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Item 8. Financial Statements and Supplementary Data

2023-03-01 compared with 2022-03-10 · 818 added, 1202 removed, 1447 unchanged (58% of the section changed)

15 unchanged sentences

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to a lack of an effectively designed control (i) over the communication of modifications to pre-existing compensation agreements in an acquisition transaction between the legal function and the accounting function to ensure the accounting impact of the modifications could be evaluated, and (ii) with a sufficient level of precision to allow for an appropriate review of the tax balances associated with the opening balance sheet of acquired entities.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses referred to above are described in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.

We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2021 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

1 unchanged sentence

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in management’s report referred to above.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appear under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

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Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded ProQuest from its assessment of internal control over financial reporting as of December 31, 2021 because it was acquired by the Company in a purchase business combination during 2021.

We have also excluded this entity from our audit of internal control over financial reporting.

ProQuest is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 2% and 4%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.

Definition and Limitations of Internal Control over Financial Reporting

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(ii) provide reasonable assurance that transactions are recorded as

necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquired Database Intangible Asset and Customer Relationships Intangible Assets – ProQuest

As described in Note 4 to the consolidated financial statements, the Company acquired 100% of ProQuest in 2021.

The aggregate consideration paid in connection with the closing of the ProQuest acquisition was $4,994.3 million, net of cash acquired, which resulted in $2,773.0 million and $709.3 million of customer relationships and technology and databases intangible assets, respectively, being recorded.

Technology and databases intangible assets include both acquired technology intangible assets and acquired databases intangible assets.

As disclosed by management, the fair value of the customer relationships intangible assets acquired was estimated by management through a discounted cash flow model using the multi-period excess earnings method, which involved the use of significant estimates and assumptions related to projected revenue growth rates, operating margins, projected cash flows, royalty rates, tax rates, discount rates, tax amortization benefits, and customer attrition rates, among other items.

The fair value of the databases intangible assets acquired was estimated by management through a discounted cash flow model using the relief from royalty method, which involved the use of significant estimates and assumptions related to projected revenue growth rates, royalty rates, tax rates, discount rates, tax amortization benefits, and obsolescence rates.

The principal considerations for our determination that performing procedures relating to an acquired database intangible asset and the acquired customer relationships intangible assets from the ProQuest acquisition is a critical audit matter are (i) a high degree of auditor judgment and subjectivity in performing procedures relating to the estimated fair value of certain database and customer relationships intangible assets due to the significant judgment by management when developing these estimates;

(ii) the significant audit effort in evaluating the significant assumptions related to projected revenue growth rates,

royalty rate, tax rate, discount rate, tax amortization benefit and obsolescence rate related to the database intangible asset, as well as the significant assumptions related to projected revenue growth rates, operating margins, projected cash flows, royalty rates, tax rates, discount rates, tax amortization benefits, and customer attrition rates related to the customer relationship intangible assets;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to business combination accounting, including controls over management’s valuation of the database intangible asset and the customer relationship intangible assets and controls over the development of significant assumptions related to projected revenue growth rates, royalty rate, tax rate, discount rate, tax amortization benefit and obsolescence rate related to the acquired database intangible asset, as well as significant assumptions related to projected revenue growth rates, operating margins, projected cash flows, royalty rates, tax rates, discount rates, tax amortization benefits and customer attritions rates related to the customer relationship intangible assets.

These procedures also included, among others (i) reading the purchase agreement;

(ii) testing management’s process for estimating the fair value of the database intangible asset and the customer relationships intangible assets;

(iii) evaluating the appropriateness of the discounted cash flow models;

(iv) testing the completeness and accuracy of the underlying data used in the models;

and (v) evaluating the reasonableness of the aforementioned significant assumptions.

Evaluating management’s significant assumptions involved evaluating whether the assumptions used were reasonable considering the consistency of the assumptions with external market and industry data and whether these assumptions were consistent with evidence obtained in other areas of the audit, as applicable.

Evaluating projected revenue growth rates (for both the database intangible asset and the customer relationship intangible assets) and operating margins and projected cash flows (for customer relationship intangible assets) also involved evaluating whether the assumptions used were reasonable considering the current and past performance of the acquired entity.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow models and evaluating the reasonableness of management’s significant assumptions related to the projected revenue growth rates, royalty rates, tax rates, discount rates, and tax amortization benefits (for both the database intangible asset and the customer relationships intangible assets), the customer attrition rates (for customer relationship intangible assets), and the obsolescence rate (for the database intangible asset).

Goodwill Impairment Assessment for the IP Management Reporting Unit

As described in Notes 3, 9 and 11 to the consolidated financial statements, the Company’s consolidated goodwill balance was $7,904.9 million as of December 31, 2021, and the goodwill balance assigned to the IP Management Reporting Unit was $3,047.3 million.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessments for Certain Reporting Units

As described in Notes 3, 8 and 10 to the consolidated financial statements, the Company’s consolidated goodwill balance was $2,876.5 million as of December 31, 2022.

Management evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment or one level below an operating segment, annually as of October 1 or more frequently if impairment indicators arise.

As disclosed by management, a quantitative assessment was performed for its IP Management reporting unit.

A quantitative impairment assessment was performed as of September 30, 2022 over the Company’s reporting units due to possible impairment indicators, and this coincided with the Company’s change in organizational structure.

This included quantitative assessments over the ProQuest reporting unit post-realignment and the former IP Management and Patent reporting units under the legacy structure.

In determining the fair value of a reporting unit, management estimates the fair value using a discounted cash flow model under the income approach.

The discounted cash flow model determines the fair value of a reporting unit based on the present value of estimated future cash flows, which include significant assumptions related to projected revenue growth rates, operating margins, tax rates, terminal values and discount rates, among others.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment for the IP Management reporting unit is a critical audit matter are (i) a high degree of auditor judgment and subjectivity in performing procedures relating to the estimated fair value of the IP Management reporting unit due to the significant judgment by management when developing this estimate;

(ii) the significant audit effort in evaluating the significant assumptions related to projected revenue growth rates, operating margins, tax rate, and discount rate;

The discounted cash flow model determines the fair value of a reporting unit based on the present value of estimated future cash flows, which include significant judgments related to projected revenue growth rates, operating margins, tax rates, terminal values and discount rates, among others.

Based on the quantitative analysis performed 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 principal considerations for our determination that performing procedures relating to the goodwill impairment assessments for the ProQuest and former IP Management and Patent reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the reporting units;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projected revenue growth rates, operating margins, terminal values, and discount rates;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the determination of the reporting units, valuation of the IP Management reporting unit, and controls over the development of significant assumptions related to projected revenue growth rates, operating margins, tax rate, and discount rate.

These procedures also included, among others (i) testing management’s process for estimating the fair value of the IP Management reporting unit;

(ii) evaluating whether there were any impairment indicators;

(iii) evaluating the appropriateness of the discounted cash flow model;

(iv) testing the completeness and accuracy of underlying data used in the model;

and (v) evaluating the reasonableness of management’s significant assumptions related to projected revenue growth rates, operating margins, tax rate and discount rate.

management’s significant assumptions involved evaluating whether the assumptions used were reasonable considering the consistency of the assumptions with external market and industry data and whether the assumptions were consistent with evidence obtained in other areas of the audit.

Evaluating the projected revenue growth rates and operating margins also involved evaluating whether the assumptions used were reasonable considering the past performance of the Company.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow model and evaluating the reasonableness of management’s significant assumption related to the discount rate.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the determination of the reporting units, valuation of the ProQuest and former IP Management and Patent reporting units, and controls over the development of significant assumptions related to projected revenue growth rates, operating margins, terminal values and discount rates.

These procedures also included, among others (i) testing management’s process for developing the fair value estimates of the reporting units;

(ii) evaluating the appropriateness of the discounted cash flow models;

(iii) testing the completeness and accuracy of underlying data used in the models;

and (iv) evaluating the reasonableness of management’s significant assumptions related to projected revenue growth rates, operating margins, terminal values and discount rates.

Evaluating management’s significant assumptions related to projected revenue growth rates, operating margins, and terminal values involved evaluating whether the assumptions used were reasonable considering (i) the consistency of the assumptions with external market and industry data;

(ii) the past performance of the reporting units, and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

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Consolidated Balance Sheets

(In thousands, except share and per share data)

(In millions, except share and per share data)

As of December 31,

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Restricted cash 8.0 156.7

Accounts receivable, net of allowance of $ 6,713 and $ 8,745 at December 31, 2021 and December 31, 2020, respectively

906,428 737,733

Accounts receivable, net 872.1 906.4

Prepaid expenses 89.4 76.6

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Accounts payable $ 101.4 $ 129.2

Accrued compensation 132.1 150.6

Accrued expenses and other current liabilities 352.1 529.0

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Total liabilities 7,132.4 8,257.1

Commitments and contingencies

Commitments and contingencies (Note 20)

Shareholders’ equity:

1 unchanged sentence

14,375,000 shares authorized;

5.25 % Mandatory Convertible Preferred Shares, Series A, 14,375,000 and 0 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively

5.25 % Mandatory Convertible Preferred Shares, Series A, 14,375,000 shares issued and outstanding as of both December 31, 2022 and December 31, 2021

1,392.6 1,392.6

Ordinary Shares, no par value;

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Treasury shares, at cost;

547,136 shares as of December 31, 2021 and 6,325,860 Shares as of December 31, 2020

( 16,956 ) ( 196,038 )

Accumulated other comprehensive income 326,755 492,382

0 and 547,136 shares as of December 31, 2022 and December 31, 2021, respectively

Accumulated other comprehensive (loss) income ( 665.9 ) 326.7

Accumulated deficit ( 5,658.9 ) ( 1,604.4 )

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Consolidated Statements of Operations

(In thousands, except share and per share data)

(In millions, except per share data)

Year Ended December 31,

4 unchanged sentences

Selling, general and administrative costs 729.9 643.0 544.7

Depreciation ( 13,996 ) ( 12,709 ) ( 9,181 )

Amortization ( 523,819 ) ( 290,441 ) ( 191,361 )

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

Depreciation and amortization 710.5 537.8 303.2

Restructuring and impairment 66.7 129.5 56.1

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

Goodwill impairment 4,449.1 — —

Other operating (income) expense, net ( 324.8 ) 27.5 ( 52.4 )

Total operating expenses 6,585.4 1,963.9 1,290.4

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

Mark to market adjustment on financial instruments 81,320 ( 205,062 ) ( 47,656 )

Legal settlement — — 39,399

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

Income (loss) from operations ( 3,925.6 ) ( 87.0 ) ( 36.3 )

Mark to market (gain) loss on financial instruments ( 206.8 ) ( 81.3 ) 205.1

Interest expense and amortization of debt discount, net 270.3 252.5 111.9

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

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

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

Income (loss) before income taxes ( 3,989.1 ) ( 258.2 ) ( 353.3 )

(Benefit) provision for income taxes ( 28.9 ) 12.3 ( 2.7 )

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

Dividends on preferred shares 75.4 41.5 —

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

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

Basic $ ( 5.97 ) $ ( 0.49 ) $ ( 0.82 )

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Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(In millions)

Year Ended December 31,

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Foreign currency translation adjustment ( 1,032.5 ) ( 169.9 ) 499.0

Total other comprehensive income (loss), net of tax ( 165,627 ) 497,261 ( 10,237 )

Comprehensive income (loss) $ ( 436,075 ) $ 146,636 $ ( 268,870 )

Total other comprehensive (loss) income, net of tax ( 992.6 ) ( 165.7 ) 497.3

Comprehensive (loss) income $ ( 4,952.8 ) $ ( 436.2 ) $ 146.7

The accompanying Notes are an integral part of these Consolidated Financial Statements.

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Consolidated Statements of Changes in Equity

(In thousands, except share data)

(In millions)

Ordinary Shares Preferred Shares Treasury Shares Accumulated

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Shares Amount Shares Amount Shares Amount

Balance at December 31, 2018, as originally reported 1,646,223 $ 1,677,510 — $ — — $ — $ 5,358 $ ( 632,261 ) $ 1,050,607

Conversion of units of share capital 215,880,202 — — — — — — — —

Balance at December 31, 2018, as recasted 217,526,425 1,677,510 — — — — 5,358 ( 632,261 ) 1,050,607

Shares subject to redemption — ( 64,157 ) — — — — — — ( 64,157 )

Tax Receivable Agreement — ( 264,000 ) — — — — — — ( 264,000 )

Settlement of Tax Receivable Agreement — 64,000 — — — — — — 64,000

Issuance of ordinary shares, net 1,597,691 1,582 — — — — — — 1,582

Merger recapitalization 87,749,999 678,054 — — — — — — 678,054

Share-based award activity — 51,383 — — — — — — 51,383

Net loss — — — — — — — ( 258,633 ) ( 258,633 )

Other comprehensive loss — — — — — — ( 10,237 ) — ( 10,237 )

Balance at December 31, 2019 306.9 $ 2,144.4 — $ — — $ — $ ( 4.9 ) $ ( 890.9 ) $ 1,248.6

Balance at December 31, 2019 306,874,115 $ 2,144,372 — $ — — $ — $ ( 4,879 ) $ ( 890,894 ) $ 1,248,599

Adjustment to opening Accumulated deficit related to adoption of ASC Topic 326 — — — — — — — ( 9.3 ) ( 9.3 )

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Net loss — — — — — — — ( 350.6 ) ( 350.6 )

Comprehensive income (loss) — — — — — — 497,261 — 497,261

Other Comprehensive income — — — — — — 497.3 — 497.3

Balance at December 31, 2020 606.3 $ 9,989.2 — $ — 6.3 $ ( 196.0 ) $ 492.4 $ ( 1,250.8 ) $ 9,034.8

Exercise of Private Placement Warrants 0.2 3.6 — — — — — — 3.6

Exercise of stock options 3.1 18.6 — — — — — — 18.6

Vesting of restricted stock units 1.0 — — — — — — — —

Shares returned to the Company for net share settlements ( 1.7 ) ( 24.9 ) — — — — — — ( 24.9 )

Issuance of ordinary shares, net 257.3 6,980.6 — — — — — — 6,980.6

Share-based award activity — 56.2 — — — — — — 56.2

Repurchases of ordinary shares — — — — ( 183.8 ) ( 5,211.5 ) — — ( 5,211.5 )

Retirement of treasury shares ( 183.8 ) ( 5,211.5 ) — — 183.8 5,211.5 — — —

CLARIVATE PLC

Consolidated Statements of Changes in Equity

(In thousands, except share data)

(In millions)

Ordinary Shares Preferred Shares Treasury Shares Accumulated

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Shares Amount Shares Amount Shares Amount

Issuance of preferred shares, net — — 14.4 1,392.6 — — — — 1,392.6

Issuance of treasury shares, net — — — — ( 5.8 ) 179.1 — ( 41.6 ) 137.5

Dividends to preferred stockholders 0.7 16.1 — — — — — ( 41.5 ) ( 25.4 )

Net loss — — — — — — — ( 270.5 ) ( 270.5 )

Other comprehensive loss — — — — — — ( 165.7 ) — ( 165.7 )

Balance at December 31, 2021 683.1 $ 11,827.9 14.4 $ 1,392.6 0.5 $ ( 16.9 ) $ 326.7 $ ( 1,604.4 ) $ 11,925.9

Exercise of Private Placement Warrants 212,174 3,592 — — — — — — 3,592

Balance at December 31, 2021 683.1 $ 11,827.9 14.4 $ 1,392.6 0.5 $ ( 16.9 ) $ 326.7 $ ( 1,604.4 ) $ 11,925.9

Reclassification of EBT Shares ( 0.5 ) — — — — — — — —

Exercise of stock options 0.4 0.9 — — — — — — 0.9

1 unchanged sentence

Shares returned to the Company for net share settlements ( 1.3 ) ( 14.9 ) — — — — — — ( 14.9 )

Issuance of ordinary shares, net 257,359,494 6,980,615 — — — — — — 6,980,615

Share-based award activity — 98.1 — — — — — — 98.1

1 unchanged sentence

Retirement of treasury shares — ( 167.3 ) — — ( 10.7 ) 175.0 — ( 7.7 ) —

Issuance of preferred shares, net — — 14,375,000 1,392,616 — — — — 1,392,616

Issuance of treasury shares, net — — — — ( 5,778,724 ) 179,082 — ( 41,667 ) 137,415

Dividends to preferred stockholders 664,730 16,141 — — — — — ( 41,508 ) ( 25,367 )

Sale of treasury shares 0.5 — — — ( 0.5 ) 16.9 — ( 11.2 ) 5.7

Dividends to preferred shareholders — — — — — — — ( 75.4 ) ( 75.4 )

Net loss — — — — — — — ( 3,960.2 ) ( 3,960.2 )

Other comprehensive income — — — — — — ( 165,627 ) — ( 165,627 )

Other comprehensive loss — — — — — — ( 992.6 ) — ( 992.6 )

Balance at December 31, 2022 674.4 $ 11,744.7 14.4 $ 1,392.6 — $ — $ ( 665.9 ) $ ( 5,658.9 ) $ 6,812.5

2 unchanged sentences

Consolidated Statements of Cash Flows

(In thousands)

(In millions)

Year Ended December 31,

4 unchanged sentences

Depreciation and amortization 710.5 537.8 303.2

Bad debt expense 5,988 3,332 1,331

Deferred income tax benefit ( 13,358 ) ( 45,509 ) 357

Deferred income taxes ( 54.3 ) ( 13.3 ) ( 45.5 )

Share-based compensation 93.9 33.3 34.2

Restructuring and impairment 48,152 5,212 —

Restructuring and impairment, including Goodwill 4,478.5 48.2 5.2

Loss (gain) on foreign currency forward contracts 1.2 6.9 ( 2.9 )

Mark to market adjustment on contingent shares ( 25,085 ) 25,212 —

Mark to market adjustment on financial instruments ( 81,320 ) 205,062 47,656

Loss on extinguishment of debt — — 50,676

Gain on disposal of business

Mark to market (gain) loss on contingent shares — ( 25.1 ) 25.2

Mark to market (gain) loss on financial instruments ( 206.8 ) ( 81.3 ) 205.1

Gain on sale from divestitures

( 278.5 ) — ( 29.2 )

Impairment on assets held for sale — — 18,431

Deferred finance charges 13,170 5,752 2,496

Amortization of debt issuance costs 16.4 13.2 5.8

Other operating activities ( 19.5 ) 6.6 5.9

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Capital expenditures ( 202.9 ) ( 118.5 ) ( 107.7 )

Acquisitions, net of cash acquired ( 3,930,214 ) ( 2,916,471 ) ( 68,424 )

Acquisition of intangible assets — ( 5,982 ) ( 2,625 )

Proceeds from sale of product line, net of restricted cash 4,297 41,398 —

Net cash used in investing activities ( 4,044,460 ) ( 2,988,768 ) ( 140,885 )

Payments for acquisitions and cost method investments, net of cash acquired ( 24.8 ) ( 3,930.3 ) ( 2,922.5 )

Proceeds from divestitures, net of cash and restricted cash 285.0 4.3 41.4

Net cash provided by (used in) investing activities $ 57.3 $ ( 4,044.5 ) $ ( 2,988.8 )

Cash Flows From Financing Activities

Proceeds from revolving credit facility 175,000 60,000 70,000

Proceeds from issuance of debt — 2,000.0 1,960.0

Proceeds from revolving credit facility — 175.0 60.0

Redemption of Notes not exchanged — ( 157.4 ) —

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Contingent purchase price payment — — ( 7.8 )

Proceeds from reverse recapitalization — — 682,087

Proceeds from issuance of preferred shares — 1,392.6 —

1 unchanged sentence

Proceeds from issuance of treasury shares 5.7 139.9 —

Extinguishment of debt — — ( 1,342,651 )

CLARIVATE PLC

Consolidated Statements of Cash Flows

(In thousands)

Year Ended December 31,

2021 2020 2019

Tax receivable agreement payout — — ( 200,000 )

Repurchases of ordinary shares ( 175.0 ) ( 159.4 ) —

4 unchanged sentences

Payments related to tax withholding for stock-based compensation ( 14.9 ) ( 24.9 ) ( 33.1 )

Net cash provided by financing activities 4,032,160 2,926,580 75,215

CLARIVATE PLC

Consolidated Statements of Cash Flows

(In millions)

Year Ended December 31,

2022 2021 2020

Net cash (used in) provided by financing activities $ ( 759.2 ) $ 4,032.2 $ 2,926.6

Effects of exchange rates ( 38.2 ) 3.7 ( 5.0 )

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

Net increase in cash and cash equivalents, and restricted cash 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

Beginning of period:

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Total cash and cash equivalents, and restricted cash, beginning of period $ 587.6 $ 272.4 $ 76.1

Cash included in assets held for sale, end of period — — ( 384 )

Cash and cash equivalents, and restricted cash, end of period 587,613 272,408 76,139

End of period:

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Cash paid for income tax 63.7 33.9 27.6

Assets received as reverse recapitalization capital $ — $ — $ 1,877

Liabilities assumed as reduction of reverse recapitalization capital $ — $ — $ 5,910

Capital expenditures included in accounts payable 11.7 8.7 7.8

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Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Background and Nature of Operations

Clarivate Plc (“Clarivate,” “us,” “we,” “our,” or the “Company”), is a public limited company organized under the laws of Jersey, Channel Islands.

We were initially registered on January 7, 2019, and at our 2020 annual general meeting, our shareholders approved a change of our corporate name from “Clarivate Analytics Plc” to “Clarivate Plc”.

Pursuant to the definitive agreement entered into to effect a merger between Camelot Holdings (Jersey) Limited ("Jersey") and Churchill Capital Corp, a Delaware corporation, ("Churchill") (the “2019 Transaction”), the Company was formed for the purposes of completing the 2019 Transaction and related transitions and carrying on the business of Jersey and its subsidiaries.

The Company is a provider of proprietary and comprehensive content, analytics, professional services and workflow solutions that enable users across government and academic institutions, life science companies and research and development (“R&D”) intensive corporations to discover, protect and commercialize their innovations.

Clarivate has two reportable segments:

Science and Intellectual Property ("IP").

Our segment structure is organized to address customer needs by product line.

Our Science segment consists of our AGPL and Life Sciences Product Lines.

Both provide curated, high-value, structured information that is delivered and embedded into the workflows of our customers, which include research intensive corporations, life science organizations and universities world-wide.

Our IP segment consists of our Patent, Trademark, Domain, and IP Management Product Lines.

These Product Lines help manage customer's end-to-end portfolios of intellectual property from patents to trademarks to corporate website domains.

Clarivate Plc (“Clarivate,” “us,” “we,” “our,” or the “Company”), is a public limited company organized under the laws of Jersey, Channel Islands, pursuant to the definitive agreement entered into on May 13, 2019 to effect a merger between Camelot Holdings (Jersey) Limited ("Jersey") and Churchill Capital Corp, a Delaware corporation ("Churchill") (the “2019 Transaction”).

The Company is a provider of proprietary and comprehensive information, analytics, professional services and workflow solutions that enable users across government and academic institutions, life science and healthcare companies, corporations and law firms to power the entire innovation lifecycle, from cultivating curiosity to protecting the world's critical intellectual property assets.

During the third quarter of 2022, the Company realigned its organization's structure and the composition of its reportable segments, which also resulted in a change to its goodwill reporting units.

Clarivate has three reportable segments:

Academia & Government ("A&G"), Life Sciences & Healthcare ("LS&H"), and Intellectual Property ("IP").

Our segment structure is organized based on the products we offer and the markets they serve.

Segment results for all periods presented have been recast to conform to the current presentation.

See Note 19 - Segment Information, for additional information on the Company's reportable segments.

In January 2019, we entered into an Agreement and Plan of Merger (as amended by Amendment No.

1 to the Agreement and Plan of Merger, dated February 26, 2019, and Amendment No.

2 to the Agreement and Plan of Merger, dated March 29, 2019, collectively, the “Merger Agreement”) by and among Churchill, Jersey, CCC Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Clarivate (“Delaware Merger Sub”), Camelot Merger Sub (Jersey) Limited, a private limited company organized under the laws of Jersey, Channel Islands and wholly owned subsidiary of Clarivate (“Jersey Merger Sub”), and the Company, which, among other things, provided for (i) Jersey Merger Sub to be merged with and into Jersey with Jersey being the surviving company in the merger (the “Jersey Merger”) and (ii) Delaware Merger Sub to be merged with and into Churchill with Churchill being the surviving corporation in the merger (the “Delaware Merger”), and together with the Jersey Merger, the “Mergers”.

On May 13, 2019, the 2019 Transaction was consummated, and Clarivate became the sole managing member of Jersey, operating and controlling all of the business and affairs of Jersey, through Jersey and its subsidiaries.

Following the consummation of the 2019 Transaction on May 13, 2019, the Company’s ordinary shares and warrants began trading on the New York Stock Exchange.

All of the Company’s public warrants have subsequently been redeemed.

See Note 16 - Shareholders’ Equity for further information regarding the redemption of the Company’s public warrants.

The 2019 Transaction was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America ("U.S.

Under this method of accounting, Churchill was treated as the "acquired" company for financial reporting purposes.

This determination was primarily based on post 2019 Transaction relative voting rights, composition of the governing board, size of the two entities pre-merger, and intent of the 2019 Transaction.

Accordingly, for accounting purposes, the 2019 Transaction was treated as the equivalent of the Company issuing stock for the net assets of Churchill.

The net assets of Churchill were stated at historical cost, with no goodwill or other intangible assets resulting from the 2019 Transaction.

Reported amounts from operations included herein prior to the 2019 Transaction are those of Jersey.

In February 2020, the Company consummated a public offering of 27,600,000 ordinary shares at $ 20.25 per share.

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 per share.

Of the 50,400,000 ordinary shares, 14,000,000 were ordinary shares offered by Clarivate and 36,400,000 were 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 underwriters' option to purchase the remaining 4,800,000 ordinary shares from certain selling shareholders expired on July 3, 2020.

The Company received approximately $ 304,030 in net proceeds from the sale of its ordinary shares, 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, and cash on the balance sheet to fund

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

the repayment of CPA Global's parent company outstanding debt of $ 2,055,822 .

The Company did not receive any proceeds from the sale of ordinary shares by the selling shareholders.

Additionally, in connection with the acquisition of CPA Global, on October 1, 2020, the Company issued 210,357,918 shares to Redtop Holdings Limited, a portfolio company of Leonard Green & Partners, L.P.

representing approximately 35 % ownership of Clarivate.

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 were sold by selling shareholders (which included 5.8 million ordinary shares that the underwriters purchased pursuant to their option to purchase additional shares).

The ordinary shares sold by selling shareholders included 10.6 million ordinary shares from Onex, 4.1 million ordinary shares from Baring and 0.7 million ordinary shares from Directors, Executive Officers and other shareholders.

The Company received approximately $ 728.1 in net proceeds from the sale of ordinary shares offered by the Company, after deducting underwriting discounts and estimated offering expenses payable .

The Company did not receive any proceeds from the secondary ordinary shares sold by the selling shareholders.

We used the net proceeds to finance a portion of the purchase price for the ProQuest acquisition, which was completed on December 1, 2021.

We used the net proceeds to fund a portion of the purchase 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 Mandatory Convertible Preferred Shares ("MCPS") which included 1,875,000 of our mandatory convertible preferred shares that the underwriters purchased pursuant to their option to purchase additional shares.

In June 2021, 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 mandatory convertible preferred shares that the underwriters purchased pursuant to their option to purchase additional shares.

The Company received approximately $ 1,392.7 in net proceeds from the mandatory convertible preferred share offering, 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.

In September 2021, certain selling shareholders completed an underwritten public offering of 25,000,000 of our ordinary shares at a share price of $ 25.25 , The ordinary shares sold by selling shareholders included 18,000,000 ordinary shares from Onex and 7,000,000 ordinary shares from Baring.

We used the net proceeds to fund a portion of the purchase for the ProQuest acquisition, which was completed on December 1, 2021.

In September 2021, certain selling shareholders completed an underwritten public offering of 25.0 million of our ordinary shares at a share price of $ 25.25 , The ordinary shares sold by selling shareholders included 18.0 million ordinary shares from Onex and 7.0 million ordinary shares from Baring.

The Company did not receive any proceeds from the sale of ordinary shares by the selling shareholders.

After giving effect to the offering, Onex and Baring owned approximately 6.7 % and 2.6 %, respectively, of the Company's ordinary shares.

After giving effect to these offerings, Onex and Baring owned approximately 6.7 % and 2.6 %, respectively, of the Company's ordinary shares.

Risks and Uncertainties

In March 2020, the World Health Organization characterized COVID-19 as a pandemic.

The rapid spread of COVID-19 and issues relating to the resurgence of COVID - 19 and/or new strains of COVID - 19 along with continuously evolving responses to combat it have had an increasingly negative impact on the global economy.

This has had, and may continue to have, an adverse impact to our operational and financial performance as well as the businesses of our customers and partners, including their spending priorities.

It is difficult to predict the full extent of the potential effects and impact on our operations, business, and financial performance, however, we continue to conduct business with substantial modifications and precautionary measures to our daily operations.

Modifications include less employee travel as well as a virtual shift related to work location, and sales and marketing events.

Given the uncertainty around the severity and duration of the COVID-19 pandemic and the measures taken, or may be taken, in response to the COVID-19 pandemic, the Company cannot reasonably estimate the full impact of the COVID-19 pandemic on our business, financial condition and results of operations at this time, which may be material.

COVID-19 has had, and may continue to have, an adverse impact to our operational and financial performance as well as the businesses of our customers and partners, including their spending priorities.

It is difficult to predict the full extent of the potential effects and impact on our operations, business, and financial performance, however, we continue to conduct business with modifications and precautionary measures to our daily operations.

The Company cannot reasonably estimate the full impact on our business, financial condition and results of operations from any new COVID-19 strains that may emerge or any future pandemic, which may be material.

As the conflict in Ukraine continues to evolve, we are closely monitoring the current and potential impact on our business, our people, and our clients.

Given the levying of sanctions, regional instability, geopolitical shifts, and other potential adverse effects on macroeconomic conditions, security conditions, currency exchange, and financial markets, the short and long-term implications of Russia’s invasion of Ukraine are not possible to predict.

We do not expect any direct impacts to our business to be material, but we are not currently able to predict any indirect impacts on the global economy and how those could negatively affect our business in the future.

However, revenue growth in 2022 was slightly impacted by our

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

decision to cease commercial operations in Russia in March 2022.

We continue to monitor any evolving impacts of this conflict and its effects on the global economy and geopolitical landscape.

Basis of Presentation

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The Employee Benefit Trust ("EBT") associated with the CPA Global Equity Plan was consolidated on October 1, 2020.

The EBT held Clarivate shares that were recorded as treasury shares as they were legally issued but not outstanding.

The EBT also holds cash that is classified as restricted cash on the Consolidated Balance Sheet.

The EBT did not hold any shares as treasury shares as of December 31, 2022.

As of December 31, 2021, the EBT held Clarivate shares that were recorded as treasury shares as they were legally issued but not outstanding.

Refer to Note 14 - Shareholders’ Equity for additional information.

The EBT holds cash that is classified as restricted cash on the Consolidated Balance Sheet as on December 31, 2022 and December 31, 2021.

In the current year, the Company has changed its presentation of dollar amounts from thousands to millions and, as a result, any necessary rounding adjustments have been made to prior year disclosed amounts.

Additionally, certain reclassifications and revisions of prior period data have been made to conform to the current year's presentation.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

During the fourth quarter of 2020, the Company realigned its reporting structure and changed the manner in which performance is assessed.

The two operating segments created include the Science Group and the Intellectual Property Group.

Summary of Significant Accounting Policies

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The Company held $ 8.0 and $ 156.7 of restricted cash as of December 31, 2022 and 2021, respectively.

Restricted cash as of December 31, 2021 primarily included the cash received from the sale of treasury shares from the Employee Benefit Trust established for the CPA Equity Plan in December 2021.

The cash received from the Employee Benefit Trust established for the CPA Equity Plan in December 2021 was subsequently paid in the first quarter of 2022.

Restricted cash as of December 31, 2021 primarily included the cash received from the sale of treasury shares from the Employee Benefit Trust established for the CPA Equity Plan in December 2021, which was subsequently paid in the first quarter of 2022.

Accounts Receivable

Through the adoption of ASU 2016-13 and the related standards, the Company revised its policy regarding the recognition of expected credit losses and for its accounts receivable portfolio.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Accounts receivable are recorded at the amount invoiced to customers and do not bear interest.

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Management performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed appropriate.

Credit losses have been immaterial and

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

reasonable within management’s expectations.

Credit losses have been immaterial and reasonable within management’s expectations.

Our ten largest customers represented only 7 % of revenues for the year ended December 31, 2022.

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If the carrying value is greater than the undiscounted cash flows of the asset, the asset is written down to its estimated fair value.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Business Combinations

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Customer Relationships — Customer relationships primarily consist of customer contracts and customer relationships arising from such contracts.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Databases and Content — Databases and content primarily consists of repositories of the Company’s specific financial and customer information and intellectual content.

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If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

Management identified an impairment loss in connection with the divestiture of certain assets and liabilities of its MarkMonitor Product Line within its IP segment in the year ended December 31, 2019.

As a result of restructuring initiatives, the Company recorded non-cash impairment for leases in the years ended December 31, 2020, and December 31, 2021.

As a result of restructuring initiatives, the Company recorded non-cash impairment for leases during each of the years ended December 31, 2020, 2021, and 2022.

See Note 22 - Restructuring and Impairment for further information.

Goodwill and Indefinite-Lived Intangible Assets

The carrying amount of goodwill is 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.

Goodwill is tested for impairment on a 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.

We use both qualitative and quantitative analysis to determine whether we believe it is more likely than not that goodwill has been impaired.

For our most recent annual goodwill impairment test, we applied the qualitative assessment to three of the reporting units identified and the quantitative assessment to two of the reporting units identified.

For our prior year goodwill impairment test, as of October 1, 2020, all reporting units identified were subject to the quantitative assessment.

For the year ended December 31, 2021, the fair values of our reporting units exceeded each individual reporting unit’s carrying value, and goodwill was not impaired.

There was no impairment of goodwill as a result of the Company’s annual impairment testing conducted for the years ended December 31, 2021, 2020, and 2019.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

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 as of the first day of the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Goodwill impairment 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 (a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying value, which is based on an evaluation of the events and circumstances that occurred during the year.

If we bypass the qualitative assessment, or if the qualitative assessment indicates that quantitative analysis should be performed, we evaluate goodwill for impairment by comparing the estimated fair value of a reporting unit with its carrying amount, including goodwill.

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

Under the income approach, a discounted cash flow ("DCF") model is used to determine fair value based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate.

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, 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.

The Company has indefinite-lived intangible assets related to trade names.

As of October 1, 2021, our most recent annual indefinite-live intangible assets impairment testing date, the fair value of our indefinite-lived trade names exceeded the assets carrying value, and the assets were not impaired.

There was no impairment of indefinite-lived intangible assets as a result of the Company’s annual impairment testing conducted for the years ended December 31, 2021, 2020, and 2019.

As part of our annual indefinite-lived intangible asset impairment testing, the Company has the option to first perform qualitative testing by evaluating whether any events and circumstances occurred that provide evidence that it is more likely than not that the indefinite-lived assets are impaired.

If, based on our evaluation of the events and circumstances that occurred during the year we do not believe that it is more likely than not that the indefinite-lived assets are impaired, no quantitative impairment test is required.

If the Company chooses not to complete a qualitative assessment, or if the initial assessment indicates that it is more likely than not that the carrying value exceeds the estimated fair value, additional quantitative testing is performed.

The quantitative test for impairment is performed using the relief-from-royalty method under the income approach to determine the fair value based on the present value of estimated future cash flows that the indefinite-lived intangible asset can be expected to generate in the future.

Significant judgments inherent in the analysis include estimating the amount and timing of future cash flows and the selection of appropriate discount rates, royalty rates and long-term growth rate assumptions.

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

We determine if an arrangement is a lease at inception.

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Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Debt is recognized initially at par value, net of any applicable discounts or financing costs.

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We used a third-party specialist to fair value the awards using the Monte Carlo simulation approach.

The assumptions included in the model include, but are not limited to, risk-free interest rate, expected volatility of stock prices for the Company’s and its peer group, and dividend yield.

The assumptions included in the model include, but are not limited to, risk-free interest rate, expected volatility of stock prices for the Company and its peer group, and dividend yield.

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

Derivative Financial Instruments

Foreign Exchange Forward Contracts

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Interest Rate Swaps

The Company has interest rate swaps with counterparties to reduce its exposure to variability in cash flows relating to interest payments on a portion of its outstanding first lien senior secured term loan facility in an aggregate principal amount of $ 2,818,800 (“Term Loan Facility”).

The Company applies hedge accounting and has designated these instruments as cash flow hedges of the risk associated with floating interest rates on designated future quarterly interest payments.

Management assumes the hedge is highly effective and therefore changes in the value of the hedging instrument are recorded in

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets.

Management assumes the hedge is highly effective and therefore changes in the value of the hedging instrument are recorded in Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets.

Any ineffectiveness is recorded in earnings.

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See Note 20 - Commitments and Contingencies for further information on contingencies.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Treasury Shares

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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 future taxable income by tax jurisdiction and 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.

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 deferred tax assets to the net realizable value 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.

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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

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

different from our current estimate of the unrecognized tax benefit liabilities.

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.

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Subscription based revenues recognize revenue over time, whereas our re-occurring revenues recognize revenue at a point in time.

Our transactional revenues recognize revenue at a point in time and other revenues relating to professional services recognize revenue over time.

Our transactional and other revenues recognize revenue at a point in time and other revenues relating to professional services recognize revenue over time.

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

The revenue recognition policies for the Company’s revenue streams are discussed below.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Subscription Revenues

Subscription-based revenues are recurring revenues that are earned under annual, evergreen or multi-year 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, and analytics solutions are recognized ratably over the contractual period as revenues are earned.

Revenues from the sale of subscription data, maintenance services, and analytics solutions are recognized ratably over the contractual period.

Subscription revenues are typically generated either on (i) an enterprise basis, meaning that the organization has a license for the particular product or service offering and then anyone within the organization can use it at no additional cost, (ii) a seat basis, meaning each individual that uses the particular product or service offering has to have his or her own license, or (iii) a unit basis, meaning that incremental revenues are generated on an existing subscription each time the product is used (e.g., a trademark or brand is searched or assessed).

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Transactional and Other Revenues

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

Transactional revenues are typically generated on a unit basis, although for certain product and service offerings transactional revenues are generated on a seat basis.

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

Transactional and other revenues are typically generated on a unit basis, although for certain product and service offerings transactional and other revenues are generated on a seat basis.

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 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

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

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

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

Other revenues also includes one-time perpetual archive license ("PAL") revenues.

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In addition to the primary content subscription, these types of performance obligations can often include other performance obligations, such as training subscriptions, access to historical content, software licenses, professional services, maintenance and other optional content.

Revenue for these performance obligations are primarily recognized over the length of the contract (i.e.

subscription revenue).

Revenue for these performance obligations are primarily recognized over the length of the contract (i.e., subscription revenue).

In case of software sold as a subscription, the cloud based hosted services and post-sales support and maintenance are considered as one performance obligation distinct from other services in the contract.

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Subscription based revenues are recognized ratably over the period that the service is being provided, generally one year .

There are instances where Content Subscription revenue could be recognized upon delivery (i.e.

transactional revenue).

There are instances where Content Subscription revenue could be recognized upon delivery (i.e., transactional and other revenues).

Historical content and some optional content can be purchased via a perpetual license, which would be recognized upon delivery.

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Packages of select single reports are recognized pro rata as the individual reports are delivered if all other revenue recognition criteria are met based on estimated selling price.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

SaaS Subscription:

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The Company records revenue on the date when the customer is granted access to the license/service and revenue is recognized at a point in time.

Domain Registration Services:

This performance obligation relates to the MarkMonitor Product Line.

This is a service to register domain names with the applicable registries, with the Company being responsible for monitoring the domain name expiration and paying the registry before expiration.

In addition, the Company has an ongoing responsibility to ensure the domain name is maintained at the registry.

Customers typically sign a one to two years contract, identifying specific domain names to be registered and tracked.

Revenue is recognized over the term of the contract and fees are typically invoiced annually at the beginning of each contract term.

Search Services:

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Revenue is recognized over the term of the contract, with fees paid annually at the beginning of each contract term.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

This performance obligation relates to the CPA Global product line.

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IP Transaction Processing:

This performance obligation related to the IPM Product Line that was disposed of in October of 2018 and reacquired as part of the acquisition of the CPA Global business and Product Line in October of 2020.

This performance obligation relates to the CPA Global product line.

These services consist of gathering all necessary data and information, preparing the renewal applications, and submitting payment to the PTO in the relevant country on behalf of the IP holders and the Company could have potential liability for the successful completion of the renewal application process, for which we carry insurance.

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The PTO fees and any taxes collected from customers are deemed fees collected on behalf of third parties, and therefore revenue from renewals services is recognized net of these fees.

Revenue is recognized upon transfer of control of the promised service to customers (i.e., at the time the renewal paperwork and payment are submitted to the PTO) because at that point the Company has a right to payment and the risks and rewards associated with the Renewal Preparation service are transferred to the customer, coupled with the fact customer acceptance is deemed a formality that does not impact the timing of transfer of control.

Revenue is recognized upon transfer of control of the promised service to customers (i.e., at the time the renewal paperwork and payment are submitted to the PTO) because at that point, the Company has a right to payment and the risks and rewards associated with the Renewal Preparation service are transferred to the customer, coupled with the fact that customer acceptance is deemed a formality that does not impact the timing of transfer of control.

Principal Versus Agent

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

For revenue generated from contracts with customers involving another party, the Company considers if we maintain control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, collection risk, and discretion in establishing price.

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(b) The Company has latitude in establishing pricing for its services.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Therefore, the Company reports the revenues from these transactions on a gross basis and records the related third-party commission fees as cost of revenues.

As it relates to the Content Subscription, PALs and SaaS Subscription performance obligations have an additional party is involved in a transaction and can be categorized as either agreements with Third Party Distributors or Reseller Agreements.

As it relates to the Content Subscription, PALs and SaaS Subscription performance obligations have an additional party involved in a transaction and can be categorized as either agreements with Third Party Distributors or Reseller Agreements.

Third Party Distributor agreements provide the distributor with the right to market and resell ProQuest products to end customers and based on the indicators of control, revenues from these Third Party Distributor transactions are generally recognized gross.

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Determining a standalone selling price that may not be directly observable amongst all the products and performance obligations requires judgment.

Specifically, many Web of Science, DRG, CPA Global, and ProQuest Product Line contracts include multiple product offerings, which may have both subscription and transactional revenues.

Specifically, many Web of Science, DRG, CPA Global, and ProQuest product line contracts include multiple product offerings, which may have both subscription and transactional and other revenues.

Judgment is also required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the subscription service and recognized over time for other products.

The Company allocates value to primary content subscriptions or licenses including PALs and accompanying performance obligations, such as training subscriptions, continuing service fees, access to historical content, maintenance and other optional content.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

optional content.

When multiple performance obligations exist in a single contract, the transaction price is allocated to each performance obligation based on the standalone selling price of each performance obligation.

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Deferred Revenues

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

The timing of revenue recognition may differ from the timing of invoicing to customers.

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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 term of the related lease.

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.

Share-based Compensation

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The fair value of stock options is estimated at the date of grant using the Black-Scholes option pricing model, which requires management to make certain assumptions of future expectations based on historical and current data.

The assumptions include the expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate.

The assumptions

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

include the expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate.

The Company recognizes compensation expense over the vesting period of the award on a graded-scale basis.

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The liabilities are recorded within Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

The corresponding expenses are recorded

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

within Restructuring and impairment in the Consolidated Statements of Operations.

The corresponding expenses are recorded within Restructuring and impairment in the Consolidated Statements of Operations.

See Note 22 - Restructuring and Impairment for further details.

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Other operating income (expense) 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 and our subsidiaries that are denominated in currencies other than each relevant entity’s functional currency.

The gain and loss of certain divested non-core assets and liabilities of the IP segment are included in the year ended December 31, 2020.

See Note 5 - Assets Held for Sale and Divested Operations for further details.

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

Interest Expense, Net

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Diluted shares outstanding are calculated based on the average share price for each fiscal period using the treasury stock method.

Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of benefits that would be recorded in Ordinary shares when the award becomes deductible for tax purposes are assumed to be used to repurchase shares.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

would be recorded in Ordinary shares when the award becomes deductible for tax purposes are assumed to be used to repurchase shares.

Newly Adopted Accounting Standards

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The Company prospectively adopted the standard on January 1, 2020.

The adoption of this standard had an impact of $ 10,097 on the beginning Accumulated deficit balance in the Consolidated Balance Sheets as of January 1, 2020.

In April 2019 and November 2019, the FASB issued ASU 2019-05 and ASU 2019-11, respectively, effective for the same period as ASU 2016-03.

These updates offered options to entities intended to bring transition relief and offered clarification on the previously issued standard, respectively.

The Company's accounting for credit losses did not change as a result of these two updates.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

In August 2018, the FASB issued guidance, ASU 2018-14, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

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The Company's January 1, 2021, adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

In August 2018, the FASB issued guidance, ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license).

The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update.

The Company prospectively adopted the standard on January 1, 2020.

The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

All future capitalized implementation costs incurred related to these hosting arrangements will be recorded as a prepaid asset and as a charge to operating expenses over the expected life of the contract.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, which provides targeted improvements or clarification and correction to the ASU 2016-01 Financial Instruments Overall, ASU 2016-13 Financial Instruments Credit Losses, and ASU 2017-12 Derivatives and Hedging, accounting standards updates that were previously issued.

The guidance is effective upon adoption of the related standards.

The Company prospectively adopted the standard on January 1, 2020.

This standard did not have a material impact on the Company’s Consolidated Financial Statements.

In November 2019, the FASB issued ASU 2019-10, Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which provides improvements or clarification and correction to the ASU 2016-02 Leases, ASU 2016-13 Financial Instruments Credit Losses, and ASU 2017-12 Derivatives and Hedging, accounting standards updates.

The guidance is effective upon adoption of the three ASUs, all of which the Company had already adopted.

This standard did not have a material impact on the Company’s Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law.

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As a result of the adoption, we have accounted for contract assets and liabilities for our 2021 acquisitions in accordance with this updated guidance.

Recently Issued Accounting Standards

In June 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity as a result of complexity associated with GAAP for certain financial instruments with characteristics of liabilities and

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

This guidance is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods.

The Company will adopt ASU 2020-06 effective January 1, 2022, and it is expected that the adoption will not have a material impact to the Company's Consolidated Financial Statements.

The Company adopted ASU 2020-06 effective January 1, 2022, prospectively, and the adoption did not have a material impact on the Company's Consolidated Financial Statements.

In April 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options , which provides guidance regarding the accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange.

This guidance is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

The Company will adopt ASU 2021-04 effective January 1, 2022, and it is expected that the adoption will not have a material impact to the Company's Consolidated Financial Statements.

The Company adopted ASU 2021-04 effective January 1, 2022, and the adoption did not have a material impact on the Company's Consolidated Financial Statements.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842) Lessors – Certain Leases with Variable Lease Payments , in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities as well as disclosing key information about leasing transactions.

This guidance is effective for all entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years for public business entities.

The Company will adopt ASU 2021-05 effective January 1, 2022, and is still evaluating the impact to the Company’s Consolidated Financial Statements.

The Company adopted ASU 2021-05 effective January 1, 2022, and the adoption did not have a material impact on the Company’s Consolidated Financial Statements.

Recently Issued Accounting Standards

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815) – Portfolio Layer Method, amendments in this ASU allow multiple hedged layers to be designated for a single closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments.

For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the impact that the standard will have on our Consolidated Financial Statements, and it is expected that the adoption will not have a material impact.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848.

Amendments in this ASU defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.

This ASU did not have a material impact on the Company as noted above in accordance with ASU 2020-04 beginning with the quarter ended September 30, 2020, the Company adopted this standard and elected the optional expedients for its interest rate swap agreements and debt agreements with reference to LIBOR.

There were no other new accounting standards or updates issued or effective as of December 31, 2022, that have, or are expected to have, a material impact on the Company's Consolidated Financial Statements.

Business Combinations

On May 13, 2019, the Company completed the 2019 Transaction.

Jersey began operations in 2016 as a provider of proprietary and comprehensive content, analytics, professional services and workflow solutions that enables users across government and academic institutions, life science companies and R&D intensive corporations to discover, protect and commercialize their innovations.

Churchill was a special purpose acquisition company whose business was to effect a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination.

The shares and earnings per share available to holders of the Company’s ordinary shares, prior to the 2019 Transaction, have been recasted as shares reflecting the exchange ratio established in the 2019 Transaction (1.0 Jersey share to 132.13667 Clarivate shares).

Pursuant to the Merger Agreement, the aggregate stock consideration issued by the Company in the 2019 Transaction was $ 3,052,500 , consisting of 305,250,000 newly issued ordinary shares of the Company valued at $ 10.00 per share, subject to certain adjustments described below.

Of the $ 3,052,500 , the shareholders of Jersey prior to the closing of the 2019 Transaction (the “Company Owners”) received $ 2,175,000 in the form of 217,500,000 newly issued ordinary shares of the Company.

In addition, of the $ 3,052,500 , Churchill public shareholders received $ 690,000 in the form of 68,999,999 newly issued ordinary shares of the Company.

In addition, Churchill Sponsor LLC (the “sponsor”) received $ 187,500 in the form of 17,250,000 ordinary shares of the Company issued to the sponsor, and 1,500,000 additional ordinary shares of the Company were issued to certain investors.

See Note 16 - Shareholders’ Equity for further information.

Upon consummation of the 2019 Transaction, each outstanding share of ordinary stock of Churchill was converted into one ordinary share of the Company.

At the closing of the 2019 Transaction, the Company Owners held approximately 74 % of the issued and outstanding ordinary shares of the Company and stockholders of Churchill held approximately 26 % of the issued and outstanding shares of the Company excluding the impact of (i) 52,800,000 warrants, (ii) approximately 24,806,793 compensatory options issued to the Company's management (based on number of options to purchase Jersey ordinary shares outstanding immediately prior to the 2019 Transaction, after giving effect to the exchange ratio described above) and (iii) 10,600,000 ordinary shares of Clarivate owned of record by the sponsor and available for distribution to certain individuals following the applicable lock-up and vesting restrictions.

Certain restrictions were removed following the Secondary Offering on August 14, 2019.

See Note 17 - Employment and Compensation Arrangements for further information.

After giving effect to the satisfaction of the vesting restrictions the Company Owners held approximately 60 % of the issued and outstanding shares of the Company at the close of the 2019 Transaction.

See Note 16 - Shareholders’ Equity for further information on equity instruments.

Acquisition of ProQuest

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(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 Cambridge Information Group (“CIG”), Atairos and certain other equityholders (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 and (ii) approximately $ 3,951,947 in cash, including approximately $ 917,491 to fund the repayment of ProQuest debt.

The purchase price is subject to the Seller's final approval of the Final Closing Statement.

Issuance of 46,910,923 shares (1)

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.

Issuance of 46.9 million shares (1)

Cash consideration (2)

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(1) Based on the Company’s closing share price of $ 23.34 on November 30, 2021.

(2) Based on the Closing Statement, total cash consideration of $ 3,951,947 includes a base cash consideration of $ 3,988,000 , less working capital adjustments of $ 31,661 , less closing indebtedness adjustments of $ 36,618 , plus closing cash consideration of $ 32,225 as defined in the Transaction Agreement.

(3) Cash acquired includes $ 52,514 of total cash acquired, less $ 1,957 of restricted cash acquired as defined in the Transaction Agreement.

The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the assembled workforce and expected synergies.

The majority of goodwill is deductible for tax purposes.

During the year-ended December 31, 2021, total transaction costs incurred in connection with the acquisition of ProQuest were $ 62,950 .

The ProQuest acquisition is reported as part of the Science Segment, see Note 22 - Segment Information for further details.

The amount of Revenues, net and Net loss resulting from the acquisition that are attributable to the Company's stockholders and included in the Consolidated Statements of Operations and Comprehensive Loss were as follows:

Year Ended December 31, 2021

Revenues, net $ 80,418

Net income attributable to the Company's shareholders $ 3,000

The purchase price allocation for the ProQuest acquisition as of the close date of December 1, 2021 is preliminary and may change upon completion of the determination of the fair value of assets acquired and liabilities assumed.

For example, the attrition assumptions used in valuing the customer relationship intangible assets acquired are provisional.

A 0.5 % change in the attrition assumption used would represent a material change in the purchase price allocation.

The following table summarizes the preliminary purchase price allocation for this acquisition:

(2) Total cash consideration of $ 3,959.9 includes a base cash consideration of $ 3,988.0 , less working capital adjustments of $ 31.7 , less closing indebtedness adjustments of $ 36.6 , plus closing cash consideration of $ 40.2 .

(3) Cash acquired includes $ 2.0 of restricted cash.

The excess of the purchase price over the net tangible and intangible assets was recorded to Goodwill and primarily reflects the assembled workforce and expected synergies, with the majority being deductible for tax purposes.

Total transaction costs incurred in connection with the acquisition were $ 16.2 and $ 63.0 for the year ended December 31, 2022 and 2021, respectively.

ProQuest is reported primarily as part of our A&G segment.

Refer to Note 8 - Other Intangible Assets, net and Goodwill and Note 19 - Segment Information for additional information.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

The purchase price allocation for the ProQuest acquisition as of the close date of December 1, 2021, was preliminary and did change upon completion of the determination of the fair value of assets acquired and liabilities assumed.

The following table summarizes the purchase price allocation for this acquisition:

Original Purchase Price Allocation Measurement Period Adjustments Final

Purchase Price Allocation

Accounts receivable $ 113.5 $ 1.2 $ 114.7

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Other intangible assets (1)

3,534.7 ( 1.0 ) 3,533.7

Other non-current assets 18.0 — 18.0

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Goodwill $ 1,897.2 $ 2.8 $ 1,900.0

(1) The Company acquired cash of $ 52,514 , including $ 1,957 of restricted cash to fund bank guarantees (contract performance guarantees, rental guarantees, and bid bonds) assumed in the ProQuest acquisition.

(1) Of the $ 3,534.7 , $ 3,528.0 relates to the valued intangible assets as per the purchase price allocation and $ 6.7 relates to acquired assets under construction.

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The following table summarizes the estimated fair value of ProQuest's identifiable intangible assets acquired and their remaining amortization period (in years):

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Fair Value as of December 1, 2021 Remaining

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Technology & databases (1)

709,300 5 - 17

Trade names 45.7 2 - 10

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(1) Technology and databases intangible assets include both acquired technology intangible assets and acquired databases intangible assets.

Unaudited pro forma information for the Company for the periods presented as if the acquisition had occurred January 1, 2020 is as follows:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Unaudited pro forma information for the Company for the relevant periods presented as if the acquisition had occurred January 1, 2020, is as follows:

Year Ended December 31,

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The unaudited pro forma results include certain pro forma adjustments to net loss that were directly attributable to the acquisition, assuming the acquisition had occurred on January 1, 2020, including the following:

(i) additional amortization expense that would have been recognized relating to the acquired intangible assets, (ii) adjustments to interest expense to reflect the removal of ProQuest debt and the additional Company borrowings in conjunction with the acquisition, (iii) acquisition-related transaction costs which reduced expenses by $ 62,950 for the year ended December 31, 2021, and (iv) other one-time non-recurring costs related to undrawn bridge commitment fees which reduced expenses by $ 55,000 for the year ended December 31, 2021.

(i) additional amortization expense that would have been recognized relating to the acquired intangible assets, (ii) adjustments to interest expense to reflect the removal of ProQuest debt and the additional Company borrowings in conjunction with the acquisition, and (iii) acquisition-related transaction costs which reduced expenses by $ 63.0 for the year ended December 31, 2021, and (iv) other one-time non-recurring costs related to undrawn bridge commitment fees which reduced expenses by $ 55.0 for the year ended December 31, 2021.

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 and including an equity holdback 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 as of October 1, 2020.

There were 6,325,860 shares that were issued to Leonard Green & Partners, L.P.

that were returned to Clarivate to fund an Employee Benefit Trust established for the CPA Global Phantom 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 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 as of October 1, 2020.

There were 6.3 million shares that were issued to Leonard Green & Partners, L.P.

that were returned to Clarivate to fund an Employee Benefit Trust established for the CPA Global Equity Plan.

Accordingly, these shares were excluded from purchase price consideration.

During January 2021, the Company issued the remaining 1,500,000 ordinary shares to Redtop Holdings Limited pursuant to a hold-back clause within the purchase agreement.

Issuance of 210,357,918 shares

During January 2021, the Company issued the remaining 1.5 million ordinary shares to Redtop Holdings Limited pursuant to a hold-back clause within the purchase agreement.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Issuance of 210.4 million shares

Cash paid for repayment of CPA Global's parent company debt and related interest rate swap termination charge 2,078.1

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Total purchase price, net of cash acquired $ 8,540.9

The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the assembled workforce and expected synergies.

The majority of goodwill is deductible for tax purposes.

During the year ended December 31, 2021, total transaction costs incurred in connection with the acquisition of CPA Global were $ 23 .

Total transaction costs during the year ended December 31, 2020 were $ 37,164 .

Total transaction costs incurred in connection with the acquisition were $ 0.0 and $ 37.2 during the year ended December 31, 2021 and 2020, respectively.

CPA Global is reported as part of our IP segment.

Refer to Note 8 - Other Intangible Assets, net and Goodwill and Note 19 - Segment Information for additional information.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Year ended December 31,

Revenues, net (1)

$ 631,365 $ 157,504

Net loss attributable to the Company's stockholders $ ( 54,032 ) $ ( 39,985 )

(1) Includes $ 3,863 and $ 15,297 of a deferred revenue adjustment recognized during the year ended December 31, 2021 and 2020, respectively.

(In millions, except option prices, ratios or as noted)

The purchase price allocation for the CPA Global acquisition as of the close date of October 1, 2020 is final.

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Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Accounts receivable (1)

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(2) The Company recorded measurement period adjustments of $ 49.2 increasing accrued expenses and other current liabilities, of which, $ 61.0 relates to adjustments to CPA Global's accrual for claims existing prior to the date of acquisition, offset by a $ 11.8 reduction to CPA Global's other accruals.

See Note 23 - Commitments and Contingencies for further information.

(3) The $ 13.4 deferred income tax measurement period adjustment is due to the tax impact of CPA Global's other measurement period adjustments detailed in the chart above.

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Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

future consolidated results of operations of the Company.

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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 , comprised 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 on March 5, 2021.

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

Refer to Note 19 - Segment Information for additional information.

The aggregate consideration paid in connection with the closing of the DRG acquisition was $ 965.0 , comprised of $ 900.0 of base cash plus $ 6.1 of adjusted closing cash paid on the closing date and 2.9 million of the Company's ordinary shares issued to PEL on March 5, 2021.

The contingent stock consideration was valued at $ 58.9 on the closing date and was revalued at each period end until the issuance date.

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The corresponding liability was $ 86.0 as of December 31, 2020, and recorded to Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

As the liability settled on March 5, 2021 with the Company issuing 2,895,638 ordinary shares valued at $ 61,619 , there was no liability captured within the December 31, 2021 Consolidated Balance Sheet.

See Note 23 - Commitments and Contingencies for more information.

As the liability settled on March 5, 2021, with the Company issuing 2.9 million ordinary shares valued at $ 61.6 , there was no liability captured within the December 31, 2021, Consolidated Balance Sheet.

The DRG acquisition was accounted for using the acquisition method of accounting.

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Total transaction costs during the year ended December 31, 2020, were $ 47.1 .

Year ended December 31,

Revenues, net (1)

$ 105,265 $ 186,428

Net income attributable to the Company's stockholders $ 28,431 $ 4,999

(1) Includes $ 0 and $ 7,157 of a deferred revenue adjustment recognized during the year ended December 31, 2021 and 2020, respectively.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

The following table summarizes the final purchase price allocation for this acquisition:

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Total identifiable intangible assets $ 487.4

During the year ended December 31, 2020, there were additional purchase accounting adjustments of $ 314 related to fixed assets, deferred revenue and legal accrual with a corresponding increase to goodwill and $ 1,804 related to the aforementioned items and a reduction in the valuation of assumed lease liabilities and a corresponding reduction in goodwill, respectively.

Unaudited pro forma information for the Company for the periods presented as if the acquisition had occurred January 1, 2019, is as follows:

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Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Year ended December 31,

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(i) additional amortization expense that would have been recognized relating to the acquired intangible assets, (ii) adjustments to interest expense to reflect the removal of DRG debt and the additional Company borrowings in conjunction with the acquisition, (iii) acquisition-related transaction costs and other one-time non-recurring costs which reduced expenses by $ 26.3 for the year ended December 31, 2020.

Assets Held for Sale and Divested Operations

On November 6, 2020, the Company completed the sale of certain assets and liabilities of the Techstreet business to The International Society of Interdisciplinary Engineers LLC for a total purchase price of $ 42,832 , of which $ 4,300 was held in escrow and paid to the Company in November 2021.

As a result of the sale, the Company recorded a net gain on sale of $ 28,140 , inclusive of incurred transaction costs of $ 115 in connection with the divestiture during the fourth quarter of 2020.

The gain on sale is included in Other operating (expense) income, net within the Consolidated Statements of Operations during the year ended December 31, 2020.

As a result of the sale, the Company wrote off balances associated with Techstreet including intangible assets of $ 10,179 and Goodwill in the amount of $ 9,129 .

The Company used the proceeds for general business purposes.

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.

The divestiture closed on January 1, 2020 for a total purchase price of $ 3,751 .

An impairment charge of $ 18,431 was recognized in the Consolidated Statements of Operations during the year ended December 31, 2019, to write down the Assets and Liabilities of the disposal group to fair value.

Of the total impairment charge, $ 17,967 related to the write down of intangible assets and $ 468 to the write down of goodwill.

There was an immaterial loss on the divestiture recorded to Other operating income (expense), net during the year ended December 31, 2020.

The Company used the proceeds for general business purposes.

The divestitures of Techstreet and certain assets and liabilities of MarkMonitor did not represent a strategic shift and are not expected to have a major effect on the Company’s operations or financial results, as defined by ASC 205-20, Discontinued Operations ;

as a result, the divestitures do not meet the criteria to be classified as discontinued operations.

Accounts Receivable

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The Company estimates credit losses for trade receivables by aggregating similar customer types together, because they tend to share similar credit risk characteristics, taking into consideration the number of days the receivable is past due.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

rates for the allowance for doubtful accounts are based upon the historical loss method by evaluating factors such as the length of time receivables that are past due and historical collection experience.

Provision rates for the allowance for doubtful accounts are based upon the historical loss method by evaluating factors such as the length of time receivables that are past due and historical collection experience.

Additionally, provision rates are based upon current and future economic and competitive environment factors that could impact the collectability of the receivable.

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Additional provisions (1)

10.9 9.2 19.5

Write-offs ( 7.8 ) ( 8.0 ) ( 22.2 )

Opening balance sheet adjustment related to ASU 2016 -13 adoption — 10,097 —

Opening balance sheet adjustment (ASU 2016 -13 adoption) — — 10.1

Exchange differences ( 0.9 ) ( 0.2 ) —

Balance at the end of year $ 27.1 $ 24.9 $ 23.9

(1) Prior period amounts have been revised pertaining to the accretion of fair value adjustments related to purchase accounting from recent acquisitions.

The revisions did not impact Accounts receivable, net in our Consolidated Balance Sheets.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

The potential for credit losses is mitigated because customer creditworthiness is evaluated before credit is extended.

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We continue to monitor any impacts from the COVID-19 pandemic on our customers and various counterparties.

During the year ended December 31, 2021 and 2020, the Company’s allowance for doubtful accounts and credit losses considered additional risk related to the pandemic.

During the years ended December 31, 2022, 2021 and 2020, the Company’s allowance for doubtful accounts and credit losses considered additional risk related to the pandemic.

However, this risk to-date was not considered material.

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Financing lease assets are included within the Property and Equipment financial statement line item and the related lease liability is treated as an item of indebtedness (see Note 12 - Debt) as a financing lease obligation within the Consolidated Balance Sheet.

As of December 31, 2021, we did not record an impairment related to these assets beyond the impairments recorded due to restructuring activity further described within Note 25 - Restructuring and Impairment.

As of December 31, 2022, we did not record an impairment related to these assets beyond the non-cash adjustments recorded due to restructuring activity further described within Note 22 - Restructuring and Impairment.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

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The initial valuation of financing lease assets and liabilities is identical to the operating leases, as described above, however they are presented separately from Operating lease ROU assets and Operating lease liabilities in the Consolidated Balance Sheet.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

We have lease agreements with lease and non-lease components, which are accounted as a single lease component.

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Supplemental balance sheet information related to leases is summarized as follows:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Assets Classification

10 unchanged sentences

(2) Finance lease assets are recorded net of accumulated amortization of $ 1.8 and $ 1.0 as of December 31, 2022 and 2021, respectively.

The following illustrates the lease costs for the years ended December 31, 2021 and 2020:

The following illustrates the lease costs for the year ended December 31, 2022 and 2021:

Year Ended December 31,

8 unchanged sentences

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Year Ended December 31,

1 unchanged sentence

Cash Paid for amounts included in measurement of lease liabilities

Operating cash flows from operating leases $ 63,777 $ 31,841

Operating cash flows for operating leases (1)

$ 34.7 $ 30.8

Operating cash flows for finance leases 1.2 0.1

9 unchanged sentences

Finance leases 6.9 % 3.8 %

(1) During the preparation of the financial statements for the year ended December 31, 2022, the Company revised the disclosure within this table associated with cash paid for operating leases for the year ended December 31, 2021.

Although the Company has determined that this revision did not have a material impact on its previously issued consolidated financial statements, the Company is revising the disclosure to reflect a decrease of $ 33.0 in cash paid for operating leases.

The revision had no impact on cash flows from operating, investing or financing activities in the accompanying consolidated Statements of Cash Flows.

The future aggregate minimum lease payments as of December 31, 2022, under all non-cancelable leases for the years noted are as follows:

5 unchanged sentences

2026 12.8 3.4

2026 11,969 —

2028 & Thereafter 17.1 33.3

5 unchanged sentences

There were no material future minimum sublease payments to be received under non-cancelable subleases at December 31, 2022.

The Company recognized $ 3,115 and $ 2,023 of sublease income for the years ended December 31, 2021 and 2020, respectively, and there was no material sublease income for the year ended December 31, 2019.

The Company recognized $ 3.3 , $ 3.1 and $ 2.0 of sublease income for the years ended December 31, 2022, 2021 and 2020, respectively.

Total rental expense under operating leases amounted to $ 27.9 , $ 28.8 and $ 24.4 the years ended December 31, 2022, 2021 and 2020, respectively.

3 unchanged sentences

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Computer hardware $ 45.1 $ 45.5

6 unchanged sentences

Total property and equipment, net $ 54.5 $ 83.8

(1) See Note 7 - Leases for additional information.

Depreciation amounted to $ 13,996 , $ 12,709 and $ 9,181 for the years ended December 31, 2021, 2020 and 2019 , respectively, and there were $ 5,491 of impairment charges related to leasehold improvements during the year ended December 31, 2021.

Depreciation amounted to $ 35.2 , $ 14.0 and $ 12.7 for the years ended December 31, 2022, 2021 and 2020, respectively .

There were no impairments related to leasehold improvements during the year ended December 31, 2022 , compared to $ 5.5 for the year ended December 31, 2021.

As part of the ProQuest Acquisition Integration Program, the Company abandoned a portion of the Capital office lease facility during the year ended December 31, 2022 .

As a result, the Company recorded a non-cash adjustment to Restructuring and impairment within the Consolidated Statement of Operations of $ 13.8 for the year ended December 31, 2022, and the carrying value of the capital office leases - finance lease asset was reduced by the same amount.

Other Intangible Assets, net and Goodwill

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Additionally, the Company reviewed goodwill for indicators of impairment at December 31, 2022 and 2021.

As part of this analysis, the Company determined that its trade name, with a carrying value of $ 161,317 and $ 161,245 as of December 31, 2021 and 2020, respectively, was not impaired and will continue to be reported as indefinite-lived intangible assets.

As a result of the sale, the Company recorded a net gain on sale of $ 28,140 , inclusive of incurred transaction costs of $ 115 in connection with the divestiture during the fourth quarter of 2020.

As a result of the sale, the Company wrote off balances associated with Techstreet including intangible assets of $ 10,179 .

See Note 5 - Assets Held for Sale and Divested Operations for further details.

On January 1, 2020, all assets, liabilities, and equity interest of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line were sold to OpSec Security for a purchase price of $ 3,751 , which was determined to be the

As part of this analysis, the Company determined that its indefinite-lived trade name assets, with a carrying value of $ 156.9 and $ 161.3 as of December 31, 2022 and 2021, respectively, was not impaired and will continue to be reported as indefinite-lived intangible assets.

The weighted-average amortization period for each class of finite-lived intangible assets and for total finite-lived intangible assets, which range between 3 and 23 years, is as follows:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

approximation of the fair value.

In addition, the Company compared the book value of the assets and liabilities to the purchase price and recorded a total impairment charge during the year ended December 31, 2019 of $ 18,431 , which included the write down of $ 17,967 intangible assets classified as Assets held for sale at that time.

See Note 5 - Assets Held for Sale and Divested Operations for further details.

In June 2020, the Company acquired the assets of CustomersFirst Now for a purchase price of $ 6,446 , which was accounted for as an asset acquisition.

As a result, the Company's identifiable intangible assets increased by $ 6,446 , which consisted of $ 5,446 of databases and content and $ 1,000 of computer software.

At the time of acquisition, the databases and process methodology and the computer software had a remaining weighted average amortization period of 5.0 years and 3.0 years, respectively, resulting in a total remaining weighted average amortization period of 4.7 years.

The weighted-average amortization period for each class of finite-lived intangible assets and for total finite-lived intangible assets, which range between 4 and 23 years, is as follows:

(In millions, except option prices, ratios or as noted)

Remaining Weighted-Average Amortization Period (in years)

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Estimated amortization for each of the five succeeding years as of December 31, 2022, is as follows:

2022 $ 656,866

Thereafter 6,275.8

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Total intangible assets $ 9,437.7

The change in the carrying amount of goodwill is shown below:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Science Segment Intellectual Property Segment Consolidated Total

The change in the carrying amount of goodwill by segment is shown below:

Segment Consolidated Total

Balance as of December 31, 2020 (1)

$ 1,077.5 $ 1,045.2 $ 3,920.3 $ 6,043.0

Acquisition (1)

Divestiture — ( 9,129 ) ( 9,129 )

Impact of foreign currency fluctuations and other 607 221,547 222,154

1,786.0 132.8 27.0 1,945.8

Impact of foreign currency fluctuations ( 0.9 ) ( 0.7 ) ( 82.3 ) ( 83.9 )

Balance as of December 31, 2021 (1)

Acquisition 1,918,764 27,022 1,945,786

Impact of foreign currency fluctuations and other ( 1,613 ) ( 82,274 ) ( 83,887 )

$ 2,862.6 $ 1,177.3 $ 3,865.0 $ 7,904.9

Acquisition measurement period adjustments 2.9 2.1 — 5.0

Divestiture (2)

— — ( 42.8 ) ( 42.8 )

Goodwill impairment (3)

( 1,745.8 ) — ( 2,662.1 ) ( 4,407.9 )

Impact of foreign currency fluctuations (4)

( 9.9 ) ( 3.0 ) ( 569.8 ) ( 582.7 )

Balance as of December 31, 2022 $ 1,109.8 $ 1,176.4 $ 590.3 $ 2,876.5

The Company performed the goodwill impairment test as of October 1, 2021 and 2020.

As of December 31, 2021, 2020 and 2019, the accumulated goodwill impairment was $ 0 .

Goodwill represents the purchase price in excess of the fair value of the net assets acquired in a business combination.

If the carrying value of a reporting unit exceeds the implied fair value of that reporting unit, an impairment charge to goodwill is recognized for the excess.

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.

See Note 3 - Summary of Significant Accounting Policies for further details.

The Company estimates the fair value of its reporting units using the income approach.

Under the income approach, the fair value of a reporting unit is calculated based on the present value of estimated cash flows.

No indicators of impairment existed as a result of the Company’s assessments, except for the sale of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line.

On December 22, 2021, the Company acquired Patient Connect, which included $ 8,502 of goodwill.

This goodwill balance is allocated to the Science segment.

On December 1, 2021, the Company acquired ProQuest, which included $ 1,897,184 of goodwill.

This goodwill balance is allocated to the Science segment.

See Note 4 - Business Combinations for further details.

On August 3, 2021, the Company acquired Bioinfogate, which included $ 13,078 of goodwill.

This goodwill balance is allocated to the Science segment.

In addition, the Company compared the book value of the assets and liabilities to the purchase price and recorded a total impairment charge during the year ended December 31, 2019 of $ 18,431 , which included the write down of the $ 468 goodwill classified as Assets held for sale at that time.

See Note 5 - Assets Held for Sale and Divested Operations for further details.

On November 23, 2020, the Company acquired Hanlim IPS.

(Hanlim), which included $ 2,861 of goodwill.

This goodwill balance is allocated to the Intellectual Property segment.

As a result of the sale, the Company recorded a net gain on sale of $ 28,140 , inclusive of incurred transaction costs of $ 115 in connection with the divestiture during the fourth quarter of 2020.

As a result of the sale, the Company wrote off goodwill in the amount of $ 9,129 .

See Note 5 - Assets Held for Sale and Divested Operations for further details.

(1) The prior year amounts have been revised for a reclassification of allocated goodwill between reporting units.

Refer to Note 19 - Segment Information for additional information.

(2) Relates to the MarkMonitor Domain Management business divestiture.

Refer to Note 18 - Other Operating (Income) Expense, Net for additional information.

(3) The total goodwill impairment charge reflected in the Consolidated Statements of Operations was $ 4,449 for the year ended December 31, 2022.

The difference represents the CTA impact for amounts recorded in subsidiaries with functional currencies other than USD.

(4) The impact of foreign currency fluctuations was primarily driven by changes in the GBP/USD translation rate as of December 31, 2022, compared to December 31, 2021.

On December 22, 2021, the Company acquired Patient Connect, which included $ 8.5 of goodwill allocated to the LS&H segment.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

On October 26, 2020, the Company acquired Beijing IncoPat Technology Co.

Ltd., which included $ 40,610 of goodwill, inclusive of $ 136 in purchase accounting adjustments recorded in 2021.

This goodwill balance is allocated to the Intellectual Property segment.

On October 1, 2020, the Company acquired CPA Global, which included $ 3,986,246 of goodwill, inclusive of $ 26,886 in purchase accounting adjustments recorded in 2021.

This goodwill balance is allocated to the Intellectual Property segment.

See Note 4 - Business Combinations for further details.

On February 28, 2020, the Company acquired DRG, which included $ 499,199 of goodwill.

This goodwill balance is allocated to the Science segment.

(In millions, except option prices, ratios or as noted)

On December 1, 2021, the Company acquired ProQuest, which included $ 1,897.2 of goodwill allocated to the A&G segment with the exception of $ 132.8 allocated to the LS&H segment.

See Note 4 - Business Combinations for further details.

On August 3, 2021, the Company acquired Bioinfogate, which included $ 13.1 of goodwill allocated to the LS&H segment.

Results of Impairment Tests

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 post-realignment.

Refer to Note 3 - Summary of Significant Accounting Policies and Note 19 - Segment Information for additional information.

Based on the quantitative analysis performed in connection with the Company's preparation of these 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.

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.

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.

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

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.

Divested Operations

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

On October 31, 2022, the Company completed the sale of the MarkMonitor Domain Management business (IP segment) to Newfold Digital, a leading web presence solutions provider.

The aggregate closing consideration included proceeds, net of cash transferred of $ 285.0 , deferred closing consideration of $ 10.6 , and other of $ 0.5 .

As a result of the sale, the Company recorded a net gain of $ 278.5 during the year ended December 31, 2022 and wrote off balances associated with the business including intangible assets of $ 10.6 and goodwill of $ 42.8 .

On November 6, 2020, the Company completed the sale of certain assets and liabilities of the Techstreet business (IP segment) to The International Society of Interdisciplinary Engineers LLC, for a total purchase price of $ 42.8 , of which $ 4.3 was held in escrow and paid to the Company in November 2021.

The Company used the proceeds for general business purposes.

As a result of the sale, the Company recorded a net gain on sale of $ 28.1 , inclusive of transaction costs of $ 0.1 incurred in connection with the divestiture.

The gain on sale is included in Other operating (expense) income , net within the Consolidated Statements of Operations during the year ended December 31, 2020.

As a result of the sale, the Company wrote off balances associated with Techstreet including intangible assets of $ 10.2 and goodwill of $ 9.1 .

The divestitures did not represent a strategic shift and are not expected to have a major effect on the Company’s operations or financial results, as defined by ASC 205-20, Discontinued Operations.

As a result, the divestitures do not meet the criteria to be classified as discontinued operations.

Derivative Instruments

Effective March 31, 2017, the Company entered into interest rate swap arrangements with counterparties to reduce its exposure to variability in cash flows relating to interest payments on $ 300,000 of its outstanding Term Loan arrangements.

Additionally, effective February 28, 2018, the Company entered into another interest rate swap relating to interest payments on $ 50,000 of its outstanding Term Loan arrangements.

These hedging instruments matured on March 31, 2021.

The Company had interest rate swap arrangements with counterparties to reduce its exposure to variability in cash flows relating to interest payments on its outstanding Term Loan arrangements.

In November 2022, the Company amended an interest rate swap arrangement entered into during March 2021 to increase the 0 % LIBOR floor to a 1 % LIBOR floor.

The interest swap arrangement relates to $ 150.0 of its Term Loan arrangement effective October 31, 2022, with a maturity date of March 31, 2024.

Additionally, in October 2022, the Company amended an interest rate swap arrangement entered into during March 2021 to split the interest rate swap into two arrangements relating to interest payments on a total of $ 200.0 of its Term Loan arrangements, effective March 31, 2021, and October 31, 2022, respectively.

Both of these derivatives have a maturity date of March 28, 2024.

The Company applies hedge accounting by designating the interest rate swaps as a hedge on applicable future quarterly interest payments.

In April 2019, the Company entered into interest rate swap arrangements with counterparties to reduce its exposure to variability in cash flows relating to interest payments on $ 50,000 of its term loans, effective April 30, 2021.

Additionally, in May 2019, the Company entered into additional interest rate swap arrangements with counterparties to reduce its exposure to variability in cash flows relating to interest payments on $ 100,000 of its term loan, effective March 2021.

Both of these derivatives have notional amounts that amortize downward, and both have a maturity of September 2023.

The Company will apply hedge accounting by designating the interest rate swaps as a hedge in applicable future quarterly interest payments.

Changes in the fair value are recorded in Accumulated other comprehensive income(loss) ("AOCI") and the amounts reclassified out of AOCI are recorded to Interest expense, net.

The fair value of the interest rate swaps is recorded in Other current assets or Accrued expenses and other current liabilities and Other non-current assets or liabilities, according to the duration of related cash flows.

The fair value of the interest rate swaps was an asset of $ 1,957 as of December 31, 2021 and a liability of $ 5,159 as of December 31, 2020.

In March 2020, the Company amended all of its interest rate derivatives to reduce the 1 % LIBOR floor to a 0 % LIBOR floor.

For the current derivatives, all other terms and conditions remain unchanged.

The Company collected $ 1,737 in the year ended December 31, 2020, for the amendments of these derivatives.

For the two forward starting swaps, an adjustment was made to reduce the weighted average fixed rate from 2.183 % at December 31, 2019 to 1.695 % at the amendment date.

The Company had a period of ineffectiveness related to the cash flow hedges in the three months ended March 31, 2020.

The ineffectiveness was due to a drop in LIBOR rates below the LIBOR floor defined per the credit facilities, which were amended on March 31, 2020, resulting in a highly effective hedge.

As a result of the ineffectiveness, the Company recognized a loss of $ 0 and $ 978 for the year ended December 31, 2021 and 2020, respectively, which was recorded to Interest expense, net on the Consolidated Statements of Operations.

As of December 31, 2021, there was no hedge ineffectiveness associated with the Company’s interest rate swaps.

In March 2021, the Company entered into interest rate swap arrangements with counterparties to reduce its exposure to variability in cash flows relating to interest payments on $ 350,000 of its term loans and replaced the interest rate swaps that matured during March 2021.

These interest rate swap arrangements are effective March 31, 2021 and have a maturity date of March 31, 2024.

In August 2022, the Company entered into two interest rate swap arrangements relating to interest payments on a total of $ 779.8 of its Term Loan arrangements, effective August 5, 2022, and August 4, 2022, respectively.

Both of these derivatives have notional amounts that amortize downward, and a maturity date of October 31, 2026.

The Company applies hedge accounting by designating the interest rate swaps as a hedge on applicable future quarterly interest payments.

In 2019, the Company also entered into two interest rate swap arrangements relating to interest payments on a total of $ 100.0 of its Term Loan arrangements, effective March 31, 2021, and April 30, 2021, respectively.

Both of these derivatives have notional amounts that amortize downward, and a maturity date of September 2023.

The Company applies hedge accounting by designating the interest rate swaps as a hedge on applicable future quarterly interest payments.

For additional information on our outstanding Term Loan and related hedging, see Note 12 - Debt and Item 7A.

Qualitative and Quantitative Disclosures about Market Risk.

Changes in fair value are recorded in accumulated other comprehensive income (loss) ("AOCI") and the amounts reclassified out of AOCI are recorded to Interest expense and amortization of debt discount, net.

The fair value of the interest rate swaps is recorded in other current assets or accrued expenses and other current liabilities and other non-current assets or liabilities in the Consolidated Balance Sheets, according to the duration of related cash flows.

The fair value of the interest rate swaps was an asset of $ 49.5 and $ 2.0 as of December 31, 2022 and December 31, 2021, respectively.

The following table summarizes the changes in AOCI (net of tax) related to cash flow hedges for the year ended December 31, 2022, 2021 and 2020 :

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Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

AOCI Balance at December 31, 2019 $ ( 2.8 )

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AOCI Balance at December 31, 2020 $ ( 3.8 )

Derivative losses recognized in Other comprehensive loss ( 4,432 )

Derivative gains recognized in Other comprehensive loss 3.4

Amount reclassified out of Other comprehensive loss to Net loss 3.0

4 unchanged sentences

Foreign Currency Forward Contracts

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.

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

These contracts generally do not exceed 180 days in duration.

The Company recognized (loss) gains from the mark to market adjustment of $( 6,904 ), $ 20,805 , and $ 0 for the year ended December 31, 2021, 2020, and 2019, respectively, in Other operating income, net on the Consolidated Statements of Operations.

The nominal amount of outstanding foreign currency contracts was $ 216,748 and $ 354,751 as of December 31, 2021, and December 31, 2020, respectively.

The Company accounts for these forward contracts at fair value and recognizes the associated realized and unrealized gains and losses in Other operating (expense) income, net in the Consolidated Statements of Operations, as the contracts are not designated as accounting hedges under the applicable sections of ASC Topic 815.

The Company recognized loss (gain) 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 of outstanding foreign currency contracts was $ 165.1 and $ 216.7 as of December 31, 2022 and December 31, 2021, respectively.

The Company accounts for these forward contracts at fair value and recognizes the associated realized and unrealized gains and losses in Other operating (income) expense, net in the Consolidated Statements of Operations.

The contracts are not designated as accounting hedges under the applicable sections of ASC 815, Derivatives and Hedging .

The total fair value of the forward contracts represented an asset balance of $ 0.8 and $ 2.2 and a liability balance of $ 0.4 and $ 0.7 as of December 31, 2022 and December 31, 2021, respectively, which was classified within Other current assets and Accrued expenses and other current liabilities, respectively, on the Consolidated Balance Sheets.

The Company recognized (loss) gains from the mark to market adjustment of $( 6,904 ), $ 20,805 and $ 0 for the year ended December 31, 2021, 2020 and 2019, respectively, in Other operating (expense) income, net on the Consolidated Statements of Operations.

See Note 11 - Fair Value Measurements for additional information on derivative instruments.

See Note 10 - Fair Value Measurements for additional information related to the fair value of derivative instruments.

Fair Value Measurements

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Below is a summary of the valuation techniques used in determining fair value:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Derivatives - Derivatives consist of foreign exchange contracts and interest rate swaps.

The fair value of foreign exchange contracts is based on observable market inputs of spot and forward rates or using other observable rates.

The fair value of the interest rate swaps is the estimated amount that the Company would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities or using market inputs with mid-market pricing as a practical expedient for bid-ask spread.

The fair value of the interest rate swaps is the estimated amount that the Company would receive or pay to terminate such agreements, taking

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

into account market interest rates and the remaining time to maturities or using market inputs with mid-market pricing as a practical expedient for bid-ask spread.

See Note 9 - Derivative Instruments for additional information.

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Debt - The carrying value of the Company's variable interest rate debt, excluding unamortized debt issuance costs and original issue discount, approximates fair value due to the short-term nature of the interest rate benchmark rates.

The fair value of the fixed rate debt is estimated based on market observable data for debt with similar prepayment features.

The fair value of the Company's debt was $ 5,595,522 and $ 3,574,282 at December 31, 2021 and 2020, respectively.

The fair value is considered Level 2 under the fair value hierarchy.

The fair value of the Company's variable and fixed rate debt is estimated based on market observable data for our debt.

The fair value of the Company's debt was $ 4,709.6 and $ 5,595.5 at December 31, 2022 and 2021, respectively, and is considered Level 2 under the fair value hierarchy.

Private Placement Warrants - The Company has determined that the Private Placement Warrants for shares of the Company's ordinary stock that are not indexed to its own stock are subject to accounting treatment as a liability and should be reported at fair value on the balance sheet.

The Company has determined that the fair value of each Private Placement Warrant issued using a Monte Carlo simulation approach for valuations performed through the August 14, 2019 modification described in Note 17 - Employment and Compensation Arrangements, and a Black-Scholes option valuation model thereafter.

The Company has determined that the fair value of each Private Placement Warrant issued using a Monte Carlo simulation approach for valuations performed through the August 14, 2019, modification described in Note 15 - Share-based Compensation, and a Black-Scholes option valuation model thereafter.

Accordingly, the warrants issued are classified as Level 3 financial instruments and are subject to remeasurement at each balance sheet date.

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At that time, the portion of the warrant liabilities related to the ordinary stock warrants will be reclassified to additional paid-in capital.

The amount of income (expense) recorded within the Consolidated Statement of Operations for each period as a result of the changes in fair value was $ 81,320 and $( 205,062 ) for the fiscal year end December 31, 2021 and 2020, respectively.

The amount of income recorded within the Consolidated Statement of Operations for each period as a result of the changes in fair value was $ 206.8 and $ 81.3 for the year ended December 31, 2022 and 2021, respectively.

Forward Contracts and Interest Rate Swaps - The Company has determined that its forward contracts, included in other current assets, along with its interest rate swaps, included in Accrued expenses and other current liabilities and Other non-current liabilities according to the duration of related cash flows, reside within Level 2 of the fair value hierarchy.

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These contracts are initially recognized at fair value at the date the contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period.

These contracts generally do not exceed 180 days in duration, and these instruments are carried as assets when the fair value is positive (Other current assets on the Consolidated Balance Sheets), and as liabilities when the fair value is negative (Other current liabilities on the Consolidated Balance Sheets) The resulting gain or loss is recognized in profit or loss (other operating income (expense), net) immediately.

The resulting gain or loss is recognized in profit or loss (other operating income (expense), net) immediately.

The Company assesses the fair value of these instruments, considering current and anticipated movements in future interest rates and the relevant currency spot and future rates available in the market.

1 unchanged sentence

Accordingly, these instruments are classified as Level 2 inputs.

Earn-Outs - In accordance with ASC 805, we estimated the fair value of the earn-outs using a Monte Carlo simulation.

The amount of the earn-outs approximates fair value due to the short term nature of their remaining payments as of December

Employee Phantom Share Plan - As of December 31, 2021, the Company maintained a liability associated with the CPA Global Phantom Equity Plan, a portion of which was recorded in connection with the acquisition opening balance sheet.

Changes in the liability were recorded to Selling, general and administrative costs and Cost of revenues in the Consolidated Statements of Operations, which was primarily driven by the change in fair value pertaining to Clarivate's share price that is

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

31, 2021 and December 31, 2020.

This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820.

As of December 31, 2020, the Company paid the remaining earn-out liabilities related to Publons and TrademarkVision.

These acquisitions occurred in 2017 and 2018, respectively.

The amounts payable were contingent upon the achievement of certain company specific milestones and performance metrics including number of cumulative users, cumulative reviews and annual revenue over a 1-year and 3-year period.

Changes in the earn-out are recorded to Selling, general and administrative costs in the Consolidated Statements of Operations.

As part of the DRG acquisition, the Company maintained a contingent stock liability based on observable market data relating to the DRG acquisition that occurred on February 28, 2020.

Changes in the contingent stock liability were recorded to Selling, general and administrative costs in the Consolidated Statements of Operations.

The contingent stock liability was recorded in Accrued expenses and other current liabilities and is classified as Level 2 in the fair value hierarchy.

The liability was settled by the issuance of ordinary shares on March 5, 2021.

This fair value measurement is based on observable market data and other indirect observable market inputs and thus represents a Level 2 measurement as defined in ASC 820.

As part of the CPA Global acquisition, the Company maintained a contingent stock liability based on observable market data relating to the CPA Global acquisition that occurred on October 1, 2020.

Changes in the contingent stock liability were recorded to Selling, general and administrative costs in the Consolidated Statements of Operations.

The contingent stock liability was recorded in Accrued expenses and other current liabilities and is classified as Level 2 in the fair value hierarchy.

The liability was settled by the issuance of ordinary shares on January 21, 2021.

This fair value measurement is based on observable market data and other indirect observable market inputs and thus represents a Level 2 measurement as defined in ASC 820.

Employee Phantom Share Plan - As of December 31, 2021 and December 31, 2020, the Company maintains a liability associated with the CPA Global Phantom Equity Plan, a portion of which was recorded in connection with the acquisition opening balance sheet.

Changes in the liability are recorded to Selling, general and administrative costs and Cost of revenues in the Consolidated Statements of Operations, which is primarily driven by the change in fair value pertaining to Clarivate's share price that is marked to market at the end of each reporting period.

(In millions, except option prices, ratios or as noted)

marked to market at the end of each reporting period.

To the extent vesting of awards were accelerated for colleagues, the Company accounted for these as a modification and acceleration of share-based compensation charges within the Restructuring and impairment line item of the Consolidated Statement of Operations.

The current and non-current portions of the liability are recorded in Accrued expenses and other current liabilities and Other non-current liabilities, respectively.

The balances are classified as Level 2 in the fair value hierarchy.

This fair value measurement is based on observable market data and other indirect observable market input such as, the expected volatility of the Company’s stock price, the DLOM, and the discount for potential forfeiture or modification.

Private Placement Warrants - The following table summarizes the changes in Private Placement Warrant liability for the year ended December 31, 2021 and 2020:

The current and non-current portions of the liability were recorded in Accrued expenses and other current liabilities and Other non-current liabilities, respectively.

The balances were classified as Level 2 in the fair value hierarchy because it was based on observable market data and other indirect observable market input such as, the expected volatility of the Company’s stock price, the DLOM, and the discount for potential forfeiture or modification.

The following table provides a summary of the Company’s assets and liabilities that were recognized at fair value on a recurring basis at December 31, 2022 and December 31, 2021:

December 31, 2022

Level 2 Level 3 Total

Forward currency contracts asset - current $ 0.8 $ — $ 0.8

Interest rate swap asset - current 2.3 — 2.3

Interest rate swap asset - non-current 47.2 — 47.2

Total $ 50.3 $ — $ 50.3

Warrant liability $ — $ 21.0 $ 21.0

Forward currency contracts liability - current 0.4 — 0.4

Total $ 0.4 $ 21.0 $ 21.4

December 31, 2021

Level 2 Level 3 Total

Forward currency contracts asset - current $ 2.2 $ — $ 2.2

Interest rate swap asset - non-current 2.0 — 2.0

Total $ 4.2 $ — $ 4.2

Warrant liability $ — $ 227.8 $ 227.8

CPA Global Equity Plan liability - current (1)

152.4 — 152.4

Forward currency contracts liability - current 0.7 — 0.7

Total $ 153.1 $ 227.8 $ 380.9

(1) This amount is reflected within Accrued expenses and other current liabilities within our Consolidated Balance Sheets as of December 31, 2021.

Private Placement Warrants - The following table summarizes the changes in the Private Placement Warrants liability for the year ended December 31, 2022 and 2021:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Balance at December 31, 2020 $ 312.7

6 unchanged sentences

There were no transfers of assets or liabilities between levels during the year ended December 31, 2022 and 2021.

The following table presents the changes in the earn-out for the year ended December 31, 2021 and 2020:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Balance at December 31, 2019 $ 11,100

Payment of earn-out liability (1)

Revaluations included in earnings 601

Balance at December 31, 2020 $ —

Payment of earn-out liability —

Revaluations included in earnings —

Balance at December 31, 2021 $ —

(1) See Note 23 - Commitments and Contingencies for further details.

The following table provides a summary of the Company’s assets and liabilities that were recognized at fair value on a recurring basis as at December 31, 2021 and 2020:

December 31, 2021

Level 1 Level 2 Level 3 Total Fair Value

Forward contracts asset $ — $ 2,205 $ — $ 2,205

Interest rate swap asset — 1,957 — 1,957

— 4,162 — 4,162

Warrant liability — — 227,839 227,839

Employee phantom share liability - current — 152,422 — 152,422

Forward contracts liability — 641 — 641

Total $ — $ 153,063 $ 227,839 $ 380,902

December 31, 2020

Level 1 Level 2 Level 3 Total Fair Value

Forward contracts asset $ — $ 8,574 $ — $ 8,574

— 8,574 — 8,574

Warrant liability — — 312,751 312,751

Employee phantom share liability - current — 57,752 — 57,752

Employee phantom share liability - non-current — 393 — 393

Forward contracts liability — 106 — 106

Interest rate swap liability — 5,159 — 5,159

Contingent stock liability — 130,594 — 130,594

Total $ — $ 194,004 $ 312,751 $ 506,755

Non-Financial Assets Valued on a Non-Recurring Basis

2 unchanged sentences

Finite-lived Intangible Assets - If a triggering event occurs, the Company determines the estimated fair value of finite-lived intangible assets by determining the present value of the expected cash flows.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Indefinite-lived Intangible Asset - If a qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the carrying value of an indefinite-lived intangible asset, the Company determines the estimated fair value of the indefinite-lived intangible asset (trade name) by determining the present value of the estimated royalty payments on an after-tax basis that it would be required to pay the owner for the right to use such trade name.

6 unchanged sentences

The Company determines the implied estimated fair value of goodwill by determining the present value of the estimated future cash flows for each reporting unit and comparing the reporting unit’s risk profile and growth prospects to selected, reasonably similar publicly traded companies.

Effective January 1, 2020, all assets, liabilities, and equity interest of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line were sold to OpSec Security for a purchase price of $ 3,751 , which approximates fair value of the assets as of December 31, 2019.

To measure the amount of impairment related to the divestiture, the Company compared the fair values of assets and liabilities at the evaluation date to the carrying amounts as of December 31, 2019.

The loss on impairment was $ 18,431 as of December 31, 2019.

The sale of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line assets and liabilities are categorized as Level 2 within the fair value hierarchy.

The key assumption included the negotiated sales price of the assets and the assumptions of the liabilities.

See Note 5 - Assets Held for Sale and Divested Operations for additional information.

Right of Use Asset - The guidance in ASC 360-10 requires three steps to identify, recognize and measure the impairment of a long-lived asset (asset group) to be held and used.

2 unchanged sentences

If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of the long-lived asset (asset group), the Company determines the fair value of the long-lived asset (asset group) and recognizes an impairment loss if the carrying amount of the long-lived asset (asset group) exceeds its fair value.

For the year ended December 31, 2021, an impairment charge was recorded where the carrying value of the operating lease right of use asset was reduced by $ 57,305 , which are non-cash charges.

The Company recorded a non-cash adjustment to Restructuring and impairment within the Consolidated Statement of Operations to reduce the carrying value of operating lease right of use assets by $ 8.6 and $ 57.3 for the year ended December 31, 2022 and 2021, respectively.

Additionally, the Company incurred $ 0.7 and $ 3.3 in lease termination fees during the year ended December 31, 2022 and 2021, respectively.

Fair value assumptions including sublease probabilities and the present value factor were used in the impairment calculation.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities, consisted of the following as of December 31, 2021 and December 31, 2020:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

December 31, December 31,

Employee phantom share plan liability (1)

$ 152,422 $ 57,752

Contingent stock liability (2)

Employee related accruals (3)

150,634 98,481

Accrued professional fees (4)

39,440 57,151

Accrued legal liability (5)

79,013 11,965

Tax related accruals (6)

28,538 45,127

Accrued royalty costs (7)

Other accrued expenses and other current liabilities (8)

158,275 163,236

Total accrued expenses and other current liabilities $ 679,603 $ 569,682

(1) See Note 4 - Business Combinations, Note 11 - Fair Value Measurements, Note 17 - Employment and Compensation Arrangements and Note 25 - Restructuring and Impairment, for further information with respect to the employee phantom share plan liabilities.

(2) Represents contingent stock consideration associated with the CPA Global and DRG acquisitions.

See Note 4 - Business Combinations and Note 23 - Commitments and Contingencies for further information.

(3) Employee related accruals include accrued payroll, bonus and employee commissions.

(4) Professional and outside service-related fees include accrued legal fees, audit fees, outside services, technology, and contractor fees.

(5) Of the balance as of December 31, 2021, our best estimate of the Company's potential liability for the larger legal claims is $ 60,500 , which includes estimated legal costs and accrued interest.

See Note 23 - Commitments and Contingencies for further information with respect to the probable claim reserves.

(6) Tax related accruals include value-added tax payable and other current taxes payable.

(7) Represents accrued royalty costs associated with licensee agreements.

(8) Includes current liabilities due to customers, interest payable, and a collection of miscellaneous other current liabilities.

(In millions, except option prices, ratios or as noted)

Pension and Other Post‑Retirement Benefits

12 unchanged sentences

Defined contribution plans

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Employees participate in various defined contribution savings plans that provide for Company-matching contributions.

6 unchanged sentences

The following table presents the changes in projected benefit obligations, the plan assets, and the funded status of the defined benefit pension plans:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Obligation and funded status:

25 unchanged sentences

The following table summarizes the amounts recognized in the Consolidated Balance Sheets related to the defined benefit pension plans:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Current liabilities $ ( 1.1 ) $ ( 1.1 )

2 unchanged sentences

The following table provides information for those pension plans with an accumulated benefit obligation in excess of plan assets and projected benefit obligations in excess of plan assets:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Plans with accumulated benefit obligation in excess of plan assets:

20 unchanged sentences

The following table presents the weighted-average assumptions used to determine the benefit obligations as of:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Discount rate 4.84 % 2.38 %

6 unchanged sentences

The cash flows from the Company’s expected benefit obligation payments are then matched to the yield curve to derive the discount rates.

At December 31, 2021, the discount rates ranged from 0.55 % to 5.90 % for the Company’s pension plan and postretirement benefit plan.

At December 31, 2022, the discount rates ranged

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

from 1.60 % to 7.20 % for the Company’s pension plan and postretirement benefit plan.

At December 31, 2021, the discount rates ranged from 0.55 % to 5.90 % for the Company’s pension plan and postretirement benefit plan.

14 unchanged sentences

2028 to 2032 8.6

Total $ 15,011

Based on the current status of our defined benefit obligations, we expect to make payments in the amount of $ 1.0 to fund these plans in 2023.

However, this estimate may change based on future regulatory changes.

The following table is a summary of the Company’s debt:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

The following is a summary of the Company’s debt:

(In millions, except option prices, ratios or as noted)

December 31, 2022 December 31, 2021

5 unchanged sentences

Senior Secured Notes 2028 3.875 % 921.2 3.875 % 921.2

Senior Secured Notes (2026) 2026 4.500 % 700,000 4.500 % 700,000

Term Loan Facility (2026) 2026 3.860 % 2,818,800 3.626 % 2,847,400

Revolving Credit Facility 2027 7.234 % — 3.359 % 175.0

Term Loan Facility 2026 7.384 % 2,497.4 3.860 % 2,818.8

Senior Secured Notes 2026 4.500 % 700.0 4.500 % 700.0

Finance lease (1)

3 unchanged sentences

Term Loan Facility (2026), Senior Notes (2029), Senior Secured Notes (2028), discounts ( 28.5 ) ( 33.2 )

Short-term debt, including current portion of long-term debt ( 30,577 ) ( 28,600 )

Long-term debt, net of current portion and debt issuance costs $ 5,456,280 $ 3,457,900

Current portion of long-term debt ( 1.0 ) ( 30.6 )

Long-term debt $ 5,005.0 $ 5,456.3

(1) See Note 6 - Leases for additional information.

1 unchanged sentence

Financing Transactions

Senior Secured Notes due 2026

On October 31, 2019, we closed a private placement offering of $ 700,000 in aggregate principal amount of Senior Secured Notes ("Notes") due 2026 bearing interest at 4.50 % per annum, payable semi-annually to holders of record in May and November.

The first interest payment was paid in May 2020.

The Notes due 2026 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.

These Notes are guaranteed on a joint and several basis by certain Clarivate subsidiaries.

The Notes will be general senior secured obligations of the Issuer and will be secured on a first-priority basis by the collateral now owned or hereafter acquired by the Issuer and each of the Guarantors that secures the Issuer’s and such Guarantor’s obligations under the New Senior Credit Facility (subject to permitted liens and other exceptions).

The Notes are subject to redemption as a result of certain changes in tax laws or treaties of (or their interpretation by) a relevant taxing jurisdiction at 100 % of the principal amount, plus accrued and unpaid interest to the date of redemption, and upon certain changes in control at 101 % of the principal amount, plus accrued and unpaid interest to the date of purchase.

Additionally, at the Company’s election the Notes may be redeemed (i) prior to November 1, 2022 at a redemption price equal to 100 % of the aggregate principal amount of Notes being redeemed plus a “make-whole” premium, plus accrued and unpaid interest to the date of redemption or (ii) prior to November 1, 2022, the Company may use funds in an aggregate amount not exceeding the net cash proceeds of one or more specified equity offerings to redeem up to 40 % of the aggregate principal amount of the Notes at a redemption price equal to 104.5 % of the aggregate principal amount of the Notes being redeemed, plus accrued and unpaid interest and additional amounts to the date of redemption provided that at least 50 % of the original aggregate principal amount of the Notes issued on the Closing Date remains outstanding after the redemption (or all Notes are redeemed substantially concurrently) and the redemption occurs within 120 days of the date of the closing of such equity offering or (iii) on November 1, 2022 of each of the years referenced below based on the call premiums listed below, plus accrued and unpaid interest to the date of redemption.

Senior Notes (2029) and Senior Secured Notes (2028)

The Company has $ 921.2 aggregate principal amount of its Senior Secured Notes due 2028 and $ 921.4 aggregate principal amount of its Senior Notes due 2029 bearing interest at a rate of 3.875 % and 4.875 % per annum, respectively, payable semi-annually to holders of record on June 30 and December 30 of each year.

The first interest payment was paid in December 2021.

Both of these series of Notes were issued by Clarivate Science Holdings Corporation (the "Issuer"), an indirect wholly-owned subsidiary of Clarivate.

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.

Both of these series of 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 Senior Notes due 2029 are the Issuer’s and such guarantors’ unsecured obligations.

The Senior Secured Notes and Senior Notes are subject to redemption as a result of certain changes in control at 101 % of the principal amount, plus accrued and unpaid interest to the date of purchase.

At the Company’s election, these Notes may be redeemed (i) prior to June 30, 2024, at a redemption price equal to 100 % of the aggregate principal amount of the Notes being redeemed, plus a “make-whole” premium and accrued and unpaid interest to the date of redemption;

(ii) prior to June 30, 2024, the Company may use funds, in an aggregate amount not exceeding the net cash proceeds of one or more specified equity offerings, to redeem up to 40 % of the aggregate principal amount of the Senior Secured Notes and Senior Notes at a redemption price equal to 103.875 % and 104.875 % of the aggregate principal amount being redeemed, respectively, plus accrued and unpaid interest and additional amounts to the date of redemption provided that at least 50 % of the original aggregate principal amount of the Notes issued on the Closing Date remains outstanding after the redemption (or all Notes are redeemed substantially concurrently) and the redemption occurs within 120 days of the date of the closing of such equity offering;

or, (iii) on or after June 30, 2024, during the 12 month period commencing on June 30 of each of the years referenced below based on the call premiums listed below, plus accrued and unpaid interest to the date of redemption.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Period Redemption Price

(In millions, except option prices, ratios or as noted)

Redemption Price

(as a percentage of principal)

Senior Secured Notes (2028)

Senior Notes (2029)

101.938 % 102.438 %

1 unchanged sentence

2026 and thereafter

100.000 % 100.000 %

The Indenture governing the Senior Secured Notes due 2028 contains covenants which, among other things, limit the incurrence 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 December 31, 2022, we were in compliance with the indenture covenants.

We used the net proceeds from the offering of the Notes due 2026, together with proceeds from the $ 900,000 Term Loan Facility and a $ 250,000 Revolving Credit Facility with a $ 40,000 letter of credit sub-limit, collectively the "Credit Facilities" discussed below to, among other things, redeem the 7.875 % senior notes due 2024 issued by Camelot Finance S.A.

("Prior Notes") in full, refinance all amounts outstanding under the $ 175,000 revolving credit facility which was governed by the credit agreement dated as of October 3, 2016 ("Prior Revolving Credit Facility") and the $ 1,550,000 term loan facility ("Prior Term Loan Facility"), collectively the "Prior Credit Facilities", fund in full the TRA Termination Payment pursuant to the TRA Buyout Agreement and pay fees and expenses related to the foregoing.

We redeemed the Prior Notes at a fixed price of 103.938 %, plus accrued and unpaid interest to the date of the purchase.

The total loss on the extinguishment of debt, including the transactions noted below, was $ 3,179 .

Senior Secured Notes (2026)

The Company has $ 700.0 aggregate principal amount of its Senior Secured Notes due 2026 bearing interest at 4.50 % per annum, payable semi-annually to holders of record on May 1 and November 1 of each year.

The first interest payment was paid in May 2020.

The Senior Secured Notes due 2026 were issued by Camelot Finance S.A.

(the "Lux Issuer"), an indirect wholly-owned subsidiary of Clarivate, and are secured on a first-lien pari passu basis with borrowings under the Credit Facilities and Senior Secured Notes due 2028.

These Notes are guaranteed on a joint and several basis by each of Clarivate's indirect subsidiaries that is an obligor or guarantor under the Credit Facilities and are general senior secured obligations of the Lux Issuer and are secured on a first-priority basis by the collateral now owned or hereafter acquired by the Lux Issuer and each of the guarantors that secures the Issuer’s and such guarantor’s obligations under Clarivate's credit facilities (subject to permitted liens and other exceptions).

The Senior Secured Notes due 2026 are subject to redemption as a result of certain changes in tax laws or treaties of (or their interpretation by) a relevant taxing jurisdiction at 100 % of the principal amount, plus accrued and unpaid interest to the date of redemption, and upon certain changes in control at 101 % of the principal amount, plus accrued and unpaid interest to the date of purchase.

Additionally, at the Company’s election, the Notes may be redeemed (i) prior to November 1, 2022 at a redemption price equal to 100 % of the aggregate principal amount of Notes being redeemed plus a “make-whole” premium and accrued and unpaid interest to the date of redemption or (ii) prior to November 1, 2022, the Company may use funds in an aggregate amount not exceeding the net cash proceeds of one or more specified equity offerings to redeem up to 40 % of the aggregate principal amount of the Notes at a redemption price equal to 104.5 % of the aggregate principal amount of the Notes being redeemed, plus accrued and unpaid interest and additional amounts to the date of redemption provided that at least 50 % of the original aggregate principal amount of the Notes issued on the Closing Date remains outstanding after the redemption (or all Notes are redeemed substantially concurrently) and the redemption occurs within 120 days of the date of the closing of such equity offering or (iii) on November 1 of each of the years and respective call premiums listed below, plus accrued and unpaid interest to the date of redemption.

Period Redemption Price

(as a percentage of principal)

2023 101.125 %

2024 and thereafter 100.000 %

The Indenture governing the Senior Secured Notes due 2026 contains covenants which, among other things, limit the incurrence 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 December 31, 2022, we were in compliance with the indenture covenants.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

The Credit Facilities

On October 31, 2019, we entered into the Credit Facilities.

The Credit Facilities consist of a $ 900,000 Term Loan Facility, due 2026, and a $ 250,000 Revolving Credit Facility with a $ 40,000 letter of credit sublimit, due 2024.

In November 2021, we increased the capacity of the revolving credit facility by $ 100,000 to $ 350,000 .

Borrowings under the Credit Facility 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 %.

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.

Commencing with the last day of the first full quarter ending after the closing date of the Credit Facilities, 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.

4 unchanged sentences

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 senior 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.

With respect to the credit facilities, the Company may be subject to certain negative covenants, including either a fixed charge coverage ratio, total first lien net leverage ratio, or total net leverage ratio if certain conditions are met.

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.

The Company may be subject to certain negative covenants, including either a fixed charge coverage ratio, total first lien net leverage ratio, or total net leverage ratio if certain conditions are met.

As of December 31, 2022, the Company was in compliance with the covenants for the credit facilities.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

The obligations of the borrowers under the Credit Agreement are guaranteed by UK Holdco and certain of its restricted subsidiaries and are collateralized by substantially all of UK Holdco’s and certain of its restricted subsidiaries’ assets (with customary exceptions described in the Credit Agreement).

UK Holdco and its restricted subsidiaries are subject to certain covenants including restrictions on UK Holdco’s ability to pay dividends, incur indebtedness, grant a lien over its assets, merge or consolidate, make investments, or make payments to affiliates.

Term Loan Facility (2026)

On October 31, 2019, when we entered into the Credit Facilities, the Credit Facilities consisted of a $ 900,000 Term Loan Facility, which was fully drawn at closing.

On February 28, 2020, in connection with the DRG acquisition, the Company incurred an incremental $ 360,000 of borrowings under our term loan facility and used the net proceeds from such borrowings to fund a portion of the DRG acquisition and to pay related fees and expenses.

In addition, the Company secured the backstop of a $ 950,000 fully committed bridge facility in connection with the DRG acquisition.

However, the Company obtained all required financing with proceeds from the additional term loan borrowings and through a primary equity offering in February 2020.

As such, the bridge facility remained undrawn through its expiration on closing of the 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 of $ 2,055,822 .

Previously, the Company had secured the backstop of a $ 1,500,000 fully committed bridge facility.

However, the Company obtained all required financing with proceeds from the additional term loan borrowings and the bridge facility remained undrawn through its expiration on closing of the acquisition.

The Term Loan Facility matures on October 31, 2026.

Principal repayments under the Term Loan Facility are due quarterly in an amount equal to 0.25 % of the aggregate outstanding principal amount borrowed under the Term Loan Facility on October 31, 2019 and on the maturity date, in an amount equal to the aggregate outstanding principal amount on such date, together in each case, with accrued and unpaid interest.

The Prior Credit facility and Prior Notes were replaced by the Credit Facility and Notes.

As part of the new Credit Facility, $ 41,980 of old unamortized discount and fees were written off as part of the restructuring, and of the new costs incurred under the Credit Facility and the Notes, $ 17 was expensed and $ 25,818 was deferred during the year-ended December 31, 2019.

Revolving Credit Facility

On October 31, 2019, we entered into the Credit Facilities, the Credit Facilities consist of a $ 250,000 Revolving Credit Facility with a $ 40,000 letter of credit sublimit, which was undrawn at closing.

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.

The Revolving Credit Facility carries an interest rate at LIBOR plus 3.25 % per annum or Prime plus a margin of 2.25 % per annum, as applicable depending on the borrowing, and matures on October 31, 2024.

The Revolving Credit Facility interest rate margins will decrease upon the achievement of certain first lien net leverage ratios (as the term is used in the Credit Agreement).

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.

The revolving credit facility is subject to a commitment fee of 0.375 % per annum.

On October 1, 2020, the Company borrowed $ 60,000 on the existing Revolving Credit Facility and used the net proceeds from such borrowings to fund the debt extinguishment costs in connection with funding of the repayment of CPA Global's parent company outstanding debt.

The amount was repaid in the fourth quarter of 2020 and the revolving credit facility has remained undrawn in the period subsequent to the pay down.

The Revolving Credit Facility provides for revolving loans, same-day borrowings and letters of credit pursuant to commitments in an aggregate principal amount of $ 750.0 with a letter of credit sublimit of $ 80.0 .

Proceeds of loans

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).

The Revolving Credit Facility carries an interest rate 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 Revolving Credit Facility interest rate margins will decrease upon the achievement of certain first lien net leverage ratios (as the term is used in the Credit Agreement) and is subject to a commitment fee rate of 0.5 % per annum (or 0.375 % per annum, based on first lien leverage ratios) times the unutilized amount of total revolving commitments.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

made under the Revolving Credit Facility may be borrowed, repaid and reborrowed prior to the maturity of the Revolving Credit Facility.

Our ability to draw under the Revolving Credit Facility or issue letters of credit thereunder will be conditioned upon, among other things, delivery of required notices, accuracy of the representations and warranties contained in the Credit Agreement and the absence of any default or event of default under the Credit Agreement.

(In millions, except option prices, ratios or as noted)

Proceeds of loans made under the Revolving Credit Facility may be borrowed, repaid and reborrowed prior to the maturity of the Revolving Credit Facility.

Our ability to draw under the Revolving Credit Facility or issue letters of credit thereunder is conditioned upon, among other things, delivery of required notices, accuracy of the representations and warranties contained in the Credit Agreement and the absence of any default or event of default under the Credit Agreement.

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 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.

As of December 31, 2022, letters of credit totaling $ 9.5 were collateralized by the Revolving Credit Facility.

Notwithstanding the Revolving Credit Facility, as of December 31, 2021 the Company had an unsecured corporate guarantee outstanding for $ 10,488 and cash collateralized letters of credit totaling $ 550 , all of which were not collateralized by the Revolving Credit Facility.

The Company borrowed $ 175,000 and $ 0 against the Revolving Credit Facility as of December 31, 2021 and December 31, 2020, to support current operations.

Senior Unsecured Notes (2029) and Senior Secured Notes (2028)

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 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 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 Old Unsecured Notes for the newly-issued 4.875 % Senior Unsecured Notes due 2029 (the “New Unsecured Notes” and, together with the New Secured Notes, the “New Notes”).

The initial aggregate principal amount of the 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.

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.

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").

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.

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 are secured on a first-lien pari passu basis with borrowings under the existing credit facilities and senior secured notes, and the New Unsecured Notes are the Issuer’s and such guarantors’ unsecured obligations.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

The New Notes are subject to redemption as a result of certain changes in control at 101 % of the principal amount, plus accrued and unpaid interest to the date of purchase.

At the Company’s election the New Notes may be redeemed (i) prior to June 30, 2024 at a redemption price equal to 100 % of the aggregate principal amount of the New Notes being redeemed plus a “make-whole” premium, plus accrued and unpaid interest to the date of redemption or (ii) prior to June 30, 2024, the Company may use funds in an aggregate amount not exceeding the net cash proceeds of one or more specified equity offerings to redeem up to 40 % of the aggregate principal amount of the New Notes at a redemption price equal to 103.875 % and 104.875 % of the aggregate principal amount of the New Secured Notes and New Unsecured Notes respectively being redeemed, plus accrued and unpaid interest and additional amounts to the date of redemption provided that at least 50 % of the original aggregate principal amount of the New Notes issued on the Closing Date remains outstanding after the redemption (or all Notes are redeemed substantially concurrently) and the redemption occurs within 120 days of the date of the closing of such equity offering or (iii) on or after June 30, 2024, during the 12 month period commencing on June 30 of each of the years referenced below based on the call premiums listed below, plus accrued and unpaid interest to the date of redemption.

Redemption Price

(as a percentage of principal)

New Secured Notes

New Unsecured Notes

101.938 % 102.438 %

100.969 % 101.219 %

2026 and thereafter

100.000 % 100.000 %

The Indenture governing the New Secured notes due 2028 contains covenants which, among other things, limit the incurrence 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 December 31, 2021, we were in compliance with the indenture covenants.

The carrying value of the Company’s variable interest rate debt, excluding unamortized debt issuance costs, approximates fair value due to the short-term nature of the interest rate benchmark rates.

The fair value of the fixed rate debt is estimated based on market observable data for debt with similar prepayment features.

The fair value of the Company’s debt was $ 5,595,522 and $ 3,574,282 at December 31, 2021 and December 31, 2020, respectively.

The debt is considered a Level 2 liability under the fair value hierarchy.

Amounts due under all of the outstanding borrowings as of December 31, 2021 for the next five years are as follows:

2022 $ 30,577

2026 3,404,400

Notwithstanding the Revolving Credit Facility, the Company had unsecured corporate guarantees outstanding for $ 12.9 and cash collateralized letters of credit totaling $ 3.3 as of December 31, 2022, all of which were not collateralized by the Revolving Credit Facility.

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 .

The fair value of the Company’s debt was $ 4,709.6 and $ 5,595.5 at December 31, 2022 and December 31, 2021, respectively, and is considered Level 2 under the fair value hierarchy.

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

Amounts due under all of the Company's outstanding borrowings as of December 31, 2022, for the next five years are as follows:

Thereafter 1,867.3

1 unchanged sentence

capitalized debt issuance costs and original issue discount ( 65.3 )

Total debt outstanding as of December 31, 2021

Total, including the current portion of long-term debt, as of December 31, 2022

Disaggregated Revenues

The tables below show the Company’s disaggregated revenue for the periods presented:

We disaggregate our revenues by segment (see Note 19 - Segment Information) and by transaction type based on revenue recognition pattern as follows:

• Subscription-based revenues are recurring revenues that are earned under annual, evergreen or multi-year 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, and analytics solutions are recognized ratably over the contractual period.

• 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.

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

Deliverables are usually received by the customer instantly or in a short period of time, at which time the revenues

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

are recognized.

The most significant component of our re-occurring revenues is our 'renewal' business within CPA Global.

• Transactional and other revenues.

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 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 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.

Other revenues also includes one-time perpetual archive license revenues.

The following table presents the Company’s revenues by transaction type based on revenue recognition pattern for the periods presented:

Year Ended December 31,

7 unchanged sentences

Total revenues, net $ 2,659.8 $ 1,876.9 $ 1,254.1

(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.

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

Cost to Obtain a Contract

4 unchanged sentences

Contract Balances

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Accounts receivable, net Current portion of deferred revenues Non-current portion of deferred revenues

Opening (1/1/2021) $ 737,733 $ 707,318 $ 41,399

Closing (12/31/2021) 906,428 1,030,399 54,250

(Increase)/decrease $ ( 168,695 ) $ ( 323,081 ) $ ( 12,851 )

Opening (1/1/2020) $ 333,858 $ 407,325 $ 19,723

Closing (12/31/2020) 737,733 707,318 41,399

(Increase)/decrease $ ( 403,875 ) $ ( 299,993 ) $ ( 21,676 )

Opening (1/1/2019) $ 331,295 $ 391,102 $ 17,112

Closing (12/31/2019) 333,858 407,325 19,723

(Increase)/decrease $ ( 2,563 ) $ ( 16,223 ) $ ( 2,611 )

Opening (January 1, 2022) $ 906.4 $ 1,030.4 $ 54.2

Closing (December 31, 2022) 872.1 947.5 38.5

Decrease $ 34.3 $ 82.9 $ 15.7

Opening (January 1, 2021) $ 737.7 $ 707.3 $ 41.4

Closing (December 31, 2021) 906.4 1,030.4 54.2

Increase $ ( 168.7 ) $ ( 323.1 ) $ ( 12.8 )

Opening (January 1, 2020) $ 333.9 $ 407.3 $ 19.7

Closing (December 31, 2020) 737.7 707.3 41.4

Increase $ ( 403.8 ) $ ( 300.0 ) $ ( 21.7 )

The amount of revenue recognized in the period that was included in the opening deferred revenues balances was $ 955.9 , $ 563.1 and $ 400.7 for the years ended December 31, 2022, 2021 and 2020, respectively.

This revenue consists primarily of subscription revenues.

Transaction Price Allocated to the Remaining Performance Obligation

As of December 31, 2021, approximately $ 92,887 of revenue is expected to be recognized in the future from remaining performance obligations, excluding contracts with duration of one year or less.

Transaction Price Allocated to Remaining Performance Obligations

As of December 31, 2022, approximately $ 101.6 of revenue is expected to be recognized in the future from remaining performance obligations, excluding contracts with a duration of one year or less.

The Company expects to recognize revenue on approximately 51 % of these performance obligations over the next 12 months.

Of the remaining 49 %, 24 % is expected to be recognized within the following year, 16 % is expected to be recognized within three to five years, with the final 9 % expected to be recognized within six to ten years.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Shareholders’ Equity

Pre-2019 Transaction

In March 2017, the Company formed the Management Incentive Plan under which certain employees of the Company may be eligible to purchase shares of the Company.

In exchange for each share purchase subscription, the purchaser is entitled to a fully vested right to an ordinary share.

Additionally, along with a subscription, employees receive a corresponding number of options to acquire additional ordinary shares subject to five years vesting.

See Note 17 - Employment and Compensation Arrangements for additional detail related to the options.

There were no share subscriptions received prior to or following the close of the 2019 Transaction for the year ended December 31, 2021.

Post-2019 Transaction

Immediately prior to the closing of the 2019 Transaction, there were 87,749,999 shares of Churchill ordinary stock issued and outstanding, consisting of (i) 68,999,999 public shares (Class A) and (ii) 18,750,000 founder shares (Class B).

On May 13, 2019, in connection with the 2019 Transaction, all of the Class B ordinary stock converted into Class A ordinary stock of the post-combination company on a one -for-one basis, and effected the reclassification and conversion of all of the Class A ordinary stock and Class B ordinary stock into a single class of ordinary stock of Clarivate Plc.

One stockholder elected to have one share redeemed in connection with the 2019 Transaction.

In June 2019, the Company formed the 2019 Incentive Award Plan under which employees of the Company may be eligible to purchase shares of the Company.

See Note 17 - Employment and Compensation Arrangements for additional detail related to the 2019 Incentive Award Plan.

In exchange for each share subscription purchased, the purchaser is entitled to a fully vested right to an ordinary share.

At December 31, 2021 there were unlimited shares of ordinary stock authorized, and 683,139,210 shares issued and outstanding, with a par value of $ 0.00 .

The Company held 547,136 and 6,325,860 shares as treasury shares as of December 31, 2021 and December 31, 2020, respectively.

The Company’s ordinary stockholders are entitled to one vote per share.

Public Warrants

Upon consummation of the 2019 Transaction, the Company had warrants outstanding to purchase an aggregate of 52,800,000 ordinary shares.

Each outstanding whole warrant of Churchill represented the right to purchase one ordinary share of the Company in lieu of one share of Churchill ordinary stock upon closing of the 2019 Transaction.

During the period January 1, 2020 through February 21, 2020, 24,132,666 of the Company’s outstanding public warrants were exercised for one ordinary share per whole public 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.

As of December 31, 2020, no public warrants were outstanding.

Merger Shares

Upon consummation of the 2019 Transaction, there were 7,000,000 ordinary shares of Clarivate that are issuable to persons designated by Messrs.

Stead and Klein, including themselves, if the last sale price of Clarivate’s ordinary shares is at least $ 20.00 for 40 days over a 60 consecutive trading day period on or before the sixth anniversary of the closing of the 2019 Transaction.

On January 31, 2020, our Board agreed to waive all performance vesting conditions associated with the Merger Shares (as defined below).

The Merger Shares were issued as ordinary shares to persons designated by Jerre Stead and Michael Klein on June 1, 2020 as part of the June 2020 underwritten public offering.

These shares were issued during the year ended December 31, 2020.

See Note 17 - Employment and Compensation Arrangements for additional detail related to the Merger Shares.

As of December 31, 2022, there were unlimited shares of ordinary stock authorized and 674.4 million shares issued and outstanding, with no par value.

The Company did not hold any shares as treasury shares as of December 31, 2022, and 0.5 million shares as treasury shares as of December 31, 2021.

The Company’s ordinary shareholders are entitled to one vote per share.

DRG Acquisition Shares

In connection with the DRG acquisition, 2,895,638 ordinary shares of the Company were issued to PEL in March 2021.

See Note 4 - Business Combinations for additional details.

In connection with the DRG acquisition, 2.9 million ordinary shares of the Company were issued to Piramal Enterprises Limited ("PEL") in March 2021.

MCPS Offering

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

In June 2021, concurrently with the June 2021 Ordinary Share Offering (see Note 1 - Background and Nature of Operations), 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).

Based upon the agreement provisions and accounting guidance in ASC 480 - Distinguishing Liabilities from Equity and ASC 815-40 - Derivatives and Hedging , the Company concluded that the preferred stock should be classified as permanent equity within the Consolidated Balance Sheet.

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.

In June 2021, concurrently with the June 2021 Ordinary Share Offering (see Note 1 - Background and Nature of Operations), we completed a 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).

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 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.

Each of our convertible preferred shares has a liquidation preference of $ 100.00 .

See Note 23 - Commitments and Contingencies for further details.

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.

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 .

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.

As of December 31, 2021, we recognized $ 6,499 of accrued preferred share dividends within accrued expenses and other current liabilities.

As of December 31, 2022, we accrued $ 6.5 of 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.

If the dividends are not declared, they will continue to accumulate until paid, due to a backstop contained in the agreement (even if never declared).

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Each of our MCPS will automatically convert on the second business day immediately following the last trading day of the "Settlement Period" (the 30 consecutive Trading Day period commencing on, and including, the 31st Scheduled Trading Day immediately preceding June 1, 2024) into between 3.2052 and 3.8462 of our ordinary shares (respectively, the “Minimum Conversion Rate” and “Maximum Conversion Rate”), each subject to anti-dilution adjustments.

1 unchanged sentence

At any time prior to June 1, 2024, holders may elect to convert each convertible preferred share into ordinary shares at the Minimum Conversion Rate.

Holders of the Preferred Stock have the right to convert all or any portion of their shares at any time until the close of business on the mandatory conversion date.

Holders of the preferred shares have the right to convert all or any portion of their shares at any time until the close of business on the mandatory conversion date.

Early conversions that are not in connection with a “Make-Whole Fundamental Change” will be settled at the minimum conversion rate.

If a Make-Whole Fundamental Change occurs, holders of the Preferred Stock will, in certain circumstances, be entitled to convert their shares at an increased conversion rate for a specified period of time and receive an amount to compensate them for certain unpaid accumulated dividends and any remaining future scheduled dividend payments.

The Preferred Stock will not be redeemable at our election before the mandatory conversion date.

The holders of the Preferred Stock will not have any voting rights, with limited exceptions.

In the event that Preferred Stock dividends have not been declared and paid in an aggregate amount corresponding to six or more dividend periods, whether or not consecutive, the holders of the Preferred Stock will have the right to elect two new directors until all accumulated and unpaid Preferred Stock dividends have been paid in full, at which time that right will terminate.

If a Make-Whole Fundamental Change occurs, holders of the preferred shares will, in certain circumstances, be entitled to convert their shares at an increased conversion rate for a specified period of time and receive an amount to compensate them for certain unpaid accumulated dividends and any remaining future scheduled dividend payments.

The preferred shares will not be redeemable at our election before the mandatory conversion date and the holders of these shares do not have any voting rights, with limited exceptions.

In the event that preferred share dividends have not been declared and paid in an aggregate amount corresponding to six or more dividend periods, whether or not consecutive, the holders of these shares will have the right to elect two new directors until all accumulated and unpaid MCPS dividends have been paid in full, at which time that right will terminate.

Treasury Shares

CPA Global Acquisition Shares - In connection with the CPA Global acquisition, on October 1, 2020, the Company issued as part of the purchase consideration, 210,357,918 ordinary shares of the Company.

In addition, there were 6,325,860 shares that were issued to Leonard Green & Partners, L.P.

that were returned to Clarivate to fund an Employee Benefit Trust ("EBT") established for the CPA Global Phantom Equity Plan.

Accordingly, these shares were excluded from purchase price consideration.

As noted in Note 2 - Basis of Presentation, the EBT associated with the CPA Global Equity Plan was consolidated on October 1, 2020.

The EBT held Clarivate shares that were recorded as treasury shares as they were legally issued but not outstanding.

See Note 4 - Business Combinations for additional details.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

During January 2021, the Company issued 1,500,000 ordinary shares to Redtop Holdings Limited pursuant to a hold-back clause within the purchase agreement for a total of $ 43,890 which was satisfied.

See Note 4 - Business Combinations and Note 23 - Commitments and Contingencies for additional details.

During the fourth quarter of 2021, 5,778,724 shares held in the EBT were sold at an average net price per share of $ 23.78 to fund the payment to the respective employees via payroll in the first quarter of 2022 as it relates to the first lock-up period and vesting date which occurred on October 1, 2021.

CPA Global Acquisition Shares - During the year ended December 31, 2021, 5.8 million shares held in the EBT were sold at an average net price per share of $ 23.78 to fund the payment to the respective employees via payroll in the first quarter of 2022 as it relates to the first lock-up period and vesting date which occurred on October 1, 2021.

Given the original share value of $ 30.99 as of the date of the acquisition, an associated loss was recognized within the Consolidated Statement of Changes in Equity in the amount of $ 41.6 .

During the year ended December 31, 2022, the last remaining 0.5 million shares held in the Employee Benefit Trust ("EBT"), established for the CPA Global Equity Plan, were sold at an average net price per share of $ 10.72 to fund the payment to the respective employees.

Given the original share value of $ 30.99 as of the date of the acquisition, an associated loss was recognized within the Consolidated Statement of Changes in Equity in the amount of $ 11.2 .

During January 2021, the Company issued 1.5 million ordinary shares as per the purchase agreement for the acquisition of CPA Global pursuant to a hold-back clause within the purchase agreement for a total of $ 43.9 , which was satisfied.

See Note 20 - Commitments and Contingencies for additional details.

Share Repurchase Program and Share Retirements - 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 with a total carrying value of $ 159,356 .

The repurchased shares were retired and restored as authorized but unissued ordinary shares.

Upon formal retirement and in accordance with Financial Accounting Standards Board's Accounting Standards Codification ("ASC") Topic 505, Equity , the Company reduced our ordinary shares account by the carrying amount of the treasury shares.

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 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 at an average price per share of $ 16.33 with a total carrying value of $ 175.0 all of which were subsequently retired at an average price at retirement of $ 15.61 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 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 27 - Subsequent Events for additional information related to the Share Repurchase Program.

Employment and Compensation Arrangements

Employee Incentive Plans

Prior to the 2019 Transaction, the Company operated under its 2016 Equity Incentive Plan, which provided for certain employees of the Company to be eligible to participate in equity ownership in the Company.

On May 8, 2019, in anticipation of the 2019 Transaction, the Board adopted the 2019 Incentive Award Plan, which was an amendment, restatement and continuation of the 2016 Equity Incentive Plan.

Upon closing of the 2019 Transaction, awards under the 2016 Equity Incentive Plan were converted using the exchange ratio established during the 2019 Transaction and assumed into the 2019 Incentive Award Plan (See Note 4 - Business Combinations).

The 2019 Incentive Award Plan permits the granting of awards in the form of incentive stock options, non-qualified stock options, share appreciation rights, restricted shares, restricted share units and other stock-based or cash-based awards.

Equity awards may be issued in the form of restricted shares or restricted share units with dividend rights or dividend equivalent rights subject to vesting terms and conditions specified in individual award agreements.

The Company’s Management Incentive Plan provides for employees of the Company to be eligible to purchase shares of the Company.

See Note 16 - Shareholders’ Equity for additional information.

A maximum aggregate amount of 60,000,000 ordinary shares are reserved for issuance under the 2019 Incentive Award Plan.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Share-based Compensation

The Company grants share-based awards under the Clarivate Plc 2019 Incentive Award Plan ("the Plan").

A maximum aggregate amount of 60.0 million ordinary shares are reserved for issuance under the Plan.

Equity awards under the 2019 Incentive Award Plan may be issued in the form of options to purchase shares of the Company which are exercisable upon the occurrence of conditions specified within individual award agreements.

As of December 31, 2021 and 2020, 40,200,324 and 42,785,926 , respectively, awards have not been granted.

Total share-based compensation expense, inclusive of cash and non-cash expense, included in the Consolidated Statements of Operations amounted to $ 139,571 , $ 70,472 and $ 51,383 for the years ended December 31, 2021, 2020 and 2019, respectively.

The total associated tax benefits recognized amounted to $ 8,480 , $ 30,620 and $ 751 for the years ended December 31, 2021, 2020 and 2019, respectively.

The Company’s Management Incentive Plan provides for certain employees of the Company to be eligible to purchase shares of the Company.

See Note 16 - Shareholders’ Equity for additional information.

Along with each subscription, employees may receive a corresponding number of options to acquire additional ordinary shares subject to five years vesting.

As of December 31, 2021 and 2020 , the re was no unrecognized compensation cost related to outstanding stock options.

As of December 31, 2022 and 2021, approximately 29.7 million and 40.2 million shares, respectively, of the Company’s ordinary shares were available for share-based awards.

The Plan provides for the issuance of stock options, restricted stock units ("RSUs") and performance share units ("PSUs").

Share-based compensation expense is recorded to the “Cost of revenues" and “Selling, general and administrative” line items on the accompanying Consolidated Statements of Operations.

Total share-based compensation expense for the year ended December 31, 2022 , 2021 and 2020, comprised of the following:

Year Ended December 31, 2022

Stock Options RSUs PSUs CPA Global Equity Plan Total

Cost of revenues $ — $ 32.9 $ — $ 3.4 $ 36.3

Selling, general and administrative costs 0.4 57.6 3.2 4.7 65.9

Total share-based compensation expense $ 0.4 $ 90.5 $ 3.2 $ 8.1 $ 102.2

Year Ended December 31, 2021

Stock Options RSUs PSUs CPA Global Equity Plan Total

Cost of revenues $ 0.1 $ 18.9 $ 0.5 $ 25.7 $ 45.2

Selling, general and administrative costs 0.4 32.4 3.9 57.2 93.9

Total share-based compensation expense $ 0.5 $ 51.3 $ 4.4 $ 82.9 $ 139.1

Year Ended December 31, 2020

Stock Options RSUs PSUs CPA Global Equity Plan/Other SBC Plans Total

Cost of revenues $ 0.2 $ — $ — $ 9.4 $ 9.6

Selling, general and administrative costs 11.2 16.3 0.2 33.9 61.6

Total share-based compensation expense $ 11.4 $ 16.3 $ 0.2 $ 43.3 $ 71.2

Total income tax benefits recognized for stock-based compensation arrangements were as follows:

Year Ended December 31,

2022 2021 2020

Income tax benefits $ 8.3 $ 8.5 $ 30.6

Stock Options

The Company’s stock option activity is summarized below:

The Company’s stock option activity for the year ended December 31, 2022, and 2021, respectively is summarized below:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Options Weighted

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Granted — — 0 —

Expired ( 2,008 ) 29.33 0 —

Exercised ( 0.4 ) 12.13 0 0.8

Forfeited ( 0.7 ) 15.92 0 —

Balance at December 31, 2022 3.7 $ 13.12 3.96 $ 1.2

Vested and exercisable at December 31, 2022 3.7 $ 13.12 3.96 $ 1.2

Options Weighted

Average Exercise

Price per Share Weighted-Average

Contractual Life

(in years) Aggregate

Balance at December 31, 2020 7.9 $ 12.95 6.2 $ 132.0

Granted — — 0 —

Exercised ( 3.1 ) 12.19 0 ( 43.4 )

Outstanding as of December 31, 2021 4,801,602 $ 13.43 4.75 $ 49,655

Forfeited — — 0

Balance at December 31, 2021 4.8 $ 13.43 4.75 $ 49.7

Vested and exercisable at December 31, 2021 4.8 $ 13.43 4.75 $ 49.7

The aggregate intrinsic value in the table above represents the difference between the Company’s most recent valuation and the exercise price of each in-the-money option on the last day of the period presented.

3,057,008 and 12,042,862 stock options were exercised as of December 31, 2021 and 2020, respectively.

The total intrinsic value of stock options exercised was approximately $ 43,425 and $ 150,381 during the years ended December 31, 2021 and 2020, respectively.

The Company accounts for awards issued under the 2019 Incentive Award Plan as additional contributions to equity.

Share-based compensation includes expense associated with stock option grants which is estimated based on the grant date fair value of the award issued.

Share-based compensation expense related to stock options is recognized over the vesting period of the award which is generally five years , on a graded-scale basis.

The weighted-average fair value of options granted per share was $ 0 and $ 0 as of December 31, 2021 and 2020, respectively.

In connection with the sale and divestiture of non-core assets and liabilities within the IP segment on November 6, 2020, the Company accelerated 43,605 unvested stock options, which resulted in recognition of $ 791 of compensation expense during the year ended December 31, 2020.

On November 30, 2020, the Company accelerated the vesting of approximately 3,530,000 remaining unvested stock options of the original 28,400,000 issued pursuant to the private company equity plan adopted in 2016 at the time of the formation of Clarivate as a standalone business after its divestiture from Thomson Reuters, including the previously disclosed unvested options held by key officers of the Company.

The Company viewed this as an appropriate step to take at that time to streamline the Company’s equity compensation program by easing the administration of the plan and by allowing the Company to better manage the logistics and vesting of these options.

The accelerated vesting resulted in the recognition of approximately $ 2,007 of compensation expense during the year ended December 31, 2020.

The Company uses the Black-Scholes option pricing model to estimate the fair value of options granted.

The Black-Scholes model considers the fair value of an ordinary share and the contractual and expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate.

Prior to becoming a public company, the fair value of the Company’s ordinary shares were determined utilizing an external third-party pricing specialist.

As of December 31, 2022 and 2021 , the re was no unrecognized compensation cost related to outstanding stock options.

The contractual term of the option ranges from one to ten years .

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The assumptions used to value the Company’s options granted during the period presented and their expected lives were as follows:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

2021 2020 2019

Weighted-average expected dividend yield — —

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34.05 % - 39.43 %

19.52 % - 20.26 %

Weighted-average expected volatility 31.15 % 34.79 %

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Expected life (in years) 1.95 1

Restricted Stock Units (“RSUs”)

RSUs typically vest from six months to three years and are generally subject to either cliff vesting or graded vesting.

RSUs do not have non-forfeitable rights to dividends or dividend equivalents.

The fair value of RSUs is typically based on the fair value of our ordinary shares on the date of grant.

We amortize the value of these awards to expense over the vesting period on a graded-scale basis.

The Company recognizes forfeitures as they occur.

Number of Shares Weighted Average Grant Date Fair Value per Share

Outstanding as of December 31, 2019 293,182 $ 16.75

Granted 1,918,288 22.12

Vested ( 289,641 ) 17.17

Forfeited ( 111,283 ) 21.19

Outstanding as of December 31, 2020 1,810,546 19.30

Granted 4,310,054 23.91

Vested ( 986,132 ) 23.18

Forfeited ( 602,337 ) 23.39

Outstanding as of December 31, 2021 4,532,131 $ 23.42

The Company granted 4,310,054 and 1,918,288 RSUs at a weighted average grant date fair value per share of $ 23.91 and $ 22.12 , correspondingly recognized $ 47,606 and $ 15,142 in compensation expense during the year ended December 31, 2021 and 2020.

The total fair value of RSUs that vested during the year ended December 31, 2021 and 2020 was $ 22,859 and $ 4,972 , respectively.

Performance Stock Units (“PSUs”)

The Company began granting PSUs (the "Original PSUs") to certain members of management on April 1, 2020 under the 2019 Incentive Award Plan.

The Original PSUs typically vest over three years and are subject to performance conditions with a modifier of relative TSR as compared to the S&P 500 for vesting.

The fair value of the PSUs is based on the fair value of our ordinary shares on the date of grant and valued using a Monte Carlo simulation.

In years one and two of the three year vesting period, it was not possible to predict the likelihood of achieving the target and therefore, the performance condition was deemed not probable as of December 31, 2021.

Accordingly, no compensation expense was recognized for the year ended December 31, 2021.

During December of 2020, the Human Resources and Compensation Committee (the “HRCC”) considered the need to continue to align the interests of our named executive officers with those of Clarivate’s shareholders and to compensate our named executive officers for the significant value created for shareholders in 2020.

In addition, the HRCC considered the effects of the Covid-19 pandemic on the value of the Original PSUs granted to our named executive officers earlier in 2020, which are eligible to vest based on the achievement of certain three-year financial performance metrics.

In choosing the primary performance goals for the Original PSUs, the HRCC had not anticipated the Covid-19 pandemic and its impact on certain elements of performance, which significantly reduced the anticipated value of the Original PSUs.

Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”)

The following table summarizes the Company’s existing share-based compensation awards program activity for the year ended December 31, 2022, and 2021, respectively:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

The Company made a one-time grant of additional PSUs to certain key employees, including its named executive officers on December 17, 2020 under the 2019 Incentive Award Plan.

The PSUs are eligible to vest based upon Clarivate’s three-year total shareholder return (“TSR”) as compared to the TSR of the S&P 500 for the same period (the “TSR PSUs”).

The TSR PSUs cover the period from January 1, 2020 to December 31, 2022 and have a payout range of 0 % to 120 % of target.

The TSR PSU grants vest over three years and are subject to market conditions for vesting.

The probability of achieving the market conditions are incorporated into the fair value of the award, and related expense is recognized over the vesting period.

The fair value of the PSUs is based on the fair value of our ordinary shares on the date of grant and valued using a Monte Carlo simulation.

Accordingly, the Company recognized $ 4,473 and $ 178 of compensation expense for the year ended December 31, 2021 and 2020, respectively.

In the event that the Original PSUs vest, the TSR PSUs will be forfeited.

On March 1, 2021, May 15, 2021 and August 15, 2021, the Company granted 499,141 , 28,577 and 38,178 PSUs, respectively, to key employees under the 2019 Incentive Award Plan.

These PSUs are eligible to vest based on Clarivate's three-year total shareholder return ("TSR") as compared to the TSR of the S&P 500 for the same period as well as the Company's performance against forecasted results.

These PSUs cover from January 1, 2021 through December 31, 2023 and have a payout range of 0 % to 200 %.

These PSUs vest over three years and are subject to market conditions.

The probability of achieving the market conditions are incorporated into the fair value of the award, and related expense is recognized over the vesting period.

The fair value of the PSUs is based on the fair value of our ordinary shares on the date of grant and valued using a Monte Carlo simulation.

Accordingly, the Company recognized $ 805 of compensation expense for the year ended December 31, 2021.

On November 29, 2021 the Company granted 109,505 , to a key employee under the 2019 Incentive Award Plan.

This award has no TSR based vesting conditions.

These PSUs will vest over one year and are subject to performance conditions.

No expense has been booked against these awards in 2021, since the performance period will start from January 1, 2022.

Average Grant Date Fair Value per Share

Outstanding as of December 31, 2020 873,325 $ 25.16

(In millions, except option prices, ratios or as noted)

Year Ended December 31, 2022

RSUs RSUs Weighted

Average Grant Date Fair Value PSUs PSUs Weighted

Average Grant Date Fair Value

Balance at December 31, 2021 4.5 $ 23.42 1.4 $ 24.86

Granted 12.9 12.14 1.2 13.83

Exercised/Vested ( 2.9 ) 22.27 — —

Forfeited/Unexercised ( 1.0 ) 16.99 ( 0.5 ) 23.26

Balance at December 31, 2022 13.5 $ 13.40 2.1 $ 17.67

Total remaining unamortized compensation costs $ 106.6 $ 6.6

Weighted average remaining service period 1.07 years 1.55 years

Year Ended December 31, 2021

RSUs RSUs Weighted

Average Grant Date Fair Value PSUs PSUs Weighted

Average Grant Date Fair Value

Balance at December 31, 2020 1.8 $ 19.30 0.9 $ 25.16

Granted 4.3 23.91 0.7 23.56

Vested ( 1.0 ) 23.18 — 32.50

Forfeited ( 0.6 ) 23.39 ( 0.2 ) 24.52

Outstanding as of December 31, 2021 1,360,255 $ 24.86

(1) The PSUs number of shares are at grant amount and are not reflective of the maximum shares that may ultimately be issued, if any.

In connection with the acquisition of Churchill Capital Corp consummated on May 13, 2019, the Company had warrants outstanding for certain individuals to purchase an aggregate of 52,800,000 ordinary shares with an exercise price of $ 11.50 per share, consisting of 34,500,000 public warrants and 18,300,000 Private Placement Warrants.

Balance at December 31, 2021 4.5 $ 23.42 1.4 $ 24.86

Total remaining unamortized compensation costs $ 63.0 $ 7.2

Weighted average remaining service period 0.94 years 1.51 years

In connection with the acquisition of Churchill Capital Corp consummated on May 13, 2019, the Company had warrants outstanding for certain individuals to purchase an aggregate of 52.8 million ordinary shares with an exercise price of $ 11.50 per share, consisting of 34.5 million public warrants and 18.3 million Private Placement Warrants.

As of December 31, 2020, no public warrants were outstanding.

On November 23, 2020, one individual exercised warrants for 274,000 ordinary shares through a cashless redemption in which 110,484 shares were withheld to cover the exercise price.

The net impact of the redemption was an issuance of 163,516 shares.

Additionally, on January 21, 2021, one warrant holder exercised warrants for 212,174 ordinary shares through a cashless redemption in which 80,610 shares were withheld to cover the exercise price.

The net impact of the redemption was an issuance of 131,564 shares.

As of December 31, 2021, there were 17,813,826 ordinary shares outstanding for Private Placement Warrants.

The following table summarizes the changes in Private Placement Warrant shares outstanding as of December 31, 2021 and December 31, 2020.

On November 23, 2020, one individual exercised warrants for 0.3 million ordinary shares through a cashless redemption in which 0.1 million shares were withheld to cover the exercise price.

The net impact of the redemption was an issuance of 0.2 million shares.

Additionally, on January 21, 2021, one warrant holder exercised warrants for 0.2 million ordinary shares through a cashless redemption in which 0.1 million shares were withheld to cover the exercise price.

The net impact of the redemption was an issuance of 0.1 million shares.

As of December 31, 2022, there were 17.8 million ordinary shares outstanding for Private Placement Warrants.

The following table summarizes the changes in Private Placement Warrant shares outstanding as of December 31, 2022 and 2021.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Number of Shares Weighted Average Fair Value per Share

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Outstanding at December 31, 2021 17.8 $ 12.79

18,026,000 $ 17.35

Outstanding at December 31, 2021 17.8 $ 12.79

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Outstanding at December 31, 2022 17.8 $ 1.18

17,813,826 $ 12.79

2019 Transaction Related Awards

Upon consummation of the 2019 Transaction, there were 7,000,000 ordinary shares of Clarivate (the "Merger Shares") issuable if the last sale price of Clarivate’s ordinary shares is at least $ 20.00 for 40 days over a 60 consecutive trading day period on or before the sixth anniversary of the closing of the 2019 Transaction.

We engaged a third party specialist to fair value the awards at the modification date using the Monte Carlo simulation approach.

The assumptions in the model included, but were not limited to, risk-free interest rate, 1.33 %;

expected volatility of the Company's and its peer group's stock prices, 20.00 %;

and dividend yield, 0.00 %.

The Company recognized $ 13,720 of exp ense during the year ended December 31, 2020 , in Share-based compensation expense as a result of the waived performance vesting conditions.

The Sponsor Agreement provided that certain ordinary shares of Clarivate were subject to certain time and performance-based vesting provisions described below.

The vesting conditions added to certain ordinary shares include the following:

5,309,713 ordinary shares of Clarivate held by persons designated in the Sponsor Agreement, will vest in three equal annual installments on the first, second and third anniversaries of the closing of the 2019 Transaction, respectively, and are not contingent on continuing or future service of the respective holders to the Company.

2,654,856 ordinary shares of Clarivate held by such persons will vest at such time as the last sale price of Clarivate’s ordinary shares is at least $ 15.25 on or before the date that is 42 months after the closing of the 2019 Transaction;

provided that none of such Clarivate ordinary shares will vest prior to the first anniversary of the closing of the 2019 Transaction, not more than 1/3 of such Clarivate warrants will vest prior to the second anniversary of the closing of the 2019 Transaction, and not more than 2/3 of such Clarivate warrants will vest prior to the third anniversary of the closing of the 2019 Transaction.

Further, such vesting is not contingent on continuing or future service of the respective holders to the Company.

2,654,856 ordinary shares of Clarivate held by such persons will vest at such time as the last sale price of Clarivate’s ordinary shares is at least $ 17.50 on or before the fifth anniversary of the closing of the 2019 Transaction;

Further, such vesting is not contingent on continuing or future service of the respective holders to the Company.

The vesting conditions added to certain warrants include the following:

17,265,826 of certain warrants held by persons designated in the Sponsor Agreement, will vest at such time as the last sale price of Clarivate’s ordinary shares is at least $ 17.50 on or before the fifth anniversary of the closing of the 2019 Transaction;

provided that none of such Clarivate warrants will vest prior to the first anniversary of the closing of the 2019 Transaction, not more than 1/3 of such Clarivate warrants will vest prior to the second anniversary of the closing of the 2019 Transaction, and not more than 2/3 of such Clarivate warrants will vest prior to the third anniversary of the closing of the 2019 Transaction.

Further, such vesting is not contingent on continuing or future service of the respective holders to the Company.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

In considering the terms of the transaction related awards, the Company notes that the time-based vesting restrictions were not conditioned on any continuing or future service of the holders to the Company, and reflect “lock-up” periods of the issuable shares.

Further, the above mentioned performance-based restrictions were considered market conditions pursuant to ASC 718, and are contemplated in the value of the awards.

As such vesting restrictions were contemplated in conjunction with the granting of the merger shares (See Note 16 - Shareholders’ Equity), the Company considered such terms of the total basket of transaction awards in determination of the fair value of the awards.

As no continued or future service was required by the holders of such awards, the Company recognized compensation expense in the second quarter of 2019 based on the fair value of such awards upon closing of the 2019 Transaction.

The Company recognized $ 25,013 expense, net in Share-based compensation expense as of the date of the 2019 Transaction in accordance with the issuance of the merger shares offset by the addition of vesting terms to certain ordinary shares and warrants, as described above.

The expense included the increases in value of $ 48,102 for the granting of merger shares, the increase in value of $ 1,193 for ordinary shares with only time vesting conditions, and the increase in value of shares purchased by the Founders immediately prior to the transaction of $ 4,411 , all offset by the reduction in value of $ 9,396 for ordinary shares with performance vesting condition of $ 15.25 , the reduction in value of $ 13,101 for ordinary shares with performance vesting condition of $ 17.50 and the reduction in value of $ 6,297 related to warrants.

Pursuant to the Sponsor Agreement, certain founders of Churchill Capital Corp purchased an aggregate of 1,500,000 shares of Class B ordinary stock of Churchill immediately prior to the closing of the 2019 Transaction for an aggregate purchase price of $ 15,000 .

We used a third-party specialist to fair value the awards at the 2019 Transaction close date of May 13, 2019 using the Monte Carlo simulation approach.

The assumptions included in the model include, but are not limited to, risk-free interest rate, 2.20 %;

expected volatility of the Company’s and the peer group’s stock prices, 20.00 %;

and dividend yield, 0.00 %.

A discount for lack of marketability (“DLOM”) was applied to shares that are subject to remaining post vesting lock up restrictions.

The DLOM was between 3 % - 7 % dependent on the length of the post vesting restriction period.

On August 14, 2019, Clarivate (on its behalf and on behalf of its subsidiaries) agreed to waive the performance and time vesting conditions, described above, subject to the consummation of the secondary offering.

These shares and warrants nevertheless remain subject to a lock-up for a period ranging from two to three years following the closing of the Mergers.

We used a third-party specialist to fair value the awards at the modification date using the Monte Carlo simulation approach.

The assumptions included in the model include, but are not limited to, risk-free interest rate, 1.42 %;

expected volatility of the Company’s and the peer group’s stock prices, 20.00 %;

and dividend yield, 0.00 %.

A DLOM was applied to shares that are subject to remaining post vesting lock up restrictions.

The DLOM was between 3 % - 7 % dependent on the length of the post vesting restriction period.

CPA Global Phantom Plan

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Given the nature of the lock up periods and the retentive element to the award for the benefit of Clarivate, post-combination stock based compensation charges of $ 8.1 , $ 82.9 and $ 29.9 were recorded within the Cost of revenues and Selling, general and administrative costs line items of the Consolidated Statement of Operations for the years ended December 31, 2022, 2021 and 2020, respectively .

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

within the Restructuring and impairment line item of the Consolidated Statement of Operations for the years ended December 31, 2021 and 2020, respectively.

To the extent vesting of awards were accelerated for colleagues that were involuntarily terminated, the Company accounted for these as a modification and acceleration of stock based compensation charges of $ 0.1 , $ 4.6 and $ 8.5 within the Restructuring and impairment line item of the Consolidated Statement of Operations for the years ended December 31, 2022, 2021 and 2020, respectively .

The Employee Benefit Trust ("EBT") associated with the CPA Global Equity Plan was consolidated on October 1, 2020.

The EBT held Clarivate shares that were recorded as treasury shares as they were legally issued but not outstanding.

The EBT also holds cash that is classified as restricted cash on the Consolidated Balance Sheet.

See Note 16 - Shareholder's Equity for further details on the sale of shares in the EBT in December 2021 to fund the payment to the respective employees via payroll in the first quarter of 2022.

Income tax (benefit)/expense on income/(loss) analyzed by jurisdiction is as follows:

The EBT also held cash that was classified as restricted cash on the Consolidated Balance Sheet.

See Note 14 - Shareholders’ Equity for further details on the sale of shares in the EBT for the year ended December 2021 and December 2022 to fund the payment to the respective employees via payroll during 2022.

Income tax (benefit)/expense analyzed by jurisdiction is as follows:

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

Year Ended December 31,

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2.2 ( 8.3 ) ( 15.9 )

Federal 5,987 ( 15,020 ) ( 824 )

( 56.0 ) 6.0 ( 15.0 )

State ( 3.8 ) ( 2.8 ) ( 1.0 )

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Total provision (benefit) for income taxes $ ( 28.9 ) $ 12.3 $ ( 2.7 )

The components of pre-tax loss are as follows:

(1) The $( 56.0 ) for the year ended December 31, 2022 is inclusive of a release of valuation allowance in the amount of $( 56.2 ) associated with an internal legal entity restructuring executed during the fourth quarter of 2022.

The components of pre-tax income (loss) are as follows:

Year Ended December 31,

2022 2021 2020

(loss) $ ( 13,059 ) $ ( 347,158 ) $ ( 246,688 )

income (loss) $ 174.7 $ ( 13.1 ) $ ( 347.1 )

income (loss) ( 3,721.5 ) ( 284.9 ) ( 47.2 )

Other income (loss) ( 442.3 ) 39.8 41.0

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Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Year Ended December 31,

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Withholding tax — % ( 0.4 ) % ( 0.2 ) %

Tax indemnity — % — % 3.0 %

Impairments ( 6.0 ) % — % — %

Tax Exempt Gain 1.3 % — % — %

Other 0.5 % — % ( 0.1 ) %

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Deferred revenue 10.0 5.2

Partnerships outside basis difference (1)

Other assets 32.6 33.0

Unrealized gain/loss 679 208

Fixed assets, net — 6,237

Debt issuance costs 11.6 17.0

Lease liabilities 12.6 13.5

Goodwill 73,827 123,175

Operating losses and tax attributes 601.8 533.3

1 unchanged sentence

Valuation Allowances (1)

( 1,179.3 ) ( 546.8 )

Net deferred tax assets 155.9 155.7

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Other liabilities ( 19.7 ) ( 20.0 )

Partnerships outside basis difference — ( 49.1 )

Right of use assets ( 7.2 ) ( 9.4 )

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Net deferred tax liabilities $ ( 291.9 ) $ ( 352.2 )

In the Consolidated Balance Sheets, deferred tax assets and liabilities are shown net if they are in the same jurisdiction.

The components of the net deferred tax liabilities as reported on the Consolidated Balance Sheets are as follows:

(1) Goodwill impairment, recorded during the third quarter of 2022, drove the increase in the Goodwill deferred tax asset and the Partnership outside basis difference deferred tax asset;

these increases were primarily offset by increases in Valuation Allowances.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

In the Consolidated Balance Sheets, deferred tax assets and liabilities are shown net if they are in the same jurisdiction.

The components of the net deferred tax liabilities as reported on the Consolidated Balance Sheets are as follows:

Deferred tax asset $ 24.2 $ 27.9

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The valuation allowance is $ 1,179.3 and $ 546.8 at December 31, 2022 and 2021, respectively against certain deferred tax assets, as it more likely than not that such amounts will not be fully realized.

During the years ended December 31, 2021 and 2020, the valuation allowance increased by $ 178,808 and $ 194,703 , respectively.

During the year ended December 31, 2022 and 2021, the valuation allowance increased by $ 632.5 and $ 178.8 , respectively.

At December 31, 2022, the Company had U.S.

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The Company has provided income taxes and withholding taxes in the amount of $ 16.4 on the undistributed earnings of foreign subsidiaries as of December 31, 2022.

Included in the amount is a historical ProQuest liability in the amount of $ 7,461 which was recorded against goodwill in the acquisition accounting.

The Company is not permanently reinvesting its foreign earnings offshore.

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As of December 31, 2022, the interest and penalties are $ 25.8 and, as of December 31, 2021, the interest and penalties are $ 19.8 .

It is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months by

It is reasonably possible that the amount of unrecognized tax benefit related to an open exam will change during the

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

approximately $ 745 .

(In millions, except option prices, ratios or as noted)

next 12 months if the Company is able to resolve material open issues with the local tax authority.

We are unable to estimate the range of the reasonably possible change at this time.

The Company files income tax returns in the United Kingdom, the United States and various other jurisdictions.

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Increases for return to provisions — 11.0 —

Decreases for tax positions taken in prior years ( 19.3 ) — —

Decreases due to statute expirations ( 2.9 ) ( 0.3 ) —

Decrease due to payment — — ( 717 )

Balance at the end of the year $ 83.8 $ 100.2 $ 13.7

Tax Benefits Preservation Plan

The Company’s ability to utilize net operating loss carryforwards and other tax attributes to reduce future U.S.

federal taxable income (collectively, “Tax Assets”) is subject to potential limitations under Section 382 of the Internal Revenue Code and its related tax regulations.

The utilization of these attributes may be limited if certain ownership changes by 5% shareholders (as defined in Treasury regulations pursuant to Section 382) and the effects of stock issuances by the Company during any three-year period result in a cumulative change of more than 50% in the beneficial ownership of the Company.

There are conditions that exist that are beyond the Company’s control which could cause an ownership change in the future and create a significant limitation on the Company’s ability to utilize those tax attributes.

On December 22, 2022, the Board of Directors of the Company adopted a tax benefits preservation plan in order to protect against this possible limitation on the Company’s ability to use Tax Assets to reduce potential future U.S.

federal income tax obligations.

The Tax Benefits Preservation Plan is intended to reduce the likelihood of such an ownership change by deterring any person or group that would be treated as a 5% shareholder from acquiring beneficial ownership, as determined for relevant tax purposes, of 4.9 % or more of the Company’s securities, and deterring existing shareholders who currently meet or exceed this ownership threshold from acquiring additional Company stock.

Any such person or group is an “Acquiring Person” within the meaning of the Tax Benefits Preservation Plan.

To implement the Tax Benefits Preservation Plan, the Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding ordinary share, no par value per share (the “Ordinary Shares”), of the Company.

The dividend was payable to holders of record as of the close of business on January 1, 2023.

Any Ordinary Shares issued after January 1, 2023 will be issued together with the Rights.

The Rights will be exercisable after any person or group becomes an Acquiring Person.

The Tax Benefits Preservation Plan contains an exception from the definition of an Acquiring Person for persons or groups who, immediately prior to the first public announcement of the adoption of the Tax Benefits Preservation Plan, were beneficial owners of 4.9 % or more of the Company’s Ordinary Shares then outstanding, and the exception applies unless or until such person or group acquires beneficial ownership of additional Ordinary Shares.

If the Rights become exercisable, each Right (other than Rights beneficially owned by the Acquiring Person, its affiliates and associates) will entitle the holder to purchase, for $ 42.00 (the “Purchase Price”), a number of Ordinary Shares having an aggregate market value of twice the Purchase Price.

Rights held by the Acquiring Person will become void and will not be exercisable.

The Tax Benefits Preservation Plan also includes an exchange option.

At any time after any person or group of persons acquires 4.9 % or more of the Company’s Ordinary Shares, but less than 50 % or more of the outstanding Ordinary Shares, the Board of Directors, at its option, may exchange the Rights (other than Rights owned by such person or group of persons

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

which will have become void), in whole or in part, at an exchange ratio of one Ordinary Share per outstanding Right (subject to adjustment).

The Rights will trade with the Company’s Ordinary Shares and will expire at the close of business on October 31, 2023, unless earlier terminated or redeemed.

The Board of Directors may terminate the Tax Benefits Preservation Plan prior to the time the Rights are triggered or may redeem the Rights prior to the Distribution Date, as defined in the Tax Benefits Preservation Plan, following a determination that the Tax Benefits Preservation Plan is no longer necessary or desirable for the preservation of the Tax Assets.

The Tax Benefits Preservation Plan adopted by the Board of Directors is similar to plans adopted by other publicly held companies with substantial tax assets and has a limited duration of less than one year .

The Tax Benefits Preservation Plan is not designed to prevent any action that the Board of Directors determines to be in the best interest of the Company and its shareholders.

Earnings Per Share

Basic net earnings per ordinary share from continuing operations (“EPS”) is calculated by taking Income (loss) available to ordinary stockholders divided by the weighted average number of ordinary shares outstanding for the applicable period.

Basic net earnings per ordinary share from continuing operations (“EPS”) is calculated by taking Net income (loss) available to ordinary shareholders divided by the weighted average number of ordinary shares outstanding for the applicable period.

Diluted net EPS is computed by taking net earnings adjusted for the effect of the fair value of Private Placement Warrants divided by the weighted average number of ordinary shares outstanding increased by the number of additional shares which have a dilutive effect.

Potential ordinary shares of 4,703,176 , 19,507,036 and 80,873,293 of Private Placement Warrants, options, RSUs, and PSUs related to the 2019 Incentive Award Plan and other potentially dilutive instruments were excluded from diluted EPS, as applicable, for the year ended December 31, 2021, 2020 and 2019, respectively, as the Company had a net loss and their inclusion would have been anti-dilutive or their performance metric was not met.

See Note 16 - Shareholders’ Equity and Note 17 - Employment and Compensation Arrangements for additional information.

Potential ordinary shares on a gross basis of 11.0 million, 9.6 million and 35.5 million options, RSUs, PSUs, and Warrants related to the 2019 Incentive Award Plan were excluded from diluted EPS for the year ended December 31, 2022, 2021 and 2020, respectively, as their inclusion would have been anti-dilutive or their performance metric was not met.

See Note 14 - Shareholders’ Equity and Note 15 - Share-based Compensation for additional information.

The potential dilutive effect of our MCPS outstanding during the period was calculated using the if-converted method assuming the conversion as of the earliest period reported or at the date of issuance, if later.

The resulting weighted ordinary shares of 25,315,230 r elated to our MCPS are not included in the dilutive weighted-average ordinary shares outstanding calculation for the year ended December 31, 2021, as their effect would be anti-dilutive given the net loss incurred during the year.

The basic and diluted EPS computations for our ordinary shares are calculated as follows (in thousands, except share and per share amounts):

The resulting weighted-average ordinary shares of 55.3 million related to our MCPS are not included in the dilutive weighted-average ordinary shares outstanding calculation for the year ended December 31, 2022, as their effect would be anti-dilutive.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

The basic and diluted EPS computations for our ordinary shares are calculated as follows:

Year Ended December 31,

2022 2021 2020

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

Net income (loss) available to ordinary shareholders $ ( 3,960.2 ) $ ( 270.5 ) $ ( 350.6 )

Dividends on preferred shares 75.4 41.5 —

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

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

Basic weighted-average number of ordinary shares outstanding 676.1 631.0 427.0

Basic EPS $ ( 5.97 ) $ ( 0.49 ) $ ( 0.82 )

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

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

Change in fair value of private placement warrants ( 197.6 ) ( 81.3 ) —

Net loss attributable to ordinary shares, diluted $ ( 393,276 ) $ ( 350,625 ) $ ( 258,633 )

Shares used in computing net loss attributable to per share to ordinary shareholders, basic 630,976,906 427,023.558 273,883,342

Net income (loss) attributable to ordinary shares, diluted $ ( 4,233.2 ) $ ( 393.3 ) $ ( 350.6 )

Shares used in computing net income (loss) attributable to per share to ordinary shareholders, basic 676.1 631.0 427.0

Weighted-average effect of potentially dilutive shares to purchase ordinary shares 2.5 9.8 —

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2022 2021 2020

Net gain on sale of business and other assets (1)

$ — $ 28,140 $ —

Net foreign exchange (loss) gain ( 19,618 ) 19,771 ( 191 )

Net gain on sale of business divestitures $ ( 278.5 ) $ — $ ( 28.1 )

Net foreign exchange (gain) loss ( 45.4 ) 19.6 ( 19.8 )

Miscellaneous expense (income), net ( 0.9 ) 7.9 ( 4.5 )

Other operating (expense) income, net $ ( 27,507 ) $ 52,381 $ 4,826

(1) Includes the net gain on sale of Techstreet in 2020.

Tax Receivable Agreement

At the completion of the 2019 Transaction, we recorded an initial liability of $ 264,600 payable to the pre-business combination equity holders under the TRA, representing approximately 85 % of the calculated tax savings based on the portion of the Covered Tax Assets we anticipate being able to utilize in future years.

TRA payments were expected to commence in 2021 (with respect to taxable periods ending in 2019) and would have been subject to deferral, at the Company’s election, for payment amounts in excess of $ 30,000 to be made in 2021 and 2022 but would not be subject to deferral thereafter.

On August 21, 2019, the Company entered into a Buyout Agreement among the Company and Onex Partners IV LP (“TRA Buyout Agreement”), pursuant to which all future payment obligations of the Company under the Tax Receivable Agreement would terminate in exchange for a payment of $ 200,000 (the “TRA Termination Payment”), which the Company paid on November 7, 2019 with a portion of the net proceeds from the Refinancing 2019 Transaction.

As a result of the

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

payment, a gain was recorded to shareholders equity of $ 64,600 .

As of December 31, 2021 and 2020, our liability under the TRA was $ 0 .

Other operating (income) expense, net $ ( 324.8 ) $ 27.5 $ ( 52.4 )

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.

The aggregate closing consideration included proceeds, net of cash transferred of $ 285.0 , deferred closing consideration of $ 10.6 , and other of $ 0.5 .

As a result of the sale, the Company recorded a net gain of $ 278.5 .

On November 6, 2020, the Company completed the sale of certain assets and liabilities of the Techstreet business for an aggregate purchase price of $ 42.8 , which resulted in a net gain of $ 28.1 .

Segment Information

The Chief Executive Officer is the Company’s Chief Operating Decision Maker (“CODM”).

The CODM evaluates segment performance based primarily on revenue and segment Adjusted EBITDA, as described below.

The CODM does not review assets by operating segment for the purposes of assessing performance or allocated resources.

Each of the Company’s reportable segments, Science Group and Intellectual Property Group, recognizes revenue in accordance with the revenue recognition policy within Note 3 - Summary of Significant Accounting Policies and our ten largest customers represented only 9 %, 6 %, and 5 % of revenues for the years ended December 31, 2021, 2020 and 2019, respectively.

Below is the overview of the product lines within each reportable segment.

The Science segment consists of our Academic and Government Product Line, which includes ProQuest, and our Life Sciences Product Line.

Both Product Lines provide curated, high-value, structured information and consulting services that is delivered and embedded into the workflows of our customers, which include research-intensive corporations, life science organizations and universities world-wide.

Intellectual Property:

The Intellectual Property segment consists of our Patent, Trademark, Domain, and IP Management Product Lines.

These Product Lines help manage customer’s end-to-end portfolio of intellectual property from patents to trademarks to corporate website domains.

Each of the two operating segments represent the segments for which discrete financial information is available and upon which operating results are regularly evaluated by the CODM in order to assess performance and allocate resources.

The CODM evaluates performance based primarily on revenue and segment Adjusted EBITDA.

Adjusted EBITDA represents net (loss) income 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), losses on extinguishment of debt, stock-based compensation, unrealized foreign currency gains/(losses), costs associated with the transition services agreement with Thomson Reuters, 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-cash income/(loss) on equity and cost method investments, non-operating income or expense, the impact of certain non-cash, legal settlements 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.

The CODM evaluates segment performance based primarily on revenue and Adjusted EBITDA.

The CODM does not review assets by segment for the purposes of assessing performance or allocating resources.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

During the quarter ended September 30, 2022, the Company realigned its organizational structure and the composition of its reportable segments, which also resulted in a change to its goodwill reporting units.

Clarivate has three reportable segments:

Academia & Government ("A&G"), Life Sciences & Healthcare ("LS&H"), and Intellectual Property ("IP").

This structure enables a sharp focus on cross-selling opportunities within the markets we serve and provides substantial scale.

The change was effective September 30, 2022, and all segment results for prior periods have been recast to conform to the new presentation and allocation methodologies, which consists of assigning certain costs to each segment based on an identified driver.

Each of the Company’s reportable segments recognizes revenue in accordance with the revenue recognition policy within Note 3 - Summary of Significant Accounting Policies and our ten largest customers represented only 7 %, 9 %, and 6 % of revenues for the years ended December 31, 2022, 2021 and 2020, respectively.

Below is the overview of the product groups within each reportable segment.

• The A&G segment consists of our Academia & Government product group, which drives research excellence across institutions, empower researchers to tackle today’s global challenges and help academic institutions and libraries improve operational efficiency and effectiveness.

• The 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.

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

Each of the three segments represent the segments for which discrete financial information is available and upon which operating results are regularly evaluated by the CODM in order to assess performance and allocate resources.

The CODM evaluates performance based primarily on segment revenue and Adjusted EBITDA.

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 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.

Revenues, net by segment

The following table summarizes revenue by reportable segment for the periods indicated:

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2022 2021 2020

Science Segment $ 902,624 $ 736,765 $ 547,542

Intellectual Property Segment

974,270 517,282 426,803

Total Revenues $ 1,876,894 $ 1,254,047 $ 974,345

Academia and Government $ 1,280.1 $ 489.4 $ 384.7

Life Sciences and Healthcare 452.6 413.2 352.1

Intellectual Property 927.1 974.3 517.3

Total Revenues, net $ 2,659.8 $ 1,876.9 $ 1,254.1

Adjusted EBITDA by segment

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Notes to the Consolidated Financial Statements

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

(In millions, except option prices, ratios or as noted)

Year Ended December 31,

2022 2021 2020

Science Segment Adjusted EBITDA $ 417,066 $ 344,000 $ 240,602

Intellectual Property Segment Adjusted EBITDA 383,338 142,600 53,463

Academia and Government $ 485.5 $ 258.8 $ 202.5

Life Sciences and Healthcare 184.2 143.7 107.0

Intellectual Property 443.0 397.9 177.1

Total Adjusted EBITDA $ 1,112.7 $ 800.4 $ 486.6

Benefit (provision) for income taxes ( 12,298 ) 2,698 ( 10,201 )

Provision for income taxes 28.9 ( 12.3 ) 2.7

Depreciation and amortization ( 710.5 ) ( 537.8 ) ( 303.2 )

Interest, net ( 252,490 ) ( 111,914 ) ( 157,689 )

Mark to market adjustment on financial instruments (1)

Interest expense and amortization of debt discount, net ( 270.3 ) ( 252.5 ) ( 111.9 )

Mark to market gain (loss) on financial instruments (1)

206.8 81.3 ( 205.1 )

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Share-based compensation expense ( 102.2 ) ( 139.6 ) ( 70.5 )

Gain on sale of assets — 28,140 —

Gain on sale from divestitures (4)

Restructuring and impairment (5)

( 66.7 ) ( 129.5 ) ( 56.1 )

Legal settlement — — 39,399

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

Goodwill impairment ( 4,449.1 ) — —

26.9 ( 30.3 ) 1.2

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

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

Dividends on preferred shares ( 75.4 ) ( 41.5 ) —

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

(1) 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.

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

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

(1) 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.

(2) 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.

(3) Includes costs incurred to complete business combination transactions, including acquisitions, dispositions and capital market activities and include advisory, legal, and other professional and consulting costs.

This also includes the mark to market adjustments on the contingent stock consideration associated with the CPA Global and DRG acquisitions.

(4) 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.

(5) Includes primarily the net impact of foreign exchange gains and losses related to the re-measurement of balances and other items that do not reflect our ongoing operating performance.

The 2020 detail also includes costs related to a transition services agreement and offset by the reverse transition services agreement from the sale of MarkMonitor.

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.

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.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

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

(4) 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.

(5) 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.

(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.

Consolidated Revenue and Long-Lived Assets Information by Geographic Area

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Revenue by Geography

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

The following table summarizes revenue from external customers by geography, which is based on the location of the customer:

7 unchanged sentences

Assets by Geography

Assets are allocated based on operations and physical location.

The following table summarizes non-current assets other than financial instruments, operating lease ROU assets and deferred tax assets by geography:

The following table summarizes assets by geography, which is based on operations and physical location:

Year Ended December 31,

3 unchanged sentences

Total Assets $ 13,954.6 $ 20,183.0

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Commitments and Contingencies

6 unchanged sentences

At the present time, primarily because the matters are generally in early stages, we can give no assurance as to the outcome of any pending litigation to which we are currently a party, and we are unable to determine the ultimate resolution of these matters or the effect they may have on us.

Our best estimate of the Company's potential liability for the larger legal claims is $ 60,500 , which includes estimated legal costs and accrued interest.

Our best estimate of the Company's potential liability for the larger legal claims is approximately $ 56 , which includes estimated legal costs and accrued interest.

The recorded probable loss is an estimate and the actual costs arising from our litigation could be materially lower or higher.

We do not expect the outcome of such proceedings to have a material adverse effect on our results of operations or financial condition.

We have and will continue to vigorously defend ourselves against these claims.

We maintain appropriate insurance that we expect is likely to provide coverage for some of these liabilities or other losses that may arise from these litigation matters.

On January 24, 2022, a putative securities class action complaint was filed in the United States District Court for the Eastern District of New York against Clarivate and certain of its executives alleging that there were weaknesses in the company’s internal controls over financial reporting and financial reporting procedures that it failed to disclose in violation of federal securities law and claiming damages on behalf of a putative class of shareholders who acquired Clarivate securities between February 26, 2021 and December 27, 2021.

The complaint references an error in the accounting treatment of an equity plan included in the Company’s 2020 business combination with CPA Global that was disclosed on December 27, 2021.

Clarivate does not believe that the claims alleged in the complaint have merit and will vigorously defend against it.

Given the early stage of the proceedings, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter.

We maintain appropriate levels of insurance, which we expect are likely to provide coverage for some of these liabilities or other losses that may arise from these litigation matters.

Between January and March 2022, three putative securities class action complaints were filed in the United States District Court for the Eastern District of New York against Clarivate and certain of its executives and directors alleging that there were weaknesses in the Company’s internal controls over financial reporting and financial reporting procedures that it failed to disclose in violation of federal securities law.

The complaints were consolidated into a single proceeding on May 18, 2022.

On August 8, 2022, plaintiffs filed a consolidated amended complaint, seeking damages on behalf of a putative class of shareholders who acquired Clarivate securities between July 30, 2020, and February 2, 2022, and/or acquired Clarivate common or preferred shares in connection with offerings on June 10, 2021, or Clarivate common shares in connection with a September 13, 2021, offering.

The amended complaint, like the prior complaints, references an error in the accounting treatment of an equity plan included in the Company’s 2020 business combination with CPA Global that was disclosed on December 27, 2021, and related restatements issued on February 3, 2022, of certain of the Company’s previously issued

CLARIVATE PLC

Notes to the Consolidated Financial Statements

(In millions, except option prices, ratios or as noted)

financial statements;

the amended complaint also alleges that the Company and certain of its executives and directors made false or misleading statements relating to the Company’s product quality and expected organic revenues and organic growth rate, and that they failed to disclose significant known changes to the Company’s business model.

Defendants moved to dismiss the amended complaint on October 7, 2022.

On June 7, 2022, a class action was filed in Pennsylvania state court in the Court of Common Pleas of Philadelphia asserting claims under the Securities Act of 1933, based on substantially similar allegations, with respect to alleged misstatements and omissions in the offering documents for two issuances of Clarivate ordinary shares in June and September 2021.

The Company moved to stay this proceeding on August 19, 2022, and filed its preliminary objections to the state court complaint on October 21, 2022.

Clarivate does not believe that the claims alleged in the complaints have merit and will vigorously defend against them.

Given the early stage of the proceedings, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from these matters.

Warrant Liabilities

2 unchanged sentences

Contingent Liabilities

In conjunction with the acquisition of Publons, the Company agreed to pay former shareholders up to an additional $ 9,500 through 2020.

Amounts payable were contingent upon Publons’ achievement of certain milestones and performance metrics.

The Company paid $ 0 and $ 3,701 of the contingent purchase price in the year ended December 31, 2021 and 2020, respectively, as a result of Publons achieving the first tier of milestones and performance metrics during 2020.

The Company had an outstanding liability of $ 0 related to the estimated fair value of this contingent consideration as of December 31, 2021 and 2020.

In conjunction with the acquisition of Kopernio, the Company paid former shareholders $ 2,184 during the year ended December 31, 2020, due to the achievement of certain milestones and performance metrics.

As a result of the payment, no further obligations exist as of December 31, 2021 and 2020.

In conjunction with the acquisition of TrademarkVision, the Company agreed to pay former shareholders a potential earn-out dependent upon achievement of certain milestones and financial performance metrics through 2020.

Amounts payable were contingent upon TrademarkVision’s achievement of certain milestones and performance metrics.

During the year ended December 31, 2020, the Company paid $ 8,000 of the contingent purchase price to complete the earn-out.

Due to the earn-out being settled during 2020, the outstanding liability as of December 31, 2021 and 2020 was $ 0 .

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

In conjunction with the acquisition of DRG, the Company agreed to pay up to 2,895,638 shares as contingent stock consideration, valued at $ 58,897 on the closing date of the acquisition.

See Note 4 - Business Combinations for more information on the contingent stock consideration.

In conjunction with the acquisition of DRG, the Company agreed to pay up to 2.9 million shares as contingent stock consideration, valued at $ 58.9 on the closing date of the acquisition.

Amounts payable were contingent upon any indemnity losses or claims to indemnity losses occurring within that one-year period.

During March 2021, the Company issued 2,895,638 shares as per the purchase agreement for the acquisition of DRG for a total of $ 61,619 which was satisfied.

The issuance of these shares represents a non-cash financing activity on the statement of cash flows.

In conjunction with the acquisition of CPA Global, the Company agreed to pay up to 1,500,000 shares as contingent stock consideration, valued at $ 46,485 on the closing date of the acquisition.

See Note 4 - Business Combinations for more information on the contingent stock consideration.

During March 2021, the Company issued 2.9 million shares as per the purchase agreement for the acquisition of DRG for a total of $ 61.6 which was satisfied.

The issuance of these shares represents a non-cash financing activity on the Consolidated Statement of Cash Flows.

In conjunction with the acquisition of CPA Global, the Company agreed to pay up to 1.5 million shares as contingent stock consideration, valued at $ 46.5 on the closing date of the acquisition.

The amount was payable 110 days after the acquisition date and was contingent upon any indemnity losses or claims for indemnity losses as defined in the purchase agreement.

During January 2021, the Company issued 1,500,000 shares as per the purchase agreement for the acquisition of CPA Global related to a hold-back clause for a total of $ 43,890 which was satisfied.

During January 2021, the Company issued 1.5 million shares as per the purchase agreement for the acquisition of CPA Global related to a hold-back clause for a total of $ 43.9 which was satisfied.

The issuance of these shares represents a non-cash financing activity on the statement of cash flows.

As of December 31, 2021, there were no outstanding contingent liabilities.

As of December 31, 2022 and 2021, there were no outstanding contingent liabilities.

MCPS Dividends

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The contractual terms of these purchase obligations extend through 2027.

The Company incurred $ 83,598 towards these purchase obligations during the year ended December 31, 2021.

The Company paid $ 157.2 towards these purchase obligations during the year ended December 31, 2022.

The future unconditional purchase obligations as of December 31, 2022, are as follows:

Year ending December 31,

Total $ 199,944

Related Party and Former Parent Transactions

The Company had an outstanding liability of $ 13 , $ 4 and $ 3 to Onex as of December 31, 2021, 2020 and 2019, respectively.

In connection with the 2016 Transaction, Bidco and a subsidiary of the Former Parent entered into the Transition Service Agreement, which became effective on October 3, 2016, pursuant to which such subsidiary of the Former Parent will, or will cause its affiliates and/or third-party service providers to, provide Bidco, its affiliates and/or third-party service providers with certain technology, facilities management, human resources, sourcing, financial, accounting, data management, marketing and other services to support the operation of the IP&S business as an independent company.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

services are provided by such subsidiary of the Former Parent or its affiliates and/or third-party service providers for various time periods and at various costs based upon the terms set forth in the Transition Service Agreement.

Two controlled affiliates of Baring are vendors of ours.

Total expenses incurred for these vendors were $ 880 , $ 830 and $ 765 for the years ended December 31, 2021, 2020 and 2019, respectively.

The Company had an outstanding liability to these vendors of $ 330 and $ 237 as of December 31, 2021 and 2020, respectively.

A controlled affiliate of Onex is a customer of ours.

The net revenue from this customer during the period was $ 1,790 and $ 2,136 for the years ended December 31, 2021 and 2020, respectively.

The Company had no outstanding receivable as of December 31, 2021 and 2020.

This customer was not a related party for the year ended December 31, 2019.

Three controlled affiliates of Leonard Green & Partners, L.P.

are customers of ours.

The net revenue from these customers during the period was $ 128 , $ 42,184 and $ 180 for the year ended December 31, 2021 and $ 129 , $ 10,857 and $ 136 for the year ended December 31, 2020, respectively.

The Company had an outstanding receivable of $ 32 , $ 70,952 and $ 51 as of December 31, 2021 and $ 31 , $ 54,656 and $ 264 as of December 31, 2020.

These customers were not a related party for the year ended December 31, 2019.

Three controlled affiliates of Leonard Green & Partners, L.P.

are vendors of ours.

Total expenses incurred for these vendors were $ 1,257 , $ 32,394 and $ 6,110 for the year ended December 31, 2021 and $ 295 , $ 6,934 and $ 1,817 for the year ended December 31, 2020, respectively.

The Company had no outstanding liability to these vendors as of December 31, 2021 and $ 0 , $ 0 and $ 1,995 as of December 31, 2020.

These vendors were not a related party for the year ended December 31, 2019.

One of our independent directors has an immediate family member who is a member of management within one of Clarivate’s customers.

Total revenue from the Customer was $ 1,028 , $ 1,497 and $ 33 for the years ended December 31, 2021, 2020 and 2019, respectively.

The Company had $ 60 , $ 100 and $ 4 outstanding receivable as of December 31, 2021, 2020 and 2019, respectively.

(In millions, except option prices, ratios or as noted)

Year Ending December 31,

Total $ 637.3

Related Party Transactions

Two of our independent directors are each affiliated with a Clarivate customer.

As of and for the year ended December 31, 2022, the Company had $ 0.1 of receivables outstanding and recognized $ 1.3 of revenues, net, from these customers.

An independent director is affiliated with a Clarivate vendor.

As of and for the year ended December 31, 2022, the Company had no outstanding payables and incurred $ 4.5 of expense related to this vendor.

An independent director has an immediate family member who is affiliated with a Clarivate customer.

As of both December 31, 2022 and 2021, the Company had $ 0.1 of receivables outstanding, and recognized $ 1.1 , $ 1.0 and $ 1.5 of revenues, net, during the year ended December 31, 2022, 2021 and 2020, respectively, from this customer.

On May 15, 2021, Clarivate entered into an agreement with Capri Acquisition Topco Limited (“Capri”) and Solaro ExchangeCo Limited (“NewCo”), and for certain limited purposes, LGP.

Capri and NewCo are controlled by LGP and held the Clarivate ordinary shares beneficially owned by LGP and certain other existing shareholders.

Under the agreement, Capri contributed 177,206,779 of its Clarivate ordinary shares to NewCo.

Capri and NewCo are controlled by LGP and held Clarivate ordinary shares beneficially owned by LGP and certain other existing shareholders.

Under the agreement, Capri contributed 177.2 million of its Clarivate ordinary shares to NewCo.

Clarivate then acquired NewCo in exchange for the issuance of the same number of Clarivate ordinary shares to Capri.

3 unchanged sentences

On December 1, 2021, Clarivate closed its acquisition of ProQuest from CIG, Atairos and certain other equity holders (the "Seller Group").

The aggregate consideration included $ 1,094,901 from the issuance of 46,910,923 ordinary shares to the Seller Group.

The aggregate consideration included $ 1,094.9 from the issuance of 46.9 million ordinary shares to the Seller Group.

As part of the acquisition, and as a result, CIG is a related party to Clarivate.

Clarivate assumed a Finance lease in which CIG is the Lessor as part of the acquisition.

From the period between December 1, 2021 and December 31, 2021, interest expense of $ 98 and amortization of Finance lease ROU asset of $ 1,291 is reflected in the Consolidated Statements of Operations.

For the year ended December 31, 2022, interest expense of $ 1.2 and amortization of the Finance lease right of use asset ("ROU") of $ 10.8 is reflected in the Consolidated Statements of Operations.

The Finance lease ROU asset of $ 8.0 is presented within Property, Plant, and Equipment (see Note 7 - Property and Equipment, Net) and the corresponding lease liability of $ 31.3 is treated as an item of indebtedness (see Note 12 - Debt) within the Consolidated Balance Sheet.

Restructuring and Impairment

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

In connection with the CPA Global Acquisition restructuring program, a social plan was entered into in Belgium.

Liabilities for non-retirement post-employment benefits that fall under ASC 712 are recognized when the severance liability was determined to be probable of being paid and reasonably estimable.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

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.

Restructuring charges included actions to reduce operational costs.

Components of the pre-tax charges include $ 2,063 and $ 16,069 in severance costs and $ 158 and $ 10,578 in other costs incurred during the year ended December 31, 2021 and 2020, respectively.

The Science and IP segments incurred $ 775 and $ 1,446 of the expense, respectively, during the year ended December 31, 2021 and $ 13,559 and $ 13,087 during the year ended December 31, 2020, respectively.

DRG Acquisition Integration Program

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

Restructuring charges included actions to reduce operational costs.

Components of the pre-tax charges include $ 120 and $ 5,133 in severance costs and $ 75 and $ 1,464 in other costs incurred during the year ended December 31, 2021 and 2020, respectively .

The Science and IP segments incurred $ 78 and $ 117 of the expense, respectively, during the year ended December 31, 2021, and $ 3,286 and $ 3,311 during the year ended December 31, 2020, respectively.

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.

Restructuring charges included actions to reduce operational costs.

Components of the pre-tax charges include $ 35,882 and $ 18,715 in severance costs and $ 69,240 and $ 4,179 in other costs incurred during the year ended December 31, 2021 and 2020, respectively .

The Science and IP segments incurred $ 37,899 and $ 67,223 of the expense, respectively, during the year ended December 31, 2021, and $ 7,414 and $ 6,938 during the year ended December 31, 2020.

One Clarivate Program

During the second quarter 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 cost savings driver being from a reduction in workforce.

Components of the pre-tax charges include $ 17,275 and $0 in severance costs and $ 2,707 and $0 in other costs incurred during the year ended December 31, 2021 and 2020, respectively .

The Science and IP segments incurred $ 7,206 and $ 12,775 of the expense, respectively, during the year ended December 31, 2021, and $0 and $0 during the year ended December 31, 2020.

ProQuest Acquisition Integration Program

During the fourth quarter 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 cost savings driver being from a reduction in workforce.

Components of the pre-tax charges include $ 1,939 in severance costs and $0 in other costs incurred during the year ended December 31, 2021.

The Science and IP segments incurred $ 671 and $ 1,268 of the expense, respectively, during the year ended December 31, 2021.

The table below summarizes the activity related to the restructuring reserves across each of Clarivate's cost-saving's programs.

During the second quarter of 2021, the Company approved a restructuring plan to streamline operations within targeted areas of the Company to reduce operational costs, with the primary cost savings driver being from a reduction in workforce.

D uring the years ended December 31, 2022 and 2021, c omponents of the pre-tax charges included $ 16.7 and $ 17.3 in severance costs and $ — and $ 2.7 in other costs, respectively.

Of the total pre-tax charges incurred during the year ended December 31, 2022, $ 9.3 , $ 3.0 , and $ 4.4 were attributed to our A&G, LS&H, and IP segments, respectively.

Of the total pre-tax charges incurred during the year ended December 31, 2021, $ 7.0 , $ 3.9 , and $ 9.1 were attributed to our A&G, LS&H, and IP segments, respectively.

As of December 31, 2022, the Company does not expect to incur any significant further costs associated with this program.

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Restructuring Programs Severance and Related Benefit Costs (3)

Costs Associated with Exit and Disposal Costs (1)

(In millions, except option prices, ratios or as noted)

ProQuest Acquisition Integration Program

During the fourth quarter of 2021, the Company approved a restructuring plan to streamline operations within targeted areas of the Company to reduce operational costs, with the primary cost savings driver being from a reduction in workforce.

D uring the years ended December 31, 2022 and 2021, c omponents of the pre-tax charges included $ 22.9 and $ 1.9 in severance costs and $ 26.5 and $ 0.0 in other costs, respectively.

Of the total pre-tax charges incurred during the year ended December 31, 2022, $ 26.5 , $ 7.6 , and $ 15.3 were attributed to our A&G, LS&H, and IP segments, respectively.

Of the total pre-tax charges incurred during the year ended December 31, 2021, $ 0.7 , $ 0.4 and $ 0.8 were attributed to our A&G, LS&H, and IP segments, respectively.

Other Restructuring Programs

During 2020 and the fourth quarter of 2019, we engaged a strategic consulting firm to assist us in optimizing our structure and cost base, resulting in the implementation of several cost-saving and margin improvement programs designed to generate substantial incremental cash flows.

As of December 31, 2022, the Company does not expect to incur any significant further costs associated with these programs.

D uring the years ended December 31, 2022 and 2021, c omponents of the pre-tax charges included $( 0.4 ) and $ 38.1 in severance costs and $ 1.0 and $ 69.5 in other costs, respectively.

Of the total pre-tax charges incurred during the year ended December 31, 2022, $ 0.4 , $ 0.0 , and $ 0.2 were attributed to our A&G, LS&H, and IP segments, respectively.

Of the total pre-tax charges incurred during the year ended December 31, 2021, $ 24.9 , $ 23.9 , and $ 58.8 were attributed to our A&G, LS&H, and IP segments, respectively.

The table below summarizes the activity related to the restructuring reserves across each of Clarivate's cost-saving programs.

Restructuring Programs Severance and Related Benefit Costs Costs Associated with Exit and Disposal Costs (1)

Reserve Balance as of December 31, 2020 $ 25.7 $ 3.8 $ 29.5

Expenses recorded (2)

57.3 72.2 129.5

Payments made ( 48.8 ) ( 35.2 ) ( 84.0 )

Noncash items and other adjustments 1,707 ( 6,404 ) ( 4,697 )

Noncash items ( 5.9 ) ( 40.1 ) ( 46.0 )

Reserve Balance as of December 31, 2021 $ 28.3 $ 0.7 $ 29.0

4 unchanged sentences

Reserve Balance as of December 31, 2022 $ 11.5 $ 0.1 $ 11.6

(1) Relates primary to lease exit costs and legal and advisory fees.

(2) Severance and related benefit cost includes $ 4,532 of non-cash adjustments, primarily related to the acceleration of stock based compensation awards.

(3) Expenses recorded for Severance and Related Benefit Costs includes the acceleration of equity based awards for severed individuals under the CPA Global Equity Plan.

These expenses will be paid in cash and is accounted for as a liability award.

The following table is a summary of charges incurred related to the Company's restructuring programs for the year ended December 31, 2021 and 2020 .

(1) Relates to lease abandonment, contract exit and legal and advisory fees.

(2) Severance and related benefit cost includes non-cash adjustments, primarily related to the acceleration of stock based compensation awards.

The following table is a summary of charges incurred related to the Company's restructuring programs for the years ended December 31, 2022, 2021 and 2020.

Year Ended December 31,

2022 2021 2020

Severance and related benefit costs $ 39.2 $ 57.3 $ 39.9

Costs associated with exit and disposal activities (1)

Costs associated with lease exit costs including impairment (2)

Costs associated with lease abandonment 24.3 61.1 7.7

Total restructuring and impairment $ 66.7 $ 129.5 $ 56.1

(1) Relates primarily to contract exit costs, legal and advisory fees.

(2) Relates primary to lease exit costs.

Employee Rights Upon Retirement

In Israel, the Company is required by law to make severance payments upon dismissal of an employee or upon termination of employment in certain other circumstances.

The Company operates a number of post-employment defined contribution plans.

A defined contribution plan is a program that benefits an employee after termination of employment, under which the Company regularly makes ongoing deposits into Israeli employees' pension plans to fund their severance liabilities.

According to Section 14 of the Severance Pay Law, for employees employed by the Company under section 14, the Company deposits are made in lieu of the Company's severance liability for 85 % of the employees' salaries, therefore no obligation is provided for in the financial statements for such portion of the employees' salaries.

Severance pay liabilities for the section 14 employees, is calculated for 15 % of salary and provided for in the financial statements based upon the latest monthly salary multiplied by the number of years of employment.

The fund assets for such section 14 employees are not included in the Company’s financial position.

For employees that are not under section 14, severance pay liabilities are provided for in the financial statements based upon the latest monthly salary multiplied by the number of years of employment.

The fund assets for such non-section 14 employees are included in the Company’s financial position.

In accordance with its terms, the plans meet the definition of a defined contribution plan.

December 31, 2021 December 31, 2020

Long-term severance payable $ 8,586 $ 9,608

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

Quarterly Financial Data (Unaudited)

The following table below summarizes certain quarterly results of operations (in thousands except per share data).

We have revised our Diluted EPS disclosures for the First and Third Quarter Diluted EPS calculations for misstatements identified in the original calculations which incorrectly excluded the change in fair value of private placement warrants and the corresponding effect of the weighted-average impact of potentially dilutive shares to purchase ordinary shares.

We evaluated whether our previously issued interim consolidated financial statements were materially misstated due to these corrections.

Based upon our evaluation of both quantitative and qualitative factors, we believe that the effects of these misstatements were not material individually or in the aggregate to the previously reported quarterly periods.

Accordingly, we have revised such amounts below and will revise the diluted earnings per share in the subsequent quarterly filings on Form 10-Q in 2022.

Refer to the footnote in the table below for more information related to these revisions.

First Quarter Second Quarter Third Quarter Fourth Quarter

Revenues $ 428,430 $ 445,645 $ 442,117 $ 560,702

(Loss) income from operations $ ( 69,510 ) $ ( 63,770 ) $ 14,375 $ 31,925

Net (loss) income attributable to ordinary shares $ ( 55,951 ) $ ( 131,567 ) $ 5,993 $ ( 130,431 )

Earnings per share:

Basic $ ( 0.09 ) $ ( 0.22 ) $ 0.01 $ ( 0.20 )

Diluted (As Revised) $ ( 0.17 ) (1)

$ ( 0.22 ) $ ( 0.12 ) (1)

(1) The revision pertains to the treatment of mark-to-market gains within Q1-21 and Q3-21 reported results on the warrants within income attributable to ordinary shareholders and corresponding adjustments to Diluted weighted-average shares outstanding.

Refer to the supplemental quarterly table presented below for revised computations.

Previously reported Diluted earnings per share for the first quarter and third quarter of 2021 was ($0.09) and $0.01, respectively.

The diluted EPS computations for our ordinary shares for each of the quarterly periods presented were calculated as follows (in thousands, except share and per share amounts):

First Quarter Second Quarter Third Quarter Fourth Quarter

Net (loss) income attributable to ordinary shares $ ( 55,951 ) $ ( 131,567 ) $ 5,993 $ ( 130,431 )

Change in fair value of private placement warrants (1)

( 51,215 ) — ( 83,013 ) —

Net loss attributable to ordinary shares, diluted $ ( 107,166 ) $ ( 131,567 ) $ ( 77,020 ) $ ( 130,431 )

Shares used in computing net loss attributable to per share to ordinary shareholders, basic 602,272,375 611,093,882 634,508,967 654,886,227

Weighted-average effect of potentially dilutive shares to purchase ordinary shares (1)

10,326,289 — 9,393,810 —

Diluted weighted-average number of ordinary shares outstanding 612,598,664 611,093,882 643,902,777 654,886,227

Diluted EPS $ ( 0.17 ) $ ( 0.22 ) $ ( 0.12 ) $ ( 0.20 )

CLARIVATE PLC

Notes to the Consolidated Financial Statements

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

First Quarter Second Quarter Third Quarter Fourth Quarter

Revenues $ 240,592 $ 273,500 $ 284,360 $ 455,595

(Loss) income from operations $ ( 28,308 ) $ 14,246 $ ( 12,664 ) $ ( 9,621 )

Net loss attributable to ordinary shares $ ( 129,633 ) $ ( 25,281 ) $ ( 181,986 ) $ ( 13,725 )

Earnings per share:

Basic $ ( 0.38 ) $ ( 0.07 ) $ ( 0.47 ) $ ( 0.02 )

Diluted $ ( 0.38 ) $ ( 0.07 ) $ ( 0.47 ) $ ( 0.05 )

(In millions, except option prices, ratios or as noted)

Lease Remeasurements

In connection with the Company's digital workplace transformation initiative to enable colleagues to work remotely, the Company had ceased the use of select leased sites during the year ended December 31, 2022 and 2021.

As a result, the Company recorded a non-cash adjustment to Restructuring and impairment within the Consolidated Statement of Operations based on the estimate of future recoverable cash flows of $ 23.6 and $ 57.3 for the year ended December 31, 2022 (consisting of operating and finance leases) and 2021, respectively.

Additionally, the Company incurred $ 0.7 and $ 3.3 in lease termination fees during the year ended December 31, 2022 and 2021, respectively.

Subsequent Events

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Based on this evaluation, other than disclosed within these Consolidated Financial Statements and related notes, the Company has determined no other events were required to be recognized or disclosed.

On February 7, 2022, the Company announced that our Board of Directors approved the purchase of up to $ 1,000 million of the Company's ordinary shares through open-market purchases, to be executed through December 31, 2023.

The Board of Directors also 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.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data