0001764046-20-000068.txt : 20200730 0001764046-20-000068.hdr.sgml : 20200730 20200730063638 ACCESSION NUMBER: 0001764046-20-000068 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 104 CONFORMED PERIOD OF REPORT: 20200630 FILED AS OF DATE: 20200730 DATE AS OF CHANGE: 20200730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLARIVATE Plc CENTRAL INDEX KEY: 0001764046 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 000000000 STATE OF INCORPORATION: Y9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38911 FILM NUMBER: 201059077 BUSINESS ADDRESS: STREET 1: 1500 SPRING GARDEN STREET CITY: PHILADELPHIA STATE: PA ZIP: 19130 BUSINESS PHONE: (215) 386-0100 MAIL ADDRESS: STREET 1: 1500 SPRING GARDEN STREET CITY: PHILADELPHIA STATE: PA ZIP: 19130 FORMER COMPANY: FORMER CONFORMED NAME: Clarivate Analytics PLC DATE OF NAME CHANGE: 20190108 10-Q 1 ccc-20200630.htm 10-Q ccc-20200630
0001764046False2020Q212/3111,07416,511387,335,119306,874,115387,335,119306,874,11532714805396620777P5YP1YP3Y.33.664,77113700017640462020-01-012020-06-30xbrli:shares00017640462020-07-28iso4217:USD00017640462020-06-3000017640462019-12-31iso4217:USDxbrli:shares00017640462020-04-012020-06-3000017640462019-04-012019-06-3000017640462019-01-012019-06-300001764046srt:ScenarioPreviouslyReportedMemberus-gaap:CommonStockMember2018-12-310001764046srt:ScenarioPreviouslyReportedMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001764046srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2018-12-310001764046srt:ScenarioPreviouslyReportedMember2018-12-310001764046us-gaap:CommonStockMember2018-12-312018-12-310001764046us-gaap:CommonStockMember2018-12-310001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001764046us-gaap:RetainedEarningsMember2018-12-3100017640462018-12-310001764046us-gaap:CommonStockMember2019-01-012019-03-3100017640462019-01-012019-03-310001764046us-gaap:RetainedEarningsMember2019-01-012019-03-310001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310001764046us-gaap:CommonStockMember2019-03-310001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-310001764046us-gaap:RetainedEarningsMember2019-03-3100017640462019-03-310001764046us-gaap:CommonStockMember2019-04-012019-06-300001764046us-gaap:RetainedEarningsMember2019-04-012019-06-300001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001764046us-gaap:CommonStockMember2019-06-300001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300001764046us-gaap:RetainedEarningsMember2019-06-3000017640462019-06-300001764046us-gaap:CommonStockMember2019-12-310001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001764046us-gaap:RetainedEarningsMember2019-12-310001764046us-gaap:RetainedEarningsMemberccc:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember2019-12-310001764046ccc:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember2019-12-310001764046us-gaap:CommonStockMember2020-01-012020-03-3100017640462020-01-012020-03-310001764046us-gaap:RetainedEarningsMember2020-01-012020-03-310001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001764046us-gaap:CommonStockMember2020-03-310001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001764046us-gaap:RetainedEarningsMember2020-03-3100017640462020-03-310001764046us-gaap:CommonStockMember2020-04-012020-06-300001764046us-gaap:RetainedEarningsMember2020-04-012020-06-300001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001764046us-gaap:CommonStockMember2020-06-300001764046us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001764046us-gaap:RetainedEarningsMember2020-06-3000017640462020-02-012020-02-2900017640462020-02-29xbrli:pure0001764046ccc:OnexandBaringMemberus-gaap:CommonStockMember2020-02-280001764046ccc:OnexandBaringMemberus-gaap:CommonStockMember2019-12-3100017640462020-06-012020-06-300001764046ccc:ClarivateMember2020-06-012020-06-300001764046ccc:SellingShareholdersMember2020-06-012020-06-300001764046ccc:OnexMemberus-gaap:CommonStockMember2020-02-280001764046ccc:BaringMemberus-gaap:CommonStockMember2020-02-280001764046ccc:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-01-010001764046ccc:JerseyMemberccc:ClarivateMember2019-05-132019-05-130001764046ccc:JerseyMember2019-05-132019-05-130001764046ccc:JerseyMember2019-05-130001764046ccc:CompanyOwnersMemberccc:JerseyMember2019-05-132019-05-130001764046ccc:JerseyMemberccc:ChurchillPublicShareholdersMember2019-05-132019-05-130001764046ccc:JerseyMemberccc:ChurchillSponsorLLCMember2019-05-132019-05-130001764046ccc:JerseyMemberccc:CertainInvestorsMember2019-05-132019-05-1300017640462019-05-130001764046ccc:ChurchillSponsorLLCMember2019-05-130001764046ccc:DecisionResourcesGroupMember2020-02-282020-02-280001764046ccc:DecisionResourcesGroupMember2020-02-280001764046ccc:DecisionResourcesGroupMember2020-04-012020-06-300001764046ccc:DecisionResourcesGroupMember2020-01-012020-06-300001764046ccc:DecisionResourcesGroupMember2020-06-300001764046ccc:DecisionResourcesGroupAcquisitionMember2020-04-012020-06-300001764046ccc:DecisionResourcesGroupAcquisitionMember2020-01-012020-06-300001764046ccc:DRGAcquisitionMember2020-02-280001764046ccc:DRGAcquisitionMember2020-02-282020-02-280001764046us-gaap:DatabasesMemberccc:DRGAcquisitionMember2020-02-282020-02-280001764046us-gaap:DatabasesMemberccc:DRGAcquisitionMember2020-01-012020-06-300001764046us-gaap:DevelopedTechnologyRightsMemberccc:DRGAcquisitionMember2020-02-282020-02-280001764046us-gaap:DevelopedTechnologyRightsMemberccc:DRGAcquisitionMember2020-01-012020-06-300001764046us-gaap:CustomerRelationshipsMemberccc:DRGAcquisitionMember2020-02-282020-02-280001764046us-gaap:CustomerRelationshipsMemberccc:DRGAcquisitionMember2020-01-012020-06-300001764046ccc:DRGAcquisitionMemberus-gaap:TrademarksAndTradeNamesMember2020-02-282020-02-280001764046ccc:DRGAcquisitionMemberus-gaap:TrademarksAndTradeNamesMember2020-01-012020-06-300001764046ccc:DRGAcquisitionMemberus-gaap:OrderOrProductionBacklogMember2020-02-282020-02-280001764046ccc:DRGAcquisitionMemberus-gaap:OrderOrProductionBacklogMember2020-01-012020-06-300001764046us-gaap:DevelopedTechnologyRightsMemberccc:DRGAcquisitionMember2020-02-280001764046ccc:BrandProtectionAntiPiracyandAntiFraudsolutionsMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-01-010001764046ccc:BrandProtectionAntiPiracyandAntiFraudsolutionsMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-10-012019-12-310001764046ccc:ComputerHardwareMember2020-06-300001764046ccc:ComputerHardwareMember2019-12-310001764046us-gaap:LeaseholdImprovementsMember2020-06-300001764046us-gaap:LeaseholdImprovementsMember2019-12-310001764046ccc:FurnitureFixturesAndEquipmentMember2020-06-300001764046ccc:FurnitureFixturesAndEquipmentMember2019-12-310001764046us-gaap:CustomerRelationshipsMember2020-06-300001764046us-gaap:CustomerRelationshipsMember2019-12-310001764046ccc:DatabasesAndContentMember2020-06-300001764046ccc:DatabasesAndContentMember2019-12-310001764046us-gaap:ComputerSoftwareIntangibleAssetMember2020-06-300001764046us-gaap:ComputerSoftwareIntangibleAssetMember2019-12-310001764046us-gaap:TradeNamesMember2020-06-300001764046us-gaap:TradeNamesMember2019-12-310001764046us-gaap:OrderOrProductionBacklogMember2020-06-300001764046us-gaap:TradeNamesMember2020-06-300001764046us-gaap:TradeNamesMember2019-12-310001764046ccc:CustomerFirstNowMember2020-06-012020-06-300001764046us-gaap:DatabasesMemberccc:CustomerFirstNowMember2020-06-012020-06-300001764046us-gaap:ComputerSoftwareIntangibleAssetMemberccc:CustomerFirstNowMember2020-06-012020-06-300001764046us-gaap:InterestRateSwapMember2017-03-312017-03-310001764046us-gaap:InterestRateSwapMember2018-02-282018-02-280001764046us-gaap:InterestRateSwapMember2019-04-012019-04-300001764046us-gaap:InterestRateSwapMember2019-05-012019-05-310001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2020-06-300001764046us-gaap:OtherNoncurrentAssetsMemberus-gaap:InterestRateSwapMember2019-12-310001764046us-gaap:LondonInterbankOfferedRateLIBORMember2020-06-300001764046us-gaap:LondonInterbankOfferedRateLIBORMember2019-12-3100017640462020-03-012020-03-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-12-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-01-012020-03-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-03-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-04-012020-06-300001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-06-300001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2018-12-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-01-012019-03-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-03-310001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-04-012019-06-300001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001764046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-01-012020-03-310001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-04-012020-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2019-01-012019-03-310001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2019-01-012019-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2019-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2020-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberccc:EarnOutLiabilityMemberus-gaap:FairValueInputsLevel3Member2020-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberccc:EarnOutLiabilityMember2020-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-06-300001764046us-gaap:FairValueMeasurementsRecurringMember2020-06-300001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2019-12-310001764046us-gaap:FairValueMeasurementsRecurringMemberccc:EarnOutLiabilityMemberus-gaap:FairValueInputsLevel3Member2019-12-310001764046us-gaap:FairValueMeasurementsRecurringMemberccc:EarnOutLiabilityMember2019-12-310001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2019-12-310001764046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2019-12-310001764046us-gaap:FairValueMeasurementsRecurringMember2019-12-310001764046ccc:SeniorUnsecuredNotes2024Member2020-06-300001764046ccc:SeniorUnsecuredNotes2024Member2019-12-310001764046ccc:TermLoanFacilityMember2020-06-300001764046ccc:TermLoanFacilityMember2019-12-310001764046us-gaap:RevolvingCreditFacilityMember2020-06-300001764046us-gaap:RevolvingCreditFacilityMember2019-12-310001764046ccc:DRGAcquisitionTermLoanMember2019-12-310001764046ccc:BridgeFacilityDRGAcquisitionMember2019-10-310001764046us-gaap:RevolvingCreditFacilityMember2020-01-012020-06-300001764046us-gaap:RevolvingCreditFacilityMember2020-06-300001764046ccc:SeniorUnsecuredNotesMember2020-06-300001764046us-gaap:LetterOfCreditMember2020-06-300001764046us-gaap:FairValueInputsLevel2Member2020-06-300001764046us-gaap:FairValueInputsLevel2Member2019-12-310001764046ccc:SubscriptionRevenuesMember2020-04-012020-06-300001764046ccc:SubscriptionRevenuesMember2019-04-012019-06-300001764046ccc:TransactionRevenuesMember2020-04-012020-06-300001764046ccc:TransactionRevenuesMember2019-04-012019-06-300001764046ccc:SubscriptionRevenuesMember2020-01-012020-06-300001764046ccc:SubscriptionRevenuesMember2019-01-012019-06-300001764046ccc:TransactionRevenuesMember2020-01-012020-06-300001764046ccc:TransactionRevenuesMember2019-01-012019-06-3000017640462020-07-012020-04-012020-06-3000017640462020-07-012020-06-3000017640462017-03-312017-03-31ccc:voting_right0001764046us-gaap:WarrantMember2020-02-210001764046us-gaap:WarrantMember2020-01-012020-02-210001764046us-gaap:WarrantMember2020-03-230001764046us-gaap:WarrantMember2020-03-232020-03-230001764046ccc:IncentiveAwardPlan2019Member2019-12-310001764046ccc:IncentiveAwardPlan2019Member2020-06-300001764046ccc:IncentiveAwardPlan2019Member2020-04-012020-06-300001764046us-gaap:EmployeeStockOptionMember2019-12-310001764046us-gaap:EmployeeStockOptionMember2020-01-012020-03-310001764046us-gaap:EmployeeStockOptionMember2020-04-012020-06-300001764046us-gaap:EmployeeStockOptionMember2020-01-012020-06-300001764046us-gaap:EmployeeStockOptionMember2020-06-300001764046srt:MinimumMember2020-04-012020-06-300001764046srt:MaximumMember2020-04-012020-06-300001764046srt:MinimumMemberus-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-300001764046us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMember2020-01-012020-06-300001764046us-gaap:RestrictedStockUnitsRSUMember2019-12-310001764046us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-300001764046us-gaap:RestrictedStockUnitsRSUMember2020-06-300001764046us-gaap:PerformanceSharesMember2020-01-012020-06-300001764046us-gaap:PerformanceSharesMember2019-12-310001764046us-gaap:PerformanceSharesMember2020-06-300001764046ccc:TransactionRelatedAwards2019Member2019-05-130001764046ccc:TransactionRelatedAwards2019Member2019-05-132019-05-130001764046ccc:TransactionRelatedAwards2019Member2020-04-012020-06-300001764046ccc:TransactionRelatedAwards2019Member2020-01-012020-06-3000017640462019-05-132019-05-130001764046us-gaap:ShareBasedCompensationAwardTrancheOneMember2019-05-130001764046us-gaap:ShareBasedCompensationAwardTrancheOneMember2019-05-132019-05-130001764046us-gaap:ShareBasedCompensationAwardTrancheTwoMember2019-05-130001764046us-gaap:ShareBasedCompensationAwardTrancheTwoMember2019-06-3000017640462019-05-132020-06-300001764046us-gaap:PerformanceSharesMemberccc:VestingPriceOneMember2019-05-132020-06-300001764046us-gaap:PerformanceSharesMemberccc:VestingPriceOneMember2019-05-130001764046ccc:VestingPriceTwoMember2019-05-132020-06-300001764046us-gaap:PerformanceSharesMemberccc:VestingPriceTwoMember2019-05-1300017640462019-03-122019-03-120001764046us-gaap:CommonClassBMember2019-03-122019-03-120001764046srt:MinimumMember2019-05-132019-05-130001764046srt:MaximumMember2019-05-132019-05-130001764046ccc:PublonsLimitedMember2020-06-300001764046ccc:PublonsLimitedMember2020-01-012020-06-300001764046ccc:AccruedExpensesAndOtherCurrentLiabilitiesMemberccc:PublonsLimitedMember2020-06-300001764046ccc:AccruedExpensesAndOtherCurrentLiabilitiesMemberccc:PublonsLimitedMember2019-12-310001764046ccc:TrademarkvisionUsaLlcMember2020-01-012020-06-300001764046ccc:TrademarkvisionUsaLlcMember2020-06-300001764046ccc:TrademarkvisionUsaLlcMember2019-12-310001764046ccc:OnexPartnersAdvisorLpMember2020-06-300001764046ccc:OnexPartnersAdvisorLpMember2020-04-012020-06-300001764046ccc:OnexPartnersAdvisorLpMember2019-04-012019-06-300001764046ccc:OnexPartnersAdvisorLpMember2020-01-012020-06-300001764046ccc:OnexPartnersAdvisorLpMember2019-01-012019-06-300001764046ccc:OnexPartnersAdvisorLpMember2019-12-310001764046ccc:BaringMember2020-04-012020-06-300001764046ccc:BaringMember2019-04-012019-06-300001764046ccc:BaringMember2020-01-012020-06-300001764046ccc:BaringMember2019-01-012019-06-300001764046ccc:BaringMember2020-06-300001764046ccc:BaringMember2019-12-310001764046ccc:ControlledAffiliateOfBaringMember2020-04-012020-06-300001764046ccc:ControlledAffiliateOfBaringMember2019-04-012019-06-300001764046ccc:ControlledAffiliateOfBaringMember2020-01-012020-06-300001764046ccc:ControlledAffiliateOfBaringMember2019-01-012019-06-300001764046ccc:ControlledAffiliateOfBaringMember2020-06-300001764046ccc:ControlledAffiliateOfBaringMember2019-12-310001764046srt:ChiefExecutiveOfficerMember2020-04-012020-06-300001764046srt:ChiefExecutiveOfficerMember2020-06-300001764046srt:ChiefExecutiveOfficerMember2019-12-310001764046ccc:MemberOfKeyManagementMember2020-04-012020-06-300001764046ccc:MemberOfKeyManagementMember2019-04-012019-06-300001764046ccc:MemberOfKeyManagementMember2020-01-012020-06-300001764046ccc:MemberOfKeyManagementMember2019-01-012019-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:SeveranceAndRelatedBenefitCostMember2019-12-310001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:ExitAndDisposalCostsMember2019-12-310001764046ccc:OperationSimplificationAndOptimizationProgramMember2019-12-310001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:SeveranceAndRelatedBenefitCostMember2020-01-012020-03-310001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:ExitAndDisposalCostsMember2020-01-012020-03-310001764046ccc:OperationSimplificationAndOptimizationProgramMember2020-01-012020-03-310001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:SeveranceAndRelatedBenefitCostMember2020-03-310001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:ExitAndDisposalCostsMember2020-03-310001764046ccc:OperationSimplificationAndOptimizationProgramMember2020-03-310001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:SeveranceAndRelatedBenefitCostMember2020-04-012020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:ExitAndDisposalCostsMember2020-04-012020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMember2020-04-012020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:SeveranceAndRelatedBenefitCostMember2020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:ExitAndDisposalCostsMember2020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMember2020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:SeveranceAndRelatedBenefitCostMember2019-04-012019-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:ExitAndDisposalCostsMember2019-04-012019-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:LeaseExistCostIncludingImpairmentMember2020-04-012020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:LeaseExistCostIncludingImpairmentMember2019-04-012019-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMember2019-04-012019-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:SeveranceAndRelatedBenefitCostMember2020-01-012020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:SeveranceAndRelatedBenefitCostMember2019-01-012019-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:ExitAndDisposalCostsMember2020-01-012020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:ExitAndDisposalCostsMember2019-01-012019-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:LeaseExistCostIncludingImpairmentMember2020-01-012020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMemberccc:LeaseExistCostIncludingImpairmentMember2019-01-012019-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMember2020-01-012020-06-300001764046ccc:OperationSimplificationAndOptimizationProgramMember2019-01-012019-06-300001764046ccc:SeveranceAndRelatedBenefitCostMemberccc:DRGAcquisitionIntegrationProgramMember2019-12-310001764046ccc:ExitAndDisposalCostsMemberccc:DRGAcquisitionIntegrationProgramMember2019-12-310001764046ccc:DRGAcquisitionIntegrationProgramMember2019-12-310001764046ccc:SeveranceAndRelatedBenefitCostMemberccc:DRGAcquisitionIntegrationProgramMember2020-01-012020-06-300001764046ccc:ExitAndDisposalCostsMemberccc:DRGAcquisitionIntegrationProgramMember2020-01-012020-06-300001764046ccc:DRGAcquisitionIntegrationProgramMember2020-01-012020-06-300001764046ccc:SeveranceAndRelatedBenefitCostMemberccc:DRGAcquisitionIntegrationProgramMember2020-06-300001764046ccc:ExitAndDisposalCostsMemberccc:DRGAcquisitionIntegrationProgramMember2020-06-300001764046ccc:DRGAcquisitionIntegrationProgramMember2020-06-300001764046ccc:SeveranceAndRelatedBenefitCostMemberccc:DRGAcquisitionIntegrationProgramMember2020-04-012020-06-300001764046ccc:ExitAndDisposalCostsMemberccc:DRGAcquisitionIntegrationProgramMember2020-04-012020-06-300001764046ccc:DRGAcquisitionIntegrationProgramMember2020-04-012020-06-300001764046us-gaap:SubsequentEventMemberccc:RedtopMember2020-07-290001764046us-gaap:SubsequentEventMember2020-07-292020-07-290001764046us-gaap:SubsequentEventMemberccc:BridgeFacilityMember2020-07-29


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _______
Commission File No. 001-38911
CLARIVATE PLC
(Exact name of registrant as specified in its charter)
Jersey, Channel Islands
(State or other jurisdiction of incorporation or organization)
Not applicable
(I.R.S. Employer Identification No.)
Friars House
160 Blackfriars Road
LondonSE1 8EZ
United Kingdom
(Address of principal executive offices)
Registrant's telephone number, including area code: +44 207 4334000
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of exchange on which registered
Ordinary sharesCCCNew York Stock Exchange
Securities registered pursuant to Section 12(g) of the Exchange Act: None
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer 
  Accelerated filer 
Non-accelerated Filer 
  Smaller reporting company 
   Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes     No 
The number of ordinary shares of the Company outstanding as of July 28, 2020 was 387,366,886.
DOCUMENTS INCORPORATED BY REFERENCE
None



Table of Contents

2


Cautionary Statement Regarding Forward-looking Statements
This interim report includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this interim report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, anticipated cost savings, results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which we operate. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting us. Factors that may impact such forward-looking statements include:
our ability to make, consummate and integrate acquisitions, including the DRG acquisition and our planned combination with CPA Global, and realize any expected benefits or effects of any acquisitions or the timing, final purchase price, costs associated with achieving synergies or integration or consummation of any acquisitions, including the DRG acquisition and the CPA Global combination;

our ability to compete in the highly competitive markets in which we operate, and potential adverse effects of this competition;

our ability to maintain revenues if our products and services do not achieve and maintain broad market acceptance, or if we are unable to keep pace with or adapt to rapidly changing technology, evolving industry standards and changing regulatory requirements;

our ability to achieve all expected benefits from the items reflected in the adjustments included in Standalone Adjusted EBITDA, a non-GAAP measure;

our ability to achieve operational cost improvements and other anticipated benefits of our merger with Churchill Capital Corp in 2019;

our dependence on third parties, including public sources, for data, information and other services;

increased accessibility to free or relatively inexpensive information sources;

our ability to maintain high annual revenue renewal rates as recurring subscription-based arrangements generate a significant percentage of our revenues;

any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks;

our reliance on our own and third-party telecommunications, data centers and network systems, as well as the Internet;

potential adverse tax consequences resulting from the international scope of our operations, corporate structure and financing structure;

increased risks resulting from our international operations, including from pandemics such as the COVID-19 global public health crisis;

our ability to comply with various trade restrictions, such as sanctions and export controls, resulting from our international operations;
3



our ability to comply with the anti-corruption laws of the United States and various international jurisdictions;

the United Kingdom’s withdrawal from the EU;

government and agency demand for our products and services and our ability to comply with government contracting regulations;

changes in legislation and regulation, which may impact how we provide products and services and how we collect and use information, particularly relating to the use of personal data;

actions by governments that restrict access to our platform in their countries;

potential intellectual property infringement claims;

our ability to operate in a litigious environment;

our potential need to recognize impairment charges related to goodwill, identified intangible assets and fixed assets;

our ability to make timely and accurate financial disclosure and maintain effective systems of internal controls;

our substantial indebtedness, which could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness; and

other factors beyond our control, including the impact from COVID-19.

The forward-looking statements contained in this interim report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks and uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Item 1A. Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We will not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
4


Note on Defined Terms and Presentation
 
We employ a number of defined terms in this interim report for clarity and ease of reference, which we have capitalized so that you may recognize them as such. Generally, we explain a defined term the first time it is used. As used throughout this interim report, unless otherwise indicated or the context otherwise requires, the terms “Clarivate,” the “Company,” “our,” “us” and “we” refer to Clarivate Plc and its consolidated subsidiaries; “Baring” refers to the affiliated funds of Baring Private Equity Asia Pte Ltd that from time to time hold our ordinary shares; and “Onex” refers to the affiliates of Onex Partners Advisor LP that from time to time hold our ordinary shares.
 
Unless otherwise indicated, dollar amounts throughout this interim report are presented in thousands of dollars, except for share and per share amounts.
 
Website and Social Media Disclosure
 
We use our website (www.clarivate.com) and corporate Twitter account (@Clarivate) as routine channels of distribution of company information, including news releases, analyst presentations, and supplemental financial information, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, investors should monitor our website and our corporate Twitter account in addition to following press releases, SEC filings, and public conference calls and webcasts. Additionally, we provide notifications of news or announcements as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts.
 
None of the information provided on our website, in our press releases, public conference calls, and webcasts, or through social media channels is incorporated into, or deemed to be a part of, this interim report or in any other report or document we file with the SEC, and any references to our website or our social media channels are intended to be inactive textual references only.

Foreign Private Issuer Status and Financial Presentation

We currently qualify as a foreign private issuer (“FPI”) under the rules of the SEC. We anticipate that we will no longer retain FPI status after December 31, 2020. However, even though we qualify as an FPI, we report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”) and, we have elected to file our periodic and current reports on Forms 10-K, 10-Q and 8-K.
 
Industry and Market Data
 
The market data and other statistical information used throughout this interim report are based on industry publications and surveys, public filings and various government sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. Statements as to our ranking, market position and market estimates (including estimates of the sizes and future growth rates of our markets) are based on independent industry publications, government publications, third-party forecasts and management’s good faith estimates and assumptions about our markets and our internal research. We have not independently verified such third-party information nor have we ascertained the underlying economic assumptions relied upon in those sources, and we are unable to assure you of the accuracy or completeness of such information contained in this interim report. While we are not aware of any misstatements regarding our market, industry or similar data presented herein, such data involve risks and uncertainties and are subject to change based on various factors. See “Item 1A. Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this interim report.
5


PART I. Financial Information

Item 1. Financial Statements and Supplementary Data
CLARIVATE PLC
Interim Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)
June 30,
2020

December 31,
2019
Assets
Current assets:
Cash and cash equivalents $608,522  $76,130  
Restricted cash 2,010  9  
Accounts receivable, net of allowance for doubtful accounts of $11,074 and $16,511 at June 30, 2020 and December 31, 2019, respectively279,160  333,858  
Prepaid expenses 51,440  40,710  
Other current assets 18,960  11,750  
Assets held for sale  30,619  
Total current assets
960,092  493,076  
Computer hardware and other property, net 24,324  18,042  
Other intangible assets, net 2,261,549  1,828,640  
Goodwill 1,824,258  1,328,045  
Other non-current assets 22,178  18,632  
Deferred income taxes 17,161  19,488  
Operating lease right-of-use assets100,622  85,448  
Total Assets$5,210,184  $3,791,371  
Liabilities and Shareholders’ equity
Current liabilities:
Accounts payable $22,068  $26,458  
Accrued expenses and other current liabilities 228,474  159,217  
Current portion of deferred revenues 424,187  407,325  
Current portion of operating lease liabilities24,067  22,130  
Current portion of long-term debt 12,600  9,000  
Liabilities held for sale  26,868  
Total current liabilities
711,396  650,998  
Long-term debt 1,913,214  1,628,611  
Non-current portion of deferred revenues 19,116  19,723  
Other non-current liabilities 16,959  18,891  
Deferred income taxes 86,247  48,547  
Operating lease liabilities80,663  64,189  
Total liabilities
2,827,595  2,430,959  
Commitments and contingencies
Shareholders’ equity:
Ordinary Shares, no par value; unlimited shares authorized at June 30, 2020 and December 31, 2019; 387,335,119 and 306,874,115 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively;3,326,267  2,208,529  
Accumulated other comprehensive loss
(15,629) (4,879) 
Accumulated deficit
(928,049) (843,238) 
Total shareholders’ equity2,382,589  1,360,412  
Total Liabilities and Shareholders’ equity$5,210,184  $3,791,371  

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
6

CLARIVATE PLC
Interim Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share data)

Three Months Ended June 30,
20202019
Revenues, net $273,500  $242,309  
Operating costs and expenses:
Cost of revenues, excluding depreciation and amortization(90,859) (87,629) 
Selling, general and administrative costs, excluding depreciation and amortization(88,482) (92,453) 
Share-based compensation expense (6,856) (33,932) 
Depreciation (2,904) (2,131) 
Amortization (53,241) (40,932) 
Transaction expenses(8,527) (23,158) 
Transition, integration and other related expenses (1,320) (5,262) 
Restructuring and impairment (15,846)   
Other operating income, net8,781  6,607  
Total operating expenses(259,254) (278,890) 
Income (loss) from operations 14,246  (36,581) 
Interest expense, net (21,122) (37,468) 
Loss before income tax (6,876) (74,049) 
Benefit (provision) for income taxes 5,385  (3,712) 
Net loss$(1,491) $(77,761) 
Per Share
Basic and diluted$0.00  $(0.29) 
Weighted-average shares outstanding
Basic and diluted375,877,260  264,762,720  

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
7

CLARIVATE PLC
Interim Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share data)

Six Months Ended June 30,
20202019
Revenues, net $514,092  $476,334  
Operating costs and expenses:
Cost of revenues, excluding depreciation and amortization(173,258) (176,896) 
Selling, general and administrative costs, excluding depreciation and amortization(175,430) (184,749) 
Share-based compensation expense (24,325) (37,108) 
Depreciation (5,233) (4,182) 
Amortization (102,353) (97,038) 
Transaction expenses(35,216) (33,428) 
Transition, integration and other related expenses (3,552) (6,423) 
Restructuring and impairment (23,600)   
Other operating income, net 14,813  990  
Total operating expenses(528,154) (538,834) 
Loss from operations (14,062) (62,500) 
Interest expense, net (52,062) (70,569) 
Loss before income tax(66,124) (133,069) 
Provision for income taxes (9,368) (3,952) 
Net loss$(75,492) $(137,021) 
Per Share:
Basic and diluted$(0.21) $(0.57) 
Weighted-average shares outstanding
Basic and diluted359,503,556  241,275,061  

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
8

CLARIVATE PLC
Interim Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
(In thousands)
Three Months Ended June 30,
20202019
Net loss$(1,491) $(77,761) 
Other comprehensive loss, net of tax:
Interest rate swaps(254) (3,845) 
Actuarial gain (loss)25  (8) 
Foreign currency translation adjustments (2,051) (8) 
Total other comprehensive loss, net of tax (2,280) (3,861) 
Comprehensive loss$(3,771) $(81,622) 
Six Months Ended June 30,
20202019
Net loss$(75,492) $(137,021) 
Other comprehensive loss, net of tax:
Interest rate swaps (3,144) (5,791) 
Actuarial loss(42) (8) 
Foreign currency translation adjustments (7,564) (1,832) 
Total other comprehensive loss, net of tax (10,750) (7,631) 
Comprehensive loss $(86,242) $(144,652) 

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

9

CLARIVATE PLC
Interim Condensed Consolidated Statement of Changes in Equity (Unaudited)
(In thousands, except share data)
Ordinary SharesAccumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Shareholders’
Equity
SharesAmount
Balance at December 31, 2018, as originally reported1,646,223  $1,677,510  $5,358  $(632,261) $1,050,607  
Conversion of units of share capital215,880,202  —  —  —  —  
Balance at December 31, 2018, as recasted217,526,425  1,677,510  5,358  (632,261) 1,050,607  
Issuance of ordinary shares, net2  —  —  —  —  
Share-based award activity—  3,176  —  —  3,176  
Net loss—  —  —  (59,260) (59,260) 
Comprehensive loss—  —  (3,770) —  (3,770) 
Balance at March 31, 2019217,526,427  1,680,686  1,588  (691,521) 990,753  
Tax Receivable Agreement—  (264,600) —  —  (264,600) 
Issuance of common stock, net(7,929) 137  —  —  137  
Merger recapitalization87,749,999  678,054  —  —  678,054  
Share-based award activity—  33,932  —  —  33,932  
Net loss—  —  —  (77,761) (77,761) 
Comprehensive loss—  —  (3,861) —  (3,861) 
Balance at June 30, 2019305,268,497  $2,128,209  $(2,273) $(769,282) $1,356,654  
Balance at December 31, 2019306,874,115  $2,208,529  $(4,879) $(843,238) $1,360,412  
Adjustment to opening Accumulated deficit related to adoption of ASC Topic 326—  —  —  (9,319) (9,319) 
Exercise of public warrants28,880,098  277,526  —  —  277,526  
Exercise of stock options3,715,455  1,182  —  —  1,182  
Vesting of restricted stock units169,842  —  —  —  —  
Shares returned to the Company for net share settlements(2,301,458) (10,302) —  —  (10,302) 
Issuance of ordinary shares, net27,600,000  539,714  —  —  539,714  
Share-based award activity—  16,384  —  —  16,384  
Net loss—  —  —  (74,001) (74,001) 
Comprehensive loss—  —  (8,470) —  (8,470) 
Balance at March 31, 2020364,938,052  3,033,033  (13,349) (926,558) 2,093,126  
Exercise of stock options3,723,332  —  —  —  —  
Vesting of restricted stock units2,528  —  —  —  —  
Shares returned to the Company for net share settlements(2,311,293) (15,118) —  —  (15,118) 
Issuance of ordinary shares, net20,982,500  304,030  —  —  304,030  
Share-based award activity—  4,322  —  —  4,322  
Net loss—  —  —  (1,491) (1,491) 
Comprehensive loss—  —  (2,280) —  (2,280) 
Balance at June 30, 2020387,335,119  $3,326,267  $(15,629) $(928,049) $2,382,589  


The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
10

CLARIVATE PLC
Interim Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

Six Months Ended June 30,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss$(75,492) $(137,021) 
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 107,586  101,220  
Allowance for doubtful accounts and credit losses787  2,478  
Gain on sale of line of business(395)   
Deferred income tax benefit(6,641) (4,603) 
Share-based compensation 20,824  37,108  
Restructuring and impairment4,771    
Deferred finance charges2,072  13,144  
Other operating activities (8,568) (1,492) 
Changes in operating assets and liabilities:
Accounts receivable 93,036  57,607  
Prepaid expenses (6,693) (7,125) 
Other assets 58,218  3,919  
Accounts payable (5,851) (8,018) 
Accrued expenses and other current liabilities (15,379) (28,827) 
Deferred revenue (6,073) 19,404  
Operating lease right of use assets4,698  6,297  
Operating lease liabilities(5,439) (6,434) 
Other liabilities (53,899) (4,770) 
Net cash provided by operating activities 107,562  42,887  
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (52,651) (24,871) 
Acquisition, net of cash acquired(885,323)   
Proceeds from sale of product line, net of restricted cash3,751    
Acquisition of intangible assets (5,982)   
Net cash used in investing activities (940,205) (24,871) 
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of principal on long-term debt (6,300) (637,672) 
Repayment of revolving credit facility(65,000) (50,000) 
Proceeds of revolving credit facility  5,000  
Proceeds from reverse recapitalization  682,087  
Contingent purchase price payment(4,115)   
Payment of debt issuance costs(5,267)   
Proceeds from issuance of debt360,000    
Proceeds from issuance of ordinary shares843,766    
Proceeds from warrant exercises277,526    
Proceeds from stock options exercised1,182  137  
Payments related to tax withholding for stock-based compensation(25,538)   
Net cash provided by (used in) financing activities1,376,254  (448) 
Effect of exchange rate changes on cash and cash equivalents, and restricted cash(9,218) (80) 
Net increase in cash and cash equivalents, and restricted cash534,393  17,488  
Beginning of period:
Cash and cash equivalents76,130  25,575  
Restricted cash9  9  
11

CLARIVATE PLC
Interim Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

Six Months Ended June 30,
20202019
Total cash and cash equivalents, and restricted cash, beginning of period76,139  25,584  
Cash and cash equivalents, and restricted cash, end of period 610,532  43,072  
Cash and cash equivalents608,522  43,063  
Restricted cash2,010  9  
Total cash and cash equivalents, and restricted cash, end of period$610,532  $43,072  
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest $42,187  $57,551  
Cash paid for income tax $8,028  $14,573  
Capital expenditures included in accounts payable$1,819  $7,697  
Tax receivable agreement included in liabilities$  $264,600  
Assets received as reverse recapitalization capital$  $1,877  
Liabilities assumed as reduction of reverse recapitalization capital$  $5,910  

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
12

CLARIVATE PLC
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share data)

Note 1: Background and Nature of Operations
Clarivate Plc (“Clarivate,” “us,” “we,” “our,” or the “Company”), 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 enables users across government and academic institutions, life science companies and research and development (“R&D”) intensive corporations to discover, protect and commercialize their innovations. Our Science Product Group consists of our Web of Science and Life Science Product Lines. Both Product Lines 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 Intellectual Property ("IP") Product Group consists of our Derwent, CompuMark and MarkMonitor Product Lines. These Product Lines help manage customer’s end-to-end portfolios of intellectual property from patents to trademarks to corporate website domains.
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.

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. GAAP"). 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. After this offering, Onex Corporation and Baring Private Equity Asia Limited ("BPEA") continued to beneficially own approximately 38.3% of the Company’s ordinary shares, down from approximately 70.8% of the ordinary shares beneficially owned by Onex and BPEA immediately after the closing of our merger with Churchill Capital Corp in 2019.
In June 2020, the Company consummated a public offering of 50,400,000 of our ordinary shares 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. 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 intend to use the net proceeds of the offering received by us for general corporate purposes.
13

CLARIVATE PLC
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share data)
The Company did not receive any proceeds from the sale of ordinary shares by the selling shareholders. After the offering, Onex and Baring continued to own approximately 18.4% and 7.2%, respectively, of the Company's ordinary shares, down from 38.3% owned subsequent to the February 2020 offering.
Risks and Uncertainties
In March 2020, the World Health Organization characterized COVID-19 as a pandemic. The rapid spread of COVID-19 and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. In view of the rapidly changing business environment, market volatility and heightened degree of uncertainty resulting from COVID-19, we are currently unable to fully determine its future impact on our business. However, we continue to assess the potential effect on our financial position, results of operations, and cash flows. If the global pandemic continues to evolve into a prolonged crisis, the effects could have an adverse impact on the Company's results of operations, financial condition and cash flows.

Note 2: Basis of Presentation
The accompanying unaudited Interim Condensed Consolidated Financial Statements were prepared in conformity with U.S. GAAP. The Interim Condensed Consolidated Financial Statements do not include all of the information or notes necessary for a complete presentation in accordance with U.S. GAAP. Accordingly, these Interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s annual financial statements as of and for the year ended December 31, 2019. The results of operations for the three and six months ended June 30, 2020 and 2019 are not necessarily indicative of the operating results for the full year.
In the opinion of management, the interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented. The Interim Condensed Consolidated Financial Statements of the Company include the accounts of all of its subsidiaries. Subsidiaries are entities over which the Company has control, where control is defined as the power to govern financial and operating policies. Generally, the Company has a shareholding of more than 50% of the voting rights in its subsidiaries. The effect of potential voting rights that are currently exercisable are considered when assessing whether control exists. Subsidiaries are fully consolidated from the date control is transferred to the Company, and are de-consolidated from the date control ceases. Intercompany accounts and transactions have been eliminated in consolidation. The U.S. dollar is the Company's reporting currency. As such, the financial statements are reported on a U.S. dollar basis.

Note 3: Summary of Significant Accounting Policies
Our significant accounting policies are those that we believe are important to the portrayal of our financial condition and results of operations, as well as those that involve significant judgments or estimates about matters that are inherently uncertain. There have been no material changes to the significant accounting policies discussed in “Item 8. – Financial Statements and Supplementary Data – Notes to the Consolidated Financial Statements – Note 3” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on March 2, 2020 (the "Annual Report"), except as noted below.
Accounts Receivable
Through the adoption of ASU 2016-13 and the related standards, the Company revised the policy regarding the recognition of expected credit losses and for our accounts receivables portfolio as follows.
Accounts receivable are recorded at the amount invoiced to customers and do not bear interest. 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. 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. Trade and other receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include past due status greater than 360 days or bankruptcy of the debtor.
Newly Adopted Accounting Standards
14

CLARIVATE PLC
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share data)
FASB issued new guidance, ASU 2016-13 and various other related issuances, related to measurement of credit losses on financial instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The Company has determined that the impact of this new accounting guidance will primarily affect our trade receivables. The Company prospectively adopted the standard on January 1, 2020. The adoption of this standard had an impact of $9,319 on the beginning Accumulated deficit balance in the Interim Condensed Consolidated Balance Sheet as of January 1, 2020.
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 Interim Condensed 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 Interim Condensed 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.

Recently Issued Accounting Standards
Except as noted below, there have been no material changes from the recently issued accounting standards previously disclosed in the Annual Report. Please refer to “Item 8. – Financial Statements and Supplementary Data – Notes to the Consolidated Financial Statements – Note 3” section of the Annual Report on Form 10-K for a discussion of the recently issued accounting standards that relate to the Company.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, which provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The guidance is effective for all entities during the period March 12, 2020 through December 31, 2022. The Company is currently in the process of evaluating the potential impact of the adoption of this standard on its Interim Condensed Consolidated Financial Statements.

Note 4: 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
15

CLARIVATE PLC
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share data)
sponsor, and 1,500,000 additional ordinary shares of the Company were issued to certain investors. See Note 15 — "Shareholders' Equity" for further information.
Upon consummation of the 2019 Transaction, each outstanding share of common 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.
Acquisition of Decision Resources Group
 
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 up to 2,895,638 of the Company's ordinary shares to be issued to PEL following the one-year anniversary of closing. The contingent stock consideration was valued at $58,897 on the closing date and will be revalued at each period end. For the three and six months ended June 30, 2020, the fair value of the contingent stock consideration increased by $4,575 and $5,763, respectively, which was recorded to Transaction expenses in the Interim Condensed Consolidated Statement of Operations. The corresponding liability increased to $64,660 as of June 30, 2020 which was recorded to Accrued expenses and other current liabilities in the Interim Condensed Consolidated Balance Sheet. See Note 19 — "Commitments and Contingencies” for more information. The DRG acquisition was accounted for using the acquisition method of accounting. 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. Goodwill is not deductible for tax purposes. Total transaction costs incurred in connection with the acquisition of DRG were $5,702 and $25,465 for the three and six months ended June 30, 2020, respectively.

The amount of Revenues, net and Net loss resulting from the acquisition that are attributable to the Company's stockholders and included in the Condensed Consolidated Statements of Operations and Comprehensive Loss were as follows:
Three months ended June 30, 2020
Revenues, net (1)
$46,663  
Net loss attributable to the Company's stockholders(8,911) 
(1) Includes $3,271 of a deferred revenue haircut recognized during the three months ended June 30, 2020.
Six months ended June 30, 2020
Revenues, net (1)
$63,707  
Net loss attributable to the Company's stockholders(9,518) 
(1) Includes $4,805 of a deferred revenue haircut recognized during the six months ended June 30, 2020.
16

CLARIVATE PLC
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share data)
The purchase price allocation for this acquisition as of the close date of February 28, 2020 is preliminary and may change upon completion of the determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocation for this acquisition:
Total
Accounts receivable$52,193  
Prepaid expenses4,295  
Other current assets68,001  
Computer hardware and other property4,302  
Other intangible assets(1)
491,366  
Other non-current assets2,960  
Operating lease right-of-use assets 25,099  
Total assets$648,216  
Accounts payable3,474  
Accrued expenses and other current liabilities35,812  
Current portion of deferred revenue35,126  
Current portion of operating lease liabilities 5,188  
Deferred income taxes47,467  
Non-current portion of deferred revenue628  
Other non-current liabilities52,908  
Operating lease liabilities 20,341  
Total liabilities200,944  
Fair value of acquired identifiable assets and liabilities$447,272  
(1)Includes $3,966 of internally developed software in progress acquired.
Purchase price, net of cash(2)
944,220  
Less: Fair value of acquired identifiable assets and liabilities 447,272  
Goodwill$496,948  
(2)The Company acquired cash of $20,777.
The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives. The following table summarizes the estimated fair value of DRG’s identifiable intangible assets acquired and their remaining weighted-average amortization period (in years):
Fair Value as of February 28, 2020Remaining
Weighted - Average
Amortization
Period (in years)
Customer Relationships$381,000  17.6
Database and Content50,200  4.7
Trade names5,200  4.0
Purchased Software23,000  6.4
Backlog28,000  4.0
Total identifiable intangible assets$487,400  
During the three and six months ended June 30, 2020, there were additional purchase accounting adjustments of $2,100 related to a reduction in the valuation of assumed lease liabilities and a corresponding reduction in goodwill.
Unaudited pro forma information for the Company for the periods presented as if the acquisition had occurred January 1, 2019 is as follows:
17

CLARIVATE PLC
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share data)
Three Months Ended June 30,
20202019
Pro forma revenues, net$276,771  $286,137  
Pro forma net income (loss) attributable to the Company's stockholders1,925  (91,455) 
Six Months Ended June 30,
20202019
Pro forma revenues, net$542,112  $553,937  
Pro forma net loss attributable to the Company's stockholders(62,512) (191,956) 
The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisition taken place on the date indicated, or the future consolidated results of operations of the Company. The pro forma financial information presented above has been derived from the historical condensed consolidated financial statements of the Company and from the historical accounting records of DRG.
The unaudited pro forma results include certain pro forma adjustments to revenue and net loss that were directly attributable to the acquisition, assuming the acquisition had occurred on January 1, 2019, 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 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 $1,261 and $26,187 for the three and six months ended June 30, 2020 and increased expenses by $1,261 and $26,626 for the three and six months ended June 30, 2019.

Note 5: Divested Operations
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 Statement of Operations during the fourth quarter 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, net during the six months ended June 30, 2020. The Company used the proceeds for general business purposes.
The divestiture does not represent a strategic shift and did not 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 did not meet the criteria to be classified as discontinued operations.

Note 6: Accounts Receivable