ITEM 1.    FINANCIAL STATEMENTS

nVent Electric plc

Condensed Combined Statements of Income and Comprehensive Income (Unaudited)

See accompanying notes to condensed combined financial statements.

nVent Electric plc

Condensed Combined Balance Sheets (Unaudited)

See accompanying notes to condensed combined financial statements.

nVent Electric plc

Condensed Combined Statements of Cash Flows (Unaudited)

	Three months ended
In millions	March 31, 2018			March 31, 2017
Operating activities
Net income	$	52.3		$	55.3
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Depreciation	9.2			8.7
Amortization	15.4			15.3
Deferred income taxes	(0.6		)	(5.5		)
Share-based compensation	2.4			6.2
Changes in assets and liabilities, net of effects of business acquisitions
Accounts and notes receivable	(1.3		)	(9.4		)
Inventories	2.0			(9.5		)
Other current assets	(8.0		)	(6.8		)
Accounts payable	(34.6		)	(6.3		)
Employee compensation and benefits	(16.5		)	(8.0		)
Other current liabilities	19.4			28.5
Other non-current assets and liabilities	(3.6		)	18.6
Net cash provided by (used for) operating activities	36.1			87.1
Investing activities
Capital expenditures	(5.4		)	(11.3		)
Proceeds from sale of property and equipment	2.3			—
Acquisitions, net of cash acquired	(2.0		)	(13.5		)
Net cash provided by (used for) investing activities	(5.1		)	(24.8		)
Financing activities
Proceeds from long-term debt	800.0			—
Debt issuance costs	(7.5		)	—
Net transfers to Parent	(10.0		)	(51.1		)
Net cash provided by (used for) financing activities	782.5			(51.1		)
Effect of exchange rate changes on cash and cash equivalents	(3.7		)	(4.7		)
Change in cash and cash equivalents	809.8			6.5
Cash and cash equivalents, beginning of period	26.9			21.5
Cash and cash equivalents, end of period	$	836.7		$	28.0

See accompanying notes to condensed combined financial statements.

nVent Electric plc

Condensed Combined Statements of Changes in Equity (Unaudited)

See accompanying notes to condensed combined financial statements.

1. Basis of Presentation and Responsibility for Interim Financial Statements

Business

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

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

Separation from Pentair

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

In connection with the separation, we filed a Registration Statement on Form 10 (as amended, the “Form 10”) with the Securities and Exchange Commission (the “SEC”), which was declared effective on April 9, 2018. The Form 10 included an Information Statement describing the details of the separation and providing information as to our business and management. The final version of the Information Statement was filed with the SEC as Exhibit 99.1 to our Current Report on Form 8-K/A filed with the SEC on April 11, 2018 (the "Information Statement").

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 combined financial statements of nVent.

Basis of presentation

The accompanying unaudited condensed combined financial statements of nVent have been prepared following the requirements of the 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. As these are condensed financial statements, one should also read our combined financial statements and notes thereto for the year ended December 31 2017, which were included in the Information Statement.

We are responsible for the unaudited condensed 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, results of operations and cash flows for the interim periods presented.

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 condensed combined financial statements of nVent have been derived from the consolidated financial statements and records of Pentair as if nVent were operated on a stand-alone basis. The condensed combined financial statements have been prepared in U.S. dollars (“USD”) and in accordance with GAAP.

Cost allocations

The condensed combined financial statements of nVent include general corporate expenses of Pentair for certain support functions 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 Combined Statements of Income and Comprehensive Income within Selling, general and administrative expense and Other expense . The amounts allocated were $26.3 million and $17.9 million for the three months ended March 31, 2018 and 2017, respectively, of which $7.7 million and $6.0 million , respectively, were historically recorded to the Electrical segment in Pentair’s consolidated financial statements. These expenses have been 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.

Pentair maintains self-insurance programs at the corporate level. nVent was a participant in Pentair’s self-insurance program, including general product liability, workers’ compensation and vehicle liability. Liabilities associated with these risks are estimated in part by considering historical claims experience, demographic factors and other actuarial assumptions. The annual cost is allocated to all of the participating businesses using methodologies deemed reasonable by management. All obligations pursuant to these programs have historically been obligations of Pentair. No self-insurance reserves have been allocated to the Company as these reserves represent obligations of Pentair, which are not transferable.

Pentair’s external debt and related interest expense have not been allocated to nVent for any of the periods presented as nVent was not the legal obligor of the debt and no portion of the borrowings was assumed by nVent upon separation.

nVent considers the allocation methodology regarding Pentair’s general corporate expenses to be reasonable for all periods presented. Nevertheless, the condensed combined financial statements of nVent may not reflect the actual expenses that would have been incurred and may not reflect nVent’s combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented. Actual costs 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 Pentair have been included in related party transactions in these unaudited condensed combined financial statements and are considered to be effectively settled at the time the transaction is recorded. The total net effect of the settlement of these transactions is reflected in the Condensed Combined Statements of Cash Flows as a financing activity and in the Condensed Combined Balance Sheets as Net Parent investment . The Net Parent investment represents Pentair’s historical investment in nVent, the net effect of cost allocations from transactions with Pentair, net transfers of cash and assets to Pentair and nVent’s accumulated earnings. See Note 10 for a further description of related party transactions and Net Parent investment .

Cash is managed centrally with certain net earnings reinvested locally and working capital requirements met from existing liquid funds. Accordingly, the cash and cash equivalents held by Pentair at the corporate level are not attributed to nVent for any of the periods presented. Only cash amounts specifically attributable to nVent are reflected in the Condensed Combined Balance Sheets. Transfers of cash, both to and from Pentair’s centralized cash management system are reflected as a component of Net Parent investment in the Condensed Combined Balance Sheets and as a financing activity on the Condensed Combined Statements of Cash Flows.

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

Adoption of new accounting standards

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

The effect of the retrospective presentation change related to the net periodic cost of our defined benefit pension and other post-retirement plans on our Condensed Combined Statements of Income and Comprehensive Income was as follows:

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.

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.

A majority of our net sales continue to be recognized when products are shipped from our manufacturing facilities or delivery has occurred, depending on terms of the sale. Under the new standard, timing for recognition of certain revenue may be accelerated such that a portion of revenue will be recognized prior to shipment or delivery dependent upon contract-specific terms.

The impact of adopting the new standard primarily relates to the accounting for certain custom products manufactured by our Enclosures segment. Previously revenue was recognized for these custom products upon shipment. However, as these products have no alternative use to the Company and we have an enforceable right to payment for our performance completed to date, revenue related to these custom products will now be recognized over time. Additionally, the new revenue standard resulted in reclassifications on the Condensed Combined Balance Sheets related to accounting for sales returns.

The impact of adoption of the new revenue standard on our Condensed Combined Statements of Income and Comprehensive Income and Condensed Combined Balance Sheets for the first quarter of 2018 was not material.

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

New accounting standards issued but not yet adopted

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, "Leases" ("the new lease standard" or "ASC 842"), which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The new lease standard requirements are effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and early adoption is permitted. The Company has begun evaluating the new lease standard, including the review and implementation of the necessary changes to our existing processes and systems that will be required to implement this new standard. While we are unable to quantify the impact at this time, we expect the primary impact to our combined financial position upon adoption will be the recognition, on a discounted basis, of our minimum commitments under noncancelable operating leases on our combined balance sheets resulting in the recording of right of use assets and lease obligations. We currently do not expect ASC 842 to have a material effect on either our Combined Statements of Income and Comprehensive Income or Combined Statements of Cash Flows. We plan to adopt ASC 842 in the first quarter of 2019.

2. Revenue

Revenue recognition

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

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

Performance obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, stand-alone selling price is generally readily observable.

Our performance obligations are satisfied at a point in time or over time as work progresses. Revenue from products and services transferred to customers at a point in time accounted for 72.5% and 85.5% of our revenue for the three-month periods ended March 31, 2018 and 2017, respectively. Revenue on these contracts is recognized when obligations under the terms of the contract with our customer are satisfied; generally this occurs with the transfer of control upon shipment.

Revenue from products and services transferred to customers over time accounted for 27.5% and 14.5% of our revenue for the three-month periods ended March 31, 2018 and 2017, respectively. The increase in our revenue recognized on an over time basis in the first three months of 2018 compared to the first three months of 2017 is primarily the result of the impact of the new revenue standard for certain custom products manufactured by our Enclosures segment. Previously, revenue was recognized for these custom products upon shipment. However, as these products have no alternative use to the Company and we have an enforceable right to payment for our performance completed to date, revenue related to these custom products will now be recognized over time.

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 March 31, 2018 , we had $77.4 million of remaining performance obligations on contracts with original expected duration of one year or more. We expect to recognize the majority of our remaining performance obligations on these contracts within the next twelve to eighteen months .

Sales returns

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

Pricing and sales incentives

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

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

Pricing is established at or prior to the time of sale with our customers and we record sales at the agreed-upon net selling price. However, certain of our businesses allow customers to apply for a refund of a percentage of the original purchase price if they can demonstrate sales to a qualifying end customer. We use the expected value method to estimate the anticipated refund to be

paid based on historical experience and reduce sales for the probable cost of the discount. The cost of these refunds is recorded as a reduction of transaction price.

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

Shipping and handling costs

Amounts billed to customers for shipping and handling activities after the customer obtains control are treated as a promised service performance obligation and recorded in Net sales in the accompanying Condensed 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 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 Combined Balance Sheets.

Contract assets and liabilities consisted of the following:

The $0.5 million increase in net contract assets from December 31, 2017 to March 31, 2018 was primarily the result of timing of milestone payments. Approximately half of our contract liabilities at December 31, 2017 were recognized in revenue in the first quarter of 2018 . There were no impairment losses recognized on our contract assets for the three months ended March 31, 2018 .

Practical expedients and exemptions

We generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in Selling, general and administrative expense in the Condensed 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 by segment, based on geographic destination of the sale, was as follows:

Vertical net sales information by segment was as follows:

During the three months ended March 31, 2018 and the year ended December 31, 2017 , we initiated and continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. Initiatives during the three months ended March 31, 2018 and year ended December 31, 2017 included the reduction in hourly and salaried headcount of approximately 25 and 250 employees, respectively.

Restructuring related costs included in Selling, general and administrative expense in the Condensed 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:

	Three months ended
In millions	March 31, 2018			March 31, 2017
Enclosures	$	0.3		$	3.1
Thermal Management	2.1			5.6
Electrical & Fastening Solutions	0.4			0.6
Consolidated	$	2.8		$	9.3

Activity related to accrued severance and related costs recorded in Other current liabilities in the Condensed Combined Balance Sheets is summarized as follows for the three months ended March 31, 2018 :  

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 pro forma earnings per share were calculated as follows:

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

In January 2018 , we completed an acquisition as part of our Electrical & Fastening Solutions segment with a purchase price of $2.0 million in cash, net of cash acquired.

Identifiable intangible assets consisted of the following:

Identifiable intangible asset amortization expense was $15.4 million and $15.3 million for the three months ended March 31, 2018 and 2017 , respectively.

Estimated future amortization expense for identifiable intangible assets during the remainder of 2018 and the next five years is as follows:

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.

At March 31, 2018 and December 31, 2017 , we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of $10.8 million and $10.7 million , respectively. The impact of these contracts on the Condensed 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 Combined Statements of Income and Comprehensive Income when the hedged item affects earnings. Such reclassifications during the three months ended March 31, 2018 and 2017 were 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 and nonrecurring basis were as follows:

	March 31, 2018
In millions	Level 1			Level 2			Level 3			Total
Recurring fair value measurements
Deferred compensation plan assets	$	21.3		$	1.9		$	—		$	23.2
Total recurring fair value measurements	$	21.3		$	1.9		$	—		$	23.2

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”), a 100-percent owned subsidiary of nVent, issued $300.0 million aggregate principal amount of 3.950% senior notes due 2023 (the "2023 Notes") and $500.0 million aggregate principal amount of 4.550% senior notes due 2028 (the "2028 Notes" and, collectively with the 2023 Notes, the "Notes"). Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, beginning October 15, 2018.

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. The Senior Credit Facilities became effective in April 2018.

Our debt agreements contain certain financial covenants, the most restrictive of which are in the Senior Credit Facilities, including that we may not permit (i) the ratio of our consolidated debt (net of our consolidated unrestricted cash in excess of $5.0 million but not to exceed $250.0 million ) to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense ("EBITDA") on the last day of any period of four consecutive fiscal quarters to exceed 3.75 to 1.00 and (ii) the ratio of our EBITDA to our consolidated interest expense for the same period to be less than 3.00 to 1.00 . In addition, subject to certain qualifications and exceptions, the Senior Credit Facilities also contain covenants that, among other things, restrict our ability to create liens, merge or consolidate with another person, make acquisitions and incur subsidiary debt.

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

In April 2018, we drew $200.0 million under the Term Loan Facility. Subsequently, in connection with the separation, we transferred to Pentair all cash in excess of $50.0 million of nVent and its subsidiaries, as consideration for the contribution of the net assets of the Electrical business to nVent by Pentair.

The effective income tax rate for the three months ended March 31, 2018 was 18.0% , compared to 16.3% for 2017 . The tax rate in any quarter can be affected positively or negatively by adjustments that are required to be reported in the specific quarter of resolution. The liability for uncertain tax positions was $24.2 million and $24.6 million at March 31, 2018 and December 31, 2017 , respectively. We record penalties and interest related to unrecognized tax benefits in Provision for income taxes and Interest expense , respectively, on the Condensed Combined Statements of Income and Comprehensive Income, which is consistent with our past practices.

U.S. tax reform

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

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

The Company calculated its best estimate of the impact of the Act in its December 31, 2017 income tax provision in accordance with its understanding of the Act and guidance available as of the date of the filing of the Form 10 and as a result recorded a provisional income tax benefit of $84.8 million in the fourth quarter of 2017, the period in which the legislation was enacted. The provisional amount related to the remeasurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future was a decrease to income tax expense of $122.0 million . The remeasurement of deferred taxes requires further analysis regarding the state tax impacts of the remeasurement, the impact of the Act on the taxation of executive compensation arrangements, changes to tax capitalization provisions and other aspects of the Act that may impact our tax balances.

The amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was an increase to income tax expense of $37.2 million . The determination of the transition tax requires additional analysis regarding the amount and composition of the Company’s historical foreign earnings and foreign tax credit position.

We have not made any additional measurement-period adjustments related to these items during the quarter. However, we are continuing to gather additional information to complete our accounting for these items and expect to complete the analysis required to complete our accounting within the prescribed measurement period.

Sales to Pentair by nVent were not material for the three months ended March 31, 2018 and 2017 .

During the historical periods presented, nVent engaged in cash pooling arrangements with related parties managed centrally by the Parent.

The Parent’s business model includes a combination of stand-alone and combined business functions between Pentair and nVent, varying by region and country. The condensed combined financial statements of nVent include allocations of these costs between Pentair and nVent. Such allocations are estimates, and also may not represent the cost of such services if performed on a stand-alone basis. See further description of cost allocations in Note 1.

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

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

We sponsor defined-benefit pension plans and a post-retirement health plan. The defined benefit pension plans cover certain non-U.S. employees and retirees, and the pension benefits are based principally on an employee’s years of service and/or compensation levels near retirement. These plans are accounted for as defined benefit pension plans for purposes of the condensed combined financial statements. Accordingly, the funded position of these plans and the related expense are recorded in the condensed combined financial statements. The unfunded post-retirement health plan covers certain U.S. employees and retirees and provides a fixed monthly dollar credit for retiree health care expenses. The benefit obligation and related expense for this plan are included in the condensed combined financial statements.

Components of net periodic benefit cost for our pension plans for the three months ended March 31, 2018 and 2017 were as follows:

As described in Note 1. Basis of Presentation and Responsibility of Interim Financial Statements, during the first quarter of 2018, the Company adopted ASU 2017-07. As a result, service costs are classified as employee compensation costs within Cost of goods sold and Selling, general and administrative expense within the Condensed Combined Statements of Income and Comprehensive Income. All other components of net periodic benefit cost are classified within Other expense for the periods presented.

Components of net periodic benefit cost for our other post-retirement plan for the three months ended March 31, 2018 and 2017 were not material.

Certain Company employees participate in defined benefit pension plans and post-retirement health plans sponsored by Pentair ("Shared Plans"), which also include other Pentair participants. For purposes of these condensed combined financial statements, the Company accounts for the Shared Plans as multi-employer benefit plans. Accordingly, the Company does not record an asset or liability to recognize the funded status of the Shared Plans. However, the Company does record expense attributable to its employees who participate in the Shared Plans, as well as expense allocated for Pentair’s corporate and shared functional employees. The total expense was $0.7 million and $1.8 million for the three months ended March 31, 2018 and 2017 , respectively. nVent did not assume any benefit obligation of the Shared Plans as a result of the separation.

Prior to the separation on April 30, 2018, the Company's employees participated in stock-based compensation plans sponsored by Pentair. The share-based compensation expense recorded by the Company includes the expenses associated with employees historically attributable to the Company’s operations. Additionally, a portion of share-based compensation expense for Pentair’s corporate and shared functional employees has been allocated to the Company’s financial statements. Total share-based compensation expense, including allocated expense for Pentair’s corporate and shared functional employees, for the three months ended March 31, 2018 and 2017 were as follows:

	Three months ended
In millions	March 31, 2018			March 31, 2017
Restricted stock units	$	1.1		$	2.0
Stock options	0.5			1.8
Performance share units	0.8			2.4
Total share-based compensation expense	$	2.4		$	6.2