UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~June~~September 30, 2020


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

Commission file number 001-38265

nVent Electric plc

(Exact name of Registrant as specified in its charter)

Ireland

98-1391970

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification number)

The Mille, 1000 Great West Road, 8th Floor (East), London, TW8 9DW, United Kingdom

(Address of principal executive offices)

Registrant's telephone number, including area code: 44-20-3966-0279

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§223.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting
company

☐

Emerging growth
company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

On ~~June~~September 30, 2020, ~~169,929,586~~170,118,318 shares of Registrant's common stock were outstanding.

Table of Contents

nVent Electric plc

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

nVent Electric plc

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (Unaudited)


		Three months ended						Six months ended							Three months ended					Nine months ended
In millions, except per-share data	In millions, except per-share data	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		In millions, except per-share data	September 30, 2020		September 30, 2019			September 30, 2020		September 30, 2019
Net sales	Net sales	$	447.2	$	539.5	$	968.1	$	1,077.5	Net sales	$	509.3	$	559.8		$	1,477.4	$	1,637.3
Cost of goods sold	Cost of goods sold	286.9		327.3		612.5		655.4		Cost of goods sold	312.5		335.7			925.0		991.1
Gross profit	Gross profit	160.3		212.2		355.6		422.1		Gross profit	196.8		224.1			552.4		646.2
Selling, general and administrative	Selling, general and administrative	104.3		113.1		227.4		233.2		Selling, general and administrative	107.4		126.2			334.8		359.4
Research and development	Research and development	10.7		12.1		22.6		24.4		Research and development	10.5		11.8			33.1		36.2

Operating income		45.3		87.0		105.6		164.5
Impairment of goodwill and trade names										Impairment of goodwill and trade names	220.5		0			220.5		0
Operating income (loss)										Operating income (loss)	(141.6)		86.1			(36.0)		250.6

Net interest expense	Net interest expense	9.4		11.9		19.3		22.4		Net interest expense	8.5		11.6			27.8		34.0

Other expense	Other expense	0.7		1.0		1.5		1.9		Other expense	0.7		0.9			2.2		2.8
Income before income taxes		35.2		74.1		84.8		140.2
Provision for income taxes		9.4		13.2		40.4		22.9
Net income		$	25.8	$	60.9	$	44.4	$	117.3
Income (loss) before income taxes										Income (loss) before income taxes	(150.8)		73.6			(66.0)		213.8
Provision (benefit) for income taxes										Provision (benefit) for income taxes	(12.1)		13.7			28.3		36.6
Net income (loss)										Net income (loss)	$	(138.7)	$	59.9		$	(94.3)	$	177.2

Comprehensive income, net of tax
Net income		$	25.8	$	60.9	$	44.4	$	117.3
Comprehensive income (loss), net of tax										Comprehensive income (loss), net of tax
Net income (loss)										Net income (loss)	$	(138.7)	$	59.9		$	(94.3)	$	177.2
Changes in cumulative translation adjustment	Changes in cumulative translation adjustment	6.6		3.2		(16.9)		6.2		Changes in cumulative translation adjustment	1.2		(8.0)			(15.7)		(1.8)
Changes in market value of derivative financial instruments, net of tax	Changes in market value of derivative financial instruments, net of tax	(4.8)		12.7		12.2		6.5		Changes in market value of derivative financial instruments, net of tax	(5.4)		2.3			6.8		8.8

Comprehensive income		$	27.6	$	76.8	$	39.7	$	130.0
Earnings per ordinary share
Comprehensive income (loss)										Comprehensive income (loss)	$	(142.9)	$	54.2		$	(103.2)	$	184.2
Earnings (loss) per ordinary share										Earnings (loss) per ordinary share
Basic	Basic	$	0.15	$	0.36	$	0.26	$	0.67	Basic	$	(0.82)	$	0.35		$	(0.56)	$	1.03
Diluted	Diluted	$	0.15	$	0.35	$	0.26	$	0.67	Diluted	$	(0.82)	$	0.35		$	(0.56)	$	1.02
Weighted average ordinary shares outstanding	Weighted average ordinary shares outstanding									Weighted average ordinary shares outstanding
Basic	Basic	169.9		171.5		169.9		174.0		Basic	170.0		169.1			169.9		172.3
Diluted	Diluted	170.4		173.0		170.7		175.6		Diluted	170.0		170.3			169.9		173.8
Cash dividends paid per ordinary share	Cash dividends paid per ordinary share	$	0.175	$	0.175	$	0.35	$	0.35	Cash dividends paid per ordinary share	$	0.175	$	0.175		$	0.525	$	0.525

See accompanying notes to condensed consolidated financial statements.

Table of Contents

nVent Electric plc

Condensed Consolidated Balance Sheets (Unaudited)


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
In millions, except per-share data	In millions, except per-share data										September 30, 2020	December 31, 2019
Assets	Assets									Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	235.0	$	106.4	Cash and cash equivalents	$	159.8	$	106.4
Accounts and notes receivable, net of allowances of $6.5 and $5.4, respectively		300.2		334.3
Accounts and notes receivable, net of allowances of $7.5 and $5.4, respectively						Accounts and notes receivable, net of allowances of $7.5 and $5.4, respectively	327.4		334.3
Inventories	Inventories	247.5		244.7		Inventories	238.9		244.7
Other current assets	Other current assets	100.4		113.3		Other current assets	89.9		113.3
Total current assets	Total current assets	883.1		798.7		Total current assets	816.0		798.7
Property, plant and equipment, net	Property, plant and equipment, net	276.8		284.5		Property, plant and equipment, net	278.1		284.5
Other assets	Other assets					Other assets
Goodwill	Goodwill	2,297.3		2,279.1		Goodwill	2,090.7		2,279.1
Intangibles, net	Intangibles, net	1,139.6		1,160.5		Intangibles, net	1,117.6		1,160.5
Other non-current assets	Other non-current assets	115.6		117.5		Other non-current assets	108.2		117.5

Total other assets	Total other assets	3,552.5		3,557.1		Total other assets	3,316.5		3,557.1
Total assets	Total assets	$	4,712.4	$	4,640.3	Total assets	$	4,410.6	$	4,640.3
Liabilities and Equity	Liabilities and Equity									Liabilities and Equity
Current liabilities	Current liabilities					Current liabilities
Current maturities of long-term debt and short-term borrowings	Current maturities of long-term debt and short-term borrowings	$	20.0	$	17.5	Current maturities of long-term debt and short-term borrowings	$	20.0	$	17.5
Accounts payable	Accounts payable	134.9		187.1		Accounts payable	139.1		187.1
Employee compensation and benefits	Employee compensation and benefits	61.5		71.9		Employee compensation and benefits	68.8		71.9
Other current liabilities	Other current liabilities	169.8		185.7		Other current liabilities	182.0		185.7

Total current liabilities	Total current liabilities	386.2		462.2		Total current liabilities	409.9		462.2
Other liabilities	Other liabilities					Other liabilities
Long-term debt	Long-term debt	1,187.6		1,047.1		Long-term debt	1,032.8		1,047.1
Pension and other post-retirement compensation and benefits	Pension and other post-retirement compensation and benefits	211.0		207.2		Pension and other post-retirement compensation and benefits	220.0		207.2
Deferred tax liabilities	Deferred tax liabilities	253.8		237.8		Deferred tax liabilities	234.7		237.8
Other non-current liabilities	Other non-current liabilities	95.6		93.5		Other non-current liabilities	99.8		93.5
Total liabilities	Total liabilities	2,134.2		2,047.8		Total liabilities	1,997.2		2,047.8
Equity	Equity					Equity

Ordinary shares $0.01 par value, 400.0 authorized, 169.9 and 169.5 issued at June 30, 2020 and December 31, 2019, respectively		1.7		1.7
Ordinary shares $0.01 par value, 400.0 authorized, 170.1 and 169.5 issued at September 30, 2020 and December 31, 2019, respectively						Ordinary shares $0.01 par value, 400.0 authorized, 170.1 and 169.5 issued at September 30, 2020 and December 31, 2019, respectively	1.7		1.7
Additional paid-in capital	Additional paid-in capital	2,508.3		2,502.7		Additional paid-in capital	2,516.2		2,502.7
Retained earnings	Retained earnings	171.5		186.7		Retained earnings	3.0		186.7
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(103.3)		(98.6)		Accumulated other comprehensive loss	(107.5)		(98.6)
Total equity	Total equity	2,578.2		2,592.5		Total equity	2,413.4		2,592.5
Total liabilities and equity	Total liabilities and equity	$	4,712.4	$	4,640.3	Total liabilities and equity	$	4,410.6	$	4,640.3

See accompanying notes to condensed consolidated financial statements.

Table of Contents

nVent Electric plc

Condensed Consolidated Statements of Cash Flows (Unaudited)


		Six months ended							Nine months ended
In millions	In millions	June 30, 2020		June 30, 2019		In millions	September 30, 2020		September 30, 2019
Operating activities	Operating activities					Operating activities
Net income		$	44.4	$	117.3
Net income (loss)						Net income (loss)	$	(94.3)	$	177.2

Adjustments to reconcile net income to net cash provided by (used for) operating activities
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities						Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities

Depreciation	Depreciation	19.0		17.2		Depreciation	28.8		26.1
Amortization	Amortization	32.0		30.2		Amortization	48.1		45.6
Deferred income taxes	Deferred income taxes	26.2		(2.2)		Deferred income taxes	6.2		(1.9)

Share-based compensation	Share-based compensation	6.1		8.4		Share-based compensation	10.0		12.4

Impairment of goodwill and trade names						Impairment of goodwill and trade names	220.5		0

Changes in assets and liabilities, net of effects of business acquisitions	Changes in assets and liabilities, net of effects of business acquisitions					Changes in assets and liabilities, net of effects of business acquisitions
Accounts and notes receivable	Accounts and notes receivable	31.9		(7.6)		Accounts and notes receivable	7.8		(17.2)
Inventories	Inventories	(2.9)		(19.7)		Inventories	9.3		(18.4)
Other current assets	Other current assets	10.0		(7.5)		Other current assets	22.2		0
Accounts payable	Accounts payable	(49.3)		(44.0)		Accounts payable	(46.1)		(53.6)
Employee compensation and benefits	Employee compensation and benefits	(9.4)		(11.9)		Employee compensation and benefits	(3.5)		(7.7)
Other current liabilities	Other current liabilities	(16.5)		(21.5)		Other current liabilities	(3.4)		(1.9)
Other non-current assets and liabilities	Other non-current assets and liabilities	(1.0)		(0.9)		Other non-current assets and liabilities	(1.9)		(3.1)

Net cash provided by (used for) operating activities	Net cash provided by (used for) operating activities	90.5		57.8		Net cash provided by (used for) operating activities	203.7		157.5
Investing activities	Investing activities					Investing activities
Capital expenditures	Capital expenditures	(17.2)		(17.6)		Capital expenditures	(25.4)		(29.0)
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	1.4		6.1		Proceeds from sale of property and equipment	1.5		6.1

Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(27.0)		—		Acquisitions, net of cash acquired	(27.0)		(127.8)

Net cash provided by (used for) investing activities	Net cash provided by (used for) investing activities	(42.8)		(11.5)		Net cash provided by (used for) investing activities	(50.9)		(150.7)
Financing activities	Financing activities					Financing activities

Net receipts of revolving long-term debt	Net receipts of revolving long-term debt	150.0		119.0		Net receipts of revolving long-term debt	0		216.5

Repayments of long-term debt	Repayments of long-term debt	(7.5)		(5.0)		Repayments of long-term debt	(12.5)		(9.7)

Dividends paid	Dividends paid	(59.5)		(61.5)		Dividends paid	(89.2)		(91.1)

Shares issued to employees, net of shares withheld	Shares issued to employees, net of shares withheld	2.7		5.2		Shares issued to employees, net of shares withheld	4.7		5.3
Repurchases of ordinary shares	Repurchases of ordinary shares	(3.2)		(235.7)		Repurchases of ordinary shares	(3.2)		(235.7)

Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	82.5		(178.0)		Net cash provided by (used for) financing activities	(100.2)		(114.7)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(1.6)		(2.0)		Effect of exchange rate changes on cash and cash equivalents	0.8		(1.6)
Change in cash and cash equivalents	Change in cash and cash equivalents	128.6		(133.7)		Change in cash and cash equivalents	53.4		(109.5)
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	106.4		159.0		Cash and cash equivalents, beginning of period	106.4		159.0
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	235.0	$	25.3	Cash and cash equivalents, end of period	$	159.8	$	49.5

See accompanying notes to condensed consolidated financial statements.

Table of Contents

nVent Electric plc

Condensed Consolidated Statements of Changes in Equity (Unaudited)


In millions	In millions	Ordinary shares						Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total			In millions		Ordinary shares						Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss		Total
			Number		Amount														In millions		Additional paid-in capital	Retained earnings	Accumulated other comprehensive loss	Total
Balance - December 31, 2019	Balance - December 31, 2019	169.5	$	1.7		$	2,502.7								$	186.7		$									(98.6)		$	2,592.5		Balance - December 31, 2019	169.5		$	1.7	$	2,502.7	$	186.7	$	(98.6)	$	2,592.5
Net income	Net income	—	—			—		18.6		—		18.6		Net income		—			—						—			18.6			—		18.6
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	—	—			—		—		(6.5)		(6.5)		Other comprehensive income (loss), net of tax		—			—						—			—			(6.5)		(6.5)
Dividends declared	Dividends declared	—	—			—		(29.8)		—		(29.8)		Dividends declared		—			—						—			(29.8)			—		(29.8)
Share repurchases	Share repurchases	(0.2)	—			(3.2)		—		—		(3.2)		Share repurchases		(0.2)			0						(3.2)			—			—		(3.2)
Exercise of options, net of shares tendered for payment	Exercise of options, net of shares tendered for payment	0.3	—			6.4		—		—		6.4		Exercise of options, net of shares tendered for payment		0.3			—						6.4			—			—		6.4
Issuance of restricted shares, net of cancellations	Issuance of restricted shares, net of cancellations	0.3	—			—		—		—		—		Issuance of restricted shares, net of cancellations		0.3			—						—			—			—		0
Shares surrendered by employees to pay taxes	Shares surrendered by employees to pay taxes	(0.1)	—			(3.3)		—		—		(3.3)		Shares surrendered by employees to pay taxes		(0.1)			—						(3.3)			—			—		(3.3)
Share-based compensation	Share-based compensation	—	—			1.9		—		—		1.9		Share-based compensation		—			—						1.9			—			—		1.9
Balance - March 31, 2020	Balance - March 31, 2020	169.8	$	1.7		$	2,504.5	$	175.5	$	(105.1)	$	2,576.6	Balance - March 31, 2020		169.8			$	1.7					$	2,504.5		$	175.5		$	(105.1)	$	2,576.6
Net income	Net income	—	—			—		25.8		—		25.8		Net income		—			—						—			25.8			—		25.8
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	—	—			—		—		1.8		1.8		Other comprehensive income (loss), net of tax		—			—						—			—			1.8		1.8
Dividends declared	Dividends declared	—	—			—		(29.8)		—		(29.8)		Dividends declared		—			—						—			(29.8)			—		(29.8)

Exercise of options, net of shares tendered for payment	Exercise of options, net of shares tendered for payment	—	—			0.2		—		—		0.2		Exercise of options, net of shares tendered for payment		0			—						0.2			—			—		0.2
Issuance of restricted shares, net of cancellations	Issuance of restricted shares, net of cancellations	0.1	—			—		—		—		—		Issuance of restricted shares, net of cancellations		0.1			—						—			—			—		—
Shares surrendered by employees to pay taxes	Shares surrendered by employees to pay taxes	—	—			(0.6)		—		—		(0.6)		Shares surrendered by employees to pay taxes		0			—						(0.6)			—			—		(0.6)
Share-based compensation	Share-based compensation	—	—			4.2		—		—		4.2		Share-based compensation		—			—						4.2			—			—		4.2
Balance - June 30, 2020	Balance - June 30, 2020	169.9	$	1.7		$	2,508.3	$	171.5	$	(103.3)	$	2,578.2	Balance - June 30, 2020		169.9			$	1.7					$	2,508.3		$	171.5		$	(103.3)	$	2,578.2
Net income (loss)														Net income (loss)		—			—						—			(138.7)			—		(138.7)
Other comprehensive income (loss), net of tax														Other comprehensive income (loss), net of tax		—			—						—			—			(4.2)		(4.2)
Dividends declared														Dividends declared		—			—						—			(29.8)			—		(29.8)

Exercise of options, net of shares tendered for payment														Exercise of options, net of shares tendered for payment		0.2			—						2.2			—			—		2.2

Shares surrendered by employees to pay taxes														Shares surrendered by employees to pay taxes		—			—						(0.2)			—			—		(0.2)
Share-based compensation														Share-based compensation		—			—						5.9			—			—		5.9
Balance - September 30, 2020														Balance - September 30, 2020		170.1			$	1.7					$	2,516.2		$	3.0		$	(107.5)	$	2,413.4

In millions Ordinary shares Additional paid-in capital Retained earnings Accumulated
other
comprehensive loss Total
Number Amount
Balance - December 31, 2018 177.2 $ 1.8 $ 2,709.7 $ 83.4 $ (107.8) $ 2,687.1
Net income — — — 56.4 — 56.4
Other comprehensive income (loss), net of tax — — — — (3.2) (3.2)
Dividends declared — — — (30.6) — (30.6)
Share repurchases (3.0) (0.1) (79.8) — — (79.9)
Exercise of options, net of shares tendered for payment 0.3 — 3.6 — — 3.6
Issuance of restricted shares, net of cancellations 0.3 — — — — —
Shares surrendered by employees to pay taxes (0.1) — (2.6) — — (2.6)
Share-based compensation — — 4.3 — — 4.3
Balance - March 31, 2019 174.7 $ 1.7 $ 2,635.2 $ 109.2 $ (111.0) $ 2,635.1
Net income — — — 60.9 — 60.9
Other comprehensive income (loss), net of tax — — — — 15.9 15.9
Dividends declared — — — (29.6) — (29.6)
Share repurchases (5.9) — (152.8) — — (152.8)
Exercise of options, net of shares tendered for payment 0.3 — 4.8 — — 4.8
Shares surrendered by employees to pay taxes — — (0.6) — — (0.6)
Share-based compensation — — 4.1 — — 4.1
Balance - June 30, 2019 169.1 $ 1.7 $ 2,490.7 $ 140.5 $ (95.1) $ 2,537.8

Table of Contents


In millions	Ordinary shares			Additional paid-in capital	Retained earnings		Accumulated other comprehensive loss		Total
	Number	Amount
Balance - December 31, 2018	177.2	$	1.8		$	2,709.7	$	83.4	$	(107.8)	$	2,687.1
Net income	—	—			—		56.4		—		56.4
Other comprehensive income (loss), net of tax	—	—			—		—		(3.2)		(3.2)
Dividends declared	—	—			—		(30.6)		—		(30.6)
Share repurchases	(3.0)	(0.1)			(79.8)		—		—		(79.9)
Exercise of options, net of shares tendered for payment	0.3	—			3.6		—		—		3.6
Issuance of restricted shares, net of cancellations	0.3	—			—		—		—		0
Shares surrendered by employees to pay taxes	(0.1)	—			(2.6)		—		—		(2.6)
Share-based compensation	—	—			4.3		—		—		4.3
Balance - March 31, 2019	174.7	$	1.7		$	2,635.2	$	109.2	$	(111.0)	$	2,635.1
Net income	—	—			—		60.9		—		60.9
Other comprehensive income (loss), net of tax	—	—			—		—		15.9		15.9
Dividends declared	—	—			—		(29.6)		—		(29.6)
Share repurchases	(5.9)	0			(152.8)		—		—		(152.8)
Exercise of options, net of shares tendered for payment	0.3	—			4.8		—		—		4.8

Shares surrendered by employees to pay taxes	0	—			(0.6)		—		—		(0.6)
Share-based compensation	—	—			4.1		—		—		4.1
Balance - June 30, 2019	169.1	$	1.7		$	2,490.7	$	140.5	$	(95.1)	$	2,537.8
Net income	—	—			—		59.9		—		59.9
Other comprehensive income (loss), net of tax	—	—			—		—		(5.7)		(5.7)
Dividends declared	—	—			—		(29.6)		—		(29.6)

Exercise of options, net of shares tendered for payment	0	—			0.3		—		—		0.3
Issuance of restricted shares, net of cancellations	0.1	—			—		—		—		—
Shares surrendered by employees to pay taxes	0	—			(0.3)		—		—		(0.3)
Share-based compensation	—	—			4.1		—		—		4.1
Balance - September 30, 2019	169.2	$	1.7		$	2,494.8	$	170.8	$	(100.8)	$	2,566.5

See accompanying notes to condensed consolidated financial statements.

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

1.Basis of Presentation and Responsibility for Interim Financial Statements

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 3 reporting segments: Enclosures, ~~Thermal Management and~~ Electrical & Fastening ~~Solutions.~~Solutions and Thermal Management.

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 have tax residency in the U.K.

Separation from Pentair

On April 30, 2018, Pentair plc ("Pentair" or "former Parent") completed the separation of its Water business and its Electrical business into two independent, publicly-traded companies (the "separation"). To effect the separation, Pentair distributed to its shareholders 1 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 an independent publicly-traded company and began "regular way" trading under the symbol "NVT" on the New York Stock Exchange on May 1, 2018.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements of nVent have been prepared following the requirements of the Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America ("GAAP") can be condensed or omitted.

We are responsible for the unaudited condensed consolidated financial statements included in this document. The financial statements include all normal recurring adjustments that are considered necessary for the fair presentation of our financial position and operating results. As these are condensed financial statements, one should also read our consolidated and combined financial statements and notes thereto, which are included in our Annual Report on Form 10-K for the year ended December 31, 2019.

Revenues, expenses, cash flows, assets and liabilities can and do vary during each quarter of the year. Additionally, in March 2020, the World Health Organization declared novel coronavirus 2019 (“COVID-19”) a pandemic. The effects of the COVID-19 pandemic have had and may continue to have an unfavorable impact on our business. The broader implication of COVID-19 on our results of operations and overall financial performance remains uncertain. We may experience reduced customer demand or constrained supply that could materially adversely impact our business, financial condition, results of operations and overall financial performance in future periods. Therefore, the results and trends in these interim financial statements may not be indicative of those for a full year.

Adoption of new accounting standards

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

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

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

2.Revenue

Disaggregation of revenue

We disaggregate our revenue from contracts with customers by geographic location and vertical for each of our segments, 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:


		Three months ended June 30, 2020															Three months ended September 30, 2020
In millions	In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
U.S. and Canada	U.S. and Canada	$	140.8	$	51.2	$	100.6	$	292.6	U.S. and Canada	$	159.7	$	109.2	$	69.6	$	338.5
Developed Europe ⁽¹⁾	Developed Europe ⁽¹⁾	55.5		24.0		21.4		100.9		Developed Europe (1)	60.4		26.3		32.0		118.7
Developing ⁽²⁾	Developing ⁽²⁾	19.6		16.4		6.3		42.3		Developing (2)	20.9		8.2		12.2		41.3
Other Developed ⁽³⁾	Other Developed ⁽³⁾	3.4		4.2		3.8		11.4		Other Developed (3)	3.7		4.0		3.1		10.8
Total	Total	$	219.3	$	95.8	$	132.1	$	447.2	Total	$	244.7	$	147.7	$	116.9	$	509.3


		Six months ended June 30, 2020															Nine months ended September 30, 2020
In millions	In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
U.S. and Canada	U.S. and Canada	$	314.9	$	121.8	$	203.1	$	639.8	U.S. and Canada	$	474.6	$	312.3	$	191.4	$	978.3
Developed Europe⁽¹⁾	Developed Europe⁽¹⁾	117.4		53.6		48.6		219.6		Developed Europe (1)	177.8		74.9		85.6		338.3
Developing ⁽²⁾	Developing ⁽²⁾	39.0		33.3		15.0		87.3		Developing (2)	59.9		23.2		45.5		128.6
Other Developed ⁽³⁾	Other Developed ⁽³⁾	6.5		7.6		7.3		21.4		Other Developed (3)	10.2		11.3		10.7		32.2
Total	Total	$	477.8	$	216.3	$	274.0	$	968.1	Total	$	722.5	$	421.7	$	333.2	$	1,477.4


		Three months ended June 30, 2019															Three months ended September 30, 2019
In millions	In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
U.S. and Canada	U.S. and Canada	$	186.1	$	73.4	$	109.6	$	369.1	U.S. and Canada	$	183.3	$	107.6	$	90.7	$	381.6
Developed Europe ⁽¹⁾	Developed Europe ⁽¹⁾	47.5		30.2		28.2		105.9		Developed Europe (1)	52.0		28.1		32.1		112.2
Developing ⁽²⁾	Developing ⁽²⁾	23.6		21.9		9.5		55.0		Developing (2)	23.6		10.5		20.3		54.4
Other Developed ⁽³⁾	Other Developed ⁽³⁾	2.8		3.3		3.4		9.5		Other Developed (3)	3.7		3.4		4.5		11.6
Total	Total	$	260.0	$	128.8	$	150.7	$	539.5	Total	$	262.6	$	149.6	$	147.6	$	559.8


		Six months ended June 30, 2019															Nine months ended September 30, 2019
In millions	In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
U.S. and Canada	U.S. and Canada	$	366.5	$	157.3	$	207.0	$	730.8	U.S. and Canada	$	549.8	$	314.6	$	248.0	$	1,112.4
Developed Europe⁽¹⁾	Developed Europe⁽¹⁾	98.4		65.3		54.8		218.5		Developed Europe (1)	150.4		82.9		97.4		330.7
Developing⁽²⁾	Developing⁽²⁾	45.3		42.9		19.6		107.8		Developing (2)	68.9		30.1		63.2		162.2
Other Developed⁽³⁾	Other Developed⁽³⁾	5.3		8.4		6.7		20.4		Other Developed (3)	9.0		10.1		12.9		32.0
Total	Total	$	515.5	$	273.9	$	288.1	$	1,077.5	Total	$	778.1	$	437.7	$	421.5	$	1,637.3
⁽¹⁾ Developed Europe includes Western Europe and Eastern Europe included in European Union.	⁽¹⁾ Developed Europe includes Western Europe and Eastern Europe included in European Union.																	(1) Developed Europe includes Western Europe and Eastern Europe included in European Union.
⁽²⁾ Developing includes China, Eastern Europe not included in European Union, Latin America, Middle East and Southeast Asia.	⁽²⁾ Developing includes China, Eastern Europe not included in European Union, Latin America, Middle East and Southeast Asia.																	(2) Developing includes China, Eastern Europe not included in European Union, Latin America, Middle East and Southeast Asia.
⁽³⁾ Other Developed includes Australia and Japan.	⁽³⁾ Other Developed includes Australia and Japan.																	(3) Other Developed includes Australia and Japan.

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

Vertical net sales information was as follows:


		Three months ended June 30, 2020															Three months ended September 30, 2020
In millions	In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
Industrial	Industrial	$	133.6	$	35.7	$	25.9	$	195.2	Industrial	$	148.4	$	29.4	$	47.4	$	225.2
Commercial & Residential	Commercial & Residential	23.7		32.8		72.1		128.6		Commercial & Residential	28.5		83.3		45.2		157.0
Energy	Energy	18.5		26.1		15.4		60.0		Energy	21.3		15.5		22.7		59.5
Infrastructure	Infrastructure	43.5		1.2		18.7		63.4		Infrastructure	46.5		19.5		1.6		67.6
Total	Total	$	219.3	$	95.8	$	132.1	$	447.2	Total	$	244.7	$	147.7	$	116.9	$	509.3


		Six months ended June 30, 2020															Nine months ended September 30, 2020
In millions	In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
Industrial	Industrial	$	290.1	$	82.2	$	51.9	$	424.2	Industrial	$	438.5	$	81.3	$	129.6	$	649.4
Commercial & Residential	Commercial & Residential	55.4		72.6		154.2		282.2		Commercial & Residential	83.9		237.5		117.8		439.2
Energy	Energy	45.3		58.7		30.4		134.4		Energy	66.6		45.9		81.4		193.9
Infrastructure	Infrastructure	87.0		2.8		37.5		127.3		Infrastructure	133.5		57.0		4.4		194.9
Total	Total	$	477.8	$	216.3	$	274.0	$	968.1	Total	$	722.5	$	421.7	$	333.2	$	1,477.4


		Three months ended June 30, 2019															Three months ended September 30, 2019
In millions	In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
Industrial	Industrial	$	154.8	$	54.7	$	29.9	$	239.4	Industrial	$	157.8	$	30.1	$	60.5	$	248.4
Commercial & Residential	Commercial & Residential	26.7		39.9		87.9		154.5		Commercial & Residential	29.4		87.2		47.3		163.9
Energy	Energy	26.2		31.9		14.7		72.8		Energy	26.5		13.6		37.1		77.2
Infrastructure	Infrastructure	52.3		2.3		18.2		72.8		Infrastructure	48.9		18.7		2.7		70.3
Total	Total	$	260.0	$	128.8	$	150.7	$	539.5	Total	$	262.6	$	149.6	$	147.6	$	559.8


		Six months ended June 30, 2019															Nine months ended September 30, 2019
In millions	In millions	Enclosures		Thermal Management		Electrical & Fastening Solutions		Total		In millions	Enclosures		Electrical & Fastening Solutions		Thermal Management		Total
Industrial	Industrial	$	309.9	$	113.4	$	56.6	$	479.9	Industrial	$	467.7	$	86.7	$	173.9	$	728.3
Commercial & Residential	Commercial & Residential	49.3		84.4		167.8		301.5		Commercial & Residential	78.7		255.0		131.7		465.4
Energy	Energy	52.1		72.0		28.2		152.3		Energy	78.6		41.8		109.1		229.5
Infrastructure	Infrastructure	104.2		4.1		35.5		143.8		Infrastructure	153.1		54.2		6.8		214.1
Total	Total	$	515.5	$	273.9	$	288.1	$	1,077.5	Total	$	778.1	$	437.7	$	421.5	$	1,637.3

Contract balances

Contract assets and liabilities consisted of the following:


In millions	In millions	June 30, 2020		December 31, 2019		$ Change		% Change		In millions	September 30, 2020		December 31, 2019		$ Change		% Change
Contract assets	Contract assets	$	56.1	$	69.4	$	(13.3)	(19.2)	%	Contract assets	$	42.8	$	69.4	$	(26.6)	(38.3)	%
Contract liabilities	Contract liabilities	13.1		13.7		(0.6)		(4.4)	%	Contract liabilities	11.7		13.7		(2.0)		(14.6)	%

Net contract assets	Net contract assets	$	43.0	$	55.7	$	(12.7)	(22.8)	%	Net contract assets	$	31.1	$	55.7	$	(24.6)	(44.2)	%

910

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

The ~~$12.7~~$24.6 million decrease in net contract assets from December 31, 2019 to ~~June~~September 30, 2020 was primarily the result of timing of milestone payments. The majority of our contract liabilities at December 31, 2019 were recognized in revenue during the ~~six~~nine months ended ~~June~~September 30, 2020. There were 0 material impairment losses recognized on our contract assets for the three ~~months~~ or ~~six~~nine months ended ~~June~~September 30, 2020.

Remaining performance obligations

We have elected the practical expedient to disclose only the value of remaining performance obligations for contracts with an original expected length of one year or more. On ~~June~~September 30, 2020, we had ~~$98.5~~$82.7 million of remaining performance obligations on contracts with an 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 12 to 18 months.

3.Restructuring

During the ~~six~~nine months ended ~~June~~September 30, 2020 and the year ended December 31, 2019, we initiated and continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. Specifically in the first ~~six~~nine months of 2020, certain initiatives were executed in response to the decrease in expected demand attributed to the effect of the COVID-19 pandemic and recent significant ~~decline~~volatility in oil and gas ~~prices.~~prices leading to a potential sustained downturn in the energy industry. Restructuring initiatives during the ~~six~~nine months ended ~~June~~September 30, 2020 included the reduction in hourly and salaried headcount of approximately ~~200~~300 employees.

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


		Three months ended						Six months ended							Three months ended					Nine months ended
In millions	In millions	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		In millions	September 30, 2020		September 30, 2019			September 30, 2020		September 30, 2019
Severance and related costs	Severance and related costs	$	2.7	$	0.7	$	6.2	$	3.5	Severance and related costs	$	3.5	$	10.9		$	9.7	$	14.4
Other	Other	0.3		0.4		1.1		1.2		Other	0.8		0.3			1.9		1.5
Total restructuring costs	Total restructuring costs	$	3.0	$	1.1	$	7.3	$	4.7	Total restructuring costs	$	4.3	$	11.2		$	11.6	$	15.9

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

Restructuring costs by reportable segment were as follows:


		Three months ended						Six months ended							Three months ended					Nine months ended
In millions	In millions	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		In millions	September 30, 2020		September 30, 2019			September 30, 2020		September 30, 2019
Enclosures	Enclosures	$	1.1	$	0.1	$	4.2	$	0.1	Enclosures	$	0.9	$	1.5		$	5.1	$	1.6
Electrical & Fastening Solutions										Electrical & Fastening Solutions	0.3		0.2			0.4		1.2
Thermal Management	Thermal Management	1.5		0.8		2.6		2.8		Thermal Management	1.7		2.8			4.3		5.6
Electrical & Fastening Solutions		0.1		0.1		0.1		1.0
Other	Other	0.3		0.1		0.4		0.8		Other	1.4		6.7			1.8		7.5
Total	Total	$	3.0	$	1.1	$	7.3	$	4.7	Total	$	4.3	$	11.2		$	11.6	$	15.9

Activity related to accrued severance and related costs recorded in Other current liabilities in the Condensed Consolidated Balance Sheets is summarized as follows for the ~~six~~nine months ended ~~June~~September 30, 2020:


In millions
Beginning balance	$	9.5

Costs incurred	~~6.2~~9.7
Cash payments and other	~~(6.7)~~(11.6)
Ending balance	$	~~9.0~~7.6

1011

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

4.Earnings (Loss) Per Share

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


		Three months ended						Six months ended							Three months ended					Nine months ended
In millions, except per-share data	In millions, except per-share data	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		In millions, except per-share data	September 30, 2020		September 30, 2019			September 30, 2020		September 30, 2019
Net income		$	25.8	$	60.9	$	44.4	$	117.3
Net income (loss)										Net income (loss)	$	(138.7)	$	59.9		$	(94.3)	$	177.2
Weighted average ordinary shares outstanding	Weighted average ordinary shares outstanding									Weighted average ordinary shares outstanding
Basic	Basic	169.9		171.5		169.9		174.0		Basic	170.0		169.1			169.9		172.3
Dilutive impact of stock options, restricted stock units and performance share units	Dilutive impact of stock options, restricted stock units and performance share units	0.5		1.5		0.8		1.6		Dilutive impact of stock options, restricted stock units and performance share units	—		1.2			—		1.5
Diluted	Diluted	170.4		173.0		170.7		175.6		Diluted	170.0		170.3			169.9		173.8
Earnings per ordinary share
Earnings (loss) per ordinary share										Earnings (loss) per ordinary share

Basic earnings per ordinary share		$	0.15	$	0.36	$	0.26	$	0.67
Basic earnings (loss) per ordinary share										Basic earnings (loss) per ordinary share	$	(0.82)	$	0.35		$	(0.56)	$	1.03

Diluted earnings per ordinary share		$	0.15	$	0.35	$	0.26	$	0.67
Anti-dilutive stock options excluded from the calculation of diluted earnings per share		4.5		2.1		3.4		2.0
Diluted earnings (loss) per ordinary share										Diluted earnings (loss) per ordinary share	$	(0.82)	$	0.35		$	(0.56)	$	1.02
Anti-dilutive stock options excluded from the calculation of diluted earnings (loss) per share										Anti-dilutive stock options excluded from the calculation of diluted earnings (loss) per share	4.6		2.6			4.4		2.1

As a result of the Company’s net loss during the three and nine month periods ended September 30, 2020, 0.5 million and 0.7 million of outstanding stock options, restricted stock units and performance share units were not included in the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive.

5.Acquisitions

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

The excess purchase price over tangible net assets and identified intangible assets acquired has been ~~preliminarily~~ allocated to goodwill in the amount of ~~$50.6~~$51.2 million, none of which is expected to be deductible for income tax purposes. Identifiable intangible assets acquired included $46.7 million of definite-lived customer relationships with an estimated useful life of 17 years. ~~The preliminary purchase price allocation is subject to further refinement, primarily related to the impacts associated with income taxes and other accruals.~~

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

The excess purchase price over tangible net assets and identified intangible assets acquired has been preliminarily allocated to goodwill in the amount of ~~$13.8~~$13.7 million, substantially all of which is expected to be deductible for income tax purposes. Identifiable intangible assets acquired included $11.3 million of definite-lived customer relationships with an estimated useful life of 12 years.

The pro forma impact of these acquisitions is not material.

1112

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

6.Goodwill and Other Identifiable Intangible Assets

As a result of the adverse market and economic conditions attributed to the COVID-19 pandemic, combined with significant volatility in oil and gas prices leading to a potential sustained downturn in the energy industry, we concluded a triggering event occurred during the third quarter of 2020 for our Thermal Management reporting unit requiring an impairment test as of September 30, 2020. In order to perform the goodwill impairment test for the Thermal Management reporting unit, including consideration of market-based inputs such as a market capitalization reconciliation, we determined it was appropriate to measure the fair value of all of our reporting units as of September 30, 2020.

The fair value of the reporting units was determined using a discounted cash flow and market approach. Determining the fair value of the reporting units required the use of significant judgment, including assumptions about future revenues and expenses, capital expenditures and changes in working capital and discount rates, which are based on our annual operating plan and long-term business plan. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, including the impacts from the COVID-19 pandemic and growth expectations for the industries and end markets in which the reporting unit participates. Inputs used to estimate these fair values included significant unobservable inputs that reflect the Company’s assumptions about the inputs that market participants would use and, therefore, the fair value assessments are classified within Level 3 of the fair value hierarchy defined by the accounting guidance.

As a result of this analysis, during the three months ended September 30, 2020, we recognized a pre-tax, non-cash goodwill impairment expense of $212.3 million related to the Thermal Management reporting unit. Subsequent to the impairment charge recorded in the quarter, the remaining goodwill for the Thermal Management reporting unit was $712.5 million. The impairment resulted in a $21.6 million income tax benefit associated with the proportionate share of tax deductible goodwill. The impairment expense is included in Impairment of goodwill and trade names on the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).

The changes in the carrying amount of goodwill by reportable segment were as follows:


In millions	In millions	December 31, 2019		Acquisitions/ divestitures		Foreign currency translation/other		June 30, 2020		In millions	December 31, 2019		Acquisitions/ divestitures		Impairment		Foreign currency translation/other		September 30, 2020
Enclosures	Enclosures	$	315.4	$	5.6	$	0.4	$	321.4	Enclosures	$	315.4	$	6.4	$	0	$	4.4	$	326.2
Electrical & Fastening Solutions										Electrical & Fastening Solutions	1,038.2		13.8		0		0		$	1,052.0
Thermal Management	Thermal Management	925.5		—		(1.6)		923.9		Thermal Management	925.5		0		(212.3)		(0.7)		$	712.5
Electrical & Fastening Solutions		1,038.2		13.8		—		1,052.0
Total goodwill	Total goodwill	$	2,279.1	$	19.4	$	(1.2)	$	2,297.3	Total goodwill	$	2,279.1	$	20.2	$	(212.3)	$	3.7	$	2,090.7

Identifiable intangible assets consisted of the following:


		June 30, 2020										December 31, 2019									September 30, 2020						December 31, 2019
In millions	In millions	Cost		Accumulated amortization		Net		Cost		Accumulated amortization		Net		In millions	Cost		Accumulated amortization		Net		Cost		Accumulated amortization		Net
Definite-life intangibles	Definite-life intangibles													Definite-life intangibles
Customer relationships	Customer relationships	$	1,207.0	$	(356.9)	$	850.1	$	1,197.9	$	(326.1)	$	871.8	Customer relationships	$	1,209.8	$	(373.1)	$	836.7	$	1,197.9	$	(326.1)	$	871.8
Proprietary technology and patents	Proprietary technology and patents	16.3		(8.1)		8.2		14.8		(7.4)		7.4		Proprietary technology and patents	16.3		(8.5)		7.8		14.8		(7.4)		7.4

Total definite-life intangibles	Total definite-life intangibles	1,223.3		(365.0)		858.3		1,212.7		(333.5)		879.2		Total definite-life intangibles	1,226.1		(381.6)		844.5		1,212.7		(333.5)		879.2
Indefinite-life intangibles	Indefinite-life intangibles													Indefinite-life intangibles
Trade names	Trade names	281.3		—		281.3		281.3		—		281.3		Trade names	273.1		—		273.1		281.3		—		281.3
Total intangibles	Total intangibles	$	1,504.6	$	(365.0)	$	1,139.6	$	1,494.0	$	(333.5)	$	1,160.5	Total intangibles	$	1,499.2	$	(381.6)	$	1,117.6	$	1,494.0	$	(333.5)	$	1,160.5

Identifiable intangible asset amortization expense was ~~$16.0~~$16.1 million and ~~$15.1~~$15.4 million for the three months ended ~~June~~September 30, 2020 and 2019, respectively, and ~~$32.0~~$48.1 million and ~~$30.2~~$45.6 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively. For the three and nine months ended September 30, 2020, we recognized pre-tax, non-cash impairment expense of $8.2 million related to trade names.

Estimated future amortization expense for identifiable intangible assets during the remainder of 2020 and the next five years is as follows:

Q3-Q4
In millions 2020 2021 2022 2023 2024 2025
Estimated amortization expense $ 32.0 $ 63.0 $ 62.9 $ 62.7 $ 62.1 $ 62.1


	Q4
In millions	2020		2021		2022		2023		2024		2025
Estimated amortization expense	$	16.0	$	63.1	$	63.1	$	62.9	$	62.3	$	62.3

1213

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

7.Supplemental Balance Sheet Information


In millions	In millions	June 30, 2020		December 31, 2019		In millions	September 30, 2020		December 31, 2019
Inventories	Inventories					Inventories
Raw materials and supplies	Raw materials and supplies	$	71.6	$	67.1	Raw materials and supplies	$	69.3	$	67.1
Work-in-process	Work-in-process	25.8		25.6		Work-in-process	25.5		25.6
Finished goods	Finished goods	150.1		152.0		Finished goods	144.1		152.0
Total inventories	Total inventories	$	247.5	$	244.7	Total inventories	$	238.9	$	244.7
Other current assets	Other current assets					Other current assets
Contract assets	Contract assets	$	56.1	$	69.4	Contract assets	$	42.8	$	69.4
Prepaid expenses	Prepaid expenses	32.3		32.5		Prepaid expenses	33.8		32.5
Prepaid income taxes	Prepaid income taxes	9.4		9.0		Prepaid income taxes	10.7		9.0
Other current assets	Other current assets	2.6		2.4		Other current assets	2.6		2.4
Total other current assets	Total other current assets	$	100.4	$	113.3	Total other current assets	$	89.9	$	113.3
Property, plant and equipment, net	Property, plant and equipment, net					Property, plant and equipment, net
Land and land improvements	Land and land improvements	$	39.8	$	40.6	Land and land improvements	$	40.4	$	40.6
Buildings and leasehold improvements	Buildings and leasehold improvements	177.3		181.6		Buildings and leasehold improvements	180.6		181.6
Machinery and equipment	Machinery and equipment	450.5		440.4		Machinery and equipment	454.3		440.4
Construction in progress	Construction in progress	17.6		16.5		Construction in progress	21.7		16.5
Total property, plant and equipment	Total property, plant and equipment	685.2		679.1		Total property, plant and equipment	697.0		679.1
Accumulated depreciation and amortization	Accumulated depreciation and amortization	408.4		394.6		Accumulated depreciation and amortization	418.9		394.6
Total property, plant and equipment, net	Total property, plant and equipment, net	$	276.8	$	284.5	Total property, plant and equipment, net	$	278.1	$	284.5
Other non-current assets	Other non-current assets					Other non-current assets

Deferred compensation plan assets	Deferred compensation plan assets	$	16.3	$	17.3	Deferred compensation plan assets	$	17.9	$	17.3
Lease right-of-use assets	Lease right-of-use assets	47.3		44.2		Lease right-of-use assets	46.8		44.2
Deferred tax assets	Deferred tax assets	24.8		40.9		Deferred tax assets	25.7		40.9
Other non-current assets	Other non-current assets	27.2		15.1		Other non-current assets	17.8		15.1
Total other non-current assets	Total other non-current assets	$	115.6	$	117.5	Total other non-current assets	$	108.2	$	117.5
Other current liabilities	Other current liabilities					Other current liabilities

Dividends payable	Dividends payable	$	29.7	$	29.7	Dividends payable	$	29.8	$	29.7

Accrued rebates	Accrued rebates	31.5		44.1		Accrued rebates	36.5		44.1
Contract liabilities	Contract liabilities	13.1		13.7		Contract liabilities	11.7		13.7
Accrued taxes payable	Accrued taxes payable	19.2		24.8		Accrued taxes payable	21.6		24.8
Current lease liabilities	Current lease liabilities	14.4		14.7		Current lease liabilities	14.3		14.7
Other current liabilities	Other current liabilities	61.9		58.7		Other current liabilities	68.1		58.7
Total other current liabilities	Total other current liabilities	$	169.8	$	185.7	Total other current liabilities	$	182.0	$	185.7
Other non-current liabilities	Other non-current liabilities					Other non-current liabilities

Income taxes payable	Income taxes payable	$	34.3	$	31.9	Income taxes payable	$	31.8	$	31.9

Deferred compensation plan liabilities	Deferred compensation plan liabilities	16.3		17.3		Deferred compensation plan liabilities	17.9		17.3
Non-current lease liabilities	Non-current lease liabilities	37.1		33.7		Non-current lease liabilities	36.7		33.7
Other non-current liabilities	Other non-current liabilities	7.9		10.6		Other non-current liabilities	13.4		10.6
Total other non-current liabilities	Total other non-current liabilities	$	95.6	$	93.5	Total other non-current liabilities	$	99.8	$	93.5

1314

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

8.Derivatives and Financial Instruments

Derivative financial instruments

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

Foreign currency contracts

We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. dollar. We manage our economic and transaction exposure to certain market-based risks through the use of foreign currency derivative financial instruments. Our objective in holding these derivatives is to reduce the volatility in net earnings and cash flows associated with changes in foreign currency rates. The majority of our foreign currency contracts have an original maturity date of less than one year.

At ~~June~~September 30, 2020 and December 31, 2019, we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of ~~$38.4~~$40.8 million and $34.5 million, respectively. The impact of these contracts on the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) was not material for any period presented.

Cross currency swaps

At both ~~June~~September 30, 2020 and December 31, 2019, we had outstanding cross currency swap agreements with a combined notional amount of $303.5 million. The agreements are accounted for as either cash flow hedges, to hedge foreign currency fluctuations on certain intercompany debt, or as net investment hedges, to manage our exposure to fluctuations in the Euro-U.S. Dollar exchange rate. At ~~June~~September 30, 2020 and December 31, 2019, we had deferred foreign currency gains of ~~$14.1~~$8.7 million and $1.9 million, respectively, in Accumulated other comprehensive loss associated with our cross currency swap activity.

Fair value of financial instruments

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

•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 inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance; and

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

1415

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

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


		June 30, 2020						December 31, 2019							September 30, 2020					December 31, 2019
In millions	In millions	Recorded Amount		Fair Value		Recorded Amount		Fair Value		In millions	Recorded Amount		Fair Value			Recorded Amount		Fair Value
Variable rate debt	Variable rate debt	$	412.1	$	412.1	$	269.6	$	269.6	Variable rate debt	$	257.1	$	257.1		$	269.6	$	269.6
Fixed rate debt	Fixed rate debt	800.0		897.6		800.0		863.5		Fixed rate debt	800.0		909.0			800.0		863.5
Total debt	Total debt	$	1,212.1	$	1,309.7	$	1,069.6	$	1,133.1	Total debt	$	1,057.1	$	1,166.1		$	1,069.6	$	1,133.1

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


Recurring fair value measurements	Recurring fair value measurements	June 30, 2020																		Recurring fair value measurements	September 30, 2020
In millions	In millions	Level 1		Level 2		Level 3		NAV		Total		In millions	Level 1		Level 2		Level 3		NAV		Total
Foreign currency contract liabilities	Foreign currency contract liabilities	$	—	$	(0.1)	$	—	$	—	$	(0.1)	Foreign currency contract liabilities	$	0	$	(5.2)	$	0	$	0	$	(5.2)
Foreign currency contract assets	Foreign currency contract assets	—		14.6		—		—		14.6		Foreign currency contract assets	0		5.3		0		0		5.3
Deferred compensation plan assets	Deferred compensation plan assets	12.0		—		—		4.3		16.3		Deferred compensation plan assets	13.9		0		0		4.0		17.9
Total recurring fair value measurements	Total recurring fair value measurements	$	12.0	$	14.5	$	—	$	4.3	$	30.8	Total recurring fair value measurements	$	13.9	$	0.1	$	0	$	4.0	$	18.0


Recurring fair value measurements	Recurring fair value measurements	December 31, 2019																		Recurring fair value measurements	December 31, 2019
In millions	In millions	Level 1		Level 2		Level 3		NAV		Total		In millions	Level 1		Level 2		Level 3		NAV		Total
Foreign currency contract liabilities	Foreign currency contract liabilities	$	—	$	(3.4)	$	—	$	—	$	(3.4)	Foreign currency contract liabilities	$	0	$	(3.4)	$	0	$	0	$	(3.4)
Foreign currency contract assets	Foreign currency contract assets	—		7.6		—		—		7.6		Foreign currency contract assets	0		7.6		0		0		7.6
Deferred compensation plan assets	Deferred compensation plan assets	12.8		—		—		4.5		17.3		Deferred compensation plan assets	12.8		0		0		4.5		17.3
Total recurring fair value measurements	Total recurring fair value measurements	$	12.8	$	4.2	$	—	$	4.5	$	21.5	Total recurring fair value measurements	$	12.8	$	4.2	$	0	$	4.5	$	21.5

9.Debt

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


In millions	In millions	Average interest rate at June 30, 2020	Maturity Year	June 30, 2020		December 31, 2019		In millions	Average interest rate at September 30, 2020	Maturity Year	September 30, 2020		December 31, 2019
Revolving credit facility	Revolving credit facility	1.559%	2023	$	284.6	$	134.6	Revolving credit facility	1.520%	2023	$	134.6	$	134.6
Senior notes - fixed rate	Senior notes - fixed rate	3.950%	2023	300.0		300.0		Senior notes - fixed rate	3.950%	2023	300.0		300.0
Senior notes - fixed rate	Senior notes - fixed rate	4.550%	2028	500.0		500.0		Senior notes - fixed rate	4.550%	2028	500.0		500.0
Term loan facility	Term loan facility	1.555%	2023	127.5		135.0		Term loan facility	1.520%	2023	122.5		135.0

Unamortized debt issuance costs and discounts	Unamortized debt issuance costs and discounts	N/A		(4.5)		(5.0)		Unamortized debt issuance costs and discounts	N/A		(4.3)		(5.0)
Total debt	Total debt			1,207.6		1,064.6		Total debt			1,052.8		1,064.6
Less: Current maturities and short-term borrowings	Less: Current maturities and short-term borrowings			(20.0)		(17.5)		Less: Current maturities and short-term borrowings			(20.0)		(17.5)
Long-term debt	Long-term debt			$	1,187.6	$	1,047.1	Long-term debt			$	1,032.8	$	1,047.1

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.

1516

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

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 Notes are fully and unconditionally guaranteed as to payment by nVent (the "Parent Company Guarantor"). 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.

In March 2020, as a pr~~oactive~~proactive measure to maximize our liquidity in response to the effect of the COVID-19 pandemic, we drew down ~~$150.0~~$150.0 million on our Revolving Credit Facility. ~~The proceeds~~ ~~remain~~ ~~available to be used for working capital, general corporate or other purposes~~.We repaid this amount on our Revolving Credit Facility in September 2020. Total availability under the Revolving Credit Facility was ~~$315.4~~$465.4 million as of ~~June~~September 30, 2020.

Our debt agreements contain certain financial covenants, the most restrictive of which are in the Senior Credit Facilities, including that we may not permit (i) the ratio of our consolidated debt (net of our consolidated unrestricted cash in excess of $5.0 million but not to exceed $250.0 million) to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense ("EBITDA") on the last day of any period of four consecutive fiscal quarters to exceed 3.75 to 1.00 and (ii) the ratio of our EBITDA to our consolidated interest expense for the same period to be less than 3.00 to 1.00. In addition, subject to certain qualifications and exceptions, the Senior Credit Facilities also contain covenants that, among other things, restrict our ability to create liens, merge or consolidate with another person, make acquisitions and incur subsidiary debt. As of ~~June~~September 30, 2020, we were in compliance with all financial covenants in our debt agreements, and there is no material uncertainty about our ongoing ability to meet those covenants.

Debt outstanding, excluding unamortized issuance costs and discounts, at ~~June~~September 30, 2020 matures on a calendar year basis as follows:


		Q3-Q4																	Q4
In millions	In millions	2020		2021		2022		2023		2024		2025		Thereafter		Total		In millions	2020		2021		2022		2023		2024		2025		Thereafter		Total
Contractual debt obligation maturities	Contractual debt obligation maturities	$	10.0	$	20.0	$	20.0	$	662.1	$	—	$	—	$	500.0	$	1,212.1	Contractual debt obligation maturities	$	5.0	$	20.0	$	20.0	$	512.1	$	0	$	0	$	500.0	$	1,057.1

10.Income Taxes

The effective income tax rate for the ~~six~~nine months ended ~~June~~September 30, 2020 was ~~47.6%~~negative 42.9%, compared to ~~16.3%~~17.1% for the ~~six~~nine months ended ~~June~~September 30, 2019. The liability for uncertain tax positions was ~~$19.4 million and~~ $17.0 million at ~~June~~both September 30, 2020 and December 31, ~~2019, respectively.~~2019. We record penalties and interest related to unrecognized tax benefits in Provision (benefit) for income taxes and Net interest expense, respectively, on the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss), which is consistent with our past practices.

In the third quarter of 2020, along with the goodwill impairment expense of $212.3 million, we recorded $21.6 million of income tax benefit associated with the proportionate share of tax deductible goodwill.

Valuation allowances are recorded to reduce the amount of deferred tax assets in jurisdictions where, based on the weight of information available to us, we determine that it is more likely than not the related tax benefits will not be realized. In the ~~six-month~~nine-month period ended ~~June~~September 30, 2020, as a result of the assessment of the available information, we established a valuation allowance of $19.4 million on certain foreign deferred tax assets.

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in response to the COVID-19 pandemic. The CARES Act contains numerous income tax provisions, such as relaxing limitations on the deductibility of interest and the ability to carryback net operating losses arising in taxable years from 2018 through 2020. The CARES Act provisions provided a permanent cash benefit of $7.5 million, offset by base erosion and anti-abuse tax of $1.1 million related to 2019 that was recorded as a discrete tax item in the first quarter of 2020.

~~Table of Contents~~

~~nVent Electric plc~~

~~Notes to condensed consolidated financial statements (unaudited)~~

In April 2020, the Internal Revenue Service released final regulations as part of the Tax Cuts and Jobs Act of 2017 that place limitations on the deductibility of certain interest expense for U.S. tax purposes retroactively to 2019. These regulations resulted in a discrete tax expense of approximately $4.5 million in the second quarter of 2020.

11.Shareholders' Equity

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 "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 (the "2019 Authorization"). The 2018 and 2019 Authorizations expire on July 23, 2021.

As of ~~June~~September 30, 2020, we have $585.1 million available for share repurchases under the combined 2018 and 2019 Authorizations, which total $880.0 million.

In March 2020, to enhance our liquidity position in response to the COVID-19 pandemic, we elected to temporarily suspend any share repurchases under our existing share repurchase program. In July 2020, we lifted the temporary suspension of share ~~repurchases. The existing program remains authorized by~~repurchases, and in October 2020, we resumed the ~~Board~~execution of ~~Directors and we may resume~~ share repurchases ~~in the future at any time, depending upon market conditions, our capital needs and other factors.~~

~~Dividends payable~~to help offset dilution.

On ~~May 14,~~September 28, 2020, the Board of Directors declared a quarterly cash dividend of $0.175 per ordinary share payable on ~~August 7,~~November 6, 2020, to shareholders of record at the close of business on ~~July 24,~~October 23, 2020. The balance of dividends payable included in Other current liabilities on our Condensed Consolidated Balance Sheets was $29.8 million and $29.7 million at ~~both June~~September 30, 2020 and December 31, ~~2019.~~2019, respectively.

1718

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

12.Segment Information

We evaluate performance based on 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, acquisition related expenses, costs of restructuring activities, impairments and other unusual non-operating items.

Financial information by reportable segment is as follows:


		Three months ended						Six months ended							Three months ended					Nine months ended
In millions	In millions	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		In millions	September 30, 2020		September 30, 2019			September 30, 2020		September 30, 2019
Net sales	Net sales									Net sales
Enclosures	Enclosures	$	219.3	$	260.0	$	477.8	$	515.5	Enclosures	$	244.7	$	262.6		$	722.5	$	778.1
Electrical & Fastening Solutions										Electrical & Fastening Solutions	147.7		149.6			421.7		437.7
Thermal Management	Thermal Management	95.8		128.8		216.3		273.9		Thermal Management	116.9		147.6			333.2		421.5
Electrical & Fastening Solutions		132.1		150.7		274.0		288.1
Total	Total	$	447.2	$	539.5	$	968.1	$	1,077.5	Total	$	509.3	$	559.8		$	1,477.4	$	1,637.3
Segment income (loss)	Segment income (loss)									Segment income (loss)
Enclosures	Enclosures	$	28.2	$	48.2	$	69.1	$	93.8	Enclosures	$	44.0	$	47.6		$	113.1	$	141.4
Electrical & Fastening Solutions										Electrical & Fastening Solutions	40.7		41.3			108.9		114.1
Thermal Management	Thermal Management	14.4		25.3		34.7		59.6		Thermal Management	25.5		38.5			60.2		98.1
Electrical & Fastening Solutions		34.7		41.6		68.2		72.8
Other	Other	(9.0)		(10.3)		(22.2)		(25.2)		Other	(9.3)		(12.8)			(31.5)		(38.0)
Total	Total	$	68.3	$	104.8	$	149.8	$	201.0	Total	$	100.9	$	114.6		$	250.7	$	315.6

The following table presents a reconciliation of segment income to income before income taxes:


		Three months ended						Six months ended							Three months ended					Nine months ended
In millions	In millions	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		In millions	September 30, 2020		September 30, 2019			September 30, 2020		September 30, 2019
Segment income	Segment income	$	68.3	$	104.8	$	149.8	$	201.0	Segment income	$	100.9	$	114.6		$	250.7	$	315.6
Impairment of goodwill										Impairment of goodwill	(212.3)		0			(212.3)		0
Impairment of trade names										Impairment of trade names	(8.2)		0			(8.2)		0
Intangible amortization	Intangible amortization	(16.0)		(15.1)		(32.0)		(30.2)		Intangible amortization	(16.1)		(15.4)			(48.1)		(45.6)
Restructuring and other	Restructuring and other	(6.2)		(2.7)		(10.5)		(6.3)		Restructuring and other	(5.4)		(11.2)			(15.9)		(17.5)
Acquisition transaction and integration costs	Acquisition transaction and integration costs	(0.8)		—		(1.7)		—		Acquisition transaction and integration costs	(0.5)		(1.9)			(2.2)		(1.9)

Net interest expense	Net interest expense	(9.4)		(11.9)		(19.3)		(22.4)		Net interest expense	(8.5)		(11.6)			(27.8)		(34.0)

Other expense	Other expense	(0.7)		(1.0)		(1.5)		(1.9)		Other expense	(0.7)		(0.9)			(2.2)		(2.8)

Income before income taxes		$	35.2	$	74.1	$	84.8	$	140.2
Income (loss) before income taxes										Income (loss) before income taxes	$	(150.8)	$	73.6		$	(66.0)	$	213.8

1819

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

13.Leases

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

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

During the three months ended ~~June~~September 30, 2020 and ~~June~~September 30, 2019, rent expense was ~~$5.0~~$4.9 million and ~~$4.9~~$5.0 million, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2020 and ~~June~~September 30, 2019, rent expense was ~~$10.1~~$15.0 million and ~~$9.1~~$14.1 million, respectively. Rent expense figures are primarily related to operating lease costs. Costs associated with short-term leases, variable rent and subleases were immaterial.

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

June 30, 2020

June 30, 2019

September 30, 2020

September 30, 2019

Weighted average remaining lease term

Operating leases

5 years

Operating leases

5 years

Weighted average discount rate

Operating leases

3.8

4.5

Operating leases

3.7

4.1

Future lease payments under non-cancelable operating leases as of ~~June~~September 30, 2020 were as follows:


In millions	In millions			In millions
Remainder of 2020	Remainder of 2020	$	8.8	Remainder of 2020	$	4.6
2021	2021	14.3		2021	15.5
2022	2022	10.1		2022	11.3
2023	2023	6.5		2023	7.5
2024	2024	4.8		2024	5.6
2025	2025	4.2		2025	4.5
Thereafter	Thereafter	9.8		Thereafter	9.9
Total lease payments	Total lease payments	$	58.5	Total lease payments	$	58.9
Less imputed interest	Less imputed interest	(7.0)		Less imputed interest	(7.9)
Total reported lease liability	Total reported lease liability	$	51.5	Total reported lease liability	$	51.0

As of ~~June~~September 30, 2020, we have ~~no material additional operating leases~~approximately $23 million in future undiscounted cash flows related to a lease of a manufacturing facility and warehouse that ~~have~~has not yet ~~commenced.~~commenced for which we are involved in the design and construction of the assets. The lease has a term of 10 years and is expected to commence in the first half of 2021.

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


		Six months ended							Nine months ended
In millions	In millions	June 30, 2020		June 30, 2019		In millions	September 30, 2020		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities	$	9.2	$	8.5	Cash paid for amounts included in the measurement of lease liabilities	$	13.8	$	12.9
Lease right-of-use assets obtained in exchange for new lease liabilities	Lease right-of-use assets obtained in exchange for new lease liabilities	6.9		3.6		Lease right-of-use assets obtained in exchange for new lease liabilities	13.8		12.8

1920

Table of Contents

nVent Electric plc

Notes to condensed consolidated financial statements (unaudited)

Supplemental balance sheet information related to operating leases was as follows:


In millions	In millions	Classification	June 30, 2020		December 31, 2019		In millions	Classification	September 30, 2020		December 31, 2019
Assets	Assets						Assets
Lease right-of-use assets	Lease right-of-use assets	Other non-current assets	$	47.3	$	44.2	Lease right-of-use assets	Other non-current assets	$	46.8	$	44.2
Liabilities	Liabilities						Liabilities
Current lease liabilities	Current lease liabilities	Other current liabilities	$	14.4	$	14.7	Current lease liabilities	Other current liabilities	$	14.3	$	14.7
Non-current lease liabilities	Non-current lease liabilities	Other non-current liabilities	37.1		33.7		Non-current lease liabilities	Other non-current liabilities	36.7		33.7
Total lease liabilities	Total lease liabilities		$	51.5	$	48.4	Total lease liabilities		$	51.0	$	48.4

14.Commitments and Contingencies

Warranties and guarantees

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

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

We provide service and warranty policies on our products. Liability under service and warranty policies is based upon a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience warrant. Our liability for service and product warranties as of ~~June~~September 30, 2020 and December 31, 2019 was 0t material.

Stand-by letters of credit, bank guarantees and bonds

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 ~~June~~September 30, 2020 and December 31, 2019, the outstanding value of bonds, letters of credit and bank guarantees totaled ~~$69.4~~$41.3 million and $70.0 million, respectively.

2021

Table of Contents

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

This report contains statements that we believe to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact are forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets," "plans," "believes," "expects," "intends," "will," "likely," "may," "anticipates," "estimates," "projects," "should," "would," "positioned," "strategy," "future," "forecast" or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include adverse effects on our business operations or financial results, including due to the impact of the novel coronavirus 2019 ("COVID-19") ~~pandemic;~~pandemic and potential impairment of goodwill and trade names; overall global economic and business conditions impacting our business; the ability to achieve the benefits of our restructuring plans; the ability to successfully identify, finance, complete and integrate acquisitions; competition and pricing pressures in the markets we serve, including the impacts of tariffs; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating goals. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission (the "SEC"), including this Quarterly Report on Form 10-Q and ITEM 1A. of our Annual Report on Form 10-K for the year ended December 31, 2019. All forward-looking statements speak only as of the date of this report. nVent Electric plc assumes no obligation, and disclaims any obligation, to update the information contained in this report.

Overview

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

We classify our operations into business segments based primarily on types of products offered and markets served. We operate across three segments: Enclosures, ~~Thermal Management and~~ Electrical & Fastening Solutions and Thermal Management, which represented approximately ~~50%~~49%, ~~22%~~28% and ~~28%~~23% of total revenues during the first ~~six~~nine months of 2020, respectively.

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

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

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

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

2122

Table of Contents

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

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

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

COVID-19

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

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

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

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

•Limiting discretionary spending across the organization;

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

•Temporarily reducing certain discretionary employee benefits;

•Aligning our cost structure to meet demand;

•Reducing capital expenditures;

2223

Table of Contents

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

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

In addition to actions taken to lower costs, ~~preserve~~manage our liquidity and ~~manage~~focus on cash flow, we remain focused on enhancing our digital and technological capabilities. Our shift to working virtually where possible is allowing us to accelerate our digital initiatives as we collaborate with customers and distribution partners to enhance our websites and improve our digital product content. We are also continuing to invest in our technological capabilities, with new product launches in the first ~~six~~nine months of 2020, and more expected to be launched during the balance of this year.

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

Key Trends and Uncertainties Regarding our Existing Business

The following trends and uncertainties affected our financial performance in 2019 and the first ~~six~~nine months of 2020 and will likely impact our results in the future:

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

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

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

•During 2019 and the first ~~six~~nine months of 2020, we continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. Specifically in the first ~~six~~nine months of 2020, certain initiatives were executed in response to the decrease in demand attributed to the effect of the COVID-19 pandemic.

In addition to the actions and objectives discussed in the Overview and COVID-19 sections above, our operating objectives in 2020 also include the following:

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

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

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

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

2324

Table of Contents

CONSOLIDATED RESULTS OF OPERATIONS

The consolidated results of operations for the three months ended ~~June~~September 30, 2020 and 2019 were as follows:


		Three months ended																			Three months ended
In millions	In millions	June 30, 2020			June 30, 2019			$ change		% / point change		In millions	September 30, 2020			September 30, 2019			$ change		% / point change
Net sales	Net sales	$	447.2		$	539.5		$	(92.3)	(17.1)	%	Net sales	$	509.3		$	559.8		$	(50.5)	(9.0)	%
Cost of goods sold	Cost of goods sold	286.9			327.3			(40.4)		(12.3)	%	Cost of goods sold	312.5			335.7			(23.2)		(6.9)	%
Gross profit	Gross profit	160.3			212.2			(51.9)		(24.5)	%	Gross profit	196.8			224.1			(27.3)		(12.2)	%
% of net sales	% of net sales	35.8		%	39.3		%			(3.5)	%	% of net sales	38.6		%	40.0		%			(1.4)	%

Selling, general and administrative	Selling, general and administrative	104.3			113.1			(8.8)		(7.8)	%	Selling, general and administrative	107.4			126.2			(18.8)		(14.9)	%
% of net sales	% of net sales	23.3		%	21.0		%			2.3	%	% of net sales	21.1		%	22.5		%			(1.4)	%
Research and development	Research and development	10.7			12.1			(1.4)		(11.6)	%	Research and development	10.5			11.8			(1.3)		(11.0)	%
% of net sales	% of net sales	2.4		%	2.2		%			0.2	%	% of net sales	2.1		%	2.1		%			—	%

Impairment of goodwill and trade names												Impairment of goodwill and trade names	220.5			—			220.5		N.M.

Operating income		45.3			87.0			(41.7)		(47.9)	%
Operating income (loss)												Operating income (loss)	(141.6)			86.1			(227.7)		(264.5)	%
% of net sales	% of net sales	10.1		%	16.1		%			(6.0)	%	% of net sales	(27.8)		%	15.4		%			(43.2)	%

Net interest expense	Net interest expense	9.4			11.9			(2.5)		N.M.		Net interest expense	8.5			11.6			(3.1)		N.M.
Other expense	Other expense	0.7			1.0			(0.3)		N.M.		Other expense	0.7			0.9			(0.2)		N.M.

Income before income taxes		35.2			74.1			(38.9)		(52.5)	%
Provision for income taxes		9.4			13.2			(3.8)		(28.8)	%
Income (loss) before income taxes												Income (loss) before income taxes	(150.8)			73.6			(224.4)		(304.9)	%
Provision (benefit) for income taxes												Provision (benefit) for income taxes	(12.1)			13.7			(25.8)		(188.3)	%
Effective tax rate	Effective tax rate	26.7		%	17.8		%			8.9	%	Effective tax rate	8.0		%	18.6		%			(10.6)	%

N.M. Not Meaningful

2425

Table of Contents

The consolidated results of operations for the ~~six~~nine months ended ~~June~~September 30, 2020 and ~~June~~September 30, 2019 were as follows:


		Six months ended																			Nine months ended
In millions	In millions	June 30, 2020			June 30, 2019			$ change		% / point change		In millions	September 30, 2020			September 30, 2019			$ change		% / point change
Net sales	Net sales	$	968.1		$	1,077.5		$	(109.4)	(10.2)	%	Net sales	$	1,477.4		$	1,637.3		$	(159.9)	(9.8)	%
Cost of goods sold	Cost of goods sold	612.5			655.4			(42.9)		(6.5)	%	Cost of goods sold	925.0			991.1			(66.1)		(6.7)	%
Gross profit	Gross profit	355.6			422.1			(66.5)		(15.8)	%	Gross profit	552.4			646.2			(93.8)		(14.5)	%
% of net sales	% of net sales	36.7		%	39.2		%			(2.5)	%	% of net sales	37.4		%	39.5		%			(2.1)	%

Selling, general and administrative	Selling, general and administrative	227.4			233.2			(5.8)		(2.5)	%	Selling, general and administrative	334.8			359.4			(24.6)		(6.8)	%
% of net sales	% of net sales	23.5		%	21.6		%			1.9	%	% of net sales	22.7		%	22.0		%			0.7	%
Research and development	Research and development	22.6			24.4			(1.8)		(7.4)	%	Research and development	33.1			36.2			(3.1)		(8.6)	%
% of net sales	% of net sales	2.3		%	2.3		%			—	%	% of net sales	2.2		%	2.2		%			—	%

Impairment of goodwill and trade names												Impairment of goodwill and trade names	220.5			—			220.5		N.M.

Operating income		105.6			164.5			(58.9)		(35.8)	%
Operating income (loss)												Operating income (loss)	(36.0)			250.6			(286.6)		(114.4)	%
% of net sales	% of net sales	10.9		%	15.3		%			(4.4)	%	% of net sales	(2.4)		%	15.3		%			(17.7)	%

Net interest expense	Net interest expense	19.3			22.4			(3.1)		N.M.		Net interest expense	27.8			34.0			(6.2)		N.M.
Other expense	Other expense	1.5			1.9			(0.4)		N.M.		Other expense	2.2			2.8			(0.6)		N.M.

Income before income taxes		84.8			140.2			(55.4)		(39.5)	%
Income (loss) before income taxes												Income (loss) before income taxes	(66.0)			213.8			(279.8)		(130.9)	%
Provision for income taxes	Provision for income taxes	40.4			22.9			17.5		76.4	%	Provision for income taxes	28.3			36.6			(8.3)		(22.7)	%
Effective tax rate	Effective tax rate	47.6		%	16.3		%			31.3	%	Effective tax rate	(42.9)		%	17.1		%			(60.0)	%

N.M. Not Meaningful

2526

Table of Contents

Net sales

The components of the change in consolidated net sales from the prior period were as follows:


		Three months ended June 30, 2020		Six months ended June 30, 2020			Three months ended September 30, 2020		Nine months ended September 30, 2020
		over the prior year period					over the prior year period
Volume	Volume	(21.3)	%	(14.7)	%	Volume	(13.8)	%	(14.4)	%
Price	Price	(0.3)		0.1		Price	0.3		0.2
Organic growth	Organic growth	(21.6)		(14.6)		Organic growth	(13.5)		(14.2)
Acquisition	Acquisition	5.5		5.5		Acquisition	3.6		4.8
Currency	Currency	(1.0)		(1.1)		Currency	0.9		(0.4)
Total	Total	(17.1)	%	(10.2)	%	Total	(9.0)	%	(9.8)	%

The ~~17.1~~9.0 and ~~10.2~~9.8 percentage point decreases in net sales in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively were primarily the result of:

•slowdown in capital spending, including from the effects of the COVID-19 pandemic, resulting in organic sales decline of approximately ~~10.5%~~7.0% and ~~7.5%~~8.0% from our industrial business in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively, and approximately ~~6.0%~~2.0% and ~~3.0%~~2.5% from our commercial & residential business in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, ~~respectively; and~~

•~~unfavorable foreign currency effects.~~respectively.

These decreases were partially offset by:

•sales of ~~$29.8~~$20.3 and ~~$58.8~~$79.1 million in the ~~second~~third quarter and first ~~half~~nine months of 2020, respectively, as a result of the Eldon and WBT acquisitions.

Gross profit

The ~~3.5~~1.4 and ~~2.5~~2.1 percentage point decreases in gross profit as a percentage of net sales in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively ~~was~~were primarily the result of:

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

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

These decreases were partially offset by:

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

•savings generated from our lean and supply management practices.

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

The ~~2.3 and 1.9~~1.4 percentage point ~~increases~~decrease in SG&A expense as a percentage of net sales in the ~~second~~third quarter ~~and first half~~ of 2020 from 2019 ~~respectively~~was primarily the result of:

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

•restructuring and other costs of $5.4 million in the third quarter of 2020, compared to $11.2 million in the third quarter of 2019; and

•savings generated from restructuring and other lean initiatives.

These decreases were partially offset by:

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

•inflationary increases impacting our labor costs.

The 0.7 percentage point increase in SG&A expense as a percentage of net sales in the first nine months of 2020 from 2019 was primarily the result of:

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

Table of Contents

•inflationary increases impacting our labor costs.

These increases were partially offset by:

•savings generated from restructuring and other lean initiatives.

~~Table~~Impairment of ~~Contents~~goodwill and trade names

During the third quarter of 2020, as a result of the adverse market and economic conditions attributed to the COVID-19 pandemic, combined with significant volatility in oil and gas prices leading to a potential sustained downturn in the energy industry, we recognized pre-tax, non-cash impairment expense of $220.5 million, which primarily relates to a $212.3 million impairment of goodwill in the Thermal Management reporting unit. During the third quarter of 2020, we also recognized pre-tax, non-cash impairment expense of $8.2 million related to trade names.

Provision (benefit) for income taxes

The ~~8.9 and 31.3 percentage point increases~~differences in the effective tax ~~rate~~rates in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019 ~~respectively~~ were primarily the result of:

•impairment of goodwill during the third quarter of 2020 of $212.3 million and the related $21.6 million tax benefit from favorable deferred tax adjustments; and

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

•~~a discrete tax charge of $4.5 million related to the finalization of U.S. tax regulations in April 2020 that impacted the deductibility of certain interest expenses; and~~

•~~non-recurring adjustments related to the implementation of the March 2020 Coronavirus Aid, Relief, and Economic Security Act.~~2020.

SEGMENT RESULTS OF OPERATIONS

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

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

Enclosures

The net sales, segment income and segment income as a percentage of net sales for Enclosures were as follows:


		Three months ended											Six months ended												Three months ended									Nine months ended
In millions	In millions	June 30, 2020			June 30, 2019			% / point change		June 30, 2020			June 30, 2019			% / point change		In millions	September 30, 2020			September 30, 2019				% / point change		September 30, 2020			September 30, 2019				% / point change
Net sales	Net sales	$	219.3		$	260.0		(15.7)	%	$	477.8		$	515.5		(7.3)	%	Net sales	$	244.7		$	262.6			(6.8)	%	$	722.5		$	778.1			(7.1)	%
Segment income	Segment income	28.2			48.2			(41.5)	%	69.1			93.8			(26.3)	%	Segment income	44.0			47.6				(7.6)	%	113.1			141.4				(20.0)	%
% of net sales	% of net sales	12.9		%	18.5		%	(5.6)	pts	14.5		%	18.2		%	(3.7)	pts	% of net sales	18.0		%	18.1		%		(0.1)	pts	15.7		%	18.2		%		(2.5)	pts

Table of Contents

Net sales

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


		Three months ended June 30, 2020		Six months ended June 30, 2020			Three months ended September 30, 2020		Nine months ended September 30, 2020
		over the prior year period					over the prior year period
Volume	Volume	(23.3)	%	(15.8)	%	Volume	(13.9)	%	(15.2)	%
Price	Price	(1.4)		(0.7)		Price	(0.1)		(0.5)
Organic growth	Organic growth	(24.7)		(16.5)		Organic growth	(14.0)		(15.7)
Acquisition	Acquisition	9.9		10.2		Acquisition	6.1		8.8
Currency	Currency	(0.9)		(1.0)		Currency	1.1		(0.2)
Total	Total	(15.7)	%	(7.3)	%	Total	(6.8)	%	(7.1)	%

The ~~15.7~~6.8 and ~~7.3~~7.1 percent decreases in Enclosures net sales in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively were primarily the result of:

•slowdown in capital spending, including the effects of the COVID-19 pandemic, resulting in organic sales decline of approximately ~~14.0%~~8.0% and ~~9.5%~~9.0% from our industrial business in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively, and approximately ~~4.0%~~1.5% and ~~1.5%~~3.0% from our ~~commercial & residential~~infrastructure business in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, ~~respectively; and~~

•~~unfavorable foreign currency effects.~~respectively.

These decreases were partially offset by:

•sales of ~~$25.6~~$16.0 million and ~~$52.4~~$68.4 million in the ~~second~~third quarter and first ~~half~~nine months of 2020, respectively, as a result of the Eldon acquisition.

~~Table of Contents~~

Segment income

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


		Three months ended June 30, 2020		Six months ended June 30, 2020			Three months ended September 30, 2020		Nine months ended September 30, 2020
		over the prior year period					over the prior year period
Growth/acquisition	Growth/acquisition	(5.4)	pts	(3.2)	pts	Growth/acquisition	(1.6)	pts	(2.6)	pts

Price	Price	(1.1)		(0.6)		Price	(0.1)		(0.4)
Currency	Currency	0.9		0.6		Currency	0.5		0.5
Net productivity	Net productivity	—		(0.5)		Net productivity	1.1		—
Total	Total	(5.6)	pts	(3.7)	pts	Total	(0.1)	pts	(2.5)	pts

The ~~5.6~~0.1 and ~~3.7~~2.5 percentage point decreases in segment income for Enclosures as a percentage of net sales in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively were primarily the result of:

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

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

These decreases were partially offset by:

•savings generated from restructuring and lean initiatives.

Electrical & Fastening Solutions

The net sales, segment income and segment income as a percentage of net sales for Electrical & Fastening Solutions were as follows:


	Three months ended								Nine months ended
In millions	September 30, 2020			September 30, 2019			% / point change		September 30, 2020			September 30, 2019			% / point change
Net sales	$	147.7		$	149.6		(1.3)	%	$	421.7		$	437.7		(3.7)	%
Segment income	40.7			41.3			(1.4)	%	108.9			114.1			(4.6)	%
% of net sales	27.6		%	27.6		%	—	pts	25.8		%	26.1		%	(0.3)	pts

Table of Contents

Net sales

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


	Three months ended September 30, 2020		Nine months ended September 30, 2020
	over the prior year period		over the prior year period
Volume	(7.1)	%	(7.5)	%
Price	2.3		1.7
Organic growth	(4.8)		(5.8)
Acquisition	2.9		2.4
Currency	0.6		(0.3)
Total	(1.3)	%	(3.7)	%

The 1.3 and 3.7 percent decreases in Electrical & Fastening Solutions net sales in the third quarter and first nine months of 2020 from 2019, respectively were primarily the result of:

•slowdown in capital spending, including the effects of the COVID-19 pandemic, resulting in organic sales decline of approximately 3.0% and 4.0% from our commercial & residential business in the third quarter and first nine months of 2020 from 2019, respectively, and approximately 3.5% from our industrial business in both the third quarter and first nine months of 2020 from 2019, respectively.

These decreases were partially offset by:

•sales of $4.3 million and $10.7 million in the third quarter and first nine months of 2020, respectively, as a result of the WBT acquisition;

•organic sales growth contribution of approximately 1.0% from our energy business in the third quarter and first nine months of 2020 from 2019, respectively; and

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

Segment income

The components of the change in Electrical & Fastening Solutions segment income as a percentage of net sales from the prior period were as follows:


	Three months ended September 30, 2020		Nine months ended September 30, 2020
	over the prior year period		over the prior year period
Growth/acquisition	(3.2)	pts	(2.7)	pts

Price	1.6		1.2
Currency	—		—
Net productivity	1.6		1.2
Total	—	pts	(0.3)	pts

The flat segment income for Electrical & Fastening Solutions as a percentage of net sales in the third quarter, and the 0.3 percentage point decrease in the first nine months, of 2020 from 2019, were primarily the result of:

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

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

These decreases were fully offset in the third quarter, and partially offset in the first nine months, of 2020 from 2019, by:

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

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

Table of Contents

Thermal Management

The net sales, segment income and segment income as a percentage of net sales for Thermal Management were as follows:


		Three months ended											Six months ended												Three months ended									Nine months ended
In millions	In millions	June 30, 2020			June 30, 2019			% / point change		June 30, 2020			June 30, 2019			% / point change		In millions	September 30, 2020			September 30, 2019				% / point change		September 30, 2020			September 30, 2019				% / point change
Net sales	Net sales	$	95.8		$	128.8		(25.6)	%	$	216.3		$	273.9		(21.0)	%	Net sales	$	116.9		$	147.6			(20.8)	%	$	333.2		$	421.5			(20.9)	%
Segment income	Segment income	14.4			25.3			(43.1)	%	34.7			59.6			(41.8)	%	Segment income	25.5			38.5				(33.8)	%	60.2			98.1				(38.6)	%
% of net sales	% of net sales	15.0		%	19.6		%	(4.6)	pts	16.0		%	21.8		%	(5.8)	pts	% of net sales	21.8		%	26.1		%		(4.3)	pts	18.1		%	23.3		%		(5.2)	pts

Net sales

The components of the change in Thermal Management net sales from the prior period were as follows:


		Three months ended June 30, 2020		Six months ended June 30, 2020			Three months ended September 30, 2020		Nine months ended September 30, 2020
		over the prior year period					over the prior year period
Volume	Volume	(24.0)	%	(19.9)	%	Volume	(20.6)	%	(20.2)	%
Price	Price	—		0.3		Price	(1.0)		(0.1)
Organic growth	Organic growth	(24.0)		(19.6)		Organic growth	(21.6)		(20.3)

Currency	Currency	(1.6)		(1.4)		Currency	0.8		(0.6)
Total	Total	(25.6)	%	(21.0)	%	Total	(20.8)	%	(20.9)	%

The ~~25.6~~20.8 and ~~21.0~~20.9 percent decreases in Thermal Management net sales in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively were primarily the result of:

•slowdown in capital ~~spending,~~spending, including the effects of the COVID-19 pandemic and significant ~~decline~~volatility in oil and gas prices, resulting in organic sales decline of approximately ~~14.0%~~9.0% and ~~11.0%~~10.0% from our industrial business in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively, and approximately ~~5.0%~~10.0% and ~~4.0%~~6.0% from our ~~commercial & residential~~energy business in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, ~~respectively; and~~respectively.

•~~unfavorable foreign currency effects.~~

~~Table of Contents~~

Segment income

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

Three months ended June 30, 2020

Six months ended June 30, 2020

Three months ended September 30, 2020

Nine months ended September 30, 2020

over the prior year period

Growth

(7.3)

pts

(6.3)

pts

Growth

(6.1)

pts

(6.2)

pts

Price

—

0.3

Price

(0.7)

(0.1)

Currency

(0.2)

—

Net productivity

2.7

0.2

Net productivity

2.7

1.1

Total

(4.6)

pts

(5.8)

pts

Total

(4.3)

pts

(5.2)

pts

The ~~4.6~~4.3 and ~~5.8~~5.2 percentage point decreases in segment income for Thermal Management as a percentage of net sales in the ~~second~~third quarter and first ~~half~~nine months of 2020 from 2019, respectively were primarily the result of:

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

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

These decreases were partially offset by:

•savings generated from restructuring and lean initiatives.

~~Electrical & Fastening Solutions~~

~~The net sales, segment income and segment income as a percentage of net sales for Electrical & Fastening Solutions were as follows:~~

Three months ended Six months ended
In millions June 30,
2020 June 30,
2019 % / point change June 30,
2020 June 30,
2019 % / point change
Net sales $ 132.1 $ 150.7 (12.3) % $ 274.0 $ 288.1 (4.9) %
Segment income 34.7 41.6 (16.6) % 68.2 72.8 (6.3) %
% of net sales 26.3 % 27.6 % (1.3) pts 24.9 % 25.3 % (0.4) pts

~~Net sales~~

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

Three months ended June 30, 2020 Six months ended June 30, 2020
over the prior year period over the prior year period
Volume (15.4) % (7.6) %
Price 1.2 1.4
Organic growth (14.3) (6.2)
Acquisition 2.7 2.2
Currency (0.7) (0.9)
Total (12.3) % (4.9) %

~~The 12.3 and 4.9 percent decreases in Electrical & Fastening Solutions net sales in the second quarter and first half of 2020 from 2019, respectively were primarily the result of:~~

•slowdown in capital spending, including the effects of the COVID-19 pandemic, resulting in organic sales decline of approximately 10.0% and 4.5% from our commercial & residential business in the second quarter and first half of 2020 from 2019, respectively, and approximately 2.5% and 1.5% from our industrial business in the second quarter and first half of 2020 from 2019, respectively; and

•~~unfavorable foreign currency effects.~~

~~Table of Contents~~

~~These decreases were partially offset by:~~

•~~sales of $4.1 million and $6.4 million in the second quarter and first half of 2020, respectively, as a result of the WBT acquisition; and~~

•~~selective increases in selling prices to mitigate inflationary cost increases.~~

~~Segment income~~

~~The components of the change in Electrical & Fastening Solutions segment income as a percentage of net sales from the prior period were as follow~~s:

Three months ended June 30, 2020 Six months ended June 30, 2020
over the prior year period over the prior year period
Growth/acquisition (4.4) pts (2.5) pts
Price 0.8 1.0
Currency 0.1 0.1
Net productivity 2.2 1.0
Total (1.3) pts (0.4) pts

The 1.3 and 0.4 percentage point decreases in segment income for Electrical & Fastening Solutions as a percentage of net sales in the second quarter and first half of 2020 from 2019, respectively were primarily the result of:

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

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

~~These decreases were partially offset by:~~

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

•~~selective increases in selling prices to mitigate inflationary cost increases.~~

3031

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

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

In March 2020, as a proactive measure to maximize our liquidity in response to the effect of the COVID-19 pandemic, we drew down $150.0 million on our ~~revolving credit facility. The proceeds~~ ~~remain~~ ~~available to be used for working capital, general corporate or other purposes.~~Revolving Credit Facility. We repaid this amount on the Revolving Credit Facility in September 2020. As of ~~June~~September 30, 2020, wewe had ~~$235.0~~$159.8 million of cash on hand, of which ono~~ly $9.2~~nly $11.2 million is held in certain countries in which the ability to repatriate is limited due to local regulations or significant potential tax consequences.

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

Operating activities

Net cash provided by operating activities was ~~$90.5~~$203.7 million in the first ~~six~~nine months of 2020, compared to net cash provided by operating activities of ~~$57.8~~$157.5 million in the first ~~six~~nine months of 2019. Net cash provided by operating activities in the first ~~six~~nine months of 2020 primarily reflects net income of ~~$121.6~~$209.3 million, net of non-cash depreciation, amortization, ~~and~~ changes in deferred taxes ~~offset by a negative impact of $36.2 million as a result of increases in net working capital.~~and impairment expenses.

Investing activities

Net cash used for investing activities ~~was $42.8~~of $50.9 million in the first ~~six~~nine months of 2020 ~~compared~~relates primarily to ~~$11.5 million in the first six months of 2019. Net cash used for investing activities in the first six months of 2020 primarily reflects~~ capital expenditures of ~~$17.2~~$25.4 million and cash paid for the WBT acquisition of $27.0 million.

Net cash used for investing activities of ~~$11.5~~$150.7 million in the first ~~six~~nine months of 2019 relates primarily to capital expenditures of ~~$17.6~~$29.0 million ~~partially offset by~~and cash paid for the ~~sale~~Eldon acquisition of ~~property and equipment of $6.1~~$127.8 million.

Financing activities

Net cash ~~provided by~~used for financing activities of ~~$82.5~~$100.2 million in the first ~~six~~nine months of 2020 primarily relates to ~~net receipts of revolving credit facility of $150.0 million, offset by~~ dividends paid of ~~$59.5~~$89.2 million.

Net cash used for financing activities of ~~$178.0~~$114.7 million in the first ~~six~~nine months of 2019 primarily relates to share repurchases of $235.7 million and dividends paid of ~~$61.5~~$91.1 million, offset by net receipts of revolving credit facility of ~~$119.0~~$216.5 million.

Senior notes

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

Table of Contents

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

~~Table of Contents~~

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.

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. Total availability under the Revolving Credit Facility was ~~$315.4 million~~$465.4 as of ~~June~~September 30, 2020.

Share repurchases

During the ~~six~~nine months ended ~~June~~September 30, 2020, we repurchased 0.2 million of our ordinary shares for $3.2 million under the 2018 Authorization. During the ~~six~~nine months ended ~~June~~September 30, 2019, we repurchased 9.0 million of our ordinary shares for $232.7 million under the 2018 Authorization. As of ~~June~~September 30, 2020, we have $585.1 million available for share repurchases under the combined 2018 and 2019 Authorizations, which total $880.0 million.

Dividends

During the ~~six~~nine months ended ~~June~~September 30, 2020, we paid dividends of ~~$59.5~~$89.2 million, or ~~$0.35~~$0.525 per ordinary share. During the ~~six~~nine months ended ~~June~~September 30, 2019, we paid dividends of ~~$61.5~~$91.1 million, or ~~$0.35~~$0.525 per ordinary share.

On ~~May 14,~~September 28, 2020, the Board of Directors declared a quarterly cash dividend of $0.175 per ordinary share payable on ~~August 7,~~November 6, 2020, to shareholders of record at the close of business on ~~July 24,~~October 23, 2020. The balance of dividends payable included in Other current liabilities on our Condensed Consolidated Balance Sheets was ~~$29.7~~$29.8 million at both ~~June~~September 30, 2020 and December 31, 2019.

3233

Table of Contents

Other financial measures

In addition to measuring our cash flow generation or usage based upon operating, investing and financing classifications included in the Condensed Consolidated Statements of Cash Flows, we also measure our free cash flow. Free cash flow is a non-GAAP financial measure that we use to assess our cash flow performance. We believe free cash flow is an important measure of liquidity because it provides us and our investors a measurement of cash generated from operations that is available to pay dividends, make acquisitions, repay debt and repurchase shares. In addition, free cash flow is used as a criterion to measure and pay compensation-based incentives. Our measure of free cash flow may not be comparable to similarly titled measures reported by other companies. The following table is a reconciliation of free cash flow:


		Six months ended					Nine months ended
In millions	In millions	June 30, 2020		June 30, 2019		In millions	September 30, 2020		September 30, 2019
Net cash provided by (used for) operating activities	Net cash provided by (used for) operating activities	$	90.5	$	57.8	Net cash provided by (used for) operating activities	$	203.7	$	157.5
Capital expenditures	Capital expenditures	(17.2)		(17.6)		Capital expenditures	(25.4)		(29.0)
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	1.4		6.1		Proceeds from sale of property and equipment	1.5		6.1
Free cash flow	Free cash flow	$	74.7	$	46.3	Free cash flow	$	179.8	$	134.6

NEW ACCOUNTING STANDARDS

See Note 1 of the Notes to Condensed Consolidated Financial Statements for information pertaining to recently adopted accounting standards or accounting standards to be adopted in the future.

CRITICAL ACCOUNTING POLICIES

We have adopted various accounting policies to prepare the consolidated financial statements in accordance with GAAP. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. In our 2019 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our consolidated and combined financial statements.

Goodwill is tested annually for impairment as of the first day of the fourth quarter, and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. 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 connection with our 2019 annual impairment test, the percentages of excess fair value over carrying value of our Thermal~~ ~~Management and Electrical & Fastening Solutions reporting units were approximately 21% and 11%, respectively.~~

As a result of the changes in the current economic environment related to the COVID-19 pandemic, we evaluated whether current circumstances and market conditions indicate that it is more likely than not that ~~either~~any of ~~these~~our reporting units may be impaired and require an impairment test as of ~~June~~September 30, 2020. Our evaluation included consideration of changes in business performance assumptions compared to those used in our 2019 annual impairment test, such as estimates regarding future revenues and expenses, projected capital expenditures and income tax rates. We also considered changes in market-based inputs such as estimated market multiples, costs of invested capital and the most recent price of our ordinary shares. ~~Based on~~

Due to the adverse market and economic conditions attributed to the COVID-19 pandemic, combined with significant volatility in oil and gas prices leading to a potential sustained downturn in the energy industry, we concluded a triggering event occurred during the third quarter of 2020 for our ~~evaluation~~Thermal Management reporting unit, requiring an impairment test as of ~~these factors, we do not believe it is more likely than not that~~September 30, 2020. In order to perform the goodwill impairment test for the Thermal Management orreporting unit, including consideration of market-based inputs such as a market capitalization reconciliation, we determined it was appropriate to measure the fair value of all of our reporting units as of September 30, 2020.

The fair value of the reporting units was determined using a discounted cash flow analysis and market approach. Determining the fair value of the reporting unit required the use of significant judgment, including assumptions about future revenues and expenses, capital expenditures and changes in working capital and discount rates, which are based on our annual operating plan and long-term business plan. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, including the impacts from the COVID-19 pandemic, and growth expectations for the industries and end markets in which the reporting unit participates. 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.

The level of judgment and estimation is inherently higher in the current environment considering the uncertainty created by the COVID-19 pandemic. We have evaluated numerous factors and made significant assumptions, which include the severity and

Table of Contents

duration of the business disruption, the potential impact on customer demand, the timing and degree of economic recovery and ultimately, the combined effect of these assumptions on our future operating results and cash flows.

In connection with the interim impairment test as of September 30, 2020, the percentage of excess fair value over carrying value of our Electrical & Fastening Solutions reporting ~~units may be impaired. As a result, we determined that an impairment test~~unit was ~~not required as of June 30, 2020.~~approximately 5%.

There is a risk that changes in economic and operating conditions affecting the assumptions used in our ~~evaluation,~~impairment tests, including changes due to the evolving nature of the COVID-19 pandemic, could adversely affect future estimates or fair value and result in additional goodwill or other intangible asset impairment ~~charges~~expense in the future.

There have been no additional material changes to our critical accounting policies and estimates from those previously disclosed in our 2019 Annual Report on Form 10-K for the year ended December 31, 2019.

~~Table of Contents~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Except for the broad effects of the COVID-19 pandemic as a result of its negative impact on the global economy and major financial markets, there have been no material changes in our market risk during the quarter ended ~~June~~September 30, 2020. For additional information, refer to our 2019 Annual Report on Form 10-K for the year ended December 31, 2019.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures designed to provide reasonable assurance as to the reliability of our published financial statements and other disclosures included in this report. Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter ended ~~June~~September 30, 2020 pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the "Exchange Act"). Based upon their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, as of the end of the quarter ended ~~June~~September 30, 2020 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms, and to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

(b) Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended ~~June~~September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

3435

Table of Contents

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material developments with respect to the legal proceedings previously disclosed in Item 3 of our 2019 Annual Report on Form 10-K for the year ended December 31, 2019.

ITEM 1A. RISK FACTORS

There have been no additional material changes from the risk factors previously disclosed in our 2019 Annual Report on Form 10-K for the year ended December 31, 2019, except for the addition of the risk factor set forth below.

Our business, results of operations and financial condition may be materially adversely affected by global public health epidemics, including the strain of coronavirus known as COVID-19

Our business, consolidated results of operations and financial condition may be adversely affected if a global public health pandemic, including the current global COVID-19 pandemic, interferes with the ability of our employees, vendors and customers to perform our and their respective responsibilities and obligations relative to the conduct of our business. The COVID-19 pandemic has significantly impacted economic activity and markets around the world, and it has had, and could continue to have, a material negative impact on our business in numerous ways, including but not limited to those outlined below:

•The risk that we or our employees, vendors or customers may be prevented from conducting business activities for an indefinite period of time, including shutdowns that may be requested or mandated by governmental authorities or that we determine are appropriate to sanitize our facilities.

•Restrictions on travel to or from locations where we provide services, or restrictions on shipping products from certain jurisdictions where they are produced or into certain jurisdictions where customers are located.

•Inability to meet our customers’ needs and achieve costs targets due to disruptions in our manufacturing and supply arrangements caused by the loss or disruption of essential manufacturing and supply elements such as raw materials or other finished product components, transportation, workforce or other manufacturing and distribution capability.

•Failure of third parties on which we rely, including our suppliers, distributors, contractors and commercial banks, to meet their obligations to the Company, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties and may adversely impact our operations.

•Significant reductions in demand or significant volatility in demand for one or more of our products and a global economic recession that could further reduce demand and/or pricing for our products, resulting from actions taken by governments, businesses and/or the general public in an effort to limit exposure to and spreading of such infectious diseases, such as travel restrictions, quarantines and business shutdowns or slowdowns. Deteriorating economic and political conditions caused by the COVID-19 pandemic, such as increased unemployment, decreases in capital spending, business shutdowns or economic recessions, could cause a further decrease in demand for our products.

•Delays or modifications to our strategic plans, initiatives and goals due to disruptions or uncertainties related to the COVID-19 pandemic for a sustained period of time.

•An impairment in the carrying value of goodwill or intangible assets or a change in the useful life of definite-lived intangible assets could occur if there are sustained changes in consumer purchasing behaviors, government restrictions, financial results, or a deterioration of macroeconomic conditions. As a result of the adverse market and economic conditions attributed to the COVID-19 pandemic, combined with significant volatility in oil and gas prices leading to a potential sustained downturn in the energy industry, during the third quarter of 2020, we recognized pre-tax, non-cash goodwill impairment expense of $212.3 million related to the Thermal Management reporting unit. During the third quarter of 2020, we also recognized pre-tax, non-cash impairment expense of $8.2 million related to trade names.

•Actions we have taken or may take, or decisions we have made or may make as a consequence of the COVID-19 pandemic may result in legal claims or litigation against us.

The global spread of the COVID-19 pandemic has created significant volatility, uncertainty and economic disruption, which is likely to continue and could cause a global recession. While we have taken certain actions in response to the COVID-19 pandemic to lower costs, preserve our liquidity and manage cash flow, the extent to which the COVID-19 pandemic will continue to impact our business, results of operations, liquidity and financial condition is uncertain and will depend on numerous evolving factors that we may not be able to accurately predict, including:

•the duration and scope of the pandemic;

Table of Contents

•governmental, business and individual actions taken in response to the pandemic and the impact of those actions on global economic activity;

•the actions taken in response to economic disruption;

~~Table of Contents~~

•the impact of business disruptions on our customers and the resulting impact on their demand for our products and services; and

•our customers' ability to pay for our products and services.

Any of these factors could cause or contribute to the risks and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and could materially adversely affect our business, financial condition and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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

(a) (b) (c) (d)
Total number of
shares
purchased Average price
paid per share Total number of
shares
purchased as
part of publicly
announced
plans or
programs Dollar value
of
shares that may
yet be purchased
under the plans or
programs
April 1 - April 25, 2020 12,685 $ 17.67 — $ 585,149,838
April 26 - May 23, 2020 12,901 16.57 — 585,149,838
May 24 - June 30, 2020 4,726 17.19 — 585,149,838
Total 30,312 —


	(a)	(b)		(c)	(d)
	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Dollar value of shares that may yet be purchased under the plans or programs
July 1 - July 25, 2020	4,487	$	18.61	—	$	585,149,838
July 26 - August 22, 2020	534	18.42		—	585,149,838
August 23 - September 30, 2020	3,862	19.20		—	585,149,838
Total	8,883			—

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

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

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

(d)On July 23, 2018, our Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $500.0 million (the "2018 Authorization"). 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 (the "2019 Authorization"). The 2018 and 2019 Authorizations expire on July 23, 2021. As of ~~June~~September 30, 2020, we have $585.1 million available for share repurchases under the combined 2018 and 2019 Authorizations.

3637

Table of Contents

ITEM 6. EXHIBITS

The exhibits listed in the following Exhibit Index are filed as part of this Quarterly Report on Form 10-Q.

Exhibit Index to Form 10-Q for the Period Ended ~~June~~September 30, 2020



~~10.1~~						~~nVent Electric plc 2018 Omnibus Incentive Plan (Incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed on March 31, 2020 (File No. 001-38265)).~~

~~10.5~~						~~Description of nVent Electric plc Management Incentive Plan.~~

~~10.8~~						~~nVent Electric plc Employee Stock Purchase and Bonus Plan, as amended and restated May 14, 2020.~~

~~10.9~~						~~Description of an Amendment to the nVent Management Company Non-Qualified Deferred Compensation Plan.~~

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

31.1						Certification of Chief Executive Officer.

31.2						Certification of Chief Financial Officer.

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

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

101						The following materials from nVent Electric plc's Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30, 2020 are filed herewith, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, (ii) the Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2020 and December 31, 2019, (iii) the Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, (iv) the Condensed Consolidated Statements of Changes in Equity for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, and (v) Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

3738

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on ~~July 31,~~October 30, 2020.



			nVent Electric plc
			Registrant

			By			/s/ Sara E. Zawoyski
						Sara E. Zawoyski
						Executive Vice President and Chief Financial Officer

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

3839