LONDON, March 10, 2022
/PRNewswire/ -- Clarivate Plc (NYSE: CLVT) (the "Company" or
"Clarivate"), a global leader in providing trusted information and
insights to accelerate the pace of innovation, today reported
results for the fourth quarter and year ended December 31, 2021.
Fourth Quarter 2021 Financial Highlights
- Revenues of $560.7 million
increased 23.1%, and 24.3% at constant currency
- Adjusted Revenues(1) of $560.2 million increased 18.9%, and 20.1% at
constant currency
- Adjusted organic revenues(1) increased 4.0% at
constant currency
- Net loss(2) attributable to ordinary shares of
$130.4 million increased $116.7 million; Net loss per diluted share of
$0.20 increased $0.15
- Adjusted Net Income(1) of $163.2 million increased 20.4%; Adjusted Income
per diluted share(1) of $0.23 increased 4.7% or $0.01
- Adjusted EBITDA(1) of $256.6
million increased 28.3% and Adjusted EBITDA
Margin(1) of 45.8% increased 340 basis points
Full Year 2021 Financial Highlights
- Revenues of $1,876.9 million
increased 49.7%, and 48.3% at constant currency
- Adjusted Revenues(1) of $1,880.8 million increased 47.3%, and 46.0% at
constant currency
- Adjusted organic revenues([1]) increased 4.5% at
constant currency
- Net loss(2) attributable to ordinary shares of
$312.0 million improved $38.7 million; Net loss per diluted share of
$0.61 improved $0.21
- Adjusted Net Income(1) of $481.7 million increased 66.6%; Adjusted Income
per diluted share(1) of $0.72 increased 11.5% or $0.08
- Adjusted EBITDA(1) of $800.4
million increased 64.5% and Adjusted EBITDA
Margin(1) of 42.6% increased 450 basis points
- Cash Flow from Operations increased $60.3 million to $323.8
million; Adjusted Free Cash Flow(1) increased
$157.8 million to $459.4 million
1
|
Represents a Non-GAAP
measure. Please see "Reconciliation to Certain Non-GAAP measures"
in this earnings release for important disclosures and
reconciliations of these financial measures to the most directly
comparable GAAP measure. These terms are defined elsewhere in this
earnings press release.
|
|
|
2
|
Net loss margin
change from comparable period is not meaningful.
|
Jerre Stead, Executive Chair and
CEO, said: "We delivered good subscription and re-occurring revenue
growth and grew our Adjusted EBITDA margin in the fourth quarter.
Transactional revenues faced some headwinds late in the quarter,
which prevented us from delivering better results. However, we are
taking steps to improve this smaller segment of our
business."
"2021 continued to be a transformative year for us. We enhanced
our academic offerings with the acquisition of ProQuest, completed
the inside sales customer migration to better serve more than
24,000 customers, launched more than 90 new product offerings and
enhancements, and continued to deliver on cost savings initiatives.
With our One Clarivate vision, which aligns our operations into
four customer verticals to focus outside-in on our customers and
the complete portfolio of solutions we can offer them, we are
poised to deliver improved growth and exceptional cash flows in
2022."
Selected Financial Information
The results for the
year ended December 31, 2021 include
contributions from the following 2020 acquisitions: 1) CPA Global,
which was completed in October 2020;
2) Beijing Incopat Co., Ltd ("IncoPat"), which was completed in
October 2020; 3) Hanlim IPS Co., Ltd
("Hanlim"), which was completed in November
2020; and 4) DRG, which was completed in February 2020. Additionally, the results for the
year ended December 31, 2021 include
contributions from the following 2021 acquisitions: 1) Bioinfogate,
which was completed in August 2021;
and 2) ProQuest, which was completed in December 2021 for which there were no comparable
amounts in the year ended December 31,
2020. The results for the three months and year ended
December 31, 2021 exclude the results
of Techstreet, which was divested in November 2020.
|
Three Months
Ended
December 31,
|
|
Change
|
|
Year Ended
December 31,
|
|
Change
|
(in millions,
except percentages and per share data);(unaudited)
|
2021
|
|
2020
|
|
$
|
|
%
|
|
2021
|
|
2020
|
|
$
|
|
%
|
Revenues,
net
|
$
560.7
|
|
$
455.6
|
|
$
105.1
|
|
23.1%
|
|
$
1,876.9
|
|
$
1,254.0
|
|
$
622.8
|
|
49.7%
|
Adjusted revenues,
net(1)
|
$
560.2
|
|
$
471.3
|
|
$
88.9
|
|
18.9%
|
|
$
1,880.8
|
|
$
1,277.1
|
|
$
603.7
|
|
47.3%
|
Annualized Contract
Value (ACV)
|
$
1,611.8
|
|
$
906.6
|
|
$
705.2
|
|
77.8%
|
|
$
1,611.8
|
|
$
906.6
|
|
$
705.2
|
|
77.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to ordinary shareholders
|
$
(130.4)
|
|
$
(13.7)
|
|
$
116.7
|
|
850.3%
|
|
$ (312.0)
|
|
$ (350.6)
|
|
$
(38.7)
|
|
(11.0)%
|
Net loss per share
(diluted)
|
$
(0.20)
|
|
$
(0.05)
|
|
$
0.15
|
|
300.0%
|
|
$
(0.61)
|
|
$
(0.82)
|
|
$
(0.21)
|
|
(25.6)%
|
Weighted-average
shares outstanding (diluted)
|
654.9
|
|
620.8
|
|
—
|
|
5.5%
|
|
640.8
|
|
427.0
|
|
—
|
|
50.1%
|
Adjusted
EBITDA(1)
|
$
256.6
|
|
$
200.1
|
|
$
56.5
|
|
28.3%
|
|
$
800.4
|
|
$
486.6
|
|
$
313.8
|
|
64.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income(1)
|
$
163.2
|
|
$
135.6
|
|
$
27.6
|
|
20.4%
|
|
$
481.7
|
|
$
289.1
|
|
$
192.5
|
|
66.6%
|
Adjusted diluted
EPS(1)
|
$
0.23
|
|
$
0.22
|
|
$
0.01
|
|
4.7%
|
|
$
0.72
|
|
$
0.64
|
|
$
0.08
|
|
11.5%
|
Weighted average
ordinary shares (diluted)(2)
|
714.0
|
|
620.8
|
|
—
|
|
15.0%
|
|
670.4
|
|
448.9
|
|
—
|
|
49.4%
|
Net cash provided by
operating activities
|
$
18.3
|
|
$
135.5
|
|
$
(117.2)
|
|
(86.5)%
|
|
$
323.8
|
|
$
263.5
|
|
$
60.3
|
|
22.9%
|
Free cash
flow(1)
|
$
(14.1)
|
|
$
106.4
|
|
$
(120.5)
|
|
(113.3)%
|
|
$
205.2
|
|
$
155.8
|
|
$
49.4
|
|
31.7%
|
Adjusted free cash
flow(1)
|
$
143.8
|
|
$
173.4
|
|
$
(29.7)
|
|
(17.1)%
|
|
$
459.4
|
|
$
301.7
|
|
$
157.8
|
|
52.3%
|
|
(Amounts in tables
may not sum due to rounding)
|
|
|
(1)
|
Non-GAAP measure.
Please see "Reconciliation to Certain Non-GAAP measures" in this
earnings release for important disclosures and reconciliations of
these financial measures to the most directly comparable GAAP
measure. These terms are defined elsewhere in this earnings
release.
|
|
|
(2)
|
Calculated assuming a
net income position compared to a net loss position on the
statement of operations for calculating Adjusted net income and
Adjusted diluted EPS.
|
Fourth Quarter 2021 Operating Results
Revenues, net, for the fourth quarter increased $105.1 million, or 23.1%, to $560.7 million, and increased 24.3% on a
constant currency basis. Adjusted revenues, net, which excludes the
impact of deferred revenues resulting from purchase accounting
adjustments related to acquisitions, increased 20.1% on a constant
currency basis. Adjusted organic revenues(1) increased
4.0% on a constant currency basis.
Subscription revenues for the fourth quarter increased
$61.9 million, or 25.4%, to
$305.5 million, and increased
26.4% on a constant currency basis, primarily driven by the
acquisition of ProQuest in December
2021, partially offset by the Techstreet divestiture.
Organic subscription revenues(1) increased 4.5% on a
constant currency basis due to higher life sciences, healthcare
data solutions, and CPA Global revenues.
Re-occurring revenues for the fourth quarter increased
$7.7 million, or 6.9% to $119.6 million, and increased 8.7% on a constant
currency basis. Organic re-occurring revenues(1)
increased 8.4% on a constant currency basis, primarily from the CPA
Global patent renewals business.
Transactional revenues for the fourth quarter increased
$19.3 million, or 16.7%, to
$135.0 million, and increased
17.8% on a constant currency basis, primarily due to the
acquisition of ProQuest, partially offset by the Techstreet
divestiture. Organic transactional revenues(1) decreased
1.2% on a constant currency basis due to lower healthcare data
solutions, healthcare professional services and IP custom data
sales.
Net loss attributable to ordinary shares for the fourth quarter
was $130.4 million, or $(0.20) per diluted share, compared to Net loss
of $13.7 million, or $(0.05) per diluted share, in the prior-year
period, primarily driven by higher interest expense as a result of
recent acquisitions and the negative impact of mark to market
adjustments on outstanding private placement warrants.
Adjusted EBITDA for the fourth quarter was $256.6 million, an increase of $56.5 million or 28.3%, driven by the earnings
contribution from acquisitions, organic growth and cost savings
from integration programs.
Adjusted net income for the fourth quarter was $163.2 million, an increase of $27.6 million or 20.4%, driven by higher revenues
and ongoing cost savings initiatives.
Adjusted diluted earnings per share was $0.23 for the fourth quarter, compared to
$0.22 in the prior-year period, as
strong growth in Adjusted net income was offset by a 15.0% increase
in weighted average ordinary shares outstanding primarily driven by
the acquisitions of CPA Global and ProQuest.
Full Year 2021 Operating Results
Revenues, net, for the full year 2021 increased $622.8 million, or 49.7%, to $1,876.9 million, and increased 48.3% on a
constant currency basis. Adjusted revenues, net, increased
$603.7 million or 47.3%, to
$1,880.8 million, and increased 46.0%
on a constant currency basis. Adjusted organic
revenues(1) increased 4.5% on a constant currency
basis.
Subscription revenues for the full year 2021 increased
$156.7 million, or 17.9%, to
$1,034.4 million, and increased 16.0%
on a constant currency basis, primarily driven by the acquisition
of CPA Global, partially offset by the Techstreet divestiture.
Organic subscription revenues(1) increased 3.5% on a
constant currency basis due to higher life sciences, healthcare
data solutions, Web of Science and CompuMark revenues.
Re-occurring revenues for the full year 2021 increased
$341.3 million, or 304.9% to
$453.2 million, and increased 306.7%
on a constant currency basis, primarily from the patent renewals
business acquired in the CPA Global acquisition. Organic
re-occurring revenues(1) increased 8.4% on a constant
currency basis due to higher CPA Global revenues.
Transactional revenues for the full year 2021 increased
$105.7 million, or 36.8%, to
$393.2 million, and increased
35.9% on a constant currency basis, primarily due to the
acquisition of CPA Global, partially offset by the Techstreet
divestiture. Organic transactional revenues(1) increased
5.9% on a constant currency basis due to higher healthcare data
solutions, stronger back file sales and trademark search
volumes.
Net loss attributable to ordinary shares for the full year 2021
was $312.0 million, or
$(0.61) per diluted share, compared
to Net loss of $350.6 million, or
$(0.82) per diluted share, in the
prior year period, primarily driven by improved mark to market
adjustments on outstanding private placement warrants, partially
offset by higher interest expense.
Adjusted EBITDA for the full year 2021 was $800.4 million, an increase of $313.8 million or 64.5%, driven by the earnings
contribution from acquisitions, organic growth and cost savings
from integration programs.
Adjusted net income for the full year 2021 was $481.7 million, an increase of $192.5 million or 66.6%, driven by higher
revenues and ongoing cost savings initiatives.
Adjusted diluted earnings per share was $0.72 for the full year 2021, compared to
$0.64 in the prior year, as strong
growth in Adjusted net income was offset by a 49.4% increase in
weighted average ordinary shares outstanding primarily driven by
the acquisition of CPA Global and ProQuest.
Balance Sheet and Cash Flow
As of December 31, 2021, cash and
cash equivalents of $430.9 million
increased $173.1 million, driven by
the growth in revenues and profits. Restricted cash increased
$142.1 million to $156.7 million, compared to December 31, 2020 primarily due to the cash
received from the Employee Benefit Trust established for the CPA
Equity Plan in December 2021.
The Company's total debt outstanding as of December 31, 2021 was $5.6
billion, an increase of $2.0
billion compared to December 31,
2020, primarily due to the debt offering to finance a
portion of the purchase price for the acquisition of ProQuest.
Net cash provided by operating activities was $323.8 million for the year ended December 31, 2021, compared to net cash provided
by operating activities of $263.5
million for the prior year. Adjusted free cash flow for the
year ended December 31, 2021, was
$459.4 million, and an increase of
$157.8 million, compared to the prior
year, as a result of growth in revenues and Adjusted EBITDA.
Outlook for 2022 (forward-looking statement)
Jonathan Collins, Executive Vice
President and Chief Financial Officer, said: "Our 2022 financial
outlook reflects significant growth driven by the acquisition of
ProQuest and an increase in organic revenue. With our enhanced
inside sales model and a united go-to-market sales strategy
centered around the One Clarivate vision, we currently expect to
generate a 200-basis improvement in organic revenue growth of
approximately 6.5%. Our Adjusted EBITDA margin will slightly
compress before we fully recognize the more than $100 million of cost synergies related to the
ProQuest acquisition by the end of 2023."
The full year outlook presented below assumes no further
currency movements, acquisitions, divestitures, or unanticipated
events.
The below outlook includes Non-GAAP measures. Please see
"Reconciliation to Certain Non-GAAP measures" presented below for
important disclosure and reconciliations of these financial
measures to the most directly comparable GAAP measure. These terms
are defined elsewhere in this earnings press release.
|
2022
Outlook
|
Revenues
|
$2.80B to
$2.88B
|
Adjusted
EBITDA
|
$1.16B to
$1.22B
|
Adjusted EBITDA
margin
|
41% to 42%
|
Adjusted Diluted
EPS(1)
|
$0.85 to
$0.95
|
Adjusted Free Cash
Flow
|
$675M to
$725M
|
|
|
(1)
|
Adjusted Diluted EPS
for 2022 is calculated based on approximately 741.7 million
fully diluted weighted average shares outstanding.
|
Conference Call and Webcast
Clarivate will host a
conference call and webcast today to review the results for the
fourth quarter at 9:00 a.m. Eastern
Time. The conference call will be simultaneously webcast on
the Investor Relations section of the company's website.
Interested parties may access the live audio broadcast by
dialing 1-888-317-6003 in the United
States, 1-412-317-6061 for international, and 1-866-284-3684
in Canada. The conference ID
number is 7262464. An audio replay will be available approximately
two hours after the completion of the call at 1-877-344-7529 in
the United States, 1-412-317-0088
for international, and 1-855-669-9658 in Canada. The Replay Conference ID number is
10153175. The recording will be available for replay through
March 25, 2022. The webcast can be
accessed at https://services.choruscall.com/links/clvt220217.html
and will be available for replay.
Use of Non-GAAP Financial Measures
Non-GAAP results
are not presentations made in accordance with U.S. generally
accepted accounting principles ("GAAP") and are presented only as a
supplement to our financial statements based on GAAP. Non-GAAP
financial information is provided to enhance the reader's
understanding of our financial performance, but none of these
non-GAAP financial measures are recognized terms under GAAP. They
are not measures of financial condition or liquidity, and should
not be considered as an alternative to profit or loss for the
period determined in accordance with GAAP or operating cash flows
determined in accordance with GAAP. As a result, you should not
consider such measures in isolation from, or as a substitute for,
financial measures or results of operations calculated or
determined in accordance with GAAP.
We use non-GAAP measures in our operational and financial
decision-making. We believe that such measures allow us to focus on
what we deem to be a more reliable indicator of ongoing operating
performance and our ability to generate cash flow from operations
and we also believe that investors may find these non-GAAP
financial measures useful for the same reasons. Non-GAAP measures
are frequently used by securities analysts, investors, and other
interested parties in their evaluation of companies comparable to
us, many of which present non-GAAP measures when reporting their
results. These measures can be useful in evaluating our performance
against our peer companies because we believe the measures provide
users with valuable insight into key components of GAAP financial
disclosures. However, non-GAAP measures have limitations as
analytical tools and because not all companies use identical
calculations, our presentation of non-GAAP financial measures may
not be comparable to other similarly titled measures of other
companies.
Definitions and reconciliations of non-GAAP measures, such as
Adjusted Revenues, Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, Adjusted
Free Cash Flow, Standalone Adjusted EBITDA, and organic revenue to
the most directly comparable GAAP measures are provided within the
schedules attached to this release. Our presentation of non-GAAP
measures should not be construed as an inference that our future
results will be unaffected by any of the adjusted items, or that
any projections and estimates will be realized in their entirety or
at all.
Forward-Looking Statements
This communication contains "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
These statements, which express management's current views
concerning future business, events, trends, contingencies,
financial performance, or financial condition, appear at various
places in this communication and may use words like "aim,"
"anticipate," "assume," "believe," "continue," "could," "estimate,"
"expect," "forecast," "future," "goal," "intend," "likely," "may,"
"might," "plan," "potential," "predict," "project," "see," "seek,"
"should," "strategy," "strive," "target," "will," and "would" and
similar expressions, and variations or negatives of these words.
Examples of forward-looking statements include, among others,
statements we make regarding: guidance outlook and predictions
relating to expected operating results, such as revenue growth and
earnings; strategic actions such as acquisitions, joint ventures,
and dispositions, including the anticipated benefits therefrom, and
our success in integrating acquired businesses; anticipated levels
of capital expenditures in future periods; our ability to
successfully realize cost savings initiatives and transition
services expenses; our belief that we have sufficiently liquidity
to fund our ongoing business operations; expectations of the effect
on our financial condition of claims, litigation, environmental
costs, the COVID-19 pandemic and governmental responses thereto,
contingent liabilities, and governmental and regulatory
investigations and proceedings; and our strategy for customer
retention, growth, product development, market position, financial
results, and reserves. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on management's current beliefs, expectations,
and assumptions regarding the future of our business, future plans
and strategies, projections, anticipated events and trends, the
economy, and other future conditions. Because forward-looking
statements relate to the future, they are difficult to predict and
many of which are outside of our control. Important factors that
could cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include those factors discussed under the caption "Risk Factors" in
our annual report on Form 10-K, along with our other filings with
the U.S. Securities and Exchange Commission ("SEC"). However, those
factors should not be considered to be a complete statement of all
potential risks and uncertainties. Additional risks and
uncertainties not known to us or that we currently deem immaterial
may also impair our business operations. Forward-looking statements
are based only on information currently available to our management
and speak only as of the date of this communication. We do not
assume any obligation to publicly provide revisions or updates to
any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances
change, except as otherwise required by securities and other
applicable laws. Please consult our public filings with the SEC or
on our website at www.clarivate.com.
About Clarivate
Clarivate™ is a global leader in providing solutions to
accelerate the lifecycle of innovation. Our bold mission is to help
customers solve some of the world's most complex problems by
providing actionable information and insights that reduce the time
from new ideas to life-changing inventions in the areas of science
and intellectual property. We help customers discover, protect and
commercialize their inventions using our trusted subscription and
technology-based solutions coupled with deep domain expertise. For
more information, please visit clarivate.com.
Consolidated
Balance Sheets (In thousands, except share data)
(unaudited)
|
|
|
December
31,
2021
|
|
December
31,
2020
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
430,879
|
|
$
257,730
|
Restricted
cash
|
156,734
|
|
14,678
|
Accounts receivable,
net of allowance of $6,713 and $8,745 at December 31, 2021 and
December 31, 2020, respectively
|
906,428
|
|
737,733
|
Prepaid
expenses
|
76,551
|
|
58,273
|
Other current
assets
|
66,646
|
|
79,150
|
Total current
assets
|
1,637,238
|
|
1,147,564
|
Property and
equipment, net
|
83,849
|
|
36,267
|
Other intangible
assets, net
|
10,392,354
|
|
7,370,350
|
Goodwill
|
7,904,863
|
|
6,042,964
|
Other non-current
assets
|
50,710
|
|
31,334
|
Deferred income
taxes
|
27,938
|
|
29,863
|
Operating lease
right-of-use assets
|
86,027
|
|
132,356
|
Total
Assets
|
$
20,182,979
|
|
$
14,790,698
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
129,218
|
|
$
82,038
|
Accrued expenses and
other current liabilities
|
679,603
|
|
569,682
|
Current portion of
deferred revenues
|
1,030,399
|
|
707,318
|
Current portion of
operating lease liability
|
32,177
|
|
35,455
|
Current portion of
long-term debt
|
30,577
|
|
28,600
|
Total current
liabilities
|
1,901,974
|
|
1,423,093
|
Long-term
debt
|
5,456,280
|
|
3,457,900
|
Warrant
liabilities
|
227,839
|
|
312,751
|
Non-current portion
of deferred revenues
|
54,250
|
|
41,399
|
Other non-current
liabilities
|
142,752
|
|
49,445
|
Deferred income
taxes
|
380,060
|
|
366,996
|
Operating lease
liabilities
|
93,955
|
|
104,324
|
Total
liabilities
|
8,257,110
|
|
5,755,908
|
Commitments and
contingencies
|
|
|
|
Shareholders'
equity:
|
|
|
|
Preferred Shares, no
par value; 14,375,000 shares authorized; 5.25% Mandatory
Convertible Preferred Shares, Series A, 14,375,000 and 0 shares
issued and outstanding at December 31, 2021 and December 31,
2020, respectively
|
1,392,616
|
|
—
|
Ordinary Shares, no
par value; unlimited shares authorized at December 31, 2021 and
December 31, 2020; 683,139,210 and 606,329,598 shares issued
and outstanding at December 31, 2021 and December 31, 2020,
respectively
|
11,827,915
|
|
9,989,284
|
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
|
Accumulated
deficit
|
(1,604,461)
|
|
(1,250,838)
|
Total shareholders'
equity
|
11,925,869
|
|
9,034,790
|
Total Liabilities
and Shareholders' Equity
|
$
20,182,979
|
|
$
14,790,698
|
Consolidated
Statement of Operations (In thousands, except share and
per share data) (unaudited)
|
|
|
Three Months Ended
December 31,
|
|
2021
|
|
2020
|
Revenues,
net
|
$
560,702
|
|
$
455,595
|
Operating
expenses:
|
|
|
|
Cost of
revenues
|
(187,793)
|
|
(170,172)
|
Selling, general and
administrative costs
|
(184,142)
|
|
(176,454)
|
Depreciation
|
(4,753)
|
|
(4,558)
|
Amortization
|
(140,549)
|
|
(122,392)
|
Restructuring and
impairment
|
(3,774)
|
|
(29,346)
|
Other operating
expense, net
|
(7,766)
|
|
37,706
|
Total operating
expenses
|
(528,777)
|
|
(465,216)
|
Income (loss) from
operations
|
31,925
|
|
(9,621)
|
Mark to market
adjustment on financial instruments
|
(31,887)
|
|
19,113
|
Income before
interest expense and income tax
|
38
|
|
9,492
|
Interest expense and
amortization of debt discount, net
|
(111,334)
|
|
(39,608)
|
Loss before income
tax
|
(111,296)
|
|
(30,116)
|
Provision for income
taxes
|
(58)
|
|
16,391
|
Net loss
|
(111,354)
|
|
(13,725)
|
Dividends on preferred
shares
|
(19,077)
|
|
—
|
Net loss attributable
to ordinary shares
|
$
(130,431)
|
|
$
(13,725)
|
|
|
|
|
Per share:
|
|
|
|
Basic
|
$
(0.20)
|
|
$
(0.02)
|
Diluted
|
$
(0.20)
|
|
$
(0.05)
|
|
|
|
|
Weighted average
shares used to compute earnings per share:
|
|
|
|
Basic
|
654,886,227
|
|
599,768,645
|
Diluted
|
654,886,227
|
|
620,754,996
|
Consolidated
Statement of Operations (In thousands, except share and
per share data) (unaudited)
|
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
Revenues,
net
|
$
1,876,894
|
|
$
1,254,047
|
Operating
expenses:
|
|
|
|
Cost of
revenues
|
(626,104)
|
|
(438,787)
|
Selling, general and
administrative costs
|
(642,989)
|
|
(544,700)
|
Depreciation
|
(13,996)
|
|
(12,709)
|
Amortization
|
(523,819)
|
|
(290,441)
|
Restructuring and
impairment
|
(129,459)
|
|
(56,138)
|
Other operating
(expense) income, net
|
(27,507)
|
|
52,381
|
Total operating
expenses
|
(1,963,874)
|
|
(1,290,394)
|
Loss from
operations
|
(86,980)
|
|
(36,347)
|
Mark to market
adjustment on financial instruments
|
81,320
|
|
(205,062)
|
Loss before interest
expense and income tax
|
(5,660)
|
|
(241,409)
|
Interest expense and
amortization of debt discount, net
|
(252,490)
|
|
(111,914)
|
Loss before income
tax
|
(258,150)
|
|
(353,323)
|
(Provision) benefit
for income taxes
|
(12,298)
|
|
2,698
|
Net loss
|
(270,448)
|
|
(350,625)
|
Dividends on preferred
shares
|
(41,508)
|
|
—
|
Net loss attributable
to ordinary shares
|
$
(311,956)
|
|
$
(350,625)
|
|
|
|
|
Per share:
|
|
|
|
Basic
|
$
(0.49)
|
|
$
(0.82)
|
Diluted
|
$
(0.61)
|
|
$
(0.82)
|
|
|
|
|
Weighted average
shares used to compute earnings per share:
|
|
|
|
Basic
|
630,976,906
|
|
427,023,558
|
Diluted
|
640,774,100
|
|
427,023,558
|
Consolidated
Statements of Cash Flows (In thousands)
(unaudited)
|
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
Cash Flows From
Operating Activities
|
|
|
|
Net loss
|
$
(270,448)
|
|
$
(350,625)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
537,815
|
|
303,150
|
Bad debt
expense
|
5,988
|
|
3,332
|
Deferred income tax
benefit
|
(13,358)
|
|
(45,509)
|
Share-based
compensation
|
33,329
|
|
34,158
|
Restructuring and
impairment
|
48,152
|
|
5,212
|
Loss (gain) on foreign
currency forward contracts
|
6,904
|
|
(2,903)
|
Mark to market
adjustment on contingent shares
|
(25,085)
|
|
25,212
|
Mark to market
adjustment on financial instruments
|
(81,320)
|
|
205,062
|
Gain on disposal of
business
|
—
|
|
(29,192)
|
Deferred finance
charges
|
13,170
|
|
5,752
|
Other operating
activities
|
541
|
|
2,611
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(64,067)
|
|
29,947
|
Prepaid
expenses
|
2,744
|
|
5,742
|
Other
assets
|
27,702
|
|
45,678
|
Accounts
payable
|
31,193
|
|
(2,851)
|
Accrued expenses and
other current liabilities
|
85,924
|
|
(54,794)
|
Deferred
revenues
|
207
|
|
80,683
|
Operating lease right
of use assets
|
3,363
|
|
5,329
|
Operating lease
liabilities
|
(25,820)
|
|
(6,064)
|
Other
liabilities
|
6,833
|
|
3,570
|
Net cash provided by
operating activities
|
323,767
|
|
263,500
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(118,543)
|
|
(107,713)
|
Acquisitions, net of
cash acquired
|
(3,930,214)
|
|
(2,916,471)
|
Acquisition of
intangible assets
|
—
|
|
(5,982)
|
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)
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
Proceeds from
revolving credit facility
|
175,000
|
|
60,000
|
Proceeds from issuance
of debt
|
2,000,000
|
|
1,960,000
|
Redemption of Notes
not exchanged
|
(157,424)
|
|
—
|
Principal payments on
term loan
|
(28,600)
|
|
(12,600)
|
Repayments of
revolving credit facility
|
—
|
|
(125,000)
|
Payment of debt
issuance costs and discounts
|
(32,624)
|
|
(38,340)
|
Contingent purchase
price payment
|
—
|
|
(7,816)
|
Proceeds from issuance
of preferred shares
|
1,392,616
|
|
—
|
Proceeds from issuance
of ordinary shares
|
728,040
|
|
843,744
|
Proceeds from issuance
of treasury shares
|
139,864
|
|
—
|
Repurchases of
ordinary shares
|
(159,356)
|
|
—
|
Cash dividends on
preferred shares
|
(18,868)
|
|
—
|
Proceeds from warrant
exercises
|
—
|
|
277,526
|
Proceeds from stock
options exercised
|
18,562
|
|
2,122
|
Payments related to
finance lease
|
(158)
|
|
—
|
Payments related to tax
withholding for stock-based compensation
|
(24,892)
|
|
(33,056)
|
Net cash provided by
financing activities
|
4,032,160
|
|
2,926,580
|
Effects of exchange
rates
|
3,738
|
|
(5,043)
|
|
|
|
|
Net increase in cash
and cash equivalents
|
173,149
|
|
181,600
|
Net increase in
restricted cash
|
142,056
|
|
14,669
|
Net increase in cash
and cash equivalents, and restricted cash
|
315,205
|
|
196,269
|
|
|
|
|
Beginning of
period:
|
|
|
|
Cash and cash
equivalents
|
257,730
|
|
76,130
|
Restricted
cash
|
14,678
|
|
9
|
Total cash and cash
equivalents, and restricted cash, beginning of period
|
272,408
|
|
76,139
|
Cash and cash
equivalents, and restricted cash, end of period
|
587,613
|
|
272,408
|
|
|
|
|
End of
period:
|
|
|
|
Cash and cash
equivalents
|
430,879
|
|
257,730
|
Restricted
cash
|
156,734
|
|
14,678
|
Total cash and cash
equivalents, and restricted cash, end of period
|
$
587,613
|
|
$
272,408
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
Cash paid for
interest
|
182,415
|
|
97,510
|
Cash paid for income
tax
|
33,869
|
|
27,621
|
Capital expenditures
included in accounts payable
|
8,692
|
|
7,783
|
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
Non-Cash Financing
Activities:
|
|
|
|
Shares issued and
returned for funding of CPA Global Equity Plan
|
$
—
|
|
$
(196,038)
|
Shares issued to
Capri Acquisition Topco Limited
|
5,052,165
|
|
—
|
Retirement of
treasury shares
|
(5,211,521)
|
|
—
|
Shares issued as
contingent stock consideration associated with the DRG
acquisition
|
61,619
|
|
—
|
Shares issued as
contingent stock consideration associated with the CPA Global
acquisition
|
43,890
|
|
—
|
Shares issued as
dividends on our 5.25% Series A Mandatory Convertible Preferred
Shares
|
16,141
|
|
—
|
Dividends accrued on
our 5.25% Series A Mandatory Convertible Preferred
Shares
|
6,499
|
|
—
|
Total Non-Cash
Financing Activities
|
$
(31,207)
|
|
$
(196,038)
|
Reconciliation to Certain Non-GAAP Measures
(Amounts
in tables may not sum due to rounding)
Adjusted Revenues
Adjusted Revenues excludes
the impact of the deferred revenues purchase accounting adjustments
(recorded in connection with recent acquisitions).
The following table presents our calculation of Adjusted
Revenues for the three months and year ended December 31, 2021 and 2020 and a reconciliation
of this measure to our Revenues, net for the same periods:
|
Three Months Ended
December 31,
|
|
Variance
|
(in millions, except
percentages); (unaudited)
|
2021
|
|
2020
|
|
$
|
|
%
|
Revenues,
net
|
$
560.7
|
|
$
455.6
|
|
$
105.1
|
|
23.1%
|
Deferred revenues
adjustment(1)
|
(0.5)
|
|
15.7
|
|
(16.2)
|
|
(103.3)%
|
Adjusted revenues,
net
|
$
560.2
|
|
$
471.3
|
|
$
88.9
|
|
18.9%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
|
Year Ended
December 31,
|
|
Variance
|
(in millions, except
percentages); (unaudited)
|
2021
|
|
2020
|
|
$
|
|
%
|
Revenues,
net
|
$
1,876.9
|
|
$
1,254.0
|
|
$
622.8
|
|
49.7 %
|
Deferred revenues
adjustment(1)
|
4.0
|
|
23.1
|
|
(19.2)
|
|
(82.9)%
|
Adjusted revenues,
net
|
$
1,880.8
|
|
$
1,277.1
|
|
$
603.7
|
|
47.3 %
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
Adjusted EBITDA
Adjusted EBITDA represents net
income (loss) before provision for income taxes, depreciation and
amortization, interest income and expense adjusted to exclude
acquisition or disposal-related transaction costs (such costs
include net income from continuing operations before provision for
income taxes, depreciation and amortization and interest income and
expense from divestitures), share-based compensation, mandatory
convertible preferred share dividend expense, unrealized foreign
currency gains/(losses), costs associated with the transition
services agreement with Thomson Reuters, which we entered into in
connection with our separation from Thomson Reuters in 2016,
separation and integration costs, transformational and
restructuring expenses, acquisition-related adjustments to deferred
revenues, costs related to our merger with Churchill Capital Corp
in 2019, non-operating income or expense, the impact of certain
non-cash, mark to market adjustments on financial instruments and
other items that are included in net income for the period that the
Company does not consider indicative of its ongoing operating
performance and certain unusual items impacting results in a
particular period. Per Clarivate's Non-GAAP policy effective
January 1, 2021, we have ceased use
of adjustments for costs in connection with our separation from
Thomson Reuters including costs related to the transition services
agreement and separation, integration, and transformational
expenses, as well as costs related to our merger with Churchill
Capital Corp in 2019.
The following table presents our calculation of Adjusted EBITDA
for the three months and year ended December
31, 2021 and 2020 and reconciles these measures to our Net
loss for the same periods:
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
(in millions);
(unaudited)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net loss attributable
to ordinary shares
|
$
(130.4)
|
|
$
(13.7)
|
|
$
(312.0)
|
|
$
(350.6)
|
Dividends on
preferred shares
|
19.1
|
|
—
|
|
41.5
|
|
—
|
Net loss
|
(111.4)
|
|
(13.7)
|
|
(270.4)
|
|
(350.6)
|
Provision (benefit)
for income taxes
|
0.1
|
|
(16.4)
|
|
12.3
|
|
(2.7)
|
Depreciation and
amortization
|
145.3
|
|
127.0
|
|
537.8
|
|
303.2
|
Interest expense and
amortization of debt discount, net
|
111.3
|
|
39.6
|
|
252.5
|
|
111.9
|
Deferred revenues
adjustment(1)
|
(0.5)
|
|
15.7
|
|
4.0
|
|
23.1
|
Transaction related
costs(2)
|
38.7
|
|
29.1
|
|
46.2
|
|
99.3
|
Share-based
compensation expense
|
31.8
|
|
39.4
|
|
139.6
|
|
70.5
|
Gain on sale of
Techstreet
|
—
|
|
(28.1)
|
|
—
|
|
(28.1)
|
Restructuring and
impairment(3)
|
3.8
|
|
29.3
|
|
129.5
|
|
56.1
|
Mark to market
adjustment on financial instruments(4)
|
31.9
|
|
(19.1)
|
|
(81.3)
|
|
205.1
|
Other
(5)
|
5.6
|
|
(2.6)
|
|
30.4
|
|
(1.1)
|
Adjusted
EBITDA
|
$
256.6
|
|
$
200.1
|
|
$
800.4
|
|
$
486.6
|
Adjusted EBITDA
Margin
|
45.8 %
|
|
42.4 %
|
|
42.6 %
|
|
38.1 %
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 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.
|
|
|
(2)
|
Includes costs
incurred to complete business combination transactions, including
acquisitions, dispositions and capital market activities and
include advisory, legal, and other professional and consulting
costs. This also includes the mark to market adjustments on the
contingent stock consideration associated with the CPA Global and
DRG acquisitions.
|
|
|
(3)
|
Reflects costs
related to restructuring and impairment associated with the
acquisition of primarily DRG and CPA Global in 2020. This also
includes costs incurred in connection with the initiative,
following our merger with Churchill Capital Corp in 2019, to
streamline our operations by simplifying our organization and
focusing on two segments. During 2021, the CPA Global plan
continued as well as the addition of the One Clarivate and ProQuest
Programs, which were approved restructuring actions to streamline
operations within targeted areas of the Company. Additionally,
during the year ended December 31, 2021, 2020 and 2019, we incurred
impairment charges taken on right-of-use assets of $57,305, $4,771
and $0 respectively, relating the exit and ceased use of leased
properties.
|
|
|
(4)
|
Reflects mark to
market adjustments on financial instruments under Accounting
Standards Codification 815, Derivatives and Hedging, ("ASC
815"). Warrant instruments that do not meet the criteria to be
considered indexed to an entity's own stock shall be initially
classified as a liability at their estimated fair values,
regardless of the likelihood that such instruments will ever be
settled in cash. In periods subsequent to issuance, changes in the
estimated fair value of the liabilities are reported through
earnings.
|
|
|
(5)
|
Includes primarily
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items that do not reflect our
ongoing operating performance. The 2021 YTD detail also includes an
accrual of $8,000 for a legal case. The 2020 detail also
includes costs related to a transition services agreement and
offset by the reverse transition services agreement from the sale
of MarkMonitor. In 2019, this includes payments to Thomson Reuters
under the Transition Services Agreement. For both 2020 and 2019,
this also includes costs incurred in connection with and after our
separation from Thomson Reuters in 2016 relating to the
implementation of our standalone company infrastructure and related
cost-savings initiatives. 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.
|
Adjusted Net Income and Adjusted Diluted EPS
Adjusted Net Income is calculated using net income (loss),
adjusted to exclude acquisition or disposal-related transaction
costs (such costs include net income from continuing operations
before provision for income taxes, depreciation and amortization
and interest income and expense from the divested business),
amortization related to acquired intangible assets, share-based
compensation, mandatory convertible preferred share dividend
expense, unrealized foreign currency gains/(losses), costs
associated with the transition services agreement with Thomson
Reuters, which we entered into in connection with our separation
from Thomson Reuters in 2016, separation and integration costs,
transformational and restructuring expenses, acquisition-related
adjustments to deferred revenues, costs related to our merger with
Churchill Capital Corp in 2019, non-operating income or expense,
the impact of certain non-cash, mark to market adjustments on
financial instruments, interest on debt held in escrow, and other
items that are included in net income for the period that the
Company does not consider indicative of its ongoing operating
performance and certain unusual items impacting results in a
particular period, and the income tax impact of any adjustments.
Per Clarivate's Non-GAAP policy effective January 1, 2021, we have ceased use of
adjustments for costs in connection with our separation from
Thomson Reuters including costs related to the transition services
agreement and separation, integration, and transformational
expenses, as well as costs related to our merger with Churchill
Capital Corp in 2019. We calculate Adjusted Diluted EPS by using
Adjusted Net Income divided by adjusted diluted weighted average
shares for the period. The adjusted diluted weighted average shares
assumed that all instruments in the calculation are dilutive.
The following table presents our calculation of Adjusted Net
Income and Adjusted Diluted EPS for the three months and year ended
December 31, 2021 and 2020 and
reconciles these measures to our Net loss and EPS for the same
periods:
|
Three Months
Ended
December 31,
|
|
Three Months
Ended
December 31,
|
|
2021
|
|
2020
|
(in millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net loss attributable
to ordinary shares
|
$
(130.4)
|
|
$
(0.20)
|
|
$
(32.8)
|
|
$
(0.05)
|
Dividends on preferred
shares
|
19.1
|
|
0.03
|
|
19.1
|
|
0.03
|
Net loss
|
(130.4)
|
|
(0.20)
|
|
(13.7)
|
|
(0.02)
|
Deferred revenues
adjustment(1)
|
(0.5)
|
|
—
|
|
15.7
|
|
0.03
|
Transaction related
costs(2)
|
38.7
|
|
0.05
|
|
29.1
|
|
0.05
|
Share-based
compensation expense
|
31.8
|
|
0.04
|
|
39.4
|
|
0.06
|
Amortization related
to acquired intangible assets
|
117.4
|
|
0.16
|
|
100.2
|
|
0.16
|
Restructuring and
impairment(3)
|
3.8
|
|
0.01
|
|
29.3
|
|
0.05
|
Mark to market
adjustment on financial instruments(4)
|
31.9
|
|
0.04
|
|
(19.1)
|
|
(0.03)
|
Interest on new debt
held in escrow(5)
|
66.6
|
|
0.09
|
|
—
|
|
—
|
Gain on sale of
Techstreet
|
—
|
|
—
|
|
(28.1)
|
|
(0.05)
|
Other(6)
|
5.6
|
|
0.01
|
|
(2.6)
|
|
—
|
Income tax impact of
related adjustments
|
(20.7)
|
|
(0.03)
|
|
(14.5)
|
|
(0.02)
|
Adjusted net income
and Adjusted Diluted EPS
|
$
163.2
|
|
$
0.23
|
|
$
135.6
|
|
$
0.22
|
Adjusted weighted
average ordinary shares (Diluted)
|
713,985,329
|
|
620,754,996
|
|
Year Ended
December 31,
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
(in millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net loss attributable
to ordinary shares, diluted
|
$
(393.3)
|
|
$
(0.61)
|
|
$
(350.6)
|
|
$
(0.82)
|
Change in fair value
of private placement warrants
|
81.3
|
|
0.12
|
|
—
|
|
—
|
Net loss attributable
to ordinary shares
|
(312.0)
|
|
(0.49)
|
|
(350.6)
|
|
(0.82)
|
Dividends on preferred
shares
|
41.5
|
|
0.06
|
|
—
|
|
—
|
Net loss
|
(270.4)
|
|
(0.43)
|
|
(350.6)
|
|
(0.82)
|
Deferred revenues
adjustment(1)
|
4.0
|
|
0.01
|
|
23.1
|
|
0.05
|
Transaction related
costs(2)
|
46.2
|
|
0.07
|
|
99.3
|
|
0.22
|
Share-based
compensation expense
|
139.6
|
|
0.21
|
|
70.5
|
|
0.16
|
Amortization related
to acquired intangible assets
|
450.5
|
|
0.67
|
|
237.0
|
|
0.53
|
Restructuring and
impairment(3)
|
129.5
|
|
0.19
|
|
56.1
|
|
0.13
|
Mark to market
adjustment on financial instruments(4)
|
(81.3)
|
|
(0.12)
|
|
205.1
|
|
0.46
|
Interest on debt held
in escrow(5)
|
95.8
|
|
0.14
|
|
—
|
|
—
|
Debt extinguishment
costs and refinancing related costs
|
—
|
|
—
|
|
8.6
|
|
0.02
|
Gain on sale of
Techstreet
|
—
|
|
—
|
|
(28.1)
|
|
(0.06)
|
Other(6)
|
30.4
|
|
0.05
|
|
(1.1)
|
|
—
|
Income tax impact of
related adjustments
|
(62.4)
|
|
(0.09)
|
|
(30.7)
|
|
(0.07)
|
Adjusted net income
and Adjusted Diluted EPS
|
$
481.7
|
|
$
0.72
|
|
$
289.1
|
|
$
0.64
|
Adjusted weighted
average ordinary shares (Diluted)
|
670,399,061
|
|
448,875,052
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
|
|
(2)
|
Includes costs
incurred to complete business combination transactions, including
acquisitions, dispositions and capital market activities and
include advisory, legal, and other professional and consulting
costs. This also includes the mark to market adjustments on the
contingent stock consideration associated with the CPA Global and
DRG acquisitions.
|
|
|
(3)
|
Reflects costs
primarily related to restructuring and impairment associated with
the acquisition of primarily DRG and CPA Global in 2020, as well as
the approved One Clarivate and ProQuest restructuring programs in
2021. This also includes costs incurred in connection with the
initiative, following our merger with Churchill Capital Corp in
2019, to streamline our operations by simplifying our organization
and focusing on two segments.
|
|
|
(4)
|
Reflects mark to
market adjustments on our private placement warrant financial
instruments. In periods after issuance, changes in the estimated
fair value of the liabilities are reported through
earnings.
|
|
|
(5)
|
Reflects interest
expense incurred on the principal related to the 2021 debt
offering, that was held in escrow until the completion of the
acquisition of ProQuest on December 1, 2021. Clarivate used the net
proceeds to finance a portion of the purchase price and
therefore, considered as part of the transaction costs associated
with the acquisition.
|
|
|
(6)
|
Includes primarily
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items that do not reflect our
ongoing operating performance. The 2021 YTD detail also includes an
accrual of $8,000 for a legal case. The 2020 detail also includes
costs related to a transition services agreement and offset by the
reverse transition services agreement from the sale of MarkMonitor
and costs incurred in connection with and after our separation from
Thomson Reuters in 2016 relating to the implementation of our
standalone company infrastructure and related cost-savings
initiatives. These costs were largely wound down by the end of
2020.
|
Free Cash Flow and Adjusted Free Cash Flow
Free cash flow is calculated using net cash provided by
operating activities less capital expenditures. Adjusted free cash
flow is calculated as free cash flow, less cash paid for
restructuring and lease-exit activities, transition services
agreement, transition, transformation and integration expenses,
transaction related costs, interest on debt held in escrow, and
debt issuance costs offset by cash received for hedge accounting
transactions. Per Clarivate's Non-GAAP policy effective
January 1, 2021, we have ceased use
of adjustments for costs in connection with our separation from
Thomson Reuters including costs related to the transition services
agreement and separation, integration, and transformational
expenses, as well as costs related to our merger with Churchill
Capital Corp in 2019.
The following table reconciles our non-GAAP free cash flow and
Adjusted free cash flow measure to net cash provided by operating
activities:
|
Year Ended
December 31,
|
(in millions);
(unaudited)
|
2021
|
|
2020
|
Net cash provided by
operating activities
|
$
323.8
|
|
$
263.5
|
Capital
expenditures
|
(118.5)
|
|
(107.7)
|
Free cash
flow
|
205.2
|
|
155.8
|
Cash paid for
restructuring costs(1)
|
80.3
|
|
26.0
|
Cash paid for
transaction related costs(2)
|
78.2
|
|
95.8
|
Cash paid for
transition, integration and other costs(3)
|
1.6
|
|
20.3
|
Cash paid for
transition services agreement(4)
|
—
|
|
(2.2)
|
Cash paid for debt
issuance costs
|
57.8
|
|
7.7
|
Cash paid for interest
held in escrow(5)
|
36.3
|
|
—
|
Cash received for
hedge accounting transactions
|
—
|
|
(1.7)
|
Adjusted free cash
flow
|
$
459.4
|
|
$
301.7
|
|
|
(1)
|
Reflects cash
payments for costs primarily related to restructuring and
lease-exit activities associated with the acquisition of DRG and
CPA Global in 2020. This also includes cash paid for costs incurred
in connection with the initiative, following our merger with
Churchill Capital Corp in 2019, to streamline our operations by
simplifying our organization and focusing on two
segments.
|
|
|
(2)
|
Includes cash paid
for costs incurred to complete business combination transactions,
including acquisitions, dispositions and capital market activities
and include advisory, legal, and other professional and consulting
costs.
|
|
|
(3)
|
Includes cash paid
for costs incurred in 2020 and 2019 in connection with and after
our separation from Thomson Reuters in 2016 relating to the
implementation of our standalone company infrastructure and related
cost-savings initiatives, costs for which were largely wound down
by December 31, 2020, as well as other costs that do not reflect
our ongoing operating performance.
|
|
|
(4)
|
In 2020, this is
related to a new transition services agreement, offset by the
reverse transition services agreement from the sale of MarkMonitor
assets.
|
|
|
(5)
|
Reflects the portion
of cash paid on interest expense incurred on the principal related
to the 2021 debt offering, that was held in escrow until the
completion of the pending acquisition of ProQuest on December 1,
2021. Clarivate used the net proceeds to finance a portion of the
purchase price and therefore, considered as part of the transaction
costs associated with the pending acquisition.
|
Required Reported Data
Standalone Adjusted
EBITDA
We are required to report Standalone Adjusted EBITDA, which is
identical to Consolidated EBITDA and EBITDA as such terms are
defined under our credit facilities, dated as of October 31, 2019, and the indentures governing
our secured notes due 2026 issued by Camelot Finance S.A. and
guaranteed by certain of our subsidiaries, and the indentures
governing the secured and unsecured notes issued by Clarivate
Science Holdings Corporation in August
2021, respectively. In addition, the credit facilities and
the indentures contain certain restrictive covenants that govern
debt incurrence and the making of restricted payments, among other
matters. These restrictive covenants utilize Standalone Adjusted
EBITDA as a primary component of the compliance metric governing
our ability to undertake certain actions otherwise proscribed by
such covenants. Standalone Adjusted EBITDA reflects further
adjustments to Adjusted EBITDA for cost savings already implemented
and excess standalone costs.
Because Standalone Adjusted EBITDA is required pursuant to the
terms of the reporting covenants under the credit facilities and
the indentures and because this metric is relevant to lenders and
noteholders, management considers Standalone Adjusted EBITDA to be
relevant to the operation of its business. It is also utilized by
management and the compensation committee of the Board as an input
for determining incentive payments to employees.
Excess standalone costs are the difference between our actual
standalone company infrastructure costs, and our estimated steady
state standalone infrastructure costs. We make an adjustment for
the difference because we have had to incur costs under the
transition services agreement, with Thomson Reuters after we had
implemented the infrastructure to replace the services provided
pursuant to the transition services agreement, thereby incurring
dual running costs. Furthermore, there has been a ramp up period
for establishing and optimizing the necessary standalone
infrastructure. Since our separation from Thomson Reuters, we have
had to transition quickly to replace services provided under the
transition services agreement, with optimization of the relevant
standalone functions typically following thereafter. Cost savings
reflect the annualized "run rate" expected cost savings, net of
actual cost savings realized, related to restructuring and other
cost savings initiatives undertaken during the relevant period.
These costs wound down at the end of December 31, 2020.
Standalone Adjusted EBITDA is calculated under the credit
facilities and the indentures by using our Consolidated Net Loss
for the trailing 12-month period (defined in the credit facilities
and the indentures as our U.S. GAAP net income adjusted for certain
items specified in the credit facilities and the indentures)
adjusted for items including: taxes, interest expense, depreciation
and amortization, non-cash charges, expenses related to capital
markets transactions, acquisitions and dispositions, restructuring
and business optimization charges and expenses, consulting and
advisory fees, run-rate cost savings to be realized as a result of
actions taken or to be taken in connection with an acquisition,
disposition, restructuring or cost savings or similar initiatives,
"run rate" expected cost savings, operating expense reductions,
restructuring charges and expenses and synergies related to the
transition projected by us, costs related to any management or
equity stock plan, other adjustments that were presented in the
offering memorandum used in connection with the issuance of the
secured notes due 2026 and earnout obligations incurred in
connection with an acquisition or investment.
The following table bridges Net loss to Adjusted EBITDA to
Standalone Adjusted EBITDA, as Adjusted EBITDA reflects a
substantial portion of the adjustments that comprise Standalone
Adjusted EBITDA for the periods presented:
|
Year Ended
December 31,
|
(in millions);
(unaudited)
|
2021
|
Net loss attributable
to ordinary shares
|
$
(312.0)
|
Dividends on
preferred shares
|
41.5
|
Net loss
|
(270.4)
|
Provision for income
taxes
|
12.3
|
Depreciation and
amortization
|
537.8
|
Interest,
net
|
252.5
|
Deferred revenues
adjustment(1)
|
4.0
|
Transaction related
costs(2)
|
46.2
|
Share-based
compensation expense
|
139.6
|
Restructuring and
impairment(3)
|
129.5
|
Mark to market
adjustment on financial instruments(4)
|
(81.3)
|
Other(5)
|
30.4
|
Adjusted
EBITDA
|
$
800.4
|
Realized foreign
exchange gain
|
7.2
|
ProQuest Adjusted
EBITDA impact(6)
|
255.5
|
Bioinfogate Adjusted
EBITDA impact(6)
|
0.3
|
Patient Connect
Adjusted EBITDA impact(6)
|
(1.1)
|
Cost
savings(7)
|
130.3
|
Standalone
Adjusted EBITDA
|
$
1,192.7
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
|
|
(2)
|
Includes costs
incurred to complete business combination transactions, including
acquisitions, dispositions and capital market activities and
include advisory, legal, and other professional and consulting
costs. This also includes the mark to market adjustments on the
contingent stock consideration associated with the CPA Global and
DRG acquisitions.
|
|
|
(3)
|
Reflects costs
related to restructuring and impairment associated with the
acquisition of primarily DRG and CPA Global in 2020. This also
includes costs incurred in connection with the initiative,
following our merger with Churchill Capital Corp in 2019, to
streamline our operations by simplifying our organization and
focusing on two segments. During 2021, the CPA Global plan
continued as well as the addition of the One Clarivate and ProQuest
Programs, which were approved restructuring actions to streamline
operations within targeted areas of the Company. Additionally,
during the year ended December 31, 2021, we incurred impairment
charges taken on right-of-use assets of $57,305 relating the exit
and ceased use of leased properties.
|
|
|
(4)
|
Reflects mark to
market adjustments on financial instruments recorded under
Accounting Standards Codification 815, Derivatives and
Hedging, ("ASC 815"). Warrant instruments that do not meet the
criteria to be considered indexed to an entity's own stock shall be
initially classified as a liability at their estimated fair values,
regardless of the likelihood that such instruments will ever be
settled in cash. In periods subsequent to issuance, changes in the
estimated fair value of the liabilities are reported through
earnings.
|
|
|
(5)
|
Includes primarily
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items that do not reflect our
ongoing operating performance. The 2021 detail also includes an
accrual of $8,000 for a legal case.
|
|
|
(6)
|
Represents the
acquisition Adjusted EBITDA for the period beginning January 1 of
the year of the acquisition through the respective acquisition date
of each acquired business to reflect the company's Standalone
EBITDA as though material acquisitions occurred at the beginning of
the presented period.
|
|
|
(7)
|
Reflects the
estimated annualized run-rate cost savings, net of actual cost
savings realized, related to restructuring and other cost savings
initiatives undertaken during the period (exclusive of any cost
reductions in our estimated standalone operating costs), including
synergies related to acquisitions.
|
The foregoing adjustments (6) and (7) are estimates and are not
intended to represent pro forma adjustments presented within the
guidance of Article 11 of Regulation S-X. Although we believe these
estimates are reasonable, actual results may differ from these
estimates, and any difference may be material. See Cautionary
Statement Regarding Forward-Looking Statements.
The following tables present the amounts of our subscription,
re-occurring and transactional revenues, including as a percentage
of our total revenues, for the periods indicated, as well the
drivers of the variances between periods.
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
|
Three Months
Ended
December 31,
|
|
Total
Variance(Dollars)
|
Total
Variance(Percentage)
|
Acquisitive
|
Disposal
|
FX
Impact
|
Organic
|
(in millions, except
percentages); (unaudited)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Subscription
revenues
|
$
305.5
|
|
$
243.6
|
|
$
61.9
|
25.4%
|
23.5%
|
(1.6)%
|
(1.0)%
|
4.5%
|
Re-occurring
revenues
|
119.6
|
|
111.9
|
|
7.7
|
6.9%
|
0.3%
|
—%
|
(1.8)%
|
8.4%
|
Transactional
revenues
|
135.0
|
|
115.7
|
|
19.3
|
16.7%
|
20.8%
|
(1.7)%
|
(1.1)%
|
(1.2)%
|
Deferred revenues
adjustment(1)
|
0.5
|
|
(15.7)
|
|
16.2
|
103.3%
|
—%
|
—%
|
(0.2)%
|
103.5%
|
Revenues,
net
|
$
560.7
|
|
$
455.6
|
|
$
105.1
|
23.1%
|
17.9%
|
(1.3)%
|
(1.3)%
|
7.7%
|
Deferred revenues
adjustment(1)
|
(0.5)
|
|
15.7
|
|
(16.2)
|
(103.3)%
|
—%
|
—%
|
0.2%
|
(103.5)%
|
Adjusted revenues,
net
|
$
560.2
|
|
$
471.3
|
|
$
88.9
|
18.9%
|
17.3%
|
(1.3)%
|
(1.2)%
|
4.0%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
|
|
(2)
|
Q4 2021 reflects the
amortization of the historical purchase accounting adjustments with
no additional quarter-to-date impacts due to the adoption of ASU
no. 2021-08 described above.
|
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
|
Year Ended
December 31,
|
|
Total
Variance(Dollars)
|
Total
Variance(Percentage)
|
Acquisitive
|
Disposal
|
FX
Impact
|
Organic
|
(in millions, except
percentages); (unaudited)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Subscription
revenues
|
$
1,034.4
|
|
$
877.7
|
|
$
156.7
|
17.9%
|
16.1%
|
(3.6)%
|
1.9%
|
3.5%
|
Re-occurring
revenues
|
453.2
|
|
111.9
|
|
341.3
|
304.9%
|
298.3%
|
—%
|
(1.8)%
|
8.4%
|
Transactional
revenues
|
393.2
|
|
287.6
|
|
105.7
|
36.8%
|
36.2 %
|
(6.2)%
|
0.8%
|
5.9%
|
Deferred revenues
adjustment(1)
|
(4.0)
|
|
(23.1)
|
|
19.2
|
82.9%
|
(19.0)%
|
—%
|
(0.2) %
|
102.1%
|
Revenues,
net
|
$
1,876.9
|
|
$
1,254.0
|
|
$
622.8
|
49.7%
|
45.8%
|
(3.9)%
|
1.3%
|
6.4%
|
Deferred revenues
adjustment(1)
|
4.0
|
|
23.1
|
|
(19.2)
|
(82.9)%
|
19.0%
|
—%
|
0.2%
|
(102.1) %
|
Adjusted revenues,
net
|
$
1,880.8
|
|
$
1,277.1
|
|
$
603.7
|
47.3%
|
45.3%
|
(3.9)%
|
1.3%
|
4.5%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
The following tables and the discussion that follows presents
our revenues by Product Segment for the periods indicated, as well
as the drivers of the variances between periods, including as a
percentage of such revenues.
|
|
|
Variance
Increase/Decrease
|
Percentage of
Factors Increase/(Decrease)
|
Revenues by
Product Segment
|
Three Months
Ended
December 31,
|
|
Total Variance
(Dollars)
|
Total Variance
(Percentage)
|
Acquisitive
|
Disposal
|
FX
Impact
|
Organic
|
(in millions, except
percentages); (unaudited)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Science Product
Segment
|
$
308.3
|
|
$
222.0
|
|
$
86.3
|
38.9%
|
36.2%
|
—%
|
(0.8)%
|
3.4%
|
IP Product
Segment
|
251.9
|
|
249.3
|
|
2.6
|
1.0%
|
0.5%
|
(2.4)%
|
(1.6)%
|
4.6%
|
Deferred revenues
adjustment (1)
|
0.5
|
|
(15.7)
|
|
16.2
|
103.3%
|
—%
|
—%
|
(0.2)%
|
103.5%
|
Revenues,
net
|
$
560.7
|
|
$
455.6
|
|
$
105.1
|
23.1%
|
17.9%
|
(1.3)%
|
(1.3)%
|
7.7
%
|
Deferred revenues
adjustment (1)
|
(0.5)
|
|
15.7
|
|
(16.2)
|
(103.3)%
|
—%
|
—%
|
0.2%
|
(103.5)%
|
Adjusted revenues,
net
|
$
560.2
|
|
$
471.3
|
|
$
88.9
|
18.9%
|
17.3%
|
(1.3)%
|
(1.2)%
|
4.0%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
Revenues by
Product Segment
|
Year Ended
December 31,
|
|
Total Variance
(Dollars)
|
Total Variance
(Percentage)
|
Acquisitive
|
Disposal
|
FX
Impact
|
Organic
|
(in millions, except
percentages); (unaudited)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Science Product
Segment
|
$
902.7
|
|
$
743.6
|
|
$
159.1
|
21.4%
|
14.1%
|
—%
|
2.0%
|
5.4%
|
IP Product
Segment
|
978.1
|
|
533.5
|
|
444.6
|
83.3%
|
89.0%
|
(9.2)%
|
0.4%
|
3.3%
|
Deferred revenues
adjustment (1)
|
(4.0)
|
|
(23.1)
|
|
19.2
|
82.9%
|
(19.0)%
|
—%
|
(0.2)%
|
102.1%
|
Revenues,
net
|
$
1,876.9
|
|
$
1,254.0
|
|
$
622.8
|
49.7%
|
45.8%
|
(3.9)%
|
1.3%
|
6.4%
|
Deferred revenues
adjustment (1)
|
4.0
|
|
23.1
|
|
(19.2)
|
(82.9)%
|
19.0%
|
—%
|
0.2%
|
(102.1)%
|
Adjusted revenues,
net
|
$
1,880.8
|
|
$
1,277.1
|
|
$
603.7
|
47.3%
|
45.3%
|
(3.9)%
|
1.3%
|
4.5%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
The following table presents our calculation of Revenues, at the
mid-point, for the 2022 updated outlook including acquisitive,
disposals, FX impact and organic growth:
|
|
|
|
|
Variance
Increase/(Decrease)
|
|
Percentage of
Factors Increase/(Decrease)
|
|
Year
Ended
December
31,
|
|
Total Variance
(Dollars)
|
Total Variance
(Percentage)
|
|
Acquisitions
|
Disposals
|
FX
Impact
|
Organic
|
(in thousands,
except percentages)
|
2022
Outlook
mid-point
|
|
2021
Estimated(2)
|
|
|
|
|
|
|
|
|
Revenues, net
(1)
|
$
2,840.0
|
|
$
1,876.9
|
|
963.1
|
51.3%
|
|
46.2%
|
—%
|
(1.4)%
|
6.5%
|
|
|
(1)
|
Reflects the deferred
revenues adjustment made as a result of purchase accounting prior
to the adoption of FASB ASU No. 2021-08, "Accounting for
Contract Assets and Contract Liabilities from Contracts with
Customers". In the fourth quarter of 2021, Clarivate adopted
ASU No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with Topic 606 as if it had
originated the contracts. This guidance was applied retrospectively
to all business combinations for which the acquisition date occurs
during or subsequent to the fiscal year 2021.
|
The following table presents our calculation of Adjusted EBITDA
for the 2022 updated outlook and reconciles this measure to our Net
loss for the same period:
|
Year Ending
December 31, 2022
(Forecasted)
|
(in
millions)
|
Low
|
|
High
|
Net loss attributable
to ordinary shares
|
$
(166.2)
|
|
$
(106.2)
|
Dividends on
preferred shares(1)
|
75.5
|
|
75.5
|
Net loss
|
$
(90.7)
|
|
$
(30.7)
|
Provision for income
taxes
|
60.1
|
|
60.1
|
Depreciation and
amortization
|
560.1
|
|
560.1
|
Amortization of
ProQuest acquired intangibles
|
180.6
|
|
180.6
|
Interest expense and
amortization of debt discount, net
|
242.5
|
|
242.5
|
Deferred revenue
adjustment(2)
|
0.7
|
|
0.7
|
Restructuring and
impairment(3)
|
88.4
|
|
88.4
|
Share-based
compensation expense(4)
|
118.3
|
|
118.3
|
Adjusted
EBITDA
|
$
1,160.0
|
|
$
1,220.0
|
Adjusted EBITDA
margin
|
41%
|
|
42%
|
|
|
(1)
|
Dividends on our
mandatory convertible preferred shares ("MCPS") are payable
quarterly at an annual rate of 5.25% of the liquidation preference
of $100 per share. For the purposes of calculating net loss
attributable to Clarivate, we have excluded the accrued and
anticipated MCPS stock dividends.
|
(2)
|
Reflects the deferred
revenues adjustment made as a result of acquisition accounting
associated with businesses that were acquired prior to January 1,
2021.
|
(3)
|
Reflects
restructuring costs primarily associated with the ProQuest
acquisition which will be incurred in 2022.
|
(4)
|
Includes CPA Global
equity plan compensation expense.
|
The following table presents our calculation of Adjusted Diluted
EPS for the 2022 updated outlook and reconciles these measures to
our Net loss per share for the same period:
|
Year Ending
December 31, 2022
(Forecasted)
|
|
Low
|
|
High
|
|
Per
Share
|
|
Per
Share
|
Net loss attributable
to ordinary shares
|
$
(0.23)
|
|
$
(0.13)
|
Dividends on
preferred shares(1)
|
0.10
|
|
0.10
|
Net loss
|
$
(0.13)
|
|
$
(0.03)
|
Restructuring and
impairment(2)
|
0.12
|
|
0.12
|
Share-based
compensation expense(4)
|
0.16
|
|
0.16
|
Amortization related
to acquired intangible assets
|
0.80
|
|
0.80
|
Income tax impact of
related adjustments
|
(0.10)
|
|
(0.10)
|
Adjusted Diluted
EPS
|
$
0.85
|
|
$
0.95
|
Weighted average
ordinary shares (Diluted)(3)
|
741,709,816
|
|
|
(1)
|
Dividends on our
mandatory convertible preferred shares ("MCPS") are payable
quarterly at an annual rate of 5.25% of the liquidation preference
of $100 per share. For the purposes of calculating net loss
attributable to Clarivate, we have excluded the accrued and
anticipated MCPS stock dividends.
|
(2)
|
Reflects
restructuring costs primarily associated with the ProQuest
acquisition which will be incurred in 2022.
|
(3)
|
For the purposes of
calculating adjusted earnings per share, the Company has excluded
the accrued and anticipated MCPS stock dividends and assumed the
"if-converted" method of share dilution.
|
(4)
|
Includes CPA Global
equity plan compensation expense.
|
The following table presents our calculation of Free Cash Flow
and Adjusted Free Cash Flow for the 2022 updated outlook and
reconciles these measures to our Net cash provided by operating
activities for the same period:
|
Year Ending
December 31, 2022
(Forecasted)
|
(in
millions)
|
Low
|
|
High
|
Net cash provided by
operating activities
|
$
616.5
|
|
$
666.5
|
Capital
expenditures
|
(195.0)
|
|
(195.0)
|
Free Cash
Flow
|
421.5
|
|
471.5
|
Cash paid for
restructuring costs(1)
|
87.5
|
|
87.5
|
Cash paid for CPA
Global equity plan(2)
|
166.0
|
|
166.0
|
Adjusted Free Cash
Flow
|
$
675.0
|
|
$
725.0
|
|
|
(1)
|
Reflects cash
payments for costs primarily related to restructuring associated
with the ProQuest acquisition in 2022.
|
|
|
(2)
|
Includes cash funded
by a trust related to CPA Global equity plan payout upon
vesting.
|
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SOURCE Clarivate Plc