Investor Presentation December 2019
EBITDA Reconciliation
EBITDA RECONCILIATION
($M FYE 12/31)
2016
2017
2018
Loss from continuing operations
$(109)
$(387)
$(321)
Interest expense
25
379
289
Income tax expense (benefit)
141
19
50
Depreciation and amortization
172
287
217
EBITDA
229
259
$235
Cost to achieve operational initiatives (a)
10
84
100
Digital project implementation costs (b)
7
76
Transition costs (c)
23
104
71
Foreign currency (gains) / losses (d)
5
11
(5)
Contingent consideration (e)
(18)
(10)
Acquisition costs (f)
7
Advisory fee (g)
Impact of purchase accounting (h)
Reserve for customer dispute (i)
Loss on asset disposals
1
19
5
32
52
33
6
7
(6)
1
3
9
Reserve for warranty item (j)
Stock-based and special compensation (k)
16
Transaction costs (I)
Goodwill impairment (m)
989
85
57
Total adjustments
$243
$241
$267
Adjusted EBITDA
$472
$500
$502
Source: Company filings and Management estimates
VERTIV
COMMENTARY
a) Cost to achieve operational initiatives include transformation efforts and restructuring. Restructuring
costs include plant shutdown costs, severance, start-up and moving costs, among other things.
b) Investments in global digital and IT systems to drive efficiency, speed and cost reductions.
c) Transition costs are primarily made up of professional fees and other costs related to standing up the
business, including rebranding.
d) Represents foreign currency gains and losses as well as losses on hedges of balance sheet
exposures that do not receive deferral accounting.
e) During the second quarter of 2017 we recorded a $17.9 million adjustment to contingent consideration
pursuant to the acquisition from Emerson. During the twelve months ended December 31, 2018, we
recorded $10.0 million of adjustments to contingent consideration related to the Energy Labs
acquisition.
f) During 2018 we recorded a $7.1 million charge to cost of sales and inventory related to
discontinuation of a product line as a result of the Geist acquisition.
g) Advisory fee to be paid to an affiliate of the Company, inclusive of $10.0 million associated with
specific financing arrangements in the first quarter of 2017.
h) Represents the non-cash effect of purchase accounting related to deferred revenue, adjustments to
inventory, deferred revenue amortization, and rent expense.
Represents a reserve for an on-going customer payment dispute related to a large project completed
in the Americas.
Represents the reserve for a specific, large warranty claim associated with product primarily shipped
pre-acquisition.
k) Represents stock based compensation and includes cash bonuses paid in lieu of stock-based
compensation and other nonrecurring bonus payments.
1) Non-recurring costs (primarily fees) in connection with the separation from Emerson.
m) Goodwill impairment was largely attributable to the Europe, Middle East & Africa business and was
recorded in the quarter ended June 30, 2016.
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