-- Reaffirms outlook for 2021 --
-- Extends $250 million
share repurchase program through January 31,
2022 --
LONDON, Oct. 28, 2021 /PRNewswire/ -- Clarivate Plc
(NYSE: CLVT) (the "Company" or "Clarivate"), a global leader in
providing trusted information and insights to accelerate the pace
of innovation, today reported results for the third quarter ended
September 30, 2021.
Third Quarter 2021 Financial Highlights
- Revenues of $442.1 million and
Adjusted Revenues(1) of $442.2
million, increased 55% and 54%, respectively, at constant
currency
- Organic revenues(1), which exclude the impact of
acquisitions and divestitures, increased 3%, at constant
currency
- Net income of $0.9 million
improved 100%; Net income per diluted share of $0.00 improved $0.47
- Adjusted Net Income(1) of $113.6 million increased 94%; Adjusted Income per
diluted share(1) (EPS) of $0.16 increased 14% or $0.02. Adjusted EPS impacted by 72% increase in
weighted average ordinary shares outstanding primarily driven by
the acquisition of CPA Global and the June
2021 ordinary share and mandatory convertible preferred
share offering to finance a portion of the purchase price for the
pending acquisition of ProQuest
- Adjusted EBITDA(1) of $190.0
million increased 76% and Adjusted EBITDA
Margin(1) of 43% increased 520 basis points
Nine Months Ended September 30,
2021 Financial Highlights
- Revenues of $1,316.2 million and
Adjusted Revenues(1) of $1,320.7
million increased 62% and 61%, respectively, at constant
currency
- Organic revenues([1]), which exclude the impact of
acquisitions and divestitures, increased 5%, at constant
currency
- Net loss of $105.3 million
improved 69%; Net loss per diluted share of $(0.17) improved $0.74
- Adjusted Net Income(1) of $312.0 million increased 103%; Adjusted Income
per diluted share(1) (EPS) of $0.48 increased 23% or $0.09
- Adjusted EBITDA(1) of $543.8
million increased 90% and Adjusted EBITDA
Margin(1) of 41% increased 560 basis points
- Cash Flow from Operations increased $177.5 million to $305.5
million; Adjusted Free Cash Flow(1) increased
$187.1 million to $315.6 million
"Clarivate delivered improved year over year results in the
third quarter and we remain on track for a strong fourth quarter
including organic revenue growth towards the upper-end of our 6% to
8% target with Adjusted EBITDA margins increasing to more than
50%," said Jerre Stead, Executive
Chairman and CEO. "We continue to work with regulators on our
pending acquisition of ProQuest and remain hopeful that we can
close the transaction by the end of 2021."
The Company also announced that its Board of Directors approved
the extension of its $250 million
ordinary share repurchase program through January 31, 2022. The program was set to
expire on October 31, 2021.
(1)
|
Represents a Non-GAAP
measure. Please see "Reconciliation to Certain Non-GAAP measures"
in this earnings release for important disclosures and
reconciliations of these financial measures to the most directly
comparable GAAP measure. These terms are defined elsewhere in this
earnings press release.
|
Selected Financial Information
The results for the three and nine months ended September 30, 2021 include contributions from the
following acquisitions: 1) CPA Global, which was completed in
October 2020; 2) Beijing Incopat Co.,
Ltd ("IncoPat"), which was completed in October 2020; 3) Hanlim IPS Co., Ltd ("Hanlim"),
which was completed in November 2020;
and 4) Bioinfogate, which was completed in August 2021, for which there were no comparable
amounts in the three and nine months ended September 30, 2020. The results for the three and
nine months ended September 30, 2021
exclude the results of Techstreet, which was divested in
November 2020.
|
|
Three Months
Ended September
30,
|
|
|
|
Change
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
Change
|
|
(in millions,
except percentages and per share data)
|
|
2021
|
|
|
|
2020
|
|
|
|
$
|
|
|
%
|
|
|
|
2021
|
|
|
|
2020
|
|
|
|
$
|
|
|
%
|
|
Revenues,
net
|
$
|
442.1
|
|
|
$
|
284.4
|
|
|
$
|
157.8
|
|
|
55.5
|
%
|
|
$
|
1,316.2
|
|
|
$
|
798.5
|
|
|
$
|
517.7
|
|
|
64.8
|
%
|
Adjusted revenues,
net(1)
|
$
|
442.2
|
|
|
$
|
286.5
|
|
|
$
|
155.7
|
|
|
54.4
|
%
|
|
$
|
1,320.7
|
|
|
$
|
805.9
|
|
|
$
|
514.8
|
|
|
63.9
|
%
|
Annualized Contract
Value (ACV)
|
$
|
936.7
|
|
|
$
|
860.9
|
|
|
$
|
75.8
|
|
|
8.8
|
%
|
|
$
|
936.7
|
|
|
$
|
860.9
|
|
|
$
|
75.8
|
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
0.9
|
|
|
$
|
(182.0)
|
|
|
$
|
182.9
|
|
|
100.5
|
%
|
|
$
|
(105.3)
|
|
|
$
|
(336.9)
|
|
|
$
|
231.6
|
|
|
68.7
|
%
|
Net income (loss) per
share
|
$
|
0.00
|
|
|
$
|
(0.47)
|
|
|
$
|
0.47
|
|
|
100.0
|
%
|
|
$
|
(0.17)
|
|
|
$
|
(0.91)
|
|
|
$
|
0.74
|
|
|
81.3
|
%
|
Weighted-average
shares outstanding (diluted)
|
|
645.9
|
|
|
|
387.8
|
|
|
|
—
|
|
|
66.6
|
%
|
|
|
622.5
|
|
|
|
369.0
|
|
|
|
—
|
|
|
68.7
|
%
|
Adjusted
EBITDA(1)
|
$
|
190.0
|
|
|
$
|
108.2
|
|
|
$
|
81.8
|
|
|
75.6
|
%
|
|
$
|
543.8
|
|
|
$
|
286.6
|
|
|
$
|
257.2
|
|
|
89.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss)(1)
|
$
|
113.6
|
|
|
$
|
58.5
|
|
|
$
|
55.1
|
|
|
94.2
|
%
|
|
$
|
312.0
|
|
|
$
|
153.5
|
|
|
$
|
158.5
|
|
|
103.3
|
%
|
Adjusted diluted
EPS(1)
|
$
|
0.16
|
|
|
$
|
0.14
|
|
|
$
|
0.02
|
|
|
14.3
|
%
|
|
$
|
0.48
|
|
|
$
|
0.39
|
|
|
$
|
0.09
|
|
|
23.1
|
%
|
Weighted average
ordinary shares (diluted)(2)
|
|
699.8
|
|
|
|
407.6
|
|
|
|
—
|
|
|
71.7
|
%
|
|
|
647.5
|
|
|
|
390.5
|
|
|
|
—
|
|
|
65.8
|
%
|
Net cash provided by
operating activities
|
$
|
43.8
|
|
|
$
|
20.5
|
|
|
$
|
23.3
|
|
|
113.7
|
%
|
|
$
|
305.5
|
|
|
$
|
128.0
|
|
|
$
|
177.5
|
|
|
138.7
|
%
|
Free cash
flow(1)
|
$
|
19.7
|
|
|
$
|
(5.5)
|
|
|
$
|
25.2
|
|
|
458.2
|
%
|
|
$
|
219.3
|
|
|
$
|
49.4
|
|
|
$
|
169.9
|
|
|
343.9
|
%
|
Adjusted free cash
flow(1)
|
$
|
57.1
|
|
|
$
|
8.9
|
|
|
$
|
48.2
|
|
|
541.6
|
%
|
|
$
|
315.6
|
|
|
$
|
128.5
|
|
|
$
|
187.1
|
|
|
145.6
|
%
|
(Amounts in tables
may not sum due to rounding)
|
|
|
(1)
|
Non-GAAP measure.
Please see "Reconciliation to Certain Non-GAAP measures" in this
earnings release for important disclosures and reconciliations of
these financial measures to the most directly comparable GAAP
measure. These terms are defined elsewhere in this earnings press
release.
|
|
|
(2)
|
Calculated assuming a
net income position compared to a net loss position on the
statement of operations for calculating Adjusted net income and
Adjusted diluted EPS.
|
Revenues, net, for the third quarter of 2021 increased
$157.8 million, or 55.5%, to
$442.1 million, compared to the
prior-year period. On a constant currency basis, revenues, net,
increased 54.6% for the third quarter of 2021. Adjusted revenues,
net, which excludes the impact of deferred revenues resulting from
purchase accounting adjustments primarily related to acquisitions,
increased $155.7 million or 54.4%, to
$442.2 million, compared to the third
quarter of 2020. On a constant currency basis, Adjusted revenues,
net, increased 53.5% for the third quarter of 2021.
Organic revenues(1), which exclude the impact of
acquisitions and divestitures, increased 3.1% on a constant
currency basis for the third quarter of 2021 compared to the prior
year period, due to higher subscription and transactional revenues.
For the nine months ended September 30,
2021, organic revenues, net, increased 4.8% at constant
currency, compared to the prior year period.
Subscription revenues for the third quarter of 2021 increased
$24.4 million, or 11.0%, to
$246.5 million, compared to the
prior-year period, primarily driven by the acquisition of CPA
Global, partially offset by the Techstreet divestiture. On a
constant currency basis, subscription revenues increased 10.0% for
the third quarter of 2021. Organic subscription
revenues(1) increased 3.2% on a constant currency basis
for the third quarter of 2021 compared to the prior year period,
due to higher life sciences, healthcare data solutions, and
CompuMark revenues. For the nine months ended September 30, 2021, organic subscription revenues
increased 3.5% at constant currency, compared to the prior year
period.
Re-occurring revenues for the third quarter of 2021 were
$110.4 million (no prior year
comparable amount), primarily from the patent renewals business
acquired in the CPA Global acquisition.
Transactional revenues for the third quarter of 2021 increased
$21.0 million, or 32.5%, to
$85.4 million, compared to the
prior-year period. On a constant currency basis, transactional
revenues increased 32.1% for the third quarter of 2021, primarily
due to the acquisition of CPA Global, partially offset by the
Techstreet divestiture. Organic transactional
revenues(1) increased 2.7% on a constant currency basis,
compared to the third quarter of 2020, due to higher trademark
search volumes, stronger back file and custom data sales. For the
nine months ended September 30, 2021,
organic transactional revenues increased 9.4% at constant currency,
compared to the prior year period.
Net income for the third quarter of 2021 was $0.9 million, or $0.00 per share, compared to Net loss of
$(182.0) million, or $(0.47) per share, in the prior-year period,
primarily driven by improved income from operations and mark to
market adjustments on financial instruments, partially offset by
higher interest expense.
Adjusted EBITDA for the third quarter 2021 was $190.0 million, an increase of $81.8 million or 75.6%, compared to the
prior-year period, driven by the earnings contribution from
acquisitions, organic growth and cost savings from integration
programs.
Adjusted net income for the third quarter of 2021 was
$113.6 million, an increase of
$55.1 million or 94.2%, compared to
the prior year period, driven by higher revenues and ongoing cost
savings initiatives.
Adjusted diluted earnings per share was $0.16 for the third quarter of 2021, compared to
$0.14 in the prior-year period, as
strong growth in Adjusted net income was offset by a 71.7% increase
in weighted average ordinary shares outstanding primarily driven by
the acquisition of CPA Global and the June
2021 ordinary share and mandatory convertible preferred
share offering to finance a portion of the purchase price for the
pending acquisition of ProQuest.
Balance Sheet and Cash Flow
At September 30, 2021, cash and
cash equivalents of $2.5 billion
increased $2.2 billion, compared to
December 31, 2020, primarily driven
by the June 2021 equity offering of
$1.4 billion in net proceeds of 5.25%
Series A mandatory convertible preferred shares and $728.1 million in net proceeds of ordinary shares
after deducting underwriting discounts and estimated offering
expenses payable. Restricted cash was $1.9 billion at September 30, 2021, which primarily represents
the proceeds from the debt offering in June
2021 and the subsequent exchange offering in August 2021, which is being held in escrow until
the completion of the pending acquisition of ProQuest. The Company
intends to use the proceeds to finance a portion of the purchase
price for its pending acquisition of ProQuest.
The Company's total debt outstanding at September 30, 2021 was $5.4 billion, an increase of $1.8 billion compared to December 31, 2020, primarily due to the
June 2021 debt offering of 3.875%
senior secured notes due 2028 and 4.875% senior notes due 2029 and
the subsequent exchange offering in August
2021. The Company intends to use the proceeds to finance a
portion of the purchase price for its pending acquisition of
ProQuest.
Net cash provided by operating activities was $305.5 million for the nine months ended
September 30, 2021, compared to net
cash provided by operating activities of $128.0 million for the prior year period.
Adjusted free cash flow for the nine months ended September 30, 2021, was $315.6 million, an increase of $187.1 million, compared to the prior year
period, as a result of growth in revenues and Adjusted EBITDA.
Reaffirmed Outlook for 2021 (forward-looking
statement)
The full year outlook presented below assumes no further
currency movements, acquisitions, divestitures, or unanticipated
events. Additionally, the outlook excludes any contribution from
the pending acquisition of ProQuest.
The below outlook includes Non-GAAP measures. Please see
"Reconciliation to Certain Non-GAAP measures" presented below for
important disclosure and reconciliations of these financial
measures to the most directly comparable GAAP measure. These terms
are defined elsewhere in this earnings press release.
|
Outlook
|
Adjusted
Revenues
|
$1.80B to
$1.84B
|
Adjusted
EBITDA
|
$795M to
$825M
|
Adjusted EBITDA
margin
|
44% to 45%
|
Adjusted Diluted
EPS(1)
|
$0.70 to
$0.74
|
Adjusted Free Cash
Flow
|
$450M to
$500M
|
|
|
(1)
|
Adjusted Diluted EPS
for 2021 is calculated based on approximately 668.4 million fully
diluted weighted average shares outstanding.
|
Conference Call and Webcast
Clarivate will host a conference call and webcast today to
review the results for the third quarter at 8:00 a.m. Eastern Time. The conference call will
be simultaneously webcast on the Investor Relations section of the
company's website.
Interested parties may access the live audio broadcast by
dialing 1-888-317-6003 in the United
States, 1-412-317-6061 for international, and 1-866-284-3684
in Canada. The conference ID
number is 3877359. An audio replay will be available approximately
two hours after the completion of the call at 1-877-344-7529 in
the United States, 1-412-317-0088
for international, and 1-855-669-9658 in Canada. The Replay Conference ID number is
10153163. The recording will be available for replay through
November 11, 2021. The webcast can be
accessed at https://services.choruscall.com/links/clvt211028.html
and will be available for replay.
Investor Day Conference on November 9,
2021
Clarivate will host a Virtual Investor Day Conference on
Tuesday, November 9, 2021. Management
will provide an update on the business, with presentations starting
at 10:00 AM Eastern Time and
concluding at approximately 1:00 PM Eastern
Time.
All are invited to listen to the event and view the presentation
via webcast on the Clarivate Investor Relations website at
http://ir.clarivate.com/. To join the webcast please visit
https://clarivateir.virtualevent.page/stream-public/. A replay will
also be available as a webcast on the investor relations section of
the Company's website.
Use of Non-GAAP Financial Measures
Non-GAAP results are not presentations made in accordance with
U.S. generally accepted accounting principles ("GAAP") and are
presented only as a supplement to our financial statements based on
GAAP. Non-GAAP financial information is provided to enhance the
reader's understanding of our financial performance, but none of
these non-GAAP financial measures are recognized terms under
GAAP. They are not measures of financial condition or
liquidity, and should not be considered as an alternative to profit
or loss for the period determined in accordance with GAAP or
operating cash flows determined in accordance with GAAP. As a
result, you should not consider such measures in isolation from, or
as a substitute for, financial measures or results of operations
calculated or determined in accordance with GAAP.
We use non-GAAP measures in our operational and financial
decision-making. We believe that such measures allow us to focus on
what we deem to be a more reliable indicator of ongoing operating
performance and our ability to generate cash flow from operations
and we also believe that investors may find these non-GAAP
financial measures useful for the same reasons. Non-GAAP measures
are frequently used by securities analysts, investors, and other
interested parties in their evaluation of companies comparable to
us, many of which present non-GAAP measures when reporting their
results. These measures can be useful in evaluating our performance
against our peer companies because we believe the measures provide
users with valuable insight into key components of GAAP financial
disclosures. However, non-GAAP measures have limitations as
analytical tools and because not all companies use identical
calculations, our presentation of non-GAAP financial measures may
not be comparable to other similarly titled measures of other
companies.
Definitions and reconciliations of non-GAAP measures, such as
Adjusted Revenues, Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, Adjusted
Free Cash Flow, Standalone Adjusted EBITDA, and organic revenue to
the most directly comparable GAAP measures are provided within the
schedules attached to this release. Our presentation of non-GAAP
measures should not be construed as an inference that our future
results will be unaffected by any of the adjusted items, or that
any projections and estimates will be realized in their entirety or
at all.
Forward-Looking Statements
This communication contains "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
These statements, which express management's current views
concerning future business, events, trends, contingencies,
financial performance, or financial condition, appear at various
places in this communication and may use words like "aim,"
"anticipate," "assume," "believe," "continue," "could," "estimate,"
"expect," "forecast," "future," "goal," "intend," "likely," "may,"
"might," "plan," "potential," "predict," "project," "see," "seek,"
"should," "strategy," "strive," "target," "will," and "would" and
similar expressions, and variations or negatives of these words.
Examples of forward-looking statements include, among others,
statements we make regarding: guidance outlook and predictions
relating to expected operating results, such as revenue growth and
earnings; our expectations around our ability to consummate our
pending acquisition of ProQuest, which is subject to customary
closing conditions including receipt of approval under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; strategic
actions such as acquisitions, joint ventures, and dispositions,
including the anticipated benefits therefrom, and our success in
integrating acquired businesses; anticipated levels of capital
expenditures in future periods; our ability to successfully realize
cost savings initiatives and transition services expenses; our
belief that we have sufficiently liquidity to fund our ongoing
business operations; expectations of the effect on our financial
condition of claims, litigation, environmental costs, the COVID-19
pandemic and governmental responses thereto, contingent
liabilities, and governmental and regulatory investigations and
proceedings; and our strategy for customer retention, growth,
product development, market position, financial results, and
reserves. Forward-looking statements are neither historical facts
nor assurances of future performance. Instead, they are based only
on management's current beliefs, expectations, and assumptions
regarding the future of our business, future plans and strategies,
projections, anticipated events and trends, the economy, and other
future conditions. Because forward-looking statements relate to the
future, they are difficult to predict and many of which are outside
of our control. Important factors that could cause our actual
results and financial condition to differ materially from those
indicated in the forward-looking statements include those factors
discussed under the caption "Risk Factors" in our 2020 annual
report on Form 10-K/A, along with our other filings with the U.S.
Securities and Exchange Commission ("SEC"). However, those factors
should not be considered to be a complete statement of all
potential risks and uncertainties. Additional risks and
uncertainties not known to us or that we currently deem immaterial
may also impair our business operations. Forward-looking statements
are based only on information currently available to our management
and speak only as of the date of this communication. We do not
assume any obligation to publicly provide revisions or updates to
any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances
change, except as otherwise required by securities and other
applicable laws. Please consult our public filings with the SEC or
on our website at www.clarivate.com.
About Clarivate
Clarivate™ is a global leader in providing solutions to
accelerate the lifecycle of innovation. Our bold mission is to help
customers solve some of the world's most complex problems by
providing actionable information and insights that reduce the time
from new ideas to life-changing inventions in the areas of science
and intellectual property. We help customers discover, protect and
commercialize their inventions using our trusted subscription and
technology-based solutions coupled with deep domain expertise. For
more information, please visit clarivate.com.
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In thousands,
except share data)
|
|
|
September
30,
2021
|
|
December
31,
2020
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
2,479,880
|
|
|
$
|
257,730
|
|
Restricted
cash
|
1,854,257
|
|
|
11,278
|
|
Accounts receivable,
net of allowance of $8,642 and $8,745 at September 30, 2021 and
December 31, 2020, respectively
|
610,755
|
|
|
737,733
|
|
Prepaid
expenses
|
58,056
|
|
|
58,273
|
|
Other current
assets
|
186,298
|
|
|
262,494
|
|
Total current
assets
|
5,189,246
|
|
|
1,327,508
|
|
Property and
equipment, net
|
27,948
|
|
|
36,267
|
|
Other intangible
assets, net
|
6,964,081
|
|
|
7,370,350
|
|
Goodwill
|
6,198,701
|
|
|
6,252,636
|
|
Other non-current
assets
|
41,808
|
|
|
47,944
|
|
Deferred income
taxes
|
30,110
|
|
|
29,786
|
|
Operating lease
right-of-use assets
|
45,880
|
|
|
132,356
|
|
Total
Assets
|
$
|
18,497,774
|
|
|
$
|
15,196,847
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
94,494
|
|
|
$
|
82,038
|
|
Accrued expenses and
other current liabilities
|
592,721
|
|
|
716,356
|
|
Current portion of
deferred revenues
|
579,935
|
|
|
707,318
|
|
Current portion of
operating lease liability
|
28,459
|
|
|
35,455
|
|
Current portion of
long-term debt
|
1,865,627
|
|
|
28,600
|
|
Total current
liabilities
|
3,161,236
|
|
|
1,569,767
|
|
Long-term
debt
|
3,443,578
|
|
|
3,457,900
|
|
Warrant
liabilities
|
195,952
|
|
|
312,751
|
|
Non-current portion
of deferred revenues
|
44,934
|
|
|
41,399
|
|
Other non-current
liabilities
|
58,332
|
|
|
67,722
|
|
Deferred income
taxes
|
324,959
|
|
|
362,261
|
|
Operating lease
liabilities
|
58,443
|
|
|
104,324
|
|
Total
liabilities
|
7,287,434
|
|
|
5,916,124
|
|
Commitments and
contingencies
|
|
|
|
Shareholders'
equity:
|
|
|
|
Preferred Shares, no
par value; 14,375,000 shares authorized; 5.25% Mandatory
Convertible Preferred Shares, Series A, 14,375,000 and 0 shares
issued and outstanding at September 30, 2021 and December 31,
2020, respectively
|
1,392,671
|
|
|
—
|
|
Ordinary Shares, no
par value; unlimited shares authorized at September 30, 2021 and
December 31, 2020; 639,750,620 and 606,329,598 shares issued
and outstanding at September 30, 2021 and December 31, 2020,
respectively
|
10,810,130
|
|
|
9,989,284
|
|
Accumulated other
comprehensive income
|
324,904
|
|
|
503,521
|
|
Accumulated
deficit
|
(1,317,365)
|
|
|
(1,212,082)
|
|
Total shareholders'
equity
|
11,210,340
|
|
|
9,280,723
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
18,497,774
|
|
|
$
|
15,196,847
|
|
Condensed
Consolidated Statement of Operations (Unaudited)
|
|
(In thousands,
except share and per share data)
|
|
|
Three Months Ended
September 30,
|
|
2021
|
|
2020
(As Restated)
|
Revenues,
net
|
$
|
442,117
|
|
|
$
|
284,360
|
|
Operating
expenses:
|
|
|
|
Cost of
revenues
|
(141,111)
|
|
|
(93,554)
|
|
Selling, general and
administrative costs
|
(141,219)
|
|
|
(131,526)
|
|
Depreciation
|
(2,657)
|
|
|
(2,918)
|
|
Amortization
|
(128,026)
|
|
|
(65,696)
|
|
Restructuring and
impairment
|
(15,621)
|
|
|
(3,192)
|
|
Other operating
expense, net
|
(4,411)
|
|
|
(138)
|
|
Total operating
expenses
|
(433,045)
|
|
|
(297,024)
|
|
Income (loss) from
operations
|
9,072
|
|
|
(12,664)
|
|
Mark to market
adjustment on financial instruments
|
83,013
|
|
|
(144,753)
|
|
Income (loss) before
interest expense and income tax
|
92,085
|
|
|
(157,417)
|
|
Interest expense and
amortization of debt discount, net
|
(65,194)
|
|
|
(20,244)
|
|
Income (loss) before
income tax
|
26,891
|
|
|
(177,661)
|
|
Provision for income
taxes
|
(3,579)
|
|
|
(4,325)
|
|
Net income
(loss)
|
23,312
|
|
|
(181,986)
|
|
Dividends on preferred
shares
|
(22,431)
|
|
|
—
|
|
Net income (loss)
attributable to ordinary shares
|
$
|
881
|
|
|
$
|
(181,986)
|
|
|
|
|
|
Per share:
|
|
|
|
Basic
|
$
|
0.00
|
|
|
$
|
(0.47)
|
|
Diluted
|
$
|
0.00
|
|
|
$
|
(0.47)
|
|
|
|
|
|
Weighted average
shares used to compute earnings per share:
|
|
|
|
Basic
|
640,834,827
|
|
|
387,845,438
|
|
Diluted
|
645,933,513
|
|
|
387,845,438
|
|
Condensed
Consolidated Statement of Operations (Unaudited)
|
|
(In thousands,
except share and per share data)
|
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
(As Restated)
|
Revenues,
net
|
$
|
1,316,192
|
|
|
$
|
798,452
|
|
Operating
expenses:
|
|
|
|
Cost of
revenues
|
(416,459)
|
|
|
(268,614)
|
|
Selling, general and
administrative costs
|
(402,378)
|
|
|
(368,247)
|
|
Depreciation
|
(9,243)
|
|
|
(8,151)
|
|
Amortization
|
(383,270)
|
|
|
(168,049)
|
|
Restructuring and
impairment
|
(121,988)
|
|
|
(26,792)
|
|
Other operating
(expense) income, net
|
(19,741)
|
|
|
14,675
|
|
Total operating
expenses
|
(1,353,079)
|
|
|
(825,178)
|
|
Loss from
operations
|
(36,887)
|
|
|
(26,726)
|
|
Mark to market
adjustment on financial instruments
|
113,207
|
|
|
(224,175)
|
|
Income (loss) before
interest expense and income tax
|
76,320
|
|
|
(250,901)
|
|
Interest expense and
amortization of debt discount, net
|
(141,156)
|
|
|
(72,306)
|
|
Loss before income
tax
|
(64,836)
|
|
|
(323,207)
|
|
Provision for income
taxes
|
(18,016)
|
|
|
(13,693)
|
|
Net loss
|
(82,852)
|
|
|
(336,900)
|
|
Dividends on preferred
shares
|
(22,431)
|
|
|
—
|
|
Net loss attributable
to ordinary shares
|
$
|
(105,283)
|
|
|
$
|
(336,900)
|
|
|
|
|
|
Per share:
|
|
|
|
Basic
|
$
|
(0.17)
|
|
|
$
|
(0.91)
|
|
Diluted
|
$
|
(0.17)
|
|
|
$
|
(0.91)
|
|
|
|
|
|
Weighted average
shares used to compute earnings per share:
|
|
|
|
Basic
|
622,460,931
|
|
|
369,019,802
|
|
Diluted
|
622,460,931
|
|
|
369,019,802
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
(In
thousands)
|
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
(As Restated)
|
Cash Flows From
Operating Activities
|
|
|
|
Net loss
|
$
|
(82,852)
|
|
|
$
|
(336,900)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
392,513
|
|
|
176,200
|
|
Bad debt
expense
|
6,832
|
|
|
1,830
|
|
Deferred income tax
benefit
|
(11,084)
|
|
|
(7,420)
|
|
Share-based
compensation
|
36,944
|
|
|
26,344
|
|
Restructuring and
impairment
|
60,232
|
|
|
4,880
|
|
Loss (gain) on foreign
currency forward contracts
|
4,026
|
|
|
(2,903)
|
|
Mark to market
adjustment on contingent and phantom shares
|
(34,503)
|
|
|
30,839
|
|
Mark to market
adjustment on financial instruments
|
(113,207)
|
|
|
224,175
|
|
Gain on disposal of
business
|
—
|
|
|
(1,052)
|
|
Deferred finance
charges
|
9,050
|
|
|
3,140
|
|
Other operating
activities
|
3,565
|
|
|
(3,902)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
114,038
|
|
|
129,398
|
|
Prepaid
expenses
|
(887)
|
|
|
(13,335)
|
|
Other
assets
|
60,749
|
|
|
62,818
|
|
Accounts
payable
|
13,550
|
|
|
(8,394)
|
|
Accrued expenses and
other current liabilities
|
(14,208)
|
|
|
(65,062)
|
|
Deferred
revenues
|
(116,312)
|
|
|
(93,926)
|
|
Operating lease right
of use assets
|
16,838
|
|
|
5,826
|
|
Operating lease
liabilities
|
(37,362)
|
|
|
(6,611)
|
|
Other
liabilities
|
(2,407)
|
|
|
2,077
|
|
Net cash provided by
operating activities
|
305,515
|
|
|
128,022
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(86,197)
|
|
|
(78,597)
|
|
Acquisitions, net of
cash acquired
|
(14,314)
|
|
|
(885,323)
|
|
Acquisition of
intangible assets
|
—
|
|
|
(5,982)
|
|
Proceeds from sale of
product line, net of restricted cash
|
—
|
|
|
3,751
|
|
Net cash used in
investing activities
|
(100,511)
|
|
|
(966,151)
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
Proceeds from issuance
of debt
|
2,000,000
|
|
|
360,000
|
|
Redemption of Notes
not exchanged
|
(157,424)
|
|
|
—
|
|
Principal payments on
term loan
|
(21,450)
|
|
|
(9,450)
|
|
Repayments of
revolving credit facility
|
—
|
|
|
(65,000)
|
|
Payment of debt
issuance costs
|
(7,471)
|
|
|
(5,267)
|
|
Contingent purchase
price payment
|
—
|
|
|
(4,115)
|
|
Proceeds from issuance
of preferred shares
|
1,392,671
|
|
|
—
|
|
Proceeds from issuance
of ordinary shares
|
728,080
|
|
|
843,752
|
|
Repurchases of
ordinary shares
|
(65,215)
|
|
|
—
|
|
Cash dividends on
preferred shares
|
(1)
|
|
|
|
Proceeds from warrant
exercises
|
—
|
|
|
277,526
|
|
Proceeds from stock
options exercised
|
17,250
|
|
|
1,307
|
|
Payments related to tax
withholding for stock-based compensation
|
(21,455)
|
|
|
(28,674)
|
|
Net cash provided by
financing activities
|
3,864,985
|
|
|
1,370,079
|
|
Effects of exchange
rates
|
(4,860)
|
|
|
(6,447)
|
|
Net increase in cash
and cash equivalents, and restricted cash
|
4,065,129
|
|
|
525,503
|
|
|
|
|
|
Beginning of
period:
|
|
|
|
Cash and cash
equivalents
|
257,730
|
|
|
76,130
|
|
Restricted
cash
|
11,278
|
|
|
9
|
|
Total cash and cash
equivalents, and restricted cash, beginning of period
|
269,008
|
|
|
76,139
|
|
Cash and cash
equivalents, and restricted cash, end of period
|
4,334,137
|
|
|
601,642
|
|
|
|
|
|
End of
period:
|
|
|
|
Cash and cash
equivalents
|
2,479,880
|
|
|
601,075
|
|
Restricted
cash
|
1,854,257
|
|
|
567
|
|
Total cash and cash
equivalents, and restricted cash, end of period
|
$
|
4,334,137
|
|
|
$
|
601,642
|
|
|
|
|
|
Supplemental Cash
Flow Information
|
|
|
|
Cash paid for
interest
|
97,401
|
|
|
61,796
|
|
Cash paid for income
tax
|
22,387
|
|
|
20,147
|
|
Capital expenditures
included in accounts payable
|
6,612
|
|
|
922
|
|
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
Non-Cash Financing
Activities:
|
|
|
|
Shares issued to
Capri Acquisition Topco Limited
|
$
|
5,052,165
|
|
|
$
|
—
|
|
Retirement of
treasury shares
|
(5,117,380)
|
|
|
—
|
|
Shares issued as
contingent stock consideration associated with the DRG
acquisition
|
61,619
|
|
|
—
|
|
Shares issued as
contingent stock consideration associated with the CPA Global
acquisition
|
43,890
|
|
|
—
|
|
Shares issued as
dividends on our 5.25% Series A Mandatory Convertible Preferred
Shares
|
16,141
|
|
|
—
|
|
Dividends accrued on
our 5.25% Series A Mandatory Convertible Preferred
Shares
|
6,289
|
|
|
—
|
|
Total Non-Cash
Financing Activities
|
$
|
62,724
|
|
|
$
|
—
|
|
Reconciliation to
Certain Non-GAAP Measures
|
|
(Amounts in tables
may not sum due to rounding)
|
|
Adjusted
Revenues
|
|
Adjusted Revenues
excludes the impact of the deferred revenues purchase accounting
adjustment (primarily recorded in connection with recent
acquisitions).
|
|
The following table
presents our calculation of Adjusted Revenues for the three and
nine months ended September 30, 2021 and 2020 and a reconciliation
of this measure to our Revenues, net for the same
periods:
|
|
|
Three Months Ended
September 30,
|
|
Variance
|
(in millions, except
percentages)
|
2021
|
|
2020
|
|
$
|
|
%
|
Revenues,
net
|
$
|
442.1
|
|
|
$
|
284.4
|
|
|
$
|
157.8
|
|
|
55.5
|
%
|
Deferred revenues
adjustment(1)
|
0.1
|
|
|
2.1
|
|
|
(2.0)
|
|
|
(96.6)
|
%
|
Adjusted revenues,
net
|
$
|
442.2
|
|
|
$
|
286.5
|
|
|
$
|
155.7
|
|
|
54.4
|
%
|
|
|
(1) Reflects the
deferred revenues adjustment made as a result of purchase
accounting.
|
|
|
Nine Months Ended
September 30,
|
|
Variance
|
(in millions, except
percentages)
|
2021
|
|
2020
|
|
$
|
|
%
|
Revenues,
net
|
$
|
1,316.2
|
|
|
$
|
798.5
|
|
|
$
|
517.7
|
|
|
64.8
|
%
|
Deferred revenues
adjustment(1)
|
4.5
|
|
|
7.4
|
|
|
(3.0)
|
|
|
(39.8)
|
%
|
Adjusted revenues,
net
|
$
|
1,320.7
|
|
|
$
|
805.9
|
|
|
$
|
514.8
|
|
|
63.9
|
%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase
accounting.
|
Adjusted EBITDA
Adjusted EBITDA represents net income (loss) before provision
for income taxes, depreciation and amortization, interest income
and expense adjusted to exclude acquisition or disposal-related
transaction costs (such costs include net income from continuing
operations before provision for income taxes, depreciation and
amortization and interest income and expense from divestitures),
share-based compensation, mandatory convertible preferred share
dividend expense, unrealized foreign currency gains/(losses), costs
associated with the transition services agreement with Thomson
Reuters, which we entered into in connection with our separation
from Thomson Reuters in 2016, separation and integration costs,
transformational and restructuring expenses, acquisition-related
adjustments to deferred revenues, costs related to our merger with
Churchill Capital Corp in 2019, non-operating income or expense,
the impact of certain non-cash, mark to market adjustments on
financial instruments and other items that are included in net
income for the period that the Company does not consider indicative
of its ongoing operating performance and certain unusual items
impacting results in a particular period. Per Clarivate's Non-GAAP
policy effective January 1, 2021, we
have ceased use of adjustments for costs in connection with our
separation from Thomson Reuters including costs related to the
transition services agreement and separation, integration, and
transformational expenses, as well as costs related to our merger
with Churchill Capital Corp in 2019.
The following table presents our calculation of Adjusted EBITDA
for the three and nine months ended September 30, 2021 and 2020 and reconciles these
measures to our Net income (loss) for the same periods:
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income (loss)
attributable to ordinary shares
|
$
|
0.9
|
|
|
$
|
(182.0)
|
|
|
$
|
(105.3)
|
|
|
$
|
(336.9)
|
|
Dividends on
preferred shares
|
22.4
|
|
|
—
|
|
|
22.4
|
|
|
—
|
|
Net income
(loss)
|
23.3
|
|
|
(182.0)
|
|
|
(82.9)
|
|
|
(336.9)
|
|
Provision (benefit)
for income taxes
|
3.6
|
|
|
4.3
|
|
|
18.0
|
|
|
13.7
|
|
Depreciation and
amortization
|
130.7
|
|
|
68.6
|
|
|
392.5
|
|
|
176.2
|
|
Interest expense and
amortization of debt discount, net
|
65.2
|
|
|
20.2
|
|
|
141.2
|
|
|
72.3
|
|
Deferred revenues
adjustment(1)
|
0.1
|
|
|
2.1
|
|
|
4.5
|
|
|
7.4
|
|
Transaction related
costs(2)
|
11.9
|
|
|
34.9
|
|
|
(1.6)
|
|
|
70.2
|
|
Share-based
compensation expense
|
12.0
|
|
|
6.8
|
|
|
38.5
|
|
|
31.1
|
|
Restructuring and
impairment(3)
|
15.6
|
|
|
3.2
|
|
|
122.0
|
|
|
26.8
|
|
Mark to market
adjustment on financial instruments(4)
|
(83.0)
|
|
|
144.8
|
|
|
(113.2)
|
|
|
224.2
|
|
Other
(5)
|
10.7
|
|
|
5.2
|
|
|
24.8
|
|
|
1.6
|
|
Adjusted
EBITDA
|
$
|
190.0
|
|
|
$
|
108.2
|
|
|
$
|
543.8
|
|
|
$
|
286.6
|
|
Adjusted EBITDA
Margin
|
43.0
|
%
|
|
37.8
|
%
|
|
41.2
|
%
|
|
35.6
|
%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment as a result of purchase accounting associated
with businesses that were acquired.
|
|
|
(2)
|
Includes costs
incurred to complete business combination transactions, including
acquisitions, dispositions and capital market activities and
include advisory, legal, and other professional and consulting
costs. This also includes the mark to market adjustments on the
contingent stock consideration associated with the CPA Global and
DRG acquisitions, as well as the mark to market adjustment
associated with the CPA phantom share liability plan.
|
|
|
(3)
|
Reflects costs
primarily related to restructuring and impairment associated with
the acquisition of DRG and CPA Global in 2020, as well as the
approved One Clarivate restructuring program in 2021. This also
includes costs incurred in connection with the initiative,
following our merger with Churchill Capital Corp in 2019, to
streamline our operations by simplifying our organization and
focusing on two segments. Additionally, during the three and nine
months ended September 30, 2021, we incurred impairment charges
taken on right-of-use assets of $757 and $60,232, respectively,
relating the exit and ceased use of leased properties.
|
|
|
(4)
|
Reflects mark to
market adjustments on our private placement warrant financial
instruments. In periods after issuance, changes in the estimated
fair value of the liabilities are reported through
earnings.
|
|
|
(5)
|
Includes primarily
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items that do not reflect our
ongoing operating performance. The 2020 detail also includes costs
related to a transition services agreement and offset by the
reverse transition services agreement from the sale of MarkMonitor
and costs incurred in connection with and after our separation from
Thomson Reuters in 2016 relating to the implementation of our
standalone company infrastructure and related cost-savings
initiatives. These costs were largely wound down by the end of
December 31, 2020.
|
Adjusted Net Income and Adjusted Diluted EPS
Adjusted Net Income is calculated using net income (loss),
adjusted to exclude acquisition or disposal-related transaction
costs (such costs include net income from continuing operations
before provision for income taxes, depreciation and amortization
and interest income and expense from the divested business),
amortization related to acquired intangible assets, share-based
compensation, mandatory convertible preferred share dividend
expense, unrealized foreign currency gains/(losses), costs
associated with the transition services agreement with Thomson
Reuters, which we entered into in connection with our separation
from Thomson Reuters in 2016, separation and integration costs,
transformational and restructuring expenses, acquisition-related
adjustments to deferred revenues, costs related to our merger with
Churchill Capital Corp in 2019, non-operating income or expense,
the impact of certain non-cash, mark to market adjustments on
financial instruments, interest on debt held in escrow, and other
items that are included in net income for the period that the
Company does not consider indicative of its ongoing operating
performance and certain unusual items impacting results in a
particular period, and the income tax impact of any adjustments.
Per Clarivate's Non-GAAP policy effective January 1, 2021, we have ceased use of
adjustments for costs in connection with our separation from
Thomson Reuters including costs related to the transition services
agreement and separation, integration, and transformational
expenses, as well as costs related to our merger with Churchill
Capital Corp in 2019. We calculate Adjusted Diluted EPS by using
Adjusted Net Income divided by diluted weighted average shares for
the period.
The following table presents our calculation of Adjusted Net
Income and Adjusted Diluted EPS for the three and nine months ended
September 30, 2021 and 2020 and
reconciles these measures to our Net income (loss) and EPS for the
same periods:
|
Three Months Ended
September 30,
|
|
Three Months Ended
September 30,
|
|
2021
|
|
2020
|
(in millions, except
per share amounts)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net income (loss)
attributable to ordinary shares
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
(182.0)
|
|
|
$
|
(0.47)
|
|
Dividends on preferred
shares
|
22.4
|
|
|
0.06
|
|
|
—
|
|
|
—
|
|
Net income
(loss)
|
23.3
|
|
|
0.06
|
|
|
(182.0)
|
|
|
(0.47)
|
|
Deferred revenues
adjustment(1)
|
0.1
|
|
|
—
|
|
|
2.1
|
|
|
0.01
|
|
Transaction related
costs(2)
|
11.9
|
|
|
0.02
|
|
|
34.9
|
|
|
0.09
|
|
Share-based
compensation expense
|
12.0
|
|
|
0.02
|
|
|
6.8
|
|
|
0.02
|
|
Amortization related
to acquired intangible assets
|
110.9
|
|
|
0.16
|
|
|
49.0
|
|
|
0.12
|
|
Restructuring and
impairment(3)
|
15.6
|
|
|
0.02
|
|
|
3.2
|
|
|
0.01
|
|
Mark to market
adjustment on financial instruments(4)
|
(83.0)
|
|
|
(0.12)
|
|
|
144.8
|
|
|
0.36
|
|
Interest on new debt
held in escrow(5)
|
27.7
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
Other(6)
|
10.7
|
|
|
0.02
|
|
|
5.2
|
|
|
0.01
|
|
Income tax impact of
related adjustments
|
(15.5)
|
|
|
(0.02)
|
|
|
(5.5)
|
|
|
(0.01)
|
|
Adjusted net income
and Adjusted Diluted EPS
|
$
|
113.6
|
|
|
$
|
0.16
|
|
|
$
|
58.5
|
|
|
$
|
0.14
|
|
Weighted average
ordinary shares (Diluted)
|
699,822,054
|
|
407,577,327
|
|
|
Nine Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
(in millions, except
per share amounts)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net loss attributable
to ordinary shares
|
$
|
(105.3)
|
|
|
$
|
(0.17)
|
|
|
$
|
(336.9)
|
|
|
$
|
(0.91)
|
|
Dividends on preferred
shares
|
22.4
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
Net loss
|
(82.9)
|
|
|
(0.13)
|
|
|
(336.9)
|
|
|
(0.91)
|
|
Deferred revenues
adjustment(1)
|
4.5
|
|
|
0.01
|
|
|
7.4
|
|
|
0.02
|
|
Transaction related
costs(2)
|
(1.6)
|
|
|
—
|
|
|
70.2
|
|
|
0.18
|
|
Share-based
compensation expense
|
38.5
|
|
|
0.06
|
|
|
31.1
|
|
|
0.08
|
|
Amortization related
to acquired intangible assets
|
333.1
|
|
|
0.51
|
|
|
136.7
|
|
|
0.35
|
|
Restructuring and
impairment(3)
|
122.0
|
|
|
0.19
|
|
|
26.8
|
|
|
0.07
|
|
Mark to market
adjustment on financial instruments(4)
|
(113.2)
|
|
|
(0.17)
|
|
|
224.2
|
|
|
0.57
|
|
Interest on debt held
in escrow(5)
|
29.1
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
Debt extinguishment
costs and refinancing related costs
|
—
|
|
|
—
|
|
|
8.6
|
|
|
0.02
|
|
Other(6)
|
24.8
|
|
|
0.04
|
|
|
1.6
|
|
|
—
|
|
Income tax impact of
related adjustments
|
(42.3)
|
|
|
(0.07)
|
|
|
(16.2)
|
|
|
(0.04)
|
|
Adjusted net income
and Adjusted Diluted EPS
|
$
|
312.0
|
|
|
$
|
0.48
|
|
|
$
|
153.5
|
|
|
$
|
0.39
|
|
Weighted average
ordinary shares (Diluted)
|
647,508,021
|
|
390,533,995
|
|
|
(1)
|
Reflects the deferred
revenues adjustment as a result of purchase accounting associated
with businesses that were acquired.
|
|
|
(2)
|
Includes costs
incurred to complete business combination transactions, including
acquisitions, dispositions and capital market activities and
include advisory, legal, and other professional and consulting
costs. This also includes the mark to market adjustments on the
contingent stock consideration associated with the CPA Global and
DRG acquisitions, as well as the mark to market adjustment
associated with the CPA phantom share liability plan.
|
|
|
(3)
|
Reflects costs
primarily related to restructuring and impairment associated with
the acquisition of primarily DRG and CPA Global in 2020, as well as
the approved One Clarivate restructuring program in 2021. This also
includes costs incurred in connection with the initiative,
following our merger with Churchill Capital Corp in 2019, to
streamline our operations by simplifying our organization and
focusing on two segments.
|
|
|
(4)
|
Reflects mark to
market adjustments on our private placement warrant financial
instruments. In periods after issuance, changes in the estimated
fair value of the liabilities are reported through
earnings.
|
|
|
(5)
|
Reflects interest
expense incurred on the principal related to the 2021 debt
offering, currently held in escrow until the completion of the
pending acquisition of ProQuest. Clarivate intends to use the net
proceeds to finance a portion of the purchase price and
therefore, considered as part of the transaction costs associated
with the pending acquisition.
|
|
|
(6)
|
Includes primarily
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items that do not reflect our
ongoing operating performance. The 2020 detail also includes costs
related to a transition services agreement and offset by the
reverse transition services agreement from the sale of MarkMonitor
and costs incurred in connection with and after our separation from
Thomson Reuters in 2016 relating to the implementation of our
standalone company infrastructure and related cost-savings
initiatives. These costs were largely wound down by the end of
December 31, 2020.
|
Free Cash Flow and Adjusted Free Cash Flow
Free cash flow is calculated using net cash provided by
operating activities less capital expenditures. Adjusted free cash
flow is calculated as free cash flow, less cash paid for
restructuring and lease-exit activities, transition services
agreement, transition, transformation and integration expenses,
transaction related costs, interest on debt held in escrow, and
debt issuance costs offset by cash received for hedge accounting
transactions. Per Clarivate's Non-GAAP policy effective
January 1, 2021, we have ceased use
of adjustments for costs in connection with our separation from
Thomson Reuters including costs related to the transition services
agreement and separation, integration, and transformational
expenses, as well as costs related to our merger with Churchill
Capital Corp in 2019.
The following table reconciles our non-GAAP free cash flow and
Adjusted free cash flow measure to net cash provided by operating
activities:
|
Nine Months Ended
September 30,
|
(in
millions)
|
2021
|
|
2020
|
Net cash provided by
operating activities
|
$
|
305.5
|
|
|
$
|
128.0
|
|
Capital
expenditures
|
(86.2)
|
|
|
(78.6)
|
|
Free cash
flow
|
219.3
|
|
|
49.4
|
|
Cash paid for
restructuring costs(1)
|
65.8
|
|
|
18.9
|
|
Cash paid for
transaction related costs(2)
|
21.2
|
|
|
39.4
|
|
Cash paid for
transition, integration and other costs(3)
|
1.5
|
|
|
17.0
|
|
Cash paid for
transition services agreement(4)
|
—
|
|
|
(2.2)
|
|
Cash paid for debt
issuance costs
|
7.8
|
|
|
7.7
|
|
Cash received for
hedge accounting transactions
|
—
|
|
|
(1.7)
|
|
Adjusted free cash
flow
|
$
|
315.6
|
|
|
$
|
128.5
|
|
|
|
(1)
|
Reflects cash
payments for costs primarily related to restructuring and
lease-exit activities associated with the acquisition of DRG and
CPA Global in 2020. This also includes cash paid for costs incurred
in connection with the initiative, following our merger with
Churchill Capital Corp in 2019, to streamline our operations by
simplifying our organization and focusing on two
segments.
|
|
|
(2)
|
Includes cash paid
for costs incurred to complete business combination transactions,
including acquisitions, dispositions and capital market activities
and include advisory, legal, and other professional and consulting
costs.
|
|
|
(3)
|
Includes cash paid
for costs incurred in 2020 and 2019 in connection with and after
our separation from Thomson Reuters in 2016 relating to the
implementation of our standalone company infrastructure and related
cost-savings initiatives, costs for which were largely wound down
by December 31, 2020, as well as other costs that do not reflect
our ongoing operating performance.
|
|
|
(4)
|
In 2020, includes
cash payments to Thomson Reuters under the Transition Services
Agreement.
|
Required Reported Data
Standalone Adjusted EBITDA
We are required to report Standalone Adjusted EBITDA, which is
identical to Consolidated EBITDA and EBITDA as such terms are
defined under our credit facilities, dated as of October 31, 2019, and the indentures governing
our secured notes due 2026 issued by Camelot Finance S.A. and
guaranteed by certain of our subsidiaries, and the indentures
governing the secured and unsecured notes issued by Clarivate
Science Holdings Corporation in August
2021, respectively. In addition, the credit facilities and
the indentures contain certain restrictive covenants that govern
debt incurrence and the making of restricted payments, among other
matters. These restrictive covenants utilize Standalone Adjusted
EBITDA as a primary component of the compliance metric governing
our ability to undertake certain actions otherwise proscribed by
such covenants. Standalone Adjusted EBITDA reflects further
adjustments to Adjusted EBITDA for cost savings already implemented
and excess standalone costs.
Because Standalone Adjusted EBITDA is required pursuant to the
terms of the reporting covenants under the credit facilities and
the indentures and because this metric is relevant to lenders and
noteholders, management considers Standalone Adjusted EBITDA to be
relevant to the operation of its business. It is also utilized by
management and the compensation committee of the Board as an input
for determining incentive payments to employees.
Excess standalone costs are the difference between our actual
standalone company infrastructure costs, and our estimated steady
state standalone infrastructure costs. We make an adjustment for
the difference because we have had to incur costs under the
transition services agreement, with Thomson Reuters after we had
implemented the infrastructure to replace the services provided
pursuant to the transition services agreement, thereby incurring
dual running costs. Furthermore, there has been a ramp up period
for establishing and optimizing the necessary standalone
infrastructure. Since our separation from Thomson Reuters, we have
had to transition quickly to replace services provided under the
transition services agreement, with optimization of the relevant
standalone functions typically following thereafter. Cost savings
reflect the annualized "run rate" expected cost savings, net of
actual cost savings realized, related to restructuring and other
cost savings initiatives undertaken during the relevant
period. These costs wound down at the end of December 31, 2020.
Standalone Adjusted EBITDA is calculated under the credit
facilities and the indentures by using our Consolidated Net Loss
for the trailing 12-month period (defined in the credit facilities
and the indentures as our U.S. GAAP net income adjusted for certain
items specified in the credit facilities and the indentures)
adjusted for items including: taxes, interest expense, depreciation
and amortization, non-cash charges, expenses related to capital
markets transactions, acquisitions and dispositions, restructuring
and business optimization charges and expenses, consulting and
advisory fees, run-rate cost savings to be realized as a result of
actions taken or to be taken in connection with an acquisition,
disposition, restructuring or cost savings or similar initiatives,
"run rate" expected cost savings, operating expense reductions,
restructuring charges and expenses and synergies related to the
transition projected by us, costs related to any management or
equity stock plan, other adjustments that were presented in the
offering memorandum used in connection with the issuance of the
secured notes due 2026 and earnout obligations incurred in
connection with an acquisition or investment.
The following table bridges Net Loss to Adjusted EBITDA to
Standalone Adjusted EBITDA, as Adjusted EBITDA reflects a
substantial portion of the adjustments that comprise Standalone
Adjusted EBITDA for the periods presented:
|
Twelve Months
Ended September 30,
|
(in
millions)
|
2021
|
Net loss attributable
to ordinary shares
|
$
|
(80.3)
|
|
Dividends on
preferred shares
|
22.4
|
|
Net loss
|
(57.8)
|
|
Provision for income
taxes
|
2.0
|
|
Depreciation and
amortization
|
519.5
|
|
Interest,
net
|
180.8
|
|
Deferred revenues
adjustment(1)
|
20.1
|
|
Transaction related
costs(2)
|
25.7
|
|
Share-based
compensation expense
|
49.0
|
|
Gain on sale of
Techstreet
|
(28.1)
|
|
Restructuring and
impairment(3)
|
142.8
|
|
Mark to market
adjustment on financial instruments(4)
|
(132.3)
|
|
Other(5)
|
22.2
|
|
Adjusted
EBITDA
|
$
|
743.9
|
|
Realized foreign
exchange gain
|
4.6
|
|
Bioinfogate Adjusted
EBITDA impact(6)
|
0.3
|
|
Cost
savings(7)
|
59.0
|
|
Standalone
Adjusted EBITDA
|
$
|
807.8
|
|
|
|
(1)
|
Reflects the deferred
revenues adjustments recorded as a result of purchase accounting
for acquired businesses.
|
|
|
(2)
|
Includes costs
incurred to complete business combination transactions, including
acquisitions, dispositions and capital market activities and
include advisory, legal, and other professional and consulting
costs.
|
|
|
(3)
|
Reflects costs
related to restructuring and impairment of right of use assets
associated with the acquisition of DRG and CPA Global in 2020, and
related lease optimization plans, as well as the approved One
Clarivate restructuring program in 2021. This also includes costs
incurred in connection with the initiative, following our merger
with Churchill Capital Corp in 2019, to streamline our operations
by simplifying our organization and focusing on two
segments.
|
|
|
(4)
|
Reflects mark to
market adjustments on our private placement warrant financial
instruments. In periods after issuance, changes in the estimated
fair value of the liabilities are reported through
earnings.
|
|
|
(5)
|
Includes primarily
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items that do not reflect our
ongoing operating performance. The 2020 detail also includes costs
related to a transition services agreement and offset by the
reverse transition services agreement from the sale of MarkMonitor
and costs incurred in connection with and after our separation from
Thomson Reuters in 2016 relating to the implementation of our
standalone company infrastructure and related cost-savings
initiatives. These costs were largely wound down by the end of
December 31, 2020.
|
|
|
(6)
|
Represents the
acquisition Adjusted EBITDA for the period beginning October 1,
2020 through the respective acquisition date of August 3,
2021 for Bioinfogate to reflect the company's Standalone Adjusted
EBITDA as though acquisitions occurred at the beginning of the
presented period.
|
|
|
(7)
|
Reflects the
estimated annualized run-rate cost savings, net of actual cost
savings realized, related to restructuring and other cost savings
initiatives undertaken during the period (exclusive of any cost
reductions in our estimated standalone operating costs), including
synergies related to acquisitions.
|
The foregoing adjustments (6) and (7) are estimates and are not
intended to represent pro forma adjustments presented within the
guidance of Article 11 of Regulation S-X. Although we believe these
estimates are reasonable, actual results may differ from these
estimates, and any difference may be material. See "Cautionary Note
Regarding Forward-Looking Statements" in the annual report.
The following tables present the amounts of our subscription,
transactional and re-occurring revenues, including as a percentage
of our total revenues, for the periods indicated, as well the
drivers of the variances between periods.
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
|
Three Months
Ended September
30,
|
|
Total
Variance (Dollars)
|
Total
Variance (Percentage)
|
Acquisitive
|
Disposal
|
FX
Impact
|
Organic
|
(in millions, except
percentages)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Subscription
revenues
|
$
|
246.5
|
|
|
$
|
222.1
|
|
|
$
|
24.4
|
|
11.0
|
%
|
11.2
|
%
|
(4.4)
|
%
|
1.0
|
%
|
3.2
|
%
|
Re-occurring
revenues
|
110.4
|
|
|
—
|
|
|
110.4
|
|
100.0
|
%
|
100.0
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
Transactional
revenues
|
85.4
|
|
|
64.4
|
|
|
21.0
|
|
32.5
|
%
|
37.3
|
%
|
(7.9)
|
%
|
0.4
|
%
|
2.7
|
%
|
Deferred revenues
adjustment(1)
|
(0.1)
|
|
|
(2.1)
|
|
|
2.0
|
|
96.6
|
%
|
(2.4)
|
%
|
—
|
%
|
—
|
%
|
99.0
|
%
|
Revenues,
net
|
$
|
442.1
|
|
|
$
|
284.4
|
|
|
$
|
157.8
|
|
55.5
|
%
|
56.0
|
%
|
(5.2)
|
%
|
0.8
|
%
|
3.9
|
%
|
Deferred revenues
adjustment(1)
|
0.1
|
|
|
2.1
|
|
|
(2.0)
|
|
(96.6)
|
%
|
2.4
|
%
|
—
|
%
|
—
|
%
|
(99.0)
|
%
|
Adjusted revenues,
net
|
$
|
442.2
|
|
|
$
|
286.5
|
|
|
$
|
155.7
|
|
54.4
|
%
|
55.6
|
%
|
(5.2)
|
%
|
0.8
|
%
|
3.1
|
%
|
|
|
(1)
|
Reflects the deferred revenues adjustment made as a result of
purchase accounting.
|
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
|
Nine Months
Ended
September 30,
|
|
Total
Variance (Dollars)
|
Total
Variance (Percentage)
|
Acquisitive
|
Disposal
|
FX
Impact
|
Organic
|
(in millions, except
percentages)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Subscription
revenues
|
$
|
725.1
|
|
|
$
|
631.9
|
|
|
$
|
93.2
|
|
14.8
|
%
|
12.7
|
%
|
(4.4)
|
%
|
3.0
|
%
|
3.5
|
%
|
Re-occurring
revenues
|
336.2
|
|
|
—
|
|
|
336.2
|
|
100.0
|
%
|
100.0
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
Transactional
revenues
|
259.3
|
|
|
174.0
|
|
|
85.3
|
|
49.0
|
%
|
46.6
|
%
|
(9.0)
|
%
|
2.1
|
%
|
9.4
|
%
|
Deferred revenues
adjustment(1)
|
(4.5)
|
|
|
(7.4)
|
|
|
3.0
|
|
39.8
|
%
|
(59.3)
|
%
|
—
|
%
|
—
|
%
|
99.1
|
%
|
Revenues,
net
|
$
|
1,316.2
|
|
|
$
|
798.5
|
|
|
$
|
517.7
|
|
64.8
|
%
|
61.7
|
%
|
(5.4)
|
%
|
2.8
|
%
|
5.7
|
%
|
Deferred revenues
adjustment(1)
|
4.5
|
|
|
7.4
|
|
|
(3.0)
|
|
(39.8)
|
%
|
59.3
|
%
|
—
|
%
|
—
|
%
|
(99.1)
|
%
|
Adjusted revenues,
net
|
$
|
1,320.7
|
|
|
$
|
805.9
|
|
|
$
|
514.8
|
|
63.9
|
%
|
61.7
|
%
|
(5.4)
|
%
|
2.8
|
%
|
4.8
|
%
|
|
|
(1)
|
Reflects
the deferred revenues adjustment made as a result of purchase
accounting.
|
The following tables and the discussion that follows presents
our revenues by Product Segment for the periods indicated, as well
as the drivers of the variances between periods, including as a
percentage of such revenues.
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
Revenues by
Product Segment
|
Three Months
Ended September
30,
|
|
Total
Variance
(Dollars)
|
Total
Variance
(Percentage)
|
Acquisitive
|
Disposal
|
FX
Impact
|
Organic
|
(in millions, except
percentages)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Science Product
Segment
|
$
|
200.8
|
|
|
$
|
190.7
|
|
|
$
|
10.1
|
|
5.3
|
%
|
0.3
|
%
|
—
|
%
|
1.0
|
%
|
4.1
|
%
|
IP Product
Segment
|
241.3
|
|
|
95.7
|
|
|
145.6
|
|
152.1
|
%
|
165.9
|
%
|
(15.6)
|
%
|
0.6
|
%
|
1.2
|
%
|
Deferred revenues
adjustment (1)
|
(0.1)
|
|
|
(2.1)
|
|
|
2.0
|
|
96.6
|
%
|
(2.4)
|
%
|
—
|
%
|
—
|
%
|
99.0
|
%
|
Revenues,
net
|
$
|
442.1
|
|
|
$
|
284.4
|
|
|
$
|
157.8
|
|
55.5
|
%
|
56.0
|
%
|
(5.2)
|
%
|
0.8
|
%
|
3.9
|
%
|
Deferred revenues
adjustment (1)
|
0.1
|
|
|
2.1
|
|
|
(2.0)
|
|
(96.6)
|
%
|
2.4
|
%
|
—
|
%
|
—
|
%
|
(99.0)
|
%
|
Adjusted revenues,
net
|
$
|
442.2
|
|
|
$
|
286.5
|
|
|
$
|
155.7
|
|
54.4
|
%
|
55.6
|
%
|
(5.2)
|
%
|
0.8
|
%
|
3.1
|
%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase
accounting.
|
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
Revenues by
Product Segment
|
Nine Months
Ended
September 30,
|
|
Total
Variance
(Dollars)
|
Total
Variance
(Percentage)
|
Acquisitive
|
Disposal
|
FX
Impact
|
Organic
|
(in millions, except
percentages)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Science Product
Segment
|
$
|
594.4
|
|
|
$
|
521.6
|
|
|
$
|
72.8
|
|
14.0
|
%
|
4.6
|
%
|
—
|
%
|
3.1
|
%
|
6.2
|
%
|
IP Product
Segment
|
726.2
|
|
|
284.2
|
|
|
442.0
|
|
155.5
|
%
|
166.5
|
%
|
(15.2)
|
%
|
2.1
|
%
|
2.1
|
%
|
Deferred revenues
adjustment (1)
|
(4.5)
|
|
|
(7.4)
|
|
|
3.0
|
|
39.8
|
%
|
(59.3)
|
%
|
—
|
%
|
—
|
%
|
99.1
|
%
|
Revenues,
net
|
$
|
1,316.2
|
|
|
$
|
798.5
|
|
|
$
|
517.7
|
|
64.8
|
%
|
61.7
|
%
|
(5.4)
|
%
|
2.8
|
%
|
5.7
|
%
|
Deferred revenues
adjustment (1)
|
4.5
|
|
|
7.4
|
|
|
(3.0)
|
|
(39.8)
|
%
|
59.3
|
%
|
—
|
%
|
—
|
%
|
(99.1)
|
%
|
Adjusted revenues,
net
|
$
|
1,320.7
|
|
|
$
|
805.9
|
|
|
$
|
514.8
|
|
63.9
|
%
|
61.7
|
%
|
(5.4)
|
%
|
2.8
|
%
|
4.8
|
%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase
accounting.
|
The following table presents our calculation of Adjusted
Revenues for the Outlook for 2021 and reconciles this measure to
our Revenues, net for the same period:
|
Year Ending
December 31, 2021
(Forecasted)
|
|
Low
|
|
High
|
Revenues,
net
|
$
|
1,796.1
|
|
|
$
|
1,836.1
|
|
Deferred revenues
adjustment(1)
|
3.9
|
|
|
3.9
|
|
Adjusted revenues,
net
|
$
|
1,800.0
|
|
|
$
|
1,840.0
|
|
|
|
(1)
|
Reflects the deferred
revenues adjustment as a result of purchase accounting associated
with businesses that were acquired.
|
The following table presents our calculation of Adjusted EBITDA
for the Outlook for 2021 and reconciles this measure to our Net
loss for the same period:
|
Year Ending
December 31, 2021
(Forecasted)
|
(in
millions)
|
Low
|
|
High
|
Net loss attributable
to ordinary shares
|
$
|
(102.8)
|
|
|
$
|
(72.8)
|
|
Dividends on
preferred shares(1)
|
41.3
|
|
|
41.3
|
|
Net loss
|
$
|
(61.5)
|
|
|
$
|
(31.5)
|
|
Provision for income
taxes
|
40.0
|
|
|
40.0
|
|
Depreciation and
amortization
|
517.0
|
|
|
517.0
|
|
Interest expense and
amortization of debt discount, net
|
199.5
|
|
|
199.5
|
|
Deferred revenue
adjustment(2)
|
3.9
|
|
|
3.9
|
|
Restructuring and
impairment(3)
|
126.5
|
|
|
126.5
|
|
Transaction related
costs(4)
|
1.6
|
|
|
1.6
|
|
Mark to market
adjustment on financial instruments(5)
|
(113.2)
|
|
|
(113.2)
|
|
Share-based
compensation expense
|
56.4
|
|
|
56.4
|
|
Other(6)
|
24.8
|
|
|
24.8
|
|
Adjusted
EBITDA
|
$
|
795.0
|
|
|
$
|
825.0
|
|
Adjusted EBITDA
margin
|
44
|
%
|
|
45
|
%
|
|
|
(1)
|
Dividends on our
mandatory convertible preferred shares ("MCPS") are payable
quarterly at an annual rate of 5.25% of the liquidation preference
of $100 per share. For the purposes of calculating net loss
attributable to Clarivate, we have excluded the accrued and
anticipated MCPS stock dividends.
|
|
|
(2)
|
Reflects the deferred
revenues adjustment made as a result of purchase
accounting.
|
|
|
(3)
|
Reflects costs
primarily related to restructuring and impairment of right of use
assets associated with the acquisition of DRG and CPA Global in
2020, and related lease optimization plans, as well as the approved
One Clarivate restructuring program in 2021.
|
|
|
(4)
|
Includes costs
incurred to complete business combination transactions, including
acquisitions, dispositions and capital market activities and
include advisory, legal, and other professional and consulting
costs. This also includes the mark to market adjustments on the
contingent stock consideration associated with the CPA Global and
DRG acquisitions, as well as the mark to market adjustment
associated with the CPA phantom share liability plan.
|
|
|
(5)
|
Reflects mark to
market adjustments on our private placement warrant financial
instruments. In periods after issuance, changes in the estimated
fair value of the liabilities are reported through
earnings.
|
|
|
(6)
|
Includes primarily
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items incurred that do not
reflect our ongoing operating performance.
|
The following table presents our calculation of Adjusted Diluted
EPS for the Outlook for 2021 and reconciles these measures to our
Net loss for the same period:
|
Year Ending
December 31, 2021
(Forecasted)
|
|
Low
|
|
High
|
|
Per
Share
|
|
Per
Share
|
Net loss attributable
to ordinary shares
|
$
|
(0.15)
|
|
|
$
|
(0.09)
|
|
Dividends on
preferred shares(1)
|
0.06
|
|
|
0.06
|
|
Net loss
|
$
|
(0.09)
|
|
|
$
|
(0.03)
|
|
Restructuring and
impairment(2)
|
0.19
|
|
|
0.19
|
|
Transaction related
costs(3)
|
—
|
|
|
—
|
|
Share-based
compensation expense
|
0.08
|
|
|
0.08
|
|
Amortization related
to acquired intangible assets
|
0.65
|
|
|
0.65
|
|
Mark to market
adjustment on financial instruments(4)
|
(0.17)
|
|
|
(0.17)
|
|
Interest on debt held
in escrow(5)
|
0.07
|
|
|
0.07
|
|
Other(6)
|
0.04
|
|
|
0.04
|
|
Income tax impact of
related adjustments
|
(0.09)
|
|
|
(0.09)
|
|
Adjusted Diluted
EPS
|
$
|
0.70
|
|
|
$
|
0.74
|
|
Weighted average
ordinary shares (Diluted)(7)
|
668,402,150
|
|
|
(1)
|
Dividends on our
mandatory convertible preferred shares ("MCPS") are payable
quarterly at an annual rate of 5.25% of the liquidation preference
of $100 per share. For the purposes of calculating net loss
attributable to Clarivate, we have excluded the accrued and
anticipated MCPS stock dividends.
|
|
|
(2)
|
Reflects costs
primarily related to restructuring and impairment of right of use
assets associated with the acquisition of DRG and CPA Global in
2020, and related lease optimization plans, as well as the approved
One Clarivate restructuring program in 2021.
|
|
|
(3)
|
Includes costs
incurred to complete business combination transactions, including
acquisitions, dispositions and capital market activities and
include advisory, legal, and other professional and consulting
costs. This also includes the mark to market adjustments on the
contingent stock consideration associated with the CPA Global and
DRG acquisitions, as well as the mark to market adjustment
associated with the CPA phantom share liability plan.
|
|
|
(4)
|
Reflects mark to
market adjustments on our private placement warrant financial
instruments. In periods after issuance, changes in the estimated
fair value of the liabilities are reported through
earnings..
|
|
|
(5)
|
Reflects interest
expense incurred on the principal related to the 2021 debt
offering, currently held in escrow until the completion of the
pending acquisition of ProQuest. Clarivate intends to use the net
proceeds to finance a portion of the purchase price and
therefore, considered as part of the transaction costs associated
with the pending acquisition.
|
|
|
(6)
|
Includes primarily
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items incurred that do not
reflect our ongoing operating performance.
|
|
|
(7)
|
For the purposes of
calculating adjusted earnings per share, the Company has excluded
the accrued and anticipated MCPS stock dividends and assumed the
"if-converted" method of share dilution.
|
The following table presents our calculation of Free Cash Flow
and Adjusted Free Cash Flow for the Outlook for 2021 and reconciles
this measure to our Net cash provided by operating activities for
the same period:
|
Year Ending
December 31, 2021
(Forecasted)
|
(in
millions)
|
Low
|
|
High
|
Net cash provided by
operating activities
|
$
|
403.2
|
|
|
$
|
453.2
|
|
Capital
expenditures
|
(123.0)
|
|
|
(123.0)
|
|
Free Cash
Flow
|
280.2
|
|
|
330.2
|
|
Cash paid for
restructuring costs(1)
|
81.6
|
|
|
81.6
|
|
Cash paid for
transaction related costs(2)
|
38.6
|
|
|
38.6
|
|
Cash paid for other
costs(3)
|
1.5
|
|
|
1.5
|
|
Cash paid for
interest on debt held in escrow(4)
|
48.1
|
|
|
48.1
|
|
Adjusted Free Cash
Flow
|
$
|
450.0
|
|
|
$
|
500.0
|
|
|
|
(1)
|
Reflects cash
payments for costs related to restructuring and lease-exit
activities associated with the acquisition of primarily DRG and CPA
Global in 2020. This also includes cash paid for costs incurred in
connection with the initiative, following our merger with Churchill
Capital Corp in 2019, to streamline our operations by simplifying
our organization and focusing on two segments.
|
|
|
(2)
|
Includes cash paid
for costs incurred to complete business combination transactions,
including acquisitions, dispositions and capital market activities
and include advisory, legal, and other professional and consulting
costs.
|
|
|
(3)
|
Reflects cash paid
for other costs that do not reflect our ongoing operating
performance.
|
|
|
(4)
|
Reflects cash
payments for the interest expense incurred on the principal related
to the 2021 debt offering, currently held in escrow until the
completion of the pending acquisition of ProQuest. Clarivate
intends to use the net proceeds to finance a portion of the
purchase price and therefore, considered as part of the
transaction costs associated with the pending
acquisition.
|
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