Company: VRT
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001628280-25-005905
Chunk: 139

Company: Vertiv Holdings Co
Filing Date: 2025-02-18
Form: 10-K
Item: Item 1
Chunk 139
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 to historical earnings as they are more objectively verifiable compared to forecasts. In evaluating the objective evidence that historical results provide, we generally consider three years of cumulative income or loss at the jurisdictional taxpayer level as an important factor.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to certain market risks, including the impact of changes in foreign currency exchange rates, interest rates and the prices of various commodities used in the normal course of business. 

To mitigate the volatility in our earnings and cash flows, we manage certain of our exposures through the use of various financial instruments, including derivatives, to help us hedge our foreign currency exchange risk, interest rate risk, and commodity risk. We do not enter into such transactions for trading or speculative purposes.

A discussion of our accounting policies for derivative instruments and hedging activities is included in “Note 1 – Summary of Significant Accounting Policies”. Information relating to market risks is presented in “Note 12 - Financial Instruments and Risk Management” in the Notes to Consolidated Financial Statements and is incorporated by reference into Part II of this Annual Report.

Foreign Exchange Rate Risk

We have transactional foreign currency exposures related to buying and selling in currencies other than the local currencies in which we operate. We enter into one-month foreign exchange forwards to mitigate exposures of fluctuations in currencies such as European Euro, Chinese Yuan, and Great British Pound on the carrying amount of foreign currency-denominated assets, liabilities, commitments and, when applicable, we enter into foreign currency exchange forwards for generally less than one year to mitigate the exposure to certain anticipated foreign currency transactions. We have translation exposure resulting from translating the financial statements of foreign subsidiaries into United States Dollars. During 2024, we hedged portions of the net investment in foreign subsidiaries against fluctuations in the European Euro and Chinese Yuan through derivative financial instruments.

Interest Rate Risk

We are subject to market risk from exposure to changes in interest rates and cash and cash equivalents, which are exposed to floating interest rates and may impact cash flow. The ABL Revolving Credit Facility, Term Loan, and cash and cash equivalents are exposed to floating interest rates and may impact cash flow. At December 31, 2024, there were no borrowings outstanding under the ABL Revolving Credit Facility and there was an outstanding principal amount of $2,097.0 on the Term Loan, due 2027 with a borrowing rate of 6.19%. At December 31, 2023, were no borrowings outstanding under the ABL Revolving Credit Facility