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

Company: Vertiv Holdings Co
Filing Date: 2025-02-18
Form: 10-K
Item: Item 16
Chunk 18
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 December 31, 2024, there are no outstanding Private Placement Warrants.The Warrants were classified as a liability at fair value on the Company’s Consolidated Balance Sheet at December 31, 2023 and the change in the fair value of such liability in each period is recognized as a gain or loss in the Company’s Consolidated Statements of Earnings (Loss). The Warrants are deemed equity instruments for income tax purposes. The Private Placement Warrants were valued using a Black-Scholes-Merton pricing model as described in “Note 12 - Financial Instruments and Risk Management” to the Consolidated Financial Statements.Derivative Instruments and Hedging ActivitiesIn the normal course of business, the Company is exposed to changes in interest rates, foreign currency exchange rates and commodity prices due to its worldwide presence, business profile and long-term debt agreements. The Company’s foreign currency exposures relate to transactions denominated in currencies that differ from the functional currencies of its subsidiaries. Primary commodity exposures are price fluctuations on forecasted purchases of copper and aluminum and related products. As part of the Company’s risk management strategy, derivative instruments can be selectively used in an effort to minimize the impact of these exposures. All derivatives are associated with specific underlying exposures and the Company does not hold derivatives for trading or speculative purposes. The duration of hedge positions is generally less than one year.

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All derivatives are accounted for under ASC 815, Derivatives and Hedging, and recognized at fair value as assets or liabilities in the Consolidated Balance Sheets. For derivatives hedging variability in future cash flows, the gain or loss is deferred in equity as a component of accumulated other comprehensive (loss) income and recognized when the underlying transaction impacts earnings. For derivatives hedging the fair value of existing assets or liabilities, both the gain or loss on the derivative and the offsetting loss or gain on the hedged item are recognized in earnings each period. The Company also uses derivatives to hedge economic exposures that are not designated as accounting hedges under ASC 815. The underlying exposures for these hedges relate primarily to the revaluation of certain foreign-currency denominated assets and liabilities. Gains or losses of these economic hedges, as well as any gains or losses on derivative instruments not designated as hedges, are recognized in the Consolidated Statements of Earnings (Loss) immediately.The Company may enter into net investment hedges of their foreign subsidiaries. The Company utilizes intercompany foreign currency denominated debt to hedge its investment in certain foreign subsidiaries and affiliates. Realized and unrealized translation