Company: VRT
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001674101-25-000008
Chunk: 75

Company: Vertiv Holdings Co
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 8
Chunk 75
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 30, 2025, the Company expects approximately $27.9 of pre-tax net gains on cash flow hedges will be reclassified from accumulated other comprehensive income (loss) into earnings during the next twelve months.The interest rate swaps are valued using the SOFR yield curves at the reporting date and are classified in Level 2. Counterparties to these contracts are highly rated financial institutions. The fair values of the Company’s interest rate swaps are adjusted for nonperformance risk and creditworthiness of the counterparty through the Company’s credit valuation adjustment (“CVA”). The CVA is calculated at the counterparty level utilizing the fair value exposure at each payment date and applying a weighted probability of the appropriate survival and marginal default percentages.

12

Foreign currency exchange forwards - The Company may enter into derivative financial instruments designed to hedge the exposure to changes in foreign currency exchange rates. Derivatives are recognized as assets or liabilities in the Unaudited Condensed Consolidated Balance Sheets at their fair value. The duration of the derivatives are generally less than one year. The Company values foreign currency exchange swaps using broker quotations or market transactions on the listed or over-the-counter market; as such, these derivative instruments are classified in Level 2. When the derivative instrument qualifies as a cash flow hedge changes in the fair value are deferred through other comprehensive income depending on the effectiveness of the instrument. The Company reclassifies the gain or loss associated with the cash flow hedges into earnings when the underlying exposure is recognized. At June 30, 2025 and December 31, 2024, we had derivative instruments which hedge our exposure to certain foreign currency exchange rates with a notional amount of $113.6 and $129.0, respectively. For the three and six months ended June 30, 2025 there were $1.2 and $5.9 in realized losses associated with the foreign currency exchange swaps within "Cost of sales - products" on the Unaudited Condensed Consolidated Statements of Earnings (Loss). For the three and six months ended June 30, 2024 there was $0.6 realized gain associated with the foreign currency exchange swaps.Economic hedges - At June 30, 2025 and December 31, 2024 we had derivative instruments which hedge our purchases of aluminum at 8,700.0 and 10,730.0 metric tons, respectively, and copper with notional amounts of 7,190.0 and 7,330.0 metric tons,