Restructuring

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring and Impairment

One Clarivate Program

During the second quarter 2021, the Company approved a restructuring plan to streamline operations within targeted areas of the Company. The program is expected to result in a reduction in operational costs, with the primary cost savings driver being from a reduction in workforce. Components of the pre-tax charges include $5.7 in severance costs incurred during the three months ended March 31, 2022. The Science and IP segments incurred $3.1 and $2.6 of the expense, respectively, during the three months ended March 31, 2022.

ProQuest Acquisition Integration Program

During the fourth quarter 2021, the Company approved a restructuring plan to streamline operations within targeted areas of the Company. The program is expected to result in a reduction in operational costs, with the primary cost savings driver being from a reduction in workforce. Components of the pre-tax charges include $4.3 in severance costs and $1.8 in other costs incurred during the three months ended March 31, 2022. The Science and IP segments incurred $4.8 and $1.3 of the expense, respectively, during the three months ended March 31, 2022.

Other Restructuring Programs

During 2020 and the fourth quarter 2019, we engaged a strategic consulting firm to assist us in optimizing our structure and cost base. As a result, we implemented several cost-saving and margin improvement programs designed to generate substantial incremental cash flows including the Operation Simplification and Optimization Program, the DRG Acquisition Integration Program and the CPA Global Acquisition Integration and Optimization Program. The costs associated with these programs were substantially complete as of March 31, 2022. Components of the pre-tax charges include $0.4 and $22.2 in severance costs and $(0.4) and $45.7 in other costs incurred during the three months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2021, the Science and IP segments incurred $22.6 and $40.9 of the expense, respectively.

The table below summarizes the activity related to the restructuring reserves across each of Clarivate's cost-saving's programs.

Restructuring Programs	Severance and Related Benefit Costs		Costs Associated with Exit and Disposal Costs(1)		Total
Reserve Balance as of December 31, 2021	$	28.3	$	7.1	$	35.4
Expenses recorded(2)	10.3		1.4		11.7
Payments made	(23.7)		(0.1)		(23.8)
Noncash items	(0.1)		0.6		0.5
Reserve Balance as of March 31, 2022	$	14.8	$	9.0	$	23.8
Reserve Balance as of December 31, 2020	$	25.7	$	4.5	$	30.2
Expenses recorded(2)	22.2		45.7		67.9
Payments made	(15.9)		(1.1)		(17.0)
Noncash items	(1.4)		(40.9)		(42.3)
Reserve Balance as of March 31, 2021	$	30.6	$	8.2	$	38.8
(1) Relates primarily to lease exit costs and legal and advisory fees.
(2) Expenses include the acceleration of phantom equity awards under the CPA Global Equity Plan that were held by employees whose employment was involuntarily terminated. These expenses will be paid in cash and are accounted for as a liability award. See Note 2 - Basis of Presentation for more information.

The following table is a summary of charges incurred related to the Company's restructuring programs for the three months ended March 31, 2022 and 2021.

	Three Months Ended March 31,
	2022		2021
Severance and related benefit costs	$	10.3	$	22.2
Costs associated with exit and disposal activities(1)	1.7		0.5
Costs associated with lease exit costs including impairment(2)	(0.3)		45.2
Total restructuring and impairment	$	11.7	$	67.9
(1) Relates primarily to contract exit costs, legal and advisory fees.
(2) Relates primarily to lease exit costs.

Lease Impairments

The Company evaluates long-lived assets for indicators of impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers a triggering event to have occurred upon exiting a facility if the expected undiscounted cash flows for the sublease period are less than the carrying value of the assets group. An impairment charge is recorded in the excess of each operating lease ROU asset's carrying amount over its estimated fair value. In connection with the Company's digital workplace transformation initiative to enable colleagues to work remotely, the Company ceased the use of select leased sites during the three months ended March 31, 2022 and 2021. As a result, the Company recorded a non-cash impairment charge to restructuring and impairment within the Condensed Consolidated Statement of Operations based on the estimate of future recoverable cash flows of $0.0 and $41.0 for the three months ended March 31, 2022, and 2021, respectively. Additionally, the Company incurred $0.2 and $3.1 in lease termination fees during the three months ended March 31, 2022 and 2021, respectively.

Employee Rights Upon Retirement

In Israel, the Company is required by law to make severance payments upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company operates a number of post-employment defined contribution plans. A defined contribution plan is a program that benefits an employee after termination of employment, under which the Company regularly makes ongoing deposits into Israeli employees' pension plans to fund their severance liabilities. According to Section 14 of the Severance Pay Law, for employees employed by the Company under Section 14, the

Company deposits are made in lieu of the Company's severance liability for 85% of the employees' salaries, therefore no obligation is provided for in the financial statements for such portion of the employees' salaries. Severance pay liabilities for the Section 14 employees, is calculated for 15% of salary and provided for in the financial statements based upon the latest monthly salary multiplied by the number of years of employment. The fund assets for such Section 14 employees are not included in the Company’s financial position. For employees that are not under Section 14, severance pay liabilities are provided for in the financial statements based upon the latest monthly salary multiplied by the number of years of employment. The fund assets for such non-Section 14 employees are included in the Company’s financial position. In accordance with its terms, the plans meet the definition of a defined contribution plan.

	March 31, 2022		December 31, 2021
Long-term severance payable	$	8.6	$	8.6