Vertiv Holdings Co 10-Q for FY2022 Q3

Vertiv Holdings Co (VRT)

10-Q 2022-10-31 For: 2022-09-30

Added on April 02, 2026

About this 10-Q

Vertiv Holdings Co filed this 10-Q on October 31, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.48B; up 20.5% from $1.23B a year earlier
Net income: $21.2M; down 62.3% from net income of $56.2M a year earlier
Diluted EPS: $0.06; down 60.0% from $0.15 a year earlier

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	Three months ended September 30, 2022		Three months ended September 30, 2021		Nine months ended September 30, 2022		Nine months ended September 30, 2021
Net sales
Net sales - products	$	1,135.4	$	894.8	$	3,039.8	$	2,625.1
Net sales - services	345.7		334.1		997.1		962.5
Net sales	1,481.1		1,228.9		4,036.9		3,587.6
Costs and expenses
Cost of sales - products	838.5		653.4		2,301.7		1,870.4
Cost of sales - services	213.3		193.8		630.8		568.2
Cost of sales	1,051.8		847.2		2,932.5		2,438.6
Operating expenses
Selling, general and administrative expenses	295.2		257.8		875.0		779.6
Amortization of intangibles	54.2		31.6		167.7		95.3
Restructuring costs	(1.5)		(3.8)		0.1		(0.7)
Foreign currency (gain) loss, net	0.2		4.9		1.8		2.1
Asset impairments	—		8.7		—		8.7
Other operating expense (income)	1.2		0.7		(1.2)		0.2
Operating profit (loss)	80.0		81.8		61.0		263.8
Interest expense, net	38.8		22.4		101.5		66.5
Loss on extinguishment of debt	—		—		—		0.4
Change in fair value of warrant liabilities	9.8		(32.5)		(124.0)		52.3
Income (loss) before income taxes	31.4		91.9		83.5		144.6
Income tax expense	10.2		35.7		33.5		47.0
Net income (loss)	$	21.2	$	56.2	$	50.0	$	97.6

Earnings (loss) per share:
Basic	$	0.06	$	0.16	$	0.13	$	0.28
Diluted	$	0.06	$	0.15	$	(0.20)	$	0.27
Weighted-average shares outstanding:
Basic	377,016,981		352,482,900		376,531,805		351,439,095
Diluted	377,444,002		363,198,701		378,038,809		355,974,628


	Three months ended September 30, 2022		Three months ended September 30, 2021		Nine months ended September 30, 2022		Nine months ended September 30, 2021
Net income (loss)	$	21.2	$	56.2	$	50.0	$	97.6
Other comprehensive income (loss), net of tax:
Foreign currency translation	(146.1)		(28.0)		(332.3)		(43.9)
Interest rate swaps	30.9		2.7		107.1		28.0
Tax receivable agreement	—		2.2		—		(3.1)
Pension	0.1		0.1		0.2		(0.5)
Other comprehensive income (loss), net of tax	(115.1)		(23.0)		(225.0)		(19.5)
Comprehensive income (loss)	$	(93.9)	$	33.2	$	(175.0)	$	78.1


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	258.0	$	439.1
Accounts receivable, less allowances of $15.9 and $14.1, respectively	1,743.8		1,536.4
Inventories	804.3		616.3
Other current assets	167.7		106.8
Total current assets	2,973.8		2,698.6
Property, plant and equipment, net	466.0		489.3
Other assets:
Goodwill	1,247.3		1,330.1
Other intangible assets, net	1,801.6		2,138.2
Deferred income taxes	43.3		47.9
Other	295.0		235.5
Total other assets	3,387.2		3,751.7
Total assets	$	6,827.0	$	6,939.6
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	21.8	$	21.8
Accounts payable	882.9		858.5
Accrued expenses and other liabilities	900.3		953.4
Income taxes	33.4		21.1
Total current liabilities	1,838.4		1,854.8
Long-term debt, net	3,223.8		2,950.5
Deferred income taxes	152.1		198.8
Warrant liabilities	25.6		149.6
Other long-term liabilities	320.0		368.2
Total liabilities	5,559.9		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, 377,058,727 and 375,801,857 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	—		—
Additional paid-in capital	2,621.9		2,597.5
Accumulated deficit	(1,165.4)		(1,215.4)
Accumulated other comprehensive income (loss)	(189.4)		35.6
Total equity	1,267.1		1,417.7
Total liabilities and equity	$	6,827.0	$	6,939.6


	Nine months ended September 30, 2022		Nine months ended September 30, 2021
Cash flows from operating activities:
Net income (loss)	$	50.0	$	97.6
Adjustments to reconcile net income (loss) to net cash used for operating activities:
Depreciation	53.3		51.6
Amortization	178.6		105.5
Deferred income taxes	(22.0)		(22.3)
Amortization of debt discount and issuance costs	7.4		4.6
Loss on extinguishment of debt	—		0.4
Change in fair value of warrant liabilities	(124.0)		52.3
Asset impairment	—		8.7
Changes in operating working capital	(448.0)		(160.0)
Stock-based compensation	20.1		17.5
Payment of contingent consideration	(8.7)		—
Changes in tax receivable agreement	—		3.3
Other	(40.2)		15.2
Net cash provided by (used for) operating activities	(333.5)		174.4
Cash flows from investing activities:
Capital expenditures	(61.7)		(43.3)
Investments in capitalized software	(8.0)		(9.5)
Acquisition of business, net of cash acquired	(5.0)		—
Proceeds from disposition of property, plant and equipment	—		6.1
Net cash used for investing activities	(74.7)		(46.7)
Cash flows from financing activities:
Borrowings from ABL revolving credit facility and short-term borrowings	578.4		—
Repayments of ABL revolving credit facility and short-term borrowings	(281.5)		—
Repayment of long-term debt	(10.9)		(16.4)
Debt issuance costs	(0.5)		—
Proceeds from the exercise of warrants	—		107.5
Payment of tax receivable agreement	(25.0)		—
Payment of contingent consideration	(12.8)		—
Exercise of employee stock options	1.3		2.6
Employee taxes paid from shares withheld	(4.3)		(7.2)
Net cash provided by (used for) financing activities	244.7		86.5
Effect of exchange rate changes on cash and cash equivalents	(14.9)		(5.2)
Increase (decrease) in cash, cash equivalents and restricted cash	(178.4)		209.0
Beginning cash, cash equivalents and restricted cash	447.1		542.6
Ending cash, cash equivalents and restricted cash	$	268.7	$	751.6
Changes in operating working capital
Accounts receivable	$	(257.0)	$	(67.8)
Inventories	(202.3)		(147.7)
Other current assets	(4.2)		2.4
Accounts payable	42.2		63.1
Accrued expenses and other liabilities	(15.7)		5.7
Income taxes	(11.0)		(15.7)
Total changes in operating working capital	$	(448.0)	$	(160.0)


	Share Capital
	Shares	Amount		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2020	342,024,612	$	—	$	1,791.8	$	(1,331.2)	$	51.5	$	512.1
Net income (loss)	—	—		—		31.7		—		31.7
Exercise of employee stock options	76,047	—		0.9		—		—		0.9
Employee 401K match with Vertiv stock	69,309	—		1.3		—		—		1.3
Exercise of warrants (1)	9,346,822	—		176.0		—		—		176.0
Stock-based compensation	—	—		5.6		—		—		5.6
Other comprehensive income (loss), net of tax	—	—		—		—		1.1		1.1
Balance at March 31, 2021	351,516,790	$	—	$	1,975.6	$	(1,299.5)	$	52.6	$	728.7
Net income (loss)	—	$	—	$	—	$	9.7	$	—	$	9.7
Exercise of employee stock options	120,721	—		1.4		—		—		1.4
Stock comp activity, net of withholdings for tax (2)	586,139	—		(0.8)		—		—		(0.8)
Employee 401K match with Vertiv stock	107,890	—		2.3		—		—		2.3
Other comprehensive income (loss), net of tax	—	—		—		—		2.4		2.4
Balance at June 30, 2021	352,331,540	$	—	$	1,978.5	$	(1,289.8)	$	55.0	$	743.7
Net income (loss)	—	—		$	—	$	56.2	$	—	$	56.2
Exercise of employee stock options	51,122	—		0.8		—		—		0.8
Stock comp activity, net of withholdings for tax (3)	27,069	—		5.5		—		—		5.5
Employee 401K match with Vertiv stock	89,975	—		2.5		—		—		2.5
Other comprehensive income (loss), net of tax	—	—		—		—		(23.0)		(23.0)
Balance at September 30, 2021	352,499,706	$	—	$	1,987.3	$	(1,233.6)	$	32.0	$	785.7

Balance at December 31, 2021	375,801,857	$	—	$	2,597.5	$	(1,215.4)	$	35.6	$	1,417.7
Net income (loss)	—	—		—		8.5		—		8.5
Exercise of employee stock options	89,566	—		1.0		—		—		1.0
Stock-based compensation	—	—		6.6		—		—		6.6
Employee 401K match with Vertiv stock	100,541	—		2.3		—		—		2.3
Other comprehensive income (loss), net of tax	—	—		—		—		18.0		18.0
Balance at March 31, 2022	375,991,964	$	—	$	2,607.4	$	(1,206.9)	$	53.6	$	1,454.1
Net income (loss)	—	$	—	$	—	$	20.3	$	—	$	20.3
Exercise of employee stock options	4,279	—		0.1		—		—		0.1
Stock comp activity, net of withholdings for tax (4)	563,597	—		2.9		—		—		2.9
Employee 401K match with Vertiv stock	161,333	—		2.2		—		—		2.2
Other comprehensive income (loss), net of tax	—	—		—		—		(127.9)		(127.9)
Balance at June 30, 2022	376,721,173	$	—	$	2,612.6	$	(1,186.6)	$	(74.3)	$	1,351.7
Net income (loss)	—	$	—	$	—	$	21.2	$	—	$	21.2
Exercise of employee stock options	20,649	—		0.2		—		—		0.2
Stock-based compensation	—	—		6.3		—		—		6.3
Employee 401K match with Vertiv stock	316,905	—		2.8		—		—		2.8
Other comprehensive income (loss), net of tax	—	—		—		—		(115.1)		(115.1)
Balance at September 30, 2022	377,058,727	$	—	$	2,621.9	$	(1,165.4)	$	(189.4)	$	1,267.1


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


Unaudited proforma information	Three months ended September 30, 2021		Nine months ended September 30, 2021
Net sales	$	1,322.2	$	3,884.4
Net income (loss)	43.9		63.0


	Three months ended September 30, 2022
	Americas		Asia Pacific		Europe, Middle East, & Africa		Total
Sales by Product and Service Offering:
Critical infrastructure & solutions	$	417.3	$	265.7	$	224.3	$	907.3
Services & spares	203.6		113.3		71.1		388.0
Integrated rack solutions	91.7		57.1		37.0		185.8
Total	$	712.6	$	436.1	$	332.4	$	1,481.1

Timing of revenue recognition:
Products and services transferred at a point in time	$	492.7	$	343.4	$	231.8	$	1,067.9
Products and services transferred over time	219.9		92.7		100.6		413.2
Total	$	712.6	$	436.1	$	332.4	$	1,481.1


	Balances at September 30, 2022		Balances at December 31, 2021

Deferred revenue - current (1)	$	278.7	$	238.9
Deferred revenue - noncurrent (2)	45.8		59.9
Other contract liabilities - current (1)	48.2		52.1


	December 31, 2021		Expense		Paid/Utilized		September 30, 2022
Severance and benefits	$	33.8	$	(1.7)	$	(15.7)	$	16.4
Plant closing and other	0.2		1.8		(1.8)		0.2
Total	$	34.0	$	0.1	$	(17.5)	$	16.6


	December 31, 2020		Expense		Paid/Utilized		September 30, 2021
Severance and benefits	$	68.9	$	(4.8)	$	(21.0)	$	43.1
Plant closing and other	0.4		4.1		(3.9)		0.6
Total	$	69.3	$	(0.7)	$	(24.9)	$	43.7


	September 30, 2022		December 31, 2021
Term Loan due 2027 at 5.30% and 2.84% at September 30, 2022 and December 31, 2021, respectively	$	2,150.7	$	2,161.7
Senior Secured Notes due 2028 at 4.125% at both September 30, 2022 and December 31, 2021	850.0		850.0
ABL Revolving Credit Facility	280.0		—
Unamortized discount and issuance costs	(35.1)		(39.4)
	3,245.6		2,972.3
Less: Current Portion	(21.8)		(21.8)
Total long-term debt, net of current portion	$	3,223.8	$	2,950.5


	Nine months ended September 30, 2022		Nine months ended September 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - Payments on operating leases	$	42.2	$	42.1
Right-of-use assets obtained in exchange for new lease obligations:


Operating leases	$	37.9	$	52.5


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

Operating lease right-of-use assets	Other assets	$	144.6	$	152.9



Operating lease liabilities	Accrued expenses and other liabilities	$	42.6	$	42.1

Operating lease liabilities	Other long-term liabilities	105.9		113.6

Total lease liabilities		$	148.5	$	155.7


	September 30, 2022		December 31, 2021
Weighted-average remaining lease term	5.7 years		5.5 years


Weighted-average discount rate	5.5	%	5.2	%


	September 30, 2022		December 31, 2021
	Operating Leases
2022	$	12.7	$	50.5
2023	46.8		41.5
2024	35.3		30.0
2025	23.2		18.7
2026	14.4		10.3
Thereafter	43.8		32.3
Total Lease Payments	176.2		183.3
Less: Imputed Interest	(27.7)		(27.6)
Present value of lease liabilities	$	148.5	$	155.7


	September 30, 2022		December 31, 2021
Inventories
Finished products	$	268.8	$	236.5
Raw materials	360.4		274.8
Work in process	175.1		105.0
Total inventories	$	804.3	$	616.3


Warrant valuation inputs	September 30, 2022			December 31, 2021
Stock price	$	9.72		$	24.97
Strike price	$	11.50		$	11.50
Remaining life	2.35			3.10
Volatility	46.0		%	34.2		%
Interest rate (1)	4.23		%	0.98		%
Dividend yield (2)	0.10		%	0.04		%


	September 30, 2022		December 31, 2021
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	258.0	$	439.1
Restricted cash included in other current assets	10.7		8.0
Total cash, cash equivalents, and restricted cash	$	268.7	$	447.1


	Nine months ended September 30, 2022		Nine months ended September 30, 2021
Change in product warranty accrual
Balance at the beginning of the period	$	30.0	$	36.5
Provision charge to expense	10.8		11.2
Paid/utilized	(16.5)		(17.8)
Balance at the end of the period	$	24.3	$	29.9


		As of September 30, 2022
	Balance Sheet Location	Total		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Unobservable inputs (Level 3)
Assets:
Interest rate swaps	Other current assets	$	30.7	$	—	$	30.7	$	—
Interest rate swaps	Other noncurrent assets	85.1		—		85.1		—
Total assets		$	115.8	$	—	$	115.8	$	—

Liabilities:

Private warrants	Warrant liabilities	$	25.6	$	—	$	25.6	$	—
Total liabilities		$	25.6	$	—	$	25.6	$	—


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

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


	September 30, 2022				December 31, 2021
	Fair Value		Par Value (1)		Fair Value		Par Value (1)
Term Loan due 2027	$	2,053.9	$	2,150.7	$	2,148.2	$	2,161.7
Senior Secured Notes due 2028	683.3		850.0		853.2		850.0
ABL Revolving Credit Facility due 2025	280.0		280.0		—		—


Sales	Three months ended September 30, 2022		Three months ended September 30, 2021		Nine months ended September 30, 2022		Nine months ended September 30, 2021
Americas	$	722.5	$	542.1	$	1,925.8	$	1,616.2
Asia Pacific	460.3		417.2		1,250.7		1,211.1
Europe, Middle East & Africa	381.1		306.4		1,096.7		867.0
	1,563.9		1,265.7		4,273.2		3,694.3
Eliminations	(82.8)		(36.8)		(236.3)		(106.7)
Total	$	1,481.1	$	1,228.9	$	4,036.9	$	3,587.6


Intersegment sales (1)	Three months ended September 30, 2022		Three months ended September 30, 2021		Nine months ended September 30, 2022		Nine months ended September 30, 2021
Americas	$	9.9	$	4.9	$	30.9	$	12.6
Asia Pacific	24.2		22.6		74.6		61.2
Europe, Middle East & Africa	48.7		9.3		130.8		32.9
Total	$	82.8	$	36.8	$	236.3	$	106.7


(In millions, except share and per share amounts)	Three months ended September 30, 2022		Three months ended September 30, 2021		Nine months ended September 30, 2022		Nine months ended September 30, 2021
Basic earnings (loss) per share computation:
Net income (loss)	$	21.2	$	56.2	$	50.0	$	97.6
Weighted-average number of shares outstanding - basic	377,016,981		352,482,900		376,531,805		351,439,095
Basic earnings per share	0.06		0.16		$	0.13	$	0.28
Diluted earnings (loss) per share computation:
Net income (loss)	21.2		$	56.2	$	50.0	$	97.6
Gain on fair value of warrant liabilities(1)	—		—		(124.0)		—
Net income (loss) adjusted for the gain on fair value of warrant liabilities	$	21.2	$	56.2	$	(74.0)	$	97.6
Weighted-average number of shares outstanding - basic	377,016,981		352,482,900		376,531,805		351,439,095
Dilutive effect of private warrants	—		5,976,022		1,507,004		—
Dilutive effect of equity-based compensation	427,021		4,739,779		—		4,535,533
Weighted-average number of shares outstanding - diluted	377,444,002		363,198,701		378,038,809		355,974,628
Diluted earnings (loss) per share	0.06		0.15		$	(0.20)	$	0.27


(Dollars in millions)	Three months ended September 30, 2022		Three months ended September 30, 2021		$ Change		% Change
Net sales	$	1,481.1	$	1,228.9	$	252.2	20.5	%
Cost of sales	1,051.8		847.2		204.6		24.2
Gross profit	429.3		381.7		47.6		12.5
Selling, general and administrative expenses	295.2		257.8		37.4		14.5
Amortization of intangibles	54.2		31.6		22.6		71.5
Restructuring costs	(1.5)		(3.8)		2.3		(60.5)
Foreign currency (gain) loss, net	0.2		4.9		(4.7)		(95.9)
Asset impairments	—		8.7		(8.7)		(100.0)
Other operating expense (income)	1.2		0.7		0.5		71.4
Operating profit (loss)	80.0		81.8		(1.8)		(2.2)
Interest expense, net	38.8		22.4		16.4		73.2

Change in fair value of warrant liabilities	9.8		(32.5)		42.3		(130.2)
Income tax expense	10.2		35.7		(25.5)		(71.4)
Net income (loss)	$	21.2	$	56.2	$	(35.0)	(62.3)	%


(Dollars in millions)	2022		2021		$ Change		% Change
Net cash provided by (used for) operating activities	$	(333.5)	$	174.4	$	(507.9)	(291.2)	%
Net cash used for investing activities	(74.7)		(46.7)		(28.0)		(60.0)
Net cash provided by (used for) financing activities	244.7		86.5		158.2		182.9
Capital expenditures	(61.7)		(43.3)		(18.4)		(42.5)
Investments in capitalized software	(8.0)		(9.5)		1.5		15.8


Date: October 31, 2022			Vertiv Holdings Co
			/s/ Rob Johnson
			Name: Rob Johnson
			Title: Chief Executive Officer

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


Payment number	Payroll date	Actual Payments Per Agreement*
1	11/11/2022	$19,230.77
2	11/25	$19,230.77
3	12/9	$19,230.77
4	12/23	$19,230.77
5	1/6/2023	$497,307.69
6	1/20	$19,230.77
7	2/3	$19,230.77
8	2/27	$19,230.77
9	3/3	$19,230.77
10	3/17	$19,230.77
11	3/31	$19,230.77
12	4/14	$19,230.77
13	4/28	$19,230.77
14	5/12	$19,230.77
15	5/26	$19,230.77
16	6/9	$19,230.77
17	6/23	$19,230.77
18	7/7	$19,230.77
19	7/21	$19,230.77
20	8/4	$19,230.77
21	8/18	$19,230.77
22	9/1	$19,230.77
23	9/15	$19,230.77
24	9/29	$19,230.77
25	10/13	$21,923.07
26	10/27	$38,461.54


Position / Primary Work Location			Effective as of the Transition Date, Executive shall serve as CEO, with a primary work location at the Company’s headquarters located in Columbus, Ohio.
Annual Base Salary			$900,000, effective as of the Term Sheet Execution Date, which will be paid in Euros from the Term Sheet Execution Date through the Transition Date (converted using the exchange rate as of the Term Sheet Execution Date), and then paid in U.S. dollars commencing on the Transition Date.
Annual Bonus			Effective as of the Term Sheet Execution Date, incentive compensation opportunity under the Company’s Annual Incentive Plan (the “AIP”) targeted at 125% of new annual base salary, subject to proration for fiscal year 2022 in accordance with the terms of the AIP. To clarify, the 2022 AIP payment will be based 75% on current compensation (80% of $500K) and 25% on new compensation (125% of $900K).
Promotion Equity Award			Subject to approval by the Compensation Committee, on or about October 5, 2022, Executive shall be granted an award of 500,000 stock options under Vertiv’s 2020 Stock Incentive Plan (the “Equity Plan”) (valued at $2.095M with a $4.19 Black Scholes) and a per-share exercise price equal to the closing price of Vertiv’s common stock on the grant date. Such stock option shall be eligible to vest in equal annual installments on each of the first four anniversaries of the grant date, subject to Executive’s continuous employment through the applicable vesting dates. Such stock option shall be subject to the terms and conditions of the Equity Plan and an accompanying award agreement.
Annual Equity Awards			Subject to approval by the Compensation Committee and in accordance with the Company’s historical annual grant practices, in 2023 and each calendar year thereafter, Executive shall be eligible to receive an equity award under the Equity Plan with a target grant date fair value equal to $3,500,000, with such other terms and conditions as may be determined by the Compensation Committee in its sole discretion. Each such annual equity award shall be subject to the terms and conditions of the Equity Plan and an accompanying award agreement.
Non-Compete			Effective as of the Transition Date, Executive shall remain subject to his existing non-compete obligations under Vertiv’s Executive Employment Policy; provided that the Company shall not be obligated to pay any cash compensation to Executive in consideration for such non-compete obligations.
Assignment Benefits			The assignment benefits detailed in Executive’s existing employment arrangements (e.g., corporate housing in Columbus, Ohio, car arrangement in Italy, U.S. rental car reimbursement, etc.) shall remain in effect through March 14, 2023 ; provided that such assignment benefits shall cease thereafter.


Preparation of Italian and US Income Tax Returns for 2022 Only			The Company shall arrange and pay for the preparation of Executive’s Italian and U.S. income tax returns in Italy and the U.S. for calendar year 2022 only; provided that such arrangement and payment shall not be provided for any calendar year thereafter.
Income Tax Equalization			Executive shall remain eligible for income tax equalization through December 31, 2022 in accordance with Company policy and Executive’s existing employment arrangements; provided, however, that such income tax equalization shall be calculated on a pro forma basis excluding (i) any increase in compensation contemplated by this Term Sheet to occur beginning on the Term Sheet Effective Date and (ii) the Promotion Equity Award set forth in this Term Sheet. Executive shall not be eligible for tax equalization for compensation on or following the Transition Date.
Vacation / PTO			Effective as of the Transition Date, Executive shall be eligible to participate in the Company’s vacation/PTO policy and Executive shall waive any accrued vacation and unused holidays with Vertiv Italy.
Severance / Notice			Effective as of the Transition Date, Executive shall be eligible to receive severance benefits under Vertiv Executive Employment Policy. Executive agrees that, effective as of the Transition Date, Executive shall no longer remain entitled to any statutory severance benefits provided under the laws of Italy (including, without limitation, Trattamento di Fine Rapporto) because he will be terminating his employment relationship with Vertiv Italy, as noted above. To the extent Vertiv is required to pay any severance amounts, any benefits under the Executive Employment Policy or the Executive Change of Control Plan shall be offset by such amounts.
Company Pension / 401(k)			Effective as of the Transition Date, Executive shall be eligible to participate in Vertiv’s 401(k) plan subject to the terms of the plan and shall cease to be eligible to participate in any Italian retirement or pension arrangements.
Executive Change of Control Plan			Executive shall remain an eligible participant in Vertiv’s Executive Change of Control Plan.
Company Health Benefits			Subject to enrollment windows and commencing on the Transition Date, Executive shall be responsible for the payment of 100% of the premiums of the Company's benefit programs, including medical, dental and vision (unless Executive elects alternative coverage).
Taxes			All amounts paid hereunder will be subject to applicable withholding taxes.
Relocation			Executive shall be entitled to receive standard tier 3 relocation benefits on or after the Transition Date.
Governing Law / Dispute Resolution			State of Delaware. To the extent permitted by law, any dispute in connection with this Term Sheet or more detailed agreement(s) arising out of this Term Sheet shall be resolved through confidential mediation, or confidential binding arbitration in accordance with an Arbitration Agreement pursuant to the Executive Employment Policy.