income, net of tax	(50.7)					(50.7)
Net transfers to Parent	14.6				14.6
Cash provided at separation to Parent	(993.6)				(993.6)
Reclassification of Net Parent investment to additional paid-in capital	0.0		2,750.2		(2,750.2)
Issuance of common stock upon separation		178.4
Issuance of common stock upon separation	1.8	$ 1.8	0.0
Shares surrendered by employees to pay taxes (in shares)		(0.2)
Dividends declared	(93.9)			(93.9)
Share repurchase (in shares)		(2.4)
Share repurchases	(59.0)	$ 0.0	(59.0)
Exercise of options, net of shares tendered for payment (in shares)		1.0
Exercise of options, net of shares tendered for payment	12.1		12.1
Issuance of restricted shares, net of cancellations (in shares)		0.4
Shares surrendered by employees to pay taxes	(3.5)		(3.5)
Share-based compensation	9.9		9.9
Balance (in shares) at Dec. 31, 2018		177.2
Ending Balance at Dec. 31, 2018	$ 2,687.1	$ 1.8	$ 2,709.7	$ 83.4	$ 0.0	$ (107.8)

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Business

nVent Electric plc ("nVent," "we," "us," "our" or the "Company") is a leading global provider of electrical connection and protection solutions. The Company is comprised of three reporting segments: Enclosures, Thermal Management and Electrical & Fastening Solutions.

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.

Separation from Pentair

On April 30, 2018, Pentair plc ("Pentair" or "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.

Except where indicated, references below to transactions completed by nVent prior to April 30, 2018 refer to transactions completed by or on behalf of the Electrical reporting segment of Pentair that are reflected on the consolidated and combined financial statements of nVent.

Basis of presentation

The consolidated and combined financial statements have been prepared in U.S. dollars ("USD") and in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Intercompany accounts and transactions have been eliminated.

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.

Cost allocations

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. The amounts allocated were $42.5 million, $65.7 million and $75.7 million for the years ended December 31, 2018, 2017 and 2016, respectively, of which $10.3 million, $31.0 million and $31.0 million, respectively, were historically recorded to the Electrical segment in Pentair’s consolidated financial statements. 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.

The Company considers the allocation methodology regarding Pentair’s general corporate expenses to be reasonable for all periods presented. 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. Actual costs for periods prior to the separation that would have been incurred if nVent had been a standalone company would depend on multiple factors including organization structure, capital structure and strategic decisions made in various areas, including information technology and infrastructure. Transactions between nVent and Pentair have been included in related party transactions in these consolidated and combined financial statements and were considered to be effectively settled at the time the transaction was recorded. The total net effect of the settlement of these transactions is reflected in the Consolidated and Combined Statements of Cash Flows as a financing activity and in the Consolidated and Combined Balance Sheets as Net Parent investment. The Net Parent investment represents Pentair’s historical investment in nVent, the net effect of cost allocations from transactions with Pentair, net transfers of cash and assets to Pentair and nVent’s accumulated earnings.

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.

For periods prior to the separation, certain nVent operations were included in Pentair’s U.S. federal and state income tax returns and substantially all income taxes on those operations have been paid by Pentair. 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 and relieved through the Net Parent investment account and the Net transfers to 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.

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.

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.

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.

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 Selling, 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

Revenue

12 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

Revenue

Revenue recognition

Revenue is recognized when control of the promised goods or services are 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 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 72% of our revenue for the year ended December 31, 2018. 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 28% of our revenue for the year ended December 31, 2018. 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, we had $60.0 million of remaining performance obligations on contracts with original expected duration of 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.

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 can come in many forms, such as customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives.

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 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 and Comprehensive Income. 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 and Comprehensive Income.

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 and liabilities consisted of the following:



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.

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Further, we do not adjust the promised amount 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

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, 2018
In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total
U.S. and Canada	$	704.3	$	351.4	$	397.8	$	1,453.5
Developed Europe ⁽¹⁾	202.7		174.4		110.8		487.9
Developing ⁽²⁾	101.0		80.9		47.1		229.0
Other Developed ⁽³⁾	11.7		16.5		15.0		43.2
Total	$	1,019.7	$	623.2	$	570.7	$	2,213.6
⁽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.

Vertical net sales information was as follows:



	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

Earnings Per Share

12 Months Ended

Dec. 31, 2018

Earnings Per Share, Basic and Diluted [Abstract]

Earnings Per Share

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.

Basic and diluted earnings per share were calculated as follows:



	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

Restructuring

12 Months Ended

Dec. 31, 2018

Restructuring and Related Activities [Abstract]

Restructuring

During 2018, 2017 and 2016, we initiated and continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business, specifically in 2018 and 2017 in connection with the separation from Pentair. These initiatives included a reduction of in hourly and salaried headcount of approximately 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

Goodwill and Other Identifiable Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

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, 2017		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2018
Enclosures	$	274.8	$	—	$	(2.8	)	$	272.0
Thermal Management	927.1		—		(3.0		)	924.1
Electrical & Fastening Solutions	1,036.3		1.9		—			1,038.2
Total goodwill	$	2,238.2	$	1.9	$	(5.8	)	$	2,234.3



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

Identifiable intangible assets consisted of the following at December 31:



	2018							2017
In millions	Cost		Accumulated amortization			Net		Cost		Accumulated amortization			Net
Definite-life intangibles
Customer relationships	$	1,149.7	$	(266.4	)	$	883.3	$	1,153.0	$	(207.5	)	$	945.5
Proprietary technology and patents	14.8		(6.1		)	8.7		14.6		(4.8		)	9.8
Total definite-life intangibles	1,164.5		(272.5		)	892.0		1,167.6		(212.3		)	955.3
Indefinite-life intangibles
Trade names	281.3		—			281.3		281.3		—			281.3
Total intangibles	$	1,445.8	$	(272.5	)	$	1,173.3	$	1,448.9	$	(212.3	)	$	1,236.6

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

There were no impairment charges recorded in 2018. In 2017 and 2016, we recorded impairment charges for trade name intangible assets of $16.4 million and $13.3 million, respectively.

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



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

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Supplemental Balance Sheet Information

12 Months Ended

Dec. 31, 2018

Disclosure Supplemental Balance Sheet Information [Abstract]

Supplemental Balance Sheet Information



	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

Related Party Transactions and Net Parent Investment	12 Months Ended
Related Party Transactions and Net Parent Investment	Dec. 31, 2018
Related Party Transactions [Abstract]
Related Party Transactions and Net Parent Investment	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.

Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2018

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

Components of AOCI consist of the following:



	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	)

Debt

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

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	December 31, 2018	Maturity year	2018			2017
Senior notes - fixed rate ⁽¹⁾	3.950%	2023	300.0			—
Senior notes - fixed rate ⁽¹⁾	4.550%	2028	500.0			—
Term loan facility	3.795%	2023	147.5
Unamortized issuance costs and discounts	N/A	N/A	(5.8		)	—
Total debt			941.7			—
Less: Current maturities and short-term borrowings			(12.5		)	—
Long-term debt			$	929.2		$	—
⁽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.

The Notes are fully and unconditionally guaranteed as to payment by 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 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 under the Revolving Credit Facility as of December 31, 2018. We repaid $52.5 million of outstanding principal on the Term Loan Facility during 2018.

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, we were in compliance with all financial covenants in our debt agreements.

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



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

Derivatives and Financial Instruments

12 Months Ended

Dec. 31, 2018

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]

Derivatives and Financial Instruments

Derivative financial instruments

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 of 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 and 2017, we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of $129.0 million and $10.7 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 foreign currency contracts designated as hedges are reclassified out of AOCI and into Selling, general and administrative in 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 was not material.

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 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 based on observable inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance.

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



	2018				2017
In millions	Recorded Amount		Fair Value		Recorded Amount		Fair Value
Variable rate debt	$	147.5	$	147.5	$	—	$	—
Fixed rate debt	800.0		793.5		—		—
Total debt	$	947.5	$	941.0	$	—	$	—

Financial assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows:



Recurring fair value measurements	December 31, 2018
In millions	Level 1		Level 2			Level 3		Total
Foreign currency contract liabilities	$	—	$	(2.6	)	—		$	(2.6	)
Deferred compensation plan assets	19.1		4.0			—		23.1
Total recurring fair value measurements	$	19.1	$	1.4		$	—	$	20.5



Recurring fair value measurements	December 31, 2017
In millions	Level 1		Level 2		Level 3		Total
Foreign currency contract assets	$	—	$	0.7	$	—	$	0.7
Deferred compensation plan assets	22.9		2.2		—		25.1
Total recurring fair value measurements	$	22.9	$	2.9	$	—	$	25.8
Nonrecurring fair value measurements ⁽¹⁾

⁽¹⁾

During the fourth quarter of 2017, we completed our annual intangible assets impairment review. As a result, we recorded a pre-tax non-cash impairment charge of 16.4 million. The impairment charge reduced the total carrying value of the impacted trade name intangibles to $16.2 million. During the fourth quarter of 2016, we completed our annual intangible assets impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $13.3 million for a trade name intangible in 2016. The impairment charge reduced the carrying value of the impacted trade name intangible to zero. The fair value of trade names 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.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income before income taxes consisted of the following:



	Years ended December 31
In millions	2018			2017			2016
Federal ⁽¹⁾	$	(20.4	)	$	(19.9	)	$	(10.6	)
International ⁽²⁾	289.1			333.2			325.6
Income before income taxes	$	268.7		$	313.3		$	315.0


⁽¹⁾	"Federal" reflects United Kingdom ("U.K.") income before income taxes.


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

The provision for income taxes consisted of the following:



	Years ended December 31
In millions	2018			2017			2016
Currently payable
Federal ⁽¹⁾	$	—		$	1.0		$	(0.4	)
International ⁽²⁾	47.0			94.5			58.0
Total current taxes	47.0			95.5			57.6
Deferred
Federal ⁽¹⁾	—			—			(0.4		)
International ⁽²⁾	(9.1		)	(143.9		)	(1.3		)
Total deferred taxes	(9.1		)	(143.9		)	(1.7		)
Total provision (benefit) for income taxes	$	37.9		$	(48.4	)	$	55.9


⁽¹⁾	"Federal" represents U.K. taxes.


⁽²⁾	"International" represents non-U.K. taxes.

Reconciliations of the federal statutory income tax rate to our effective tax rate were as follows:



	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.

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



	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 million of total gross unrecognized tax benefits as of December 31, 2018 was $15.5 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 may decrease by a range of zero to $4.9 million during 2019, 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 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 to present are under audit by tax authorities in various jurisdictions, including Canada, China and Germany. 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 interest expense, respectively, in the Consolidated and Combined Statements of Operations and Comprehensive Income. As of December 31, 2018 and 2017, we have liabilities of $1.7 million and $2.0 million, respectively, for the possible payment of penalties and $2.7 million and $6.6 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 and Comprehensive Income).

Deferred taxes were recorded in the Consolidated and Combined Balance Sheets as follows:



	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

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



	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 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, tax loss carryforwards of $445.1 million were available to offset future income. A valuation allowance of $131.0 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 million are located in jurisdictions with unlimited tax loss carryforward periods, while the remainder will begin to expire in 2019.

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.

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.

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.

Benefit Plans

12 Months Ended

Dec. 31, 2018

Retirement Benefits [Abstract]

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"). The defined benefit pension plans cover certain 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.

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 and 2017:



	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	)

Amounts recorded in the Consolidated and Combined Balance Sheets were as follows:



	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.

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

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



	Pension plans
In millions	2018			2017			2016
Service cost	$	5.8		$	6.3		$	5.0
Interest cost	4.2			4.0			3.9
Expected return on plan assets	(1.4		)	(1.4		)	(1.3		)
Net actuarial loss (gain)	7.5			(6.8		)	16.7
Net periodic benefit expense	$	16.1		$	2.1		$	24.3

Components of net periodic benefit expense for our post-retirement plan for the years ended December 31, 2018, 2017 and 2016, 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	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
Percentages	2018		2017		2016		2018		2017		2016
Discount rate	2.25	%	2.06	%	2.61	%	3.40	%	3.80	%	3.95	%
Expected long-term return on plan assets	3.45	%	3.38	%	3.75	%	—		—		—
Rate of compensation increase	2.98	%	2.97	%	2.97	%	—		—		—

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% to 4.25%, 0.50% to 3.50% and 0.50% to 4.00% in 2018, 2017 and 2016, respectively. There are no known or anticipated changes in our discount rate assumptions that will impact our pension expense in 2019.

Expected rates of return

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


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

•

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 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.

Cash flows

Contributions

Pension contributions to the Direct Plans totaled $6.1 million and $5.9 million in 2018 and 2017, respectively. The 2019 expected contributions will equal or exceed our minimum funding requirements of $7.0 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
2019	$	4.7	$	1.2
2020	4.5		1.2
2021	4.9		1.2
2022	5.2		1.2
2023	7.8		1.2
Thereafter	35.9		5.4

Savings plan

During 2018, 2017 and 2016, certain U.S. nVent employees were eligible to participate in a 401(k) plan (the "401(k) plan") with an employee share ownership ("ESOP") bonus component, sponsored by the former Parent. 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.

Shareholders' Equity	12 Months Ended
Shareholders' Equity	Dec. 31, 2018
Stockholders' Equity Note [Abstract]
Shareholders' Equity	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 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. We have $441.0 million remaining availability for repurchases under 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 the authorization approved in July 2018 to repurchase up to $500.0 million of our ordinary shares. The authorization expires on July 23, 2021. Dividends On December 11, 2018, the Board of Directors declared a quarterly cash dividend of $0.175 that was paid on February 8, 2019 to shareholders of record at the close of business on January 25, 2019. The balance of dividends payable included in Other current liabilities on our Consolidated and Combined Balance Sheets was $31.0 million at December 31, 2018. Dividends paid per ordinary share were $0.35 for the year ended December 31, 2018. On February 19, 2019, the Board of Directors declared a quarterly cash dividend of $0.175 per ordinary share payable on May 3, 2019 to shareholders of record at the close of business on April 18, 2019.

Segment Information

12 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

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 solutions that protect, connect and manage heat in critical electronics, communication, control and power 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 and video surveillance applications in industrial, infrastructure, commercial 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 and infrastructure verticals. Its 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.

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



	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



	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 before income taxes:



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.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operating lease commitments

Net rental expense under operating leases was as follows:



	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 operating leases, principally related to facilities, equipment and vehicles as of December 31, 2018 were as follows:



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 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.

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 and 2017 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 and 2017, the outstanding value of bonds, letters of credit and bank guarantees totaled $75.8 million and $72.3 million, respectively.

Selected Quarterly Data (Unaudited)

12 Months Ended

Dec. 31, 2018

Selected Quarterly Financial Information [Abstract]

Selected Quarterly Data (Unaudited)

The following tables present 2018 and 2017 quarterly financial information:



	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 quarter 2018 includes decreases in operating income due to $24.8 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 increases in net income favorable impact of U.S. tax reform legislation.

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation

The consolidated and combined financial statements have been prepared in U.S. dollars ("USD") and in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Intercompany accounts and transactions have been eliminated.

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.

Cost allocations

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. The amounts allocated were $42.5 million, $65.7 million and $75.7 million for the years ended December 31, 2018, 2017 and 2016, respectively, of which $10.3 million, $31.0 million and $31.0 million, respectively, were historically recorded to the Electrical segment in Pentair’s consolidated financial statements. 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.

The Company considers the allocation methodology regarding Pentair’s general corporate expenses to be reasonable for all periods presented. 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. Actual costs for periods prior to the separation that would have been incurred if nVent had been a standalone company would depend on multiple factors including organization structure, capital structure and strategic decisions made in various areas, including information technology and infrastructure. Transactions between nVent and Pentair have been included in related party transactions in these consolidated and combined financial statements and were considered to be effectively settled at the time the transaction was recorded. The total net effect of the settlement of these transactions is reflected in the Consolidated and Combined Statements of Cash Flows as a financing activity and in the Consolidated and Combined Balance Sheets as Net Parent investment. The Net Parent investment represents Pentair’s historical investment in nVent, the net effect of cost allocations from transactions with Pentair, net transfers of cash and assets to Pentair and nVent’s accumulated earnings.

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.

For periods prior to the separation, certain nVent operations were included in Pentair’s U.S. federal and state income tax returns and substantially all income taxes on those operations have been paid by Pentair. 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 and relieved through the Net Parent investment account and the Net transfers to Parent in the Consolidated and Combined Statements of Cash Flows.

Fiscal Year

Fiscal year

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

Use of Estimates

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.

Research and Development

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

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

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.

Inventories

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, 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.

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.

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.

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.

Income Taxes

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 (Loss) Per Common Share

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.

Derivative Financial Instruments

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 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

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.

New accounting standards