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Item 7. Management’s Discussion and Analysis

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Certain amounts that appear in this section may not sum due to rounding.

We offer a collection of high quality, market leading information and analytic products and solutions through our Science segment and Intellectual Property (“IP”) segment, which are also our reportable segments.

Our Science segment consists of our Academic and Government Product Line (“AGPL”) and Life Sciences Product Lines, and our IP segment consists of our Patent, Trademark, Domain, and IP Management Product Lines.

Our highly curated Web of Science products are offered primarily to universities, helping them navigate scientific literature, facilitate research and evaluate and measure the quality of researchers, institutions and scientific journals across various academic disciplines.

Our Life Sciences Product Line offerings serve the content and analytical needs of pharmaceutical and biotechnology companies across the drug development lifecycle, including content on discovery and preclinical research, competitive intelligence, regulatory information and clinical trials.

Our Patent Product Line offerings help patent and legal professionals in R&D intensive businesses evaluate the novelty and patentability of new ideas and products to help protect and research patents.

Our Trademark Product Line allow businesses and legal professionals to access our comprehensive trademark database.

Our Domain Product Line offerings include enterprise web domain portfolio management products and services.

Finally, our IP Management Product Line provides technology solutions and legal support services across the IP lifecycle, including renewal and validation of IP rights on behalf of customers and the development and provision of IP management software, as well as other patent activities including patent searching, IP filing, prosecution support and trademark watching.

We offer a global portfolio of high quality, market leading data, insights, analytics and workflow products and solutions through our Academia and Government ("A&G") segment, Life Sciences and Healthcare ("LS&H") segment, and Intellectual Property (“IP”) segment, which are also our reportable segments.

Our A&G segment consists of our Academia and Government product group, which provides products and services to organizations that plan, fund, implement and utilize education and research at a global, national, institutional, and individual level.

Our LS&H segment consists of our Life Sciences & Healthcare product group, which includes products and solutions that provide insight and foresight across the drug and device lifecycle, empowering life science and healthcare organizations to create a healthier tomorrow.

Our IP segment consists of our Patent Intelligence, Brand IP Intelligence and IP Lifecycle Management product groups, which help customers establish, protect and manage their intellectual property.

For further information regarding an overview of our business and certain related trends and uncertainties, refer to Part I - Item 1.

The objective of the Management Discussion and Analysis is to detail material information, events, uncertainties and factors impacting the Company and provide investors an understanding from "Management's perspective".

Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, Management highlights the critical areas for evaluating the Company's performance which includes a discussion of reportable segment information.

Management's Discussion and Analysis of Financial Condition and Results of Operations, Management highlights the critical areas for evaluating the Company's performance which includes a discussion of reportable segment information.

In addition, refer to Item 1.

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Acquisition of ProQuest

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

On December 1, 2021, we acquired 100% of ProQuest, a leading global software, data and analytics provider to academic, research and national institutions, and its subsidiaries from the Seller Group.

On December 1, 2021, we acquired 100% of ProQuest, a leading global software, data and analytics provider to academic, research and national institutions, and its subsidiaries from Cambridge Information Group (“CIG”), Atairos and certain other equity holders (collectively, the “Seller Group”).

The aggregate consideration in connection with the closing of the ProQuest acquisition was $5,002.3, net of $52.5 cash acquired.

The aggregate consideration was composed of (i) $1,094,901 from the issuance of up to 46,910,923 ordinary shares to the Seller Group, representing approximately 7% pro forma fully diluted ownership of Clarivate and (ii) approximately $3,951,947 in cash, including approximately $917,491 to fund the repayment of ProQuest debt.

We funded the cash purchase price through a combination of cash on hand, new debt financing related to the Senior Unsecured Notes and Senior Secured Notes (see Note 14 of the Notes to Consolidated Financial Statements) and the June 2021 Ordinary Share Offering and 5.25% Series A Mandatory Convertible Preferred Shares Offering (see Note 16 of the Notes to Consolidated Financial Statements).

The aggregate consideration was composed of (i) $1,094.9 from the issuance of 46.9 million ordinary shares to the Seller Group and (ii) approximately $3,959.9 in cash, including approximately $917.5 to fund the repayment of ProQuest debt.

Acquisition of CPA Global

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The aggregate consideration in connection with the closing of the CPA Global acquisition was $8,540.9, net of $102.7 cash acquired, including an equity hold-back consideration of $46.5.

The aggregate consideration was composed of (i) $6,565,477 from the issuance of up to 218,183,778 ordinary shares to Redtop Holdings Limited, a portfolio company of Leonard Green & Partners, L.P., representing approximately 35% pro forma fully diluted ownership of Clarivate and (ii) approximately $2,078,084 in cash to fund the repayment of CPA Global's parent company outstanding debt of $2,055,822 and related interest swap termination fee of $22,262.

Of the 218,306,663 ordinary shares issuable in the acquisition, Clarivate issued 210,357,918 ordinary shares on October 1, 2020.

There were 6,325,860 shares that were transferred to Clarivate to fund an Employee Benefit Trust established for the CPA Global Equity Plan.

The aggregate consideration was composed of (i) $6,565.5 from the issuance of up to 218.2 million ordinary shares to Redtop Holdings Limited, a

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

portfolio company of Leonard Green & Partners, L.P., representing approximately 35% pro forma fully diluted ownership of Clarivate and (ii) approximately $2,078.1 in cash to fund the repayment of CPA Global's parent company outstanding debt of $2,055.8 and related interest swap termination fee of $22.3.

Of the 218.3 million ordinary shares issuable in the acquisition, Clarivate issued 210.4 million ordinary shares on October 1, 2020.

There were 6.3 million shares that were transferred to Clarivate to fund an Employee Benefit Trust established for the CPA Global Equity Plan.

Accordingly, these shares were excluded from purchase price consideration.

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On February 28, 2020, we acquired 100% of the assets, liabilities and equity interests of Decision Resources Group ("DRG"), a premier provider of high-value data, analytics and insights products and services to the healthcare industry, from Piramal Enterprises Limited ("PEL"), which is a part of global business conglomerate Piramal Group.

The acquisition helps us expand our core businesses and provides us with the potential to grow in the Life Sciences Product Line.

The aggregate consideration paid in connection with the closing of the DRG acquisition was $964,997, composed of $900,000 of base cash plus $6,100 of adjusted closing cash paid on the closing date and 2,895,638 of the Company's ordinary shares issued to PEL in March 2021.

The contingent stock consideration was valued at $58,897 on the closing date and was revalued at each period end until its issuance date and was included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

The acquisition helps us expand our core businesses and provides us with the potential to grow in the LS&H segment.

The aggregate consideration paid in connection with the closing of the DRG acquisition was $965.0, composed of $900.0 of base cash plus $6.1 of adjusted closing cash paid on the closing date and up to 2.9 million of the Company's ordinary shares valued at $58.9 on the closing date.

The contingent stock consideration was revalued at each period end until its issuance to PEL in March 2021 for a total of $61.6.

Disposition of MarkMonitor Domain Management

On October 31, 2022, the Company completed the sale of the MarkMonitor Domain Management business within the IP segment to Newfold Digital, a leading web presence solutions provider, for a total purchase price of $296.1.

A gain of $278.5 was recognized in the Consolidated Statements of Operations within Other operating (income) expense, net during the year ended December 31, 2022.

Disposition of Techstreet

On November 6, 2020, the Company completed the sale of certain assets and liabilities of certain non-core assets and liabilities within the IP segment for a total purchase price of $42.8.

A gain of $28,140 was recognized in the Consolidated Statements of Operations within Other operating (expense) income, net during the year ended December 31, 2020.

A gain of $28.1 was recognized in the Consolidated Statements of Operations within Other operating (income) expense, net during the year ended December 31, 2020.

Public Ordinary and Mandatory Convertible Preferred Share Offerings

In February 2020, we completed an underwritten public offering of 27,600,000 of our ordinary shares, generating proceeds of $540,736, which we used to fund a portion of the cash consideration for the DRG acquisition.

In June 2020, we completed an underwritten public offering of 50,400,000 of our ordinary shares (including 2,400,000 ordinary shares pursuant to the underwriters' option to purchase up to an additional 7,200,000 ordinary shares from certain selling shareholders) at a share price of $22.50.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

In June 2021, we completed an underwritten public offering of 44,230,768 of our ordinary shares at a share price of $26.00, of which 28,846,154 ordinary shares were issued and sold by Clarivate and 15,384,614 were sold by selling shareholders (which included 5,769,230 ordinary shares that the underwriters purchased pursuant to their option to purchase additional shares).

The ordinary shares sold by selling shareholders included 10,562,882 ordinary shares from Onex, 4,107,787 ordinary shares from Baring and 713,945 ordinary shares from Directors, Executive Officers and other shareholders.

In June 2021, we completed an underwritten public offering of 44.2 million of our ordinary shares at a share price of $26.00, of which 28.8 million ordinary shares were issued and sold by Clarivate and 15.4 million ordinary shares were sold by selling shareholders (which included 5.8 million ordinary shares that the underwriters purchased pursuant to their option to purchase additional shares).

See Note 1 - Background and Nature of Operations for further details on the public ordinary share offerings.

In June 2021, concurrently with the June 2021 Ordinary Share Offering, we completed an underwritten public offering of 14,375,000 of our 5.25% Series A Mandatory Convertible Preferred Shares (which included 1,875,000 of our MCPS that the underwriters purchased pursuant to their option to purchase additional shares).

See Note 16 - Shareholders’ Equity for further details on the MCPS offering.

Concurrently with the June 2021 Ordinary Share Offering, we completed an underwritten public offering of 14.4 million of our 5.25% Series A Mandatory Convertible Preferred Shares ("MCPS") (which included 1.9 million of our MCPS that the underwriters purchased pursuant to their option to purchase additional shares).

Private Placement Notes Offering

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The Old Secured Notes and the Old Unsecured Notes were issued by Clarivate Science Holdings Corporation (the "Issuer"), an indirect wholly-owned subsidiary of Clarivate.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

In August 2021, we (i) exchanged all of the outstanding, validly tendered and not withdrawn 3.875% Senior Secured Notes due 2028 (the “Old Secured Notes”) for the newly-issued 3.875% Senior Secured Notes due 2028 (the “New Secured Notes”), and (ii) exchanged all of the outstanding, validly tendered and not withdrawn 4.875% Senior Unsecured Notes due 2029 (the “Old Unsecured Notes” and, together with the Old Secured Notes, the “Old Notes”) for the Issuer’s newly-issued 4.875% Senior Notes due 2029 (the “New Unsecured Notes” and, together with the New Secured Notes, the “New Notes”).

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Restructuring

During 2020 and 2019, we engaged a strategic consulting firm to assist us in optimizing our structure and cost base.

As a result, we have implemented several cost-saving and margin improvement programs designed to generate substantial

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

incremental cash flow including the Operation Simplification and Optimization Program, the DRG Acquisition Integration Program and the CPA Global Acquisition Integration and Optimization Program.

During 2021, we approved the One Clarivate restructuring plan, which streamlines operations within targeted areas of the Company and the ProQuest Acquisition Integration Program.

The programs are expected to result in a reduction in operational costs, with the primary driver of the cost saving being from a reduction in workforce.

Operation Simplification and Optimization Program

During the fourth quarter of 2019, the Company approved restructuring actions designed to streamline our operations by simplifying our organization and focusing on two segments in planned phases.

Approximately $44,538 costs have been incurred to date under the program which was substantially complete as of December 31, 2021.

During the year ended December 31, 2021, 2020, and 2019, the Company recorded pre-tax charges of $2,221, $26,647, and $15,670 recognized within Restructuring and impairment in the Consolidated Statements of Operations.

These charges were composed of $2,063, $16,069 and $15,424 of severance and related benefit costs, $30, $4,567 and $246 of contract exit costs and legal and advisory fees, and $128, $6,011 and $0 of lease impairment and location exit costs.

DRG Acquisition Integration Program

During the second quarter of 2020, the Company approved restructuring actions designed to eliminate duplicative costs in planned phases following the acquisition of DRG.

Approximately $6,792 of costs have been incurred to date under the program which was substantially complete as of December 31, 2021.

During the year ended December 31, 2021 and 2020, the Company recorded pre-tax charges of $195 and $6,597 recognized within Restructuring and impairment in the Consolidated Statements of Operations.

These charges were composed of $ 120 and $ 5,133 of severance and related benefit costs, $75 and $487 of contract exit costs and legal and advisory fees, and $0 and $977 of lease impairment and location exit costs.

CPA Global Acquisition Integration and Optimization Program

During the fourth quarter of 2020, the Company approved restructuring actions designed to eliminate duplicative costs following the acquisition of CPA Global and to streamline our operations simplifying our organization and reducing our leasing portfolio.

As a result of these actions, the company expects to record total pre-tax restructuring charges of approximately $128,017 for all phases of the program.

Approximately $128,113 of costs have been incurred to date under the program which was substantially complete as of December 31, 2021.

During the year ended December 31, 2021 and 2020, the Company recorded pre-tax charges of $105,122 and $22,895 recognized within Restructuring and impairment in the Consolidated Statements of Operations.

These charges were composed of $35,882 and $18,715 of severance and related benefit costs, $8,303 and $3,472 of contract exit costs and legal and advisory fees, and $60,937 and $707 of lease impairment and location exit costs.

One Clarivate Program

During the second quarter of 2021, the Company approved restructuring actions to streamline operations within targeted areas of the Company.

The program will result in a reduction in operational costs, with the primary driver of the cost saving being from a reduction in workforce.

As a result of these actions, the company expects to record total pre-tax restructuring charges of approximately $39,981 for all approved phases of the program.

Approximately $19,981 of costs have been incurred to date under the program and $20,000 are expected to be incurred in a future period, all related to severance charges.

During the year ended December 31, 2021, the Company recorded pre-tax charges of $19,981 recognized within Restructuring and impairment in the Consolidated Statements of Operations.

These charges were composed of $17,275 of severance and related benefit costs and $2,707 of contract exit costs and legal and advisory fees.

The program resulted in a reduction in operational costs, with the primary driver of the cost saving being from a reduction in workforce.

As a result of these actions, the company recorded total pre-tax restructuring charges of approximately $36.7 for all approved phases of the program.

During the years ended December 31, 2022 and 2021, the Company recorded pre-tax charges of $16.7 and $20.0 recognized within Restructuring and impairment in the Consolidated Statements of Operations.

These charges were composed of 16.7 and $17.3 in severance and related benefit costs and $— and $2.7 in contract exit costs and legal and advisory fees during the year ended December 31, 2022 and 2021, respectively.

ProQuest Acquisition Integration Program

During the fourth quarter of 2021, the Company approved restructuring actions designed to eliminate duplicative costs following the acquisition of ProQuest and to streamline our operations simplifying our organization and continuing to

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

reduce our lease portfolio.

As a result of these actions, the Company expects to record total pre-tax restructuring charges of approximately $76.4 for all phases of the program.

Approximately $51.4 of costs have been incurred to date under the program and $25.0 are expected to be incurred in a future period, related to severance, lease impairments and other exit costs, such as legal and advisory fees.

During the year ended December 31, 2021, the Company recorded pre-tax charges of $1,939 recognized within Restructuring and impairment in the Consolidated Statements of Operations.

These charges were all related to severance and related benefit costs.

During the years ended December 31, 2022 and 2021, the Company recorded pre-tax charges of $49.4 and $1.9 recognized within Restructuring and impairment in the Consolidated Statements of Operations.

These charges were composed of $22.9

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

and $1.9 in severance and related benefit costs and $26.5 and $— in contract exit costs and legal and advisory fees during the year ended December 31, 2022 and 2021, respectively.

Other Restructuring Programs

During 2020 and the fourth quarter 2019, we engaged a strategic consulting firm to assist us in optimizing our structure and cost base.

As a result, we implemented several cost-saving and margin improvement programs designed to generate substantial incremental cash flows including the Operation Simplification and Optimization Program, the DRG Acquisition Integration Program and the CPA Global Acquisition Integration and Optimization Program.

The costs associated with these programs were substantially complete, and we are not expecting to incur any further cost under these restructuring plans as of December 31, 2022.

During the years ended December 31, 2022 , 2021 and 2020 , the Company recorded pre-tax charges of $0.6, $107.6 and $56.1, respectively, recognized within Restructuring and impairment in the Consolidated Statements of Operations.

These charges were composed of $(0.4), $38.1 and $39.9 in severance and related benefit costs and $1.0, $69.5 and $16.2 in contract exit costs and legal and advisory fees during the year ended December 31, 2022, 2021 and 2020, respectively.

Effect of Currency Fluctuations

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The financial statements of our subsidiaries outside the U.S.

and the UK are typically measured using the local currency as the functional currency.

are typically measured using the local currency as the functional currency.

Assets and liabilities of these subsidiaries are translated at the balance sheet date exchange rates, while income and expense items are translated at the average monthly exchange rates.

Resulting translation adjustments are recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

Subsidiary monetary assets and liabilities that are denominated in currencies other than the functional currency are remeasured using the month-end exchange rate in effect during each month, with any related gain or loss recorded in Other operating expense, net within the Consolidated Statements of Operations.

In September 2020, the Company entered into two foreign exchange forward contracts to reduce its exposure to variability in cash flows relating to funding of the repayment of CPA Global's parent company outstanding debt on October 1, 2020.

The Company recognized a gain from the mark to market adjustment of $0 and $2,903, in Other operating income, net on the Consolidated Statements of Operations for the year ended December 31, 2021 and 2020, respectively.

The nominal amount of outstanding foreign currency contracts was $0 as of December 31, 2021 and December 31, 2020.

Additionally, the Company periodically enters into foreign currency contracts.

The purpose of these derivative instruments is to help manage the Company’s exposure to foreign exchange rate risks within the acquired CPA Global business.

Resulting translation adjustments are recorded in Accumulated other comprehensive (loss) income on the Consolidated Balance Sheets.

Subsidiary monetary assets and liabilities that are denominated in currencies other than the functional currency are remeasured using the month-end exchange rate in effect during each month, with any related gain or loss recorded in Other operating (income) expense, net within the Consolidated Statements of Operations.

The Company periodically enters into foreign currency forward contracts to help manage the Company’s exposure to foreign exchange rate risks.

These contracts generally do not exceed 180 days in duration.

Quantitative and Qualitative Disclosures About Market Risk and Item 8.

Financial Statements and Supplementary Data - Note 10 to the Consolidated Financial Statements - Derivative Instruments, for additional information.

The Company recognized loss (gains) from the mark to market adjustment of $1.2, $6.9 and $(20.8) for the year ended December 31, 2022, 2021 and 2020 , respectively, in Other operating (income) expense, net on the Consolidated Statements of Operations.

The principal amount

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(In millions, except share and per share data, option prices, ratios or as noted)

of outstanding foreign currency contracts was $165.1 and $216.7 as of December 31, 2022 and 2021 , respectively.

Quantitative and Qualitative Disclosures About Market Risk and Item 8.

Financial Statements and Supplementary Data - Notes to the Consolidated Financial Statements - Note 9 - Derivative Instruments, for additional information.

Key Performance Indicators

We regularly monitor the following key performance indicators to evaluate our business and trends, measure our performance, prepare financial projections and make strategic decisions.

Adjusted Revenues

We present Adjusted Revenues, which excludes the impact of the deferred revenue purchase accounting adjustments relating to acquisitions prior to 2021 (see Note 3 - Summary of Significant Accounting Policies for further detail), which is allowable under the Company's debt covenant calculation.

We present these measures because we believe it is useful to readers to better understand the underlying trends in our operations.

Due to the adoption of ASU 2021-08, this performance indicator will not be used going forward.

See - Certain Non-GAAP Measures - Adjusted Revenues below for important information on the limitations of Adjusted Revenues and their reconciliation to the respective revenues measures under U.S.

We include Revenue growth, Adjusted EBITDA, Adjusted EBITDA margin, Annualized Contract Value, Annual Renewal Rates, Free Cash Flow and Adjusted Free Cash Flow as key performance indicators because they are a basis upon which our management assesses our performance and we believe they reflect the underlying trends and indicators of our business by allowing management to focus on the most meaningful indicators of our continuous operational performance.

Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow and Adjusted Free Cash Flow are financial measures that are not prepared in accordance with U.S.

generally accepted accounting principles (“non-GAAP”).

Although we believe these measures may be useful to investors for the same reasons, these measures are not a substitute for GAAP financial measures or disclosures.

For a reconciliation of our non-GAAP measures to the corresponding most closely related measures calculated in accordance with GAAP, see Certain Non-GAAP Measures below.

Organic revenue growth

We review year-over-year organic revenue growth in our segments as a key measure of our success in addressing customer needs.

We also review year-over-year organic revenue growth by transaction type to help us identify and address broad changes in product mix, and by geography to help us identify and address broad changes and revenue trends by region.

We measure organic revenue growth excluding acquisitions, disposals, and foreign currency impacts.

We define these components as follows:

We define organic revenue growth as total revenue growth from continuing operations for all factors other than acquisitions, disposals, and foreign currency movements.

We drive this type of revenue growth through pricing, up-selling and cross-selling efforts, securing new customer business, and the sale of new or enhanced product offerings.

• Acquisitions:

We define acquisition revenue as the revenue generated from acquired products and services from the date of acquisition to the first anniversary date of that acquisition.

This type of growth comes as a result of our strategy of the pursuit of acquisition opportunities.

We define disposals revenue as the revenue generated in the prior year comparative period from product lines, services, and/or businesses divested from the date of the sale in the current period presented.

• Foreign Currency:

We define the foreign currency impact on revenue as the difference between current revenue at current exchange rates and current revenue at the corresponding prior period exchange rates.

Due to the significance of revenue transacted in foreign currencies, we believe that it is important to measure the impact of foreign currency movements on revenue.

Adjusted EBITDA and Adjusted EBITDA margin

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See Certain Non-GAAP Measures - Adjusted EBITDA and Adjusted EBITDA margin for important information on the limitations of Adjusted EBITDA and its reconciliation to our net loss under U.S.

Adjusted EBITDA represents net 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.

Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Adjusted Revenues.

2021-08 in 2021, non-operating income or expense, the impact of certain non-cash, mark to market adjustments on financial instruments, legal settlements and other items that are included in net income for the period that the Company does not consider indicative of

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

its ongoing operating performance and certain unusual items impacting results in a particular period.

Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues, net plus the impact of the deferred revenue purchase accounting adjustments relating to acquisitions prior to 2021.

Annualized Contract Value

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We monitor ACV because it represents a leading indicator of the potential subscription revenues that may be generated from our existing customer base over the upcoming 12-month period.

Measurement of subscription revenues as a key operating metric is particularly relevant because a majority of our revenues are generated through subscription-based and re-occurring

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

revenues, which accounted for 79.1%, 76.9% and 82.6% of our total revenues for the years ended December 31, 2021, 2020 and 2019, respectively.

Measurement of subscription revenues as a key operating metric is particularly relevant because a majority of our revenues are generated through subscription-based and re-occurring revenues, which accounted for 77.5%, 79.3% and 78.9% for the years ended December 31, 2022, 2021 and 2020, respectively .

We calculate and monitor ACV for each of our segments and use the metric as part of our evaluation of our business and trends.

The amount of actual subscription revenues that we earn over any 12-month period are likely to differ from ACV at the beginning of that period, sometimes significantly.

This may occur for numerous reasons, including subsequent changes in annual revenue renewal rates, impact of price increases (or decreases), cancellations, upgrades and downgrades, and acquisitions and divestitures.

This may occur for numerous reasons, including subsequent changes in annual renewal rates, impact of price increases (or decreases), cancellations, upgrades and downgrades, and acquisitions and divestitures.

We calculate the ACV on a constant currency basis to exclude the effect of foreign currency fluctuations.

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December 31, Change

(dollars in thousands) 2021 2020 2019 2021 vs.

2022 2021 2020 2022 vs.

Annualized Contract Value $ 1,581.9 $ 1,611.8 $ 906.5 (1.9) % 77.8 %

Annual Revenue Renewal Rates

(1) The change in ACV is primarily due to the acquisition of ProQuest in December 2021 and the disposition of MarkMonitor in October 2022, supplemented by organic ACV growth of 2.6%.

Annual Renewal Rates

Our revenues are primarily subscription based, which leads to high revenue predictability.

Our ability to retain existing subscription customers is a key performance indicator that helps explain the evolution of our historical results and is a leading indicator of our revenues and cash flows for the subsequent reporting period.

“Annual revenue renewal rate” is the metric we use to determine renewal levels by existing customers across all of our Segments, and is a leading indicator of renewal trends, which impact the evolution of our ACV and results of operations.

We calculate the annual revenue renewal rate for a given period by dividing (a) the annualized dollar value of existing subscription product license agreements that are renewed during that period, including the value of any product downgrades, by (b) the annualized dollar value of existing subscription product license agreements that come up for renewal in that period.

“Open renewals,” which we define as existing subscription product license agreements that come up for renewal, but are neither renewed nor canceled by customers during the applicable reposting period, are excluded from both the numerator and denominator of the calculation.

We calculate the annual revenue renewal rate to reflect the value of product downgrades but not the value of product upgrades upon renewal, because upgrades reflect the purchase of additional services.

The impact of upgrades, new subscriptions and product price increases is reflected in ACV, but not in annual revenue renewal rates.

Our annual revenue renewal rates were 90.6%, 91.2% and 90.1% for the years ended December 31, 2021, 2020 and 2019, respectively.

Key Components of Our Results of Operations

Revenues, net

The Company disaggregates revenue based on revenue recognition pattern.

Subscription based revenues recognize revenue over time, whereas our re-occurring, transactional and other revenues typically recognize revenue at a point in time with professional services revenue recognized over time.

The Company believes subscription, re-occurring, transactional and other is reflective of how the Company manages the business.

Subscription-based revenues are recurring revenues that are earned under annual, multi-year, or evergreen contracts, pursuant to which we license the right to use our products to our customers or provide maintenance services over a contractual term.

Revenues from the sale of subscription data, maintenance services, continuing service fees related to our perpetual access license ("PALs"), and analytics solutions are recognized ratably over the contractual term as revenues are earned.

Subscription revenues are driven by annual revenue renewal rates, new subscription business, price increases on existing subscription business and subscription upgrades and downgrades from recurring customers.

Substantially all of our historical deferred revenues purchase accounting adjustments are related to subscription revenues.

Re-occurring revenues are earned under contracts for specific deliverables that are typically quoted on a product, data set, or project basis and often derived from repeat customers purchasing cyclical products.

These contracts include either evergreen clauses, in which at least six month advance notice is required prior to cancellation, or terms of multiple years.

Due to the cyclical nature of the Company’s re-occurring products, and there typically being upfront setup time with the customer, the

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

re-occurring revenue stream benefits from an established customer base, with minimal customer attrition.

A primary driver of the re-occurring revenue stream is the ‘renewal’ business obtained from the CPA global acquisition.

Revenue from this revenue stream is typically recognized point in time.

Transactional and other revenues include "clearance searching" and "backfiles" products as well as professional services such as implementation.

Clearance searching products relate to preparing detailed, custom reports post screening that uncover potential risks related to a proposed trademark.

Backfiles represent an archive of historical data content.

Transactional revenues are earned under contracts for specific deliverables that are typically quoted on a product, data set or project basis and often derived from repeat customers, including customers that also generate subscription-based revenues.

Transactional content revenues are usually delivered to the customer instantly or in a short period of time, at which time revenues are recognized.

Transactional revenues may involve sales to the same customer on multiple occasions but with different products or services comprising the order.

Other revenues relate to professional services including implementation services for software and software as a service ("SaaS") subscriptions.

These contracts vary in length from several months to years for multi-year projects.

Revenue is recognized over time utilizing a reasonable measure of progress depicting the satisfaction of the related performance obligation.

Cost of Revenues

Cost of revenues consists of costs related to the production, servicing and maintenance of our products and are composed primarily of related personnel costs, such as salaries, benefits and bonuses for employees, fees for contracted labor, and data center services and licensing costs.

Cost of revenues also includes the costs to acquire or produce content, royalties payable and non-capitalized R&D expenses.

Cost of revenues does not include production costs related to internally generated software, which are capitalized.

Selling, General and Administrative

Selling, general and administrative costs consist primarily of salaries, benefits, commission and bonuses for the executive, finance and accounting, human resources, administrative, sales and marketing personnel, third-party professional services fees, such as legal and accounting expenses, facilities rent and utilities and technology costs associated with our corporate infrastructure.

Also included within these costs are transaction expenses including costs incurred to complete business combination transactions, including acquisitions, dispositions and capital market activities and include advisory, legal, and other professional and consulting costs.

Depreciation expense relates to our fixed assets, including mainly computer hardware and leasehold improvements, furniture and fixtures.

These assets are depreciated over their expected useful lives, and in the case of leasehold improvements over the shorter of their useful life or the duration of the related lease.

Amortization expense relates to our finite-lived intangible assets, including mainly databases and content, customer relationships, internally generated computer software and trade names.

These assets are amortized over periods of between two and twenty-three years.

Definite-lived intangible assets are tested for impairment when indicators are present, and, if impaired, are written down to fair value based on discounted cash flows.

Impairment on Assets Held for Sale

Impairment on assets held for sale represents an impairment charge recorded for certain assets classified as assets held for sale.

Restructuring and Impairment

Restructuring and impairment expense includes costs associated with involuntary termination benefits provided to employees under the terms of a one-time benefit arrangement, ongoing benefit arrangements, certain contract termination costs, other costs associated with an exit or disposal activity and impairment charges associated with right of use assets in which the Company has ceased the use of during the period.

Other Operating Income (Expense), Net

“Annual renewal rate” is the metric we use to determine renewal levels by existing customers across all of our Segments, and is a leading indicator of renewal trends, which impact the evolution of our ACV and results of operations.

We calculate the annual renewal rate for a given period by dividing (a) the annualized dollar value of existing subscription product license agreements that are renewed during that period, including the value of any product downgrades, by (b) the annualized dollar value of existing subscription product license agreements that come up for renewal in that period.

“Open renewals,” which we define as existing subscription product license agreements that come up for renewal but are neither renewed nor canceled

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Other operating income (expense), net consists of gains or losses related to the disposal of our assets, asset impairments or write-downs and the consolidated impact of re-measurement of the assets and liabilities of our company, sublease income, gain recognized on foreign exchange contract settlement and our subsidiaries that are denominated in currencies other than each relevant entity's functional currency.

Mark to Market Adjustment on Financial Instruments

Mark to market adjustment on financial instruments consists of the mark to market accounting adjustments related to certain of the Company's warrants issued to the founders of Churchill Capital Corp, a special purpose acquisition company or “SPAC” with which the Company consummated a business combination transaction in May 2019.

Legal Settlement

Legal settlement represents a net gain recorded in 2019 for cash received in relation to closure of a confidential legal matter.

Interest Expense and Amortization of Debt Discount, Net

Interest expense and amortization of debt discount, net consists of expense related to interest on our borrowings under our term loan facility and our secured notes due 2026, senior unsecured notes due in 2029 and senior secured notes due in 2028, the amortization and write off of debt issuance costs and original discount, and interest related to certain derivative instruments.

Provision for Income Taxes

A provision for income tax is calculated for each of the jurisdictions in which we operate.

The benefit or provision for income taxes is determined using the asset and liability approach of accounting for income taxes.

Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.

The benefit or provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year.

Deferred taxes result from differences between the book and tax bases of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

Interest accrued related to unrecognized tax benefits and income tax related penalties are included in the provision for income taxes.

Dividends on Preferred Shares

Dividends on our convertible preferred shares are calculated at an annual rate of 5.25% of the liquidation preference of $100.00 per share.

We may pay declared dividends on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2021 and ending on, and including, June 1, 2024.

(In millions, except share and per share data, option prices, ratios or as noted)

by customers during the applicable reposting period, are excluded from both the numerator and denominator of the calculation.

We calculate the annual renewal rate to reflect the value of product downgrades but not the value of product upgrades upon renewal, because upgrades reflect the purchase of additional services.

The impact of upgrades, new subscriptions and product price increases is reflected in ACV, but not in annual renewal rates.

Our annual renewal rates were 91.3%, 90.6% and 91.2% for the years ended December 31, 2022, 2021 and 2020, respectively .

Free Cash Flow and Adjusted Free Cash Flow

We use free cash flow and adjusted free cash flow in our operational and financial decision-making and believe free cash flow and adjusted free cash flow are useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies and other interested parties to measure the ability of a company to service its debt.

Our presentation of free cash flow and adjusted free cash flow should not be construed as a measure of liquidity or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our obligations.

We define free cash flow as 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, payments related to the CPA Global equity plan, transaction related costs, interest on debt held in escrow, debt issuance costs, and other one-time payments that the Company does not consider indicative of its ongoing operating performance.

For further discussion on free cash flow and adjusted free cash flow, including a reconciliation to cash flows provided by operating activities, refer to Liquidity and Capital Resources - Cash Flows below.

Critical Accounting Policies, Estimates and Assumptions

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Our subscription contract agreements contain standard terms and conditions, and most contracts include a one-year subscription, although we may provide a multi-year subscription in certain instances.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as retroactive discounts provided to the customers, indexed or volume based discounts, and revenues between contract expiration and renewal.

In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as retroactive discounts provided to the customers, indexed or volume based discounts, and revenues between contract expiration and renewal.

We estimate the amount of the variable consideration at the expected value or at the most likely amount depending on the type of consideration.

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We utilize standard price lists, together with consideration of market conditions, customer demographics, and geographic location, to determine the standalone selling price for most of our products and services, however certain products may not have a standalone selling price that is directly observable, which requires judgment.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

Business Combinations

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Long-Lived Assets (including Other Intangible Assets)

Residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate.

We evaluate long-lived assets, including computer hardware and other property, computer software, and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

1 unchanged sentence

An asset is assessed for impairment at the lowest level that the asset generates cash inflows that are largely independent of cash inflows from other assets.

If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized equal to the amount by which the carrying amount of the asset exceeds the fair value of the

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Any such impairment would be recognized in full in the reporting period in which it has been identified, which could have a material adverse effect on our financial condition or results of operations.

Goodwill and Indefinite-Lived Intangible Assets Goodwill

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired.

Goodwill and indefinite-lived intangible assets are not amortized, but instead are tested for impairment annually during the fourth quarter each year, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

The Company performs goodwill impairment testing at the reporting unit level which is defined as the operating segment or one level below the operating segment.

As of October 1, 2021, our most recent annual goodwill impairment testing date, the Company identified five reporting units.

The Company performs goodwill impairment testing during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment.

This testing is performed at the reporting unit level which is defined as the operating segment or one level below the operating segment.

As part of our annual goodwill impairment testing, the Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the estimated fair value of a reporting unit with its carrying amount, including goodwill.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

The Company estimates the fair value of a reporting unit using the income approach.

1 unchanged sentence

The Company uses its internal forecasts to estimate future cash flows and includes an estimate of long-term future growth rates.

Significant judgments inherent in these analyses include, but are not limited to, estimating the amount and timing of future cash flows and the selection of appropriate discount rates, tax rates and long-term growth rate assumptions.

Significant judgments inherent in these analyses include, but are not limited to, projected revenue growth rates and operating margins, tax rates, terminal values, and discount rates.

The inputs utilized in the analysis are classified as Level 3 inputs within the fair value hierarchy.

Changes in these estimates and assumptions could materially affect the determination of estimated fair value.

Any such impairment charge would be recognized in full in the reporting period in which it has been identified, which could have a material adverse effect on our financial condition or results of operations.

In the fourth quarter of 2021, the Company performed its annual goodwill impairment testing by applying the qualitative assessment to three of its reporting units and the quantitative assessment to two of its reporting units.

For the reporting units tested under the qualitative assessment, the Company considered various qualitative factors, including those described above, that would have affected the estimated fair value of the reporting units, as well as the historical significant level of headroom, and the results of the qualitative assessments indicated that it is not more likely than not that the fair values of the reporting units were less than their carrying values.

For the reporting units tested under the quantitative assessment, the results indicated that, the estimated fair values of the reporting units exceeded their carrying values.

As such, as of October 1, 2021, our most recent annual goodwill impairment testing date, goodwill was not impaired.

Of the five reporting units identified and tested for goodwill impairment as of October 1, 2021, the IP Management reporting unit within our Intellectual Property segment, for which a quantitative assessment was performed, indicated an estimated fair value that was not substantially in excess of its carrying value.

The Company notes the following with respect to the IP Management reporting unit as of our most recent annual goodwill impairment testing date:

• The percentage by which the estimated fair value exceeded the carrying value was 7%;

• The amount of goodwill assigned to the reporting unit as of December 31, 2021 was $3,046,906, representing the goodwill acquired in Q4 2020 from the CPA Global and Hanlim IPS acquisitions;

• The Company estimated the fair value of the reporting unit using the income approach, and more specifically, the DCF model.

The significant assumptions used in the DCF model included projected revenue growth rates and operating margins, tax rates, terminal values, and discount rates, among others, all of which require significant judgments by management;

◦ The Company used its internal forecasts to estimate future cash flows and includes an estimate of long-term future growth rates based on its most recent views of the long-term outlook for the reporting unit.

Future cash flow estimates are, by their nature, subjective and actual results may differ materially from the Company’s estimates.

◦ The discount rate was derived using a capital asset pricing model and analyzing published rates for industries relevant to the reporting unit to estimate the cost of equity financing.

The Company used a

A quantitative goodwill impairment assessment was performed as of September 30, 2022, over the Company's reporting units due to the following possible impairment indicators:

(i) worsening market considerations and macroeconomic conditions such as increasing inflationary pressures and rising interest rates and (ii) sustained declines in the Company's share price during the three months ended September 30, 2022.

This coincided with the Company's change in organizational structure to realign its business segments based on the products we offer and the markets they serve.

With these changes, the Company changed its reportable segments, operating segments, and reporting units.

The goodwill impairment assessment included an analysis on the Company's reporting units immediately before and immediately after the change.

This included five reporting units in the legacy structure and four reporting units in the new segment structure.

Based on the quantitative analysis performed in connection with the Company's preparation of the Condensed Consolidated Financial Statements in the third quarter of 2022, the Company recorded a goodwill impairment charge of $4,407.9 as follows:

(i) $1,745.8 related to the ProQuest reporting unit within the A&G segment;

(ii) $2,569.1 related to the former IP Management reporting unit within the IP segment;

and (iii) $93.0 related to the former Patent reporting unit within the IP segment.

The impairment charge recorded for the ProQuest reporting unit and the former IP Management reporting unit represented a total write-off of the goodwill associated with each of these reporting units.

The estimated fair value of each of the remaining reporting units exceeded their carrying values.

In completing the interim quantitative goodwill impairment assessment, the Company used the following weighted average cost of capital ("WACC") for its discount rate assumptions:

• Legacy Structure:

the Company used a WACC of 9.5% for the Science Group, Trademark, Patent, and Domain reporting units.

The Company used a 10.5% WACC for the IP Management reporting unit.

• New Structure:

the Company used a WACC of 9.5% for the Web of Science Group and Life Sciences & Healthcare reporting units.

The Company used a WACC of 10.0% for the ProQuest and Intellectual Property (which includes legacy Trademark, Patent, Domain, and IP Management) reporting units.

The discount rates were derived using a capital asset pricing model and analyzing published rates for industries relevant to each reporting unit to estimate the cost of equity financing.

The Company used discount rates we believe to be commensurate with the risks and uncertainty inherent in the respective reporting units and in its internally developed forecasts.

For those reporting units whose estimated fair values exceeded their carrying values, the Company applied a hypothetical sensitivity analysis by increasing the discount rate of these reporting units by 100 basis points and, in a separate test, reducing by 10% the fair value of those reporting units.

As a result of either scenario, the Intellectual Property reporting unit's fair value is approximately equal to its carrying value.

As of December 31, 2022, the Intellectual Property reporting unit had a goodwill balance of $590.3 million.

All other reporting units evaluated under either scenario reflected fair values well in excess of carrying values by at least 40%.

Notwithstanding the results of the Company's interim impairment assessment, if the Company is unable to successfully achieve the revenue growth it projects, the financial performance of any of our reporting units declines significantly, or interest rates continue to rise and this leads to an increase in the cost of capital, then it is possible these financial, economic, and geopolitical conditions could result in another triggering event for the Company in the future and could lead to a potential impairment.

In addition, if any of these financial, economic, or geopolitical conditions has a more significant adverse effect on the Company, these could lead to a potential impairment of Company's goodwill or other indefinite-lived or long-lived assets.

Such a charge could have a material effect on our financial position and results of operations.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

discount rate of 7.0%, which we believe to be commensurate with the risks and uncertainty inherent in the respective reporting unit and in its internally developed forecast.

• Certain future events and circumstances, including deterioration of market conditions, higher cost of capital or a decline in demand for IP Management's product offerings, could result in changes to these assumptions and judgements.

A downward revision in the present value of future cash flow could result in impairment, and a non-cash charge would be recorded.

Such a charge could have a material effect on our financial position and results of operations.

(In millions, except share and per share data, option prices, ratios or as noted)

In the fourth quarter of 2022, the Company performed its annual goodwill impairment testing by applying the qualitative assessment to each of its four reporting units.

The Company considered various qualitative factors, including those described above, that would have affected the estimated fair value of the reporting units, as well as the historical significant level of headroom.

Given the recency of the last quantitative goodwill impairment assessment performed as of September 30, 2022, and the results of the qualitative assessments, Management concluded that it is not more likely than not that the fair values of the reporting units were less than their carrying values.

As such, as of October 1, 2022, our most recent annual goodwill impairment testing date, goodwill was not impaired.

Indefinite-Lived Intangible Assets

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In the fourth quarter of 2021, the Company elected to forego the qualitative assessment and performed the quantitative impairment evaluation to determine the estimated fair value of the indefinite-lived intangible assets.

The results indicated that the estimated fair value substantially exceeded its carrying value, and the indefinite-lived intangible assets were not impaired.

In the fourth quarter of 2022, the Company performed its annual indefinite-lived intangible asset impairment testing by applying the qualitative assessment.

In our evaluation of the events and circumstances that occurred during the year, the Company considered various qualitative factors, including those described above, as well as the historical significant level of headroom in our last quantitative indefinite-lived intangible asset impairment assessment performed as of October 1, 2021.

Based on this evaluation as of October 1, 2022, Management concluded that it is not more likely than not that the indefinite-lived intangible assets are impaired.

Share-Based Compensation

11 unchanged sentences

Each quarter, we evaluate the probability of the number of shares that are expected to vest and adjust our expense accordingly.

Equity compensation plans of the acquired CPA Global business are accounted for as a liability as they will be paid in cash.

Changes in the fair value of these awards are recorded at the end of each reporting period.

Warrant Liabilities

Equity compensation plans of the acquired CPA Global business were accounted for as a liability as they were paid in cash.

Changes in the fair value of these awards are recorded at the end of each reporting period based on the closing share price.

There is no outstanding liability as of December 31, 2022, under this plan.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(In millions, except share and per share data, option prices, ratios or as noted)

Warrant Liabilities

The Company accounts for Private Placement Warrants for shares of the Company's ordinary stock that are not indexed to its own stock as liabilities at fair value on the balance sheet.

5 unchanged sentences

A discount for the lack of marketability ("DLOM") is applied to shares that are subject to remaining post vesting lock up restrictions.

The Company recognizes income taxes under the asset and liability method.

Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect our best assessment of estimated current and future taxes to be paid.

Significant judgments and estimates are required in determining the consolidated income tax expense for financial statement purposes.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future.

In assessing the realizability of deferred tax assets, we consider projected future taxable income by tax jurisdiction and prudent and feasible tax planning strategies.

The Company records a valuation allowance to reduce our deferred tax assets to equal an amount that is more likely than not to be realized.

Changes in tax laws and tax rates could also affect recorded deferred tax assets and liabilities in the future.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations.

ASC Topic 740, Income Taxes , states that a benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits.

The Company first records unrecognized tax benefits as liabilities in accordance with ASC 740 and then adjusts these liabilities when our judgment changes as a result of the evaluation of new information not previously available at the time of establishing the liability.

Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities.

These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

Recently Issued and Adopted Accounting Pronouncements

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Financial Statements and Supplementary Data - Notes to the Consolidated Financial Statements - Note 3 - Summary of Significant Accounting Policies.

Results of Operations

The following table presents the results of operations for the years ended December 31, 2021, 2020 and 2019:

Year Ended December 31, Change

(in thousands, except percentages) 2021 2020 2019 % %

Key Components of Our Results of Operations

Revenues, net

Operating expenses:

The Company disaggregates revenue based on revenue recognition pattern.

The Company believes subscription, re-occurring, transactional and other is reflective of how the Company manages the business.

Subscription revenues are driven by annual renewal rates, new subscription business, price increases on existing subscription business and subscription upgrades and downgrades from recurring customers.

Substantially all of our historical deferred revenues purchase accounting adjustments are related to subscription revenues.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

These contracts include either evergreen clauses, in which at least six month advance notice is required prior to cancellation, or terms of multiple years.

Due to the cyclical nature of the Company’s re-occurring products, and there typically being upfront setup time with the customer, the re-occurring revenue stream benefits from an established customer base, with minimal customer attrition.

A primary driver of the re-occurring revenue stream is the ‘renewal’ business obtained from the CPA global acquisition.

Revenue from this revenue stream is typically recognized point in time.

Transactional and other revenues include "clearance searching" and "backfiles" products as well as professional services such as implementation.

Clearance searching products relate to preparing detailed, custom reports post screening that uncover potential risks related to a proposed trademark.

Backfiles represent an archive of historical data content.

Transactional and other revenues are earned under contracts for specific deliverables that are typically quoted on a product, data set or project basis and often derived from repeat customers, including customers that also generate subscription-based revenues.

Transactional content revenues are usually delivered to the customer instantly or in a short period of time, at which time revenues are recognized.

Transactional and other revenues may involve sales to the same customer on multiple occasions but with different products or services comprising the order.

Other revenues relate to professional services including implementation services for software and software as a service ("SaaS") subscriptions.

These contracts vary in length from several months to years for multi-year projects.

Revenue is recognized over time utilizing a reasonable measure of progress depicting the satisfaction of the related performance obligation.

Cost of Revenues

Selling, general and administrative costs (642,989) (544,700) (475,014) 18.0 % 14.7 %

Depreciation (13,996) (12,709) (9,181) 10.1 % 38.4 %

Amortization (523,819) (290,441) (191,361) 80.4 % 51.8 %

Impairment on assets held for sale — — (18,431) 0.0 % (100.0) %

Cost of revenues also includes the costs to acquire or produce content, royalties payable and non-capitalized R&D expenses.

Cost of revenues does not include production costs related to internally generated software or content, which are capitalized.

Selling, General and Administrative

Depreciation expense relates to our fixed assets, including mainly computer hardware and leasehold improvements, furniture and fixtures.

These assets are depreciated over their expected useful lives, and, in the case of leasehold improvements, over the shorter of their useful life or the duration of the related lease.

Amortization expense relates to our finite-lived intangible assets, including mainly databases and content, customer relationships, internally generated computer software and trade names.

These assets are amortized over periods of between two and twenty-three years.

Definite-lived intangible assets are tested for impairment when indicators are present, and, if impaired, are written down to fair value based on discounted cash flows.

Restructuring and Impairment

Other operating (expense) income, net (27,507) 52,381 4,826 (152.5) % 985.4 %

Total operating expenses (1,963,874) (1,290,394) (1,056,831) 52.2 % 22.1 %

Loss from operations (86,980) (36,347) (82,486) 139.3 % (55.9) %

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

Other Operating (Income) Expense, Net

Other operating (income) expense, net consists of gains or losses related to the disposal of our assets, asset impairments or write-downs and the consolidated impact of re-measurement of the assets and liabilities of our company, sublease income, gain recognized on foreign exchange contract settlement and our subsidiaries that are denominated in currencies other than each relevant entity's functional currency.

Mark to Market Adjustment on Financial Instruments

Legal settlement — — 39,399 0.0 % (100.0) %

Loss before interest expense and income tax (5,660) (241,409) (90,743) (97.7) % 166.0 %

Mark to market adjustment on financial instruments consists of the mark to market adjustments related to certain of the Company's warrants issued to the founders of Churchill Capital Corp, a special purpose acquisition company or “SPAC” with which the Company consummated a business combination transaction in May 2019.

Interest Expense and Amortization of Debt Discount, Net

Loss before income tax (258,150) (353,323) (248,432) (26.9) % 42.2 %

(Provision) benefit for income taxes (12,298) 2,698 (10,201) (555.8) % 126.4 %

Net loss (270,448) (350,625) (258,633) (22.9) % 35.6 %

Provision for Income Taxes

A provision for income tax is calculated for each of the jurisdictions in which we operate.

The benefit or provision for income taxes is determined using the asset and liability approach of accounting for income taxes.

Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.

The benefit or provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year.

Deferred taxes result from differences between the book and tax bases of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

Valuation allowances are recorded to reduce deferred tax assets to net realizable value when it is more likely than not that a tax benefit will not be realized.

Interest accrued related to unrecognized tax benefits and income tax related penalties are included in the provision for income taxes.

Dividends on Preferred Shares

Net loss attributable to ordinary shares $ (311,956) $ (350,625) $ (258,633) (11.0) % 35.6 %

Dividends on our mandatory convertible preferred shares are calculated at an annual rate of 5.25% of the liquidation preference of $100.00 per share.

We may pay declared dividends on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2021, and ending on, and including, June 1, 2024.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(In millions, except share and per share data, option prices, ratios or as noted)

Results of Operations

Revenues, net

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On a constant currency basis, Revenues, net increased by $879.9, or 46.9%.

Adjusted Revenues of $1,880,845, which excludes the impact of the deferred revenue adjustment relating to acquisitions prior to 2021 (see Note 3 - Summary of Significant Accounting Policies for further detail), in 2021 increased by $603,697, or 47.3%, from $1,277,148 in 2020.

On a constant currency basis, Adjusted Revenues increased by $587,110, or 46.0%.

Organic revenue growth was slightly impacted by our decision to cease commercial operations in Russia in March 2022.

Revenues, net of $1,876.9 in 2021, increased by $622.8, or 49.7%, from $1,254.1 in 2020.

On a constant currency basis, Revenues, net increased by $606.3, or 48.3%.

Adjusted Revenues of $1,277,148, which excludes the impact of the deferred revenues adjustment, in 2020 increased by $302,365, or 31.0%, from $974,783 in 2019.

On a constant currency basis, Adjusted Revenues increased by $298,839, or 30.7%.

The comparability of our Revenues, net between periods was impacted by several factors described under “Factors Affecting the Comparability of Our Results of Operations” above.

The tables below presents the items that impacted the change in our revenues, net between periods.

The tables below summarize the items driving the changes in revenues, net between periods.

Variance 2022 vs.

(in thousands, except percentages) $ %

(in millions, except percentages) $ %

Revenue change driver

Increase due to a reduction in deferred revenues adjustment $ 19,150 1.5 %

Decrease due to disposals (49,296) (3.9) %

Increase from acquisitions 579,159 46.2 %

Acquisitions 844.6 45.0 %

Disposals (12.5) (0.7) %

Foreign currency translation (97.0) (5.2) %

Revenue increase from organic business 57,247 4.6 %

Organic business 47.8 2.6 %

Revenues, net (total change) $ 782.9 41.7 %

Variance 2021 vs.

(in thousands, except percentages) $ %

(in millions, except percentages) $ %

Revenue change driver

Decrease due to deferred revenues adjustment $ (22,663) (2.3) %

Decrease due to disposals (64,815) (6.7) %

Increase from acquisitions 353,195 36.2 %

Reduction in deferred revenues adjustment (1)

Acquisitions 579.2 45.3 %

Disposals (49.3) (3.9) %

Foreign currency translation 16.6 1.3 %

Revenue increase from organic business 10,459 1.1 %

Organic business 57.2 4.5 %

Revenues, net (total change) $ 622.8 49.7 %

Revenues, net from our ongoing business improved for both of our segments, led by Science, reflecting a trend consistent with the increase in our ACV between periods, mainly due to product price increases and new business.

The evolution of our recurring business is discussed further below.

(1) Reflects the impact of the deferred revenues purchase accounting adjustment associated with businesses that were acquired prior to January 1, 2021.

In the fourth quarter of 2021, the Company adopted ASU No.

2021-08, which allows an acquirer to account for the related revenue contracts as if it had originated the contracts in accordance with ASC 606 Revenue from Contracts with Customers .

This was applied retrospectively to all business combinations in 2021.

The remaining impact of the deferred revenues adjustment pertains only to the continued runoff from business combinations prior to 2021, and is not material to current period results.

As a result, the current period revenue tables presented below do not present Adjusted revenues, net.

Revenue by Transaction Type

The following tables present the amounts of our subscription, re-occurring, and transactional and other revenues for the periods indicated, as well the drivers of the variances between periods, including as a percentage of such revenues.

The following tables present the amounts of our subscription, re-occurring and transactional and other revenues for the periods indicated, as well as the drivers of the variances between periods, including as a percentage of such revenues.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(In millions, except share and per share data, option prices, ratios or as noted)

Variance Increase/(Decrease)

3 unchanged sentences

Acquisitions Disposals

(in thousands, except percentages) 2021 2020

(in millions, except percentages) 2022 2021

Subscription revenues $ 1,619.8 $ 1,034.4 $ 585.4 56.6 % 59.2 % (1.1) % (4.9) % 3.4 %

4 unchanged sentences

Revenues, net $ 2,659.8 $ 1,876.9 $ 782.9 41.7 % 45.0 % (0.7) % (5.2) % 2.6 %

Deferred revenues adjustment (1)

3,951 23,101 (19,150) (82.9) % 19.0 % — % 0.2 % (102.1) %

Adjusted revenues, net $ 1,880,845 $ 1,277,148 $ 603,697 47.3 % 45.3 % (3.9) % 1.3 % 4.5 %

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of FASB ASU No.

2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" .

In the fourth quarter of 2021, Clarivate adopted ASU No.

2021-08 which allows an acquirer to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

This guidance was applied retrospectively to all business combinations for which the acquisition date occurs during or subsequent to the fiscal year 2021.

Subscription revenues of $1,034,356 in 2021, increased by $156,697, or 17.9% from $877,659 in 2020.

(1) As further described above, reflects the impact of the deferred revenues purchase accounting adjustment associated with businesses that were acquired prior to January 1, 2021.

On a constant currency basis, subscription revenues increased by $635.6, or 61.4%.

Acquisitive subscription growth was primarily generated from the DRG Transaction, CPA Global Transaction and the ProQuest Transaction.

Disposal subscription revenues reduction was derived from the Techstreet Transaction.

Organic subscription revenues increased primarily due to price increases, new business and the benefit of net installations in prior year.

Re-occurring revenues of $453,242 in 2021, increased by $341,313, or 304.9% from $111,929 in 2020 due to nine months of acquisitive growth generated from the CPA Global Transaction, which was acquired on October 1, 2020.

Acquisitive subscription growth was primarily generated from the ProQuest Transaction.

Disposal subscription revenue reductions relate to the MarkMonitor Domain Management business divestiture.

Organic subscription revenues increased primarily due to price increases and the benefit of net installations, reflecting a trend consistent with the increase in our ACV between periods.

On a constant currency basis, re-occurring revenues increased by $23.5, or 5.2%.

Organic re-occurring revenues increased primarily due to increases in patent renewal volumes and improvements in yield per case.

Transactional and other revenues of $393,247 in 2021, increased by $105,687, or 36.8% from $287,560 in 2020.

On a constant currency basis, transactional revenues increased by $103,360, or 35.9%.

Acquisitive transactional growth was primarily generated from the DRG Transaction, the CPA Global Transaction and the ProQuest Transaction.

Disposal transactional revenue reduction was derived from the Techstreet Transaction.

Organic transactional revenues increased due to an increase in trademark search volumes, stronger back file and custom data sales and strength in our professional services business lines.

On a constant currency basis, transactional and other revenues increased by $217.8, or 55.4%.

Acquisitive transactional growth was primarily generated from the ProQuest Transaction.

Organic transactional and other revenues declined primarily due to lower trademarks transactional volumes and patent filing revenue.

Variance Increase/(Decrease)

3 unchanged sentences

Acquisitions Disposals

(in thousands, except percentages) 2020 2019

(in millions, except percentages) 2021 2020

Subscription revenues $ 1,034.4 $ 877.7 $ 156.7 17.9 % 16.1 % (3.6) % 1.9 % 3.5 %

7 unchanged sentences

Adjusted revenues, net $ 1,880.9 $ 1,277.2 $ 603.7 47.3 % 45.3 % (3.9) % 1.3 % 4.5 %

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Subscription revenues of $877,659 in 2020 increased by $72,141, or 9.0% from $805,518 in 2019.

(1) As further described above, reflects the impact of the deferred revenues purchase accounting adjustment associated with businesses that were acquired prior to January 1, 2021.

On a constant currency basis, subscription revenues increased by $140.4, or 16.0%.

Acquisitive subscription growth was generated from the Darts-ip Transaction, DRG Transaction, and CPA Global Transaction.

Disposal subscription revenues reduction was derived from the MarkMonitor Transaction and Techstreet Transaction.

Organic subscription revenues increased primarily due to price increases and new business.

Re-occurring revenues of $111,929 in 2020 increased by $111,929, or 100.0% from 2019 due to acquisitive growth generated from the CPA Global Transaction.

Transactional and other revenues of $287,560 increased by $118,295, or 69.9% from $169,265 in 2019.

Acquisitive subscription growth was primarily generated from the DRG Transaction, CPA Global Transaction and the ProQuest Transaction.

Disposal subscription revenues reduction was derived from the Techstreet Transaction.

Organic subscription revenues increased primarily due to price increases, new business and the benefit of net installations in prior year.

Re-occurring revenues of $453.2 in 2021, increased by $341.3, or 305.0% from $111.9 in due to nine months of acquisitive growth generated from the CPA Global Transaction, which was acquired on October 1, 2020.

Organic re-occurring revenues increased primarily due to increases in patent renewal volumes and improvements in yield per case.

On a constant currency basis, transactional revenues increased by $103.4, or 35.9%.

Acquisitive transactional growth was generated from the DRG Transaction and CPA Global Transaction.

Disposal transactional reduction was derived from the MarkMonitor Transaction and Techstreet Transaction.

Organic transactional revenues decreased due to an overall decrease in demand primarily driven by economic conditions resulting from the COVID-19 pandemic.

Acquisitive transactional growth was primarily generated from the DRG Transaction, the CPA Global Transaction and the ProQuest Transaction.

Disposal transactional revenue reduction was derived from the Techstreet Transaction.

Organic transactional revenues increased due

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

to an increase in trademark search volumes, stronger back file and custom data sales and strength in our professional services business lines.

Revenue by Geography

2 unchanged sentences

Percentage of Factors Increase/(Decrease)

December 31, Total Variance (Dollars)

Year Ended December 31, Total Variance (Dollars)

Total Variance (Percentage)

Acquisitions Disposals

(in thousands, except percentages)

$ 928,690 $ 631,222

(in millions, except percentages)

Americas $ 1,463.6 $ 928.7

$ 534.9 57.6 % 57.3 % (1.1) % (2.1) % 3.5 %

1 unchanged sentence

142.3 25.6 % 35.6 % (0.3) % (8.3) % (1.3) %

Asia Pacific 499.1 396.4

102.7 25.9 % 28.3 % (0.2) % (7.9) % 5.7 %

Deferred revenues adjustment (1)

(1.0) (4.0) 3.0 75.0 % 75.0 % — % — % — %

Revenues, net $ 2,659.8 $ 1,876.9 $ 782.9 41.7 % 45.0 % (0.7) % (5.2) % 2.6 %

(1) As further described above, reflects the impact of the deferred revenues purchase accounting adjustment associated with businesses that were acquired prior to January 1, 2021.

Acquisitive growth for all regions was primarily related to the ProQuest Transaction.

On a constant currency basis, Americas revenues increased by $554.0, or 59.7%, with organic growth due to improved subscription and re-occurring revenues.

On a constant currency basis, Europe/Middle East/Africa revenues increased by $188.7, or 34.0%, primarily due to acquisitive growth.

On a constant currency basis, Asia Pacific revenues increased by $134.2, or 33.9%, primarily due to acquisitive growth and organic growth led by Academia & Government and Life Sciences and Healthcare subscription revenue.

Variance Increase/(Decrease)

Percentage of Factors Increase/(Decrease)

December 31, Total Variance (Dollars)

Total Variance (Percentage)

Acquisitions Disposals

(in millions, except percentages)

$ 928.7 $ 631.2

$ 297.5 47.1 % 45.8 % (5.8) % 0.1 % 7.0 %

Europe/Middle East/Africa

190.2 52.0 % 50.5 % (1.9) % 3.0 % 0.4 %

116.0 41.4 % 37.5 % (2.0) % 1.8 % 4.0 %

Deferred revenues adjustment (1)

5 unchanged sentences

Adjusted revenues, net $ 1,880.9 $ 1,277.2 $ 603.7 47.3 % 45.3 % (3.9) % 1.3 % 4.5 %

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of FASB ASU No.

2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" .

In the fourth quarter of 2021, Clarivate adopted ASU No.

2021-08 which allows an acquirer to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

This guidance was applied retrospectively to all business combinations for which the acquisition date occurs during or subsequent to the fiscal year 2021.

(1) As further described above, reflects the impact of the deferred revenues purchase accounting adjustment associated with businesses that were acquired prior to January 1, 2021.

Acquisitive growth for all regions was primarily related to the DRG Transaction, the CPA Global Transaction and the ProQuest Transaction.

7 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(In millions, except share and per share data, option prices, ratios or as noted)

Revenue by Segment

The following tables, and the discussions that follow, present our revenues by segment for the periods indicated.

Variance Increase/(Decrease)

Percentage of Factors Increase/(Decrease)

Total Variance (Dollars)

Year Ended December 31, Total Variance (Dollars)

Total Variance (Percentage)

Acquisitions Disposals

(in thousands, except percentages)

$ 631,222 $ 463,041

$ 168,181 36.3 % 46.4 % (9.4) % — % (0.7) %

Europe/Middle East/Africa

365,599 278,738

86,861 31.2 % 35.3 % (5.9) % 0.7 % 1.0 %

280,327 233,004

47,323 20.3 % 17.2 % (2.1) % 0.6 % 4.6 %

(in millions, except percentages) 2022 2021

Academia and Government $ 1,280.1 $ 489.4 $ 790.7 161.6 % 164.7 % — % (4.9) % 1.8 %

Life Sciences and Healthcare 452.6 413.3 39.3 9.5 % 8.6 % — % (3.2) % 4.1 %

Intellectual Property 928.1 978.2 (50.1) (5.1) % — % (1.3) % (6.1) % 2.3 %

Deferred revenues adjustment (1)

(23,101) (438) (22,663) N/M N/M — % — % 69.2 %

Revenues, net

(1.0) (4.0) 3.0 75.0 % 75.0 % — % — % — %

Deferred revenues adjustment (1)

23,101 438 22,663 — % N/M — % — % (69.2) %

Adjusted revenues, net $ 1,277,148 $ 974,783 $ 302,365 31.0 % 36.2 % (6.7) % 0.4 % 1.2 %

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting

Acquisitive growth for all regions was related to the Darts-ip Transaction, DRG Transaction, and CPA Global Transaction.

Disposal reduction for all regions was derived from the MarkMonitor Transaction and Techstreet Transaction.

On a constant currency basis, Americas revenues increased by $167,982, or 36.3%, with an organic decline due to lower transactional revenues due to an overall decrease in demand primarily driven by economic conditions resulting from the COVID-19 pandemic, partially offset by improved subscription revenues.

On a constant currency basis, Europe/Middle East/Africa revenues increased by $84,955, or 30.5%, primarily due to acquisitive growth and improved subscription revenues partially offset by a decline in transactional revenues.

On a constant currency basis, Asia Pacific revenues increased $45,902, or 19.7%, primarily due to acquisitive growth and improved subscription revenues partially offset by a decline in transactional revenues driven by economic conditions resulting from the COVID-19 pandemic.

Revenue by Segment

The following tables, and the discussions that follow, present our revenues by segment for the periods indicated.

Revenues, net $ 2,659.8 $ 1,876.9 $ 782.9 41.7 % 45.0 % (0.7) % (5.2) % 2.6 %

(1) As further described above, reflects the impact of the deferred revenues purchase accounting adjustment associated with businesses that were acquired prior to January 1, 2021.

Academia and Government Segment :

On a constant currency basis, revenues increased by $814.9, or 166.5%, primarily due to acquisitive growth and organic subscription revenues growth.

Acquisitive growth was primarily generated from the ProQuest Transaction.

Organic revenues, on a constant currency basis, increased primarily due to subscription revenues due to price increases and the benefit of net installations.

Life Sciences and Healthcare Segment:

On a constant currency basis, revenues increased by $52.6, or 12.7%.

Organic revenues, on a constant currency basis, increased primarily due to subscription revenues growth due to price increases and the benefit of net installations and transaction and other revenue growth on increases in custom data sales.

Intellectual Property Segment:

On a constant currency basis, revenues increased by $9.4, or 1.0%.

Organic revenues, on a constant currency basis, increased primarily due to growth in re-occurring revenues from patent renewal volumes and improvements in yield per case and subscription revenues due to price increases and the benefit of net installations.

Disposal revenue reductions relate to the MarkMonitor Domain Management business divestiture.

Variance Increase/(Decrease)

3 unchanged sentences

Acquisitions Disposals

(in thousands, except percentages) 2021 2020

Science Segment $ 902,712 $ 743,641 $ 159,071 21.4 % 14.1 % — % 2.0 % 5.4 %

IP Segment 978,133 533,507 444,626 83.3 % 89.0 % (9.2) % 0.4 % 3.3 %

(in millions, except percentages) 2021 2020

Academia and Government $ 489.4 $ 384.7 $ 104.7 27.2 % 20.1 % — % 2.9 % 4.2 %

Life Sciences and Healthcare 413.3 358.9 54.4 15.2 % 7.6 % — % 1.1 % 6.5 %

Intellectual Property 978.2 533.6 444.6 83.3 % 89.0 % (9.2) % 0.4 % 3.3 %

Deferred revenues adjustment (1)

4 unchanged sentences

Adjusted revenues, net $ 1,880.9 $ 1,277.2 $ 603.7 47.3 % 45.3 % (3.9) % 1.3 % 4.5 %

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of FASB ASU No.

2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" .

In the fourth quarter of 2021, Clarivate adopted ASU No.

2021-08 which allows an acquirer to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

This guidance was applied retrospectively to all business combinations for which the acquisition date occurs during or subsequent to the fiscal year 2021.

Science Segment :

Revenues of $902,712 in 2021 increased by $159,071, or 21.4%, from $743,641 in 2020.

(1) As further described above, reflects the impact of the deferred revenues purchase accounting adjustment associated with businesses that were acquired prior to January 1, 2021.

Academia and Government Segment:

On a constant currency basis, revenues increased by $93.9, or 24.4%, primarily due to acquisitive growth and organic subscription and transactional revenue growth.

Acquisitive growth was generated from the DRG Transaction, including two months of acquisitions revenue in 2021 compared to ten months in 2020, the ProQuest Transaction and the Bioinfogate Transaction.

Organic revenues increased due to growth resulting from custom data sales and stronger back file sales and strength in our professional services business lines.

Intellectual Property Segment:

Revenues of $978,133 in 2021 increased by $444,626, or 83.3%, from $533,507 in 2020.

On a constant currency basis, revenues decreased by $442,669, or 83.0%.

Acquisitive growth was generated from the CPA Global Transaction, including nine months of acquisitions revenue in 2021 compared to three months in 2020, the IncoPat

Acquisitive growth was generated from the ProQuest Transaction.

Organic revenues increased due to growth resulting from new business and price increases in subscriptions and stronger back file sales.

Life Sciences and Healthcare Segment:

On a constant currency basis, revenues increased by $50.4, or 14.0%, primarily due to acquisitive growth and organic subscription and transactional revenue growth.

Acquisitive growth was generated

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Transaction and the Hanlim Transaction.

Disposal revenue reduction was derived from the Techstreet Transaction.

Organic revenues, on a constant currency basis, increased primarily due to growth in re-occurring revenues from patent renewal volumes and yield and transactional revenues on improved trademark search transactional volumes and strength in our professional services business lines.

Variance Increase/(Decrease)

Percentage of Factors Increase/(Decrease)

Total Variance (Dollars)

Total Variance (Percentage)

Acquisitions Disposals

(in thousands, except percentages) 2020 2019

Science Segment $ 743,641 $ 547,542 $ 196,099 35.8 % 34.0 % — % 0.3 % 1.5 %

IP Segment 533,507 427,241 106,266 24.9 % 39.0 % (15.2) % 0.4 % 0.6 %

Deferred revenues adjustment (1)

(23,101) (438) (22,663) (5,174.2) % N/M — % — % 69.2 %

Revenues, net $ 1,254,047 $ 974,345 $ 279,702 28.7 % 33.9 % (6.7) % 0.4 % 1.1 %

Deferred revenues adjustment (1)

23,101 438 22,663 — % N/M — % — % (69.2) %

Adjusted revenues, net $ 1,277,148 $ 974,783 $ 302,365 31.0 % 36.2 % 6.7 % (0.4) % 1.2 %

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting

Science Segment :

Revenues of $743,641 in 2020 increased by $196,099, or 35.8%, from $547,542 in 2019.

On a constant currency basis, revenues increased by $194,385, or 35.6%, primarily due to acquisitive growth and organic subscription revenue growth.

Acquisitive growth was generated from the DRG Transaction.

Organic revenues increased due to price increases and new business in subscription revenues, partially offset by lower transactional revenues due to a decline in demand primarily driven by economic conditions resulting from the COVID-19 pandemic.

(In millions, except share and per share data, option prices, ratios or as noted)

primarily from the DRG Transaction, including two months of acquisitions revenue in 2021 compared to ten months in 2020.

Organic revenues increased due to growth resulting from custom data sales, new business and price increases in subscriptions and strength in our professional services business lines.

Intellectual Property Segment:

Revenues of $533,507 in 2020, increased by $106,266, or 24.9%, from $427,241 in 2019.

On a constant currency basis, revenues increased by $442.6, or 82.9%.

Acquisitive growth was generated from the Darts-IP Transaction and CPA Global Transaction.

Disposal reductions were derived from the MarkMonitor Transaction and Techstreet Transaction.

Organic revenues remained consistent due to an increase in subscription revenue driven by content upgrades, offset by lower transactional revenues due to a decline in demand primarily driven by economic conditions resulting from the COVID-19 pandemic.

Acquisitive growth was generated primarily from the CPA Global Transaction, including nine months of acquisitions revenue in 2021 compared to three months in 2020 and the IncoPat Transaction.

Disposal revenue reduction was derived from the Techstreet Transaction.

Operating Expenses

The following table presents certain of our operating expense line item amounts and their associated percentage of revenue:

Year Ended December 31, Change

(in millions, except percentages) 2022 2021 2020 $ % $ %

Operating Expenses:

Cost of revenues $ 954.0 $ 626.1 $ 438.8 $ 327.9 52.4 % $ 187.3 42.7 %

Cost of revenues of $626,104 in 2021, increased by $187,317, or 42.7%, from $438,787 in 2020.

Selling, general and administrative costs 729.9 643.0 544.7 86.9 13.5 % $ 98.3 18.0 %

Total cost of revenues and selling, general and administrative costs

$ 1,683.9 $ 1,269.1 $ 983.5 $ 414.8 32.7 % $ 285.6 29.0 %

Depreciation and amortization expense

$ 710.5 $ 537.8 $ 303.2 $ 172.7 32.1 % $ 234.6 77.4 %

As a percentage of revenue:

Total cost of revenues and selling, general and administrative costs 63.3 % 67.6 % 78.4 %

Depreciation and amortization expense 26.7 % 28.7 % 24.2 %

Cost of Revenues

On a constant currency basis, cost of revenues increased by $356.3, or 56.9%, for the year ended December 31, 2022.

The increase for the year ended December 31, 2021 was primarily due to an increase from acquisitions primarily driven by nine additional months of CPA Global expenses, which was acquired in October 2020, two additional months of DRG expenses, which was acquired in February 2020, and one month of ProQuest expenses, which was acquired in December 2021 The increase was also attributed to increased share-based compensation expenses, inclusive of expenses related to phantom equity awards under the CPA Global Equity Plan, as well as increased product expenses, which are attributed to the increase in revenues.

The increase was primarily driven by eleven additional months of ProQuest costs, which was acquired on December 1, 2021.

The increase related to ProQuest was partially offset by a reduction in product and people related costs primarily driven by the cost-saving and margin improvement programs designed to generate substantial incremental cash flow.

See Note 22 - Restructuring and Impairment for further information.

Cost of revenues as a percentage of revenues, net increased by 2.5% to 35.9% for the year ended December 31, 2022, compared to 33.4% for the year ended December 31, 2021.

On a constant currency basis, cost of revenues increased by $182.9, or 41.7%, for the year ended December 31, 2021.

The increase was also attributed to increased share-based compensation expenses, inclusive of expenses related to phantom equity awards under the CPA Global Equity Plan, as well as increased product expenses, which are attributed to the increase in revenues.

The increase in cost of revenues was partially offset by a reduction in cost of revenues for the Techstreet divestiture in Q4 2020 and reduced people costs primarily driven by the Company's cost-saving and margin improvement programs.

Cost of revenues as a percentage of revenues, net decreased by 1.6% to 33.4% for the year ended December 31, 2021 compared to 35.0% for the year ended December 31, 2020 primarily driven by the cost-saving and margin improvement programs designed to generate substantial incremental cash flow including the Operation Simplification and Optimization Program, the DRG Acquisition Integration Program, CPA Global Acquisition Integration and Optimization Program.

Cost of revenues of $438,787 in 2020, increased by $86,787, or 24.7%, from $352,000 in 2019.

On a constant currency basis, cost of revenues increased by $85,383, or 24.3%, primarily due to additional costs related to CPA Global and DRG, which were acquired in October and February 2020, offset by a decrease in costs associated with the transition service agreement, employee related costs and outside services including consulting fees, as well as the Techstreet and MarkMonitor transactions in November and January 2020, respectively.

Cost of revenues as a percentage of revenues, net decreased by 1.6% to 33.4% for the year ended December 31, 2021 compared to 35.0% for the year ended December 31, 2020.

Selling, General and Administrative

On a constant currency basis, selling, general and administrative expense increased by $110.1, or 17.1%, for the year ended December 31, 2022.

The increase was primarily driven by eleven additional months of ProQuest expenses.

The increase relating to ProQuest was partially offset by reductions in outside services, share-based compensation, legal, rent and other miscellaneous business operating expenses.

Selling, general and administrative costs as a percentage of revenues, net decreased by 6.9% to 27.4% for the year ended December 31, 2022, compared to 34.3% for the year ended December 31,

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Selling, general and administrative expense of $642,989 in 2021, increased by $98,289, or 18.0%, from $544,700 in 2020.

(In millions, except share and per share data, option prices, ratios or as noted)

2021, primarily driven by the reductions highlighted above, as well as cost-saving and margin improvement restructuring programs further discussed below.

On a constant currency basis, selling, general and administrative expense increased by $93.4, or 17.1%, for the year ended December 31, 2021.

The increase was primarily driven by nine additional months of CPA Global expenses, which was acquired in October 2020, two additional months of DRG expenses, which was acquired in February 2020, and one month of ProQuest expenses, which was acquired in December 2021.

The increase was also attributed to an increase in share-based compensation expenses, inclusive of expenses related to phantom equity awards under the CPA Global Equity Plan.

The increase was partially offset by the Techstreet divestiture in Q4 2020, a gain associated with the mark to market adjustment on contingent shares and reduced transaction costs, which were driven by expenses related to the DRG Transaction and CPA Global Transaction in 2020 that did not re-occur in 2021, partially offset by increased costs in 2021 related to the ProQuest transaction.

Selling, general and administrative costs as a percentage of revenues, net decreased by 9.1% to 34.3% for the year ended December 31, 2021 compared to 43.4% for the year ended December 31, 2020 primarily driven by the reductions highlighted above, as well as cost-saving and margin improvement programs designed to generate substantial incremental cash flow including the Operation Simplification and Optimization Program, the DRG Acquisition Integration Program, CPA Global Acquisition Integration and Optimization Program, as well as the One Clarivate restructuring plan, which streamlines operations within targeted areas of the Company.

The program is expected to result in a reduction in operational costs, with the primary driver of the cost saving being from a reduction in workforce.

Selling, general and administrative expense of $544,700 in 2020, increased by $69,686, or 14.7%, from $475,014 in 2019.

On a constant currency basis, selling, general and administrative expense increased by $67,837, or 14.3% primarily due to additional costs related to CPA Global and DRG, which were acquired in October and February 2020, increased transaction expenses associated with the DRG acquisition, the CPA Global acquisition, the MarkMonitor divestiture, the Techstreet divestiture and other finance merger and acquisition related activities during 2020, offset by costs incurred in association with our merger with Churchill Capital Corp in 2019, and a decrease in costs associated with transition service agreement, employee related costs, outside services including consulting fees and marketing costs.

Depreciation expense of $13,996 in 2021, increased by $1,287, or 10.1%, from $12,709 in 2020.

The increase for the year ended December 31, 2021 was driven by the additional depreciation on assets acquired through the DRG Transaction, CPA Global Transaction and ProQuest Transaction.

This increase was offset by run-off of previously purchased capital assets.

Depreciation expense of $12,709 in 2020, increased by $3,528, or 38.4%, from $9,181 in 2019, driven by the additional depreciation on assets acquired through the Darts Transaction, DRG Transaction, and CPA Global Transaction.

This increase was offset by run-off of previously purchased capital assets.

Amortization expense of $523,819 in 2021, increased by $233,378, or 80.4%, from $290,441 in 2020.

The increase for the year ended December 31, 2021 was driven by an increase in the amortization of intangible assets acquired through the DRG Transaction, CPA Global Transaction, ProQuest Transaction, IncoPat Transaction, BioInfogate Transaction and Hanlim Transaction.

This increase was offset by a decrease in amortization related to the Techstreet divestiture in Q4 2020.

Amortization expense of $290,441 in 2020, increased by $99,080, or 51.8%, from $191,361 in 2019, driven by an increase in the amortization of intangible assets acquired through the Darts-ip Transaction, DRG Transaction, and CPA Global Transaction.

This increase was offset by a decrease in amortization related to intangible assets acquired in connection with our separation from Thomson Reuters in 2016 that are now fully amortized and reduction of amortization from the Techstreet Transaction and MarkMonitor Transaction.

Impairment on Assets Held for Sale

The year ended December 31, 2019 includes an impairment on assets held for sale of $18,431.

On November 3, 2019, the Company entered into an agreement with OpSec Security for the sale of certain assets and liabilities of its MarkMonitor Product Line within its IP Group.

At December 31, 2019, an impairment charge of $18,431 was recognized in the Statement of Operations during the fourth quarter to reduce the Assets Held for Sale to their fair value.

There were no impairment on assets held for sale during the years ended December 31, 2021 and 2020.

These increases were partially offset by the Techstreet divestiture in Q4 2020, a gain associated with the mark to market adjustment on contingent shares and reduced transaction costs, which were driven by expenses related to the DRG Transaction and CPA Global Transaction in 2020 that did not re-occur in 2021.

Depreciation and amortization

The increase for the year ended December 31, 2022, was driven by the additional depreciation and amortization on assets acquired from the ProQuest Transaction.

This increase was partially offset by run-off of previously purchased capital assets and exchange rate fluctuations.

For the year ended December 31, 2022, depreciation and amortization expense as a percentage of revenues, net, decreased by 2.0% to 26.7% compared to 28.7% for the year ended December 31, 2021.

The increase for the year ended December 31, 2021 was driven by additional depreciation and amortization on assets acquired through the DRG Transaction, CPA Global Transaction, ProQuest Transaction, IncoPat Transaction, Bioinfogate Transaction and Hanlim Transaction.

This increase was offset by run-off of previously purchased capital assets and a decrease in amortization related to the Techstreet divestiture in Q4 2020.

For the year ended December 31, 2021, depreciation and amortization expense as a percentage of revenues, net, increased by 4.5% to 28.7% compared to 24.2% for the year ended December 31, 2020.

Restructuring and Impairment

Year Ended December 31, Change

2022 2021 2020 $ % $ %

Restructuring and impairment $ 66.7 $ 129.5 $ 56.1 $ (62.8) (48.5) % $73.4 130.8 %

The decrease for the year ended December 31, 2022, was primarily driven by the wind-down of expenses associated with the CPA Global Acquisition Integration and Optimization Program, DRG Acquisition Integration Program, and Operation Simplification and Optimization Program.

We are not expecting to incur any significant further costs under these restructuring plans as of December 31, 2022.

The decrease was partially offset by the One Clarivate and ProQuest Acquisition Integration Programs.

See Note 22 - Restructuring and Impairment for further information.

The following table summarizes the total costs incurred to date and expected costs to be incurred in a future period for each program.

Total Costs Incurred to Date Costs Expected to be Incurred in Future Periods

One Clarivate Program $ 36.7 $ —

ProQuest Acquisition Integration Program 51.4 25.0

Other Restructuring Programs:

CPA Global Acquisition Integration and Optimization Program 128.1 —

DRG Acquisition Integration Program 7.3 —

Operation Simplification and Optimization Program 44.5 —

Total Other Restructuring Programs $ 179.9 $ —

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(In millions, except share and per share data, option prices, ratios or as noted)

Restructuring and impairment charges of $129.5 in 2021, increased by $73.4, or 130.8%, from $56.1 in 2020.

The increase for the year ended December 31, 2021 was primarily driven by cost-saving and margin improvement programs designed to generate substantial incremental cash flow including the CPA Global Acquisition Integration and Optimization Program implemented in Q4 2020, as well as the One Clarivate restructuring plan, which streamlines operations within targeted areas of the Company implemented in Q2 2021.

The increase for the year ended December 31, 2021 was primarily driven by the CPA Global Acquisition Integration and Optimization Program implemented in Q4 2020, as well as the One Clarivate restructuring plan, which streamlines operations within targeted areas of the Company implemented in Q2 2021.

The increase was partially offset by the wind-down of costs associated with the Operation Simplification and Optimization Program and the DRG Acquisition Integration Program.

Restructuring and impairment charges of $56,138 in 2020, increased by $40,468, from $15,670 in 2019.

The increase is related to initiatives, following our merger with Churchill Capital Corp in 2019 and, acquisitions of DRG in February 2020 and CPA Global in October 2020, to streamline our operations by simplifying our organization and focusing on two segments.

Legal Settlement

The year ended December 31, 2019 includes a gain for a confidential legal settlement of $39,399.

There were no legal settlements during the years ended December 31, 2021 and 2020.

Goodwill impairment

The Company performed an interim quantitative goodwill impairment assessment during the nine months ended September 30, 2022, which resulted in goodwill impairment of $4,449.

Indicators of possible impairment were identified due to worsening market considerations and macroeconomic conditions such as increasing inflationary pressures and rising interest rates, as well as sustained declines in the Company's share price during the three months ended September 30, 2022.

No further impairments were taken during the three months ended December 31, 2022, resulting in goodwill impairment for the year ended December 31, 2022, of $4,449.

Other Operating (Income) Expense, Net

Other operating expense of $27,507 in 2021, decreased by $79,888, or 152.5%, from other operating income of $52,381 in 2020.

The fluctuations were primarily driven by the consolidated impact of the remeasurement of the assets and liabilities of our Company that are denominated in currencies other than each relevant entity’s functional currency.

Other operating income (expense), net of $52,381 in 2020, increased by $47,555 from $4,826 in 2019.

The increase is primarily driven by the gain on the sale of certain assets and liabilities of the Techstreet business, along with the consolidated impact of the remeasurement of the assets and liabilities of our Company that are denominated in currencies other than each relevant entity’s functional currency.

Mark to Market Adjustment on Financial Instruments

The mark to market adjustment on financial instruments resulted in a gain of $81,320 in 2021, a change of $286,382, or 139.7%, compared to a loss of $205,062 in 2020.

The fluctuations were primarily driven by the Black-Scholes option valuation model and change in the Company's share price for the year ended December 31, 2021 compared to the year ended December 31, 2020.

The mark to market adjustment on financial instruments resulted in a loss of $205,062 in 2020, a change of $157,406, or 330.3%, compared to a loss of $47,656 in 2019.

The fluctuations were primarily driven by the Black-Scholes option valuation model and change in the Company's share price for the year ended December 31, 2020 compared to the year ended December 31, 2019.

Year Ended December 31, Change

2022 2021 2020 $ % $ %

Other operating (income) expense, net $ (324.8) $ 27.5 $ (52.4) $ (352.3) (1,281.1) % $ 79.9 152.5 %

The fluctuations for the year ended December 31, 2022, as compared to the year ended December 31, 2021, were primarily driven by the $278.5 gain on sale of the MarkMonitor Domain Management business and the consolidated impact of the remeasurement of the assets and liabilities of our Company that are denominated in currencies other than each relevant entity’s functional currency, with the largest impacts derived from transactions denominated in GBP.

Refer to Note 18 - Other Operating (Income) Expense, Net in Item 8.

Financial Statements and Supplementary Data, for additional information.

The fluctuations for the year ended December 31, 2021, as compared to year ended December 31, 2020, were primarily driven by the consolidated impact of the remeasurement of the assets and liabilities of our Company that are denominated in currencies other than each relevant entity’s functional currency.

Mark to Market (Gain) Loss on Financial Instruments

Year Ended December 31, Change

2022 2021 2020 $ % $ %

Mark to market (gain) loss on financial instruments $(206.8) $(81.3) $205.1 $ (125.5) (154.4) % $ (286.4) (139.6) %

The Company accounts for its outstanding private placement warrants as liabilities at fair value on the balance sheet, which are subject to remeasurement at each balance sheet date and any change in fair value is recognized as of the end of each period for which earnings are reported.

The change in fair value, resulting in a gain in 2022 and 2021, and a loss in 2020, was driven primarily by changes in the risk-free rate as well as changes in the Company’s share price, thus impacting inputs to the Black-Scholes option valuation models as of each reporting period then ended.

Interest Expense and amortization of debt discount, Net

Interest expense and amortization of debt discount, net of $252,490 in 2021, increased by $140,576, from $111,914 in 2020.

The increase was primarily attributed to the private placement offerings and subsequent exchange offers of our New Senior Secured Notes due 2028 and Senior Notes due 2029, the $1,600,000 incremental term loan borrowing in connection with the CPA Global Transaction in October 2020 and the additional $360,000 incremental term loan borrowing in connection with the DRG Transaction in February 2020.

The increase was also attributable to the $50,000 bridge commitment and structuring fees that were paid in connection with the closing of the ProQuest Transaction on December 1, 2021.

Interest expense and amortization of debt discount, net of $111,914 in 2020, decreased by $45,775, or 29.0%, from $157,689 in 2019.

The change was due to lower interest payments resulting from lower interest rates on the Company's borrowings as the result of the refinancing transaction in October 2019.

In addition, the decrease is attributed to the write down of deferred financing charges and original issuance discount on our prior term loan facility in proportion to the principal paydown in 2019 that did not reoccur in 2020, which was partially offset by the additional $1,960,000 incremental term loan borrowings in connection with the CPA Global and DRG acquisitions.

Provision (benefit) for Income Taxes

Year Ended December 31, Change

2022 2021 2020 $ % $ %

Interest expense and amortization of debt discount, net $ 270.3 $ 252.5 $ 111.9 $ 17.8 7.0 % $ 140.6 125.6 %

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Provision for income taxes of $12,298 on a pre-tax book loss of $258,150 in 2021, increased by $14,996 from a benefit of $2,698 on a pre-tax book loss of $353,323 in 2020.

The effective tax rate being (4.8)% in 2021, compared to 0.8% in 2020.

The overall increase in tax expense is due to the recording valuation allowances against losses in certain jurisdictions where it has been deemed the losses are not recognizable.

(In millions, except share and per share data, option prices, ratios or as noted)

The increase for the year ended December 31, 2022, as compared to the year ended December 31, 2021, was primarily attributed to the increase in interest rate in 2022 on Term Loan Facility, private placement offerings and subsequent exchange offers of our New Senior Secured Notes due 2028 and Senior Notes due 2029, which took place in the second and third quarter of 2021, respectively.

The increase for the year ended December 31, 2021, as compared to year ended December 31, 2020, was primarily attributed to the private placement offerings and subsequent exchange offers of our New Senior Secured Notes due 2028 and Senior Notes due 2029, the $1,600.0 incremental term loan borrowing in connection with the CPA Global Transaction in October 2020 and the additional $360.0 incremental term loan borrowing in connection with the DRG Transaction in February 2020.

The increase was also attributable to the $50.0 bridge commitment and structuring fees that were paid in connection with the closing of the ProQuest Transaction on December 1, 2021.

Provision (benefit) for Income Taxes

Benefit for income taxes of $28.9 on pre-tax book loss of $3,989.1 for the year ended December 31, 2022, decreased by $41.2 from a provision of $12.3 on a pre-tax book loss of $258.2 for the year ended December 31, 2021.

The effective tax rate was 0.7% for the year ended December 31, 2022, as compared to (4.8)% for the year ended December 31, 2021.

The overall decrease in tax expense is driven by one-time tax benefits from the release of a valuation allowance upon the execution of an internal legal entity restructuring effective December 31, 2022, and from the release of an uncertain tax position that was favorably resolved.

These benefits were partially offset by tax expense accruals on a significant mark-to-market gain on the Private Warrants and on an increase in taxable income in tax-paying jurisdictions, resulting in a net overall tax benefit compared to prior year results.

The current year effective tax rate may not be indicative of our effective tax rates for future periods.

Benefit (provision) for income taxes of $2,698 on a pre-tax book loss of $(353,323) in 2020, increased by $12,899 from a provision of $10,201 on a pre-tax book loss of $(248,432) in 2019.

Provision for income taxes of $12.3 on a pre-tax book loss of $258.2 in 2021, increased by $15.0 from a benefit of $2.7 on a pre-tax book expense of $353.3 in 2020.

The effective tax rate being (4.8)% in 2021, compared to 0.8% in 2020.

The overall decrease in tax expense is due to the increased benefit of share-based compensation, offset by recording valuation allowances against losses in certain jurisdictions where it has been deemed the losses are not recognizable and an increase in the Base Erosion Anti-Abuse Tax ("BEAT").

The current year effective tax rate may not be indicative of our effective tax rates for future periods.

The overall increase in tax expense was due to recording valuation allowances against losses in certain jurisdictions where we determined the losses are not realizable.

Dividends on Preferred Shares

Dividends on preferred shares of $41,508 for the year ended December 31, 2021 increased 100% compared to the year ended December 31, 2020.

In July 2021, The Company's Board of Directors declared a quarterly dividend of approximately $1.12 per share on its 5.25% Series A Mandatory Convertible Preferred Shares, payable in ordinary shares on September 1, 2021 to shareholders of record at the close of business on August 15, 2021.

Year Ended December 31, Change

2022 2021 2020 $ % $ %

Dividends on preferred shares $ 75.4 $ 41.5 $ — $ 33.9 81.7 % $ 41.5 100.0 %

The fluctuation for the year ended December 31, 2022, as compared to the year ended December 31, 2021, was due to the dividends on our mandatory convertible preferred shares that are calculated at an annual rate of 5.25%.

The dividends on our preferred shares were first declared in the third quarter of 2021, and as a result, accumulated more expense in 2022 compared to 2021.

The fluctuation for the year ended December 31, 2021, as compared to the year ended December 31, 2020, was due to the quarterly dividend of approximately $1.12 per share on its 5.25% Series A Mandatory Convertible Preferred Shares, payable in ordinary shares on September 1, 2021, to shareholders of record at the close of business on August 15, 2021.

As permitted by the Statement of Rights governing its 5.25% Series A Mandatory Convertible Preferred Shares, such dividend was paid by delivery of ordinary shares (other than $1 paid in cash in lieu of any fractional ordinary share).

The number of ordinary shares deliverable in respect of such dividend was 664,730, which was determined based on the average volume-weighted average price per ordinary shares over the five consecutive trading day period ending on, and including, the trading day prior to September 1, 2021, which had a value of $16,141.

The number of ordinary shares deliverable in respect of such dividend was 0.7 million, which was determined based on the average volume-weighted average price per ordinary shares over the five consecutive trading day period ending on, and including, the trading day prior to September 1, 2021, which had a value of $16.1.

In October 2021, the Company's Board of Directors declared a quarterly dividend of approximately $1.3125 per share on its 5.25% Series A Mandatory Convertible Preferred Shares, payable in cash on December 1, 2021, to shareholders of record at the close of business on November 15, 2021.

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As of December 31, 2021, we recognized an additional $6.5 of accrued preferred share dividends.

While the dividends on the MCPS are cumulative, they will not be paid until declared by the Company’s Board of Directors.

While the dividends on the MCPS are cumulative, they will not be paid until declared by the Company’s Board

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

of Directors.

If no dividends are declared and paid, they will continue to accumulate as the agreement contains a backstop to it being paid even if never declared by the board.

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(In millions, except share and per share data, option prices, ratios or as noted)

Certain Non-GAAP Measures

We include non-GAAP measures in this annual report, including Adjusted Revenues, Adjusted EBITDA, Adjusted EBITDA margin and Free Cash Flow because they are a basis upon which our management assesses our performance and we believe they reflect the underlying trends and indicators of our business by allowing management to focus on the most meaningful indicators of our continuous operational performance.

Although we believe these measures are useful for investors for the same reasons, we recommend users of the financial statements to note these measures are not a substitute for GAAP financial measures or disclosures.

We include non-GAAP measures in this annual report, including Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow and Adjusted Free Cash Flow, because they are a basis upon which our management assesses our performance, and we believe they reflect the underlying trends and indicators of our business by allowing management to focus on the most meaningful indicators of our continuous operational performance.

Although we believe these measures are useful for investors for the same reasons, these measures are not a substitute for GAAP financial measures or disclosures.

We provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure.

Adjusted Revenues

We present Adjusted Revenues, which excludes the impact of the deferred revenues purchase accounting adjustments relating to acquisitions prior to 2021 (see Note 3 - Summary of Significant Accounting Policies for further detail) as a result of businesses that we have acquired.

We present this measure because we believe it is useful to readers to better understand the underlying trends in our operations.

Due to the adoption of ASU 2021-08, this performance indicator will not be used going forward.

Our presentation of Adjusted Revenues is for informational purposes only and is not necessarily indicative of our future results.

The following table presents our calculation of Adjusted Revenues for the years ended December 31, 2021, 2020 and 2019, and a reconciliation of this measure to our Revenues, net for the same periods:

Year Ended December 31, Change 2021 vs.

Change 2020 vs.

(in thousands, except percentages) 2021 2020 2019 % %

Revenues, net $ 1,876,894 $ 1,254,047 $ 974,345 49.7 % 28.7 %

Deferred revenues adjustment (1)

3,951 23,101 438 (82.9) % 5174.2 %

Adjusted revenues, net $ 1,880,845 $ 1,277,148 $ 974,783 47.3 % 31.0 %

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of FASB ASU No.

2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" .

In the fourth quarter of 2021, Clarivate adopted ASU No.

2021-08 which allows an acquirer to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

This guidance was applied retrospectively to all business combinations for which the acquisition date occurs during or subsequent to the fiscal year 2021.

Adjusted EBITDA and Adjusted EBITDA margin

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See Certain Non-GAAP Measures - Adjusted EBITDA and Adjusted EBITDA margin for important information on the limitations of Adjusted EBITDA and its reconciliation to our net loss under GAAP.

Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Adjusted Revenues.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Adjusted EBITDA represents net (loss) income before the provision for income taxes, depreciation and amortization, and interest expense adjusted to exclude acquisition and/or disposal-related transaction costs, losses on extinguishment of debt, share-based compensation, unrealized foreign currency gains/(losses), transformational and restructuring expenses, acquisition-related adjustments to deferred revenues prior to the adoption of FASB ASU No.

2021-08 in 2021, non-operating income and/or expense, the impact of certain non-cash mark-to-market adjustments on financial instruments, legal settlements, goodwill impairment and other items that are included in net (loss) 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.

Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues, net plus the impact of the deferred revenue purchase accounting adjustments relating to acquisitions prior to 2021.

Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by any of the adjusted items, or that our projections and estimates will be realized in their entirety or at all.

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The following table presents our calculation of Adjusted EBITDA for the years ended December 31, 2022, 2021 and 2020, and reconciles these measures to our net loss for the same periods:

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

Year Ended December 31,

(in thousands, except percentages) 2021 2020 2019

Net loss attributable to ordinary shares $ (311,956) $ (350,625) $ (258,633)

(in millions, except percentages) 2022 2021 2020

Net income (loss) attributable to ordinary shares $ (4,035.6) $ (312.0) $ (350.6)

Dividends on preferred shares 75.4 41.5 —

Net loss (270,448) (350,625) (258,633)

Provision (benefit) for income taxes 12,298 (2,698) 10,201

Net income (loss) (3,960.2) (270.5) (350.6)

Provision for income taxes (28.9) 12.3 (2.7)

Depreciation and amortization 710.5 537.8 303.2

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Deferred revenues adjustment (1)

3,951 23,101 438

Transaction related costs (2)

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Share-based compensation expense 102.2 139.6 70.5

Gain on sale of Techstreet — (28,140) —

Gain on sale from divestitures (3)

(278.5) — (28.1)

Restructuring and impairment (4)

66.7 129.5 56.1

Legal settlement — — (39,399)

Impairment on assets held for sale — — 18,431

Mark to market adjustment on financial instruments (4)

Goodwill impairment 4,449.1 — —

Mark to market (gain) loss on financial instruments (5)

(206.8) (81.3) 205.1

2 unchanged sentences

Adjusted EBITDA margin 41.8% 42.6% 38.1%

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of FASB ASU No.

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of ASU No.

2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" .

In the fourth quarter of 2021, Clarivate adopted ASU No.

2021-08 which allows an acquirer to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

This guidance was applied retrospectively to all business combinations for which the acquisition date occurs during or subsequent to the fiscal year 2021.

This guidance was applied retrospectively to all business combinations for which the acquisition date occurs during or subsequent to 2021.

(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.

(3) Reflects costs related to restructuring and impairment associated with the acquisition of primarily DRG and CPA Global in 2020.

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.

During 2021, the CPA Global plan continued as well as the addition of the One Clarivate and ProQuest Programs, which were approved restructuring actions to streamline operations within targeted areas of the Company.

Additionally, during the year ended December 31, 2021, 2020 and 2019, we incurred impairment charges taken on right-of-use assets of $57,305, $4,771 and $0 respectively, relating to the exit and ceased use of leased properties.

(4) Reflects mark to market adjustments on financial instruments under Accounting Standards Codification 815, Derivatives and Hedging, ("ASC 815").

Warrant instruments that do not meet the criteria to be considered indexed to an entity's own stock shall be initially classified as a liability at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash.

In periods subsequent to 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 2021 detail also includes an accrual of $8,000 for a legal case.

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.

In 2019, this includes payments to Thomson Reuters under the Transition Services Agreement.

For both 2020 and 2019, this also includes 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.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

restructuring and transformation of our business following our separation from Thomson Reuters in 2016 mainly related to the integration of separate business units into one functional organization and enhancements in our technology.

These costs were largely wound down by the end of 2020.

Free Cash Flow

We use free cash flow in our operational and financial decision-making and believe free cash flow is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies and other interested parties to evaluate our competitors and to measure the ability of companies to service their debt.

Our presentation of free cash flow should not be construed as a measure of liquidity or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our obligations.

2021 also includes the mark-to-market adjustment (gains) on the contingent stock consideration associated with the CPA Global and DRG acquisitions.

(3) 2022 represents the net gain from the sale of the MarkMonitor Domain Management business.

2020 represents the net gain from sale of certain assets and liabilities of the Techstreet business.

See Note 18 - Other Operating (Income) Expense, Net for further information.

(4) Primarily reflects costs related to restructuring and impairment associated with the One Clarivate, ProQuest and CPA Global restructuring programs.

Refer to Note 22 - Restructuring and Impairment for further information.

(5) Reflects mark-to-market adjustments on the Private Placement Warrants under ASC 815, Derivatives and Hedging .

Refer to Note 10 - Fair Value Measurements for further information.

(6) Primarily reflects 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.

Free Cash Flow and Adjusted Free Cash Flow

We define free cash flow as net cash provided by operating activities less capital expenditures.

For further discussion on free cash flow, including a reconciliation to cash flows provided by operating activities, refer to Liquidity and Capital Resources - Cash Flows below.

Liquidity and Capital Resources

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, capital expenditures, debt service, acquisitions, other commitments and contractual obligations.

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As a result, we experience cash flow seasonality throughout the year, with a heavier weighting of operating cash inflows occurring during the first half, and particularly first quarter, of the year, when most subscription invoices are sent, as compared to the second half of the year.

We require and will continue to need significant cash resources to, among other things, meet our debt service requirements under our credit facilities, the new unsecured notes due 2029, the new secured notes due 2028, the secured notes due 2026, and any future indebtedness, fund our working capital requirements, make capital expenditures (including related to product development), and expand our business through acquisitions.

We require and will continue to need significant cash resources to, among other things, meet our debt service requirements, fund our working capital requirements, make capital expenditures (including product development), and expand our business through acquisitions.

Based on our forecasts, we believe that cash flow from operations, available cash on hand and available borrowing capacity under our revolving credit facility will be adequate to service debt, meet liquidity needs and fund necessary capital expenditures for at least the next 12 months.

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The below table summarizes our total liquidity for the periods presented:

Total Liquidity Year Ended December 31,

(in thousands) 2021 2020

Total Liquidity December 31, December 31,

(in millions) 2022 2021

Cash and cash equivalents $ 348.8 $ 430.9

1 unchanged sentence

$ 1,089.3 $ 599.8

Unrestricted cash and cash equivalents was $430,879, $257,730 and $76,130 as of December 31, 2021, December 31, 2020 and December 31, 2019, respectively.

Restricted cash increased from $14,678 as of December 31, 2020 to $156,734 as of December 31, 2021 due to the cash received from the sale of treasury shares from the Employee Benefit Trust established for the CPA Equity Plan in December 2021 and the holdback consideration as part of the Patient Connect acquisition, partially offset by the consideration related to the IncoPat transaction held in escrow that was paid in the fourth quarter of 2021.

The cash received from the Employee Benefit Trust established for the CPA Equity Plan in December 2021 was

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

subsequently paid to the respective employees via payroll in the first quarter of 2022.

As of December 31, 2021, we had approximately $5,567,211 of debt, consisting primarily of $2,818,800 in borrowings under our term loan facility, $921,399 in outstanding principal of our new senior notes due 2029, $921,177 in outstanding principal of our new senior secured notes due 2028, $700,000 in outstanding principal of senior secured notes due 2026, $175,000 of borrowings under our revolving credit facility, and $30,835 related to a financing lease.

Refer to Note 14 - Debt in Item 8, Financial Statements and Supplementary Data, for a summary of amounts due under all of the outstanding borrowings as of December 31, 2021.

As of December 31, 2021 and December 31, 2020, we had $175,000 and $0 outstanding on the revolving credit facility, respectively.

Additional availability under the revolving credit facility as of December 31, 2021 and December 30, 2020 was $168,920 and $244,738, respectively, which is net of a letter of credit utilization of $6,080 and $5,262.

Refer to Note 14 - Debt in Item 8, Financial Statements and Supplementary Data, for additional information.

On June 24, 2021, we issued $1,000,000 in aggregate principal amount of Senior Secured Notes due June 30, 2028 and $1,000,000 in aggregate principal amount of Senior Notes due June 30, 2029 bearing interest at a rate of 3.875% and 4.875% per annum, respectively.

In August 2021, we exchanged all of the outstanding, validly tendered and not withdrawn Old Secured Notes for the newly-issued 3.875% Senior Secured Notes due 2028, and exchanged all of the outstanding, validly tendered and not withdrawn Old Unsecured Notes for the Issuer’s newly-issued 4.875% Senior Notes due 2029.

The exchange was treated as a debt modification in accordance with ASC 470.

See Note 14 - Debt for further details.

We used the net proceeds to finance a portion of the purchase price for the ProQuest acquisition, which was completed on December 1, 2021.

On October 1, 2020, in connection with the CPA Global acquisition, the Company incurred an incremental $1,600,000 of borrowings under our term loan facility and used the net proceeds from such borrowings to fund a portion of the repayment of CPA Global's outstanding debt.

On February 28, 2020, we incurred an incremental $360,000 of term loans under our term loan facility and used the net proceeds from such borrowings, together with cash on hand, to fund the remainder of the cash consideration for the DRG acquisition and to pay related fees and expenses.

As a result of additional term loans associated with the ProQuest, CPA Global and DRG acquisitions, we had $2,818,800 outstanding on our term loan facility at December 31, 2021.

See Debt Profile below.

(1) Net of letters of credit utilization of $9.5 and $6.1, respectively.

During the fourth quarter of 2022, the Company made a $300.0 prepayment on our Term Loan Facility and paid the $175.0 outstanding balance on its Revolving Credit Facility, which we had borrowed in November 2021 and used the net proceeds for general corporate purposes.

As a result, the Company had no outstanding balance on its Revolving Credit Facility as of December 31, 2022.

Refer to Note 12 - Debt in Item 8.

Financial Statements and Supplementary Data, for additional information related to outstanding borrowings.

Refer to Note 12 - Debt in Item 8.

Financial Statements and Supplementary Data, for additional information related to the "springing" maturity date.

In August 2021, the Company's Board of Directors authorized a share repurchase program allowing the Company to purchase up to $250.0 of its outstanding ordinary shares, subject to market conditions.

During the year ended December 31, 2021, the Company purchased 6,575,500 shares for a total of $159,356.

As of December 31, 2021, the Company had approximately $90,644 of availability remaining under this program.

In February 2022, the Company's Board of Directors approved the purchase of up to $1,000.0 of the Company's ordinary shares through open-market purchases, to be executed through December 31, 2023.

The repurchase program replaces the repurchase program previously announced in August 2021.

Our capital expenditures in 2021, 2020 and 2019 consisted primarily of capitalized labor, consulting and other costs associated with product development.

We estimate capital expenditures in 2022 associated with product development to be approximately $195,000.

As of December 31, 2021, we had purchase obligations of approximately $199,944 primarily for cloud computing services and software licenses, pursuant to agreements to purchase goods and services that are enforceable, legally binding, and specify significant terms, including fixed or minimum quantities to be purchased, fixed minimum or variable pricing provisions, and the approximate timing of the transactions.

Any amounts for which we are liable are reflected in our Consolidated Balance Sheets as Accounts payable or Accrued expenses and other current liabilities and $103,602 of this amount is expected to be paid within the next 12 months.

For additional information related to contractual obligations, such as debt, leases, and commitments and contingencies, Refer to Note 7 - Leases, Note 14 - Debt and Note 23 - Commitments and Contingencies in Item 8, Financial Statements and Supplementary Data.

The February 2022 repurchase program replaces the repurchase program previously announced in August 2021.

During the year ended December 31, 2022, the Company repurchased 10.7 million ordinary shares with a total carrying value of $175.0 which were subsequently retired and restored as authorized but unissued ordinary shares.

Upon formal retirement and in accordance with ASC Topic 505, Equity , the Company reduced its ordinary shares account by the carrying amount of the treasury shares.

Additionally, given the differences of the original repurchase share value and the value at the time of formal retirements, an associated loss was recognized within the

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(In millions, except share and per share data, option prices, ratios or as noted)

Consolidated Statement of Changes in Equity in the amount of $7.7.

As of December 31, 2022, the Company had approximately $825.0 of availability remaining under this program.

See Note 14 - Shareholders’ Equity for additional information related to the Share Repurchase Program.

The following table discloses our consolidated cash flows provided by (used in) operating, investing and financing activities for the periods presented:

Year Ended December 31,

(in thousands) 2021 2020 2019

2022 2021 2020

Net cash provided by operating activities $ 509.3 $ 323.8 $ 263.5

Net cash used in investing activities (4,044,460) (2,988,768) (140,885)

Net cash provided by financing activities 4,032,160 2,926,580 75,215

Net cash provided by (used in) investing activities 57.3 (4,044.5) (2,988.8)

Net cash (used in) provided by financing activities (759.2) 4,032.2 2,926.6

Effect of exchange rates

(38.2) 3.7 (5.0)

Increase in cash and cash equivalents 315,205

Net (decrease) increase in cash and cash equivalents, and restricted cash $ (230.8)

$ 315.2 $ 196.3

Net increase in cash and cash equivalents 173,149 181,600 50,555

Net increase in restricted cash 142,056 14,669 —

Net increase in cash held for sale — — 384

Increase in cash and cash equivalents 315,205 196,269 50,939

Net (decrease) increase in cash and cash equivalents $ (82.1) $ 173.1 $ 181.6

Net (decrease) increase in restricted cash (148.7) 142.1 14.7

Net (decrease) increase in cash and cash equivalents, and restricted cash $ (230.8) $ 315.2 $ 196.3

Cash and cash equivalents, beginning of period $ 430.9 $ 257.7 $ 76.1

Restricted cash, beginning of period 156.7 14.7 0.0

Cash and cash equivalents, and restricted cash beginning of the year

$ 587.6 $ 272.4 $ 76.1

Cash included in assets held for sale, end of period

Cash and cash equivalents, and restricted cash end of the year $ 587,613

Cash and cash equivalents, end of period $ 348.8 $ 430.9 $ 257.7

Restricted cash, end of period 8.0 156.7 14.7

Cash and cash equivalents, and restricted cash end of the period

$ 356.8 $ 587.6 $ 272.4

Cash Flows Provided by Operating Activities

Net cash provided by operating activities consists of net loss adjusted for non-cash items, such as:

depreciation and amortization of property and equipment and intangible assets, deferred income taxes, share-based compensation, mark to market adjustments on financial instruments, mark to market adjustment on contingent and phantom shares, deferred finance charges and for changes in net working capital assets and liabilities.

Net cash provided by operating activities was $323,767 and $263,500 for the years ended December 31, 2021 and 2020, respectively.

The increase of $60,267 in net cash provided by operating activities was primarily due to higher results from operations in 2021, which was attributed to increased revenues and a reduction in costs as a percentage of revenues driven by the cost-saving and margin improvement programs designed to generate substantial incremental cash flow including the Operation Simplification and Optimization Program, the DRG Acquisition Integration Program, CPA Global Acquisition Integration and Optimization Program.

Net cash provided by operating activities was $263,500 and $117,580 for the years ended December 31, 2020 and 2019, respectively.

The increase of $145,920 in net cash provided by operating activities was primarily due to higher results from operations in 2020, improved cash collections on accounts receivable, and increased working capital from acquired businesses.

Net Working Capital

(in thousands, except ratio) December 31, 2021

December 31, 2020 December 31, 2019

Current assets $ 1,637,238 $ 1,147,564 $ 493,076

Current liabilities 1,901,974 1,423,093 650,998

Net Working Capital $ (264,736) $ (275,529) $ (157,922)

Cash Flows Used in Investing Activities

Cash used in investing activities are primarily for acquisitions and capital expenditures, while cash inflows are primarily proceeds from divestitures.

Net cash provided by operating activities consists of net income (loss) adjusted for non-cash items, such as depreciation and amortization of property and equipment and intangible assets, deferred income taxes, share-based compensation, restructuring and impairment, including goodwill, mark to market adjustments on financial instruments, mark to market adjustment on contingent shares, deferred finance charges and for changes in operating assets and liabilities.

The increase of $185.5 in net cash provided by operating activities for the year ended December 31, 2022, was primarily due to higher earnings excluding the non-cash goodwill impairment charge, as well as timing of working capital.

The increase of $60.3 in net cash provided by operating activities for the year ended December 31, 2021, was primarily due to higher results from operations in 2021, which was attributed to increased revenues and a reduction in costs as a percentage of revenues driven by the cost-saving and margin improvement programs designed to generate substantial incremental cash flow including the Operation Simplification and Optimization Program, the DRG Acquisition Integration Program, CPA Global Acquisition Integration and Optimization Program.

Cash Flows Provided by Investing Activities

Cash provided by investing activities are primarily proceeds from divestitures, while cash used in investing activities are primarily for acquisitions and capital expenditures.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Net cash used in investing activities was $4,044,460 and $2,988,768 for the years ended December 31, 2021 and 2020, respectively.

The $1,055,692 increase in cash used in investing activities was primarily due to cash paid for acquisitions, net of cash acquired for ProQuest in December 2021, Patient Connect in December 2021, Bioinfogate in August 2021 and the consideration related to the IncoPat transaction held in escrow that was paid in the fourth quarter of 2021, partially offset by the acquisitions of DRG in February 2020, CPA Global in October 2020, IncoPat in October 2020 and Hanlim in November 2020, as well as the acquisition of intangible assets due to key business intangible assets acquired from CustomersFirst Now in June 2020.

(In millions, except share and per share data, option prices, ratios or as noted)

The $4,101.8 increase in cash provided by investing activities for the year ended December 31, 2022, was primarily due to the significant level of cash paid for acquisitions in 2021 further described below.

The increase was also attributed to cash proceeds of $285.0 for the sale of the MarkMonitor Domain Management business on October 31, 2022.

The $1,055.7 increase in cash used in investing activities for the year ended December 31, 2021, was primarily due to cash paid for acquisitions, net of cash acquired for ProQuest in December 2021, Patient Connect in December 2021, Bioinfogate in August 2021 and the consideration related to the IncoPat transaction held in escrow that was paid in the fourth quarter of 2021, partially offset by the acquisitions of DRG in February 2020, CPA Global in October 2020, IncoPat in October 2020 and Hanlim in November 2020, as well as the acquisition of intangible assets due to key business intangible assets acquired from CustomersFirst Now in June 2020.

The increase in cash used in investing activities was also attributed to an increase in capital expenditures primarily associated with product development from acquired businesses, as well as cash flows provided by the divestiture related to the sale of Techstreet in 2020 and MarkMonitor AntiFraud, Antipiracy, and Brand Protection Products in January 2020.

Net cash used in investing activities was $2,988,768 and $140,885 for the years ended December 31, 2020 and 2019.

The $2,851,283 increase in cash used in investing activities was primarily due to an increase in cash paid related to acquisitions, net of cash acquired due to the acquisitions of DRG in February 2020, CPA Global in October 2020, IncoPat in October 2020 and Hanlim in November 2020, as well as the acquisition of intangible assets due to key business intangible assets acquired from CustomersFirst Now in June 2020, partially offset by the acquisitions of Darts-ip in 2019 and the acquisition of intangible assets due to key business intangible assets acquired from SequenceBase in 2019.

The increase was also attributed to an increase in capital expenditures primarily associated with product development from acquired businesses.

The increase in cash used in investing activities was partially offset by cash flows provided by the divestiture related to the sale of Techstreet in November 2020 and MarkMonitor AntiFraud, Antipiracy, and Brand Protection Products in January 2020.

Our capital expenditures in 2021, 2020 and 2019 consisted primarily of capitalized labor, consulting and other costs associated with product development.

Cash Flows Provided by Financing Activities

Net cash provided by financing activities was $4,032,160 and $2,926,580 for the years ended December 31, 2021 and 2020, respectively.

The 1,105,580 increase in cash provided by financing activities was primarily due to the:

Our capital expenditures in 2022 consisted primarily of capitalized labor, consulting and other costs associated with product and content development.

2021 and 2020 consisted primarily of capitalized labor, consulting and other costs associated with product development.

Cash Flows Used in Financing Activities

During the year ended December 31, 2022, net cash used in financing activities was primarily driven by the principal payments on term loan, repayments of revolving credit facility and use of $175.0 for repurchases of the Company's ordinary shares.

These activities for the year ended December 31, 2021 primarily related to the cash raised to finance the purchase price of the ProQuest acquisition in December 2021, which included:

(i) the private placement offering of $1,000.0 in aggregate principal amount of Senior Secured Notes due 2028 and $1,000.0 in aggregate principal of Senior Notes due 2029, (ii) net proceeds of $1,392.6 from the issuance of our 5.25% Series A MCPS, and (iii) net proceeds of $728.0 from the ordinary shares that were issued and sold by the Company in June 2021.

During the year ended December 31, 2021, the increase in net cash provided by financing activities was primarily due to the:

(i) increase in proceeds of $1,392.6 from the issuance of our 5.25% Series A MCPS in June 2021;

9 unchanged sentences

(ii) repayment due to the redemption on the remaining outstanding $78.8 of Old Secured Notes and $78.6 of Old Unsecured Notes in August 2021;

(iii) use of proceeds to repurchase 6,575,500 of the Company's ordinary shares for a total of $159,356 in 2021;

(iv) decrease in proceeds from the issuance of ordinary shares driven by the Company's public offerings of 27,600,000 ordinary shares at $20.25 per share in February 2020 and 50,400,000 of our ordinary shares at a share price of $22.50 per share, of which 14,000,000 were ordinary shares offered by Clarivate and 36,400,000 were ordinary shares offered by selling shareholders in June 2020 compared to the public offering of 44,230,768 of our ordinary shares at a share price of $26.00, of which 28,846,154 ordinary shares were issued and sold by Clarivate and 15,384,614 were sold by selling shareholders in June 2021;

(iii) use of proceeds to repurchase 6.6 million of the Company's ordinary shares for a total of $159.4 in 2021;

(iv) decrease in proceeds from the issuance of ordinary shares driven by the Company's public offerings of 27.6 million ordinary shares at $20.25 per share in February 2020 and 50.4 million of our ordinary shares at a share price of $22.50 per share, of which 14.0 million were ordinary shares offered by Clarivate and 36.4 million were ordinary shares offered by selling shareholders in June 2020 compared to the public offering of 44.2 million of our ordinary shares at a share price of $26.00, of which 28.8 million ordinary shares were issued and sold by Clarivate and 15.4 million were sold by selling shareholders in June 2021;

(v) increase in principal payments on the term loan;

and (vi) cash payment of dividends associated with our MCPS in 2021.

Net cash provided by financing activities was $2,926,580 and $75,215 for the year ended December 31, 2020 and 2019, respectively.

The $2,851,365 increase in cash provided by financing activities was driven by:

(i) the extinguishment debt related to October 2019 refinancing of our prior credit facilities and notes;

(ii) reduced principal payments on term loans primarily driven by the repayment on our prior term loan facility upon consummation of the transaction with Churchill in 2019;

(iii) payment related to the tax receivable agreement in 2019;

(iv) increase in proceeds from the issuance of ordinary shares driven by the Company's public offerings of 27,600,000 ordinary shares at $20.25 per share in February 2020 and 50,400,000 of our ordinary shares at a share price of $22.50 per share, of which 14,000,000 were ordinary shares offered by

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Clarivate and 36,400,000 were ordinary shares offered by selling shareholders in June 2020;

(v) increase in proceeds from the exercise of the Company's outstanding public warrants in the first quarter of 2020;

(vi) $1,960,000 of borrowings under our term loan facility in February 2020 and October 2020, partially offset by proceeds related to the refinancing of debt in 2019;

(vii) decrease in the payment of debt issuance costs compared to the prior period;

(vii) increase in proceeds from the issuance of stock options;

and (vii) a reduction in the payment of debt issuance costs compared to the prior period.

The increase in cash provided by financing activities was offset by:

(i) proceeds from our merger with Churchill Capital Corp in 2019;

(ii) increased repayments repayment of borrowings under the revolving credit facility;

(iii) increase in payments related to tax withholdings for share-based compensation;

(iv) decrease in borrowings under the revolving credit facility;

and (v) increase in contingent purchase price payments primarily related to the TradeMark Vision contingent earn out in the first quarter of 2020.

In February 2020, we completed an underwritten public offering of 27,600,000 of our ordinary shares, generating net proceeds of $540,736, which we used to fund a portion of the cash consideration for the DRG acquisition.

In addition, we incurred an incremental $360,000 of term loans under our term loan facility and used the net proceeds from such borrowings, together with cash on hand, to fund the remainder of the cash consideration for the DRG acquisition and to pay related fees and expenses.

In June 2020, we completed an underwritten public offering of 50,400,000 of our ordinary shares at a share price of $22.50.

Of the 50,400,000 ordinary shares, 14,000,000 were primary ordinary shares offered by Clarivate and 36,400,000 were secondary ordinary shares offered by selling shareholders including 20,821,765 ordinary shares from Onex, 8,097,354 ordinary shares from Baring and 7,480,881 ordinary shares from Directors, Executive Officers and other shareholders.

The Company did not receive any proceeds from the sale of secondary ordinary shares by the selling shareholders.

The Company received approximately $304,030 in net proceeds from the sale of ordinary shares offered by the Company, after deducting underwriting discounts and estimated offering expenses payable.

We used the net proceeds, in conjunction with the new $1,600,000 incremental term loan facility available to Clarivate on October 1, 2020, to fund the repayment of CPA Global parent company's $2,052,926 of outstanding debt.

The Company received approximately $728,080 in net proceeds from the sale of ordinary shares offered by the Company, after deducting underwriting discounts and estimated offering expenses payable.

We used the net proceeds to finance a portion of the purchase price for the ProQuest acquisition, which was completed on December 1, 2021.

The Company did not receive any proceeds from the secondary ordinary shares sold by the selling shareholders.

In June 2021, concurrently with the June 2021 Ordinary Share Offering, we completed an underwritten public offering of 14,375,000 of our 5.25% Series A MCPS (which included 1,875,000 of our MCPS that the underwriters purchased pursuant to their option to purchase additional shares).

The Company received approximately $1,392,671 in net proceeds from the sale of our MCPS offered by the Company, after deducting underwriting discounts and estimated offering expenses payable.

We used the net proceeds to finance a portion of the purchase price for the ProQuest acquisition, which was completed on December 1, 2021.

Dividends on the MCPS are payable on a cumulative basis when declared by Clarivate’s Board of Directors, or an authorized committee of Clarivate’s Board of Directors, at an annual rate of 5.25% of the liquidation preference of $100.00 per share.

Clarivate may pay declared dividends in cash or, subject to certain limitations, in Clarivate ordinary shares, or in any combination of cash and ordinary shares, on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2021 and ending on June 1, 2024.

Free Cash Flow and Adjusted Free Cash Flow (non-GAAP measures)

The following table reconciles Free cash flow and Adjusted free cash flow, which are non-GAAP measures, to net cash provided by operating activities:

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

In July 2021, the Company's Board of Directors declared a quarterly dividend of approximately $1.12 per share on its 5.25% Series A Mandatory Convertible Preferred Shares, payable on September 1, 2021 to shareholders of record at the close of business on August 15, 2021.

In October 2021, the Company's Board of Directors declared a quarterly dividend of approximately $1.3125 per share on its 5.25% Series A MCPS, paid in cash on December 1, 2021 to shareholders of record at the close of business on November 15, 2021.

As of December 31, 2021, we recognized $6,499 of accrued preferred share dividends within accrued expenses and other current liabilities.

While the dividends on the MCPS are cumulative, they will not be paid until declared by the Company’s Board of Directors.

If no dividends are declared and paid, they will continue to accumulate as the agreement contains a backstop to it being paid even if never declared by the board.

In February 2022, the Company's Board of Directors declared a quarterly dividend of $1.3125 per share on its 5.25% Series A Mandatory Convertible Preferred Shares, payable in cash on March 1, 2022 to shareholders of record at the close of business on February 15, 2022.

During the period January 1, 2020 through February 21, 2020, 24,132,666 of the Company’s outstanding warrants were exercised for one ordinary share per whole warrant at a price of $11.50 per share.

On February 20, 2020, we announced the redemption of all of our outstanding public warrants to purchase our ordinary shares that were issued as part of the units sold in the Churchill Capital Corp initial public offering that remained outstanding at 5:00 p.m.

New York City time on March 23, 2020, for a redemption price of $0.01 per public warrant.

In addition, our Board of Directors elected that, upon delivery of the notice of the redemption on February 20, 2020, all public warrants were to be exercised only on a “cashless basis.” Accordingly, by virtue of the cashless exercise of public warrants, exercising public warrant holders received 0.4626 of an ordinary share for each public warrant, and 4,747,432 ordinary shares were issued for public warrants exercised on a cashless basis and 4,649 public warrants were redeemed for $0.01 per public warrant.

As of December 31, 2021, no public warrants were outstanding.

Free Cash Flow (non-GAAP measure)

The following table reconciles free cash flow measure, which is a non-GAAP measure, to net cash provided by operating activities:

(In millions, except share and per share data, option prices, ratios or as noted)

Year Ended December 31,

3 unchanged sentences

Free cash flow $ 306.4 $ 205.2 $ 155.8

Free cash flow was $205,224 for the year ended December 31, 2021, compared to $155,787 for the year ended December 31, 2020 and $47,744 for the year ended December 31, 2019.

The increase in free cash flow was primarily due to higher net cash provided by operating activities due to an increase in the source of cash for improved results from operations, partially offset by an increase in capital expenditures primarily driven by product development from acquired businesses.

Required Reported Data - Standalone Adjusted EBITDA (non-GAAP measure)

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, 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 New Notes issued by the Issuer 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

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

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 income (loss) for the trailing 12-month period (defined in the credit facilities and the indenture as our U.S.

GAAP net income adjusted for certain items specified in the credit facilities and the indenture) 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 of the type that were presented in the offering memorandum used in connection with the issuance of the secured notes due 2026 and earn-out obligations incurred in connection with an acquisition or investment.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

The following table reconciles Standalone Adjusted EBITDA to our Net loss for the periods presented:

Year Ended December 31,

2021 2020 2019

(in thousands)

Net loss attributable to ordinary shares $ (311,956) $ (350,625) $ (258,633)

Dividends on preferred shares 41,508 — —

Net loss (270,448) (350,625) (258,633)

Provision (benefit) for income taxes 12,298 (2,698) 10,201

Depreciation and amortization 537,815 303,150 200,542

Interest, net 252,490 111,914 157,689

Deferred revenues adjustment (1)

3,951 23,101 438

Transaction related costs (2)

46,216 99,286 46,214

Share-based compensation expense 139,571 70,472 51,383

Gain on sale of Techstreet — (28,140) —

Restructuring and impairment (3)

129,459 56,138 15,670

Legal Settlement — — (39,399)

Impairment on assets held for sale — — 18,431

Mark to market adjustment on financial instruments (4)

(81,320) 205,062 47,656

Cash paid for CPA Global equity plan (1)

Cash paid for restructuring costs (2)

41.9 80.3 26.0

Adjusted EBITDA 800,404 486,600 294,066

Realized foreign exchange gain 7,244 (2,431) (3,500)

ProQuest Adjusted EBITDA impact (6)

DRG Adjusted EBITDA impact (6)

CPA Adjusted EBITDA impact (6)

Bioinfogate Adjusted EBITDA impact (6)

IncoPat Adjusted EBITDA impact (6)

Hanlim Adjusted EBITDA impact (6)

Patient Connect Adjusted EBITDA impact (6)

Cost savings (7)

Cash paid for transaction related costs (3)

13.4 78.2 95.8

Excess standalone costs (8)

Standalone Adjusted EBITDA $ 1,192,686 $ 762,110 $ 336,066

(1) Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of FASB ASU No.

2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" .

In the fourth quarter of 2021, Clarivate adopted ASU No.

2021-08 which allows an acquirer to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

This guidance was applied retrospectively to all business combinations for which the acquisition date occurs during or subsequent to the fiscal year 2021.

This also includes the mark to market adjustments on the contingent stock consideration associated with the CPA Global and DRG acquisitions.

(3) Reflects costs related to restructuring and impairment associated with the acquisition of primarily DRG and CPA Global in 2020.

(4) Reflects mark to market adjustments on financial instruments recorded under Accounting Standards Codification 815, Derivatives and Hedging, ("ASC 815").

In periods subsequent to issuance, changes in the estimated fair value of the liabilities are reported through earnings.

Cash paid for other costs (4)

Cash paid for debt issuance costs — 57.8 7.7

Cash paid for interest held in escrow (5)

Adjusted free cash flow $ 521.8 $ 459.4 $ 301.7

(1) Includes cash funded by a trust related to CPA Global equity plan payout upon vesting.

(2) Reflects cash payments for costs primarily related to restructuring and lease-exit activities associated with the One Clarivate, ProQuest and CPA Global Programs.

The costs associated with the One Clarivate and CPA Global program were substantially complete as of December 31, 2022.

(3) Includes cash paid for costs incurred to complete business combination transactions, which comprises of acquisitions, dispositions and capital market activities, as well as advisory, legal, and other professional and consulting costs.

(4) Includes cash paid for other costs that do not reflect our ongoing operating performance.

In 2020, this is related to costs incurred (1) from our separation from Thomson Reuters in 2016 due to the implementation of our standalone company infrastructure and related cost-savings initiatives, costs for which were largely wound down by December 31, 2020, (2) new transition services agreement, offset by the reverse transition services agreement from the sale of MarkMonitor assets, and (3) cash received for hedge accounting transactions.

(5) Reflects the portion of cash paid on interest expense incurred on the principal related to the 2021 debt offering, that was held in escrow until the completion of the pending acquisition of ProQuest on December 1, 2021.

Clarivate used 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.

Adjusted free cash flow increased $62.4 for the year ended December 31, 2022, compared to the prior year period, due to increased cash provided by operating activities, offset by increased capital expenditures and other adjusting items.

The increase in adjusted free cash flow for the year ended December 31, 2021, compared to the prior year period, was primarily due to higher net cash provided by operating activities due to an increase in the source of cash for improved results from operations, partially offset by an increase in capital expenditures primarily driven by product development from acquired businesses.

Senior Notes (2029) and Senior Secured Notes (2028)

In June 2021, we issued $1,000.0 in aggregate principal amount of senior secured notes due June 30, 2028 and $1,000.0 in aggregate principal amount of senior notes due June 30, 2029 bearing interest at a rate of 3.875% and 4.875% per annum, respectively (the "old" notes), payable semi-annually to holders of record on June 30 and December 30 of each year, commencing on December 30, 2021.

Both series of old notes were issued by Clarivate Science Holdings Corporation (the "Issuer"), an indirect wholly-owned subsidiary of Clarivate.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

(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 2021 detail also includes an accrual of $8,000 for a legal case.

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.

In 2019, this includes payments to Thomson Reuters under the Transition Services Agreement.

These costs include mainly transition consulting, technology infrastructure, personnel and severance expenses relating to our standalone company infrastructure, which are recorded in selling, general and administrative costs in our income statement, as well as expenses related to the restructuring and transformation of our business following our separation from Thomson Reuters in 2016 mainly related to the integration of separate business units into one functional organization and enhancements in our technology.

These costs were largely wound down by the end of 2020.

(6) Represents the acquisition Adjusted EBITDA for the period beginning January 1 of the year of the acquisition through the respective acquisition date of each acquired business to reflect the company's Standalone EBITDA as though material 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.

(8) Reflects the difference between our actual standalone company infrastructure costs, and our estimated steady operating costs, which are summarized in the below table.

Year Ended December 31,

(in thousands) 2021 2020 2019

Actual standalone company infrastructure costs $ — $ — $ 162,000

Steady state standalone cost estimate — — (132,000)

Excess standalone costs $ — $ — $ 30,000

The foregoing adjustments (6) , (7) and (8) 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 Statement Regarding Forward-Looking Statements.

Senior Secured Notes due 2028 and Senior Notes due 2029

In June 2021, we issued $1,000,000 in aggregate principal amount of Senior Secured Notes due June 30, 2028 and $1,000,000 in aggregate principal amount of Senior Notes due June 30, 2029 bearing interest at a rate of 3.875% and 4.875% per annum, respectively.

The interest is payable semi-annually to holders of record on June 30 and December 30 of each year, commencing on December 30, 2021.

The Old Secured Notes and the Old Unsecured Notes were issued by Clarivate Science Holdings Corporation (the "Issuer"), an indirect wholly-owned subsidiary of Clarivate.

In August 2021, we (i) exchanged all of the outstanding, validly tendered and not withdrawn 3.875% Senior Secured Notes due 2028 for the newly-issued 3.875% Senior Secured Notes due 2028, and (ii) exchanged all of the outstanding, validly tendered and not withdrawn 4.875% Unsecured Senior Notes due 2029 for the Issuer’s newly-issued 4.875% Senior Notes due 2029.

The initial aggregate principal amount of New Notes is equal to the aggregate principal amount of Old Notes that were validly tendered and not validly withdrawn for exchange, and that were accepted by the Issuer.

(In millions, except share and per share data, option prices, ratios or as noted)

In August 2021, we (i) exchanged all of the outstanding, validly tendered and not withdrawn 3.875% senior secured notes due 2028 for our 3.875% Senior Secured Notes due 2028, and (ii) exchanged all of the outstanding, validly tendered and not withdrawn 4.875% senior notes due 2029 for our 4.875% Senior Notes due 2029.

The initial aggregate principal amount of our Senior Secured Notes due 2028 and Senior Notes due 2029 is equal to the aggregate principal amount of the old notes that were validly tendered and not validly withdrawn for exchange, and that were accepted by the Issuer.

The offers to exchange are referred to herein as the “Exchange Offers.” Pursuant to the Exchange Offers, the aggregate principal amounts of the old notes set forth as follows were validly tendered and not validly withdrawn, and were accepted by the Issuer and subsequently cancelled:

(i) $921,177 aggregate principal amount of Old Secured Notes;

and (ii) $921,399 aggregate principal amount of Old Unsecured Notes.

Following such cancellation, (i) $78,823 aggregate principal amount of Old Secured Notes remained outstanding;

and (ii) $78,601 aggregate principal amount of Old Unsecured Notes remained outstanding.

The Issuer redeemed such remaining outstanding Old Secured Notes and Old Unsecured Notes at 100% of the principal amount thereof plus accrued and unpaid interest from June 24, 2021 to the redemption date in August 2021.

In connection with the settlement of the Exchange Offers, the Issuer (i) issued $921,177 aggregate principal amount of its New Secured Notes;

and (ii) issued $921,399 aggregate principal amount of its New Unsecured Notes.

(i) $921.2 aggregate principal amount of old senior secured notes;

and (ii) $921.4 aggregate principal amount of Old senior notes.

Following such cancellation, (i) $78.8 aggregate principal amount of Old senior secured notes remained outstanding;

and (ii) $78.6 aggregate principal amount of Old senior notes remained outstanding.

The Issuer redeemed such remaining outstanding Old Notes at 100% of the principal amount thereof plus accrued and unpaid interest from June 24, 2021 to the redemption date in August 2021.

In connection with the settlement of the Exchange Offers, the Issuer (i) issued $921.2 aggregate principal amount of its Senior Secured Notes due 2028;

and (ii) issued $921.4 aggregate principal amount of its Senior Notes due 2029.

The interest is payable semi-annually to holders of record on June 30 and December 30 of each year, commencing on December 30, 2021.

The exchange was treated as a debt modification in accordance with Accounting Standards Codification 470, Debt ("ASC 470").

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

Concurrently with the settlement of the Exchange Offers, the Issuer deposited (or caused to be deposited) an amount in cash equal to the aggregate principal amount of the New Notes of each series into segregated escrow accounts until the date that certain escrow release conditions (the “Escrow Release Conditions”) including the consummation of the ProQuest acquisition, were satisfied.

Concurrently with the settlement of the Exchange Offers, the Issuer deposited (or caused to be deposited) an amount in cash equal to the aggregate principal amount of its Senior Secured Notes and Senior Notes into segregated escrow accounts until the date that certain escrow release conditions (the “Escrow Release Conditions”) including the consummation of the ProQuest acquisition, were satisfied.

On December 1, 2021, the Escrow Release Conditions were satisfied, and the escrow proceeds were released from the escrow accounts and used to fund a portion of the purchase price of the ProQuest acquisition and to pay related fees and expenses.

In connection with the closing of the ProQuest acquisition on December 1, 2021, the New Notes are guaranteed on a joint and several basis by each of Clarivate’s indirect subsidiaries that is an obligor or guarantor under Clarivate’s existing credit facilities and senior secured notes due 2026.

The New Secured Notes will be secured on a first-lien pari passu basis with borrowings under the existing credit facilities and senior secured notes, and the New Unsecured Notes will be the Issuer’s and such guarantors’ unsecured obligations.

In connection with the closing of the ProQuest acquisition on December 1, 2021, both of these series of Notes were guaranteed on a joint and several basis by each of Clarivate’s indirect subsidiaries that is an obligor or guarantor under Clarivate’s existing credit facilities and Senior Secured Notes due 2026.

The Senior Secured Notes due 2028 are secured on a first-lien pari passu basis with borrowings under the existing credit facilities and Senior Secured Notes due 2026, and the Senior Notes due 2029 are the Issuer’s and such guarantors’ unsecured obligations.

As of the date of this annual report, we believe we were in compliance with the indentures' covenants.

Secured Notes Due 2026

On October 31, 2019, we closed a private offering of $700,000 in aggregate principal amount of secured notes due 2026 bearing interest at 4.50% per annum.

The secured notes due 2026 were issued by Camelot Finance S.A., an indirect wholly-owned subsidiary of Clarivate, are secured on a first-lien pari passu basis with borrowings under the credit facilities, and are guaranteed on a joint and several basis by certain of Clarivate’s subsidiaries.

We used the net proceeds from the offering of secured notes due 2026, together with proceeds from the credit facilities discussed below to, among other things, redeem in full our secured notes due 2026, refinance all amounts terminating under the tax receivable agreement and under the prior credit facilities, fund in full the $200,000 payment pursuant to the agreement, and pay fees and expenses related to the foregoing.

The indenture governing the secured notes due 2026 contains covenants which, among other things, limit the occurrence of additional indebtedness (including acquired indebtedness), issuance of certain preferred stock, the payment of dividends, making restricted payments and investments, the purchase or acquisition or retirement for value of any equity interests, the provision of loans or advances to restricted subsidiaries, the sale or lease or transfer of any properties to any restricted subsidiaries, the transfer or sale of assets, and the creation of certain liens.

Senior Secured Notes (2026)

On October 31, 2019, we closed a private offering of $700.0 in aggregate principal amount of Senior Secured Notes due 2026 bearing interest at 4.50% per annum.

These Notes were issued by Camelot Finance S.A., an indirect wholly-owned subsidiary of Clarivate, and are secured on a first-lien pari passu basis with borrowings under the Credit Facilities, and are guaranteed on a joint and several basis by certain of Clarivate’s subsidiaries.

We used the net proceeds from the offering, together with proceeds from the Credit Facilities discussed below to, among other things, redeem in full our Senior Secured Notes due 2026, refinance all amounts terminating under the tax receivable agreement and under the prior credit facilities, fund in full the $200.0 payment pursuant to the agreement, and pay fees and expenses related to the foregoing.

The indenture governing the Senior Secured Notes due 2026 contains covenants which, among other things, limit the occurrence of additional indebtedness (including acquired indebtedness), issuance of certain preferred stock, the payment of dividends, making restricted payments and investments, the purchase or acquisition or retirement for value of any equity interests, the provision of loans or advances to restricted subsidiaries, the sale or lease or transfer of any properties to any restricted subsidiaries, the transfer or sale of assets, and the creation of certain liens.

As of the date of this annual report, we believe we were in compliance with the indenture covenants.

Credit Facilities

On October 31, 2019, we entered into a $900,000 term loan facility, which was fully drawn at closing.

On February 28, 2020, we incurred an incremental $360,000 of term loans under our term loan facility and used the net proceeds from such borrowings to fund a portion of the cash consideration for the DRG acquisition.

On October 1, 2020, in connection with the CPA Global acquisition, the Company incurred an incremental $1,600,000 of borrowings under our term loan facility and used the net proceeds from such borrowings to fund the repayment of CPA Global's parent company outstanding debt.

As of December 31, 2021, we had $2,818,800 outstanding on the term loan facility.

The term loan facility matures on October 31, 2026.

On October 31, 2019, we entered into $250,000 revolving credit facility.

In November 2021, we increased the capacity of the revolving credit facility by $100,000 to $350,000, of which $175,000 remained undrawn as of December 31, 2021.

In November 2021, the Company borrowed $175,000 on the existing Revolving Credit Facility and used the net proceeds from such borrowings for general corporate purposes

Borrowings under the credit facilities bear interest at a floating rate which can be, at our option, either (i) a Eurocurrency rate plus an applicable margin or (ii) an alternate base rate (equal to the highest of (i) the rate which Bank of America, N.A.

announces as its prime lending rate, (ii) the Federal Funds Effective Rate plus one-half of 1.00% and (iii) the Eurocurrency rate for an interest period of one month for loans denominated in dollars plus 1.00%) plus an applicable margin, in either case, subject to a Eurocurrency rate floor of 0.00%.

Commencing March 31, 2020, the term loan facility will amortize in equal quarterly installments in an amount equal to 1.00% per annum of the original par principal amount thereof, with the remaining balance due at final maturity.

The credit facilities are secured by substantially all of our assets and the assets of all of our U.S.

restricted subsidiaries and certain of our non-U.S.

subsidiaries, including those that are or may be borrowers or guarantors under the Credit Facilities,

The Credit Facilities

The Company's Credit Facilities consist of a $750.0 Revolving Credit Facility with a $80.0 letter of credit sublimit, due in 2027, and a $2,860.0 Term Loan Facility due 2026.

Revolving Credit Facility

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share data, option prices, ratios or as noted)

subject to customary exceptions.

The credit facilities contain customary events of default and restrictive covenants that limit us from, among other things, incurring certain additional indebtedness, issuing preferred stock, making certain restricted payments and investments, certain transfers or sales of assets, entering into certain affiliate transactions or incurring certain liens.

These credit facilities limitations are subject to customary baskets, including certain limitations on debt incurrence and issuance of preferred stock, subject to compliance with a consolidated coverage ratio of Consolidated EBITDA (as defined in the credit facilities), a measure identical to our Standalone Adjusted EBITDA disclosed above under - Required Reported Data - Standalone Adjusted EBITDA, to interest and other fixed charges on certain debt (as defined in the credit facilities) of 2.00 to 1.00.

In addition, the credit facilities require us to comply with a springing financial covenant pursuant to which, as of the third quarter of 2019, we must not exceed a total first lien net leverage ratio (as defined under the credit facilities) of 7.25 to 1.00, to be tested on the last day of any quarter only when more than 35% of the revolving credit facility (excluding (i) non-cash collateralized, issued and undrawn letters of credit in an amount up to $20,000 and (ii) any cash collateralized letters of credit) is utilized at such date.

(In millions, except share and per share data, option prices, ratios or as noted)

On March 31, 2022, the Company’s direct and indirect subsidiaries that are borrowers or guarantors under the Credit Agreement dated as of October 31, 2019, (the "Credit Agreement") entered into an amendment thereto, pursuant to which the total revolving credit commitments thereunder were increased by $400.0 from $350.0 to $750.0 in the aggregate, and the maturity date for revolving credit commitments was extended to March 31, 2027, subject to a “springing” maturity date that is 90 days prior to the maturity date of (i) the term loans outstanding under the Credit Agreement as of the date of the amendment or (ii) the 4.50% Senior Secured Notes due 2026 and issued by Camelot Finance S.A.

(but only to the extent such term loans or senior secured notes have not, prior thereto, been refinanced or extended to have a maturity date of no earlier than 90 days after March 31, 2027).

During the fourth quarter of 2022, the Company paid the $175.0 outstanding balance on its Revolving Credit Facility that we had borrowed in November 2021 for general corporate purposes.

As a result, the Company had no outstanding balance on its Revolving Credit Facility as of December 31, 2022.

Term Loan Facility (2026)

The Company has a Term Loan Facility of $2,860.0 due 2026, which was fully drawn at closing.

During the fourth quarter of 2022, the Company made a $300.0 prepayment on its Term Loan Facility.

Prior to this prepayment, the principal amount of the Term Loan Facility was repaid by the Company on the last business day of each March, June, September and December, in an amount equal to 0.25% of the aggregate outstanding amount of the initial term loans which, as of December 31, 2022, was $2,497.4.

Borrowings under our Credit Facilities are subject to floating base interest rates, plus a margin.

For our Term Loan Facility, the base rate is one-month LIBOR (subject to a floor of 0.00% for $1,094.0 and 1.00% for $1,403.4) at December 31, 2022, or Prime plus a margin of 2.25% per annum, as applicable depending on the borrowing.

For our Revolving Credit Facility, the base interest rate is at Term SOFR, plus a 0.1% SOFR adjustment, plus 3.25% per annum (or 2.75% per annum, based on first lien leverage ratios) or Prime plus a margin of 2.25% per annum, as applicable depending on the borrowing.

The interest rate margins under our credit facilities will decrease upon the achievement of certain first lien net leverage ratios (as the term is used in the Credit Agreement).

The Credit Facilities are secured by substantially all of our assets and the assets of all of our U.S.

restricted subsidiaries and certain of our non-U.S.

subsidiaries, including those that are or may be borrowers or guarantors under the Credit Facilities, subject to customary exceptions.

The Credit Agreement governing the Credit Facilities contain customary events of default and restrictive covenants that limit us from, among other things, incurring certain additional indebtedness, issuing preferred stock, making certain restricted payments and investments, certain transfers or sales of assets, entering into certain affiliate transactions or incurring certain liens.

These credit facilities limitations are subject to customary baskets, including certain limitations on debt incurrence and issuance of preferred stock, subject to compliance with a consolidated coverage ratio of Consolidated EBITDA (as defined in the credit facilities), to interest and other fixed charges on certain debt (as defined in the Credit Facilities) of 2.00 to 1.00.

In addition, the Credit Facilities require us to comply with a springing financial covenant pursuant to which, as of the first quarter of 2020, we must not exceed a total first lien net leverage ratio (as defined under the Credit Facilities) of 7.25 to 1.00, to be tested on the last day of any quarter only when more than 35% of the Revolving Credit Facility (excluding (i) non-cash collateralized, issued and undrawn letters of credit in an amount up to $20.0 and (ii) any cash collateralized letters of credit) is utilized at such date.

As of December 31, 2022, our consolidated coverage ratio was 4.6 to 1.00 and our consolidated leverage ratio was 4.1 to 1.00.

As of the date of this Report, we are in compliance with the covenants in the credit facilities.

As of the date of this form 10-K, we are in compliance with the covenants in the credit facilities.

The Credit Facilities provide that, upon the occurrence of certain events of default, our obligations thereunder may be accelerated, and the lending commitments terminated.

Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness (including the secured notes due 2026), voluntary and involuntary bankruptcy proceedings, material money judgments, loss of perfection over a material portion of collateral, material ERISA/pension plan events, certain change of control events and other customary events of default, in each case subject to threshold, notice and grace period provisions.

Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness (including the Senior Secured Notes due 2026 and 2028 and Senior Notes 2029), voluntary and involuntary bankruptcy proceedings, material money judgments, loss of perfection over a material portion of collateral, material ERISA/pension plan events, certain change of control events and other customary events of default, in each case subject to threshold, notice and grace period provisions.

Commitments and Contingencies

Our contingent liabilities consist primarily of letters of credit and performance bonds and other similar obligations in the ordinary course of business.

The Company maintained a contingent stock liability based on observable market data relating to the CPA Global acquisition that occurred on October 1, 2020.

The amount was settled on January 21, 2021 through the issuance of ordinary shares.

The contingent stock liability was $0 and $44,565 as of December 31, 2021 and December 31, 2020, recorded in Accrued expenses and other current liabilities on the Consolidated Balance Sheet.

The Company recognized a gain related to the changes in the contingent stock liability of $675 and $1,920 for the years ended December 31, 2021 and 2020, respectively, recorded within Selling, general and administrative costs on the Consolidated Statement of Operations.

The Company maintained a contingent stock liability based on observable market data relating to the DRG acquisition that occurred on February 28, 2020.

The amount was settled on March 5, 2021 through the issuance of ordinary shares.

The contingent stock liability was $0 and $86,029 as of December 31, 2021 and December 31, 2020, recorded in Accrued expenses and other current liabilities on the Consolidated Balance Sheet.

The Company recognized (income) expense related to the changes in the contingent stock liability of $(24,410) and $27,132 for the years ended December 31, 2021 and 2020, respectively, recorded within Selling, general and administrative costs on the Consolidated Statement of Operations.

Dividends on our convertible preferred shares are payable, as and if declared by our Board of Directors, at an annual rate of 5.25% of the liquidation preference of $100.00 per share.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except share and per share data, option prices, ratios or as noted)

Dividends on our mandatory convertible preferred shares are payable, as and if declared by our Board of Directors, at an annual rate of 5.25% of the liquidation preference of $100.00 per share.

We may pay declared dividends in cash or, subject to certain limitations, in our ordinary shares, or in any combination of cash and ordinary shares, on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2021, and ending on, and including, June 1, 2024.

See Note 23 - Commitments and Contingencies in Item 8, Financial Statements and Supplementary Data, for additional information.

See Note 20 - Commitments and Contingencies in Item 8.

Financial Statements and Supplementary Data, for additional information.

The Company is eng aged in various legal proceedings and claims that have arisen in the ordinary course of business.

1 unchanged sentence

We maintain appropriate insurance policies in place, which are likely to provide some coverage for these liabilities or other losses that may arise from these litigation matters.

S ee Note 23 - Commitments and Contingencies in Item 8, Financial Statements and Supplementary Data, for additional information.

S ee Note 20 - Commitments and Contingencies in Item 8.

Financial Statements and Supplementary Data, for additional information.

We estimate capital expenditures in 2023 associated with product and content development to be approximately $240.

As of December 31, 2022, we had purchase obligations of approximately $637 primarily for cloud computing services and software licenses, pursuant to agreements to purchase goods and services that are enforceable, legally binding, and specify significant terms, including fixed or minimum quantities to be purchased, fixed minimum or variable pricing provisions, and the approximate timing of the transactions.

Any amounts for which we are liable are reflected in our Consolidated Balance Sheets as Accounts payable or Accrued expenses and other current liabilities and $278.7 of this amount is expected to be paid within the next 12 months.

For additional information related to contractual obligations, such as debt, leases, and commitments and contingencies, Refer to Note 6 - Leases, Note 12 - Debt and Note 20 - Commitments and Contingencies in Item 8.

Financial Statements and Supplementary Data.

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What changed 10-K

Item 7. Management’s Discussion and Analysis