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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended September 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __to__
Commission File No. 001-38518
Vertiv Holdings Co
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
81-2376902
(I.R.S Employer
Identification No.)
1050 Dearborn Dr, Columbus, Ohio 43085
(Address of principal executive offices including zip code)
614-888-0246
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.0001 par value per share
VRTNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Exchange Act).
Yes ☐ No
As of October 28, 2022, there were 377,295,546 shares of the Company’s Class A common stock, par value $0.0001, issued and outstanding.



TABLE OF CONTENTS
Page

1



Part I. Financial Information

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
VERTIV HOLDINGS CO
(Dollars in millions except for per share data)
Three months ended September 30, 2022Three months ended September 30, 2021Nine months ended September 30, 2022Nine months ended September 30, 2021
Net sales
Net sales - products$1,135.4 $894.8 $3,039.8 $2,625.1 
Net sales - services345.7 334.1 997.1 962.5 
Net sales1,481.1 1,228.9 4,036.9 3,587.6 
Costs and expenses
Cost of sales - products838.5 653.4 2,301.7 1,870.4 
Cost of sales - services213.3 193.8 630.8 568.2 
Cost of sales1,051.8 847.2 2,932.5 2,438.6 
Operating expenses
Selling, general and administrative expenses295.2 257.8 875.0 779.6 
Amortization of intangibles54.2 31.6 167.7 95.3 
Restructuring costs(1.5)(3.8)0.1 (0.7)
Foreign currency (gain) loss, net0.2 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, net38.8 22.4 101.5 66.5 
Loss on extinguishment of debt   0.4 
Change in fair value of warrant liabilities9.8 (32.5)(124.0)52.3 
Income (loss) before income taxes31.4 91.9 83.5 144.6 
Income tax expense10.2 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:
Basic377,016,981352,482,900376,531,805351,439,095
Diluted377,444,002363,198,701378,038,809355,974,628













See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
2

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
VERTIV HOLDINGS CO
(Dollars in millions)
Three months ended September 30, 2022Three months ended September 30, 2021Nine months ended September 30, 2022Nine months ended September 30, 2021
Net income (loss)$21.2 $56.2 $50.0 $97.6 
Other comprehensive income (loss), net of tax:
Foreign currency translation(146.1)(28.0)(332.3)(43.9)
Interest rate swaps30.9 2.7 107.1 28.0 
Tax receivable agreement 2.2  (3.1)
Pension0.1 0.1 0.2 (0.5)
Other comprehensive income (loss), net of tax(115.1)(23.0)(225.0)(19.5)
Comprehensive income (loss)$(93.9)$33.2 $(175.0)$78.1 













































See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
3

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
VERTIV HOLDINGS CO
(Dollars in millions)
September 30, 2022December 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 
Inventories804.3 616.3 
Other current assets167.7 106.8 
Total current assets2,973.8 2,698.6 
Property, plant and equipment, net466.0 489.3 
Other assets:
Goodwill1,247.3 1,330.1 
Other intangible assets, net1,801.6 2,138.2 
Deferred income taxes43.3 47.9 
Other295.0 235.5 
Total other assets3,387.2 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 payable882.9 858.5 
Accrued expenses and other liabilities900.3 953.4 
Income taxes33.4 21.1 
Total current liabilities1,838.4 1,854.8 
Long-term debt, net3,223.8 2,950.5 
Deferred income taxes152.1 198.8 
Warrant liabilities25.6 149.6 
Other long-term liabilities320.0 368.2 
Total liabilities5,559.9 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 capital2,621.9 2,597.5 
Accumulated deficit(1,165.4)(1,215.4)
Accumulated other comprehensive income (loss) (189.4)35.6 
Total equity1,267.1 1,417.7 
Total liabilities and equity$6,827.0 $6,939.6 













See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
VERTIV HOLDINGS CO
(Dollars in millions)
Nine months ended September 30, 2022Nine 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:
Depreciation53.3 51.6 
Amortization178.6 105.5 
Deferred income taxes(22.0)(22.3)
Amortization of debt discount and issuance costs7.4 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 compensation20.1 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 borrowings578.4  
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 options1.3 2.6 
Employee taxes paid from shares withheld(4.3)(7.2)
Net cash provided by (used for) financing activities244.7 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 cash447.1 542.6 
Ending cash, cash equivalents and restricted cash$268.7 $751.6 
Changes in operating working capital
Accounts receivable$(257.0)$(67.8)
Inventories(202.3)(147.7)
Other current assets(4.2)2.4 
Accounts payable42.2 63.1 
Accrued expenses and other liabilities(15.7)5.7 
Income taxes(11.0)(15.7)
Total changes in operating working capital$(448.0)$(160.0)
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
VERTIV HOLDINGS CO
(Dollars in millions)
Share Capital
SharesAmountAdditional Paid in CapitalAccumulated DeficitAccumulated 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 options76,047 — 0.9 — — 0.9 
Employee 401K match with Vertiv stock69,309 — 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 options120,721 — 1.4 — — 1.4 
Stock comp activity, net of withholdings for tax (2)
586,139 — (0.8)— — (0.8)
Employee 401K match with Vertiv stock107,890 — 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 options51,122 — 0.8 — — 0.8 
Stock comp activity, net of withholdings for tax (3)
27,069 — 5.5 — — 5.5 
Employee 401K match with Vertiv stock89,975 — 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 options89,566 — 1.0 — — 1.0 
Stock-based compensation— — 6.6 — — 6.6 
Employee 401K match with Vertiv stock100,541 — 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 options4,279 — 0.1 — — 0.1 
Stock comp activity, net of withholdings for tax (4)
563,597 — 2.9 — — 2.9 
Employee 401K match with Vertiv stock161,333 — 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 options20,649 — 0.2 — — 0.2 
Stock-based compensation— — 6.3 — — 6.3 
Employee 401K match with Vertiv stock316,905 — 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 
(1)The exercise of warrants includes $107.5 of cash received during the three months ended March 31, 2021 for the exercise of public warrants.
(2)Net stock compensation activity includes 906,197 vested shares offset by 320,058 shares withheld for taxes valued at $7.0 valued and stock-based compensation of $6.2.
(3)Net stock compensation activity includes 29,605 vested shares offset by 2,536 shares withheld for taxes valued at $0.2 and stock-based compensation of $5.7.
(4)Net stock compensation activity includes 876,358 vested shares offset by 312,761 shares withheld for taxes valued at $4.3 and stock-based compensation of $7.2.




See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
6


Vertiv Holdings Co
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
(1) DESCRIPTION OF BUSINESS
Vertiv Holdings Co (together with its majority-owned subsidiaries, “Vertiv”, “we”, “our”, or “the Company”), formerly known as GS Acquisition Holdings Corp, provides mission-critical infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. Vertiv’s offerings include AC and DC power management products, thermal management products, integrated rack systems, modular solutions, management systems for monitoring and controlling digital infrastructure, and service. Vertiv manages and reports results of operations for three reportable segments: Americas; Asia Pacific; and Europe, Middle East & Africa.
(2) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and the rules and regulations of the Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its subsidiaries in which the Company has a controlling interest. These unaudited condensed consolidated interim financial statements do not include all of the information and footnotes required for complete financial statements. In management’s opinion, these financial statements reflect all adjustments of a normal, recurring nature necessary for a fair presentation of the results for the interim periods presented.
The presentation of certain prior period amounts have been reclassed to conform with current year presentation. For the three and nine months ended September 30, 2021, $31.2 and $121.4 of net sales and $25.0 and $87.6 of cost of sales from products were reclassified to services, respectively.
The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Results for these interim periods are not necessarily indicative of results to be expected for the full year due to, among other reasons, the continued uncertainty of general economic conditions due to the COVID-19 pandemic that has impacted, and may continue to impact, the Company's sales channels, supply chain, manufacturing operations, workforce, or other key aspects of the Company’s operations.
The notes included herein should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.
Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04: Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). This ASU provides optional expedients and exceptions to ease the potential burden in accounting for contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued as part of reference rate reform. The amendments became effective March 12, 2020 and can generally be applied through December 31, 2022.
As further described in “Note 6 - Debt” the ABL Revolving Credit Facility was amended on September 20, 2022 and the interest rate benchmark for currently outstanding and future revolving loans was converted from LIBOR to the Secured Overnight Financing Rate (“SOFR”) (with a 10 basis points credit spread adjustment for all available tenors), Euro Interbank Offered Rate (“EURIBOR”) and Sterling Overnight Indexed Average (“SONIA”), as applicable. As the amendment was contemporaneous with changes to terms other than those related to the replacement of the LIBOR reference rate, the Company did not apply the optional expedients within the standard.
The Company also intends to transition our Term Loan due 2027 and our interest rates swaps to another reference rate prior to the discontinuance of LIBOR. The Company does not expect the adoption of this ASU to have a material impact on its Condensed Consolidated Financial Statements.
7

(3) ACQUISITION
On November 1, 2021, the Company, through its wholly-owned subsidiaries Vertiv Holdings Ireland DAC, a private company limited by shares incorporated in Ireland and Vertiv International Holding Corporation, an Ohio corporation, acquired the shares of E&I Engineering Ireland Limited, a private company limited by shares incorporated in Ireland, and its affiliate Powerbar Gulf LLC (“E&I”).
As of September 30, 2022 in conjunction with the E&I acquisition, the value of the contingent earnout is zero based on E&I’s projected future results. For the nine months ended September 30, 2022 the decrease in the fair value of contingent consideration of $3.7 is included within “Other operating expense (income)” on the Unaudited Condensed Consolidated Statements of Earnings (Loss).
During the measurement period there was one change to the purchase price allocation related to a final working capital adjustment to the purchase price. The measurement period adjustment did not have a material impact on the Unaudited Condensed Consolidated Statements of Earnings (Loss). The following is the preliminary purchase price allocation of assets acquired and liabilities assumed as of the acquisition date and related adjustments thereafter:
Preliminary AllocationAdjustmentsAdjusted Preliminary Allocation
Accounts receivable$87.7 $ $87.7 
Inventories50.1  50.1 
Other current assets15.7  15.7 
Property, plant and equipment87.1  87.1 
Goodwill748.2 5.0 753.2 
Other intangible assets1,004.2  1,004.2 
Other assets10.4  10.4 
Accounts payable33.9  33.9 
Accrued expenses and other liabilities50.0  50.0 
Deferred income taxes129.8  129.8 
Other long-term liabilities24.3  24.3 
Net assets acquired and liabilities assumed$1,765.4 $5.0 $1,770.4 
Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of net assets recognized for E&I, and represents the future economic benefits, including synergies, and assembled workforce, that are expected to be achieved as a result of the consummation of the acquisition of E&I. The goodwill arising from the acquisition is not expected to be deductible for tax purposes. The adjusted preliminary goodwill allocation of $277.0 and $476.2 is allocated to the Americas and the Europe, Middle East & Africa segments, respectively.
The following table represents the definite lived intangible assets acquired, the preliminary fair values and respective useful lives as of the acquisition date:
Useful LifePreliminary Fair Value
Customer relationships
15 to 16 years
$731.6 
Developed technology13 years180.7 
Trademarks
15 to 16 years
52.3 
Backlog1 year39.6 
Total intangible assets$1,004.2 
The Company used the multi-period excess earnings method to value the customer relationship intangible assets and the relief from royalty method to value the developed technology intangible assets. The significant assumptions used to estimate the fair value of customer relationships included forecasted earnings before interest, taxes, and amortization, customer attrition rates and a discount rate. The significant assumptions used to estimate the fair value of developed technology included the forecasted revenues, royalty rates and a discount rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions. The estimated weighted-average useful life was 14.2 years for finite lived intangible assets.
For the three and nine months ended September 30, 2022, E&I net sales were $115.2 and $316.9, respectively, which are included in “Net sales” and operating losses were $3.7 and $27.3, respectively, which are included in “Income (loss) before income taxes, net” on the Unaudited Condensed Consolidated Statement of Earnings (Loss).
8

Pro Forma Financial Information
In accordance with ASC 805 Business Combinations, the following unaudited pro forma results of operations for the three and nine months ended September 30, 2021 assumes the E&I business combination was completed on January 1, 2020. The following pro forma results include adjustments to reflect acquisition related costs, additional interest expense and amortization of debt issuance costs, accounting policies applied to E&I after the business combination, amortization of intangibles associated with the business combination and the effects of adjustments made to the carrying value of certain assets.
Unaudited proforma informationThree months ended September 30, 2021Nine months ended September 30, 2021
Net sales$1,322.2 $3,884.4 
Net income (loss)43.9 63.0 
The unaudited pro forma results contain adjustments to give effect to pro forma events that are directly attributable to the business combination, factually supportable, and expected to have a continuing impact on the combined results. Pro forma data may not be indicative of the results that would have been obtained had the business combination occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. Additionally, the pro forma financial information does not reflect the costs which the Company has incurred or may incur to integrate the acquired business.
(4) REVENUE
The Company recognizes revenue from the sale of manufactured products and services when control of promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Disaggregation of Revenues
The following table disaggregates revenue by business segment, product and service offering and timing of transfer of control:
Three months ended September 30, 2022
AmericasAsia PacificEurope, Middle East, & AfricaTotal
Sales by Product and Service Offering:
Critical infrastructure & solutions$417.3 $265.7 $224.3 $907.3 
Services & spares203.6 113.3 71.1 388.0 
Integrated rack solutions91.7 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 time219.9 92.7 100.6 413.2 
Total$712.6 $436.1 $332.4 $1,481.1 
Three months ended September 30, 2021
AmericasAsia PacificEurope, Middle East, & AfricaTotal
Sales by Product and Service Offering:
Critical infrastructure & solutions$291.9 $234.0 $180.4 $706.3 
Services & spares180.2 104.4 80.8 365.4 
Integrated rack solutions65.1 56.2 35.9 157.2 
Total$537.2 $394.6 $297.1 $1,228.9 
Timing of revenue recognition:
Products and services transferred at a point in time$363.5 $316.0 $253.3 $932.8 
Products and services transferred over time173.7 78.6 43.8 296.1 
Total$537.2 $394.6 $297.1 $1,228.9 
9

Nine months ended September 30, 2022
AmericasAsia PacificEurope, Middle East, & AfricaTotal
Sales by Product and Service Offering:
Critical infrastructure & solutions$1,080.5 $692.5 $642.6 $2,415.6 
Services & spares555.9 330.8 208.0 1,094.7 
Integrated rack solutions258.5 152.8 115.3 526.6 
Total$1,894.9 $1,176.1 $965.9 $4,036.9 
Timing of revenue recognition:
Products and services transferred at a point in time$1,323.3 $909.5 $681.9 $2,914.7 
Products and services transferred over time571.6 266.6 284.0 1,122.2 
Total$1,894.9 $1,176.1 $965.9 $4,036.9 
Nine months ended September 30, 2021
AmericasAsia PacificEurope, Middle East, & AfricaTotal
Sales by Product and Service Offering:
Critical infrastructure & solutions$877.2 $690.0 $494.1 $2,061.3 
Services & spares513.4 305.8 229.9 1,049.1 
Integrated rack solutions213.0 154.1 110.1 477.2 
Total$1,603.6 $1,149.9 $834.1 $3,587.6 
Timing of revenue recognition:
Products and services transferred at a point in time$1,111.1 $913.3 $696.6 $2,721.0 
Products and services transferred over time492.5 236.6 137.5 866.6 
Total$1,603.6