QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification number) | |||
(Address of principal executive offices) | ||||
Title of each class | Trading symbol | Name of each exchange on which registered |
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||
Page | ||
PART I FINANCIAL INFORMATION | ||
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II OTHER INFORMATION | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 6. | ||
Three months ended | Six months ended | ||||||||||||
In millions, except per-share data | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||
Net sales | $ | $ | $ | $ | |||||||||
Cost of goods sold | |||||||||||||
Gross profit | |||||||||||||
Selling, general and administrative | |||||||||||||
Research and development | |||||||||||||
Operating income | |||||||||||||
Net interest expense | |||||||||||||
Other expense | |||||||||||||
Income before income taxes | |||||||||||||
Provision for income taxes | |||||||||||||
Net income | $ | $ | $ | $ | |||||||||
Comprehensive income, net of tax | |||||||||||||
Net income | $ | $ | $ | $ | |||||||||
Changes in cumulative translation adjustment | ( | ) | ( | ) | |||||||||
Changes in market value of derivative financial instruments, net of tax | ( | ) | ( | ) | |||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||
Earnings per ordinary share | |||||||||||||
Basic | $ | $ | $ | $ | |||||||||
Diluted | $ | $ | $ | $ | |||||||||
Weighted average ordinary shares outstanding | |||||||||||||
Basic | |||||||||||||
Diluted | |||||||||||||
Cash dividends paid per ordinary share | $ | $ | $ | $ | |||||||||
June 30, 2019 | December 31, 2018 | |||||
In millions, except per-share data | ||||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | $ | ||||
Accounts and notes receivable, net of allowances of $5.9 and $6.1, respectively | ||||||
Inventories | ||||||
Other current assets | ||||||
Total current assets | ||||||
Property, plant and equipment, net | ||||||
Other assets | ||||||
Goodwill | ||||||
Intangibles, net | ||||||
Other non-current assets | ||||||
Total other assets | ||||||
Total assets | $ | $ | ||||
Liabilities and Equity | ||||||
Current liabilities | ||||||
Current maturities of long-term debt and short-term borrowings | $ | $ | ||||
Accounts payable | ||||||
Employee compensation and benefits | ||||||
Other current liabilities | ||||||
Total current liabilities | ||||||
Other liabilities | ||||||
Long-term debt | ||||||
Pension and other post-retirement compensation and benefits | ||||||
Deferred tax liabilities | ||||||
Other non-current liabilities | ||||||
Total liabilities | ||||||
Equity | ||||||
Ordinary shares $0.01 par value, 400.0 authorized, 169.1 and 177.2 issued at June 30, 2019 and December 31, 2018, respectively | ||||||
Additional paid-in capital | ||||||
Retained earnings | ||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||
Total equity | ||||||
Total liabilities and equity | $ | $ | ||||
Six months ended | ||||||
In millions | June 30, 2019 | June 30, 2018 | ||||
Operating activities | ||||||
Net income | $ | $ | ||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities | ||||||
Depreciation | ||||||
Amortization | ||||||
Deferred income taxes | ( | ) | ( | ) | ||
Share-based compensation | ||||||
Changes in assets and liabilities, net of effects of business acquisitions | ||||||
Accounts and notes receivable | ( | ) | ( | ) | ||
Inventories | ( | ) | ( | ) | ||
Other current assets | ( | ) | ( | ) | ||
Accounts payable | ( | ) | ( | ) | ||
Employee compensation and benefits | ( | ) | ( | ) | ||
Other current liabilities | ( | ) | ||||
Other non-current assets and liabilities | ( | ) | ( | ) | ||
Net cash provided by (used for) operating activities | ||||||
Investing activities | ||||||
Capital expenditures | ( | ) | ( | ) | ||
Proceeds from sale of property and equipment | ||||||
Acquisitions, net of cash acquired | ( | ) | ||||
Net cash provided by (used for) investing activities | ( | ) | ( | ) | ||
Financing activities | ||||||
Net receipts of revolving long-term debt | ||||||
Proceeds from long-term debt | ||||||
Repayments of long-term debt | ( | ) | ||||
Debt issuance costs | ( | ) | ||||
Cash provided at separation to former Parent | ( | ) | ||||
Dividends paid | ( | ) | ||||
Shares issued to employees, net of shares withheld | ||||||
Repurchases of ordinary shares | ( | ) | ||||
Net cash provided by (used for) financing activities | ( | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||
Change in cash and cash equivalents | ( | ) | ||||
Cash and cash equivalents, beginning of period | ||||||
Cash and cash equivalents, end of period | $ | $ | ||||
In millions | Ordinary shares | Additional paid-in capital | Retained earnings | Net Parent investment | Accumulated other comprehensive loss | Total | ||||||||||||||
Number | Amount | |||||||||||||||||||
Balance - December 31, 2018 | $ | $ | $ | $ | — | $ | ( | ) | $ | |||||||||||
Net income | — | — | — | — | — | |||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | ( | ) | ( | ) | |||||||||||
Dividends declared | — | — | — | ( | ) | — | — | ( | ) | |||||||||||
Share repurchases | ( | ) | ( | ) | ( | ) | — | — | — | ( | ) | |||||||||
Exercise of options, net of shares tendered for payment | — | — | — | — | ||||||||||||||||
Issuance of restricted shares, net of cancellations | — | — | — | — | — | |||||||||||||||
Shares surrendered by employees to pay taxes | ( | ) | — | ( | ) | — | — | — | ( | ) | ||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||
Balance - March 31, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Net income | — | — | — | — | — | |||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||
Dividends declared | — | — | — | ( | ) | — | — | ( | ) | |||||||||||
Share repurchases | ( | ) | ( | ) | — | — | — | ( | ) | |||||||||||
Exercise of options, net of shares tendered for payment | — | — | — | — | ||||||||||||||||
Shares surrendered by employees to pay taxes | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||
Balance - June 30, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
In millions | Ordinary shares | Additional paid-in capital | Retained earnings | Net Parent investment | Accumulated other comprehensive loss | Total | ||||||||||||||
Number | Amount | |||||||||||||||||||
Balance - December 31, 2017 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Cumulative effect of accounting changes | — | — | — | ( | ) | — | ( | ) | ||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||
Net transfers to former Parent | — | — | — | ( | ) | — | ( | ) | ||||||||||||
Balance - March 31, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | ( | ) | ( | ) | |||||||||||
Net transfers from former Parent | — | — | — | — | — | |||||||||||||||
Cash provided at separation to former Parent | — | — | — | — | ( | ) | — | ( | ) | |||||||||||
Reclassification of Net Parent investment to additional paid-in capital | — | — | — | ( | ) | — | ||||||||||||||
Issuance of common stock upon separation | — | — | — | — | ||||||||||||||||
Exercise of options, net of shares tendered for payment | — | — | — | — | ||||||||||||||||
Shares surrendered by employees to pay taxes | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||
Balance - June 30, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Condensed Combined Balance Sheets | ||||||||||||
In millions | Balance at December 31, 2017 | Adjustments due to ASU 2016-16 | Adjustments due to ASU 2014-09 | Balance at January 1, 2018 | ||||||||
Assets | ||||||||||||
Accounts and notes receivable, net | $ | $ | $ | $ | ||||||||
Inventories | ( | ) | ||||||||||
Other current assets | ||||||||||||
Other non-current assets | ( | ) | ||||||||||
Liabilities | ||||||||||||
Other current liabilities | ||||||||||||
Deferred tax liabilities | ||||||||||||
Equity | ||||||||||||
Net Parent investment | ( | ) | ||||||||||
In millions | June 30, 2019 | December 31, 2018 | $ Change | % Change | |||||||
Contract assets | $ | $ | $ | ( | ) | ( | )% | ||||
Contract liabilities | ( | ) | ( | )% | |||||||
Net contract assets | $ | $ | $ | ( | ) | ( | )% | ||||
Three months ended June 30, 2019 | ||||||||||||
In millions | Enclosures | Thermal Management | Electrical & Fastening Solutions | Total | ||||||||
U.S. and Canada | $ | $ | $ | $ | ||||||||
Developed Europe (1) | ||||||||||||
Developing (2) | ||||||||||||
Other Developed (3) | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
Six months ended June 30, 2019 | ||||||||||||
In millions | Enclosures | Thermal Management | Electrical & Fastening Solutions | Total | ||||||||
U.S. and Canada | $ | $ | $ | $ | ||||||||
Developed Europe (1) | ||||||||||||
Developing (2) | ||||||||||||
Other Developed (3) | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
Three months ended June 30, 2018 | ||||||||||||
In millions | Enclosures | Thermal Management | Electrical & Fastening Solutions | Total | ||||||||
U.S. and Canada | $ | $ | $ | $ | ||||||||
Developed Europe (1) | ||||||||||||
Developing (2) | ||||||||||||
Other Developed (3) | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
Six months ended June 30, 2018 | ||||||||||||
In millions | Enclosures | Thermal Management | Electrical & Fastening Solutions | Total | ||||||||
U.S. and Canada | $ | $ | $ | $ | ||||||||
Developed Europe (1) | ||||||||||||
Developing (2) | ||||||||||||
Other Developed (3) | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
(1) Developed Europe includes Western Europe and Eastern Europe included in European Union. | ||||||||||||
(2) Developing includes China, Eastern Europe not included in European Union, Latin America, Middle East and Southeast Asia. | ||||||||||||
(3) Other Developed includes Australia and Japan. | ||||||||||||
Three months ended June 30, 2019 | ||||||||||||
In millions | Enclosures | Thermal Management | Electrical & Fastening Solutions | Total | ||||||||
Industrial | $ | $ | $ | $ | ||||||||
Commercial & Residential | ||||||||||||
Energy | ||||||||||||
Infrastructure | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
Six months ended June 30, 2019 | ||||||||||||
In millions | Enclosures | Thermal Management | Electrical & Fastening Solutions | Total | ||||||||
Industrial | $ | $ | $ | $ | ||||||||
Commercial & Residential | ||||||||||||
Energy | ||||||||||||
Infrastructure | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
Three months ended June 30, 2018 | ||||||||||||
In millions | Enclosures | Thermal Management | Electrical & Fastening Solutions | Total | ||||||||
Industrial | $ | $ | $ | $ | ||||||||
Commercial & Residential | ||||||||||||
Energy | ||||||||||||
Infrastructure | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
Six months ended June 30, 2018 | ||||||||||||
In millions | Enclosures | Thermal Management | Electrical & Fastening Solutions | Total | ||||||||
Industrial | $ | $ | $ | $ | ||||||||
Commercial & Residential | ||||||||||||
Energy | ||||||||||||
Infrastructure | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
Three months ended | Six months ended | ||||||||||||
In millions | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||
Severance and related costs | $ | $ | $ | $ | |||||||||
Other | |||||||||||||
Total restructuring costs | $ | $ | $ | $ | |||||||||
Three months ended | Six months ended | ||||||||||||
In millions | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||
Enclosures | $ | $ | $ | $ | |||||||||
Thermal Management | |||||||||||||
Electrical & Fastening Solutions | |||||||||||||
Other | |||||||||||||
Total | $ | $ | $ | $ | |||||||||
In millions | June 30, 2019 | ||
Beginning balance | $ | ||
Costs incurred | |||
Cash payments and other | ( | ) | |
Ending balance | $ | ||
Three months ended | Six months ended | ||||||||||||
In millions, except per-share data | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||
Net income | $ | $ | $ | $ | |||||||||
Weighted average ordinary shares outstanding | |||||||||||||
Basic | |||||||||||||
Dilutive impact of stock options, restricted stock units and performance share units | |||||||||||||
Diluted | |||||||||||||
Earnings per ordinary share | |||||||||||||
Basic earnings per ordinary share | $ | $ | $ | $ | |||||||||
Diluted earnings per ordinary share | $ | $ | $ | $ | |||||||||
Anti-dilutive stock options excluded from the calculation of diluted earnings per share | |||||||||||||
In millions | December 31, 2018 | Foreign currency translation/other | June 30, 2019 | ||||||
Enclosures | $ | $ | ( | ) | $ | ||||
Thermal Management | |||||||||
Electrical & Fastening Solutions | |||||||||
Total goodwill | $ | $ | $ | ||||||
June 30, 2019 | December 31, 2018 | ||||||||||||||||||
In millions | Cost | Accumulated amortization | Net | Cost | Accumulated amortization | Net | |||||||||||||
Definite-life intangibles | |||||||||||||||||||
Customer relationships | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||
Proprietary technology and patents | ( | ) | ( | ) | |||||||||||||||
Total definite-life intangibles | ( | ) | ( | ) | |||||||||||||||
Indefinite-life intangibles | |||||||||||||||||||
Trade names | — | — | |||||||||||||||||
Total intangibles | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||
Q3-Q4 | ||||||||||||||||||
In millions | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||||
Estimated amortization expense | $ | $ | $ | $ | $ | $ | ||||||||||||
In millions | June 30, 2019 | December 31, 2018 | ||||
Inventories | ||||||
Raw materials and supplies | $ | $ | ||||
Work-in-process | ||||||
Finished goods | ||||||
Total inventories | $ | $ | ||||
Other current assets | ||||||
Contract assets | $ | $ | ||||
Prepaid expenses | ||||||
Prepaid income taxes | ||||||
Other current assets | ||||||
Total other current assets | $ | $ | ||||
Property, plant and equipment, net | ||||||
Land and land improvements | $ | $ | ||||
Buildings and leasehold improvements | ||||||
Machinery and equipment | ||||||
Construction in progress | ||||||
Total property, plant and equipment | ||||||
Accumulated depreciation and amortization | ||||||
Total property, plant and equipment, net | $ | $ | ||||
Other non-current assets | ||||||
Deferred compensation plan assets | $ | $ | ||||
Lease right-of-use assets | ||||||
Other non-current assets | ||||||
Total other non-current assets | $ | $ | ||||
Other current liabilities | ||||||
Current lease liabilities | $ | $ | ||||
Dividends payable | ||||||
Accrued rebates | ||||||
Contract liabilities | ||||||
Accrued taxes payable | ||||||
Other current liabilities | ||||||
Total other current liabilities | $ | $ | ||||
Other non-current liabilities | ||||||
Income taxes payable | $ | $ | ||||
Deferred compensation plan liabilities | ||||||
Non-current lease liabilities | ||||||
Other non-current liabilities | ||||||
Total other non-current liabilities | $ | $ | ||||
• | 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 |
• |
June 30, 2019 | December 31, 2018 | ||||||||||||
In millions | Recorded Amount | Fair Value | Recorded Amount | Fair Value | |||||||||
Variable rate debt | $ | $ | $ | $ | |||||||||
Fixed rate debt | |||||||||||||
Total debt | $ | $ | $ | $ | |||||||||
June 30, 2019 | ||||||||||||
In millions | Level 1 | Level 2 | Level 3 | Total | ||||||||
Recurring fair value measurements | ||||||||||||
Foreign currency contract assets | $ | $ | $ | $ | ||||||||
Deferred compensation plan assets | ||||||||||||
Total recurring fair value measurements | $ | $ | $ | $ | ||||||||
December 31, 2018 | ||||||||||||
In millions | Level 1 | Level 2 | Level 3 | Total | ||||||||
Recurring fair value measurements | ||||||||||||
Foreign currency contract liabilities | $ | $ | ( | ) | $ | $ | ( | ) | ||||
Deferred compensation plan assets | ||||||||||||
Total recurring fair value measurements | $ | $ | $ | $ | ||||||||
In millions | Average interest rate as of June 30, 2019 | Maturity Year | June 30, 2019 | December 31, 2018 | ||||
Revolving credit facility | 2023 | $ | $ | |||||
Senior notes - fixed rate | 2023 | |||||||
Senior notes - fixed rate | 2028 | |||||||
Term loan facility | 2023 | |||||||
Unamortized debt issuance costs and discounts | N/A | N/A | ( | ) | ( | ) | ||
Total debt | ||||||||
Less: Current maturities and short-term borrowings | ( | ) | ( | ) | ||||
Long-term debt | $ | $ | ||||||
Q3-Q4 | ||||||||||||||||||||||||
In millions | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||||
Contractual debt obligation maturities | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Three months ended | Six months ended | ||||||||||||
In millions | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||
Net sales | |||||||||||||
Enclosures | $ | $ | $ | $ | |||||||||
Thermal Management | |||||||||||||
Electrical & Fastening Solutions | |||||||||||||
Total | $ | $ | $ | $ | |||||||||
Segment income (loss) | |||||||||||||
Enclosures | $ | $ | $ | $ | |||||||||
Thermal Management | |||||||||||||
Electrical & Fastening Solutions | |||||||||||||
Other | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Total | $ | $ | $ | $ | |||||||||
Three months ended | Six months ended | ||||||||||||
In millions | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||
Segment income | $ | $ | $ | $ | |||||||||
Intangible amortization | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Separation costs | ( | ) | ( | ) | |||||||||
Net interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Restructuring and other | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Other expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Income before income taxes | $ | $ | $ | $ | |||||||||
June 30, 2019 | ||
Weighted average remaining lease term | ||
Operating leases | ||
Weighted average discount rate | ||
Operating leases | % | |
In millions | |||
Remainder of 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total lease payments | |||
Less imputed interest | ( | ) | |
Total reported lease liability | $ | ||
In millions | |||
2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
Total | $ | ||
Six months ended | |||
In millions | June 30, 2019 | ||
Cash paid for amounts included in the measurement of lease liabilities: | $ | ||
Lease right-of-use assets obtained in exchange for new lease liabilities: | |||
In millions | Classification | June 30, 2019 | January 1, 2019 | ||||
Assets | |||||||
Lease right-of-use assets | Other non-current assets | $ | $ | ||||
Liabilities | |||||||
Current lease liabilities | Other current liabilities | $ | $ | ||||
Non-current lease liabilities | Other non-current liabilities | ||||||
Total lease liabilities | $ | $ | |||||
13. | Commitments and Contingencies |
14. | Subsequent Events |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Enclosures—The Enclosures segment provides inventive solutions that protect, connect and manage heat in critical electronics, communication, control and power equipment. From metallic and non-metallic enclosures to cabinets, subracks and backplanes, it offers the physical infrastructure to host, connect and protect server and network equipment, as well as indoor and outdoor protection for broadband voice, data and video surveillance applications in industrial, infrastructure, energy and commercial verticals. |
• | Thermal Management—The Thermal Management segment provides electric thermal solutions that connect and protect critical buildings, infrastructure, industrial processes and people. Its thermal management systems include heat tracing, floor heating, fire-rated and specialty wiring, sensing and snow melting and de-icing solutions for use in industrial, commercial & residential, energy and infrastructure verticals. Its highly reliable and easy to install solutions lower total cost of ownership to building owners, facility managers, operators and end users. |
• | Electrical & Fastening Solutions—The Electrical & Fastening Solutions segment provides fastening solutions that connect and protect electrical and mechanical systems and civil structures. Its engineered electrical and fastening products are used across a wide range of verticals, including commercial, industrial, infrastructure and energy. |
• | We have identified specific product and geographic market opportunities that we find attractive and continue to pursue, both within and outside the U.S. We are reinforcing 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 2018 and the first six months of 2019, we continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. |
• | Achieving differentiated revenue growth through new products and solutions and market 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 enhance the customer experience; and |
• | Focusing on developing global talent in light of our global presence. |
Three months ended | |||||||||||
In millions | June 30, 2019 | June 30, 2018 | $ change | % / point change | |||||||
Net sales | $ | 539.5 | $ | 542.7 | $ | (3.2 | ) | (0.6 | %) | ||
Cost of goods sold | 327.3 | 323.3 | 4.0 | 1.2 | % | ||||||
Gross profit | 212.2 | 219.4 | (7.2 | ) | (3.3 | %) | |||||
% of net sales | 39.3 | % | 40.4 | % | (1.1 pts) | ||||||
Selling, general and administrative | 113.1 | 143.1 | (30.0 | ) | (21.0 | %) | |||||
% of net sales | 21.0 | % | 26.4 | % | (5.4 | pts) | |||||
Research and development | 12.1 | 11.0 | 1.1 | 10.0 | % | ||||||
% of net sales | 2.2 | % | 2.0 | % | 0.2 | pts | |||||
Operating income | 87.0 | 65.3 | 21.7 | 33.2 | % | ||||||
% of net sales | 16.1 | % | 12.0 | % | 4.1 | pts | |||||
Net interest expense | 11.9 | 9.3 | 2.6 | N.M. | |||||||
Other expense | 1.0 | 5.1 | (4.1 | ) | N.M. | ||||||
Income before income taxes | 74.1 | 50.9 | 23.2 | 45.6 | % | ||||||
Provision for income taxes | 13.2 | 7.6 | 5.6 | 73.7 | % | ||||||
Effective tax rate | 17.8 | % | 14.9 | % | 2.9 | pts | |||||
Six months ended | |||||||||||
In millions | June 30, 2019 | June 30, 2018 | $ change | % / point change | |||||||
Net sales | $ | 1,077.5 | $ | 1,081.6 | $ | (4.1 | ) | (0.4 | %) | ||
Cost of goods sold | 655.4 | 653.3 | 2.1 | 0.3 | % | ||||||
Gross profit | 422.1 | 428.3 | (6.2 | ) | (1.4 | %) | |||||
% of net sales | 39.2 | % | 39.6 | % | (0.4 | pts) | |||||
Selling, general and administrative | 233.2 | 275.0 | (41.8 | ) | (15.2 | %) | |||||
% of net sales | 21.6 | % | 25.4 | % | (3.8 | pts) | |||||
Research and development | 24.4 | 22.4 | 2.0 | 8.9 | % | ||||||
% of net sales | 2.3 | % | 2.1 | % | 0.2 | pts | |||||
Operating income | 164.5 | 130.9 | 33.6 | 25.7 | % | ||||||
% of net sales | 15.3 | % | 12.1 | % | 3.2 | pts | |||||
Net interest expense | 22.4 | 9.9 | 12.5 | N.M. | |||||||
Other expense | 1.9 | 6.3 | (4.4 | ) | N.M. | ||||||
Income before income taxes | 140.2 | 114.7 | 25.5 | 22.2 | % | ||||||
Provision for income taxes | 22.9 | 19.1 | 3.8 | 19.9 | % | ||||||
Effective tax rate | 16.3 | % | 16.7 | % | (0.4 | pts) | |||||
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||
over the prior year period | over the prior year period | |||
Volume | (0.3 | %) | 0.1 | % |
Price | 1.7 | 1.9 | ||
Organic growth | 1.4 | 2.0 | ||
Currency | (2.0 | ) | (2.4 | ) |
Total | (0.6 | %) | (0.4 | %) |
• | unfavorable foreign currency effects. |
• | organic sales growth contributions of approximately 1.5% from our commercial & residential business in both the second quarter and first half of 2019 from 2018, which includes selective increases in selling prices. |
• | inflationary increases related to certain raw materials, labor and freight costs; and |
• | sales volume decline resulting in decreased leverage on fixed expenses in cost of goods sold. |
• | selective increases in selling prices to mitigate inflationary cost increases; and |
• | savings generated from our lean and supply management practices. |
• | inflationary increases related to certain raw materials, labor and freight costs. |
• | selective increases in selling prices to mitigate inflationary cost increases; and |
• | savings generated from our lean and supply management practices. |
• | non-recurring separation related costs of $24.8 million and $34.5 million incurred in the second quarter and first half of 2018, respectively, to prepare nVent to operate as an independent stand-alone public company; and |
• | savings generated from restructuring and other lean initiatives. |
• | investment in sales and marketing to drive growth; and |
• | inflationary increases impacting our labor costs. |
• | the favorable impact of discrete items that occurred during the second quarter of 2018 that did not recur in the corresponding period in 2019. |
• | mix of global earnings towards lower tax jurisdictions. |
Three months ended | Six months ended | ||||||||||||||||||
In millions | June 30, 2019 | June 30, 2018 | % / point change | June 30, 2019 | June 30, 2018 | % / point change | |||||||||||||
Net sales | $ | 260.0 | $ | 255.6 | 1.7 | % | $ | 515.5 | $ | 509.7 | 1.1 | % | |||||||
Segment income | 48.2 | 47.9 | 0.6 | % | 93.8 | 88.5 | 6.0 | % | |||||||||||
% of net sales | 18.5 | % | 18.7 | % | (0.2 pts) | 18.2 | % | 17.4 | % | 0.8 | pts | ||||||||
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||
over the prior year period | over the prior year period | |||
Volume | 2.4 | % | 1.5 | % |
Price | 0.9 | 1.5 | ||
Organic growth | 3.3 | 3.0 | ||
Currency | (1.6 | ) | (1.9 | ) |
Total | 1.7 | % | 1.1 | % |
• | organic sales growth contributions of approximately 1.5% and 2.0% from our infrastructure business in the second quarter and first half of 2019 from 2018, respectively, and approximately 2.0% from our commercial & residential business in both the second quarter and first half of 2019 from 2018, which includes selective increases in selling prices. |
• | unfavorable foreign currency effects. |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||
over the prior year period | over the prior year period | |||
Growth | 0.4 | pts | 0.4 | pts |
Price | 0.7 | 1.2 | ||
Currency | 0.2 | 0.2 | ||
Net productivity | (1.5 | ) | (1.0 | ) |
Total | (0.2 pts) | 0.8 | pts | |
• | inflationary increases related to certain raw materials, labor and freight costs. |
• | selective increases in selling prices to mitigate inflationary cost increases; and |
• | sales volume growth resulting in increased leverage on fixed expenses. |
• | selective increases in selling prices to mitigate inflationary cost increases; |
• | sales volume growth resulting in increased leverage on fixed expenses; and |
• | savings generated from our lean and supply management practices. |
• | inflationary increases related to certain raw materials, labor and freight costs. |
Three months ended | Six months ended | ||||||||||||||||||
In millions | June 30, 2019 | June 30, 2018 | % / point change | June 30, 2019 | June 30, 2018 | % / point change | |||||||||||||
Net sales | $ | 128.8 | $ | 139.0 | (7.3 | %) | $ | 273.9 | $ | 286.9 | (4.5 | %) | |||||||
Segment income | 25.3 | 30.4 | (16.8 | %) | 59.6 | 63.9 | (6.7 | %) | |||||||||||
% of net sales | 19.6 | % | 21.9 | % | (2.3 pts) | 21.8 | % | 22.3 | % | (0.5 pts) | |||||||||
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||
over the prior year period | over the prior year period | |||
Volume | (4.3 | %) | (1.4 | %) |
Price | — | 0.5 | ||
Organic growth | (4.3 | ) | (0.9 | ) |
Currency | (3.0 | ) | (3.6 | ) |
Total | (7.3 | %) | (4.5 | %) |
• | unfavorable foreign currency effects; and |
• | slowdown in capital spending resulting in organic sales declines of approximately 2.5% and 1.0% contributed from our industrial business in the second quarter and first half of 2019 from 2018, respectively, and approximately 2.0% and 1.0% contributed from our commercial & residential business in the second quarter and first half of 2019 from 2018, respectively. |
• | organic sales growth in the after-market repair and maintenance component of our industrial business. |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||
over the prior year period | over the prior year period | |||
Growth | (2.8 | pts) | (1.2 | pts) |
Price | — | 0.4 | ||
Currency | 0.2 | 0.1 | ||
Net productivity | 0.3 | 0.2 | ||
Total | (2.3 | pts) | (0.5 | pts) |
• | inflationary increases related to certain raw materials, labor and freight costs; |
• | impact of unfavorable product mix; and |
• | lower sales volume resulting in decreased leverage on fixed expenses. |
• | savings generated from restructuring and lean initiatives. |
Three months ended | Six months ended | ||||||||||||||||||
In millions | June 30, 2019 | June 30, 2018 | % / point change | June 30, 2019 | June 30, 2018 | % / point change | |||||||||||||
Net sales | $ | 150.7 | $ | 148.1 | 1.8 | % | $ | 288.1 | $ | 285.0 | 1.1 | % | |||||||
Segment income | 41.6 | 40.9 | 1.7 | % | 72.8 | 72.6 | 0.3 | % | |||||||||||
% of net sales | 27.6 | % | 27.6 | % | — | 25.3 | % | 25.5 | % | (0.2 | pts) | ||||||||
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||
over the prior year period | over the prior year period | |||
Volume | (1.3 | %) | (1.1 | %) |
Price | 4.7 | 4.2 | ||
Organic growth | 3.4 | 3.1 | ||
Currency | (1.6 | ) | (2.0 | ) |
Total | 1.8 | % | 1.1 | % |
• | organic sales growth contributions of approximately 3.5% and 2.5% from our commercial & residential business in the second quarter and first half of 2019 from 2018, respectively, and approximately 1.0% from our industrial business in both the second quarter and first half of 2019 from 2018, which includes selective increases in selling prices. |
• | unfavorable foreign currency effects; and |
• | slowdown in capital spending impacting our infrastructure business, driving organic sales lower by approximately 1.5% for both the second quarter and first half of 2019 from 2018. |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||
over the prior year period | over the prior year period | |||
Growth | (0.1 | pts) | 0.2 | pts |
Price | 3.2 | 3.0 | ||
Currency | 0.2 | 0.1 | ||
Net productivity | (3.3 | ) | (3.5 | ) |
Total | — | (0.2 | pts) | |
• | selective increases in selling prices, partially offset by inflationary increases related to certain raw materials, labor and freight costs. |
• | inflationary increases related to certain raw materials, labor and freight costs; and |
• | investment in research and development to drive growth. |
• | selective increases in selling prices to mitigate inflationary cost increases. |
Six months ended | ||||||
In millions | June 30, 2019 | June 30, 2018 | ||||
Net cash provided by (used for) operating activities | $ | 57.8 | $ | 81.6 | ||
Capital expenditures | (17.6 | ) | (9.7 | ) | ||
Proceeds from sale of property and equipment | 6.1 | 2.3 | ||||
Free cash flow | $ | 46.3 | $ | 74.2 | ||
(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 27, 2019 | 1,441,258 | $ | 27.65 | 1,441,200 | $ | 701,185,863 | ||||
April 28 - May 25, 2019 | 3,754,254 | 25.67 | 3,730,176 | 605,373,188 | ||||||
May 26 - June 30, 2019 | 727,894 | 23.46 | 726,935 | 588,307,762 | ||||||
Total | 5,923,406 | 5,898,311 | ||||||||
(a) | The purchases in this column include 58 shares for the period April 1 - April 27, 2019, 24,078 shares for the period April 28 - May 25, 2019, and 959 shares for the period May 26 - June 30, 2019 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 30, 2019, we have $588.3 million available for share repurchases under the combined 2018 and 2019 Authorizations. |
Certification of Chief Executive Officer. | ||
Certification of Chief Financial Officer. | ||
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. | ||
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 30, 2019 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated and Combined Statements of Income and Comprehensive Income for the three and six months ended June 30, 2019 and 2018, (ii) the Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018, (iii) the Condensed Consolidated and Combined Statements of Cash Flows for the six months ended June 30, 2019 and 2018, (iv) the Condensed Consolidated and Combined Statements of Changes in Equity for the three and six months ended June 30, 2019 and 2018, and (v) Notes to Condensed Consolidated and Combined Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |
nVent Electric plc | ||
Registrant | ||
By | /s/ Stacy P. McMahan | |
Stacy P. McMahan | ||
Executive Vice President and Chief Financial Officer | ||
By | /s/ Randolph A. Wacker | |
Randolph A. Wacker | ||
Senior Vice President and Chief Accounting Officer | ||
1. | I have reviewed this quarterly report on Form 10-Q of nVent Electric plc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 1, 2019 | /s/ Beth A. Wozniak |
Beth A. Wozniak | ||
Chief Executive Officer | ||
1. | I have reviewed this quarterly report on Form 10-Q of nVent Electric plc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 1, 2019 | /s/ Stacy P. McMahan |
Stacy P. McMahan | ||
Executive Vice President and Chief Financial Officer | ||
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 1, 2019 | /s/ Beth A. Wozniak |
Beth A. Wozniak | ||
Chief Executive Officer | ||
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 1, 2019 | /s/ Stacy P. McMahan |
Stacy P. McMahan | ||
Executive Vice President and Chief Financial Officer | ||
Condensed Consolidated and Combined Statements of Income and Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Income Statement [Abstract] | ||||
| Net sales | $ 539.5 | $ 542.7 | $ 1,077.5 | $ 1,081.6 |
| Cost of goods sold | 327.3 | 323.3 | 655.4 | 653.3 |
| Gross profit | 212.2 | 219.4 | 422.1 | 428.3 |
| Selling, general and administrative | 113.1 | 143.1 | 233.2 | 275.0 |
| Research and development | 12.1 | 11.0 | 24.4 | 22.4 |
| Operating income | 87.0 | 65.3 | 164.5 | 130.9 |
| Net interest expense | 11.9 | 9.3 | 22.4 | 9.9 |
| Other expense | 1.0 | 5.1 | 1.9 | 6.3 |
| Income before income taxes | 74.1 | 50.9 | 140.2 | 114.7 |
| Provision for income taxes | 13.2 | 7.6 | 22.9 | 19.1 |
| Net income | 60.9 | 43.3 | 117.3 | 95.6 |
| Comprehensive income, net of tax | ||||
| Net income | 60.9 | 43.3 | 117.3 | 95.6 |
| Changes in cumulative translation adjustment | 3.2 | (39.8) | 6.2 | (37.5) |
| Changes in market value of derivative financial instruments, net of tax | 12.7 | (1.0) | 6.5 | (1.7) |
| Comprehensive income | $ 76.8 | $ 2.5 | $ 130.0 | $ 56.4 |
| Earnings per ordinary share | ||||
| Basic pro forma earnings per ordinary share (in dollars per share) | $ 0.36 | $ 0.24 | $ 0.67 | $ 0.53 |
| Diluted pro forma earnings per ordinary share (in dollars per share) | $ 0.35 | $ 0.24 | $ 0.67 | $ 0.53 |
| Weighted average ordinary shares outstanding | ||||
| Basic (shares) | 171.5 | 178.5 | 174.0 | 178.7 |
| Diluted (shares) | 173.0 | 180.8 | 175.6 | 181.0 |
| Cash dividends paid per ordinary share (in usd per share) | $ 0.175 | $ 0 | $ 0.35 | $ 0 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Accounts and notes receivable, allowances | $ 5.9 | $ 6.1 |
| Ordinary shares, par value (in dollars per share) | $ 0.01 | |
| Ordinary shares authorized (in shares) | 400,000,000 | |
| Ordinary shares issued (in shares) | 169,100,000 | 177,200,000 |
Basis of Presentation and Responsibility for Interim Financial Statements |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation and Responsibility for Interim Financial Statements | 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 three reporting segments: Enclosures, Thermal Management and Electrical & Fastening Solutions. The Company was incorporated in Ireland on May 30, 2017. Although our jurisdiction of organization is Ireland, we manage our affairs so that we are centrally managed and controlled in the United Kingdom (the "U.K.") and therefore have tax residency in the U.K. Separation from Pentair On April 30, 2018, Pentair plc ("Pentair" or "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. Except where indicated, references below to transactions completed by nVent prior to April 30, 2018 refer to transactions completed by or on behalf of the Electrical reporting segment of Pentair that are reflected on the condensed consolidated and combined financial statements of nVent. Basis of presentation The accompanying unaudited condensed consolidated and combined 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 and combined 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/A for the year ended December 31, 2018. Revenues, expenses, cash flows, assets and liabilities can and do vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be indicative of those for a full year. The financial statements for periods prior to April 30, 2018 were prepared on a stand-alone basis derived from the consolidated financial statements and records of Pentair as if nVent were operated on a stand-alone basis. These condensed consolidated and combined financial statements have been prepared in U.S. dollars and in accordance with GAAP. Cost allocations For periods prior to the separation, the condensed consolidated and combined financial statements of nVent include general corporate expenses of the former Parent for certain support functions that were provided on a centralized basis, such as expenses related to executive management, finance, audit, legal, information technology, human resources, communications, facilities and employee benefits and compensation. These general corporate expenses are included in the Condensed Consolidated and Combined Statements of Income and Comprehensive Income within Selling, general and administrative expense and Other expense. The amounts allocated were $16.2 million and $42.5 million for the three and six months ended June 30, 2018, respectively, of which $2.6 million and $10.3 million, respectively, were historically recorded to the Electrical segment in Pentair’s consolidated financial statements. These expenses were allocated to nVent on the basis of direct usage when identifiable, with the remainder allocated based on a proportional basis of net sales, headcount or other measures. The Company considers the allocation methodology regarding general corporate expenses of the former Parent to be reasonable for all periods presented. Nevertheless, the condensed consolidated and combined financial statements of nVent for periods prior to the separation may not reflect the actual expenses that would have been incurred and may not reflect nVent’s condensed consolidated and combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented. Actual costs for periods prior to the separation that would have been incurred if nVent had been a stand-alone company would depend on multiple factors including organization structure, capital structure and strategic decisions made in various areas, including information technology and infrastructure. Transactions between nVent and the former Parent have been included in related party transactions in these unaudited condensed consolidated and combined financial statements and were considered to be effectively settled at the time the transaction was recorded. The total net effect of the settlement of these transactions is reflected in the Condensed Consolidated and Combined Statements of Cash Flows as a financing activity. For periods prior to the separation, certain nVent operations were included in the former Parent’s U.S. federal and state income tax returns, and substantially all income taxes on those operations have been paid by the former Parent. Income tax expense and other income tax related information contained in these condensed consolidated and combined financial statements for periods prior to the separation are presented on a separate return approach as if nVent filed its own tax returns. Under this approach, the provision for income taxes represented income tax paid or payable (or received or receivable) plus the change in deferred taxes during the year calculated as if nVent was a stand-alone taxpayer filing hypothetical income tax returns where applicable. Adoption of new accounting standards On January 1, 2019, we adopted ASU No. 2016-02, “Leases” and did not recast comparative periods in transition to the new standard. In addition, we elected the package of practical expedients permitted under the transition guidance, which among other things, allowed us to carry forward the historical lease classification. We also elected the practical expedient to not separate non-lease components from lease components for all leases. Accordingly, all costs associated with a lease contract are accounted for as lease cost. In addition, we did not elect to apply the hindsight practical expedient. We implemented internal controls and key system functionality to enable the preparation of financial information upon adoption. Refer to Note 12 for more information regarding leases. On January 1, 2018, we adopted ASU No. 2014-09, "Revenue from Contracts with Customers" and the related amendments ("ASC 606" or "the new revenue standard") using the modified retrospective method. As a result of adoption, the cumulative impact to our beginning equity at January 1, 2018 was $1.8 million. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We expect the impact of the adoption of the new standard to be immaterial to our net income on an ongoing basis. The adoption of the new standard had an impact on our accounting for certain custom products manufactured by our Enclosures segment. Prior to the adoption of the standard revenue was recognized for these custom products upon shipment. However, as these products have no alternative use to the Company and we have an enforceable right to payment for our performance completed to date, revenue related to these custom products will be recognized over time. Additionally, the new revenue standard resulted in reclassifications on the Condensed Consolidated Balance Sheets related to accounting for sales returns. On January 1, 2018, we adopted ASU No. 2016-16, "Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory" using the modified retrospective method. The ASU requires the tax effects of all intra-entity sales of assets other than inventory to be recognized in the period in which the transaction occurs. The adoption resulted in a $174.5 million cumulative-effect adjustment recorded in equity as of the beginning of 2018 that reflects a $201.5 million reduction of non-current prepaid income tax assets, partially offset by the establishment of $27.0 million of deferred tax assets. The cumulative effect of the changes made to our January 1, 2018 Condensed Combined Balance Sheets from the modified retrospective adoption of ASU 2016-16 and ASU 2014-09 was as follows:
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Revenue |
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | Revenue Revenue recognition Revenue is recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those goods or providing services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. When determining whether the customer has obtained control of the goods or services, we consider any future performance obligations. Generally, there is no post-shipment obligation on product sold other than warranty obligations in the normal and ordinary course of business. In the event significant post-shipment obligations were to exist, revenue recognition would be deferred until nVent has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. Performance obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, stand-alone selling price is generally readily observable. Our performance obligations are satisfied at a point in time or over time as work progresses. Revenue from products and services transferred to customers at a point in time accounted for 73% and 72% of our revenue for the three-month periods ended June 30, 2019 and 2018, respectively, and 72% of our revenue for the six-month periods ended June 30, 2019 and 2018. Revenue on these contracts is recognized when obligations under the terms of the contract with our customer are satisfied; generally this occurs with the transfer of control upon shipment. Revenue from products and services transferred to customers over time accounted for 27% and 28% of our revenue for the three-month periods ended June 30, 2019 and 2018, respectively, and 28% of our revenue for the six-month periods ended June 30, 2019 and 2018. For the majority of our revenue recognized over time, we use an input measure to determine progress towards completion. Under this method, sales and gross profit are recognized as work is performed generally based on the relationship between the actual costs incurred and the total estimated costs at completion ("the cost-to-cost method") or based on efforts for measuring progress towards completion in situations in which this approach is more representative of the progress on the contract than the cost-to-cost method. Contract costs include labor, material, overhead and, when appropriate, general and administrative expenses. Changes to the original estimates may be required during the life of the contract and such estimates are reviewed on a regular basis. Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs. These reviews have not resulted in adjustments that were significant to our results of operations. For performance obligations related to long-term contracts, when estimates of total costs to be incurred on a performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined. We use an output method to measure progress towards completion for certain of our Enclosures businesses, as this method appropriately depicts performance towards satisfaction of the performance obligation. Under the output method, revenue is recognized based on number of units produced. On June 30, 2019, we had $63.8 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. Sales returns The right of return may exist explicitly or implicitly with our customers. Our return policy allows for customer returns only upon our authorization. Goods returned must be product we continue to market and must be in salable condition. When the right of return exists, we adjust the transaction price for the estimated effect of returns. We estimate the expected returns based on historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer and a projection of this experience into the future. Pricing and sales incentives Our sales contracts may give customers the option to purchase additional goods or services priced at a discount. Options to acquire additional goods or services at a discount can come in many forms, such as customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives. We reduce the transaction price for certain customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives that represent variable consideration. Sales incentives given to our customers are recorded using either the expected value method or most likely amount approach for estimating the amount of consideration to which nVent shall be entitled. The expected value is the sum of probability-weighted amounts in a range of possible consideration amounts. An expected value is an appropriate estimate of the amount of variable consideration when there are a large number of contracts with similar characteristics. The most likely amount is the single most likely amount in a range of possible consideration amounts (that is, the single most likely outcome of the contract). The most likely amount is an appropriate estimate of the amount of variable consideration if the contract has limited possible outcomes (for example, an entity either achieves a performance bonus or does not). Pricing is established at or prior to the time of sale with our customers, and we record sales at the agreed-upon net selling price. However, certain of our businesses allow customers to apply for a refund of a percentage of the original purchase price if they can demonstrate sales to a qualifying end customer. We use the expected value method to estimate the anticipated refund to be paid based on historical experience and reduce sales for the probable cost of the discount. The cost of these refunds is recorded as a reduction of transaction price. Volume-based incentives involve rebates that are negotiated at or prior to the time of sale with the customer and are redeemable only if the customer achieves a specified cumulative level of sales or sales increase. Under these incentive programs, at the time of sale, we estimate the anticipated rebate to be paid based on forecasted sales levels. These forecasts are updated at least quarterly for each customer and the transaction price is reduced for the anticipated cost of the rebate. If the forecasted sales for a customer changes, the accrual for rebates is adjusted to reflect the new amount of rebates expected to be earned by the customer. Shipping and handling costs Amounts billed to customers for shipping and handling activities after the customer obtains control are treated as a promised service performance obligation and recorded in Net sales in the accompanying Condensed Consolidated and Combined Statements of Income and Comprehensive Income. Shipping and handling costs incurred by nVent for the delivery of goods to customers are considered a cost to fulfill the contract and are included in Cost of goods sold in the accompanying Condensed Consolidated and Combined Statements of Income and Comprehensive Income. Contract assets and liabilities Contract assets consist of unbilled amounts resulting from sales under long-term contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer, such as when the customer retains a small portion of the contract price until completion of the contract. We typically receive interim payments on sales under long-term contracts as work progresses, although for some contracts, we may be entitled to receive an advance payment. Contract liabilities consist of advanced payments and billings in excess of costs incurred and deferred revenue. Contract assets are recorded within Other current assets and contract liabilities are recorded within Other current liabilities in the Condensed Consolidated Balance Sheets. Contract assets and liabilities consisted of the following:
The $0.1 million decrease in net contract assets from December 31, 2018 to June 30, 2019 was primarily the result of timing of milestone payments. The majority of our contract liabilities at December 31, 2018 were recognized in revenue during the six months ended June 30, 2019. There were no impairment losses recognized on our contract assets for the three months or six months ended June 30, 2019. Practical expedients and exemptions We generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in Selling, general and administrative expense in the Condensed Consolidated and Combined Statements of Income and Comprehensive Income. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Further, we do not adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Revenue by category We disaggregate our revenue from contracts with customers by geographic location and vertical 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:
Vertical net sales information was as follows:
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Restructuring |
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| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring | Restructuring During the six months ended June 30, 2019 and the year ended December 31, 2018, we initiated and continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. Initiatives during the six months ended June 30, 2019 included the reduction in hourly and salaried headcount of approximately 50 employees. Restructuring related costs included in Selling, general and administrative expense in the Condensed Consolidated and Combined Statements of Income and Comprehensive Income included costs for severance and other restructuring costs as follows:
Other restructuring costs primarily consist of asset impairment and various contract termination costs. Restructuring costs by reportable segment were as follows:
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 months ended June 30, 2019:
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Earnings Per Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | Earnings Per Share On April 30, 2018, Pentair completed the separation of its Electrical business, distributing to its shareholders one ordinary share of nVent for every ordinary share of Pentair held as of the record date of April 17, 2018. The computations of basic and diluted earnings per share for periods prior to the separation were calculated using the shares that were distributed to Pentair shareholders upon the separation. Basic and diluted earnings per share were calculated as follows:
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Other Identifiable Intangible Assets | Goodwill and Other Identifiable Intangible Assets The changes in the carrying amount of goodwill by reportable segment were as follows:
Identifiable intangible assets consisted of the following:
Identifiable intangible asset amortization expense was $15.1 million and $15.2 million for the three months ended June 30, 2019 and 2018, respectively, and $30.2 million and $30.6 million for the six months ended June 30, 2019 and 2018, respectively. Estimated future amortization expense for identifiable intangible assets during the remainder of 2019 and the next five years is as follows:
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Supplemental Balance Sheet Information |
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| Disclosure Supplemental Balance Sheet Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Balance Sheet Information | Supplemental Balance Sheet Information
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Derivatives and Financial Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives and Financial Instruments | Derivatives and Financial Instruments Derivative financial instruments We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. dollar. We manage our economic and transaction exposure to certain market-based risks through the use of foreign currency derivative financial instruments. Our objective in holding these derivatives is to reduce the volatility of net earnings and cash flows associated with changes in foreign currency exchange rates. The majority of our foreign currency contracts have an original maturity date of less than one year. The derivative contracts contain credit risk to the extent that our bank counterparties may be unable to meet the terms of the agreements. The amount of such credit risk is generally limited to the unrealized gains, if any, in such contracts. Such risk is minimized by limiting those counterparties to major financial institutions of high credit quality. Foreign currency contracts At June 30, 2019 and December 31, 2018, we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of $124.4 million and $129.0 million, respectively. The impact of these contracts on the Condensed Consolidated and Combined Statements of Income and Comprehensive Income was not material for any period presented. Gains or losses on foreign currency contracts designated as hedges are reclassified out of Accumulated Other Comprehensive Loss and into Selling, general and administrative expense in the Condensed Consolidated and Combined Statements of Income and Comprehensive Income when the hedged transactions affect earnings. Such reclassifications during the three and six months ended June 30, 2019 and 2018 were not material. Net investment hedge We have net investments in foreign subsidiaries that are subject to changes in the foreign currency exchange rate. In October 2018, we designated a cross-currency swap with a gross notional U.S. dollar equivalent amount of $69.1 million as a net investment hedge for a portion of our net investment in our Euro denominated subsidiaries. Gains or losses resulting from the change in fair value of the net investment hedge are included as a component of the cumulative translation adjustment account within Accumulated Other Comprehensive Loss and offset gains and losses on the underlying foreign currency exposures. As of June 30, 2019 and December 31, 2018, the deferred foreign currency activity in Accumulated Other Comprehensive Loss associated with the net investment hedge was not material. Fair value of financial instruments The following methods were used to estimate the fair values of each class of financial instruments:
The recorded amounts and estimated fair values of total debt, excluding unamortized issuance costs and discounts, were as follows:
Financial assets and liabilities measured at fair value on a recurring basis were as follows:
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Debt |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt Debt and the average interest rates on debt outstanding were as follows:
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"). The Notes are fully and unconditionally guaranteed as to payment by nVent Electric plc ("Parent Company Guarantor"). There are no subsidiaries that guarantee the Notes. The Parent Company Guarantor has no independent assets or operations unrelated to its investments in its consolidated subsidiaries. The Parent Company Guarantor’s only direct subsidiary is the Subsidiary Issuer. The Subsidiary Issuer has no independent assets or operations unrelated to its investments in its consolidated subsidiaries and the issuance of the Notes and other external debt. The Notes constitute general unsecured senior obligations of the Subsidiary Issuer and rank equally in right of payment with all existing and future unsubordinated and unsecured indebtedness and liabilities of the Subsidiary Issuer. The guarantees of the Notes by the Parent Company Guarantor constitute general unsecured obligations of the Parent Company Guarantor and rank equally in right of payment with all existing and future unsubordinated and unsecured indebtedness and liabilities of the Subsidiary Issuer. Subject to certain qualifications and exceptions, the indenture pursuant to which the Notes were issued contains covenants that, among other things, restrict nVent’s, nVent Finance’s and certain subsidiaries’ ability to merge or consolidate with another person, create liens or engage in sale and lease-back transactions. There are no significant restrictions on the ability of nVent to obtain funds from its subsidiaries by dividend or loan and no material assets of nVent or its subsidiaries which represent 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. As of June 30, 2019, we had $119.0 million of outstanding borrowings under the Revolving Credit Facility. Total availability under the Revolving Credit Facility was $481.0 million as of June 30, 2019. 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 30, 2019, we were in compliance with all financial covenants in our debt agreements. Debt outstanding, excluding unamortized issuance costs and discounts, at June 30, 2019 matures on a calendar year basis as follows:
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Income Taxes |
6 Months Ended |
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Jun. 30, 2019 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The effective income tax rate for the six months ended June 30, 2019 was 16.3%, compared to 16.7% for the six months ended June 30, 2018. The liability for uncertain tax positions was $16.9 million and $16.8 million at June 30, 2019 and December 31, 2018, respectively. We record penalties and interest related to unrecognized tax benefits in Provision for income taxes and Net interest expense, respectively, on the Condensed Consolidated and Combined Statements of Income and Comprehensive Income, which is consistent with our past practices.
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Shareholders' Equity |
6 Months Ended |
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Jun. 30, 2019 | |
| Equity [Abstract] | |
| Shareholders' Equity | 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. During the three and six months ended June 30, 2019, we repurchased 5.9 million and 9.0 million of our ordinary shares for $152.8 million and $232.7 million, respectively, under the 2018 Authorization. As of June 30, 2019 and December 31, 2018, outstanding share repurchases recorded in Accounts payable were $0.0 million and $3.0 million, respectively. As of June 30, 2019, we have $588.3 million available for share repurchases under the combined 2018 and 2019 Authorizations which total $880.0 million. Dividends payable On May 10, 2019, the Board of Directors declared a quarterly cash dividend of $0.175 per ordinary share payable on August 2, 2019 to shareholders of record at the close of business on July 19, 2019. The balance of dividends payable included in Other current liabilities on our Condensed Consolidated Balance Sheets was $29.6 million and $31.0 million at June 30, 2019 and December 31, 2018, respectively.
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Segment Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Information | 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, separation costs, costs of restructuring activities, impairments and other unusual non-operating items. Financial information by reportable segment is as follows:
The following table presents a reconciliation of segment income to income before income taxes:
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Leases |
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | 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 and six months ended June 30, 2019, rent expense was $4.9 million and $9.1 million, respectively, primarily related to operating lease costs. Costs associated with short-term leases, variable rent and subleases were immaterial. Our leases have remaining lease terms 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 as of June 30, 2019 were as follows:
Future lease payments under non-cancelable operating leases as of June 30, 2019 were as follows:
As of June 30, 2019, we have no material additional operating leases that have not yet commenced. Future minimum lease commitments under non-cancelable operating leases based on accounting standards applicable as of December 31, 2018 were as follows:
Supplemental cash flow information related to operating leases for the six months ended June 30, 2019 was as follows:
Supplemental balance sheet information related to operating leases was as follows:
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Commitments and Contingencies |
6 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | 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 30, 2019 and December 31, 2018 was not 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 30, 2019 and December 31, 2018, the outstanding value of bonds, letters of credit and bank guarantees totaled $68.5 million and $75.8 million, respectively.
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Subsequent Events |
6 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent Events On July 26, 2019, as part of our Enclosures segment, we entered into an agreement to acquire Eldon Holding AB ("Eldon") for approximately €117 million in cash (approximately $130 million based on the exchange rate on such date), subject to certain customary adjustments and including repayment of Eldon third party debt. We intend to fund the acquisition with a combination of cash on hand and funds available under our Revolving Credit Facility. |
Basis of Presentation and Responsibility for Interim Financial Statements (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost Allocations | For periods prior to the separation, the condensed consolidated and combined financial statements of nVent include general corporate expenses of the former Parent for certain support functions that were provided on a centralized basis, such as expenses related to executive management, finance, audit, legal, information technology, human resources, communications, facilities and employee benefits and compensation. These general corporate expenses are included in the Condensed Consolidated and Combined Statements of Income and Comprehensive Income within Selling, general and administrative expense and Other expense. The amounts allocated were $16.2 million and $42.5 million for the three and six months ended June 30, 2018, respectively, of which $2.6 million and $10.3 million, respectively, were historically recorded to the Electrical segment in Pentair’s consolidated financial statements. These expenses were allocated to nVent on the basis of direct usage when identifiable, with the remainder allocated based on a proportional basis of net sales, headcount or other measures. The Company considers the allocation methodology regarding general corporate expenses of the former Parent to be reasonable for all periods presented. Nevertheless, the condensed consolidated and combined financial statements of nVent for periods prior to the separation may not reflect the actual expenses that would have been incurred and may not reflect nVent’s condensed consolidated and combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented. Actual costs for periods prior to the separation that would have been incurred if nVent had been a stand-alone company would depend on multiple factors including organization structure, capital structure and strategic decisions made in various areas, including information technology and infrastructure. Transactions between nVent and the former Parent have been included in related party transactions in these unaudited condensed consolidated and combined financial statements and were considered to be effectively settled at the time the transaction was recorded. The total net effect of the settlement of these transactions is reflected in the Condensed Consolidated and Combined Statements of Cash Flows as a financing activity. For periods prior to the separation, certain nVent operations were included in the former Parent’s U.S. federal and state income tax returns, and substantially all income taxes on those operations have been paid by the former Parent. Income tax expense and other income tax related information contained in these condensed consolidated and combined financial statements for periods prior to the separation are presented on a separate return approach as if nVent filed its own tax returns. Under this approach, the provision for income taxes represented income tax paid or payable (or received or receivable) plus the change in deferred taxes during the year calculated as if nVent was a stand-alone taxpayer filing hypothetical income tax returns where applicable.
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| New accounting standards | Adoption of new accounting standards On January 1, 2019, we adopted ASU No. 2016-02, “Leases” and did not recast comparative periods in transition to the new standard. In addition, we elected the package of practical expedients permitted under the transition guidance, which among other things, allowed us to carry forward the historical lease classification. We also elected the practical expedient to not separate non-lease components from lease components for all leases. Accordingly, all costs associated with a lease contract are accounted for as lease cost. In addition, we did not elect to apply the hindsight practical expedient. We implemented internal controls and key system functionality to enable the preparation of financial information upon adoption. Refer to Note 12 for more information regarding leases. On January 1, 2018, we adopted ASU No. 2014-09, "Revenue from Contracts with Customers" and the related amendments ("ASC 606" or "the new revenue standard") using the modified retrospective method. As a result of adoption, the cumulative impact to our beginning equity at January 1, 2018 was $1.8 million. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We expect the impact of the adoption of the new standard to be immaterial to our net income on an ongoing basis. The adoption of the new standard had an impact on our accounting for certain custom products manufactured by our Enclosures segment. Prior to the adoption of the standard revenue was recognized for these custom products upon shipment. However, as these products have no alternative use to the Company and we have an enforceable right to payment for our performance completed to date, revenue related to these custom products will be recognized over time. Additionally, the new revenue standard resulted in reclassifications on the Condensed Consolidated Balance Sheets related to accounting for sales returns. On January 1, 2018, we adopted ASU No. 2016-16, "Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory" using the modified retrospective method. The ASU requires the tax effects of all intra-entity sales of assets other than inventory to be recognized in the period in which the transaction occurs. The adoption resulted in a $174.5 million cumulative-effect adjustment recorded in equity as of the beginning of 2018 that reflects a $201.5 million reduction of non-current prepaid income tax assets, partially offset by the establishment of $27.0 million of deferred tax assets. The cumulative effect of the changes made to our January 1, 2018 Condensed Combined Balance Sheets from the modified retrospective adoption of ASU 2016-16 and ASU 2014-09 was as follows:
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Basis of Presentation and Responsibility for Interim Financial Statements (Tables) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to our January 1, 2018 Condensed Combined Balance Sheets from the modified retrospective adoption of ASU 2016-16 and ASU 2014-09 was as follows:
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Revenue (Tables) |
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contract with Customer, Asset and Liability | Contract assets and liabilities consisted of the following:
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| Revenue by Category | Geographic net sales information, based on geographic destination of the sale, was as follows:
Vertical net sales information was as follows:
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Restructuring (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring Related Costs | Restructuring related costs included in Selling, general and administrative expense in the Condensed Consolidated and Combined Statements of Income and Comprehensive Income included costs for severance and other restructuring costs as follows:
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| Restructuring Costs By Segment | Restructuring costs by reportable segment were as follows:
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| Restructuring Accrual Activity Recorded on Consolidated Balance Sheets | 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 months ended June 30, 2019:
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Earnings Per Share (Tables) |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic and Diluted Earnings Per Share | Basic and diluted earnings per share were calculated as follows:
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Goodwill and Other Identifiable Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill by reportable segment were as follows:
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| Schedule of Finite-Lived Intangible Assets | Identifiable intangible assets consisted of the following:
|
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| Schedule of Indefinite-Lived Intangible Assets | Identifiable intangible assets consisted of the following:
|
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| Estimated Future Amortization Expense for Identifiable Intangible Assets | Estimated future amortization expense for identifiable intangible assets during the remainder of 2019 and the next five years is as follows:
|
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Supplemental Balance Sheet Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure Supplemental Balance Sheet Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Balance Sheet Information |
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Derivatives and Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recorded Amounts and Estimated Fair Values of Long-term Debt and Derivative Financial Instruments | • deferred compensation plan assets (mutual funds, common/collective trusts and cash equivalents for payment of certain non-qualifi
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| Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis were as follows:
|
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Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt and Average Interest Rates on Debt Outstanding | Debt and the average interest rates on debt outstanding were as follows:
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| Debt Outstanding Matures on Calendar Year Basis | Debt outstanding, excluding unamortized issuance costs and discounts, at June 30, 2019 matures on a calendar year basis as follows:
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Information by Reportable Segment | Financial information by reportable segment is as follows:
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| Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table presents a reconciliation of segment income to income before income taxes:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease, Cost | Supplemental cash flow information related to operating leases for the six months ended June 30, 2019 was as follows:
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| Future Lease Payments | Future lease payments under non-cancelable operating leases as of June 30, 2019 were as follows:
Future minimum lease commitments under non-cancelable operating leases based on accounting standards applicable as of December 31, 2018 were as follows:
|
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| Operating Leases, Assets and Liabilities | Supplemental balance sheet information related to operating leases was as follows:
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Basis of Presentation and Responsibility for Interim Financial Statements - Separation from Pentair (Details) |
6 Months Ended | |
|---|---|---|
|
Apr. 30, 2018
shares
|
Jun. 30, 2019
segment
|
|
| Accounting Policies [Abstract] | ||
| Number of reportable segments | segment | 3 | |
| Equity interests issued per ordinary predecessor share (in shares) | shares | 1 |
Basis of Presentation and Responsibility for Interim Financial Statements - Cost Allocations (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
| Related Party Transaction [Line Items] | ||
| Selling, general and administrative expenses from transactions with related party | $ 16.2 | $ 42.5 |
| Predecessor | ||
| Related Party Transaction [Line Items] | ||
| Selling, general and administrative expenses from transactions with related party | $ 2.6 | $ 10.3 |
Basis of Presentation and Responsibility for Interim Financial Statements - Adoption of New Accounting Standard (Details) $ in Millions |
Jan. 01, 2018
USD ($)
|
|---|---|
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
| Net Parent investment | $ 3,675.7 |
| Accounting Standards Update 2016-16 | |
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
| Net Parent investment | (174.5) |
| Prepaid income tax assets, noncurrent | 201.5 |
| Deferred tax assets | 27.0 |
| Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
| Net Parent investment | $ 1.8 |
Revenue - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |
|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
|
| Disaggregation of Revenue [Line Items] | |||
| Net contract assets (liabilities) | $ (100,000) | ||
| Credit loss expense | $ 0 | ||
| Transferred at Point in Time | |||
| Disaggregation of Revenue [Line Items] | |||
| Revenues, percent | 73.00% | 72.00% | 72.00% |
| Transferred over Time | |||
| Disaggregation of Revenue [Line Items] | |||
| Revenues, percent | 27.00% | 28.00% | 28.00% |
Revenue - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Millions |
6 Months Ended | |
|---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
| Revenue from Contract with Customer [Abstract] | ||
| Contract assets | $ 72.5 | $ 74.4 |
| Contract liabilities | 11.4 | 13.2 |
| Net contract assets | 61.1 | $ 61.2 |
| $ Change | ||
| Contract assets | (1.9) | |
| Contract liabilities | (1.8) | |
| Net contract assets | $ 0.1 | |
| % Change | ||
| Contract assets | (2.60%) | |
| Contract liabilities | (13.60%) | |
| Net contract assets | (0.20%) |
Restructuring - Costs Included in Selling, General & Administrative Expenses (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
employee
|
Jun. 30, 2018
USD ($)
|
|
| Restructuring and Related Activities [Abstract] | ||||
| Number of employees | employee | 50 | |||
| Restructuring Cost and Reserve [Line Items] | ||||
| Restructuring costs | $ 1.1 | $ 2.3 | $ 4.7 | $ 5.1 |
| Severance and related costs | ||||
| Restructuring Cost and Reserve [Line Items] | ||||
| Restructuring costs | 0.7 | 2.3 | 3.5 | 5.1 |
| Other | ||||
| Restructuring Cost and Reserve [Line Items] | ||||
| Restructuring costs | $ 0.4 | $ 0.0 | $ 1.2 | $ 0.0 |
Restructuring - Costs by Reportable Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Restructuring Cost and Reserve [Line Items] | ||||
| Total restructuring costs | $ 1.1 | $ 2.3 | $ 4.7 | $ 5.1 |
| Enclosures | ||||
| Restructuring Cost and Reserve [Line Items] | ||||
| Total restructuring costs | 0.1 | 0.9 | 0.1 | 1.2 |
| Thermal Management | ||||
| Restructuring Cost and Reserve [Line Items] | ||||
| Total restructuring costs | 0.8 | 0.6 | 2.8 | 2.7 |
| Electrical & Fastening Solutions | ||||
| Restructuring Cost and Reserve [Line Items] | ||||
| Total restructuring costs | 0.1 | 0.6 | 1.0 | 1.0 |
| Other | ||||
| Restructuring Cost and Reserve [Line Items] | ||||
| Total restructuring costs | $ 0.1 | $ 0.2 | $ 0.8 | $ 0.2 |
Restructuring - Accrual Activity (Details) $ in Millions |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
| |
| Restructuring Reserve [Roll Forward] | |
| Beginning balance | $ 3.8 |
| Costs incurred | 3.5 |
| Cash payments and other | (5.3) |
| Ending balance | $ 2.0 |
Earnings Per Share - Additional Information (Details) |
Apr. 30, 2018
shares
|
|---|---|
| Subsequent Events [Abstract] | |
| Equity interests issued per ordinary predecessor share (in shares) | 1 |
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Earnings Per Share [Abstract] | ||||||
| Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 60.9 | $ 56.4 | $ 43.3 | $ 52.3 | $ 117.3 | $ 95.6 |
| Weighted average common shares outstanding | ||||||
| Basic (shares) | 171.5 | 178.5 | 174.0 | 178.7 | ||
| Dilutive impact of stock options, restricted stock units and performance share units | 1.5 | 2.3 | 1.6 | 2.3 | ||
| Diluted (shares) | 173.0 | 180.8 | 175.6 | 181.0 | ||
| Earnings per ordinary share | ||||||
| Basic pro forma earnings per ordinary share (in dollars per share) | $ 0.36 | $ 0.24 | $ 0.67 | $ 0.53 | ||
| Diluted pro forma earnings per ordinary share (in dollars per share) | $ 0.35 | $ 0.24 | $ 0.67 | $ 0.53 | ||
| Anti-dilutive stock options excluded from the calculation of diluted earnings per share | 2.1 | 0.9 | 2.0 | 0.7 | ||
Goodwill and Other Identifiable Intangible Assets - Changes in Carrying Amount of Goodwill by Segment (Details) $ in Millions |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
| |
| Goodwill [Roll Forward] | |
| Beginning Balance | $ 2,234.3 |
| Foreign currency translation/other | 1.2 |
| Ending Balance | 2,235.5 |
| Enclosures | |
| Goodwill [Roll Forward] | |
| Beginning Balance | 272.0 |
| Foreign currency translation/other | (0.3) |
| Ending Balance | 271.7 |
| Thermal Management | |
| Goodwill [Roll Forward] | |
| Beginning Balance | 924.1 |
| Foreign currency translation/other | 1.5 |
| Ending Balance | 925.6 |
| Electrical & Fastening Solutions | |
| Goodwill [Roll Forward] | |
| Beginning Balance | 1,038.2 |
| Foreign currency translation/other | 0.0 |
| Ending Balance | $ 1,038.2 |
Goodwill and Other Identifiable Intangible Assets - Definite-life Intangible Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Cost | $ 1,165.3 | $ 1,164.5 |
| Accumulated amortization | (302.3) | (272.5) |
| Net | 863.0 | 892.0 |
| Customer relationships | ||
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Cost | 1,150.5 | 1,149.7 |
| Accumulated amortization | (295.6) | (266.4) |
| Net | 854.9 | 883.3 |
| Proprietary technology and patents | ||
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Cost | 14.8 | 14.8 |
| Accumulated amortization | (6.7) | (6.1) |
| Net | $ 8.1 | $ 8.7 |
Goodwill and Other Identifiable Intangible Assets - Indefinite-life Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
| Indefinite-lived Intangible Assets [Line Items] | |||||
| Amortization | $ 15.1 | $ 15.2 | $ 30.2 | $ 30.6 | |
| Cost | 1,446.6 | 1,446.6 | $ 1,445.8 | ||
| Accumulated amortization | (302.3) | (302.3) | (272.5) | ||
| Net | 1,144.3 | 1,144.3 | 1,173.3 | ||
| Trade names | |||||
| Indefinite-lived Intangible Assets [Line Items] | |||||
| Indefinite-life intangibles | $ 281.3 | $ 281.3 | $ 281.3 | ||
Goodwill and Other Identifiable Intangible Assets - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||
| Acquisitions, net of cash acquired | $ 0.0 | $ 2.0 | ||
| Amortization | $ 15.1 | $ 15.2 | $ 30.2 | $ 30.6 |
Goodwill and Other Identifiable Intangible Assets - Estimated Future Amortization Expense for Identifiable Intangible Assets (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| Q2-Q4 2019 | $ 30.3 |
| 2020 | 60.4 |
| 2021 | 59.2 |
| 2022 | 59.2 |
| 2023 | 59.0 |
| 2024 | $ 58.3 |
Derivatives and Financial Instruments - Additional Information (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
Oct. 31, 2018 |
|---|---|---|---|
| Derivative [Line Items] | |||
| Derivative instruments in hedges, net | $ 69.1 | ||
| Foreign Exchange Contract | |||
| Derivative [Line Items] | |||
| Notional amount | $ 124.4 | $ 129.0 |
Derivatives and Financial Instruments - Recorded Amounts and Estimated Fair Values (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Derivative [Line Items] | ||
| Total | $ 1,061.5 | |
| Recorded Amount | ||
| Derivative [Line Items] | ||
| Variable rate debt | 261.5 | $ 147.5 |
| Fixed rate debt | 800.0 | 800.0 |
| Total | 1,061.5 | 947.5 |
| Fair Value | ||
| Derivative [Line Items] | ||
| Variable rate debt | 261.5 | 147.5 |
| Fixed rate debt | 843.8 | 793.5 |
| Total | $ 1,105.3 | $ 941.0 |
Debt - Senior Notes (Details) - Senior Notes [Member] - USD ($) |
Jun. 30, 2019 |
Jun. 30, 2018 |
|---|---|---|
| Senior Notes, Due 2023 | ||
| Debt Instrument [Line Items] | ||
| Debt face amount | $ 300,000,000.0 | |
| Average interest rate | 3.95% | 3.95% |
| Senior Notes, Due 2028 | ||
| Debt Instrument [Line Items] | ||
| Debt face amount | $ 500,000,000.0 | |
| Average interest rate | 4.55% | 4.55% |
Debt - Schedule of Contracutal Debt Maturities (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
|---|---|
| Debt Disclosure [Abstract] | |
| Q2-Q4 2019 | $ 7.5 |
| 2020 | 17.5 |
| 2021 | 20.0 |
| 2022 | 20.0 |
| 2023 | 496.5 |
| 2024 | 0.0 |
| Thereafter | 500.0 |
| Total | $ 1,061.5 |
Income Taxes (Details) - USD ($) $ in Millions |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
| Income Tax Disclosure [Abstract] | |||
| Effective income tax rate | 16.30% | 16.70% | |
| Total gross liability for unrecognized tax benefits | $ 16.9 | $ 16.8 | |
Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2019 |
Feb. 19, 2019 |
Dec. 31, 2018 |
Jul. 23, 2018 |
|
| Equity [Abstract] | ||||||
| Repurchase of shares of our common stock up to a maximum aggregate value | $ 380.0 | $ 500.0 | ||||
| Stock Repurchased During Period, Shares | 5.9 | 9.0 | ||||
| Stock Repurchased During Period, Value | $ 152.8 | $ 79.9 | $ 232.7 | |||
| Outstanding Stock Repurchases, Value | $ 0.0 | $ 0.0 | $ 3.0 | |||
| Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 588.3 | 588.3 | ||||
| Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 880.0 | 880.0 | ||||
| Dividends payable (in dollars per share) | $ 0.175 | |||||
| Dividends payable | $ 29.6 | $ 29.6 | $ 31.0 | |||
Segment Information - Financial Information by Reportable Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Segment Reporting Information [Line Items] | ||||
| Net sales | $ 539.5 | $ 542.7 | $ 1,077.5 | $ 1,081.6 |
| Segment income | 87.0 | 65.3 | 164.5 | 130.9 |
| Enclosures | ||||
| Segment Reporting Information [Line Items] | ||||
| Net sales | 260.0 | 255.6 | 515.5 | 509.7 |
| Segment income | 48.2 | 47.9 | 93.8 | 88.5 |
| Thermal Management | ||||
| Segment Reporting Information [Line Items] | ||||
| Net sales | 128.8 | 139.0 | 273.9 | 286.9 |
| Segment income | 25.3 | 30.4 | 59.6 | 63.9 |
| Electrical & Fastening Solutions | ||||
| Segment Reporting Information [Line Items] | ||||
| Net sales | 150.7 | 148.1 | 288.1 | 285.0 |
| Segment income | 41.6 | 40.9 | 72.8 | 72.6 |
| Other | ||||
| Segment Reporting Information [Line Items] | ||||
| Segment income | (10.3) | (11.6) | (25.2) | (23.9) |
| Operating Segments | ||||
| Segment Reporting Information [Line Items] | ||||
| Segment income | $ 104.8 | $ 107.6 | $ 201.0 | $ 201.1 |
Leases (Details) $ in Millions |
3 Months Ended | 6 Months Ended |
|---|---|---|
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
| Leases [Abstract] | ||
| Term of lease contract (in months) | 12 months | 12 months |
| Rent expense | $ 4.9 | $ 9.1 |
| Leases not yet commenced | no |
Leases - Weighted Average Term and Discount Rate (Details) |
Jun. 30, 2019 |
|---|---|
| Leases [Abstract] | |
| Weighted average remaining lease term, operating leases | 5 years |
| Weighted average discount rate, operating leases | 4.50% |
Leases - Future Lease Payments, Topic 842 (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|---|---|---|---|
| Operating Lease, After Adoption of 842 | |||
| Remainder of 2019 | $ 8.6 | ||
| 2020 | 14.0 | ||
| 2021 | 8.9 | ||
| 2022 | 6.2 | ||
| 2023 | 3.5 | ||
| 2024 | 2.9 | ||
| Thereafter | 9.1 | $ 9.6 | |
| Total lease payments | 53.2 | ||
| Less imputed interest | (8.0) | ||
| Total reported lease liability | 45.2 | $ 48.4 | |
| Operating Leases, Before Adoption of 842 | |||
| 2019 | 16.2 | ||
| 2020 | 12.6 | ||
| 2021 | 8.0 | ||
| 2022 | 5.6 | ||
| 2023 | 2.7 | ||
| Thereafter | $ 9.1 | 9.6 | |
| Total | $ 54.7 |
Leases - Supplemental Cash Flow Information (Details) $ in Millions |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
| |
| Leases [Abstract] | |
| Cash paid for amounts included in the measurement of lease liabilities: | $ 8.5 |
| Lease right-of-use assets obtained in exchange for new lease liabilities: | $ 3.6 |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|---|---|---|---|
| Leases [Abstract] | |||
| Lease right-of-use assets | $ 41.0 | $ 44.2 | $ 0.0 |
| Current lease liabilities | 14.1 | 13.6 | 0.0 |
| Non-current lease liabilities | 31.1 | 34.8 | $ 0.0 |
| Total lease liabilities | $ 45.2 | $ 48.4 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Liability for services and product warranties | $ 0.0 | $ 0.0 |
| Stand-by Letters of Credit, Bank Guarantees and Bonds | ||
| Guarantor Obligations [Line Items] | ||
| Obligations outstanding | $ 68.5 | $ 75.8 |
Subsequent Events (Details) - Jul. 26, 2019 € in Millions, $ in Millions |
USD ($) |
EUR (€) |
|---|---|---|
| El Camino | Subsequent Event | ||
| Subsequent Event [Line Items] | ||
| Cash paid for acquisition | $ 130.0 | € 117.0 |
| Label | Element | Value |
|---|---|---|
| Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (172,700,000) |
| Retained Earnings [Member] | ||
| Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
| Net Parent Investment [Member] | ||
| Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (172,700,000) |
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