UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

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

For the Quarterly period ended June 30, ~~2021~~2022

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

For the transition period from __to__

Commission File No. 001-38518

Vertiv Holdings Co

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

81-2376902

(I.R.S Employer

Identification No.)

1050 Dearborn Dr, Columbus, Ohio 43085

(Address of principal executive offices including zip code)

614-888-0246

(Registrant's telephone number, including area code)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, $0.0001 par value per share

VRT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of July ~~30, 2021,~~29, 2022, there were ~~352,427,840~~377,038,078 shares of ~~our~~the Company's Class A common stock, par value $0.0001, issued and outstanding.

TABLE OF CONTENTS

Page

Part I - Financial Information

Item 1.

Financial Statements (Unaudited)

Condensed Consolidated Statements of Earnings (Loss)

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)

Notes to ~~Unaudited~~ Condensed Consolidated Financial Statements (Unaudited)

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

2021

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

3031

Item 4.

Controls and Procedures

3031

Part II - Other Information

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

3233

Item 4.

Mine Safety Disclosures

Part I. Financial Information

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

VERTIV HOLDINGS CO

(Dollars in millions except for per share data)


		Three months ended June 30, 2021		Three months ended June 30, 2020		Six months ended June 30, 2021		Six months ended June 30, 2020			Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Net sales	Net sales									Net sales
Net sales - products	Net sales - products	$	976.5	$	750.2	$	1,820.5	$	1,397.4	Net sales - products	$	1,055.0	$	926.6	$	1,904.4	$	1,730.3
Net sales - services	Net sales - services	283.8		255.5		538.2		505.6		Net sales - services	344.4		333.7		651.4		628.4
Net sales	Net sales	1,260.3		1,005.7		2,358.7		1,903.0		Net sales	1,399.4		1,260.3		2,555.8		2,358.7
Costs and expenses	Costs and expenses									Costs and expenses
Cost of sales - products	Cost of sales - products	686.2		515.3		1,279.6		978.5		Cost of sales - products	807.4		653.4		1,463.2		1,217.0
Cost of sales - services	Cost of sales - services	164.8		144.0		311.8		291.1		Cost of sales - services	220.5		197.6		417.5		374.4
Cost of sales	Cost of sales	851.0		659.3		1,591.4		1,269.6		Cost of sales	1,027.9		851.0		1,880.7		1,591.4
Operating expenses	Operating expenses									Operating expenses
Selling, general and administrative expenses	Selling, general and administrative expenses	271.7		226.3		521.8		491.1		Selling, general and administrative expenses	287.6		271.7		579.8		521.8
Amortization of intangibles	Amortization of intangibles	31.9		32.2		63.7		64.6		Amortization of intangibles	55.8		31.9		113.5		63.7
Restructuring costs	Restructuring costs	1.1		2.4		3.1		1.3		Restructuring costs	0.8		1.1		1.6		3.1
Foreign currency (gain) loss, net	Foreign currency (gain) loss, net	4.1		2.8		(2.8)		4.6		Foreign currency (gain) loss, net	2.9		4.1		1.6		(2.8)
Asset impairments		0		12.3		0		12.3

Other operating expense (income)	Other operating expense (income)	(1.7)		(0.2)		(0.5)		1.1		Other operating expense (income)	(1.8)		(1.7)		(2.4)		(0.5)
Operating profit (loss)	Operating profit (loss)	102.2		70.6		182.0		58.4		Operating profit (loss)	26.2		102.2		(19.0)		182.0
Interest expense, net	Interest expense, net	20.0		30.1		44.1		99.0		Interest expense, net	33.4		20.0		62.7		44.1
Loss on extinguishment of debt	Loss on extinguishment of debt	0		0		0.4		174.0		Loss on extinguishment of debt	—		—		—		0.4
Change in fair value of warrant liabilities	Change in fair value of warrant liabilities	71.2		82.2		84.8		21.6		Change in fair value of warrant liabilities	(38.9)		71.2		(133.8)		84.8
Income (loss) before income taxes	Income (loss) before income taxes	11.0		(41.7)		52.7		(236.2)		Income (loss) before income taxes	31.7		11.0		52.1		52.7
Income tax expense	Income tax expense	1.3		14.3		11.3		28.1		Income tax expense	11.4		1.3		23.3		11.3
Net income (loss)	Net income (loss)	$	9.7	$	(56.0)	$	41.4	$	(264.3)	Net income (loss)	$	20.3	$	9.7	$	28.8	$	41.4

Earnings (loss) per share:	Earnings (loss) per share:									Earnings (loss) per share:
Basic	Basic	$	0.03	$	(0.17)	$	0.12	$	(0.93)	Basic	$	0.05	$	0.03	$	0.08	$	0.12
Diluted	Diluted	$	0.03	$	(0.17)	$	0.12	$	(0.93)	Diluted	$	0.05	$	0.03	$	(0.28)	$	0.12
Weighted-average shares outstanding:	Weighted-average shares outstanding:									Weighted-average shares outstanding:
Basic	Basic	352,199,184		328,411,705		350,908,612		284,534,285		Basic	376,594,660		352,199,184		376,285,196		350,908,612
Diluted	Diluted	356,652,811		328,411,705		354,883,869		284,534,285		Diluted	377,257,854		356,652,811		378,493,214		354,883,869

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of ~~content~~scontents

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

VERTIV HOLDINGS CO

(Dollars in millions)


		Three months ended June 30, 2021		Three months ended June 30, 2020		Six months ended June 30, 2021		Six months ended June 30, 2020			Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Net income (loss)	Net income (loss)	$	9.7	$	(56.0)	$	41.4	$	(264.3)	Net income (loss)	$	20.3	$	9.7	$	28.8	$	41.4
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Foreign currency translation	Foreign currency translation	20.2		11.9		(15.9)		(42.4)		Foreign currency translation	(149.9)		20.2		(186.2)		(15.9)
Interest rate swaps	Interest rate swaps	(8.6)		(11.5)		25.3		(35.5)		Interest rate swaps	22.0		(8.6)		76.2		25.3
Tax receivable agreement	Tax receivable agreement	(9.4)		(9.7)		(5.3)		16.2		Tax receivable agreement	—		(9.4)		—		(5.3)
Pension	Pension	0.2		0		(0.6)		(0.2)		Pension	—		0.2		0.1		(0.6)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	2.4		(9.3)		3.5		(61.9)		Other comprehensive income (loss), net of tax	(127.9)		2.4		(109.9)		3.5
Comprehensive income (loss)	Comprehensive income (loss)	$	12.1	$	(65.3)	$	44.9	$	(326.2)	Comprehensive income (loss)	$	(107.6)	$	12.1	$	(81.1)	$	44.9

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of ~~content~~scontents

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

VERTIV HOLDINGS CO

(Dollars in millions)


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	708.8	$	534.6	Cash and cash equivalents	$	194.4	$	439.1
Accounts receivable, less allowances of $21.9 and $22.3, respectively		1,374.0		1,354.4
Accounts receivable, less allowances of $15.4 and $14.1, respectively						Accounts receivable, less allowances of $15.4 and $14.1, respectively	1,676.2		1,536.4
Inventories	Inventories	551.4		446.6		Inventories	794.6		616.3
Other current assets	Other current assets	215.2		183.2		Other current assets	148.4		106.8
Total current assets	Total current assets	2,849.4		2,518.8		Total current assets	2,813.6		2,698.6
Property, plant and equipment, net	Property, plant and equipment, net	409.2		427.6		Property, plant and equipment, net	473.8		489.3
Other assets:	Other assets:					Other assets:
Goodwill	Goodwill	603.1		607.2		Goodwill	1,283.9		1,330.1
Other intangible assets, net	Other intangible assets, net	1,235.1		1,302.5		Other intangible assets, net	1,926.0		2,138.2
Deferred income taxes	Deferred income taxes	16.5		20.9		Deferred income taxes	49.0		47.9
Other	Other	218.7		196.8		Other	280.8		235.5
Total other assets	Total other assets	2,073.4		2,127.4		Total other assets	3,539.7		3,751.7
Total assets	Total assets	$	5,332.0	$	5,073.8	Total assets	$	6,827.1	$	6,939.6
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt	Current portion of long-term debt	$	21.8	$	22.0	Current portion of long-term debt	$	21.8	$	21.8
Current portion of warrant liabilities		0		68.5
Accounts payable	Accounts payable	766.4		730.5		Accounts payable	867.2		858.5
Accrued expenses and other liabilities	Accrued expenses and other liabilities	897.2		901.8		Accrued expenses and other liabilities	916.7		953.4
Income taxes	Income taxes	25.4		18.8		Income taxes	14.7		21.1
Total current liabilities	Total current liabilities	1,710.8		1,741.6		Total current liabilities	1,820.4		1,854.8
Long-term debt, net	Long-term debt, net	2,122.8		2,130.5		Long-term debt, net	3,117.5		2,950.5
Deferred income taxes	Deferred income taxes	89.9		116.5		Deferred income taxes	179.6		198.8
Warrant liabilities	Warrant liabilities	172.5		87.7		Warrant liabilities	15.8		149.6
Other long-term liabilities	Other long-term liabilities	492.3		485.4		Other long-term liabilities	342.1		368.2
Total liabilities	Total liabilities	4,588.3		4,561.7		Total liabilities	5,475.4		5,521.9
Equity	Equity					Equity
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, NaN issued and outstanding		0		0
Common stock, $0.0001 par value, 700,000,000 shares authorized, 352,331,540 and 342,024,612 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		0		0
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding						Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding	—		—
Common stock, $0.0001 par value, 700,000,000 shares authorized, 376,721,173 and 375,801,857 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively						Common stock, $0.0001 par value, 700,000,000 shares authorized, 376,721,173 and 375,801,857 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	—		—
Additional paid-in capital	Additional paid-in capital	1,978.5		1,791.8		Additional paid-in capital	2,612.6		2,597.5
Accumulated deficit	Accumulated deficit	(1,289.8)		(1,331.2)		Accumulated deficit	(1,186.6)		(1,215.4)
Accumulated other comprehensive (loss) income	Accumulated other comprehensive (loss) income	55.0		51.5		Accumulated other comprehensive (loss) income	(74.3)		35.6
Total equity	Total equity	743.7		512.1		Total equity	1,351.7		1,417.7
Total liabilities and equity	Total liabilities and equity	$	5,332.0	$	5,073.8	Total liabilities and equity	$	6,827.1	$	6,939.6

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of ~~content~~scontents

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH ~~FLOW~~FLOWS

VERTIV HOLDINGS CO

(Dollars in millions)


		Six months ended June 30, 2021		Six months ended June 30, 2020			Six months ended June 30, 2022		Six months ended June 30, 2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	41.4	$	(264.3)	Net income (loss)	$	28.8	$	41.4
Adjustments to reconcile net income (loss) to net cash used for operating activities:	Adjustments to reconcile net income (loss) to net cash used for operating activities:					Adjustments to reconcile net income (loss) to net cash used for operating activities:
Depreciation	Depreciation	35.2		28.5		Depreciation	35.5		35.2
Amortization	Amortization	70.5		72.0		Amortization	120.7		70.5
Deferred income taxes	Deferred income taxes	(22.3)		(5.9)		Deferred income taxes	(9.2)		(22.3)
Amortization of debt discount and issuance costs	Amortization of debt discount and issuance costs	3.3		7.6		Amortization of debt discount and issuance costs	4.8		3.3
Loss on extinguishment of debt	Loss on extinguishment of debt	0.4		174.0		Loss on extinguishment of debt	—		0.4
Change in fair value of warrant liabilities						Change in fair value of warrant liabilities	(133.8)		84.8

Change in fair value of warrant liabilities		84.8		21.6
Capitalized software write-off		0		12.3
Changes in operating working capital	Changes in operating working capital	(126.1)		(168.6)		Changes in operating working capital	(377.8)		(126.1)
Stock based compensation		11.8		3.2
Stock-based compensation						Stock-based compensation	13.8		11.8
Payment of contingent consideration						Payment of contingent consideration	(8.7)		—
Changes in tax receivable agreement	Changes in tax receivable agreement	1.6		16.2		Changes in tax receivable agreement	—		1.6
Other	Other	19.4		(18.3)		Other	(12.0)		19.4
Net cash provided by (used for) operating activities	Net cash provided by (used for) operating activities	120.0		(121.7)		Net cash provided by (used for) operating activities	(337.9)		120.0
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(30.4)		(13.2)		Capital expenditures	(38.2)		(30.4)
Investments in capitalized software	Investments in capitalized software	(5.4)		(6.2)		Investments in capitalized software	(6.7)		(5.4)
Acquisition of business, net of cash acquired						Acquisition of business, net of cash acquired	(5.0)		—

Net cash used for investing activities	Net cash used for investing activities	(35.8)		(19.4)		Net cash used for investing activities	(49.9)		(35.8)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings from ABL revolving credit facility		0		324.2
Repayments of ABL revolving credit facility		0		(199.1)
Proceeds from short-term borrowings		0		20.2
Borrowings from ABL revolving credit facility and short-term borrowings						Borrowings from ABL revolving credit facility and short-term borrowings	447.6		—
Repayments of ABL revolving credit facility and short-term borrowings						Repayments of ABL revolving credit facility and short-term borrowings	(254.7)		—
Repayment of long-term debt						Repayment of long-term debt	(10.9)		(10.9)

Borrowing on Term Loan, net of discount		—		2,189.0
Repayment on Term Loan		(10.9)		(5.5)
Repayment on Prior Term Loan		0		(2,070.0)
Repayment of Prior Notes		0		(1,370.0)
Payment of redemption premiums		0		(75.0)
Payment of debt issuance costs		0		(11.2)
Proceeds from reverse recapitalization, net		0		1,832.5
Payment to Vertiv Stockholder		0		(341.6)
Proceeds from the exercise of warrants	Proceeds from the exercise of warrants	107.5		0		Proceeds from the exercise of warrants	—		107.5
Payment of tax receivable agreement						Payment of tax receivable agreement	(12.5)		—
Payment of contingent consideration						Payment of contingent consideration	(12.8)		—
Exercise of employee stock options	Exercise of employee stock options	2.1		0		Exercise of employee stock options	1.1		2.1
Employee taxes paid from shares withheld	Employee taxes paid from shares withheld	(7.0)		0		Employee taxes paid from shares withheld	(4.3)		(7.0)
Net cash provided by financing activities		91.7		293.5
Net cash provided by (used for) financing activities						Net cash provided by (used for) financing activities	153.5		91.7
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(1.7)		(6.2)		Effect of exchange rate changes on cash and cash equivalents	(7.5)		(1.7)
Increase (decrease) in cash, cash equivalents and restricted cash	Increase (decrease) in cash, cash equivalents and restricted cash	174.2		146.2		Increase (decrease) in cash, cash equivalents and restricted cash	(241.8)		174.2
Beginning cash, cash equivalents and restricted cash	Beginning cash, cash equivalents and restricted cash	542.6		233.7		Beginning cash, cash equivalents and restricted cash	447.1		542.6
Ending cash, cash equivalents and restricted cash	Ending cash, cash equivalents and restricted cash	$	716.8	$	379.9	Ending cash, cash equivalents and restricted cash	$	205.3	$	716.8
Changes in operating working capital	Changes in operating working capital					Changes in operating working capital
Accounts receivable	Accounts receivable	$	(28.4)	$	27.2	Accounts receivable	$	(169.8)	$	(28.4)
Inventories	Inventories	(107.3)		(66.9)		Inventories	(187.1)		(107.3)
Other current assets	Other current assets	(8.1)		(1.2)		Other current assets	(10.0)		(8.1)
Accounts payable	Accounts payable	50.9		(21.1)		Accounts payable	20.6		50.9
Accrued expenses and other liabilities	Accrued expenses and other liabilities	(16.0)		(116.0)		Accrued expenses and other liabilities	(14.6)		(16.0)
Income taxes	Income taxes	(17.2)		9.4		Income taxes	(16.9)		(17.2)
Total changes in operating working capital	Total changes in operating working capital	$	(126.1)	$	(168.6)	Total changes in operating working capital	$	(377.8)	$	(126.1)

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of ~~content~~scontents

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

VERTIV HOLDINGS CO

(Dollars in millions)

Share Capital
Shares Amount Additional Paid in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total
Balance at December 31, 2019, as originally reported 1,000,000 $ 0 $ 277.7 $ (1,000.6) $ 18.1 $ (704.8)
Conversion of units of share capital 117,261,955 — — — — —
Balance at December 31, 2019, as recasted (1)
118,261,955 0 277.7 (1,000.6) 18.1 (704.8)
Tax Receivable Agreement — (133.4) — — (133.4)
Net income (loss) — — (208.3) — (208.3)
Stock issuance 123,900,000 — 1,195.1 — — 1,195.1
Merger recapitalization (2)
86,249,750 — 179.5 — — 179.5
Stock-based compensation — — 0.7 — — 0.7
Other comprehensive income (loss), net of tax — — — — (52.6) (52.6)
Balance at March 31, 2020 328,411,705 $ 0 $ 1,519.6 $ (1,208.9) $ (34.5) $ 276.2
Net income (loss) — — — (56.0) — (56.0)
Stock-based compensation — — 2.5 — — 2.5
Other merger adjustment — — (0.4) — — (0.4)
Other comprehensive income (loss), net of tax — — — — (9.3) (9.3)
Balance at June 30, 2020 328,411,705 $ 0 $ 1,521.7 $ (1,264.9) $ (43.8) $ 213.0
Balance at December 31, 2020 342,024,612 $ 0 $ 1,791.8 $ (1,331.2) $ 51.5 $ 512.1
Net income (loss) — — — 31.7 — 31.7
Exercise of employee stock options 76,047 — 0.9 — — 0.9
Employee 401K match with Vertiv stock 69,309 — 1.3 — — 1.3
Exercise of warrants (3)
9,346,822 — 176.0 — — 176.0
Stock-based compensation — — 5.6 — — 5.6
Other comprehensive income (loss), net of tax — — — — 1.1 1.1
Balance at March 31, 2021 351,516,790 $ 0 $ 1,975.6 $ (1,299.5) $ 52.6 $ 728.7
Net income (loss) — — — 9.7 — 9.7
Exercise of employee stock options 120,721 — 1.4 — — 1.4
Stock comp activity, net of withholdings for tax (4)
586,139 — (0.8) — — (0.8)
Employee 401K match with Vertiv stock 107,890 — 2.3 — — 2.3
Other comprehensive income (loss), net of tax — — — — 2.4 2.4
Balance at June 30, 2021 352,331,540 $ 0 $ 1,978.5 $ (1,289.8) $ 55.0 $ 743.7


	Share Capital
	Shares	Amount		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2020	342,024,612	$	—	$	1,791.8	$	(1,331.2)	$	51.5	$	512.1
Net income (loss)	—	—		—		31.7		—		31.7
Exercise of employee stock options	76,047	—		0.9		—		—		0.9
Employee 401K match with Vertiv stock	69,309	—		1.3		—		—		1.3
Exercise of warrants (1)	9,346,822	—		176.0		—		—		176.0
Stock-based compensation	—	—		5.6		—		—		5.6
Other comprehensive income (loss), net of tax	—	—		—		—		1.1		1.1
Balance at March 31, 2021	351,516,790	$	—	$	1,975.6	$	(1,299.5)	$	52.6	$	728.7
Net income (loss)	—	$	—	$	—	$	9.7	$	—	$	9.7
Exercise of employee stock options	120,721	—		1.4		—		—		1.4
Stock comp activity, net of withholdings for tax(2)	586,139	—		(0.8)		—		—		(0.8)
Employee 401K match with Vertiv stock	107,890	—		2.3		—		—		2.3
Other comprehensive income (loss), net of tax	—	—		—		—		2.4		2.4
Balance at June 30, 2021	352,331,540	$	—	$	1,978.5	$	(1,289.8)	$	55.0	$	743.7







Balance at December 31, 2021	375,801,857	$	—	$	2,597.5	$	(1,215.4)	$	35.6	$	1,417.7
Net income (loss)	—	—		—		8.5		—		8.5
Exercise of employee stock options	89,566	—		1.0		—		—		1.0
Stock-based compensation	—	—		6.6		—		—		6.6
Employee 401K match with Vertiv stock	100,541	—		2.3		—		—		2.3
Other comprehensive income (loss), net of tax	—	—		—		—		18.0		18.0
Balance at March 31, 2022	375,991,964	$	—	$	2,607.4	$	(1,206.9)	$	53.6	$	1,454.1
Net income (loss)	—	$	—	$	—	$	20.3	$	—	$	20.3
Exercise of employee stock options	4,279	—		0.1		—		—		0.1
Stock comp activity, net of withholdings for tax(3)	563,597	—		2.9		—		—		2.9
Employee 401K match with Vertiv stock	161,333	—		2.2		—		—		2.2
Other comprehensive income (loss), net of tax	—	—		—		—		(127.9)		(127.9)
Balance at June 30, 2022	376,721,173	$	—	$	2,612.6	$	(1,186.6)	$	(74.3)	$	1,351.7

(1)The shares and earnings per share available to holders of the Company’s capital stock, prior to the business combination, have been recasted as shares reflecting the exchange ratio established in the business combination (1.0 Vertiv Holdings share to 118.261955 Vertiv Holdings Co shares).

~~(2)The merger recapitalization includes the fair value of $116.3 of Public Warrants and Private Placement Warrants as of February 7, 2020.~~

~~(3)~~The exercise of warrants includes $107.5 of cash received during the three months ended March 31, 2021 for the exercise of ~~Public Warrants.~~public warrants.

~~(4)~~(2)Net stock compensation activity includes 906,197 vested shares valued at $6.2 offset by 320,058 shares withheld for taxes valued at $7.0.

(3)Net stock compensation activity includes 876,358 vested shares valued at $7.2 offset by 312,761 shares withheld for taxes valued at $4.3.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of ~~content~~scontents

Vertiv Holdings Co

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in millions, except ~~as otherwise specified and~~ per share amounts)

(1) DESCRIPTION OF BUSINESS

Vertiv Holdings Co ("(“Holdings ~~Co"~~Co”, and together with its majority-owned subsidiaries, “Vertiv”, ~~"we"~~“we”, ~~"our"~~“our”, or ~~"the Company"~~“the Company”), formerly known as GS Acquisition Holdings Corp, ~~("GSAH"),~~ provides mission-critical infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. Vertiv’s offerings include AC and DC power ~~conditioning and uninterruptible power systems,~~management products, thermal management products, integrated ~~data center control devices, software,~~rack systems, modular solutions, management systems for monitoring and controlling digital infrastructure, and service. Vertiv manages and reports results of operations for 3 reportable segments: Americas; Asia Pacific; and Europe, Middle East & Africa.

(2) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ~~("GAAP"~~(“GAAP”) in the ~~United States of America~~U.S. and the rules and regulations of the Securities and Exchange Commission ~~("SEC"~~(“SEC”) and include the accounts of the Company and its subsidiaries in which the Company has a controlling interest. These unaudited condensed consolidated interim financial statements do not include all of the information and footnotes required for complete financial statements. In management’s opinion, these financial statements reflect all adjustments of a normal, recurring nature necessary for a fair presentation of the results for the interim periods presented.

The presentation of certain prior period amounts includes the reclassification of intangible amortization expense, restructuring costs and net foreign currency (gain) loss into separate components within operating expenses to conform to the current period presentation. In addition certain prior period amounts have been reclassed to ~~confirm~~conform with current year presentation. For the three and six months ended June 30, 2021, $49.9 and $90.2 of net sales and $32.8 and $62.6 of cost of sales from products were reclassified to services, respectively.

The preparation of financial statements in conformity with GAAP ~~in the United States~~ requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Results for these interim periods are not necessarily indicative of results to be expected for the full year due to, among other reasons, the continued uncertainty of general economic conditions due to the COVID-19 pandemic that has impacted, and may continue to impact, ~~our~~the Company's sales channels, supply chain, manufacturing operations, workforce, or other key aspects of ~~our~~the Company's operations.

The notes included herein should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, 2021, filed with the SEC on ~~April~~March 1, 2022.

(3) ACQUISITION

On November 1, 2021, the Company, through its wholly-owned subsidiaries Vertiv Holdings Ireland DAC, a private company limited by shares incorporated in Ireland and Vertiv International Holding Corporation, an Ohio corporation acquired the shares of E&I Engineering Ireland Limited, a private company limited by shares incorporated in Ireland, and its affiliate Powerbar Gulf LLC (“E&I”).

As of June 30, 2022 in conjunction with the E&I acquisition, the value of the contingent earnout is zero based on E&I's projected future results. For the three and six months ended June 30, 2022 the decrease in the fair value of contingent consideration of $(2.2) and $(3.7), respectively, is included within “Other operating expense (income)” on the Unaudited Condensed Consolidated Statements of Earnings (Loss).

Table of contents

During the measurement period there was one change to the purchase price allocation. The measurement period adjustment did not have a material impact on the Unaudited Condensed Consolidated Statements of Earnings (Loss). The measurement period adjustment was related to a final working capital adjustment to the purchase price. The following is the preliminary purchase price allocation of assets acquired and liabilities assumed as of the acquisition date and related adjustments thereafter:


	Preliminary Allocation		Adjustments		Adjusted Preliminary Allocation
Accounts receivable	$	87.7	$	—	$	87.7
Inventories	50.1		—		50.1
Other current assets	15.7		—		15.7
Property, plant and equipment	87.1		—		87.1
Goodwill	748.2		5.0		753.2
Other intangible assets	1,004.2		—		1,004.2
Other assets	10.4		—		10.4
Accounts payable	33.9		—		33.9
Accrued expenses and other liabilities	50.0		—		50.0
Deferred income taxes	129.8		—		129.8
Other long-term liabilities	24.3		—		24.3
Net assets acquired and liabilities assumed	$	1,765.4	$	5.0	$	1,770.4

Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of net assets recognized for E&I, and represents the future economic benefits, including synergies, and assembled workforce, that are expected to be achieved as a result of the consummation of the acquisition of E&I. The goodwill arising from the acquisition is not expected to be deductible for tax purposes. The adjusted preliminary goodwill allocation of $277.0 and $476.2 is allocated to the Americas and the Europe, Middle East & Africa segments, respectively.

The following table represents the definite lived intangible assets acquired, the preliminary fair values and respective useful lives as of the acquisition date:

Useful Life

Preliminary Fair Value

Customer relationships

15 to 16 years

731.6

Developed technology

13 years

180.7

Trademarks

15 to 16 years

52.3

Backlog

1 year

39.6

Total intangible assets

1,004.2

The Company used the multi-period excess earnings method to value the customer relationship intangible assets and the relief from royalty method to value the developed technology intangible assets. The significant assumptions used to estimate the fair value of customer relationships included forecasted earnings before interest, taxes, and amortization, customer attrition rates and a discount rate. The significant assumptions used to estimate the fair value of developed technology included the forecasted revenues, royalty rates and a discount rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions. The estimated weighted-average useful life was 14.2 years for finite lived intangible assets.

For the three and six months ended June 30, 2022, E&I net sales were $114.2 and $201.7, respectively, which are included in “Net sales” and operating losses of $6.8 and $23.6, respectively, are included in “Income (loss) before income taxes, net” on the Unaudited Condensed Consolidated Statement of Earnings (Loss).

Pro Forma Financial Information

In accordance with ASC 805 Business Combinations, the following unaudited pro forma results of operations for the three and six months ended June 30, 2021 ~~(the "2020 Form 10-K/A").~~assumes the E&I business combination was completed on January 1, 2020. The following pro forma results include adjustments to reflect acquisition related costs, additional interest expense and amortization of debt issuance costs, accounting policies applied to E&I after the business combination, amortization of intangibles associated with the business combination and the effects of adjustments made to the carrying value of certain assets.

Table of contents


Unaudited proforma information	Three months ended June 30, 2021		Six months ended June 30, 2021
Net sales	$	1,369.4	$	2,562.2
Net income (loss)	(4.8)		19.1

The unaudited pro forma results contain adjustments to give effect to pro forma events that are directly attributable to the business combination, factually supportable, and expected to have a continuing impact on the combined results. Pro forma data may not be indicative of the results that would have been obtained had the business combination occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. Additionally, the pro forma financial information does not reflect the costs which the Company has incurred or may incur to integrate the acquired business.

~~(3)~~(4) REVENUE

The Company recognizes revenue from the sale of manufactured products and services when control of promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Disaggregation of Revenues

Beginning in the second quarter of 2020, sales were moved within product and service offering categories to reflect a strategic realignment within the Company's matrix organizational structure. Comparative results for the three and six months ended June 30, 2020 have been adjusted to reflect this modification. Additionally, product and service offering category names were revised as follows: Services & software solutions changed to Service & spares, and I.T. edge & infrastructure changed to Integrated rack solutions. There was no change in the description of the Critical infrastructure & solutions offering.

~~Table of content~~s

The following table disaggregates ~~our~~ revenue by business segment, product and service offering and timing of transfer of control:


		Three Months Ended June 30, 2021									Three months ended June 30, 2022
		Americas		Asia Pacific		Europe, Middle East, & Africa		Total			Americas		Asia Pacific		Europe, Middle East, & Africa		Total
Sales by Product and Service Offering:	Sales by Product and Service Offering:									Sales by Product and Service Offering:
Critical infrastructure & solutions	Critical infrastructure & solutions	$	305.3	$	239.8	$	181.7	$	726.8	Critical infrastructure & solutions	$	368.9	$	243.0	$	234.8	$	846.7
Services & spares	Services & spares	179.6		106.3		77.3		363.2		Services & spares	187.6		112.9		68.7		369.2
Integrated rack solutions	Integrated rack solutions	80.0		51.9		38.4		170.3		Integrated rack solutions	90.7		51.3		41.5		183.5
Total	Total	$	564.9	$	398.0	$	297.4	$	1,260.3	Total	$	647.2	$	407.2	$	345.0	$	1,399.4

Timing of revenue recognition:	Timing of revenue recognition:									Timing of revenue recognition:
Products and services transferred at a point in time	Products and services transferred at a point in time	$	403.1	$	315.8	$	248.3	$	967.2	Products and services transferred at a point in time	$	452.4	$	328.5	$	247.7	$	1,028.6
Products and services transferred over time	Products and services transferred over time	161.8		82.2		49.1		293.1		Products and services transferred over time	194.8		78.7		97.3		370.8
Total	Total	$	564.9	$	398.0	$	297.4	$	1,260.3	Total	$	647.2	$	407.2	$	345.0	$	1,399.4

Three Months Ended June 30, 2020
Americas Asia Pacific Europe, Middle East, & Africa Total
Sales by Product and Service Offering: (1)
Critical infrastructure & solutions $ 251.1 $ 196.8 $ 99.4 $ 547.3
Services & spares 161.1 86.1 64.7 311.9
Integrated rack solutions 72.5 39.9 34.1 146.5
Total $ 484.7 $ 322.8 $ 198.2 $ 1,005.7
Timing of revenue recognition:
Products and services transferred at a point in time $ 332.4 $ 256.8 $ 153.4 $ 742.6
Products and services transferred over time 152.3 66.0 44.8 263.1
Total $ 484.7 $ 322.8 $ 198.2 $ 1,005.7

~~(1)~~Comparative results for Critical infrastructure & solutions, Services & spares and Integrated rack solutions for the three months ended June 30, 2020 have been adjusted by $4.9, $(8.7), and $3.8, respectively, to reflect the strategic realignment described above.


		Six Months Ended June 30, 2021									Three months ended June 30, 2021
		Americas		Asia Pacific		Europe, Middle East, & Africa		Total			Americas		Asia Pacific		Europe, Middle East, & Africa		Total
Sales by Product and Service Offering:	Sales by Product and Service Offering:									Sales by Product and Service Offering:
Critical infrastructure & solutions	Critical infrastructure & solutions	$	584.8	$	455.8	$	314.1	$	1,354.7	Critical infrastructure & solutions	$	305.3	$	239.8	$	181.7	$	726.8
Services & spares	Services & spares	333.7		201.8		149.4		684.9		Services & spares	179.6		106.3		77.3		363.2
Integrated rack solutions	Integrated rack solutions	147.9		97.8		73.4		319.1		Integrated rack solutions	80.0		51.9		38.4		170.3
Total	Total	$	1,066.4	$	755.4	$	536.9	$	2,358.7	Total	$	564.9	$	398.0	$	297.4	$	1,260.3

Timing of revenue recognition:	Timing of revenue recognition:									Timing of revenue recognition:
Products and services transferred at a point in time	Products and services transferred at a point in time	$	763.6	$	597.4	$	443.3	$	1,804.3	Products and services transferred at a point in time	$	403.1	$	315.8	$	248.3	$	967.2
Products and services transferred over time	Products and services transferred over time	302.8		158.0		93.6		554.4		Products and services transferred over time	161.8		82.2		49.1		293.1
Total	Total	$	1,066.4	$	755.4	$	536.9	$	2,358.7	Total	$	564.9	$	398.0	$	297.4	$	1,260.3

Table of ~~content~~scontents


		Six Months Ended June 30, 2020									Six months ended June 30, 2022
		Americas		Asia Pacific		Europe, Middle East, & Africa		Total			Americas		Asia Pacific		Europe, Middle East, & Africa		Total
Sales by Product and Service Offering: ~~(1)~~	Sales by Product and Service Offering: ~~(1)~~									Sales by Product and Service Offering: ~~(1)~~
Critical infrastructure & solutions	Critical infrastructure & solutions	$	491.2	$	310.8	$	204.7	$	1,006.7	Critical infrastructure & solutions	$	663.2	$	426.8	$	421.6	$	1,511.6
Services & spares	Services & spares	322.7		164.9		129.9		617.5		Services & spares	352.3		217.5		133.6		703.4
Integrated rack solutions	Integrated rack solutions	137.5		71.0		70.3		278.8		Integrated rack solutions	166.8		95.7		78.3		340.8
Total	Total	$	951.4	$	546.7	$	404.9	$	1,903.0	Total	$	1,182.3	$	740.0	$	633.5	$	2,555.8

Timing of revenue recognition:	Timing of revenue recognition:									Timing of revenue recognition:
Products and services transferred at a point in time	Products and services transferred at a point in time	$	645.6	$	417.7	$	319.2	$	1,382.5	Products and services transferred at a point in time	$	830.5	$	584.9	$	452.7	$	1,868.1
Products and services transferred over time	Products and services transferred over time	305.8		129.0		85.7		520.5		Products and services transferred over time	351.8		155.1		180.8		687.7
Total	Total	$	951.4	$	546.7	$	404.9	$	1,903.0	Total	$	1,182.3	$	740.0	$	633.5	$	2,555.8

~~(1)~~Comparative results for Critical infrastructure & solutions, Services & spares and Integrated rack solutions for the six months ended June 30, 2020 have been adjusted by $7.0, $(11.4), and $4.4, respectively, to reflect the strategic realignment described above.


	Six months ended June 30, 2021
	Americas		Asia Pacific		Europe, Middle East, & Africa		Total
Sales by Product and Service Offering:
Critical infrastructure & solutions	$	584.8	$	455.8	$	314.1	$	1,354.7
Services & spares	333.7		201.8		149.4		684.9
Integrated rack solutions	147.9		97.8		73.4		319.1
Total	$	1,066.4	$	755.4	$	536.9	$	2,358.7

Timing of revenue recognition:
Products and services transferred at a point in time	$	763.6	$	597.4	$	443.3	$	1,804.3
Products and services transferred over time	302.8		158.0		93.6		554.4
Total	$	1,066.4	$	755.4	$	536.9	$	2,358.7

The opening and closing balances of ~~our~~ current and long-term contract assets and current and long-term deferred revenue ~~are~~as of June 30, 2022 and December 31, 2021 were as follows:


		Balances at June 30, 2021		Balances at December 31, 2020			Balances at June 30, 2022		Balances at December 31, 2021

Deferred revenue - current (1)	Deferred revenue - current (1)	$	231.1	$	199.6	Deferred revenue - current (1)	$	281.4	$	238.9
Deferred revenue - noncurrent (2)	Deferred revenue - noncurrent (2)	42.3		38.8		Deferred revenue - noncurrent (2)	47.1		59.9
Other contract liabilities - current (1)	Other contract liabilities - current (1)	50.5		36.1		Other contract liabilities - current (1)	49.2		52.1

(1) Current deferred revenue and contract liabilities are included within ~~accrued~~“Accrued expenses and other ~~liabilities.~~liabilities” on the Unaudited Condensed Consolidated Balance Sheets.

(2) Noncurrent deferred revenue is recorded within ~~other~~“Other long-term ~~liabilities.~~liabilities” on the Unaudited Condensed Consolidated Balance Sheets.

Deferred revenue - noncurrent consists primarily of maintenance, extended warranty and other service contracts. ~~We expect~~The Company expects to recognize revenue of ~~$13.2, $15.0~~$19.9, $16.5 and ~~$14.1~~ $10.7in ~~fiscal year 2022, fiscal year 2023,~~the next 13 to 24 months, the next 25 to 36 months, and thereafter, respectively.

~~(4)~~(5) RESTRUCTURING COSTS

Restructuring costs include expenses associated with the Company's efforts to continually improve operational efficiency and reposition its assets to remain competitive on a worldwide basis. Plant closing and other costs include costs of moving fixed assets, employee training, relocation, and facility costs.

Table of contents

Restructuring costs by business segment ~~are~~were as follows:


		Three Months Ended June 30, 2021		Three Months Ended June 30, 2020		Six Months Ended June 30, 2021		Six Months Ended June 30, 2020			Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Americas	Americas	$	1.4	$	0.7	$	2.1	$	1.0	Americas	$	0.5	$	1.4	$	1.0	$	2.1
Asia Pacific	Asia Pacific	3.2		0		3.4		0.2		Asia Pacific	—		3.2		—		3.4
Europe, Middle East & Africa	Europe, Middle East & Africa	(3.8)		1.6		(2.7)		0.8		Europe, Middle East & Africa	0.3		(3.8)		0.7		(2.7)
Corporate	Corporate	0.3		0.1		0.3		(0.7)		Corporate	—		0.3		(0.1)		0.3
Total	Total	$	1.1	$	2.4	$	3.1	$	1.3	Total	$	0.8	$	1.1	$	1.6	$	3.1

The change in the liability for the restructuring of operations during the six months ended June 30, 2022 were as follows:


	December 31, 2021		Expense		Paid/Utilized		June 30, 2022
Severance and benefits	$	33.8	$	0.1	$	(13.5)	$	20.4
Plant closing and other	0.2		1.5		(1.5)		0.2
Total	$	34.0	$	1.6	$	(15.0)	$	20.6

The change in the liability for the restructuring of operations during the six months ended June 30, 2021 ~~are~~were as follows:


	December 31, 2020		Expense		Paid/Utilized		June 30, 2021
Severance and benefits	$	68.9	$	(0.4)	$	(15.8)	$	52.7
Plant closing and other	0.4		3.5		(3.6)		0.3
Total	$	69.3	$	3.1	$	(19.4)	$	53.0

~~The change in the liability for the restructuring of operations during the six months ended June 30, 2020 are as follows:~~

December 31, 2019 Expense Paid/Utilized June 30, 2020
Severance and benefits $ 21.6 $ 0.6 $ (12.7) $ 9.5
Plant closing and other 0.6 0.7 (0.8) 0.5
Total $ 22.2 $ 1.3 $ (13.5) $ 10.0

~~Table of content~~s

~~(5)~~(6) DEBT

Long-term debt, net, ~~consists~~consisted of the following as of June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:

June 30, 2021 December 31, 2020
Term Loan due 2027 at 2.84% and 3.15% at June 30, 2021 and December 31, 2020, respectively. $ 2,172.6 $ 2,183.5
Unamortized discount and issuance costs (28.0) (31.0)
2,144.6 2,152.5
Less: Current Portion (21.8) (22.0)
Total long-term debt, net of current portion $ 2,122.8 $ 2,130.5

~~Contractual maturities of the Company’s debt obligations as of June 30, 2021 are shown below:~~
Term Loan
Remainder of 2021 $ 10.9
2022 21.8
2023 21.8
2024 21.8
2025 21.8
2026 21.8
Thereafter 2,052.7
Total $ 2,172.6

~~Amendment to the Term Loan due 2027~~

As previously disclosed, on March 10, 2021, Vertiv Group Corporation, a Delaware corporation and an indirect wholly owned subsidiary of the Company ("Vertiv Group" or the "Borrower"), Vertiv Intermediate Holding II Corporation, a Delaware corporation and the direct parent of Vertiv Group ("Holdings"), and certain direct and indirect subsidiaries of the Borrower, as guarantors, entered into an Amendment No. 1 to Term Loan Credit Agreement (the "Term Loan Amendment" and, the Original Term Loan Credit Agreement as amended by the Term Loan Amendment, the "Credit Agreement") with Citibank, N.A., as administrative agent (in such capacity, the “Term Agent”) and various financial institutions from time to time party thereto ("Term Lenders"), which Term Loan Amendment made certain modifications to the Term Loan Credit Agreement entered into by Borrower and the other parties on March 2, 2020 (the "Original Term Loan Credit Agreement"), including reducing the interest rate margins.

Pursuant to the Term Loan Amendment, among other modifications, the interest rate margin for the Borrower’s outstanding term loans under the Credit Agreement was reduced by 0.25%, to 2.75% in respect of term loans bearing interest based on the LIBOR rate and to 1.75% in respect of term loans bearing interest based on a base rate defined in the Credit Agreement. The Company recognized a "loss on the extinguishment of debt of $0.4 related to the Amendment for the six months ended June 30, 2021.

~~The maturity date for such term loans remains March 2, 2027, and all other material provisions of the Credit Agreement remain materially unchanged.~~


	June 30, 2022		December 31, 2021
Term Loan due 2027 at 3.87% and 2.84% at June 30, 2022 and December 31, 2021, respectively	$	2,150.7	$	2,161.7
Senior Secured Notes due 2028 at 4.125% at both June 30, 2022 and December 31, 2021	850.0		850.0
ABL Revolving Credit Facility	175.0		—
Unamortized discount and issuance costs	(36.4)		(39.4)
	3,139.3		2,972.3
Less: Current Portion	(21.8)		(21.8)
Total long-term debt, net of current portion	$	3,117.5	$	2,950.5

ABL Revolving Credit Facility

At June 30, ~~2021,~~2022, Vertiv Group Corporation (a wholly-owned subsidiary of the Company), as the ~~Borrower~~“Borrower,” and certain subsidiaries of the Borrower as co-borrowers (the ~~"Co-Borrowers"~~“Co-Borrowers”), had ~~$434.9~~$262.3 of availability under the Asset Based Revolving Credit Facility (the ~~"ABL~~“ABL Revolving Credit ~~Facility"~~Facility“) (subject to customary conditions, and subject to separate sublimits for letters of credit, swingline borrowings and borrowings made to certain non-U.S. Co-Borrowers), net of letters of credit outstanding in the aggregate principal amount of ~~$20.1,~~$17.7, and taking into account the borrowing base limitations set forth in the ABL Revolving Credit Facility. At June 30, 2022, there was a $175.0 balance on the ABL Revolving Credit Facility with a weighted-average borrowing rate of 2.44%. At December 31, 2021, there was 0no borrowing balance on the ABL Revolving Credit Facility.

Short-Term Borrowings

~~(6)~~As of June 30, 2022, we had short-term borrowings of $17.9 with a borrowing rate of 3.7% included in “Accrued expenses and other liabilities” on the Unaudited Condensed Consolidated Balance Sheets.

Table of contents

(7) LEASES

The Company leases office space, warehouses, vehicles, and equipment. Leases have remaining lease terms of 1 year to 20 years, some of which have renewal and termination options. Termination options are exercisable at the Company's option. ~~Terms and conditions~~Lease terms used to ~~extend or terminate are recognized as part of the~~recognize right-of-use assets and lease liabilities include periods covered by options to extend the lease where ~~prescribed~~the Company is reasonably certain to exercise that option and periods covered by an option to terminate the ~~guidance.~~lease if the Company is reasonably certain not to exercise that option. The majority of ~~our~~the Company's leases are operating leases. Finance leases, which are recorded in ~~"Property, Plant,~~“Property, plant, and ~~Equipment",~~equipment, net,” are immaterial to ~~our condensed consolidated financial statements.~~the Company's Unaudited Condensed Consolidated Financial Statements.

~~Table of content~~s

Operating lease expenses are recorded in ~~"Cost~~“Cost of ~~sales"~~sales” and ~~"Selling,~~“Selling, general and administrative ~~expenses"~~expenses” on the Unaudited Condensed Consolidated Statements of Earnings (Loss). Refer to the below table for a summary of these lease expenses:


		Three months ended June 30, 2021		Three months ended June 30, 2020		Six months ended June 30, 2021		Six months ended June 30, 2020			Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Operating lease cost	Operating lease cost	$	14.9	$	12.3	$	28.6	$	25.2	Operating lease cost	$	14.3	$	14.9	$	28.3	$	28.6
Short-term and variable lease cost	Short-term and variable lease cost	5.3		5.6		10.5		13.1		Short-term and variable lease cost	5.5		5.3		12.3		10.5
Total lease cost	Total lease cost	$	20.2	$	17.9	$	39.1	$	38.3	Total lease cost	$	19.8	$	20.2	$	40.6	$	39.1

Supplemental cash flow information related to operating leases is as follows:
Six months ended June 30, 2021 Six months ended June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - Payments on operating leases $ 27.9 $ 25.2
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases $ 45.4 $ 24.6


	Six months ended June 30, 2022		Six months ended June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - Payments on operating leases	$	28.2	$	27.9
Right-of-use assets obtained in exchange for new lease obligations:


Operating leases	$	29.1	$	45.4

Supplemental balance sheet information related to operating leases is as follows:
Financial statement line item June 30, 2021 December 31, 2020
Operating lease right-of-use assets Other assets $ 163.9 $ 145.8
Operating lease liabilities Accrued expenses and other liabilities 43.7 42.3
Operating lease liabilities Other long-term liabilities 124.4 107.3
Total lease liabilities $ 168.1 $ 149.6
~~Weighted average~~


	Financial statement line item	June 30, 2022		December 31, 2021

Operating lease right-of-use assets	Other assets	$	153.1	$	152.9



Operating lease liabilities	Accrued expenses and other liabilities	$	41.7	$	42.1

Operating lease liabilities	Other long-term liabilities	112.7		113.6

Total lease liabilities		$	154.4	$	155.7

Weighted-average remaining lease terms and discount rates for operating leases are as follows:


	June 30, 2022		December 31, 2021
Weighted-average remaining lease term	5.8 years		5.5 years


Weighted-average discount rate	5.2	%	5.2	%

Table of contents
June 30, 2021 December 31, 2020
Weighted Average Remaining Lease Term 5.7 years 4.5 years
Weighted Average Discount Rate 5.5 % 5.8 %

Maturities of lease liabilities are as follows:


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
		Operating Leases					Operating Leases
2021		$	27.4	$	51.0
2022	2022	47.6		41.4		2022	$	26.1	$	50.5
2023	2023	39.7		33.4		2023	46.0		41.5
2024	2024	27.1		20.9		2024	34.5		30.0
2025	2025	16.1		10.4		2025	22.4		18.7
2026						2026	13.5		10.3
Thereafter	Thereafter	41.8		17.2		Thereafter	42.6		32.3
Total Lease Payments	Total Lease Payments	199.7		174.3		Total Lease Payments	185.1		183.3
Less: Imputed Interest	Less: Imputed Interest	(31.6)		(24.7)		Less: Imputed Interest	(30.7)		(27.6)
Present value of lease liabilities	Present value of lease liabilities	$	168.1	$	149.6	Present value of lease liabilities	$	154.4	$	155.7

~~Table of content~~s

~~(7)~~(8) INCOME TAXES

The Company's effective tax rate was 36.0%, 44.7%, 11.8%, ~~21.4%, (34.3)%~~ and ~~(11.9)%~~21.4% for the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The effective tax rate in the ~~current~~ three and six ~~month periods are~~months ended June 30, 2022 is primarily influenced by the mix of income between ~~our~~the Company's U.S. and non-U.S. operations, net of changes in valuation allowances offset by the positive impact of non-taxable changes in fair value of the warrant liabilities. The effective rates for the comparative three and six month period were primarily influenced by the mix of income between the Company's U.S. and non-U.S. operations, net of changes in valuation allowances, and reflect the negative impact of non-deductible changes in fair value of the warrant liabilities as well as a discrete tax adjustment related to legislative changes enacted in the ~~quarter. This negative impact is partially offset by the benefit of certain internal reorganizations and tax elections outside the U.S. The effective rates for the~~ comparative three and six month periods were primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of changes in valuation allowances. The prior periods also reflect a discrete tax benefit related to a change in our indefinite reinvestment liability caused by legislative changes enacted during the periods and movement in foreign currencies.period.

The Company ~~has~~ provided ~~for~~ U.S. federal income taxes and foreign withholding taxes on all temporary differences attributed to basis differences in foreign subsidiaries that are not considered indefinitely reinvested. As of June 30, ~~2021,~~2022, the Company has certain earnings of certain foreign affiliates that continue to be indefinitely reinvested, but it was not practicable to ~~determine~~estimate the ~~impact.~~associated deferred tax liability, due to interaction with other tax laws and regulations in the year of inclusion.

~~(8)~~(9) RELATED PARTY TRANSACTIONS

~~Services Agreement~~

The Company received certain corporate and advisory services from Platinum Equity Advisors, LLC ("Advisors"), and affiliates of Advisors. These services were provided pursuant to a corporate advisory services agreement ("the "CASA") between Advisors and the Company. During the three months ended March 31, 2020, the Company recorded $0.5 in charges related to the CASA. This agreement was terminated on February 7, 2020.

During the three months ended March 31, 2020, the Company recorded $25.0 in charges relating to services performed in connection with the business combination. These charges were recorded as a reduction of the cash acquired from GSAH within additional paid-in capital.

~~During the three months ended March 31, 2020, the Company recorded $5.5 of cash related to a true-up of merger consideration in connection with the business combination.~~

Transactions with Affiliates of Advisors

The Company ~~also~~ purchased and sold goods in the ordinary course of business with affiliates of ~~Advisors.~~ Platinum Equity Advisors, LLC. For the three and six months ended June 30, 2022 and 2021 purchases were $34.4, $69.3, $19.1 and $33.7, respectively. For the three and six months ended June 30, 2022 sales were $19.7 and $51.1, respectively, and were insignificant for the three and six months ended June 30, 2021. Accounts payable were $1.7 and $3.9 as of June 30, 2022 and December 31, 2021, respectively. Accounts receivable were $27.0 and $42.9 as of June 30, 2022 and December 31, 2021, respectively.

Tax Receivable Agreement

On December 31, 2021, the Company and an affiliate of Platinum Equity Advisors (the "Vertiv Stockholder") agreed to amend and supplement the tax receivable agreement entered into by the Company and the Vertiv Stockholder on February 7, 2020, (the “Tax Receivable Agreement”) to replace the Company’s remaining payment obligations under the Tax Receivable Agreement with an obligation to pay $100 in cash in 2 equal installments. The first installment payment was scheduled to be on or before June 15, 2022 and the second payment was scheduled to be due on or before September 15, 2022. On June 15, 2022, the Company and the Vertiv Stockholder agreed to further amend the payment schedule under the Tax Receivable Agreement into 3 installment payments, wherein the first installment payment of $12.5 became due and was paid on June 15, 2022, the second installment of $12.5 will be due on or before September 15, 2022, and the third installment of $75 will be due on or before November 15, 2022. Upon receipt of the third installment payment, the Tax Receivable Agreement will terminate and the Company will not be required to make any further payments to the Vertiv Stockholder under the Tax Receivable Agreement.

For the three and six months ended June 30, 2021 the Company recorded $(0.1) and ~~2020 purchases were $19.1, $33.7, $12.9~~$1.6, respectively, of accretion expense in “Interest expense, net” in the Unaudited Condensed Consolidated Statement of Earnings (Loss). For the three and ~~$24.4, respectively. Accounts payable from affiliates of Advisors were insignificant as of~~six months ended June 30, 2021, an unrealized gain (loss) of $(9.4) and ~~December 31, 2020.~~

~~Tax Receivable Agreement~~

~~See Note 10 — Financial Instruments and Risk Management for additional information.~~

$(5.3) was recorded in “Other comprehensive income (loss), net” in the Unaudited Condensed Consolidated Comprehensive Income (Loss), related to the change in fair value of the tax receivable liability.

1213

Table of ~~content~~scontents

~~(9)~~(10) OTHER FINANCIAL INFORMATION
June 30, 2021 December 31, 2020
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents $ 708.8 $ 534.6
Restricted cash included in other current assets 8.0 8.0
Total cash, cash equivalents, and restricted cash $ 716.8 $ 542.6

June 30, 2021 December 31, 2020
Inventories
Finished products $ 222.9 $ 201.0
Raw materials 177.2 155.7
Work in process 151.3 89.9
Total inventories $ 551.4 $ 446.6
June 30, 2021 December 31, 2020
Property, plant and equipment, net
Machinery and equipment $ 341.3 $ 322.4
Buildings 255.0 255.5
Land 46.9 47.4
Construction in progress 16.7 23.1
Property, plant and equipment, at cost 659.9 648.4
Less: Accumulated depreciation (250.7) (220.8)
Property, plant and equipment, net $ 409.2 $ 427.6
June 30, 2021 December 31, 2020
Accrued expenses and other liabilities
Deferred revenue $ 231.1 $ 199.6
Accrued payroll and other employee compensation 119.1 138.5
Litigation reserve (see note 14) 96.2 96.6
Contract liabilities (see note 3) 50.5 36.1
Operating lease liabilities 43.7 42.3
Product warranty 35.9 36.5
Restructuring (see note 4) 53.0 69.3
Other 267.7 282.9
Total $ 897.2 $ 901.8


	June 30, 2022		December 31, 2021
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	194.4	$	439.1
Restricted cash included in other current assets	10.9		8.0
Total cash, cash equivalents, and restricted cash	$	205.3	$	447.1

2021 2020
Change in product warranty accrual
Beginning balance, January 1 $ 36.5 $ 43.3
Provision charge to expense 11.3 13.2
Paid/utilized (11.9) (19.6)
Ending balance, June 30, $ 35.9 $ 36.9


	June 30, 2022		December 31, 2021
Inventories
Finished products	$	276.3	$	236.5
Raw materials	354.5		274.8
Work in process	163.8		105.0
Total inventories	$	794.6	$	616.3

	June 30, 2022		December 31, 2021
Property, plant and equipment, net
Machinery and equipment	$	381.9	$	373.6
Buildings	295.7		304.8
Land	43.2		42.1
Construction in progress	43.8		34.8
Property, plant and equipment, at cost	764.6		755.3
Less: Accumulated depreciation	(290.8)		(266.0)
Property, plant and equipment, net	$	473.8	$	489.3

	June 30, 2022		December 31, 2021
Accrued expenses and other liabilities
Deferred revenue	$	281.4	$	238.9
Accrued payroll and other employee compensation	107.0		125.8
Restructuring (see Note 5)	20.6		34.0
Operating lease liabilities (see Note 7)	41.7		42.1
Product warranty	26.3		30.0
Contract liabilities (see Note 4)	49.2		52.1
Tax Receivable Agreement (see Note 9)	87.5		100.0
Other	303.0		330.5
Total	$	916.7	$	953.4


	Six months ended June 30, 2022		Six months ended June 30, 2021
Change in product warranty accrual
Balance at the beginning of the period	$	30.0	$	36.5
Provision charge to expense	5.8		11.3
Paid/utilized	(9.5)		(11.9)
Balance at the end of the period	$	26.3	$	35.9

~~(10)~~(11) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

In accordance with ASC 820, the Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. Observable inputs are from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. These tiers include the following:

Level 1 — inputs include observable unadjusted quoted prices in active markets for identical assets or liabilities

Table of contents

Level 2 — inputs include other than quoted prices in active markets that are either directly or indirectly observable

Level 3 — inputs include unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions

~~Table of content~~s

In determining fair value, the Company uses various valuation techniques and prioritizes the use of observable inputs. The availability of observable inputs varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the instrument. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management judgment. For other financial instruments, pricing inputs are less observable in the marketplace and may require management judgment.

Recurring fair value measurements

~~We elected to apply fair value option accounting to the Tax Receivable Agreement.~~ A summary of the Company's financial instruments recognized at fair value, and the fair value measurements used ~~follows:~~

Balance Sheet Location Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3)
June 30, 2021
Assets:
Interest rate swaps Other noncurrent assets $ 2.7 $ 0 $ 2.7 $ 0
Total assets $ 2.7 $ 0 $ 2.7 $ 0
Liabilities:
Interest rate swaps Accrued expenses and other liabilities $ 10.2 $ 0 $ 10.2 $ 0
Tax Receivable Agreement Other long-term liabilities 162.5 0 0 162.5
Private warrants Warrant liabilities 172.5 0 172.5 0
Total liabilities $ 345.2 $ 0 $ 182.7 $ 162.5

Balance Sheet Location Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3)
December 31, 2020
Liabilities:
Tax Receivable Agreement Other long-term liabilities $ 155.6 $ 0 $ 0 $ 155.6
Interest rate swaps Accrued expenses and other liabilities 10.3 0 10.3 0
Interest rate swaps Other long-term liabilities 22.5 0 22.5 0
Public warrants Current portion of warrant liabilities 68.5 68.5 0 0
Private warrants Warrant liabilities 87.7 0 87.7 0
Total liabilities $ 344.6 $ 68.5 $ 120.5 $ 155.6

~~Tax Receivable Agreement —~~ The Company has estimated total payments of approximately $191.5 on an undiscounted basis. The initial fair value of the estimated liability resulting from the business combination of $133.4 was included as an adjustment to Additional paid in capital. Subsequent measurements are recorded in "Interest expense, net" in the Unaudited Condensed Consolidated Statements of Earnings (Loss) and "Accumulated other comprehensive income" in the Unaudited Condensed Consolidated Balance Sheets, as appropriate based on the passage of time, change in risk-free rate and implied credit spread. Cash flows of the Tax Receivable Agreement are discounted at an appropriate rate for the applicable duration of the instrument adjusted for our own credit spread. The fair value movement on the tax receivable agreement attributable to our own credit risk spread is recorded in "Accumulated other comprehensive income" in the Unaudited Condensed Consolidated Balance Sheets. These estimates and assumptions are subject to change, which may materially affect the measurement of the liability.

~~Table of content~~s

We have recorded $(0.1), $1.6, $7.1 and $16.2 of accretion expense in "Interest expense, net" for the three and six months ended June 30, 2021 and 2020, respectively, in the Unaudited Condensed Consolidated Statement of Earnings (Loss). An unrealized gain (loss) of $(9.4), $(5.3), $(9.7) and $16.2 was recorded in "Accumulated other comprehensive income" in the Unaudited Condensed Consolidated Balance Sheets, related to the change in fair value of the tax receivable liability for the three and six months ended June 30, 2021 and 2020, respectively.

The value of the Tax Receivable Agreement is determined using Level 3 inputs. The measurement is calculated using unobservable inputs based on the Company’s own assumptions including the timing and amount of future taxable income and realizability of tax attributes. When valuing the tax receivable liability at June 30, 2021, we utilized a discount rate of 2.9%. The discount rate was determined based on the risk-free rate and Vertiv's implied credit spread. A one percentage point change in the discount rate would result in a change in value of approximately $11.0 at June 30, 2021. Significant changes in unobservable inputs could result in material changes to the tax receivable liability.

~~Details of the changes in value for the Tax Receivable Agreement~~ are as follows:

2021 2020
Beginning liability balance, January 1 $ 155.6 $ 0
Tax receivable agreement, initially recorded 0 133.4
Change in fair value 6.9 (0.1)
Ending liability balance, June 30, $ 162.5 $ 133.3


		As of June 30, 2022
	Balance Sheet Location	Total		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Unobservable inputs (Level 3)
Assets:
Interest rate swaps	Other current assets	$	18.3	$	—	$	18.3	$	—
Interest rate swaps	Other noncurrent assets	66.6		—		66.6		—
Total assets		$	84.9	$	—	$	84.9	$	—

Liabilities:

Private warrants	Warrant liabilities	$	15.8	$	—	$	15.8	$	—
Total liabilities		$	15.8	$	—	$	15.8	$	—


		As of December 31, 2021
	Balance Sheet Location	Total		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Unobservable inputs (Level 3)
Assets:
Interest rate swaps	Other noncurrent assets	$	16.1	$	—	$	16.1	$	—
Total assets		$	16.1	$	—	$	16.1	$	—

Liabilities:
Interest rate swaps	Accrued expenses and other liabilities	$	7.4	$	—	$	7.4	$	—
Contingent consideration	Accrued expenses and other liabilities	3.7		—		—		3.7
Private warrants	Warrant liabilities	149.6		—		149.6		—
Total liabilities		$	160.7	$	—	$	157.0	$	3.7

Interest rate swaps — From time to time the Company may enter into derivative financial instruments designed to hedge the variability in interest expense on floating rate debt. Derivatives are recognized as assets or liabilities in the Unaudited Condensed Consolidated Balance Sheets at their fair value. When the derivative instrument qualifies as a cash flow hedge, changes in the fair value are deferred through other comprehensive ~~earnings,~~income, depending on the nature and effectiveness of the offset.

Concurrent with the refinancing on March 2, 2020, the Company designated certain interest rate swaps with an initial notional amount of $1,200.0 as cash flow hedges effectively swapping such amount in LIBOR based floating rate debt for fixed rate debt.

The Company uses interest rate swaps to manage the interest rate mix of ~~our~~the Company's total debt portfolio and related overall cost of borrowing. At June 30, 2022 and December 31, 2021, interest rate swap agreements designated as cash flow hedges effectively swapped a notional amount of $1,000.0 of LIBOR based floating rate debt for fixed rate debt. ~~Our~~The Company's interest rate swaps mature in March 2027. AsThe Company recognized $1.7, $4.3, $2.6, and $5.3 of ~~June 30, 2021 the fair value of interest rate swaps was $7.5 and was recorded in "Accumulated other comprehensive (loss) income"~~expense within “Other operating expense (income)” on the Unaudited Condensed Consolidated ~~Balance Sheets . The total fair value at June 30, 2021 consisted~~Statements of $10.2 current portion recorded in "Accrued expenses and other liabilities" in the Unaudited Condensed Consolidated Balance Sheets and a $2.7 non-current portion recorded in "Other assets". The Company recognized $2.6, $5.3, $0.5 and $0.5 in earningsEarnings (Loss) for the three and six months ended June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Table of contents

At June 30, ~~2021,~~2022, the Company expects that approximately ~~$10.2~~$18.3 of pre-tax net ~~losses~~gains on cash flow hedges will be reclassified from ~~Accumulated~~accumulated other comprehensive income (loss) into earnings during the next twelve months.

The interest rate swaps are valued using the LIBOR yield curves at the reporting date. Counterparties to these contracts are highly rated financial institutions. The fair values of the Company’s interest rate swaps are adjusted for nonperformance risk and creditworthiness of the counterparty through the Company’s credit valuation adjustment (“CVA”). The CVA is calculated at the counterparty level utilizing the fair value exposure at each payment date and applying a weighted probability of the appropriate survival and marginal default percentages.

~~Public warrants~~Net investment hedge — asFrom time to time the ~~Public warrants were traded~~Company designates certain intercompany debt to hedge a portion of its investment in ~~active markets, their value~~foreign subsidiaries and affiliates. The net impact of translation adjustments from these hedges was ~~derived using quoted market prices~~$6.8 for both the three and six months ended June 30, 2022 and are ~~classified as Level 1 financial instruments.~~included in “Foreign currency translation” in the Unaudited Condensed Consolidated Statement of Other Comprehensive Income (Loss). As of June 30, 2022, approximately $227.5 of the Company's intercompany debt was designated to hedge investments in certain foreign subsidiaries and affiliates.

Private warrants — the fair value of the ~~Private~~private warrants is considered a Level 2 valuation and is determined using the Black-Sholes-Merton valuation model.

~~Table of content~~s

The significant assumptions which the Company used in the model are:
Warrant valuation inputs June 30, 2021 December 31, 2020
Stock price $ 27.30 $ 18.67
Strike price $ 11.50 $ 11.50
Remaining life 3.60 4.10
Volatility 32.8 % 29.0 %
Interest rate (1)
0.58 % 0.27 %
Dividend yield (2)
0.04 % 0.05 %


Warrant valuation inputs	June 30, 2022			December 31, 2021
Stock price	$	8.22		$	24.97
Strike price	$	11.50		$	11.50
Remaining life	2.60			3.10
Volatility	43.0		%	34.2		%
Interest rate (1)	2.96		%	0.98		%
Dividend yield (2)	0.12		%	0.04		%

(1) Interest rate determined from a constant maturity treasury ~~yield~~yield.

(2) June 30, ~~2021~~2022 and December 31, ~~2020~~2021 dividend yield assumes $0.01 per share per annum.

~~Foreign currency exchange rate risk management~~

We conduct business in several major international currencies and are, therefore, subject to risks associated with changing foreign currency exchange rates. We enter into various contracts that change in value as foreign currency exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable currency exchange rate fluctuations.

Other fair value measurements

~~We determine~~The Company determines the fair value of debt using Level 2 inputs based on quoted market prices. The following table presents the estimated fair value and carrying value of long-term debt, including the current portion of long-term debt as of June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

June 30, 2021 December 31, 2020
Fair Value
Par Value (1)
Fair Value
Par Value (1)
Term Loan due 2027 $ 2,156.3 $ 2,172.6 $ 2,169.9 $ 2,183.5


	June 30, 2022				December 31, 2021
	Fair Value		Par Value (1)		Fair Value		Par Value (1)
Term Loan due 2027	$	1,989.4	$	2,150.7	$	2,148.2	$	2,161.7
Senior Secured Notes due 2028	697.0		850.0		853.2		850.0
ABL Revolving Credit Facility due 2025	175.0		175.0		—		—

(1)See ~~Note 5~~“Note 6 — ~~Debt~~Debt” for additional ~~information~~information.

~~(11)~~

Table of contents

(12) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Activity in accumulated other comprehensive income (loss) is as follows:


		Three months ended June 30, 2021		Three months ended June 30, 2020		Six months ended June 30, 2021		Six months ended June 30, 2020			Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Foreign currency translation, beginning	Foreign currency translation, beginning	$	68.8	$	(21.4)	$	104.9	$	32.9	Foreign currency translation, beginning	$	3.5	$	68.8	$	39.8	$	104.9
Other comprehensive income (loss)	Other comprehensive income (loss)	20.2		11.9		(15.9)		(42.4)		Other comprehensive income (loss)	(149.9)		20.2		(186.2)		(15.9)
Foreign currency translation, ending	Foreign currency translation, ending	89.0		(9.5)		89.0		(9.5)		Foreign currency translation, ending	(146.4)		89.0		(146.4)		89.0
Interest rate swaps, beginning	Interest rate swaps, beginning	1.1		(24.0)		(32.8)		0		Interest rate swaps, beginning	62.9		1.1		8.7		(32.8)
Unrealized gain (loss) deferred during the period (1)	Unrealized gain (loss) deferred during the period (1)	(8.6)		(11.5)		25.3		(35.5)		Unrealized gain (loss) deferred during the period (1)	22.0		(8.6)		76.2		25.3
Interest rate swaps, ending	Interest rate swaps, ending	(7.5)		(35.5)		(7.5)		(35.5)		Interest rate swaps, ending	84.9		(7.5)		84.9		(7.5)
Pension, beginning	Pension, beginning	(20.5)		(15.0)		(19.7)		(14.8)		Pension, beginning	(12.8)		(20.5)		(12.9)		(19.7)
Actuarial gains (losses) recognized during the period, net of income taxes		0.2		0		(0.6)		(0.2)
Actuarial gain (losses) recognized during the period, net of income taxes										Actuarial gain (losses) recognized during the period, net of income taxes	—		0.2		0.1		(0.6)
Pension, ending	Pension, ending	(20.3)		(15.0)		(20.3)		(15.0)		Pension, ending	(12.8)		(20.3)		(12.8)		(20.3)
Tax receivable agreement, beginning		3.2		25.9		(0.9)		0
Tax Receivable Agreement, beginning										Tax Receivable Agreement, beginning	—		3.2		—		(0.9)
Unrealized gain (loss) during the period (2)	Unrealized gain (loss) during the period (2)	(9.4)		(9.7)		(5.3)		16.2		Unrealized gain (loss) during the period (2)	—		(9.4)		—		(5.3)
Tax receivable agreement, ending		(6.2)		16.2		(6.2)		16.2
Tax Receivable Agreement, ending										Tax Receivable Agreement, ending	—		(6.2)		—		(6.2)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	$	55.0	$	(43.8)	$	55.0	$	(43.8)	Accumulated other comprehensive income (loss)	$	(74.3)	$	55.0	$	(74.3)	$	55.0

(1)During the three and six months ended June 30, 2022 and 2021, $1.7, $4.3, $2.6 and ~~2020, $2.6,~~ $5.3, ~~$0.5 and $0.5,~~ respectively, was reclassified into earnings.

(2)The fair value movement on the Tax Receivable Agreement attributable to ~~our~~the Company's own credit risk spread iswas recorded in ~~other~~“Other comprehensive income (loss) ~~income.~~” prior to amending the Tax Receivable Agreement.

~~Table of content~~s

~~(12)~~(13) SEGMENT INFORMATION

~~Beginning in 2021,~~Operating profit (loss) is the primary income measure ~~used for assessing~~the Company uses to assess segment performance and ~~making~~make operating ~~decisions is operating profit (loss).~~decisions. Segment performance is assessed exclusive of Corporate and other costs, foreign currency gain (loss), and amortization of intangibles. Corporate and other costs primarily include ~~headquarters management costs,~~ stock-based compensation, other incentive compensation, ~~global IT costs,~~ change in fair value of warrant liabilities, asset impairments, and costs that support centralized global functions including Finance, Treasury, Risk Management, Strategy & Marketing, IT, Legal, and global product platform development and offering management.

Vertiv determines its reportable segments based on how operations are managed internally for the products and services sold to customers, including how the results are reviewed by the chief operating decision maker, ~~(CODM),~~ which includes determining resource allocation methodologies used for reportable segments. At the beginning of 2021 we reorganized our internal reporting and realigned our operating segment structure to how our CODM, our Chief Executive Officer, now allocates resources and makes decisions. The changes resulted in the identification of 2 new operating segments, 1) North Asia and 2) Australia & New Zealand, South East Asia and India (ASI) which previously were reported as our legacy Asia Pacific operating segment. Given the similarities of economic characteristics and other qualitative factors, we aggregate these operating segments, such that our reportable segments are unchanged.

In conjunction with the realignment, the Company concluded the new operating segments also comprised reporting units and the company tested goodwill for impairment for each reporting unit both immediately before and immediately after the business realignment. The Company allocated goodwill to the 2 new reporting units based on their relative fair value. The goodwill impairment tests under both the legacy and new reporting unit structures concluded that 0 impairment existed during the first half of fiscal 2021.

Summarized information about the Company’s results of operations by reportable segment and product and service offering follows:

Americas includes products and services sold for applications within the data center, communication networks and commercial/industrial markets in North America and Latin America. This segment’s principal product and service offerings include:

•Critical infrastructure & solutions includes AC and DC power management, thermal management, and modular hyperscale type data center sites.

•Integrated rack solutions includes racks, rack power, rack power distribution, rack thermal systems, ~~and~~ configurable integrated solutions; and hardware for managing ~~I.T.~~IT equipment.

•Services & spares includes preventative maintenance, acceptance testing, engineering and consulting, performance assessments, remote monitoring, training, spare parts, and digital critical infrastructure software.

Asia Pacific includes products and services sold for applications within the data center, communication networks and commercial/industrial markets throughout ~~North~~Greater China, Australia & New Zealand, South East Asia, and ~~ASI.~~India. Products and services offered are similar to the Americas segment.

Europe, Middle East & Africa includes products and services sold for applications within the data center, communication networks and commercial/industrial markets in Europe, Middle East & Africa. Products and services offered are similar to the Americas segment.

~~Reportable Segments~~
Sales Three months ended June 30, 2021 Three months ended June 30, 2020 Six months ended June 30, 2021 Six months ended June 30, 2020
Americas $ 568.2 $ 488.1 $ 1,074.1 $ 957.5
Asia Pacific 416.3 340.6 793.9 579.6
Europe, Middle East & Africa 310.2 210.1 560.6 427.8
1,294.7 1,038.8 2,428.6 1,964.9
Eliminations (34.4) (33.1) (69.9) (61.9)
Total $ 1,260.3 $ 1,005.7 $ 2,358.7 $ 1,903.0

Table of ~~content~~scontents

Intersegment sales (1)
Three months ended June 30, 2021 Three months ended June 30, 2020 Six months ended June 30, 2021 Six months ended June 30, 2020
Americas $ 3.3 $ 3.4 $ 7.7 $ 6.1
Asia Pacific 18.3 17.8 38.5 32.9
Europe, Middle East & Africa 12.8 11.9 23.7 22.9
Total $ 34.4 $ 33.1 $ 69.9 $ 61.9
Reportable Segments


Sales	Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Americas	$	654.3	$	568.2	$	1,203.3	$	1,074.1
Asia Pacific	436.6		416.3		790.4		793.9
Europe, Middle East & Africa	397.6		310.2		715.6		560.6
	1,488.5		1,294.7		2,709.3		2,428.6
Eliminations	(89.1)		(34.4)		(153.5)		(69.9)
Total	$	1,399.4	$	1,260.3	$	2,555.8	$	2,358.7


Intersegment sales (1)	Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Americas	$	7.1	$	3.3	$	21.0	$	7.7
Asia Pacific	29.4		18.3		50.4		38.5
Europe, Middle East & Africa	52.6		12.8		82.1		23.7
Total	$	89.1	$	34.4	$	153.5	$	69.9

(1)Intersegment selling prices approximate market prices.

Operating profit (loss) (1)
Three months ended June 30, 2021 Three months ended June 30, 2020 Six months ended June 30, 2021 Six months ended June 30, 2020
Americas $ 128.6 $ 130.0 $ 255.0 $ 221.5
Asia Pacific 62.8 56.1 115.9 77.0
Europe, Middle East & Africa 62.4 27.5 95.8 48.3
Total reportable segments 253.8 213.6 466.7 346.8
Foreign currency gain (loss) (4.1) (2.8) 2.8 (4.6)
Corporate and other (115.6) (108.0) (223.8) (219.2)
Total corporate, other and eliminations (119.7) (110.8) (221.0) (223.8)
Amortization of intangibles (31.9) (32.2) (63.7) (64.6)
Operating profit (loss) $ 102.2 $ 70.6 $ 182.0 $ 58.4

~~(1)~~Beginning in the first quarter of 2021, operating profit (loss) is the primary income measure used for assessing segment performance and making operating decisions. Comparative results for the three and six months ended June 30, 2020 have been presented in conformity with the updated format.


Operating profit (loss)	Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Americas	$	82.5	$	128.6	$	140.4	$	255.0
Asia Pacific	68.5		62.8		110.0		115.9
Europe, Middle East & Africa	61.8		62.4		95.0		95.8
Total reportable segments	212.8		253.8		345.4		466.7
Foreign currency gain (loss)	(2.9)		(4.1)		(1.6)		2.8
Corporate and other	(127.9)		(115.6)		(249.3)		(223.8)
Total corporate, other and eliminations	(130.8)		(119.7)		(250.9)		(221.0)
Amortization of intangibles	(55.8)		(31.9)		(113.5)		(63.7)
Operating profit (loss)	$	26.2	$	102.2	$	(19.0)	$	182.0

~~(13)~~(14) EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per ~~ordinary~~ share is computed by dividing net ~~earnings attributable to holders of the Company's Class A common shares~~income (loss) by the ~~weighted average~~weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per ~~ordinary~~ share is computed by dividing net ~~earnings attributable to holders~~income (loss) adjusted for the gain on fair value of warrant liability, if the ~~Company's Class A common shares~~warrants are in-the-money and the impact is dilutive, by the ~~weighted average~~weighted-average number of common shares outstanding during the period increased by the number of additional shares that would have been outstanding related to potentially dilutive ~~securities or instruments, if the impact is dilutive.~~equity-based compensation and warrants.

Table of contents

The details of the earnings per share calculations for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 are as ~~follows (in millions, except~~follows:


(In millions, except share and per share amounts)	Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Basic earnings (loss) per share computation:
Net income (loss)	$	20.3	$	9.7	$	28.8	$	41.4
Weighted-average number of shares outstanding - basic	376,594,660		352,199,184		376,285,196		350,908,612
Basic earnings per share	0.05		0.03		$	0.08	$	0.12

Diluted earnings (loss) per share computation:
Net income (loss)	20.3		$	9.7	$	28.8	$	41.4
Gain on fair value of warrant liabilities(1)	—		—		(133.8)		—
Net income (loss) adjusted for the gain on fair value of warrant liabilities	$	20.3	$	9.7	$	(105.0)	$	41.4

Weighted-average number of shares outstanding - basic	376,594,660		352,199,184		376,285,196		350,908,612
Dilutive effect of private warrants	—		—		2,208,018		—
Dilutive effect of equity-based compensation	663,194		4,453,627		—		3,975,257
Weighted-average number of shares outstanding - diluted	377,257,854		356,652,811		378,493,214		354,883,869
Diluted earnings (loss) per share	0.05		0.03		$	(0.28)	$	0.12

(1)For the three months ended June 30, 2022, the warrants were out of the money and therefore the net income is not adjusted for the gain on fair value of warrant liabilities to calculate diluted earnings (loss) per ~~share and per share amounts):~~

Three months ended June 30, 2021 Three months ended June 30, 2020 Six months ended June 30, 2021 Six months ended June 30, 2020
Net income (loss) attributable to common shareholders $ 9.7 $ (56.0) $ 41.4 $ (264.3)
Weighted-average number of ordinary shares outstanding - basic 352,199,184 328,411,705 350,908,612 284,534,285
Dilutive effect of equity-based compensation and warrants 4,453,627 0 3,975,257 0
Weighted-average number of ordinary shares outstanding - diluted 356,652,811 328,411,705 354,883,869 284,534,285
Net income per share attributable to common shareholders
Basic $ 0.03 $ (0.17) $ 0.12 $ (0.93)
Diluted 0.03 (0.17) 0.12 (0.93)
share.

The dilutive effect of ~~stock~~private warrants was 2.2 million during the six months ended June 30, 2022. Additional equity-based compensation awards ~~was 4.5 million~~ and ~~4.0 million shares~~warrants were also outstanding during the three and six months ended June 30, ~~2021.~~2022, but were not included in the computation of diluted earnings (loss) per share because the effect would be anti-dilutive. Such anti-dilutive equity-based compensation awards represent 20.3 million and 11.1 million shares for the three and six months ended June 30, 2022, respectively.

The dilutive effect of equity-based compensation awards was 4.5 million and 4.0 million during the three and six months ended June 30, 2021, respectively. Additional ~~stock~~equity-based compensation awards and warrants were also outstanding during the three and six months ended June 30, 2021, but were not included in the computation of diluted earnings per common share because the effect would be anti-dilutive. Such anti-dilutive ~~stock~~equity-based compensation awards and warrants represented 0.5 million and 5.5 million shares for the three months ended June 30, 2021, and 1.0 million and 6.5 million shares for the six months ended June 30, 2021, respectively.

~~Table of content~~s

The dilutive effect of stock awards was zero during the three and six months ended June 30, 2020. Additional stock awards and warrants were also outstanding during the three and six months ended June 30, 2020, but were not included in the computation of diluted earnings per common share because the effect would be anti-dilutive. Such anti-dilutive stock awards and warrants represented 1.5 million and 33.5 million shares for the three months ended June 30, 2020, and 3.1 million and 33.5 million shares for the six months ended June 30, 2020.

~~(14)~~(15) COMMITMENTS AND CONTINGENCIES

The Company is a party to a number of pending legal proceedings and claims, including those involving general and product liability and other matters. The Company accrues for such liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Accruals are based on developments to date; management’s estimates of the outcomes of these matters; the Company’s experience in contesting, litigating and settling similar matters; and any related insurance coverage. While the Company believes that a material adverse impact is unlikely, given the inherent uncertainty of litigation, a future development in these matters could have a material adverse impact on the Company. The Company is unable to estimate any additional loss or range of loss that may result from the ultimate resolution of these matters, other than those described below.

~~On May 10, 2018, the jury in the case~~

Table of Bladeroom Group Limited, et al. v. Facebook, Inc., Emerson Electric Co., Emerson Network Power Solutions, Inc. (now known as Vertiv Solutions, Inc.) and Liebert Corporation returned a verdict in favor of the plaintiff in the amount of $30.0. The jury found the defendants breached a confidentiality agreement with Bladeroom, were unjustly enriched by such breach, improperly disclosed or used certain of the plaintiff’s trade secrets and the misappropriation of such trade secrets was willful and malicious. On March 11, 2019, the court entered orders in the case affirming the original award of $30.0 and imposing an additional award for punitive damages of $30.0 as well as attorney fees and interest. Under the terms of the purchase agreement with Emerson, the Company is indemnified for damages arising out of or relating to this case, including the above amounts. On August 12, 2019, judgment was entered, confirming the award entered on March 11, 2019. Emerson has submitted an appeal, and in connection with the appeal has submitted a surety bond underwritten by a third-party insurance company in the amount of $120.1. As of June 30, 2021, the Company had accrued $96.2 in accrued expenses, the full amount of the judgment, and recorded an offsetting indemnification receivable of $96.2 in other current assets related to this matter.contents

On December 28, 2017, Vertiv acquired Energy Labs, Inc. (“Energy Labs”). The purchase agreement contained a provision for contingent consideration in the form of an earn-out payment based on the achievement of 2018 operating results. The range of payment outcomes was 0zero to $34.5. On June 4, 2019, Vertiv notified the selling ~~shareholders~~stockholders of Energy Labs of Vertiv’s determination that the applicable 2018 operating results had not been achieved and that 0 contingent consideration was due to the selling ~~shareholders.~~stockholders. On September 6, 2019, the selling ~~shareholders~~stockholders of Energy Labs notified Vertiv of their dispute regarding the contingent consideration allegedly due to them. The selling ~~shareholders assert~~stockholders asserted that the applicable 2018 operating results were exceeded and that Vertiv ~~owes~~owed $34.5 in earn-out, the highest amount of earn-out possible under the agreement. On December 21, 2021, the parties agreed to a settlement term sheet, which includes, among other terms, the following: the Company agreed to pay $21.5 to the selling stockholders of Energy Labs; a full and complete mutual waiver, release and discharge of all claims and liabilities; and a dismissal of the pending lawsuit. The parties executed a Settlement Agreement on December 30, 2021 consistent with the aforementioned terms. On January 12, 2022, the Company paid the agreed upon settlement of $21.5.

On August 3, 2021, an American Arbitration Association arbitration hearing commenced with respect to a 2018 claim filed by Vertiv against SVO Building One, LLC (“SVO”) alleging damages of approximately $12.0 with respect to (i) unremitted payment for work and materials in connection with, the design, engineering, procurement, installation, construction, and commissioning of a data center located in Sacramento, California and (ii) damages and injunctive relief relating to SVO’s unauthorized use of Vertiv’s intellectual property and work product. SVO filed a counterclaim in 2018 alleging damages of approximately $18.0 relating to (i) allegations that Vertiv was not a duly licensed contractor at all times during the project in violation of California’s contractor license regulations, (ii) breach of warranty, and (iii) gross negligence. On September 3, 2021, the arbitrator issued an interim phase one ruling finding (1) that Vertiv was in violation of California contractor license regulations and was barred from recovery of approximately $9.0 for work performed and equipment delivered in connection with the project, as well as requiring disgorgement plus interest of $10.0, (2) SVO was not in violation of California’s contractor license regulations, and (3) Vertiv and SVO agreed to a traditional baseball arbitration provision under the terms and conditions for the project, wherein each party is required to submit a proposed final award to the arbitrator for consideration, and the arbitrator is required to select one of the proposed awards submitted by the parties as the final award in the arbitration and is prohibited from issuing an alternative award. On December 31, 2021, the parties entered into a settlement agreement on ordinary and customary terms, settling all of the disputes between them. As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021 the settlement was recorded in “Accrued expenses and other liabilities” on the Unaudited Condensed Consolidated Balance Sheet.

On March 24, 2022, a putative securities class action, Kirk Vinings v. Vertiv Holdings Co, 22-cv-2416, was filed against Vertiv, Rob Johnson, and David Fallon in the Southern District of New York. The plaintiff asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5 on behalf of a putative class of all persons and entities that purchased or otherwise acquired Vertiv securities between April 28, 2021 and February 23, 2022, relating to certain disclosures contained in filings made by the Company ~~had accrued $2.8~~with the SEC during 2021. On May 13, 2022, the plaintiff voluntarily dismissed his lawsuit.

On May 3, 2022, a related putative securities class action, In re Vertiv Holdings Co Securities Litigation, 22-cv-3572, was filed against Vertiv, certain of the Company’s officers and directors, and other defendants in ~~accrued expenses. Discovery is underway~~the Southern District of New York. The complaint alleges that certain of the Company’s public statements were materially false and/or misleading with respect to inflationary and supply chain pressures and pricing issues, and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended. These claims are asserted on behalf of a ~~trial has been scheduled for~~putative class of all persons and entities that (i) purchased Vertiv securities between February ~~2022.~~24, 2021 and February 23, 2022; and/or (ii) purchased Vertiv securities in or traceable to the November 4, 2021 secondary public offering by a selling stockholder pursuant to a resale registration statement. While ~~Vertiv~~the Company believes it has meritorious defenses against the ~~assertions of~~plaintiff’s claims, the ~~selling shareholders of Energy Labs, Vertiv~~Company is unable at this time to predict the outcome of this ~~dispute. If Vertiv is unsuccessful,~~dispute or the ~~ultimate resolution~~amount of ~~this dispute could result in a loss of up to $31.7 in excess of the $2.8 accrued as well as costs and legal fees.~~any cost associated with its resolution.

At June 30, ~~2021,~~2022, other than as described above, there were no known contingent liabilities (including guarantees, taxes and other claims) that management believes will be material in relation to the Company’s ~~consolidated financial statements,~~Unaudited Condensed Consolidated Financial Statements, nor were there any material commitments outside the normal course of ~~business other than those described above.~~

business.

1920

Table of ~~content~~scontents

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

Unless the context otherwise indicates or requires, references to (1) “the Company,” “Vertiv,” “we,” “us” and “our” refer to Vertiv Holdings Co, a Delaware corporation, and its consolidated subsidiaries following the business combination; (2) “GSAH” refers to GS Acquisition Holdings Corp prior to the business combination; and (3) “Holdings” refers to Vertiv Holdings, LLC and its subsidiaries prior to the business combination.subsidiaries. In addition, dollar amounts are stated in millions, except for per share amounts. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, in our Quarterly Report on Form 10-Q for the three month period ended March 31, 2022, filed with the SEC on May 2, 2022, and in our Annual Report on Form ~~10-K/A filed April 30, 2021~~10-K for the year ended December 31, ~~2020.~~2021, filed with the SEC on March 1, 2022 (the “2021 Form 10-K”).

~~Overview~~

We are a global leader in the design, manufacturing and servicing of critical digital infrastructure technology that powers, cools, deploys, secures and maintains electronics that process, store and transmit data. We provide this technology to data centers, communication networks and commercial and industrial environments worldwide. We aim to help create a world where critical technologies always work, and where we empower the vital applications of the digital world.

~~Key Developments~~

~~Below is a summary of selected key developments affecting our business in the six months ended June 30, 2021:~~

•On March 10, 2021, Vertiv Group Corporation, a Delaware corporation (the “Borrower”) and an indirect wholly owned subsidiary of Vertiv Holdings Co, Vertiv Intermediate Holding II Corporation, a Delaware corporation (“Holdings”) and the direct parent of Vertiv Group, and certain direct and indirect subsidiaries of the Borrower entered into an Amendment No. 1 to Term Loan Credit Agreement (the "Term Loan Amendment") with Citibank, N.A., as administrative agent (in such capacity, the “Term Agent”), and the lenders party thereto, which Term Loan Amendment amended the Term Loan Credit Agreement, dated as of March 2, 2020 (as amended by the Term Loan Amendment, the “Term Loan Credit Agreement”), by and among Holdings, the Borrower, the Term Agent and the lenders from time to time party thereto, to, among other things, reduce the interest rate margin for the Borrower’s outstanding term loans under the Term Loan Credit Agreement by 0.25%, to 2.75% in respect of term loans bearing interest based on the LIBOR rate and to 1.75% in respect of term loans bearing interest based on a base rate defined in the Term Loan Credit Agreement. The maturity date for such term loans remains March 2, 2027, and all other material provisions of the Original Term Loan Credit Agreement remain materially unchanged.

•On December 17, 2020, the Company announced its plans to redeem for cash all of its outstanding public warrants to purchase shares of our Class A common shares. In December 2020, $156.5 of cash was generated from the exercise of 13.6 million public warrants. In January 2021, 9.3 million public warrants were exercised generating cash proceeds of $107.5. Public warrants that remained unexercised as of 5 p.m. New York City time on January 19, 2021 were no longer exercisable, and the registered holders of such unexercised public warrants became entitled to receive the redemption price of $0.01 per warrant. All public warrants were exercised or redeemed as of January 22, 2021.

•As previously disclosed in our 2020 Form 10-K/A as filed on April 30, 2021, we restated the Company’s previously issued consolidated financial statements as of and for the year ended December 31, 2020, as well each of the quarters within 2020 to make the necessary accounting corrections related to warrant accounting.

~~Table of content~~s

~~RESULTS OF OPERATIONS~~

~~Comparison of the Three Months Ended June 30, 2021 and Three Months Ended June 30, 2020~~

(Dollars in millions) Three months ended June 30, 2021 Three months ended June 30, 2020 $ Change % Change
Net sales $ 1,260.3 $ 1,005.7 $ 254.6 25.3 %
Cost of sales 851.0 659.3 191.7 29.1 %
Gross profit 409.3 346.4 62.9 18.2 %
Selling, general and administrative expenses 271.7 226.3 45.4 (20.1) %
Amortization of intangibles 31.9 32.2 (0.3) 0.9 %
Restructuring costs 1.1 2.4 (1.3) 54.2 %
Foreign currency (gain) loss, net 4.1 2.8 1.3 (46.4) %
Asset impairments — 12.3 (12.3) 100.0 %
Other operating expense (income) (1.7) (0.2) (1.5) (750.0) %
Operating profit (loss) 102.2 70.6 31.6 (44.8) %
Interest expense, net 20.0 30.1 (10.1) 33.6 %
Change in fair value of warrant liabilities 71.2 82.2 (11.0) 13.4 %
Income tax expense (benefit) 1.3 14.3 (13.0) 90.9 %
Net income (loss) $ 9.7 $ (56.0) $ 65.7 117.3 %

~~Net Sales~~

Net sales were $1,260.3 in the second quarter of 2021, an increase of $254.6, or 25.3%, compared with $1,005.7 in the second quarter of 2020. The increase in sales was primarily driven by demand gains across each of the Company's product and service offerings, positive impacts from foreign currency of $49.5 and recovery from the COVID-19 pandemic. By offering, critical infrastructure & solutions sales increased $179.5 including the positive impacts from foreign currency of $29.6. Services & spares sales increased $51.3, including positive impacts from foreign currency of $13.3. Integrated rack solutions sales increased $23.8 including the positive impacts from foreign currency of $6.6.

Excluding intercompany sales, net sales were $564.9 in the Americas, $398.0 in Asia Pacific and $297.4 in EMEA. Movements in net sales by segment and offering are each detailed in the Business Segments section below.

~~Cost of Sales~~

Cost of sales were $851.0 in the second quarter of 2021, an increase of $191.7, or 29.1% compared to the second quarter of 2020. The increase in cost of sales was primarily due to the flow-through impact of higher net sales volume and increased commodity and logistic costs. Gross profit was $409.3 in the second quarter of 2021, or 32.5% of sales, compared to $346.4, or 34.4% of sales in the second quarter of 2020.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative expenses (SG&A) were $271.7 in the second quarter of 2021, an increase of $45.4 compared to the second quarter of 2020. SG&A as a percentage of sales were 21.6% in the second quarter of 2021 compared with 22.5% in the second quarter of 2020. The increase in SG&A was primarily driven by prior year fixed cost reduction actions in the response to the COVID-19 pandemic, including discretionary spending cuts, that resulted in approximately $30.0 of one-time cost savings during the second quarter of 2020 that were not replicated in 2021.

~~Other Operating Expense~~

Other operating expenses includes amortization of intangibles, restructuring costs, foreign currency (gain) loss, and other operating expense (income). Other operating expenses were $35.4 for the second quarter of 2021, which was a $14.1 decrease from the second quarter of 2020. The decrease was primarily due to the 2020 write-off of capitalized software of $12.3 and a $1.1 government subsidy received in the second quarter of 2021.

~~Table of content~~s

~~Change in Fair Value of Warrant Liabilities~~

Change in Fair Value of Warrant Liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection issued in connection with the initial public offering ("IPO") of GSAH. The change in fair value of the outstanding warrants during the second quarter of 2021 and 2020 of $71.2 and $82.2, respectively. The change in fair value of stock warrants is the result of changes in market prices deriving the value of the financial instruments.

~~Interest Expense~~

Interest expense, net, was $20.0 in the second quarter of 2021 compared to $30.1 in the second quarter of 2020. The $10.1 decrease is primarily driven by a $7.2 decrease in accretion expense associated with the Tax Receivable Agreement, a $3.9 decrease in interest rates secured in the amendment to the Term Loan due 2027 during the first quarter of 2021, as described inCautionary Note ~~5 to the unaudited condensed consolidated financial statements, partially offset by a $2.6 increase due to net settlement payments on the Company's interest rate swaps.~~

~~Income Taxes~~

Income tax expense was $1.3 in the second quarter of 2021 versus $14.3 in the second quarter of 2020. The effective rate in the three months ended June 30, 2021 is primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of valuation allowances, and reflects the negative impact of non-deductible changes in fair value of the warrant liabilities, as well as a discrete tax adjustment related to legislative changes enacted in the quarter. This negative impact is partially offset by the benefit of certain internal reorganizations and tax elections outside the U.S. For the three months ended June 30, 2020, income tax expense was primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of changes in valuation allowances, and discrete tax benefits related to a change in our indefinite reinvestment liability caused by legislative changes and movement in foreign currencies.

The second quarter of 2021 tax expense is $13.0 lower than the second quarter of 2020 primarily related to the change in the mix of income and net discrete benefits from certain internal reorganization activities, tax elections outside the U.S. and available tax elections outside the U.S.

~~Business Segments~~

The following is detail of business segment results for the three months ended June 30, 2021. Segment profitability is defined as operating profit (loss). Segment margin represents segment operating profit (loss) expressed as a percentage of segment net sales. For reconciliations of segment net sales and earnings to the Company’s consolidated results, see Note 12 — Segment Information, of the Company's condensed consolidated financial statements. Segment net sales are presented excluding intercompany sales.

~~Americas~~
(Dollars in millions) Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 $ Change % Change
Net sales $ 564.9 $ 484.7 $ 80.2 16.5 %
Operating profit (loss) 128.6 130.0 (1.4) (1.1) %
Margin 22.8 % 26.8 %

Americas net sales of $564.9 in the second quarter of 2021 increased $80.2, or 16.5% from the second quarter of 2020. By product offering, net sales improved in all offering categories. Critical infrastructure & solutions increased by $54.2 primarily due to strong growth in Thermal, AC Power, and Custom Solutions offerings. Service and spares increased by $18.5 primarily due to customer site availability. Integrated rack solutions increased by $7.5 primarily due to strong UPS growth. Additionally, Americas net sales were positively impacted by foreign currency of approximately $6.3.

~~Operating profit (loss) in the second quarter of 2021 was $128.6, a decrease of $1.4 compared with the second quarter of~~ ~~2020. Margin decreased primarily due to increased commodity and logistic costs and supply chain constraints.~~

~~Table of content~~s

~~Asia Pacific~~
(Dollars in millions) Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 $ Change % Change
Net sales $ 398.0 $ 322.8 $ 75.2 23.3 %
Operating profit (loss) 62.8 56.1 6.7 11.9 %
Margin 15.8 % 17.4 %

Asia Pacific net sales were $398.0 in the second quarter of 2021, an increase of $75.2, or 23.3% from the second quarter of 2020. Sales increases were primarily due to strong growth in large projects such as data centers, 5G projects, and wind power. Additionally, sales improved in part due to a recovery from COVID-19 in telecom, channel and services. By product offering, net sales improved in all offering categories, including increases in critical infrastructure & solutions, integrated rack solutions and service & spares by $43.0, $12.0 and $20.2, respectively. Additionally, Asia Pacific net sales were positively impacted by foreign currency of approximately $26.2.

Operating profit (loss) in the second quarter of 2021 was $62.8, an increase of $6.7 compared with the second quarter of 2020. Margin decreased primarily due to 2020 COVID-19 cost actions, including one-time government subsidies, not repeating, partially offset by fixed cost volume leveraging on higher sales.

~~Europe, Middle East & Africa~~

(Dollars in millions) Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 $ Change % Change
Net sales $ 297.4 $ 198.2 $ 99.2 50.1 %
Operating profit (loss) 62.4 27.5 34.9 126.9 %
Margin 21.0 % 13.9 %

EMEA net sales were $297.4 in the second quarter of 2021, an increase of $99.2, or 50.1% from the second quarter of 2020. Sales increased primarily due to deployment of large colocation data centers and recovery from COVID-19. By product offering, net sales improved in all product offering categories including increases in critical infrastructure & solutions, service & spares, and integrated rack solutions by $82.3, $12.6, and $4.3, respectively. Additionally, EMEA net sales were positively impacted by foreign currency of approximately $17.0.

Operating profit (loss) in the second quarter of 2021 was $62.4, an increase of $34.9 compared with the second quarter of 2020. Margin improved primarily due to fixed cost volume leveraging on higher sales, improved operational productivity and new product introductions, partially offset by ~~increased commodity, logistic costs and supply chain constraints.~~

~~Vertiv Corporate and Other~~

Corporate and other costs include costs associated with our headquarters located in Columbus, Ohio, as well as centralized global functions including Finance, Treasury, Risk Management, Strategy & Marketing, IT, Legal, and global product platform development and offering management. Corporate and other costs were $115.6 and $108.0 in the second quarter of 2021 and 2020, respectively. Corporate and other costs increased $7.6 compared with the second quarter of 2020 primarily due to a $23.0 increase in costs related to research and development and growth initiatives, partially offset by a 2020 write-off of capitalized software of $12.3 that did not repeat in 2021.

~~Table of content~~s

~~Comparison of the Six Months Ended June 30, 2021 and Six Months Ended June 30, 2020~~

(Dollars in millions) Six months ended June 30, 2021 Six months ended June 30, 2020 $ Change % Change
Net sales $ 2,358.7 $ 1,903.0 $ 455.7 23.9 %
Cost of sales 1,591.4 1,269.6 321.8 25.3 %
Gross profit 767.3 633.4 133.9 21.1 %
Selling, general and administrative expenses 521.8 491.1 30.7 (6.3) %
Amortization of intangibles 63.7 64.6 (0.9) 1.4 %
Restructuring costs 3.1 1.3 1.8 (138.5) %
Foreign currency (gain) loss, net (2.8) 4.6 (7.4) 160.9 %
Asset impairments — 12.3 (12.3) 100.0 %
Other operating expense (income) (0.5) 1.1 (1.6) 145.5 %
Operating profit (loss) 182.0 58.4 123.6 (211.6) %
Interest expense, net 44.1 99.0 (54.9) 55.5 %
Loss on extinguishment of debt 0.4 174.0 (173.6) 99.8 %
Change in fair value of warrant liabilities 84.8 21.6 63.2 (292.6) %
Income tax expense (benefit) 11.3 28.1 (16.8) 59.8 %
Net income (loss) $ 41.4 $ (264.3) $ 305.7 115.7 %

~~Net Sales~~

Net sales were $2,358.7 in the first half of 2021, an increase of $455.7, or 23.9%, compared with $1,903.0 in the first half of 2020. The increase in sales was primarily driven by demand gains across each of the Company's product and service offerings, positive impacts from foreign currency of $75.4 and recovery from the COVID-19 pandemic. By product offering, critical infrastructure & solutions sales increased $348.0, which included positive impacts from foreign currency of $44.2. Services & spares sales increased $67.4, which included positive impacts from foreign currency of $21.2. Integrated rack solutions sales increased $40.3, which included the positive impacts from foreign currency of $10.0.

Excluding intercompany sales, net sales were $1,066.4 in the Americas, $755.4 in Asia Pacific and $536.9 in EMEA. Movements in net sales by segment and offering are each detailed in the Business Segments section below.

~~Cost of Sales~~

Cost of sales were $1,591.4 in the first half of 2021, an increase of $321.8, or 25.3% compared to the first half of 2020. The increase in cost of sales was primarily due to the flow-through impact of higher net sales volume and increases due to increased commodity and logistic costs, particularly in the second quarter of 2021. Gross profit was $767.3 in the first half of 2021, or 32.5% of sales, compared to $633.4, or 33.3% of sales, in the first half of 2020.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative expenses (SG&A) were $521.8 in the first half of 2021, an increase of $30.7 compared to the first half of 2020. SG&A as a percentage of sales was 22.1% for the six months ended June 30, 2021 compared with 25.8% in the six months ended June 30, 2020. The increase in SG&A was primarily driven by prior year fixed cost reduction actions in the response to the COVID-19 pandemic, including discretionary spending cuts, that resulted in approximately $30.0 of one-time cost savings during the second quarter of 2020 that were not replicated in 2021. These cost saving were offset by one-time transaction related bonuses in 2020.

~~Other Operating Expenses~~

Other operating expenses include amortization of intangibles, restructuring costs, foreign currency (gain) loss, and other operating expense (income). Other expenses were $63.5 for the first half of 2021, which was a $20.4 decrease from the first half of 2020. The decrease was primarily due to a write-offs of capitalized software of $12.3 in 2020, and a change in foreign currency (gain) loss of $7.4, partially offset by increased restructuring costs of $1.8.

~~Table of content~~s

~~Loss on Extinguishment of Debt~~

Loss on extinguishment of debt was $0.4 in the first half of 2021 and related to lender fees associated with the Term Loan Amendment. This was a $173.6 decrease from the first half of 2020 loss that resulted from the repayment of indebtedness from the business combination and the subsequent refinancing transactions.

~~Change in Fair Value of Warrant Liabilities~~

Change in Fair Value of Warrant Liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with the IPO of GSAH. The change in fair value of the outstanding warrants liability during the first half of 2021 and 2020 was an increase of $84.8 and $21.6, respectively. The change in fair value of stock warrants is the result of changes in market prices deriving the value of the financial instruments.

~~Interest Expense~~

Interest expense, net, was $44.1 in the first half of 2021 compared to $99.0 in the first half of 2020. The $54.9 decrease is primarily due to a $25.4 reduction in interest expense resulting from the repayment of indebtedness in the first half of 2020, a $18.2 decrease related to lower interest rates secured through the debt refinancing, as described in Note 5 to the unaudited condensed consolidated financial statements, a $14.6 decrease in accretion expense associated with the Tax Receivable Agreement, partially offset by a $5.3 increase due to net settlement payments on the Company's interest rate swaps.

~~Income Taxes~~

Income tax expense was $11.3 in the first half of 2021 versus $28.1 in the first half of 2020. The effective rate in the first half of 2021 is primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of changes in valuation allowances, and reflects the negative impact of non-deductible changes in fair value of the warrant liabilities, as well as a discrete tax adjustment related to legislative changes enacted in the quarter. This negative impact is partially offset by the benefit of certain internal reorganizations and tax elections outside the U.S. In the first half of 2020, income tax expense was primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of changes in valuation allowances, and discrete tax benefits related to a change in our indefinite reinvestment liability caused by legislative changes and movement in foreign currencies.

The tax expense in the first half of 2021 is $16.8 lower than the first half of 2020 primarily due to the change in mix of income, non-U.S. tax elections and changes in valuation allowances in the U.S.

~~Business Segments~~

The following is detail of business segment results for the six months ended June 30, 2021. Segment profitability is defined as operating profit (loss). Segment margin represents segment operating profit (loss) expressed as a percentage of segment net sales. For reconciliations of segment net sales and earnings to the Company’s consolidated results, see Note 12 — Segment Information, of the Company's condensed consolidated financial statements. Segment net sales are presented excluding intercompany sales.

~~Americas~~
(Dollars in millions) Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 $ Change % Change
Net sales $ 1,066.4 $ 951.4 $ 115.0 12.1 %
Operating profit (loss) 255.0 221.5 33.5 15.1 %
Margin 23.9 % 23.3 %

Americas net sales of $1,066.4 in the first half of 2021 increased $115.0, or 12.1% from the first half of 2020. By product offering, net sales improved in all offering categories. Critical infrastructure & solutions increased by $93.6 primarily due to strong growth in Thermal, AC Power and Custom Solutions offerings. Service and spares increased by $11.0 primarily due to customer site availability. Integrated rack solutions increased by $10.4 primarily due to strong growth in Rack UPS. Americas net sales were positively impacted by foreign currency of approximately $4.2.

Operating profit (loss) in the first half of 2021 was $255.0, an increase of $33.5 compared with the first half of 2020. Margin improved primarily due to fixed cost volume leveraging on higher sales and fixed cost management, partially offset by ~~increased commodity, logistic costs, and supply chain constraints.~~

~~Table of content~~s

~~Asia Pacific~~
(Dollars in millions) Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 $ Change % Change
Net sales $ 755.4 $ 546.7 $ 208.7 38.2 %
Operating profit (loss) 115.9 77.0 38.9 50.5 %
Margin 15.3 % 14.1 %

Asia Pacific net sales were $755.4 in the first half of 2021, an increase of $208.7, or 38.2% from the first half of 2020. Sales increases were primarily due to strong growth in large projects such as data centers, 5G projects, and wind power. Additionally sales improved in part due to a recovery from COVID-19 in telecom, channel and services. By product offering, net sales improved in all offering categories, including increases in critical infrastructure & solutions, integrated rack solutions and service & spares of $145.0, $26.8 and $36.9, respectively. Additionally, Asia Pacific net sales were positively impacted by foreign currency of approximately $39.8.

Operating profit (loss) in the first half of 2021 was $115.9, an increase of $38.9 compared with the first half of 2020. Margin improvements were driven by fixed cost volume leveraging on higher sales, partially offset by the absence of related government subsidies experienced in 2020 and increased commodity, logistic costs, and supply chain constraints.

~~Europe, Middle East & Africa~~
(Dollars in millions) Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 $ Change % Change
Net sales $ 536.9 $ 404.9 $ 132.0 32.6 %
Operating profit (loss) 95.8 48.3 47.5 98.3 %
Margin 17.8 % 11.9 %

EMEA net sales were $536.9 in the first half of 2021, an increase of $132.0, or 32.6% from the first half of 2020. Sales increases were primarily due to deployment of large colocation data centers and recovery from COVID-19. By offering, net sales improved in all offering categories, including increases in critical infrastructure & solutions, service & spares, and integrated rack solutions of $109.4, $19.5, and $3.1 respectively. Additionally, Europe, Middle East & Africa net sales were positively impacted by foreign currency of approximately $31.4.

Operating profit (loss) in the first half of 2021 was $95.8, an increase of $47.5 compared with the first half of 2020. Margin improved primarily due to fixed cost volume leveraging on higher sales, improved operational productivity and new product introductions, partially offset by increased commodity, logistic costs and supply constraints.

~~Vertiv Corporate and Other~~

Corporate and other costs include costs associated with our headquarters located in Columbus, Ohio, as well as centralized global functions including Finance, Treasury, Risk Management, Strategy & Marketing, IT, Legal, and global product platform development and offering management. Corporate and other costs were $223.8 and $219.2 in the first half of 2021 and 2020, respectively. Corporate and other costs increased $4.6 compared with the first half of 2020 primarily due to a $25.0 increase in costs related to research and development and growth initiatives, partially offset by a 2020 write-off of capitalized software of $12.3 that did not repeat in 2021.

~~Table of content~~s

~~Capital Resources and Liquidity~~

Our primary future cash needs relate to working capital, operating activities, capital spending, strategic investments and debt service. As previously disclosed in the Company's 2020 Annual Report, in connection with the consummation of the business combination which resulted in the IPO of Vertiv Holdings Co. on February 7, 2020, the Company used $1,464.0 of the proceeds to pay down its existing debt. On March 2, 2020, Vertiv announced the closing of a new seven-year $2,200.0 term loan, the proceeds of which were used to repay in full its previous term loan and redeem in full its high-yield bonds, including its Prior Notes. On March 10, 2021, we amended our Term Loan Credit Agreement whereby the interest rate margin for our outstanding term loans under the Credit Agreement was reduced by 0.25% to 2.75%. The maturity date for such term loan remains March 2, 2027, and all other material provisions of the Credit Agreement remain materially unchanged. Additionally, Holdings, Vertiv Group and certain of its subsidiaries closed an amendment on their $455.0 ABL Revolving Credit Facility which extended the maturity to March 2, 2025.

In addition to the cash inflow generated from the closing of the merger with GSAH, we believe that net cash provided by operating activities, augmented by long-term debt arrangements and the ABL Revolving Credit Facility, will provide adequate near-term liquidity for the next 12 months of independent operations, as well as the resources necessary to invest for growth in existing businesses and manage our capital structure on a short- and long-term basis. We expect to continue to opportunistically access the capital markets and financing markets from time to time. Access to capital and the availability of financing on acceptable terms in the future will be affected by many factors, including our credit rating, economic conditions, and the overall liquidity of capital markets. There can be no assurance that we will continue to have access to the capital markets and financing markets on acceptable terms.

At June 30, 2021, we had $708.8 in cash and cash equivalents, which includes amounts held outside of the U.S., primarily in Europe and Asia. Non-U.S. cash is generally available for repatriation without legal restrictions, subject to certain taxes, mainly withholding taxes. We are not asserting indefinite reinvestment of cash or outside basis for our non-U.S. subsidiaries due to the outstanding debt obligations in instances where alternative repatriation options other than dividends are not available. Our ABL Revolving Credit Facility provides for up to $455.0 of revolving borrowings, with separate sublimits for letters of credit and swingline borrowings and an uncommitted accordion of up to $145.0. At June 30, 2021, Vertiv Group and certain other subsidiaries of the Company had $434.9 of availability under the ABL Revolving Credit Facility, net of letters of credit outstanding in the aggregate principal amount of $20.1, and taking into account the borrowing base limitations set forth in the ABL Revolving Credit Facility.

~~Long-Term Debt Obligations~~

There is a discussion in Note 5 — Debt of the consolidated financial statements of the long-term debt arrangements issued by the Company with certain of our subsidiaries named as guarantors or co-borrowers.

~~Summary Statement of Cash Flows~~

~~Six Months Ended June 30, 2021 and 2020~~

(Dollars in millions) 2021 2020 $ Change % Change
Net cash provided by (used for) operating activities $ 120.0 $ (121.7) $ 241.7 (198.6) %
Net cash used for investing activities (35.8) (19.4) (16.4) 84.5
Net cash provided by financing activities 91.7 293.5 (201.8) (68.8)
Capital expenditures (30.4) (13.2) (17.2) 130.3
Investments in capitalized software (5.4) (6.2) 0.8 (12.9)

~~Net Cash provided by (used for) Operating Activities~~

Net cash provided by operating activities was $120.0 in the first half of 2021, a $241.7 increase in cash generation compared to the first half of 2020. The increase in cash generation was primarily driven by higher sales and operating profit, lower cash paid for interest expense as a result of debt pay down and refinancing, improved trade working capital, and reduced one-time costs associated with the special purpose acquisition company ("SPAC") transactions in the first half of 2020.

~~Table of content~~s

~~Net Cash used for Investing Activities.~~

Net cash used for investing activities was $35.8 in the first half of 2021 compared to net cash used for investing activities of $19.4 in the first half of 2020. The increased use of cash over the comparable period was primarily the result of increased capital expenditures.

~~Net Cash provided by Financing Activities~~

Net cash provided by financing activities was $91.7 in the first half of 2021 compared to $293.5 in the first half of 2020. The decrease in cash generation was primarily the result of many non-recurring financing activities the first quarter of 2020, including the proceeds from the business combination (as mentioned above) of $1,827.0 partially offset by payments to the Vertiv Stockholder of $341.6 and repayments of Prior Notes of $1,370.0. Additionally, there were net borrowings on the ABL Revolving Credit Facility and Term Loan of $125.1 and $113.5, respectively, in the first half of 2020. In the first half of 2021, the financial activity was driven by proceeds from the exercise of public warrants totaling $107.5.

~~Critical Accounting Policies and Estimates~~

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. The preceding discussion and analysis of our consolidated results of operations and financial condition should be read in conjunction with our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. The 2020 financial statements, as restated as part of our Form 10-K/A filed on April 30, 2021, includes additional information about us, our operations, our financial condition, our critical accounting policies and accounting estimates, and should be read in conjunction with this Quarterly Report on Form 10-Q. Our significant accounting policies are described in Note 1 - Summary of Significant Accounting Policies of Form 10-K/A.

~~Table of content~~s

~~CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS~~Regarding Forward-looking Statements

This Quarterly Report on Form 10-Q, and other statements that Vertiv may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, with respect to Vertiv’s future financial or business performance, strategies or expectations, and as such are not historical facts. This includes, without limitation, statements regarding ~~the~~Vertiv's financial position, capital structure, indebtedness, business strategy and plans and objectives of Vertiv management for future operations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Vertiv cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained or incorporated by reference in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on Vertiv. There can be no assurance that future developments affecting Vertiv will be those that Vertiv has anticipated. Vertiv undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond Vertiv’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Vertiv has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports, including those set forth in ~~its Annual~~

~~Report on~~the 2021 Form ~~10 K/A for the year ended December 31, 2020 filed with the SEC on April 30, 2021.~~10-K. These risk factors and those identified elsewhere in this Quarterly Report on Form 10-Q, among others, could cause actual results to differ materially from historical performance and include, but are not limited to: competition, the ability of Vertiv to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; and factors relating to the business, operations and financial performance of Vertiv and its subsidiaries, including: global economic weakness and uncertainty; risks relating to the continued growth of Vertiv’s customers’ markets; ~~failure to meet or anticipate technology changes; the unpredictability of Vertiv’s future operational results, including the ability to grow and manage growth profitably;~~ disruption of Vertiv’s customers’ orders or Vertiv’s customers’ markets; less favorable contractual terms with large customers; risks associated with governmental contracts; failure to mitigate risks associated with long-term fixed price contracts; risks associated with information technology disruption or security; risks associated with the implementation and enhancement of information systems; failure to properly manage Vertiv’s supply chain or difficulties with third-party manufacturers; competition in the infrastructure technologies industry; failure to realize the expected benefit from any rationalization, restructuring and improvement efforts; disruption of, or changes in, Vertiv’s independent sales representatives, distributors and original equipment manufacturers; failure to obtain performance and other guarantees from financial institutions; failure to realize sales expected from Vertiv’s backlog of orders and contracts; failure to properly manage Vertiv’s supply chain or difficulties with third-party manufacturers; our ability to forecast changes in prices, including due to inflation in material, freight and/or labor costs, and timely implement measures necessary to mitigate the impacts of any such changes; risks associated with our significant backlog, including that the impacts of any measures taken to mitigate inflation will not be reflected in our financial statements immediately; failure to meet or anticipate technology changes; risks associated with information technology disruption or security; risks associated with the implementation and enhancement of information systems; failure to realize the expected benefit from any rationalization, restructuring and improvement efforts; Vertiv’s ability to realize cost savings in connection with Vertiv's restructuring program; disruption of, or changes in, Vertiv’s independent sales representatives, distributors and original equipment manufacturers; changes to tax law; ongoing tax audits; costs or liabilities associated with product liability; the global scope of Vertiv’s operations; risks associated with Vertiv’s sales and operations in emerging markets; risks associated with future legislation and regulation of Vertiv’s customers’ markets both in the ~~United States~~U.S. and abroad; costs or liabilities associated with product liability; Vertiv’s ability to attract, train and retain key members of its leadership team and other qualified personnel; the adequacy of Vertiv’s insurance coverage; a failure to benefit from future acquisitions; failure to realize the value of goodwill and intangible assets; the global scope of the Vertiv’s operations; risks associated with Vertiv’s sales and operations in emerging markets; exposure to fluctuations in foreign currency exchange rates; Vertiv’s ability to comply with various laws and regulations and the costs associated with legal compliance; adverse outcomes to any legal claims and proceedings filed by or against Vertiv; risks associated with current or potential litigation or claims against Vertiv; Vertiv’s ability to protect or enforce its proprietary rights on which its business depends; third party intellectual property infringement claims; liabilities associated with environmental, health and safety matters, including risks associated with the COVID-19 pandemic; ~~risks associated with litigation or claims against Vertiv; Vertiv's~~failure to realize the value of goodwill and intangible assets; exposure to fluctuations in foreign currency exchange rates; exposure to increases in interest rates set by central banking authorities; failure to maintain internal controls over financial reporting; the unpredictability of Vertiv’s future operational results, including the ability to ~~realize cost savings in connection with Vertiv's restructuring program; risks associated with Vertiv’s limited history of operating as an independent company;~~grow and manage growth profitably; potential net losses in future periods; ~~failure to remediate internal controls over financial reporting; the Company’s~~Vertiv’s level of indebtedness and the ability to incur additional indebtedness; ~~Vertiv's~~Vertiv’s ability to comply with the covenants and restrictions

Table of contents

contained in our credit agreements, including restrictive covenants that restrict operational flexibility; Vertiv’s ability to comply with the covenants and restrictions contained in our credit agreements ~~including restrictive covenants~~ that ~~restrict operational flexibility; Vertiv's ability to comply with the covenants and restrictions contained in our credit agreements~~ is not fully within our control; ~~the Company’s~~Vertiv’s ability to access funding through capital markets; the Vertiv Stockholder’s significant ownership and influence over the Company; risks associated with ~~Vertiv's~~Vertiv’s obligations to pay the Vertiv Stockholder portions of the tax benefits relating to pre-business combination tax assets and attributes; resales of Vertiv's securities may cause volatility in the market price of our securities; Vertiv's ~~Organizational Documents~~organizational documents contain provisions that may discourage unsolicited takeover proposals; Vertiv's ~~Certificate~~certificate of ~~Incorporation~~incorporation includes a forum selection clause, which could discourage or limit stockholders’ ability to make a claim against ~~it ;~~it; the ability of ~~Vertiv's~~Vertiv’s subsidiaries to pay

~~Table of content~~s

dividends; volatility in Vertiv's stock price due to various market and operational factors; ~~Vertiv's ability to maintain its listing on the NYSE and comply with listing requirements;~~ risks associated with the failure of industry analysts to provide coverage of Vertiv's business or securities; the ability of Vertiv to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; factors relating to the business, operations and financial performance of Vertiv and its subsidiaries, including: global economic weakness and uncertainty; Vertiv’s ability to attract, train and retain key members of its leadership team and other qualified personnel; the adequacy of Vertiv’s insurance coverage; a failure to benefit from future acquisitions; risks associated with Vertiv's limited history of operating as an independent company; and other risks and uncertainties indicated in Vertiv’s SEC reports or documents filed or to be filed with the SEC by Vertiv.

Forward-looking statements included in or incorporated by reference into this Quarterly Report on Form 10-Q speak only as of the date of this Quarterly Report on Form 10-Q or any earlier date specified for such statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be filed with the SEC by Vertiv required under applicable securities laws. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on the Company’s behalf may be qualified in their entirety by this Cautionary Note Regarding Forward-Looking Statements.

Table of contents

Overview

Outlook and Trends

Below is a summary of trends and events that are currently affecting, or may in the future affect, our business, operations and short-term outlook:

•COVID-19 Pandemic: Unprecedented measures have been taken by governments and businesses to address the COVID-19 pandemic. These measures have included periodic shelter-in-place orders, restrictions on travel and business operations, temporary closures of businesses, quarantines, and attempts to institute various regulatory requirements. As a result of this pandemic, global economic activity has been significantly impacted, causing volatility and disruption in global financial markets. These responsive measures taken by many countries have affected, and could in the future materially impact, our business, results of operations, financial condition and stock price.

•The extent of the continuing impact of the COVID-19 pandemic on our operational and financial performance is uncertain and will depend on many factors outside our control, including, without limitation, the extent, timing and duration of the pandemic; the availability, distribution and effectiveness of vaccines; the imposition of protective public safety measures; and the impact of the pandemic on the global economy and demand for products. Refer to Part I, Item 1A of the 2021 Form 10-K under the heading “Risk Factors,” for more information. We continue to monitor the situation and will take further actions as may be required by federal, state, or local governmental authorities, or that we determine are in the best interests of our associates, customers, and stockholders. At the outset of the COVID-19 pandemic, we responded swiftly in support of our people, our clients and our communities. To protect our employees, and to do our part in stopping the spread of COVID-19, most of our salaried employees moved to a remote work environment. As we continue to monitor the situation, we have taken steps to cause our U.S. locations to return to a full-time workplace environment, which may require adjustment by employees or indirectly cause attrition. We recognize the benefits to our customers, associates, and stockholders of having full-time interaction, and we are working to balance those benefits with the ongoing concerns relating to the COVID-19 pandemic, macroeconomic conditions, and continued competition for talent.

•Supply Chain Constraints and Cost Increases: During 2022 and potentially beyond, aspects of our business continue to be affected by the COVID-19 pandemic as well as increasing costs for materials, freight and labor. Despite continued strong market demand, we expect that supply chain challenges and inflationary pressures will continue throughout 2022, with critical part shortages driving the need for additional spot buys at increased costs, and increased costs associated with premium freight to meet customer commitments. Additionally, logistical issues have significantly delayed the receipt of materials and, in some cases, we cannot procure critical parts at any price, creating production and delivery challenges pressuring the top and bottom line. We continue to take actions to improve our ability to forecast inflationary headwinds and reflect anticipated cost increases in our prices and will continue to take actions to address shortages and inflationary pressures, which are expected to continue, and may increase, throughout 2022. Based on the first six months of 2022, we anticipate continued pricing realization for the remainder of 2022, even within the current inflationary environment, as a result of the pricing actions that we undertook in the fourth quarter of 2021, the first six months of 2022, and which we will continue to take throughout the remainder of 2022.

•During the first six months of 2022, we have seen an increase in inventory build in order to support upcoming customer demand and large projects in addition to working through our significant backlog. We expect this trend to continue throughout the remainder of 2022 and potentially beyond as our backlog continues to increase.

Table of contents

RESULTS OF OPERATIONS

Comparison of the Three Months Ended June 30, 2022 and Three Months Ended June 30, 2021


(Dollars in millions)	Three months ended June 30, 2022		Three months ended June 30, 2021		$ Change		% Change
Net sales	$	1,399.4	$	1,260.3	$	139.1	11.0	%
Cost of sales	1,027.9		851.0		176.9		20.8
Gross profit	371.5		409.3		(37.8)		(9.2)
Selling, general and administrative expenses	287.6		271.7		15.9		5.9
Amortization of intangibles	55.8		31.9		23.9		74.9
Restructuring costs	0.8		1.1		(0.3)		(27.3)
Foreign currency (gain) loss, net	2.9		4.1		(1.2)		(29.3)

Other operating expense (income)	(1.8)		(1.7)		(0.1)		5.9
Operating profit (loss)	26.2		102.2		(76.0)		(74.4)
Interest expense, net	33.4		20.0		13.4		67.0

Change in fair value of warrant liabilities	(38.9)		71.2		(110.1)		(154.6)
Income tax expense	11.4		1.3		10.1		776.9
Net income (loss)	$	20.3	$	9.7	$	10.6	109.3	%

Net Sales

Net sales were $1,399.4 in the second quarter of 2022, an increase of $139.1, or 11.0%, compared with $1,260.3 in the second quarter of 2021. The increase in sales was primarily driven by E&I sales of $114.2, higher sales volumes than prior year, and strong growth in the DC Power offering, partially offset by negative impacts from foreign currency of $58.6 and lower sales due to the divestiture of a heavy industrial UPS business of $16.6. By product offering, critical infrastructure & solutions sales increased $119.9 including $114.2 of E&I sales and offset by the negative impacts from foreign currency of $37.2. Integrated rack solutions sales increased $13.2 including the negative impacts from foreign currency of $6.9. Services & spares sales increased $6.0, including negative impacts from foreign currency of $14.5.

Excluding intercompany sales, net sales were $647.2 in the Americas, $407.2 in Asia Pacific and $345.0 in Europe, Middle East & Africa. Movements in net sales by segment and offering are each detailed in the Business Segments section below.

Cost of Sales

Cost of sales were $1,027.9 in the second quarter of 2022, an increase of $176.9, or 20.8% compared to the second quarter of 2021. The increase in cost of sales was primarily driven by E&I costs of $83.8 and increased commodity and logistic costs, supply chain constraints and the impact of higher volumes. Gross profit was $371.5 in the second quarter of 2022, or 26.5% of sales, compared to $409.3, or 32.5% of sales in the second quarter of 2021.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) were $287.6 in the second quarter of 2022, an increase of $15.9 compared to the second quarter of 2021. SG&A as a percentage of sales were 20.6% in the second quarter of 2022 compared with 21.6% in the second quarter of 2021. The increase in SG&A was primarily driven by E&I costs of $13.0, higher commissions as a result of higher order volume of $2.5.

Other Operating Expense

The remaining other operating expenses includes amortization of intangibles, restructuring costs, foreign currency (gain) loss, and other operating expense (income). These remaining operating expenses were $57.7 for the second quarter of 2022, which was a $22.3 increase from the second quarter of 2021. The increase was primarily due to an increase in amortization of intangibles of $23.9 associated with the acquisition of E&I on November 1, 2021.

Table of contents

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with the initial public offering of our predecessor GS Acquisition Holdings Corp. The change in fair value of the outstanding warrants during the second quarter of 2022 and 2021 resulted in a gain of $38.9 and a loss of $71.2, respectively. The change in fair value of warrants is the result of changes in market prices of our common stock and other observable inputs deriving the value of the financial instruments.

Interest Expense

Interest expense, net, was $33.4 in the second quarter of 2022 compared to $20.0 in the second quarter of 2021. The $13.4 increase is primarily driven by a $9.3 increase related to the Senior Secured Notes due 2028, which were not outstanding in the second quarter of 2021, a $3.4 increase related to the Term Loan due 2027, a $0.9 increase related to the ABL Revolving Credit Facility borrowings during the quarter, and slightly offset by a $0.9 decrease due to net settlement payments on our interest rate swaps as described in “Note 11 — Financial Instruments and Risk Management” to the Unaudited Condensed Consolidated Financial Statements. As interest rates increase, our interest expense will increase although the effect will be mitigated by our interest rate swaps.

Income Taxes

Income tax expense was $11.4 in the second quarter of 2022 versus $1.3 in the second quarter of 2021 and the $10.1 increase is primarily due to the change in mix of income in the countries in which we operate. The effective rate in the three months ended June 30, 2022 was primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of valuation allowances, and reflects the positive impact of non-taxable changes in fair value of the warrant liabilities. For the three months ended June 30, 2021, income tax expense was primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of changes in valuation allowances, and reflects the negative impact of non-deductible changes in fair value of the warrant liabilities, as well as a discrete tax adjustment related to legislative changes enacted in the quarter. Negative tax impacts are partially offset by the benefit of certain internal reorganizations and tax elections outside the U.S.

Business Segments

The following is detail of business segment results for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Segment profitability is defined as operating profit (loss). Segment margin represents segment operating profit (loss) expressed as a percentage of segment net sales. For reconciliations of segment net sales and earnings to our consolidated results, see “Note 13 — Segment Information,” of our Unaudited Condensed Consolidated Financial Statements. Segment net sales are presented excluding intercompany sales.

Americas


(Dollars in millions)	Three months ended June 30, 2022			Three months ended June 30, 2021			$ Change		% Change
Net sales	$	647.2		$	564.9		$	82.3	14.6	%
Operating profit (loss)	82.5			128.6			(46.1)		(35.8)
Margin	12.7		%	22.8		%

Americas net sales of $647.2 in the second quarter of 2022 increased $82.3, or 14.6% from the second quarter of 2021. The increase in sales was primarily driven by E&I sales of $47.0 and higher sales volume than prior year. By product offering, net sales increased in critical infrastructure & solutions by $63.6 driven primarily by E&I sales as well as strong growth in Thermal, AC and DC Power, and energy storage offerings, service & spares increased by $8.0 due to improved customer site availability, and integrated rack solutions increased $10.7 primarily due to demand in integrated rack systems offering. Additionally, Americas net sales were negatively impacted by foreign currency of approximately $1.8.

Operating profit (loss) in the second quarter of 2022 was $82.5, a decrease of $46.1 compared with the second quarter of 2021. Margin decreased primarily due to increased commodity and logistic costs and supply chain constraints, partially offset by decreased year-over-year restructuring charges of $0.9.

Table of contents

Asia Pacific


(Dollars in millions)	Three months ended June 30, 2022			Three months ended June 30, 2021			$ Change		% Change
Net sales	$	407.2		$	398.0		$	9.2	2.3	%
Operating profit (loss)	68.5			62.8			5.7		9.1
Margin	16.8		%	15.8		%

Asia Pacific net sales were $407.2 in the second quarter of 2022, an increase of $9.2, or 2.3% from the second quarter of 2021. Sales increases were primarily due to growth in India. By product offering, net sales increased in service & spares by $6.6, and critical infrastructure & solutions increased by $3.2, and decreased in integrated rack solutions by $0.6. Additionally, Asia Pacific net sales were negatively impacted by foreign currency of approximately $14.2.

Operating profit (loss) in the second quarter of 2022 was $68.5, an increase of $5.7 compared with the second quarter of 2021. Margin increased primarily due to decreased year-over-year restructuring charges of $3.2 and fixed cost improvement, partially offset by increased commodity and logistic costs and supply chain constraints.

Europe, Middle East & Africa


(Dollars in millions)	Three months ended June 30, 2022			Three months ended June 30, 2021			$ Change		% Change
Net sales	$	345.0		$	297.4		$	47.6	16.0	%
Operating profit (loss)	61.8			62.4			(0.6)		(1.0)
Margin	17.9		%	21.0		%

Europe, Middle East & Africa net sales were $345.0 in the second quarter of 2022, an increase of $47.6, or 16.0% from the second quarter of 2021. Sales increases were primarily due to E&I sales of $67.2 and higher selling prices, partially offset by the loss of net sales of $16.6 due to the divested heavy industrial UPS business. By product offering, net sales increased in critical infrastructure & solutions by $53.1 mostly due to E&I sales, increases in integrated rack solutions by $3.1, and partially offset by a decrease of $8.6 in service & spares. Additionally, Europe, Middle East & Africa net sales were negatively impacted by foreign currency of approximately $42.6.

Operating profit (loss) in the second quarter of 2022 was $61.8, a decrease of $0.6 compared with the second quarter of 2021. Margin decreased primarily due to increased commodity and logistic costs and supply chain constraints.

Vertiv Corporate and Other

Corporate and other costs include costs associated with our headquarters located in Columbus, Ohio, as well as centralized global functions including Finance, Treasury, Risk Management, Strategy & Marketing, IT, Legal, and global product platform development and offering management. Corporate and other costs were $130.8 and $119.7 in the second quarter of 2022 and 2021, respectively. Corporate and other costs increased $11.1 compared with the second quarter of 2021 primarily due to IT investments of $11.3, research and development costs of $3.5, and partially offset by decreased year-over-year restructuring charges of $0.3.

Table of contents

Comparison of the Six Months Ended June 30, 2022 and Six Months Ended June 30, 2021


(Dollars in millions)	Six months ended June 30, 2022		Six months ended June 30, 2021		$ Change		% Change
Net sales	$	2,555.8	$	2,358.7	$	197.1	8.4	%
Cost of sales	1,880.7		1,591.4		289.3		18.2
Gross profit	675.1		767.3		(92.2)		(12.0)
Selling, general and administrative expenses	579.8		521.8		58.0		11.1
Amortization of intangibles	113.5		63.7		49.8		78.2
Restructuring costs	1.6		3.1		(1.5)		(48.4)
Foreign currency (gain) loss, net	1.6		(2.8)		4.4		(157.1)

Other operating expense (income)	(2.4)		(0.5)		(1.9)		380.0
Operating profit (loss)	(19.0)		182.0		(201.0)		(110.4)
Interest expense, net	62.7		44.1		18.6		42.2
Loss on extinguishment of debt	—		0.4		(0.4)		(100.0)
Change in fair value of warrant liabilities	(133.8)		84.8		(218.6)		(257.8)
Income tax expense	23.3		11.3		12.0		106.2
Net income (loss)	$	28.8	$	41.4	$	(12.6)	(30.4)	%

Net Sales

Net sales were $2,555.8 in the first six months of 2022, an increase of $197.1, or 8.4%, compared with $2,358.7 in the first six months of 2021. The increase in sales was primarily driven by E&I sales of $201.7 and higher sales volumes than prior year, partially offset by the negative impacts from foreign currency of $76.8, and lower sales from the divested heavy industrial UPS business of $32.5. By product offering, critical infrastructure & solutions sales increased $156.9, which included negative impacts from foreign currency of $47.2. Integrated rack solutions sales increased $21.7, which included the negative impacts from foreign currency of $8.5. Services & spares sales increased $18.5, which included negative impacts from foreign currency of $21.1.

Excluding intercompany sales, net sales were $1,182.3 in the Americas, $740.0 in Asia Pacific and $633.5 in Europe, Middle East & Africa. Movements in net sales by segment and offering are each detailed in the “Business Segments” section below.

Cost of Sales

Cost of sales were $1,880.7 in the first six months of 2022, an increase of $289.3, or 18.2% compared to the first six months of 2021. The increase in cost of sales was primarily driven by E&I costs of $149.6 and increased commodity and logistic costs, and supply chain constraints, and the impact of higher volumes. Gross profit was $675.1 in the first six months of 2022, or 26.4% of sales, compared to $767.3, or 32.5% of sales, in the first six months of 2021.

Selling, General and Administrative Expenses

SG&A were $579.8 in the first six months of 2022, an increase of $58.0 compared to the first six months of 2021. SG&A as a percentage of sales was 22.7% for the six months ended June 30, 2022 compared with 22.1% in the six months ended June 30, 2021. The increase in SG&A was primarily driven by E&I costs of $25.5, increased research and development spend of $8.1, higher sales commissions as a result of higher order volume of $10.0, and increased professional service fees.

Other Operating Expenses

The remaining other operating expenses include amortization of intangibles, restructuring costs, foreign currency (gain) loss, and other operating expense (income). These remaining other expenses were $114.3 for the first six months of 2022, which was a $50.8 increase from the first six months of 2021. The increase was primarily due to an increase in amortization of intangibles of $49.8 associated with the acquisition of E&I on November 1, 2021.

Table of contents

Loss on Extinguishment of Debt

Loss on extinguishment of debt was $0.4 for the first six months of 2021 related to lender fees associated with the amendment to our Term Loan due 2027. This was not repeated in 2022.

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with the initial public offering of our predecessor, GS Acquisition Holdings Corp. The change in fair value of the outstanding warrants liability during the first six months of 2022 and 2021 resulted in a gain of $133.8 and a loss of $84.8, respectively. The change in fair value of stock warrants was the result of changes in market prices of our common stock and other observable inputs deriving the value of the financial instruments.

Interest Expense

Interest expense, net, was $62.7 in the first six months of 2022 compared to $44.1 in the first six months of 2021. The $18.6 increase was primarily due to a $18.7 increase related to the Senior Secured Notes due 2028, which were not outstanding in the first six months of 2021, and a $2.4 increase due to the Term Loan due 2027, slightly offset by a $1.6 decrease in accretion expense associated with the Tax Receivable Agreement. As interest rates increase, our interest expense will increase although the effect will be mitigated by our interest rate swaps.

Income Taxes

Income tax expense was $23.3 in the first six months of 2022 compared to $11.3 in the first six months of 2021 and the $12.0 increase is primarily due to the change in mix of income in the countries in which we operate. The effective rate in the first six months of 2022 was primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of changes in valuation allowances which is offset by the positive impact of non-taxable changes in fair value of the warrant liabilities. In the first six months of 2021, income tax expense was primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of changes in valuation allowances, and reflects the negative impact of non-deductible changes in fair value of the warrant liabilities, as well as a discrete tax adjustment related to legislative changes enacted in the first three months of the period. Negative tax impacts are partially offset by the benefit of certain internal reorganizations and tax elections outside the U.S.

Business Segments

The following is detail of business segment results for the six months ended June 30, 2022 compared to the six months ended June 30, 2022. Segment profitability is defined as operating profit (loss). Segment margin represents segment operating profit (loss) expressed as a percentage of segment net sales. For reconciliations of segment net sales and earnings to our consolidated results, see “Note 13 — Segment Information,” of our unaudited condensed consolidated financial statements. Segment net sales are presented excluding intercompany sales.

Americas


(Dollars in millions)	Six months ended June 30, 2022			Six months ended June 30, 2021			$ Change		% Change
Net sales	$	1,182.3		$	1,066.4		$	115.9	10.9	%
Operating profit (loss)	140.4			255.0			(114.6)		(44.9)
Margin	11.9		%	23.9		%

Americas net sales of $1,182.3 in the first six months of 2022 increased $115.9, or 10.9% from the first six months of 2021. The increase in sales was primarily driven by E&I sales of $64.0 and higher sales volumes compared to prior year. By product offering, net sales increased in critical infrastructure & solutions by $78.4 mostly due to E&I sales. Integrated rack solutions increased by $18.9 primarily due to higher rack power distribution unit sales. Service & spares increased by $18.6 due to improved customer site availability. Americas net sales were negatively impacted by foreign currency of approximately $1.8.

Operating profit (loss) in the first six months of 2022 was $140.4, a decrease of $114.6 compared with the first six months of 2021. Margin declined primarily due to increased commodity and logistic costs exceeding price realization.

Table of contents

Asia Pacific


(Dollars in millions)	Six months ended June 30, 2022			Six months ended June 30, 2021			$ Change		% Change
Net sales	$	740.0		$	755.4		$	(15.4)	(2.0)	%
Operating profit (loss)	110.0			115.9			(5.9)		(5.1)
Margin	14.9		%	15.3		%

Asia Pacific net sales were $740.0 in the first six months of 2022, a decrease of $15.4, or 2.0% from the first six months of 2021. Sales decreases were primarily due to lower volumes driven by supply chain constraints and customer site access as a result of COVID-19, particularly in China, and the expiration of governmental subsidies in our wind power business, partially offset by stronger sales elsewhere in the region, particularly in India. By product offering, net sales weakened in critical infrastructure & solutions and integrated rack solutions by $29.0 and $2.1, respectively, which was slightly offset by $15.7 of improvements in service & spares. Additionally, Asia Pacific net sales were negatively impacted by foreign currency of approximately $14.6.

Operating profit (loss) in the first six months of 2022 was $110.0, a decrease of $5.9 compared with the first six months of 2021. Margin declined primarily due to volume deleveraging, primarily in Greater China, and unfavorable mix, primarily in South East Asia. The impact of increased commodity and logistics costs was offset by price realization.

Europe, Middle East & Africa


(Dollars in millions)	Six months ended June 30, 2022			Six months ended June 30, 2021			$ Change		% Change
Net sales	$	633.5		$	536.9		$	96.6	18.0	%
Operating profit (loss)	95.0			95.8			(0.8)		(0.8)
Margin	15.0		%	17.8		%

Europe, Middle East & Africa net sales were $633.5 in the first six months of 2022, an increase of $96.6, or 18.0% from the first six months of 2021. Sales increases were primarily due to E&I sales of $137.7 and higher selling prices, partially offset by the loss of net sales of $32.5 due to our divestment of the heavy industrial UPS business. By product offering, net sales improved in critical infrastructure & solutions by $107.5 mostly related to E&I sales, improvements in integrated rack solutions by $4.9, and slightly offset by a $15.8 decrease in service & spares. Additionally, Europe, Middle East & Africa net sales were negatively impacted by foreign currency of approximately $60.4.

Operating profit (loss) in the first six months of 2022 was $95.0, a decrease of $0.8 compared with the first six months of 2021. Margin declined primarily due to increased commodity and logistic costs exceeding price realization.

Vertiv Corporate and Other

Corporate and other costs include costs associated with our headquarters located in Columbus, Ohio, as well as centralized global functions including Finance, Treasury, Risk Management, Strategy & Marketing, IT, Legal, and global product platform development and offering management. Corporate and other costs were $250.9 and $221.0 in the first six months of 2022 and 2021, respectively. Corporate and other costs increased $29.9 compared with the first six months of 2021 primarily due to research and development costs of $13.7, IT investments of $10.7, and E&I integration costs.

Capital Resources and Liquidity

Our primary future cash needs relate to working capital, operating activities, capital spending, strategic investments and debt service. As previously disclosed in our 2021 Form 10-K, on October 22, 2021, Vertiv Group Corporation (the “Vertiv Group”), completed its offering (the “Offering”) of $850.0 aggregate principal amount of its Senior Secured Notes due 2028 (the “Notes”) in a private placement at par. The Notes will bear interest at a fixed rate of 4.125% per annum and mature on November 15, 2028.

We believe our current cash and cash equivalent levels, augmented by long-term debt arrangements and the ABL Revolving Credit Facility, will provide adequate near-term liquidity for the next 12 months of independent operations, as well as the resources necessary to invest for growth in existing businesses and manage our capital structure on a short- and long-term basis. We expect to continue to opportunistically access the capital and financing markets from time to time. Access to capital and the availability of financing on acceptable terms in the future will be affected by many factors,

Table of contents

including our credit rating, economic conditions, and the overall liquidity of capital markets. There can be no assurance that we will continue to have access to the capital and financing markets on acceptable terms.

At June 30, 2022, we had $194.4 in cash and cash equivalents, which includes amounts held outside of the U.S., primarily in Europe and Asia. Non-U.S. cash is generally available for repatriation without legal restrictions, subject to certain taxes, mainly withholding taxes. We are not asserting indefinite reinvestment of cash or outside basis for our non-U.S. subsidiaries due to the outstanding debt obligations in instances where alternative repatriation options other than dividends are not available. Our ABL Revolving Credit Facility provides for up to $455.0 of revolving borrowings, with separate sublimits for letters of credit and swingline borrowings and an uncommitted accordion of up to $145.0. At June 30, 2022, Vertiv Group and certain other subsidiaries of the Company had $262.3 of availability under the ABL Revolving Credit Facility, net of letters of credit outstanding in the aggregate principal amount of $17.7, and taking into account the borrowing base limitations set forth in the ABL Revolving Credit Facility. At June 30, 2022, there was a $175.0 balance on the ABL Revolving Credit Facility.

Long-Term Debt Obligations

Our long-term debt obligations are discussed in “Note 6 — Debt” in Part I. Item I. of this Form 10-Q, which contains further details of the long-term debt arrangements reflected in our Unaudited Condensed Consolidated Financial Statements, which debt was issued by the Company and certain of our subsidiaries as borrowers, co-borrowers or guarantors. “Note 11 — Financial Instruments and Risk Management” in Part I. Item I. of this Form 10-Q addresses our approach to interest rate risk management through the use of swaps to mitigate the effects of increases in interest rates.

Summary Statement of Cash Flows

Six Months Ended June 30, 2022 and 2021


(Dollars in millions)	2022		2021		$ Change		% Change
Net cash provided by (used for) operating activities	$	(337.9)	$	120.0	$	(457.9)	(381.6)	%
Net cash used for investing activities	(49.9)		(35.8)		(14.1)		(39.4)
Net cash provided by (used for) financing activities	153.5		91.7		61.8		67.4
Capital expenditures	(38.2)		(30.4)		(7.8)		(25.7)
Investments in capitalized software	(6.7)		(5.4)		(1.3)		(24.1)

Net Cash provided by (used for) Operating Activities

Net cash used for operating activities was $337.9 in the first six months of 2022, a $457.9 decrease in cash generation compared to the first six months of 2021. Net income from operations of $28.8 included $31.8 of net non-cash expense items, consisting of a gain on the change in fair value of warrant liabilities of $133.8 and deferred taxes of $9.2, partially offset by depreciation and amortization of $156.2, non-cash stock-based compensation expense of $13.8 and amortization of debt discount and issuance costs of $4.8. Trade working capital used $377.8 in comparison to $126.1 in the first six months of 2021, primarily as a result of increased accounts receivable associated with higher sales volume, inventory build to support forecasted sales and to meet customer demand, and a $8.7 payment related to a litigation settlement. Refer to “Note 15 — Commitments and Contingencies” in Part I. Item I. of this Form 10-Q for additional information related to this settlement.

Net Cash used for Investing Activities

Net cash used for investing activities was $49.9 in the first six months of 2022 compared to net cash used for investing activities of $35.8 in the first six months of 2021. The increased use of cash over the comparable period was primarily the result of increased capital expenditures and a $5.0 increase related to measurement period adjustment due to a final working capital adjustment to the purchase price.

Net Cash provided by (used for) Financing Activities

Net cash provided by financing activities was $153.5 in the first six months of 2022 compared to $91.7 provided by in the first six months of 2021. The increase was primarily the result of the proceeds of $175.0 from the ABL Revolving Credit Facility, offset by the lack of proceeds from the exercise of public warrants totaling $107.5 in 2021.

Table of contents

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Unaudited Condensed Consolidated Financial Statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. The preceding discussion and analysis of our consolidated results of operations and financial condition should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. The 2021 financial statements, as part of the 2021 Form 10-K, includes additional information about us, our operations, our financial condition, our critical accounting policies and accounting estimates, and should be read in conjunction with this Quarterly Report on Form 10-Q. Our significant accounting policies are described in “Note 1 - Summary of Significant Accounting Policies” of the 2021 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~On a regular basis, Vertiv monitors third-party depository institutions that hold its cash~~There has been no material changes in our quantitative and ~~short-term investments, primarily for safety of principal and secondarily for maximizing yield on~~qualitative market risk disclosures from those funds. The Company diversifies its cash and short-term investments among counterparties to minimize exposure to any one of these entities. Vertiv also monitors the creditworthiness of its customers and suppliers to mitigate any adverse impact.

~~Vertiv uses derivative instruments to manage exposure to volatility~~described in interest rates on certain debt instruments. Derivative financial instruments used by the Company are straightforward and non-leveraged. The counterparties to these instruments are financial institutions with strong credit ratings. Vertiv maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. See Note 10 to the Unaudited Consolidated Financial Statements for additional information about hedges and derivative financial instruments.our 2021 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

~~Evaluation of~~ Disclosure Controls and Procedures

The ~~term "disclosure~~Company maintains (a) disclosure controls and ~~procedures"~~procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as "controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the ~~Act~~Exchange Act), and (b) internal control over financial reporting (as such term is ~~recorded, processed, summarized~~defined in Rules 13a-15(f) and ~~reported, within~~15d-15(f) under the ~~time periods specified in the Securities and~~ Exchange Commission’s rules and forms." Our disclosure controls and procedures are designed to ensure that material information relating to us and our consolidated subsidiaries is accumulated and communicated to our management, including our President and Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding our required disclosures.Act).

~~Our~~The Company's management, with the participation of ~~our President and~~its Chief Executive Officer and ~~our~~its Chief Financial Officer, conducted an evaluation of the effectiveness of ~~our~~the Company's disclosure controls and procedures as of June 30, ~~2021~~2022 (the end of the period covered by this Quarterly Report on Form 10-Q). Based upon that evaluation, ~~our~~the Chief Executive Officer and Chief Financial Officer have concluded that, ~~our~~as of June 30, 2022, the Company's disclosure controls and procedures were effective in ensuring that material information for the Company, including its consolidated subsidiaries, required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that it is accumulated and communicated to management, including our principal executive and financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have not ~~effective as of June 30, 2021, because of material weaknesses~~been any changes in our internal control over financial reporting ~~described below.~~

~~Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as~~(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the ~~Securities~~ Exchange ~~Act of 1934.~~

~~Management has assessed~~Act) during the ~~effectiveness of the Company’s~~quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting as of June 30, 2021 based on criteria established in the Internal Control-Integrated Framework in 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Management has identified material weaknesses in controls related to (a) not fully designing, implementing and monitoring general information technology controls in the areas of user access and program change-management for systems supporting all of the Company’s internal control processes; and (b) the aggregation of open control deficiencies across the Company’s financial reporting processes because the controls were not fully designed and operating effectively.

~~Table of content~~s

Notwithstanding the identified material weaknesses, management has concluded that the consolidated financial statements included in this quarterly report on Form 10-Q present fairly, in all material respects, the Company's financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. generally accepted accounting principles (U.S. GAAP).

~~Remediation Plan~~

We currently are implementing a number of actions, as described below, to remediate the material weaknesses described in this Item 4. Company management is committed to ensuring that our internal controls over financial reporting are designed and operating effectively.

~~General Information Technology Controls (GITCs)~~

We continue to make progress in advancing foundational elements of our GITCs. These elements are providing value as we are leveraging them in the design of our future state processes and controls within Oracle, which is expected to go-live in 2021. Our remediation plan includes, but is not limited to:

•~~Implementing new, relevant IT systems;~~

•Implementing improved IT change management policies and procedures, control activities, and tools to ensure changes affecting financial IT applications are identified, authorized, tested, and implemented appropriately;

•Implementing improved processes for requesting, authorizing, and reviewing user access to key systems which impact our financial reporting, including identifying access to roles where manual business process controls may be required;

•~~Implementing appropriate segregation of duties in relevant systems that impact internal control over financial reporting;~~

•~~Increasing resources dedicated to monitoring GITCs to ensure compliance with policies and procedures; and~~

•~~Implementing additional training to ensure a clear understanding of risk assessment and monitoring activities related to automated processes and IT systems and GITCs.~~

~~Financial Reporting~~

We continue to make progress on our automated and manual business process controls, including reports generated from these IT systems, that are dependent upon the completeness and accuracy of information from the affected GITC material weakness. These elements are providing value as we are leveraging them in the design of our future state processes and controls within Oracle, which is expected to go-live in 2021. Our remediation plan includes, but is not limited to:

•~~Frequent communications between our Audit Committee and management regarding our financial reporting and internal control environment;~~

•~~Expanded Business Unit Finance, Accounting and Reporting and Information Technology teams through the addition of experienced and qualified resources;~~

•~~We will improve the process and controls in the determination of the appropriate accounting and classification of our financial instruments and key agreements;~~

•~~Delivery of additional internal controls training, as well as policy and control standardization where possible;~~

•~~Re-designed internal controls processes as part of our Sarbanes-Oxley program to drive accountability and efficiency;~~

•~~Instituted monthly review of financial statements disaggregated by key business units, and functional areas to evaluate results, observe adherence to policies and agree on necessary actions;~~

•Engaged outside resources to assist with the design and implementation of a risk-based internal controls plan, enhance process documentation, provide company-wide training, and help with management's self-assessment and testing of internal controls.

When fully implemented and operational, we believe the controls we have designed or plan to design will remediate the control deficiencies that have led to the material weaknesses we have identified and strengthen our internal controls over financial reporting.

The Company completed the acquisition of E&I as of November 1, 2021. As such, E&I has been excluded from the Company's assessment of internal control over financial reporting. Companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting during the first year of an acquisition while integrating the acquired company under guidelines established by the Securities and Exchange Commission.

Table of ~~content~~scontents

The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

~~Changes in Internal Control over Financial Reporting~~

We have undertaken strategic remediation actions, as discussed above, to address the material weaknesses in our internal controls over financial reporting. These remediation actions continued throughout the quarter ended June 30, 2021 but have not materially affected our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information required by this item is set forth in ~~Note 14 “Commitments, Contingencies~~“Note 15 — Commitments and ~~Guarantees”~~Contingencies” to the Company’s ~~condensed consolidated financial statements~~Unaudited Condensed Consolidated Financial Statements included in Part I Item 1 “Financial Statements”, which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

Item 1A. Risk Factors

Other than as noted below, there have been no material changes to the Company’s risk factors presented in Part 1, Item 1A of the 2021 Form 10-K.

We are required to pay the Vertiv Stockholder for a significant portion of the tax benefits relating to pre-Business Combination tax assets and attributes, regardless of whether any tax savings are realized.

On December 10, 2019 we entered into a tax receivable agreement (“Tax Receivable Agreement”), which generally provided for the payment by us to the Vertiv Stockholder of 65% of the cash tax savings in U.S. federal, state, local and certain foreign taxes, that we actually realize (or are deemed to realize) in periods after the closing of the Business Combination as a result of (i) increases in the tax basis of certain intangible assets of Vertiv resulting from certain pre-Business Combination acquisitions, (ii) certain U.S. federal income tax credits for increasing research activities (so-called “R&D credits”) and (iii) tax deductions in respect of certain Business Combination expenses.

On December 31, 2021, the Company and the Vertiv Stockholder agreed to amend and supplement the Tax Receivable Agreement to replace our remaining payment obligations under the Tax Receivable Agreement with an obligation to pay $100 in cash in two equal installments. The first installment payment was scheduled to be due on or before June 15, 2022 and the second installment was scheduled to be due on or before September 15, 2022. On June 15, 2022, the Company and the Vertiv Stockholder agreed to further amend the payment schedule under the Tax Receivable Agreement into three installment payments wherein the first installment payment of $12.5 became due and was paid on June 15, 2022, the second installment of $12.5 will be due on or before September 15, 2022, and the third installment of $75 will be due on or before November 15, 2022. Upon receipt of the third installment payment, the Tax Receivable Agreement will terminate and we will not be required to make any further payments to the Vertiv Stockholder. In the event of a change of control of us prior to delivery of all installment payments, all unpaid installment payments (together with any accrued interest thereon) will accelerate and become payable upon the consummation of such change of control. In addition, in the event of a material breach by us of any of our material obligations under the amended Tax Receivable Agreement, all unpaid obligations will accelerate and become payable immediately and will accrue interest at a rate equal to the lesser of the Default Rate and the Maximum Rate (each, as defined in the amended Tax Receivable Agreement) until satisfied in full.

The acceleration of our obligations could have a substantial negative impact on our liquidity. Additionally, the obligation to make payments under the amended Tax Receivable Agreement, including the acceleration of our obligation to make payments in the event of a change of control, could make us a less attractive target for a future acquisition.

Because we do not presently know the tax savings we may realize in future periods, it is possible that the actual cash tax savings realized by us may be significantly less than the corresponding payments we are required to make under the amended Tax Receivable Agreement.

For more information about the Tax Receivable Agreement, please see the section entitled “Item 1. Business — Business Combination — Related Agreement — Tax Receivable Agreement” of the 2021 Form 10-K.

~~Item 1A. Risk Factors.~~

The Company's risk factors, as of June 30, 2021, have not materially changed from those described in Part 1, Item 1A of our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2020 filed on April 30, 2021.

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

A) Recent Sales of Unregistered Securities

None.

B) Use of Proceeds from our Initial Public Offering of Common Stock

~~None.~~Not applicable.

C) Repurchases of Shares or of Company Equity Securities

None.

Table of contents

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

3233

Table of ~~content~~scontents

ITEM 6. EXHIBITS

EXHIBIT INDEX

Exhibit No.

Description

~~3.1~~

~~Second Amended and Restated Articles of Incorporation, as amended~~ ~~(filed herewith)~~

10.1

Employment Agreement dated as of April 20, 2022 by and between Vertiv Holdings Co and Stephen Hen I Liang (filed herewith)

10.2

Amendment No. 1 to TRA Repurchase Agreement, dated as of June 15, 2022, by and between Vertiv Holdings Co and VPE Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 15, 2022)

31.1

Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

31.2

Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.1

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

32.2

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101.INS

The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2021,~~2022, formatted in Inline XBRL: (i) Unaudited Condensed Consolidated Statements of Earnings (Loss), (ii) Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) Unaudited Condensed Consolidated Balance Sheets, (iv) Unaudited Condensed Consolidated Statements of Cash Flows, ~~(ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Balance Sheets,~~ and (v) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed ~~tags.~~tags

101.SCH

Inline XBRL Taxonomy Extension Schema (filed herewith)

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase (filed herewith)

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase (filed herewith)

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase (filed herewith)

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase (filed herewith)

104

Cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2021,~~2022, formatted in Inline XBRL (and contained in Exhibit 101)

3334

Table of ~~content~~scontents

Signatures

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


Date: August ~~2, 2021~~3, 2022			Vertiv Holdings Co
			/s/ Rob Johnson
			Name: Rob Johnson
			Title: Chief Executive Officer

			/s/ David Fallon
			Name: David Fallon
			Title: Chief Financial Officer

3435


	December 31, 2019		Expense		Paid/Utilized		June 30, 2020
Severance and benefits	$	21.6	$	0.6	$	(12.7)	$	9.5
Plant closing and other	0.6		0.7		(0.8)		0.5
Total	$	22.2	$	1.3	$	(13.5)	$	10.0


	June 30, 2021		December 31, 2020
Term Loan due 2027 at 2.84% and 3.15% at June 30, 2021 and December 31, 2020, respectively.	$	2,172.6	$	2,183.5

Unamortized discount and issuance costs	(28.0)		(31.0)
	2,144.6		2,152.5
Less: Current Portion	(21.8)		(22.0)
Total long-term debt, net of current portion	$	2,122.8	$	2,130.5


	Term Loan
Remainder of 2021	$	10.9
2022	21.8
2023	21.8
2024	21.8
2025	21.8
2026	21.8
Thereafter	2,052.7
Total	$	2,172.6


	June 30, 2021		December 31, 2020
Weighted Average Remaining Lease Term	5.7 years		4.5 years


Weighted Average Discount Rate	5.5	%	5.8	%


	2021		2020
Change in product warranty accrual
Beginning balance, January 1	$	36.5	$	43.3
Provision charge to expense	11.3		13.2
Paid/utilized	(11.9)		(19.6)
Ending balance, June 30,	$	35.9	$	36.9


	2021		2020
Beginning liability balance, January 1	$	155.6	$	0
Tax receivable agreement, initially recorded	0		133.4
Change in fair value	6.9		(0.1)
Ending liability balance, June 30,	$	162.5	$	133.3


Operating profit (loss) (1)	Three months ended June 30, 2021		Three months ended June 30, 2020		Six months ended June 30, 2021		Six months ended June 30, 2020
Americas	$	128.6	$	130.0	$	255.0	$	221.5
Asia Pacific	62.8		56.1		115.9		77.0
Europe, Middle East & Africa	62.4		27.5		95.8		48.3
Total reportable segments	253.8		213.6		466.7		346.8
Foreign currency gain (loss)	(4.1)		(2.8)		2.8		(4.6)
Corporate and other	(115.6)		(108.0)		(223.8)		(219.2)
Total corporate, other and eliminations	(119.7)		(110.8)		(221.0)		(223.8)
Amortization of intangibles	(31.9)		(32.2)		(63.7)		(64.6)
Operating profit (loss)	$	102.2	$	70.6	$	182.0	$	58.4