March 31, 2021 March 31, 2020
Weighted Average Remaining Lease Term 4.7 years 4.5 years
Weighted Average Discount Rate 5.8 % 7.1 %

Maturities of lease liabilities are as follows:

As of March 31, 2021 As of December 30, 2020
Operating Leases
2021 $ 37.5 $ 51.0
2022 41.5 41.4
2023 33.7 33.4
2024 21.5 20.9
2025 10.7 10.4
Thereafter 20.5 17.2
Total Lease Payments 165.4 174.3
Less: Imputed Interest (22.7) (24.7)
Present value of lease liabilities $ 142.7 $ 149.6


	March 31, 2022		December 31, 2021
	Operating Leases
2022	$	38.4	$	50.5
2023	44.3		41.5
2024	32.7		30.0
2025	20.6		18.7
2026	11.6		10.3
Thereafter	37.2		32.3
Total Lease Payments	184.8		183.3
Less: Imputed Interest	(28.0)		(27.6)
Present value of lease liabilities	$	156.8	$	155.7

(8) INCOME TAXES

The Company's effective tax rate was ~~24.0 percent~~58.3% and ~~(7.1) percent~~24.0% for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The effective tax rate in the ~~current~~three months ended March 31, 2022 is primarily influenced by the mix of income between our U.S. and non-U.S. operations, net of changes in valuation allowances offset by non-taxable changes in fair value of the warrant liabilities. The effective rate for the comparative three month period is primarily influenced by the mix of income between our U.S. and non-U.S. operations and reflects the negative impact of Global Intangible Low-Taxed Income ~~(GILTI)~~(or "GILTI"), which is ~~partially~~ offset by ~~the benefit of~~ changes in the U.S. valuation allowance. The effective rate for the comparative three month period was primarily influenced by the mix of income between our U.S. and non-U.S. operations, and the impact of valuation allowances offsetting the tax effect in the U.S. and certain other jurisdictions. The prior period also reflects discrete tax adjustments related to (1) a change in our indefinite reinvestment liability caused by movement in foreign currencies and legislative changes enacted during the quarter, and (2) adjustments related to uncertain tax positions.

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 March 31, ~~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.~~

On March 18, 2020, the Families First Coronavirus Response Act (FFCR Act), and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) were each enacted in response to the COVID-19 pandemic. The FFCR Act and the CARES Act contain numerous incomeassociated deferred tax provisions that impact the Company, such as relaxing limitations on the deductibility of interest and the use of net operating losses arising in taxable years beginning after December 31, 2017. However,liability, due to interaction with other tax laws and regulations in the significant interest and net operating loss carryforwards subject to valuation allowance, the FFCR Act and CARES Act positions do not have a material impact on the company’s annual effective tax rate or tax position.year of inclusion.

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(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.

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 ("Advisors"). For the three months ended March 31, 2022 and 2021 purchases were $34.9 and $14.5, respectively. For the three months ended March 31, 2022 sales were $31.4, and sales with affiliates of Advisors were insignificant for the three months ended March 31, 2021. Accounts payable to affiliates of Advisors were $0.9 and $3.9 as of March 31, 2022 and December 31, 2021, respectively. Accounts receivable from affiliates of Advisors were $24.5 and $42.9 as of March 31, 2022 and December 31, 2021, respectively.

Tax Receivable Agreement

On December 31, 2021, the Company and an affiliate of Advisors (the "Vertiv Stockholder") agreed to amend and supplement the prior Tax Receivable Agreement to replace the Company’s remaining payment obligations under the prior agreement with an obligation to pay $100 million in cash in 2 equal installments. The first installment payment will be due on or before June 15, 2022, and the second installment payment will be due on or before September 15, 2022. Upon receipt of the second installment payment, the agreement will terminate and the Company will not be required to make any further payments to the Vertiv Stockholder.

For the three months ended March 31, 2021 ~~and 2020 purchases were $14.5 and $12.8, respectively.~~

~~Tax Receivable Agreement~~

~~See Note 11 — Financial Instruments and Risk Management~~we recorded $1.8 of accretion expense in "Interest expense, net" in the Unaudited Condensed Consolidated Statement of Earnings (Loss). An unrealized gain (loss) of $4.1 was recorded in "Accumulated other comprehensive income" in the Unaudited Condensed Consolidated Comprehensive Income (Loss), related to the change in fair value of the tax receivable liability for ~~additional information.~~

the three months ended March 31, 2021.

1612

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(10) OTHER FINANCIAL INFORMATION


	March 31, 2022		December 31, 2021
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	288.5	$	439.1
Restricted cash included in other current assets	8.0		8.0
Total cash, cash equivalents, and restricted cash	$	296.5	$	447.1

March 31, 2021 December 31, 2020
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents $ 677.2 $ 534.6
Restricted cash included in other current assets 8.0 8.0
Total cash, cash equivalents, and restricted cash $ 685.2 $ 542.6


	March 31, 2022		December 31, 2021
Inventories
Finished products	$	298.5	$	236.5
Raw materials	327.5		274.8
Work in process	148.5		105.0
Total inventories	$	774.5	$	616.3

	March 31, 2022		December 31, 2021
Property, plant and equipment, net
Machinery and equipment	$	384.4	$	373.6
Buildings	302.1		304.8
Land	45.0		42.1
Construction in progress	36.1		34.8
Property, plant and equipment, at cost	767.6		755.3
Less: Accumulated depreciation	(282.3)		(266.0)
Property, plant and equipment, net	$	485.3	$	489.3

	March 31, 2022		December 31, 2021
Accrued expenses and other liabilities
Deferred revenue	$	293.9	$	238.9
Accrued payroll and other employee compensation	110.8		125.8
Restructuring (see Note 5)	22.4		34.0
Operating lease liabilities	44.0		42.1
Product warranty	28.2		30.0
Contract liabilities (see Note 4)	60.3		52.1
Tax Receivable Agreement (see Note 9)	100.0		100.0
Other	312.7		330.5
Total	$	972.3	$	953.4

March 31, 2021 December 31, 2020
Inventories
Finished products $ 227.3 $ 201.0
Raw materials 154.4 155.7
Work in process 129.4 89.9
Total inventories $ 511.1 $ 446.6
March 31, 2021 December 31, 2020
Property, plant and equipment, net
Machinery and equipment $ 334.9 $ 322.4
Buildings 252.2 255.5
Land 46.6 47.4
Construction in progress 13.0 23.1
Property, plant and equipment, at cost 646.7 648.4
Less: Accumulated depreciation (233.7) (220.8)
Property, plant and equipment, net $ 413.0 $ 427.6
March 31, 2021 December 31, 2020
Accrued expenses and other liabilities
Deferred revenue $ 232.6 $ 199.6
Accrued payroll and other employee compensation 103.4 138.5
Litigation reserve (see note 15) 96.2 96.6
Contract liabilities (see note 3) 41.2 36.1
Operating lease liabilities 40.6 42.3
Product warranty 36.8 36.5
Restructuring (see note 4) 59.4 69.3
Other 259.0 282.9
Total $ 869.2 $ 901.8

2021 2020
Change in product warranty accrual
Beginning balance, December 31 $ 36.5 $ 43.3
Provision charge to expense 6.4 7.4
Paid/utilized (6.1) (10.6)
Ending balance, March 31 $ 36.8 $ 40.1


	2022		2021
Change in product warranty accrual
Beginning balance, January 1	$	30.0	$	36.5
Provision charge to expense	2.5		6.4
Paid/utilized	(4.3)		(6.1)
Ending balance, March 31,	$	28.2	$	36.8

(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

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

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

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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)
March 31, 2022
Assets:
Interest rate swaps	Other current assets	$	4.4	$	—	$	4.4	$	—
Interest rate swaps	Other noncurrent assets	58.5		—		58.5		—
Total assets		$	62.9	$	—	$	62.9	$	—

Liabilities:

Contingent consideration	Accrued expenses and other liabilities	$	2.2	$	—	$	—	$	2.2
Private warrants	Warrant liabilities	54.7		—		54.7		—
Total liabilities		$	56.9	$	—	$	54.7	$	2.2


		Balance Sheet Location	Total		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Unobservable inputs (Level 3)			Balance Sheet Location	Total		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Unobservable inputs (Level 3)
March 31, 2021
December 31, 2021											December 31, 2021
Assets:	Assets:										Assets:
Interest rate swaps	Interest rate swaps	Other noncurrent assets	$	11.1	$	0	$	11.1	$	0	Interest rate swaps	Other noncurrent assets	$	16.1	$	—	$	16.1	$	—
Total assets	Total assets		$	11.1	$	0	$	11.1	$	0	Total assets		$	16.1	$	—	$	16.1	$	—

Liabilities:	Liabilities:										Liabilities:
Interest rate swaps	Interest rate swaps	Accrued expenses and other liabilities	$	10.0	$	0	$	10.0	$	—	Interest rate swaps	Accrued expenses and other liabilities	$	7.4	$	—	$	7.4	$	—
Tax Receivable Agreement		Other long-term liabilities	153.3		0		0		153.3
Contingent consideration											Contingent consideration	Accrued expenses and other liabilities	3.7		—		—		3.7
Private warrants	Private warrants	Warrant liabilities	101.3		0		101.3		0		Private warrants	Warrant liabilities	149.6		—		149.6		—
Total liabilities	Total liabilities		$	264.6	$	0	$	111.3	$	153.3	Total liabilities		$	160.7	$	—	$	157.0	$	3.7

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Three months ended March 31, 2021 Three months ended March 31, 2020
(as restated)
Net income (loss) attributable to common shareholders $ 31.7 $ (208.3)
Weighted-average number of ordinary shares outstanding - basic 349,603,701 240,656,864
Dilutive effect of equity-based compensation and warrants 3,844,884 0
Weighted-average number of ordinary shares outstanding - diluted 353,448,585 240,656,864
Net income per share attributable to common shareholders
Basic $ 0.09 $ (0.87)
Diluted 0.09 (0.87)

The dilutive effect of private warrants was 3.7 million during the three months ended March 31, 2022. Additional ~~stock~~equity-based compensation awards ~~and warrants~~ were also outstanding during the three months ended March 31, ~~2020,~~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 represented 7.8 million shares for the three months ended March 31, 2022.

The dilutive effect of equity-based compensation awards was 3.8 million during the three months ended March 31, 2021. Additional equity-based compensation awards and warrants were also outstanding during the three months ended March 31, 2021, but were not included in the computation of diluted earnings per common share because the effect would be anti-dilutive. Such anti-dilutive equity-based compensation awards and warrants represented ~~5.4~~0.8 million and ~~33.5~~5.3 million shares for the three months ended March 31, ~~2020,~~2021, respectively.

(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 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 March 31, 2021, the Company had accrued $96.1 in accrued expenses, the full amount of the judgment, and recorded an offsetting indemnification receivable of $96.1 in other current assets related to this matter.

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 outcomes was 0zero to $34.5. On June 4, 2019, Vertiv notified the selling shareholders of Energy Labs of Vertiv’s determination that the applicable 2018 operating results had not been achieved and that 0 contingent

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consideration was due to the selling shareholders. On September 6, 2019, the selling shareholders of Energy Labs notified Vertiv of their dispute regarding the contingent consideration due to them. The selling shareholders assert that the applicable 2018 operating results were exceeded and that Vertiv owes $34.5 in earn-out, the highest amount of earn-out possible under the agreement. AsOn December 21, 2021, the parties agreed to a settlement term sheet, which includes, among other terms, the following: the Company agrees to pay $21.5 to the selling shareholders of ~~March~~Energy Labs; a full and complete 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 ~~December 31, 2020,~~customary terms, settling all of the ~~Company had accrued $2.8~~disputes between them.

On March 24, 2022, a putative securities class action, Kirk Vinings v. Vertiv Holdings Co, 22-cv-02416, was filed against Vertiv, Rob Johnson, and David Fallon, in ~~accrued expenses. Discovery is underway~~the Southern District of New York. The plaintiff asserts 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 ~~trial has been scheduled for~~putative class of all persons and entities that purchased or otherwise acquired Vertiv securities between April 28, 2021 and February 23, 2022. The complaint alleges that Vertiv failed to disclose in certain of its filings made with the SEC during 2021 that it was not able to sufficiently anticipate and respond to supply chain issues and inflation. While Vertiv believes it has meritorious defenses against the ~~assertions of the selling shareholders of Energy Labs,~~plaintiff’s claims, Vertiv 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~~any cost associated with its resolution.

Table of ~~up to $31.7 in excess of the $2.8 accrued as well as costs and legal fees.~~contents

At March 31, ~~2021,~~2022, 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, nor were there any material commitments outside the normal course of business other than those described above.

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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,” “we,” “us” and “our” refer to Vertiv Holdings Co, a Delaware corporation, and its consolidated subsidiaries following the ~~Business Combination;~~business combination; and (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.~~business combination. 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 condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form ~~10-K/A filed April 30, 2021~~10-K for the year ended December 31, ~~2020.~~2021.

~~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 during first quarter 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 re main 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.

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~~RESULTS OF OPERATIONS~~

~~Comparison of the quarters ended March 31, 2021 and March 31, 2020 (as restated)~~

(Dollars in millions) 2021 2020 (as restated) $ Change % Change
Net sales $ 1,098.4 $ 897.3 $ 201.1 22.4 %
Cost of sales 740.4 610.3 130.1 21.3 %
Gross profit 358.0 287.0 71.0 24.7 %
Selling, general and administrative expenses 250.1 264.8 (14.7) 5.6 %
Amortization of intangibles 31.8 32.4 (0.6) 1.9 %
Restructuring costs 2.0 (1.1) 3.1 281.8 %
Foreign currency (gain) loss, net (6.9) 1.8 (8.7) 483.3 %
Other operating expense (income) 1.2 1.3 (0.1) 7.7 %
Operating profit (loss) 79.8 (12.2) 92.0 754.1 %
Interest expense, net 24.1 68.9 (44.8) 65.0 %
Loss on extinguishment of debt 0.4 174.0 (173.6) 99.8 %
Change in fair value of warrant liabilities 13.6 (60.6) 74.2 122.4 %
Income tax expense (benefit) 10.0 13.8 (3.8) 27.5 %
Net income (loss) $ 31.7 $ (208.3) $ 240.0 115.2 %

~~Net Sales~~

Net sales were $1,098.4 in Q1 2021, an increase of $201.1, or 22.4 percent, compared with $897.3 in Q1 2020. The increase in sales was primarily driven by recovery from the COVID-19 pandemic in the APAC segment coupled with demand gains in critical infrastructure and solutions. By offering, critical infrastructure & solutions sales increased $166.4 including the positive impacts from foreign currency of $14.4. Services & spares sales increased $15.5, including positive impacts from foreign currency of $7.8. Integrated rack solutions sales increased $19.2 including the positive impacts from foreign currency of $3.7.

Excluding intercompany sales, net sales were $501.5 in the Americas, $357.4 in Asia Pacific and $239.5 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 $740.4 in Q1 2021, an increase of $130.1, or 21.3 percent compared to Q1 2020. The increase in cost of sales was primarily due to the flow-through impact of higher net sales volume. Gross profit was $358.0 in Q1 2021, or 32.6 percent of sales, compared to $287.0, or 32.0 percent of sales in Q1 2020.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative expenses (SG&A) were $250.1 in Q1 2021, a decrease of $14.7 compared to Q1 2020. SG&A as a percentage of sales were 22.8 percent in Q1 2021 compared with 29.5 percent in Q1 2020. The decrease in SG&A was primarily the result of fixed cost reduction actions in response to the COVID-19 pandemic, including discretionary spending cuts, and one-time transaction related bonuses in 2020.

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~~Other Operating Expenses~~

Other operating expenses include amortization of intangibles, restructuring costs, foreign currency (gain) loss, and other operating expense (income). Other expenses was $28.1 for Q1 2021. This was a $6.3 decrease from Q1 2020. The decrease was primarily due to a change in foreign currency (gain) loss of $8.7, partially offset by increased restructuring costs of $3.1.

~~Loss on Extinguishment of Debt~~

Loss on extinguishment of debt was $0.4 in Q1 2021 related to lender fees associated with the Term Loan Amendment. This was a $173.6 decrease from the Q1 2020 loss that resulted from the repayment of indebtedness from the Business Combination and the subsequent Refinancing Transactions. In Q1 2020, we recognized a $99.0 write-off of deferred financing fees and a $75.0 early redemption premium on our $500.0 of 12.00%/13.00% Senior PIK Toggle Notes due 2022 (the “2022 Senior Notes”), $750.0 of 9.250% Senior Notes due 2024 (“2024 Senior Notes”) and $120.0 of 10.00% Senior Secured Second Lien Notes due 2024 (the “2024 Senior Secured Notes” and, collectively with the 2022 Senior Notes and 2024 Senior Notes, our “Prior Notes”).

~~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 IPO of GSAH. The change in fair value of the outstanding warrants during Q1 2021 was $13.6. 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 $24.1 in Q1 2021 compared to $68.9 in Q1 2020. The $44.8 decrease is primarily due to the reduction in outstanding borrowings resulting from the business combination and lower interest rates secured through the debt refinancing, as described inCautionary Note ~~6 to the consolidated financial statements, offset by an increase due to accretion on the Tax Receivable Agreement and net settlement payments on the Company's interest rate swaps.~~

~~Income Taxes~~

Income tax expense was $10.0 in Q1 2021 versus $13.8 in Q1 2020. The effective rate in the year-to-date period is primarily influenced by the mix of income between our U.S. and non-U.S. operations, and reflects the negative impact of Global Intangible Low-Taxed Income (GILTI), which is partially offset by changes in valuation allowance in the U.S. For the three months ended March 31, 2020, income tax expense was primarily influenced by the mix of income between our U.S. and non-U.S. operations and changes in valuation allowance offsetting the tax effect in the U.S. and certain other jurisdictions as well as discrete tax adjustments related to remeasurement and legislative changes impacting the indefinite reinvestment liability and changes in the liability for uncertain tax positions.

~~The Q1 2021 tax expense is lower than Q1 2020 primarily due to the change in mix of income, non-U.S. tax incentives and changes in valuation allowances in the U.S.~~

The effective tax rate in Q1 2020 reflected the effect of significant valuation allowances offsetting tax benefits otherwise generated by losses in that period. The effective tax rate in Q1 2021 reflects a more customary relationship between tax expense and pre-tax results, as profits were generated more consistently across jurisdictions than in the prior period.

~~Business Segments~~

The following is detail of business segment results for the three months ended March 31, 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 13 — Segment Information, of the Company's condensed consolidated financial statements. Segment net sales are presented excluding intercompany sales.

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~~Americas~~

(Dollars in millions) Three months ended March 31, 2021 Three months ended March 31, 2020 $ Change % Change
Net sales $ 501.5 $ 466.7 $ 34.8 7.5 %
Operating profit (loss) 126.4 91.5 34.9 38.1 %
Margin 25.2 % 19.6 %

Americas net sales of $501.5 in Q1 2021 increased $34.8, or 7.5 percent from Q1 2020. Sales growth was primarily driven by hyperscale demand in critical infrastructure and solutions, specifically in AC power and thermal product lines. By offering, net sales increased in critical infrastructure & solutions and integrated rack solutions by $39.4 and $2.8, respectively, partially offset by a decrease in service and spares by $7.4. Americas net sales were negatively impacted by foreign currency by approximately $2.2.

Operating profit (loss) in Q1 2021 was $126.4, an increase of $34.9 compared with Q1 2020. Margin improved primarily due to contribution margin improvements (volume leverage), and fixed cost management.

~~Asia Pacific~~

(Dollars in millions) Three months ended March 31, 2021 Three months ended March 31, 2020 $ Change % Change
Net sales $ 357.4 $ 223.9 $ 133.5 59.6 %
Operating profit (loss) 53.1 20.9 32.2 154.1 %
Margin 14.9 % 9.3 %

Asia Pacific net sales were $357.4 in Q1 2021, an increase of $133.5, or 59.6 percent from Q1 2020. Sales increases in this segment were driven by COVID 19 recovery in China and India. Additionally, this segment experienced strong growth in large project lines such as data centers, 5G projects, and wind power. By offering, net sales increased in all offering categories, including gains in critical infrastructure & solutions, integrated rack solutions and service & spares of $100.0, $17.3 and $16.2, respectively. Additionally, Asia Pacific net sales were positively impacted by foreign currency of approximately $13.6.

~~Operating profit (loss) in Q1 2021 was $53.1, an increase of $32.2 compared with Q1 2020. Margin improvements were driven by leverage of fixed costs from high volume.~~

~~Europe, Middle East & Africa~~

(Dollars in millions) Three months ended March 31, 2021 Three months ended March 31, 2020 $ Change % Change
Net sales $ 239.5 $ 206.7 $ 32.8 15.9 %
Operating profit (loss) 33.4 20.8 12.6 60.6 %
Margin 13.9 % 10.1 %

EMEA net sales were $239.5 in Q1 2021, an increase of $32.8, or 15.9 percent from Q1 2020. Sales increases were primarily due to deployment of large Colocation data centers in Europe. By product offering category, critical infrastructure & solutions and service & spares increased by $27.0 and $6.7, respectively, offset by a decline in integrated rack solutions of $0.9. Additionally, Europe, Middle East & Africa net sales were positively impacted by foreign currency of approximately $14.5.

~~Operating profit (loss) in Q1 2021 was$33.4, an increase of $12.6 compared with Q1 2020. Margin improved primarily due to fixed cost savings and contribution margin improvements (volume leverage, operation productivity, and pricing).~~

~~Vertiv Corporate and Other~~

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~~Capital Resources and Liquidity~~

Our primary future cash needs relate to working capital, operating activities, capital spending, strategic investments and debt service. In connection with the consummation of the Business Combination on February 7, 2020, the Company used $1,464.0 of the proceeds from the Merger Consideration and PIPE Investment 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 9.25% senior notes, 12.0%/13.0% PIK toggle senior notes and 10.0% second-lien 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 March 31, 2021, we had $677.2 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 March 31, 2021, Vertiv Group and certain other subsidiaries of the Company had $433.9 of availability under the ABL Revolving Credit Facility, net of letters of credit outstanding in the aggregate principal amount of $21.1, 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 6 — 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~~

~~Three months ended March 31, 2021 and 2020~~

(Dollars in millions) 2021 2020 $ Change % Change
Net cash provided by (used for) operating activities $ 60.7 $ (194.7) $ 255.4 (131.2) %
Net cash used for investing activities (17.9) (8.5) (9.4) 110.6
Net cash provided by financing activities 102.9 279.3 (176.4) (63.2)
Capital expenditures (16.8) (6.7) (10.1) 150.7
Investments in capitalized software (1.1) (1.8) 0.7 (38.9)

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

Net cash provided by operating activities was $60.7 in Q1 2021, a $255.4 increase in cash generation compared to Q1 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 SPAC transactions in Q1 2020.

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~~Net Cash used for Investing Activities.~~

Net cash used for investing activities was $17.9 in Q1 2021 compared to net cash used for investing activities of $8.5 in Q1 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 $102.9 in Q1 2021 compared to $279.3 in Q1 2020. The decrease in cash generation was primarily the result of Q1 2020 having many non-recurring financing activities such as the proceeds from the Business Combination of $1.827.0 partially offset by payments to the Vertiv Stockholder of $341.6 and repayments of Prior Notes of $1,370. Additionally, there were net borrowings on the ABL and Term Loan of $131.1 and $119.0, respectively. In Q1 2021, the financial activity was driven by proceeds from the exercise of 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.

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~~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 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 Form ~~10 K~~10-K for the year ended December 31, ~~2020 .~~2021 filed with the SEC. 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 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; 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

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and restrictions contained in our credit agreements, including restrictive covenants that restrict operational flexibility; ~~Vertiv's~~Vertiv’s ability to comply with the covenants and restrictions contained in our credit agreements that 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~~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 dividends; volatility in Vertiv's stock price due to various market and operational factors; ~~Vertiv's ability to maintain its~~

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~~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 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.

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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, the Company’s business, results of operations, financial condition and stock price.

•The extent of the continuing impact of the COVID-19 pandemic on the Company’s operational and financial performance is uncertain and will depend on many factors outside the Company’s 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 Form 10-K for the year ended December 31, 2021 filed with the SEC under the heading “Risk Factors,” for more information. The Company continues 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 shareholders.

•Supply Chain Constraints and Cost Increases: During 2022, aspects of the Company’s business continue to be affected by the COVID-19 pandemic as well as increased 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 costs associated with premium freight to meet customer commitments. Additionally, logistical issues have significantly delayed the receipt of materials and, in some cases, the Company cannot procure critical parts at any price, creating production and delivery challenges pressuring the top and bottom line. The Company continues 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 first quarter results, we anticipate continued pricing realization in the remainder of 2022, even within the current more inflationary environment, as a result of the pricing actions undertaken by the Company in the fourth quarter of 2021 and which we have and will continue to take throughout 2022.

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RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2022 and Three Months Ended March 31, 2021


(Dollars in millions)	Three months ended March 31, 2022		Three months ended March 31, 2021		$ Change		% Change
Net sales	$	1,156.4	$	1,098.4	$	58.0	5.3	%
Cost of sales	852.8		740.4		112.4		15.2
Gross profit	303.6		358.0		(54.4)		(15.2)
Selling, general and administrative expenses	292.2		250.1		42.1		16.8
Amortization of intangibles	57.7		31.8		25.9		81.4
Restructuring costs	0.8		2.0		(1.2)		(60.0)
Foreign currency (gain) loss, net	(1.3)		(6.9)		(5.6)		(81.2)

Other operating expense (income)	(0.6)		1.2		(1.8)		(150.0)
Operating profit (loss)	(45.2)		79.8		(125.0)		(156.6)
Interest expense, net	29.3		24.1		5.2		21.6
Loss on extinguishment of debt	—		0.4		(0.4)		(100.0)
Change in fair value of warrant liabilities	(94.9)		13.6		(108.5)		(797.8)
Income tax expense	11.9		10.0		1.9		19.0
Net income (loss)	$	8.5	$	31.7	$	(23.2)	(73.2)	%

Net Sales

Net sales were $1,156.4 in the first three months of 2022, an increase of $58.0, or 5.3%, compared with $1,098.4 in the first three months of 2021. The increase in sales was primarily driven by E&I sales of $87.5, partially offset offset by the negative impacts from foreign currency of $18.3, and lower sales from a divested business of $15.9. The impact of higher selling prices was offset by lower volumes due to on-going supply chain constraints. By product offering, critical infrastructure & solutions sales increased $37.0, which included negative impacts from foreign currency of $2.4. Services & spares sales increased $12.4, which included negative impacts from foreign currency of $8.3. Integrated rack solutions sales increased $8.6, which included the negative impacts from foreign currency of $7.6.

Excluding intercompany sales, net sales were $535.1 in the Americas, $332.8 in Asia Pacific and $288.5 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 $852.8 in the first three months of 2022, an increase of $112.4, or 15.2% compared to the first three months of 2021. The increase in cost of sales was primarily driven by E&I of $65.8 and increased commodity and logistic costs, and supply chain constraints, partially offset by the impact of lower volumes and fixed cost investments. Gross profit was $303.6 in the first three months of 2022, or 26.3% of sales, compared to $358.0, or 32.6% of sales, in the first three months of 2021.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A) were $292.2 in the first three months of 2022, an increase of $42.1 compared to the first three months of 2021. SG&A as a percentage of sales was 25.3% for the three months ended March 31, 2022 compared with 22.8% in the three months ended March 31, 2021. The increase in SG&A was primarily driven by E&I costs of $12.5, increased research and development spend of $7.4, higher commissions of $7.5 as a result of higher order volume, and increased employee compensation costs.

Other Operating Expenses

Other operating expenses include amortization of intangibles, restructuring costs, foreign currency (gain) loss, and other operating expense (income). Other expenses were $56.6 for the first three months of 2022, which was a $28.5 increase from the first three months of 2021. The increase was primarily due to an increase in amortization of intangibles of $25.9 associated with the acquisition of E&I on November 1, 2021.

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Loss on Extinguishment of Debt

Loss on extinguishment of debt was $0.4 for the first three months of 2021 related to lender fees associated with the Term Loan Amendment. 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 IPO of our predecessor, GS Acquisition Holdings Corp. The change in fair value of the outstanding warrants liability during the first three months of 2022 and 2021 resulted in a gain of $94.9 and a loss of $13.6, respectively. The change in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.

Interest Expense

Interest expense, net, was $29.3 in the first three months of 2022 compared to $24.1 in the first three months of 2021. The $5.2 increase was primarily due to a $9.4 increase related to the Senior Secured Notes due 2028, slightly offset by a $1.8 decrease in accretion expense associated with the Tax Receivable Agreement, and $1.3 decrease as a result of the term loan refinancing in the first three months of 2021.

Income Taxes

Income tax expense was $11.9 in the first three months of 2022 compared to $10.0 in the first three months of 2021. The effective rate in the first three 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 non-taxable changes in fair value of the warrant liabilities. In the first three months of 2021, income tax expense was primarily influenced by the mix of income between our U.S. and non-U.S. operations, and reflects the negative impact of GILTI which is partially offset by changes in valuation allowance in the U.S.

The tax expense in the first three months of 2022 was $1.9 higher than the first three months of 2021 primarily due to the change in mix of income in the countries in which we operate.

Business Segments

The following is detail of business segment results for the three months ended March 31, 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 the Company’s consolidated results, see "Note 13 — 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 March 31, 2022			Three Months Ended March 31, 2021			$ Change		% Change
Net sales	$	535.1		$	501.5		$	33.6	6.7	%
Operating profit (loss)	57.9			126.4			(68.5)		(54.2)	%
Margin	10.8		%	25.2		%

Americas net sales of $535.1 in the first three months of 2022 increased $33.6, or 6.7% from the first three months of 2021. The increase in sales was primarily driven by E&I sales of $17.1 and higher selling prices with volumes relatively flat with prior year. By product offering, net sales increased in critical infrastructure & solutions by $15.1 mostly due to E&I sales. Service & spares increased by $10.5 due to improved customer site availability. Integrated rack solutions increased by $8.0 primarily due to higher rack power distribution unit sales. Americas net sales were negatively impacted by foreign currency of approximately $0.1.

Operating profit (loss) in the first three months of 2022 was $57.9, a decrease of $68.5 compared with the first three months of 2021. Margin declined primarily due to increased commodity and logistic costs exceeding price realization.

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Asia Pacific


(Dollars in millions)	Three Months Ended March 31, 2022			Three Months Ended March 31, 2021			$ Change		% Change
Net sales	$	332.8		$	357.4		$	(24.6)	(6.9)	%
Operating profit (loss)	41.5			53.1			(11.6)		(21.8)	%
Margin	12.5		%	14.9		%

Asia Pacific net sales were $332.8 in the first three months of 2022, a decrease of $24.6, or 6.9% from the first three 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 of $32.5 and $1.2, respectively, and slightly offset by $9.1 of improvements in service & spares. Additionally, Asia Pacific net sales were negatively impacted by foreign currency of approximately $0.6.

Operating profit (loss) in the first three months of 2022 was $41.5, a decrease of $11.6 compared with the first three 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)	Three Months Ended March 31, 2022			Three Months Ended March 31, 2021			$ Change		% Change
Net sales	$	288.5		$	239.5		$	49.0	20.5	%
Operating profit (loss)	33.2			33.4			(0.2)		(0.6)	%
Margin	11.5		%	13.9		%

EMEA net sales were $288.5 in the first three months of 2022, an increase of $49.0, or 20.5% from the first three months of 2021. Sales increases were primarily due to E&I sales of $70.4 and higher selling prices, partially offset by $15.9 of the divested heavy industrial UPS business. By offering, net sales improved in critical infrastructure & solutions by $54.4 of which $70.4 related to E&I sales, improvements in integrated rack solutions of $1.8, and slightly offset by a $7.2 decrease in service & spares. Additionally, Europe, Middle East & Africa net sales were negatively impacted by foreign currency of approximately $17.6.

Operating profit (loss) in the first three months of 2022 was $33.2, a decrease of $0.2 compared with the first three 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 $120.1 and $101.3 in the first three months of 2022 and 2021, respectively. Corporate and other costs increased $18.8 compared with the first three months of 2021 primarily due to $10.2 increased research and development costs 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 the Company's 2021 Annual Report, 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 4.125% per annum and mature on November 15, 2028.

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 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 and financing markets on acceptable terms.

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At March 31, 2022, we had $288.5 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 March 31, 2022, Vertiv Group and certain other subsidiaries of the Company had $432.2 of availability under the ABL Revolving Credit Facility, net of letters of credit outstanding in the aggregate principal amount of $19.1, 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 6 — Debt" in Part I. Item I. of this Form 10-Q contains further details of the long-term debt arrangements reflected in our consolidated financial statements, which debt was issued by the Company and certain of our subsidiaries as borrowers, co-borrowers or guarantors.

Summary Statement of Cash Flows

Three Months Ended March 31, 2022 and 2021


(Dollars in millions)	2022		2021		$ Change		% Change
Net cash (used for) provided by operating activities	$	(132.2)	$	60.7	$	(192.9)	(317.8)	%
Net cash used for investing activities	(18.2)		(17.9)		(0.3)		(1.7)
Net cash (used for) provided by financing activities	(1.5)		102.9		(104.4)		(101.5)
Capital expenditures	(15.1)		(16.8)		1.7		10.1
Investments in capitalized software	(3.1)		(1.1)		(2.0)		(181.8)

Net Cash (used for) provided by Operating Activities

Net cash used for operating activities was $132.2 in the first three months of 2022, a $192.9 decrease in cash generation compared to the first three months of 2021. Net income from operations of $8.5 included $11.4 of net non-cash expense items, consisting of a gain on the change in fair value of warrant liabilities of $94.9 and deferred taxes of $4.6, partially offset by depreciation and amortization of $79.2, non-cash stock based compensation expense of $6.6 and amortization of debt discount and issuance costs of $2.3. Trade working capital used $116.1 primarily as a result of inventory build to support forecasted sales and to meet customer demand and there was 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 $18.2 in the first three months of 2022 compared to net cash used for investing activities of $17.9 in the first three months of 2021. The increased use of cash over the comparable period was primarily the result of increased investment in capitalized software.

Net Cash (used for) provided by Financing Activities

Net cash used for financing activities was $1.5 in the first three months of 2022 compared to $102.9 provided by in the first three months of 2021. The decrease was primarily the result of the proceeds from the exercise of public warrants totaling $107.5 in 2021.

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 2021 financial statements, as part of our Form 10-K filed with the SEC, 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 our 2021 Annual Report on Form 10-K.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

On a regular basis, Vertiv monitors third-party depository institutions that hold its cash and short-term investments, primarily for safety of principal and secondarily for maximizing yield on 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 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 11 to the Unaudited Consolidated Financial Statements for additional information about hedges and derivative financial instruments.

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 management, with the participation of our President and Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, ~~2021~~2022 (the end of the period covered by this Quarterly Report on Form 10-Q). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2022,our disclosure controls and procedures were ~~not~~ 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

During the first three months of ~~March 31, 2021, because of material weaknesses~~2022, there have been no change in the Company's internal control over financial reporting ~~described below.~~that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

~~Management~~The Company completed the Acquisition of E&I as of November 1, 2021. As such, E&I has been excluded from the ~~Company is responsible for establishing and maintaining adequate~~Company's assessment of internal control over financial reporting. Companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting ~~as such term is defined in Rules 13a-15(f) and 15d-15(f)~~during the first year of an acquisition while integrating the acquired company under guidelines established by the Securities and Exchange ~~Act of 1934.~~

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 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.Commission.

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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 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.

~~Table of contents~~

~~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 March 31, 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~~"Note 15 ~~“Commitments, Contingencies~~- Commitments and ~~Guarantees”~~Contingencies” to

the Company’s 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.

The Company's risk factors, as of March 31, ~~2021,~~2022, have not materially changed from those described in Part 1, Item 1A of our Annual Report on Form ~~10-K/A~~10-K for the fiscal year ended December 31, ~~2021 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.

C) Repurchases of Shares or of Company Equity Securities

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

EXHIBIT INDEX ~~- To be reviewed by Legal~~

Exhibit No.

Description

~~10.1~~

Amendment No. 1 to Term Loan Credit Agreement, dated as of March 10, 2021, by and among Vertiv Group Corporation, as borrower, Vertiv Intermediate Holding Corporation and certain other affiliates of Vertiv Group Corporation, as guarantors, the lenders party thereto, and Citibank, N.A., as administrative agent, (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on March 10, 2021)

~~10.2~~

~~Aircraft Time Sharing Agreement by and between Vertiv Group Corporation and Rob Johnson dated February 12, 2021 (filed herewith).~~

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 ~~(filed~~(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 ~~(filed~~(furnished herewith)

101.INS

The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2021,~~2022, formatted in Inline XBRL: (i) Consolidated Statements of Cash Flows, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Balance Sheets, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed 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 March 31, ~~2021,~~2022, formatted in Inline XBRL (and contained in Exhibit 101)

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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: May ~~3, 2021~~2, 2022			Vertiv Holdings Co
			[/s/ Rob ~~Johnson]~~Johnson
			Name: Rob Johnson
			Title: Chief Executive Officer

			[/s/ David ~~Fallon]~~Fallon
			Name: David Fallon
			Title: Chief Financial Officer

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	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	288.5	$	439.1
Accounts receivable, less allowances of $15.2 and $14.1, respectively	1,534.3		1,536.4
Inventories	774.5		616.3
Other current assets	126.7		106.8
Total current assets	2,724.0		2,698.6
Property, plant and equipment, net	485.3		489.3
Other assets:
Goodwill	1,317.7		1,330.1
Other intangible assets, net	2,055.2		2,138.2
Deferred income taxes	51.7		47.9
Other	277.1		235.5
Total other assets	3,701.7		3,751.7
Total assets	$	6,911.0	$	6,939.6
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	21.8	$	21.8
Accounts payable	887.5		858.5
Accrued expenses and other liabilities	972.3		953.4
Income taxes	22.2		21.1
Total current liabilities	1,903.8		1,854.8
Long-term debt, net	2,946.3		2,950.5
Deferred income taxes	194.7		198.8
Warrant liabilities	54.7		149.6
Other long-term liabilities	357.4		368.2
Total liabilities	5,456.9		5,521.9
Equity
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, 375,991,964 and 375,801,857 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	—		—
Additional paid-in capital	2,607.4		2,597.5
Accumulated deficit	(1,206.9)		(1,215.4)
Accumulated other comprehensive (loss) income	53.6		35.6
Total equity	1,454.1		1,417.7
Total liabilities and equity	$	6,911.0	$	6,939.6


	March 31, 2021		December 31, 2020 (as restated)
ASSETS
Current assets:
Cash and cash equivalents	$	677.2	$	534.6
Accounts receivable, less allowances of $21.7 and $22.3, respectively	1,294.5		1,354.4
Inventories	511.1		446.6
Other current assets	183.4		183.2
Total current assets	2,666.2		2,518.8
Property, plant and equipment, net	413.0		427.6
Other assets:
Goodwill	599.8		607.2
Other intangible assets, net	1,262.7		1,302.5
Deferred income taxes	18.1		20.9
Other	201.6		196.8
Total other assets	2,082.2		2,127.4
Total assets	$	5,161.4	$	5,073.8
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt and short-term borrowings	$	22.0	$	22.0
Current portion of warrant liabilities	0		68.5
Accounts payable	737.8		730.5
Accrued expenses and other liabilities	869.2		901.8
Income taxes	16.4		18.8
Total current liabilities	1,645.4		1,741.6
Long-term debt, net	2,126.9		2,130.5
Deferred income taxes	104.0		116.5
Warrant liabilities	101.3		87.7
Other long-term liabilities	455.1		485.4
Total liabilities	4,432.7		4,561.7
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, 351,516,790 and 342,024,612 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	0		0
Additional paid-in capital	1,975.6		1,791.8
Accumulated deficit	(1,299.5)		(1,331.2)
Accumulated other comprehensive (loss) income	52.6		51.5
Total equity	728.7		512.1
Total liabilities and equity	$	5,161.4	$	5,073.8


	Three months ended March 31, 2021		Three months ended March 31, 2020 (as restated)
Cash flows from operating activities:
Net income (loss)	$	31.7	$	(208.3)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation	16.9		14.2
Amortization	35.3		36.3
Deferred income taxes	(7.5)		(3.6)
Amortization of debt discount and issuance costs	1.8		5.9
Loss on extinguishment of debt	0.4		174.0

Change in fair value of warrant liabilities	13.6		(60.6)
Changes in operating working capital	(44.6)		(139.2)
Stock based compensation	5.6		0.7
Changes in tax receivable agreement	1.8		9.0
Other	5.7		(23.1)
Net cash provided by (used for) operating activities	60.7		(194.7)
Cash flows from investing activities:
Capital expenditures	(16.8)		(6.7)
Investments in capitalized software	(1.1)		(1.8)

Net cash used for investing activities	(17.9)		(8.5)
Cash flows from financing activities:
Borrowings from ABL revolving credit facility	0		324.2
Repayments of ABL revolving credit facility	0		(193.1)




Borrowing on Term Loan, net of discount	0		2,189.0
Repayment on Term Loan	(5.5)		0
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		1,827.0
Payment to Vertiv Stockholder	0		(341.6)
Proceeds from the exercise of warrants	107.5		0
Exercise of employee stock options	0.9		0

Net cash provided by financing activities	102.9		279.3
Effect of exchange rate changes on cash and cash equivalents	(3.1)		(6.4)
Increase (decrease) in cash, cash equivalents and restricted cash	142.6		69.7
Beginning cash, cash equivalents and restricted cash	542.6		233.7
Ending cash, cash equivalents and restricted cash	$	685.2	$	303.4
Changes in operating working capital
Accounts receivable	$	47.1	$	63.8
Inventories	(68.4)		(46.0)
Other current assets	(5.3)		1.4
Accounts payable	20.7		(42.3)
Accrued expenses and other liabilities	(41.5)		(120.3)
Income taxes	2.8		4.2
Total changes in operating working capital	$	(44.6)	$	(139.2)


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


	Three Months Ended March 31, 2022
	Americas		Asia Pacific		Europe, Middle East, & Africa		Total
Sales by Product and Service Offering:
Critical infrastructure & solutions	$	294.3	$	183.8	$	186.8	$	664.9
Services & spares	164.7		104.6		64.9		334.2
Integrated rack solutions	76.1		44.4		36.8		157.3
Total	$	535.1	$	332.8	$	288.5	$	1,156.4

Timing of revenue recognition:
Products and services transferred at a point in time	$	378.1	$	256.4	$	221.7	$	856.2
Products and services transferred over time	157.0		76.4		66.8		300.2
Total	$	535.1	$	332.8	$	288.5	$	1,156.4


	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 loss, net of tax	—	—		—		—		(52.6)		(52.6)
Balance at March 31, 2020, as restated	328,411,705	$	0	$	1,519.6	$	(1,208.9)	$	(34.5)	$	276.2

Balance at December 31, 2020, as restated	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 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


Unaudited proforma information	Three months ended March 31, 2021
Net sales	$	1,192.8
Net income (loss)	23.9


	Three months ended March 31, 2020
	Americas		Asia Pacific		Europe, Middle East, & Africa		Total
Sales by Product and Service Offering: (1)
Critical infrastructure & solutions	$	239.8	$	116.3	$	105.4	$	461.5
Services & spares	161.6		79.3		65.4		306.3
Integrated rack solutions	65.3		28.3		35.9		129.5
Total	$	466.7	$	223.9	$	206.7	$	897.3

Timing of revenue recognition:
Products and services transferred at a point in time	$	313.2	$	160.9	$	165.8	$	639.9
Products and services transferred over time	153.5		63.0		40.9		257.4
Total	$	466.7	$	223.9	$	206.7	$	897.3


		Balances at March 31, 2021		Balances at December 31, 2020			Balances at March 31, 2022		Balances at December 31, 2021

Deferred revenue - current ~~(2)~~(1)	Deferred revenue - current ~~(2)~~(1)	$	232.6	$	199.6	Deferred revenue - current ~~(2)~~(1)	$	293.9	$	238.9
Deferred revenue - noncurrent ~~(3)~~(2)	Deferred revenue - noncurrent ~~(3)~~(2)	40.8		38.8		Deferred revenue - noncurrent ~~(3)~~(2)	50.0		59.9
Other contract liabilities - current ~~(2)~~(1)	Other contract liabilities - current ~~(2)~~(1)	41.2		36.1		Other contract liabilities - current ~~(2)~~(1)	60.3		52.1


	December 31, 2021		Expense		Paid/Utilized		March 31, 2022
Severance and benefits	$	33.8	$	—	$	(11.7)	$	22.1
Plant closing and other	0.2		0.8		(0.7)		0.3
Total	$	34.0	$	0.8	$	(12.4)	$	22.4


	December 31, 2020		Expense		Paid/Utilized		March 31, 2021
Severance and benefits	$	68.9	$	0.2	$	(10.1)	$	59.0
Plant closing and other	0.4		1.8		(1.8)		0.4
Total	$	69.3	$	2.0	$	(11.9)	$	59.4


	December 31, 2019		Expense		Paid/Utilized		March 31, 2020
Severance and benefits	$	21.6	$	(1.5)	$	(9.5)	$	10.6
Plant closing and other	0.6		0.4		(0.4)		0.6
Total	$	22.2	$	(1.1)	$	(9.9)	$	11.2


As of March 31, 2021	Gross		Accumulated Amortization		Net
Customer relationships	$	1,107.0	$	(383.0)	$	724.0
Developed technology	330.2		(152.1)		178.1
Capitalized software	94.1		(47.8)		46.3
Trademarks	38.8		(20.4)		18.4
Total finite-lived identifiable intangible assets	$	1,570.1	$	(603.3)	$	966.8
Indefinite-lived trademarks	295.9		—		295.9
Total intangible assets	$	1,866.0	$	(603.3)	$	1,262.7
As of December 31, 2020	Gross		Accumulated Amortization		Net
Customer relationships	$	1,114.3	$	(362.5)	$	751.8
Developed technology	330.0		(144.8)		185.2
Capitalized software	94.2		(44.3)		49.9
Trademarks	39.0		(19.3)		19.7

Total finite-lived identifiable intangible assets	$	1,577.5	$	(570.9)	$	1,006.6
Indefinite-lived trademarks	295.9		—		295.9
Total intangible assets	$	1,873.4	$	(570.9)	$	1,302.5


	March 31, 2021		December 31, 2020
Term Loan due 2027	$	2,178.0	$	2,183.5

Unamortized discount and issuance costs	(29.1)		(31.0)
	2,148.9		2,152.5
Less: Current Portion	(22.0)		(22.0)
Total long-term debt, net of current portion	$	2,126.9	$	2,130.5


	March 31, 2022		December 31, 2021
Term Loan due 2027 at 2.99% and 2.84% at March 31, 2022 and December 31, 2021, respectively.	$	2,156.2	$	2,161.7
Senior Secured Notes due 2028 at 4.125% at both March 31, 2022 and December 31, 2021	850.0		850.0
Unamortized discount and issuance costs	(38.1)		(39.4)
	2,968.1		2,972.3
Less: Current Portion	(21.8)		(21.8)
Total long-term debt, net of current portion	$	2,946.3	$	2,950.5


	Term Loan
Remainder of 2021	$	16.5
2022	22.0
2023	22.0
2024	22.0
2025	22.0
2026	22.0
Thereafter	2,051.5
Total	$	2,178.0


	Three months ended March 31, 2021		Three months ended March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - Payments on operating leases	$	13.7	$	13.0
Right-of-use assets obtained in exchange for new lease obligations:


Operating leases	$	10.2	$	11.3


	Financial statement line item	March 31, 2022		December 31, 2021

Operating lease right-of-use assets	Other assets	$	152.8	$	152.9



Operating lease liabilities	Accrued expenses and other liabilities	$	44.0	$	42.1

Operating lease liabilities	Other long-term liabilities	112.8		113.6

Total lease liabilities		$	156.8	$	155.7


	March 31, 2022		December 31, 2021
Weighted Average Remaining Lease Term	5.6 years		5.5 years


Weighted Average Discount Rate	5.3	%	5.2	%


	As of March 31, 2021		As of December 30, 2020
	Operating Leases
2021	$	37.5	$	51.0
2022	41.5		41.4
2023	33.7		33.4
2024	21.5		20.9
2025	10.7		10.4
Thereafter	20.5		17.2
Total Lease Payments	165.4		174.3
Less: Imputed Interest	(22.7)		(24.7)
Present value of lease liabilities	$	142.7	$	149.6


	2021		2020
Change in product warranty accrual
Beginning balance, December 31	$	36.5	$	43.3
Provision charge to expense	6.4		7.4
Paid/utilized	(6.1)		(10.6)
Ending balance, March 31	$	36.8	$	40.1


	2021		2020
Beginning liability balance, January 1	$	155.6	$	0
Tax receivable agreement, initially recorded	0		133.4
Change in fair value	(2.3)		(16.9)
Ending liability balance, March 31	$	153.3	$	116.5


Warrant valuation inputs	Warrant valuation inputs	March 31, 2021			December 31, 2020 (as restated)			Warrant valuation inputs	March 31, 2022			December 31, 2021
Stock price	Stock price	$	20.00		$	18.67		Stock price	$	14.00		$	24.97
Strike price	Strike price	$	11.50		$	11.50		Strike price	$	11.50		$	11.50
Remaining life	Remaining life	3.85			4.10			Remaining life	2.85			3.10
Volatility	Volatility	32.0		%	29.0		%	Volatility	41.0		%	34.2		%
Interest rate (1)	Interest rate (1)	0.59		%	0.27		%	Interest rate (1)	2.42		%	0.98		%
Dividend yield (2)	Dividend yield (2)	0.05		%	0.05		%	Dividend yield (2)	0.07		%	0.04		%


	March 31, 2021				December 31, 2020
	Fair Value		Par Value (1)		Fair Value		Par Value (1)
Term Loan due 2027	$	2,159.0	$	2,178.0	$	2,169.9	$	2,183.5


Sales	Three months ended March 31, 2022		Three months ended March 31, 2021
Americas	$	549.0	$	505.9
Asia Pacific	353.8		377.6
Europe, Middle East & Africa	318.0		250.4
	1,220.8		1,133.9
Eliminations	(64.4)		(35.5)
Total	$	1,156.4	$	1,098.4


Intersegment sales (1)	Three months ended March 31, 2021		Three months ended March 31, 2020
Americas	$	4.4	$	2.7
Asia Pacific	20.2		15.2
Europe, Middle East & Africa	10.9		11.0
Total	$	35.5	$	28.9


Operating profit (loss) (1)	Three months ended March 31, 2021		Three months ended March 31, 2020
Americas	$	126.4	$	91.5
Asia Pacific	53.1		20.9
Europe, Middle East & Africa	33.4		20.8
Total reportable segments	212.9		133.2
Foreign currency gain (loss)	6.9		(1.8)
Corporate and other	(108.2)		(111.2)
Total corporate, other and eliminations	(101.3)		(113.0)
Amortization of intangibles	(31.8)		(32.4)
Operating profit (loss)	$	79.8	$	(12.2)


Sales by Products and Services Offering	Three months ended March 31, 2021		Three months ended March 31, 2020
Critical infrastructure & solutions	$	627.9	$	461.5
Services & spares	321.8		306.3
Integrated rack solutions	148.7		129.5
Total	$	1,098.4	$	897.3


(In millions, except share and per share amounts)	Three months ended March 31, 2022		Three months ended March 31, 2021
Basic earnings (loss) per share computation:
Net income (loss)	$	8.5	$	31.7
Weighted-average number of shares outstanding - basic	375,972,294		349,603,701
Basis earnings per share	$	0.02	$	0.09

Diluted earnings (loss) per share computation:
Net income (loss)	$	8.5	$	31.7
Gain on fair value of warrant liabilities	(94.9)		—
Net income (loss) adjusted for the gain on fair value of warrant liabilities	$	(86.4)	$	31.7

Weighted-average number of shares outstanding - basic	375,972,294		349,603,701
Dilutive effect of private warrants	3,720,435		—
Dilutive effect of equity-based compensation	—		3,844,884
Weighted-average number of shares outstanding - diluted	379,692,729		353,448,585
Diluted earnings (loss) per share	$	(0.23)	$	0.09


	Three months ended March 31, 2021		Three months ended March 31, 2020 (as restated)
Net income (loss) attributable to common shareholders	$	31.7	$	(208.3)

Weighted-average number of ordinary shares outstanding - basic	349,603,701		240,656,864
Dilutive effect of equity-based compensation and warrants	3,844,884		0
Weighted-average number of ordinary shares outstanding - diluted	353,448,585		240,656,864


Net income per share attributable to common shareholders
Basic	$	0.09	$	(0.87)
Diluted	0.09		(0.87)


(Dollars in millions)	2021		2020 (as restated)		$ Change		% Change
Net sales	$	1,098.4	$	897.3	$	201.1	22.4	%
Cost of sales	740.4		610.3		130.1		21.3	%
Gross profit	358.0		287.0		71.0		24.7	%
Selling, general and administrative expenses	250.1		264.8		(14.7)		5.6	%
Amortization of intangibles	31.8		32.4		(0.6)		1.9	%
Restructuring costs	2.0		(1.1)		3.1		281.8	%
Foreign currency (gain) loss, net	(6.9)		1.8		(8.7)		483.3	%
Other operating expense (income)	1.2		1.3		(0.1)		7.7	%
Operating profit (loss)	79.8		(12.2)		92.0		754.1	%
Interest expense, net	24.1		68.9		(44.8)		65.0	%
Loss on extinguishment of debt	0.4		174.0		(173.6)		99.8	%
Change in fair value of warrant liabilities	13.6		(60.6)		74.2		122.4	%
Income tax expense (benefit)	10.0		13.8		(3.8)		27.5	%
Net income (loss)	$	31.7	$	(208.3)	$	240.0	115.2	%