ITEM 2.02 Results of Operations and Financial Condition
On February 5, 2020, nVent Electric plc (the "Company") issued a press release
announcing earnings results for the fourth quarter and full year of 2019 and a
conference call in connection therewith. A copy of the release is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
This press release refers to certain non-GAAP financial measures (organic sales,
segment income, return on sales, adjusted net income, adjusted diluted earnings
per share and free cash flow) and a reconciliation of those non-GAAP financial
measures to the corresponding financial measures contained in the Company's
financial statements prepared in accordance with generally accepted accounting
principles.
The 2019 segment income, return on sales, adjusted net income and adjusted
diluted earnings per share eliminate certain targeted restructuring activities,
certain acquisition related expenses, intangible amortization, inventory step up
amortization, pension adjustments and certain tax items. The 2018 segment
income, return on sales, adjusted net income and adjusted diluted earnings per
share eliminate certain targeted restructuring activities, intangible
amortization, separation costs, corporate allocations, interest expense
adjustments, pension adjustments and certain tax items.
We use the term "organic sales" to refer to GAAP net sales excluding 1) the
impact of currency translation and 2) the impact of revenue from acquired
businesses recorded prior to the first anniversary of the acquisition less the
amount of sales attributable to divested product lines not considered
discontinued operations ("acquisition sales"). The portion of GAAP net sales
attributable to currency translation is calculated as the difference between (a)
the period-to-period change in net sales (excluding acquisition sales) and (b)
the period-to-period change in net sales (excluding acquisition sales) after
applying current period foreign exchange rates to the prior year period. We use
the term "organic sales growth" to refer to the measure of comparing current
period organic net sales with the corresponding period of the prior year.
Management utilizes these adjusted financial measures to assess the run-rate of
its continuing operations against those of prior periods without the distortion
of these factors. The Company believes that these non-GAAP financial measures
will be useful to investors as well to assess the continuing strength of the
Company's underlying operations. In addition, segment income is used as a
criterion to measure and pay long-term incentive compensation. These non-GAAP
measures may not be comparable to similarly titled measures reported by other
companies.
The Company uses free cash flow to assess its cash flow performance. The Company
believes free cash flow is an important measure of liquidity because it provides
the Company and its investors a measurement of cash generated from operations
that is available to pay dividends and repay debt. In addition, free cash flow
is used as criterion to measure and pay compensation-based incentives. The
Company's measure of free cash flow may not be comparable to similarly titled
measures reported by other companies.
ITEM 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
    Not applicable.
(b) Pro Forma Financial Information
    Not applicable.
(c) Shell Company Transactions
    Not applicable.
(d) Exhibits

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