Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2019 | |
Document and Entity Information [Abstract] | |
Document Type | POS AM |
Entity Central Index Key | 0001764046 |
Entity Registrant Name | Clarivate Analytics Plc |
Document Period End Date | Dec. 31, 2019 |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Amendment Flag | true |
Amendment Description | Pursuant to the Registration Statement on Form F-4 (Registration No. 333-229899) (as amended by Post-Effective Amendment No. 1 thereto, the "Registration Statement") of Clarivate Analytics Plc ("Clarivate"), Clarivate registered ordinary shares issuable in exchange for shares of common stock issuable upon exercise of outstanding warrants of Churchill Capital Corp ("Churchill"), including warrants underlying units of Churchill. Under their terms, each warrant automatically entitles the holder to purchase one ordinary share of Clarivate in lieu of one share of Churchill common stock. In Part II, Item 22 of the Registration Statement, Clarivate undertook to file this Post-Effective Amendment No. 2 to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Pursuant to Item 512(a)(4) of Regulation S-K, financial statements and information otherwise required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"), are not required to be furnished herewith, provided Clarivate includes in the proxy statement/prospectus (the "Prospectus") included in the Registration Statement, by means hereof, financial statements required by Item 8.A of Form 20-F and other information as aforesaid. Clarivate filed the final Prospectus on April 26, 2019 pursuant to Rule 424(b)(3) under the Securities Act. This Post-Effective Amendment No. 2 includes a supplement (the "Supplement") to the Prospectus containing the financial statements and other information required by Item 512(a)(4) of Regulation S-K. The Supplement updates the information contained in the Prospectus and should be read together therewith. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 76,130 | $ 25,575 |
Restricted cash | 9 | 9 |
Accounts receivable, net of allowance for doubtful accounts of $16,511 and $14,076 at December 31, 2019 and December 31, 2018, respectively | 333,858 | 331,295 |
Prepaid expenses | 40,710 | 31,021 |
Other current assets | 11,750 | 20,712 |
Assets held for sale | 30,619 | 0 |
Total current assets | 493,076 | 408,612 |
Computer hardware and other property, net | 18,042 | 20,641 |
Other intangible assets, net | 1,828,640 | 1,958,520 |
Goodwill | 1,328,045 | 1,282,919 |
Other non-current assets | 18,632 | 26,556 |
Deferred income taxes | 19,488 | 12,426 |
Operating lease right-of-use assets | 85,448 | 0 |
Total Assets | 3,791,371 | 3,709,674 |
Current liabilities: | ||
Accounts payable | 26,458 | 38,418 |
Accrued expenses and other current liabilities | 159,217 | 153,849 |
Current portion of deferred revenues | 407,325 | 391,102 |
Current portion of operating lease liability | 22,130 | 0 |
Current portion of long-term debt | 9,000 | 60,345 |
Liabilities held for sale | 26,868 | 0 |
Total current liabilities | 650,998 | 643,714 |
Long-term debt | 1,628,611 | 1,930,177 |
Non-current portion of deferred revenues | 19,723 | 17,112 |
Other non-current liabilities | 18,891 | 24,838 |
Deferred income taxes | 48,547 | 43,226 |
Operating lease liabilities | 64,189 | 0 |
Total liabilities | 2,430,959 | 2,659,067 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Ordinary Shares, no par value; unlimited shares authorized at December 31, 2019 and December 31, 2018; 306,874,115 and 217,526,425 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively; | 2,208,529 | 1,677,510 |
Accumulated other comprehensive income (loss) | (4,879) | 5,358 |
Accumulated deficit | (843,238) | (632,261) |
Total shareholders' equity | 1,360,412 | 1,050,607 |
Total Liabilities and Shareholders' Equity | $ 3,791,371 | $ 3,709,674 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||||
Allowance for doubtful accounts | $ 16,511 | $ 14,076 | $ 8,495 | $ 2,643 |
Capital stock, par value (in dollars per share) | $ 0 | $ 0 | ||
Capital stock, issued (in shares) | 306,874,115 | 217,526,425 | ||
Capital stock, outstanding (in shares) | 306,874,115 | 217,526,425 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statement of Operations | |||
Revenues, net | $ 974,345 | $ 968,468 | $ 917,634 |
Operating costs and expenses: | |||
Cost of revenues, excluding depreciation and amortization | (346,503) | (396,499) | (394,215) |
Selling, general and administrative costs, excluding depreciation and amortization | (368,675) | (369,377) | (343,143) |
Share-based compensation expense | (51,383) | (13,715) | (17,663) |
Depreciation | (9,181) | (9,422) | (6,997) |
Amortization | (191,361) | (227,803) | (221,466) |
Impairment on assets held for sale | (18,431) | 0 | 0 |
Transaction expenses | (46,214) | (2,457) | (2,245) |
Transition, integration and other related expenses | (14,239) | (61,282) | (78,695) |
Restructuring | (15,670) | 0 | 0 |
Legal settlement | 39,399 | 0 | 0 |
Other operating income (expense), net | 4,826 | 6,379 | (237) |
Total operating expenses | (1,017,432) | (1,074,176) | (1,064,661) |
Loss from operations | (43,087) | (105,708) | (147,027) |
Interest expense, net | (157,689) | (130,805) | (138,196) |
Loss before income tax | (200,776) | (236,513) | (285,223) |
Benefit (provision) for income taxes | (10,201) | (5,649) | 21,293 |
Net loss | $ (210,977) | $ (242,162) | $ (263,930) |
Per share: | |||
Basic and diluted | $ (0.77) | $ (1.11) | $ (1.22) |
Weighted average shares used to compute earnings per share: | |||
Basic and diluted | 273,883,342 | 217,472,870 | 216,848,866 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Net loss | $ (210,977) | $ (242,162) | $ (263,930) |
Other comprehensive income (loss), net of tax: | |||
Interest rate swaps, net of $0 tax in all periods | (6,422) | 2,537 | 1,107 |
Defined benefit pension plans, net of tax (benefit) provision of $683, ($91), and $430, respectively | (1,041) | (17) | 881 |
Foreign currency translation adjustments | (2,774) | (11,146) | 15,466 |
Total other comprehensive income (loss) | (10,237) | (8,626) | 17,454 |
Comprehensive loss | $ (221,214) | $ (250,788) | $ (246,476) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Interest rate swaps, tax | $ 0 | $ 0 | $ 0 |
Defined benefit pension plans, tax (benefit) provision | $ 683 | $ (91) | $ 430 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Originally ReportedShare Capital | Originally ReportedAccumulated Other Comprehensive Income (Loss) | Originally ReportedAccumulated Deficit | Originally Reported | Share Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Increase (Decrease) in Shareholders' Equity | ||||||||
Conversion of units of share capital | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Conversion of units of share capital (in share) | 214,408,455 | |||||||
Balance at the beginning at Dec. 31, 2016 | $ 1,635,000 | (3,470) | (126,169) | 1,505,361 | $ 1,635,000 | $ (3,470) | $ (126,169) | $ 1,505,361 |
Balance at the beginning (in shares) at Dec. 31, 2016 | 1,635,000 | 216,043,455 | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Issuance of common stock, net | $ 9,558 | 9,558 | ||||||
Issuance of common stock, net (in shares) | 1,284,368 | |||||||
Share-based compensation | $ 17,663 | 17,663 | ||||||
Net loss | (263,930) | (263,930) | ||||||
Comprehensive Income (loss) | 17,454 | 17,454 | ||||||
Balance at the end at Dec. 31, 2017 | $ 1,662,221 | 13,984 | (390,099) | 1,286,106 | $ 1,662,221 | 13,984 | (390,099) | 1,286,106 |
Balance at the end (in shares) at Dec. 31, 2017 | 1,644,720 | 217,327,823 | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Conversion of units of share capital | $ 0 | 0 | 0 | 0 | ||||
Conversion of units of share capital (in share) | 215,683,103 | |||||||
Issuance of common stock, net | $ 1,574 | 1,574 | ||||||
Issuance of common stock, net (in shares) | 198,602 | |||||||
Share-based compensation | $ 13,715 | 13,715 | ||||||
Net loss | (242,162) | (242,162) | ||||||
Comprehensive Income (loss) | (8,626) | (8,626) | ||||||
Balance at the end at Dec. 31, 2018 | $ 1,677,510 | 5,358 | (632,261) | 1,050,607 | $ 1,677,510 | 5,358 | (632,261) | 1,050,607 |
Balance at the end (in shares) at Dec. 31, 2018 | 1,646,223 | 217,526,425 | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Conversion of units of share capital | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Conversion of units of share capital (in share) | 215,880,202 | |||||||
Tax Receivable Agreement | $ 264,000 | 264,000 | ||||||
Settlement of Tax Receivable Agreement | 64,000 | 64,000 | ||||||
Issuance of common stock, net | $ 1,582 | 1,582 | ||||||
Issuance of common stock, net (in shares) | 1,597,691 | |||||||
Merger recapitalization | $ 678,054 | 678,054 | ||||||
Merger recapitalization (in shares) | 87,749,999 | |||||||
Share-based compensation | $ 51,383 | 51,383 | ||||||
Net loss | (210,977) | (210,977) | ||||||
Comprehensive Income (loss) | (10,237) | (10,237) | ||||||
Balance at the end at Dec. 31, 2019 | $ 2,208,529 | $ (4,879) | $ (843,238) | $ 1,360,412 | ||||
Balance at the end (in shares) at Dec. 31, 2019 | 306,874,115 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities | |||
Net loss | $ (210,977) | $ (242,162) | $ (263,930) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 200,542 | 237,225 | 228,463 |
Bad debt expense | 1,331 | 6,507 | 6,505 |
Deferred income tax benefit | 357 | (14,103) | (36,272) |
Share-based compensation | 51,383 | 13,715 | 17,663 |
Loss on extinguishment of debt | 50,676 | 0 | 0 |
Gain on sale of line of business | 0 | (39,104) | 0 |
Impairment on assets held for sale | 18,431 | 0 | 0 |
Deferred finance charges | 2,496 | 9,182 | 23,510 |
Tax indemnity write-off | 0 | 33,819 | 0 |
Other operating activities | (374) | (3,979) | 2,548 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (593) | (50,906) | 43,109 |
Prepaid expenses | (10,224) | (2,936) | (4,052) |
Other assets | (975) | 578 | 10,799 |
Accounts payable | (13,838) | (18,091) | (39,660) |
Accrued expenses and other current liabilities | 1,095 | 9,842 | (6,038) |
Deferred revenues | 33,480 | 33,539 | 18,751 |
Operating lease right of use assets | 11,365 | 0 | 0 |
Operating lease liabilities | (11,251) | 0 | 0 |
Other liabilities | (5,344) | 774 | 5,271 |
Net cash (used in) provided by operating activities | 117,580 | (26,100) | 6,667 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (69,836) | (45,410) | (37,804) |
Acquisitions, net of cash acquired | (68,424) | (23,539) | (7,401) |
Acquisition of intangibles | (2,625) | ||
Proceeds from sale of Product Line, net of restricted cash | 80,883 | 5,000 | |
Net cash (used in) provided by investing activities | (140,885) | 11,934 | (40,205) |
Cash Flows used in Financing Activities: | |||
Proceeds from revolving credit facility | 70,000 | 45,000 | 30,000 |
Principal payments on term loan | (641,509) | (46,709) | (15,423) |
Repayment of revolving credit facility | (50,000) | (30,000) | |
Payment of debt issuance costs | (41,923) | (817) | |
Contingent purchase price payment | (2,371) | (2,470) | |
Proceeds from reverse recapitalization | 682,087 | 0 | 0 |
Proceeds from issuance of debt | 1,600,000 | 0 | 0 |
Extinguishment of debt | (1,342,651) | 0 | 0 |
Tax receivable agreement payout | (200,000) | 0 | 0 |
Proceeds from the exercise of warrants and employee share options | 1,582 | 1,574 | 9,058 |
Net cash (used in) provided by financing activities | 75,215 | (32,605) | 22,818 |
Effects of exchange rates | (971) | (5,193) | 3,248 |
Net increase (decrease) in cash and cash equivalents, and restricted cash | 50,939 | (51,964) | (7,472) |
Beginning of period: | |||
Cash and cash equivalents | 25,575 | 53,186 | 77,136 |
Restricted cash | 9 | 24,362 | 7,884 |
Total cash and cash equivalents, and restricted cash, beginning of period | 25,584 | 77,548 | 85,020 |
Less: Cash included in assets held for sale, end of period | (384) | 0 | 0 |
Cash and cash equivalents, and restricted cash, end of period | 76,139 | 25,584 | 77,548 |
Cash and cash equivalents | 76,130 | 25,575 | 53,186 |
Restricted cash | 9 | 9 | 24,362 |
Supplemental Cash Flow Information: | |||
Cash paid for interest | 101,164 | 121,916 | 115,236 |
Cash paid for income tax | 29,204 | 13,210 | 14,722 |
Capital expenditures included in accounts payable | 8,762 | 5,166 | 2,473 |
Assets received as reverse recapitalization capital | 1,877 | 0 | 0 |
Liabilities assumed as reduction of reverse recapitalization capital | $ 5,910 | $ 0 | $ 0 |
Background and Nature of Operat
Background and Nature of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Background and Nature of Operations | |
Background and Nature of Operations | Note 1: Background and Nature of Operations Clarivate Analytics Plc (“Clarivate,” “us,” “we,” “our,” or the “Company”), a public limited company organized under the laws of Jersey, Channel Islands, was incorporated as a Jersey limited company on January 7, 2019. 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 portfolio 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 the 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. See Note 4 – "Business Combinations" for more information. 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. On September 10, 2019 and December 9, 2019 the Company issued a public offering of 39,675,000 and 49,680,000 ordinary shares, respectively, (the “Secondary Offerings”) by affiliated funds of Onex Corporation and Baring Private Equity Asia Limited (“BPEA”), together with certain other shareholders, at $16.00 and $17.25, respectively, per share. The Company did not receive any of the proceeds from the sale of its ordinary shares by the selling shareholders. Jersey was formed on August 4, 2016 as a private limited liability company organized under the laws of the Island of Jersey. Its registered office is located at 4th Floor, St Paul’s Gate, 22-24 New Street, St Helier, Jersey JE1 4TR. On July 10, 2016, Camelot UK Bidco Limited, a private limited liability company incorporated under the laws of England and Wales, and a direct wholly owned subsidiary of Camelot UK Holdco Limited, a direct wholly owned subsidiary (“UK Holdco”), collectively referred to as (“Bidco”), entered into a separation agreement to acquire (i) certain assets and liabilities related to the Intellectual Property & Science business (“IP&S”) business from our Thomson Reuters Corporation ("Former Parent") and (ii) all of the equity interests and substantially all of the assets and liabilities of certain entities engaged in the IP&S business together with their subsidiaries (“2016 Transaction”). The 2016 Transaction total consideration was $3,566,599, net of cash acquired. Jersey is owned by affiliates of Onex Corporation and private investment funds managed by BPEA and certain co-investors. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation | |
Basis of Presentation | Note 2: Basis of Presentation The accompanying Consolidated Financial Statements for the years ended December 31, 2019, 2018 and 2017, respectively, were prepared in conformity with U.S. GAAP. The 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. The U.S. dollar is the Company’s reporting currency. As such, the financial statements are reported on a U.S. dollar basis. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 3: Summary of Significant Accounting Policies Business Combinations The Company determines whether substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this threshold is met, the set is not a business. If it is not met, the Company then evaluates whether the set meets the requirement that a business include, at a minimum, an input and as substantive process that together significantly contribute to the ability to create outputs. Business combinations are accounted for using the acquisition method at the acquisition date, which is when control is obtained. The consideration transferred is generally measured at fair value, as are the identifiable assets acquired and liabilities assumed. During the one-year period following the acquisition date, if an adjustment is identified based on new information about facts and circumstances that existed as of the acquisition date, the Company will record measurement-period adjustments related to the acquisitions in the period in which the adjustment is identified. Goodwill is measured at the acquisition date as the fair value of the consideration transferred (including, if applicable, the fair value of any previously held equity interest and any non-controlling interests) less the net recognized amount (which is generally the fair value) of the identifiable assets acquired and liabilities assumed. Transaction costs, other than those associated with the issuance of debt or equity securities incurred in connection with a business combination, are expensed as incurred and included in Transaction expenses in the Consolidated Statements of Operations. Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts and operations of the Company, and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates. The most important of these relate to share-based compensation expenses, revenue recognition, the allowance for doubtful accounts, internally developed computer software, valuation of goodwill and other identifiable intangible assets, determination of the projected benefit obligations of the defined benefit plans, income taxes, fair value of stock options, derivatives and financial instruments, contingent earn-out, and the tax related valuation allowances. On an ongoing basis, management evaluates these estimates, assumptions and judgments, in reference to historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Cash and Cash Equivalents Cash and cash equivalents is comprised of cash on hand and short-term deposits with an original maturity at the date of purchase of three months or less. Restricted Cash As of December 31, 2019 and 2018, the Company held $9 of restricted cash primarily related to funds from the Company’s Publons transaction. Accounts Receivable Accounts receivable are presented net of the allowance for doubtful accounts and any discounts. Accounts receivable are recorded at the invoiced amount and do not bear interest. Collections of accounts receivable are included in cash provided by operating activities in the Consolidated Statements of Cash Flows. The Company maintains an allowance for doubtful accounts for estimated losses and assesses its adequacy each reporting period by evaluating factors such as the length of time receivables are past due, historical collection experience, and the economic and competitive environment. The expense related to doubtful accounts is included within Selling, general and administrative costs, excluding depreciation and amortization in the Consolidated Statements of Operations. Account balances are written off against the allowance when the potential for recovery is considered remote. The Company does not have any off‑balance‑sheet credit exposure related to its customers. Concentration of Credit Risk Accounts receivable are the primary financial instrument that potentially subjects the Company to significant concentrations of credit risk. Accounts receivable represents arrangements in which services were transferred to a customer before the customer pays consideration or before payment is due. Contracts with payment in arrears are recognized as receivables after the Company considers whether a significant financing component exists. The Company does not require collateral or other securities to support customer receivables. Management performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed appropriate. Credit losses have been immaterial and reasonable within management’s expectations. No single customer accounted for more than 1% of revenues and our ten largest customers represented only 5% of revenues for the year ended December 31, 2019. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and consequently, the Company believes that such funds are subject to minimal credit risk. Prepaid Expenses Prepaid expenses represent amounts that the Company has paid in advance of receiving benefits or services. Prepaid expenses include amounts for system and service contracts, sales commissions, deposits, prepaid royalties and insurance and are recognized as an expense over the general contractual period that the Company expects to benefit from the underlying asset or service. Computer Hardware and Other Property, net Generally, computer hardware and other property are recorded at cost and are depreciated over the respective estimated useful lives. Upon the 2016 Transaction, computer hardware and other property were revalued and recorded at net book value, which approximated fair value at the 2016 Transaction. Depreciation is computed using the straight‑line method. Repair and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of sold or retired assets are removed from the accounts and any gain or loss is included within Loss from operations in the Consolidated Statements of Operations. The estimated useful lives are as follows: Computer hardware 3 years Furniture, fixtures and equipment 5-7 years Leasehold improvements Lesser of lease term or estimated useful life Computer Software Development costs related to internally generated software are capitalized once a project has progressed beyond a conceptual, preliminary stage to that of the application development stage. Costs of significant improvements on existing software for internal use, both internally developed and purchased, are also capitalized. Costs related to the preliminary project stage, data conversion and post-implementation/operation stage of an internal use software development project are expensed as incurred. Capitalized costs are amortized over five years, which is the estimated useful life of the related software. Purchased software is amortized over three years, which is the estimated useful life of the related software. The capitalized amounts, net of accumulated amortization, are included in Other intangible assets, net in the Consolidated Balance Sheets. The cost and related accumulated amortization of sold or retired assets are removed from the accounts and any gain or loss is included within Loss from operations in the Consolidated Statements of Operations. Computer software is evaluated for impairment whenever circumstances indicate the carrying amount may not be recoverable. The test for impairment compares the carrying amounts with the sum of undiscounted cash flows related to the asset. If the carrying value is greater than the undiscounted cash flows of the asset, the asset is written down to its estimated fair value. Identifiable Intangible Assets, net Upon acquisition, identifiable intangible assets are recorded at fair value and are carried at cost less accumulated amortization or accumulated impairment for indefinite-lived intangible assets. Useful lives are reviewed at the end of each reporting period and adjusted if appropriate. Fully amortized assets are retained at cost and accumulated amortization accounts until such assets are derecognized. Customer Relationships- Customer relationships primarily consist of customer contracts and customer relationships arising from such contracts. Databases and Content - Databases and content primarily consists of repositories of the Company’s specific financial and customer information and intellectual content. Trade Names- Trade names consist of purchased brand names that the Company continues to use. Where applicable, intangible assets are amortized on a straight-line basis over their estimated useful lives as follows: Customer relationships 2 – 14 years Databases and content 13 – 20 years Finite-lived trade names 18 years Indefinite-lived trade names Indefinite Impairment of Long-Lived Assets Residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate. The Company evaluates its long-lived assets, including computer hardware and other property, computer software, and finite-lived intangible assets for impairment whenever circumstances indicate that their carrying amounts may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate over its remaining life. An asset is assessed for impairment at the lowest level that the asset generates cash inflows that are largely independent of cash inflows from other assets. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Management identified an impairment loss in connection with the divestiture of certain assets and liabilities of its MarkMonitor Product Line within its IP Group in the year ended December 31, 2019. Management determined that additional impairment did not exist for any of the periods presented. Goodwill and Indefinite-Lived Intangible Assets The Company evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment or one level below an operating segment, annually as of October 1 or more frequently if impairment indicators arise in accordance with Accounting Standards Codification ("ASC”) Topic 350. The Company identified five reporting units due to a change in the Company’s reporting structure for the years ended December 31, 2019 and 2018 and one reporting unit for the year ended December 31, 2017. The Company evaluates the recoverability of goodwill at the reporting unit level. The Company assesses various qualitative factors to determine whether the fair value of a reporting unit may be less than its carrying amount. If a determination is made that, based on the qualitative factors, an impairment does not exist, the Company is not required to perform further testing. If the aforementioned qualitative assessment results in the Company concluding that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount, the fair value of the reporting unit will be determined and compared to its carrying value including goodwill. In determining the fair value of a reporting unit, the Company estimates the fair value of a reporting unit using the fair value derived from the income approach. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit; whereas, the income approach uses a discounted cash flow (“DCF”) model. The DCF model determines the fair value of our reporting units based on projected future discounted cash flows, which in turn were based on our views of uncertain variables such as growth rates, anticipated future economic conditions, and the appropriate discount rates relative to risk and estimates of residual values. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired, and the Company is not required to perform further testing. If the fair value of the reporting unit is less than the carrying value, the Company will recognize the difference as an impairment charge. Management concluded that no goodwill impairment existed for any of the periods presented. The Company also has indefinite-lived intangible assets related to trade names. Indefinite-lived intangible assets are subject to impairment testing annually or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. For purposes of impairment testing, the fair value of trade names is determined using an income approach, specifically the relief from royalties method. Management concluded that no indefinite-lived intangible impairment existed for any of the periods presented. Other Current and Non-Current Assets and Liabilities The Company defines current assets and liabilities as those from which it will benefit from or which it has an obligation for within one year that do not otherwise classify as assets or liabilities separately reported on the Consolidated Balance Sheets. Other non-current assets and liabilities are expected to benefit the Company or cause its obligation beyond one year. The Company classifies the current portion of long-term assets and liabilities as current assets or liabilities. Leases We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) assets, Current portion of operating lease liability, and Operating lease liabilities on our Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. Accounts Payable and Accruals Accounts payable and accruals are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable and accruals are recognized initially at their settlement value, and are classified as current liabilities if payment is due within one year or less. Debt Debt is recognized initially at par value, net of any applicable discounts or financing costs. Debt is subsequently stated at amortized cost with any difference between the proceeds (net of transactions costs) and the redemption value recognized in the Consolidated Statements of Operations over the term of the debt using the effective interest method. Interest on indebtedness is expensed as incurred. Debt is classified as a current liability when due within 12 months after the end of the reporting period. Tax Receivable Agreement (“TRA”) Concurrent with the completion of the 2019 Transaction, in May 2019 we became a party to a TRA with our pre-business combination equity holders. Under the TRA, we are generally required to pay to certain pre-business combination equity holders approximately 85% of the amount of calculated tax savings, if any, we are deemed to realize (using the actual applicable U.S. federal income tax rate and an assumed combined state and local income tax rate) as a result of (1) any existing tax attributes associated with Covered Tax Assets acquired in the pre-business combination organizational transactions, the benefit of which is allocable to us as a result of such transactions, (2) net operating loss (NOL) carryforwards available as a result of such transactions and (3) tax benefits related to imputed interest. Further, there may be significant changes, to the estimate of the TRA liability due to various reasons including changes in corporate tax law, changes in estimates of the amount or timing of future taxable income, and other items. Changes in those estimates are recognized as adjustments to the related TRA liability, with offsetting impacts recorded in the Consolidated Statements of Operations as Other operating income (expense), net. On August 21, 2019 the Company entered into a TRA Buyout Agreement to settle the outstanding liability. The settlement of the original TRA liability pursuant to the TRA Buyout Agreement was accounted for as an adjustment to Shareholders' equity. Derivative Financial Instruments Foreign Exchange Derivative Contracts Prior to the sale of IPM, the Company used derivative financial instruments to manage foreign currency exchange rate risk in IPM. The Company’s derivative financial instruments consist of foreign currency forward contracts (“forward contracts”). Derivative financial instruments were neither held nor issued by the Company for trading purposes. Interest Rate Swaps The Company has interest rate swaps with counterparties to reduce its exposure to variability in cash flows relating to interest payments on a portion of its outstanding first lien senior secured term loan facility in an aggregate principal amount of $900,000 (“Term Loan Facility”). The Company applies hedge accounting and has designated these instruments as cash flow hedges of the risk associated with floating interest rates on designated future quarterly interest payments. Management assumes the hedge is highly effective and therefore changes in the value of the hedging instrument are recorded in Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. Any ineffectiveness is recorded in earnings. Amounts in Accumulated other comprehensive income (loss) are reclassified into earnings in the same period during which the hedged transactions affect earnings, or upon termination of the hedging relationship. Fair Value of Financial Instruments In determining fair value, the use of various valuation methodologies, including market, income and cost approaches is permissible. The Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s interest rate swap derivative instruments are classified as Level 2. Earn-out liabilities and defined benefit plan assets are classified as Level 3. Contingent Considerations The Company records liabilities for the estimated cost of such contingencies when expenditures are probable and reasonably estimable. A significant amount of judgment is required to estimate and quantify the potential liability in these matters. We engage outside experts as deemed necessary or appropriate to assist in the calculation of the liability, however management is responsible for evaluating the estimate. As information becomes available regarding changes in circumstances for ongoing contingent considerations, our potential liability is reassessed and adjusted as necessary. See Note 22 – “Commitments and Contingencies” for further information on contingencies. Pension and Other Post-Retirement Benefits The Company may be required to sponsor pension benefit plans, for certain international markets, which are unfunded and are not material for the Company. The net periodic pension expense is actuarially determined on an annual basis by independent actuaries using the projected unit credit method. The determination of benefit expense requires assumptions such as the discount rate, which is used to measure service cost, benefit plan obligations and the interest expense on the plan obligations. Other significant assumptions include expected mortality, the expected rate of increase with respect to future compensation and pension. Because the determination of the cost and obligations associated with employee future benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results will differ from results which are estimated based on assumptions. The liability recognized in the Consolidated Balance Sheets is the present value of the defined benefit obligation at the end of the reporting period. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability. The defined benefit obligation is included in Other non-current liabilities in the Consolidated Balance Sheets. All actuarial gains and losses that arise in calculating the present value of the defined benefit obligation are recognized immediately in Accumulated deficit and included in the Consolidated Statements of Comprehensive Income (Loss). See Note 13 – “Pension and Other Post Retirement Benefits” for balances and further details including an estimate of the impact on the Consolidated Financial Statements from changes in the most critical assumptions. Employer contributions to defined contribution plans are expensed as incurred, which is as the related employee service is rendered. Taxation The Company recognizes income taxes under the asset and liability method. Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect our best assessment of estimated current and future taxes to be paid. Significant judgments and estimates are required in determining the consolidated Income tax expense for financial statement purposes. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In assessing the realizability of deferred tax assets, we consider future taxable income by tax jurisdiction and tax planning strategies. The Company records a valuation allowance to reduce our deferred tax assets to equal an amount that is more likely than not to be realized. Changes in tax laws and tax rates could also affect recorded deferred tax assets and liabilities in the future. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. ASC Topic 740, Income Taxes , states that a benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company first records unrecognized tax benefits as liabilities in accordance with ASC 740 and then adjusts these liabilities when our judgment changes as a result of the evaluation of new information not previously available at the time of establishing the liability. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. Interest accrued related to unrecognized tax benefits and income tax-related penalties are included in the Benefit (provision) for income taxes. Deferred tax is provided on taxable temporary differences arising on investments in foreign subsidiaries, except where we intend, and are able, to reinvest such amounts on a permanent basis. Revenue Recognition The Company derives revenue by selling information on a subscription and single transaction basis as well as from performing professional services. The Company recognizes revenue when control of these services are transferred to the customer for an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those goods or services. The Company determines revenue recognition utilizing the following five steps: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenue when, or as, the Company transfers control of the product or service for each performance obligation. Revenue is recognized net of discounts and rebates, as well as value added and other sales taxes. Cash received or receivable in advance of the delivery of the services or publications is included in deferred revenues. The Company disaggregates revenue based on revenue recognition pattern. Subscription based revenues recognize revenue over time whereas our transactional revenues recognize revenue at a point in time. The Company believes subscription and transaction is reflective of how the Company manages the business. The revenue recognition policies for the Company’s revenue streams are discussed below. Subscription Revenues Subscription-based revenues are recurring revenues that are earned under annual, evergreen or multi-year contracts pursuant to which we license the right to use our products to our customers. Revenues from the sale of subscription data and analytics solutions are typically invoiced annually in advance and recognized ratably over the year as revenues are earned. Subscription revenues are typically generated either on (i) an enterprise basis, meaning that the organization has a license for the particular product or service offering and then anyone within the organization can use it at no additional cost, (ii) a seat basis, meaning each individual that uses the particular product or service offering has to have his or her own license, or (iii) a unit basis, meaning that incremental revenues are generated on an existing subscription each time the product is used (e.g., a trademark or brand is searched or assessed). Transactional Revenues Transactional revenues are revenues that are earned under contracts for specific deliverables that are typically quoted on a product, data set or project basis and often derived from repeat customers, including customers that also generate subscription-based revenues. Revenues from the sale of transactional products and services are invoiced according to the terms of the contract, typically in arrears. Transactional content sales are usually delivered to the customer instantly or in a short period of time, at which time revenues are recognized. In the case of professional services, these contracts vary in length from several months to years for multi-year projects and customers and typically invoiced based on the achievement of milestones. Transactional revenues are typically generated on a unit basis, although for certain product and service offerings transactional revenues are generated on a seat basis. Transactional revenues may involve sales to the same customer on multiple occasions but with different products or services comprising the order. Performance Obligations Content Subscription: Content subscription performance obligations are most prevalent in the Web of Science, Derwent, and Life Sciences Product Lines. Content subscriptions are subscriptions that can only be accessed through the Company’s on-line platform for a specified period of time through downloads or access codes. In addition to the primary content subscription, these types of performance obligations can often include other performance obligations, such as training subscriptions, access to historical content, maintenance and other optional content. While revenue for these performance obligations are primarily recognized over the length of the contract (subscription revenue) there are instances where revenue could be recognized upon delivery (transactional revenue). Historical content and some optional content can be purchased via a perpetual license, which would be recognized upon delivery. Fees are typically paid annually at the beginning of each term. Domain Registration Services: This performance obligation relates to the MarkMonitor Product Line. This is a service to register domain names with the applicable registries, with the Company being responsible for monitoring the domain name expiration and paying the registry before expiration. In addition, the Company has an ongoing responsibility to ensure the domain name is maintained at the registry. Customers typically sign a one to two year contract, identifying specific domain names to be registered and tracked. Revenue is recognized over the term of the contract and fees are typically invoiced annually at the beginning of each contract term. Search Services: This performance obligation relates to the CompuMark Product Line. It is a comprehensive search report across multiple databases for a proposed trademark. The report is compiled by Clarivate’s analysts and sent to customers. Revenue is recognized upon delivery of the report. Fees are typically paid upon delivery. Trademark Watch: This performance obligation relates to the CompuMark Product Line. Trademark watch service is an annual subscription that allows customers to protect their trademarks from infringement by providing timely notification of newly filed or published trademarks. Revenue is recognized over the term of the contract, with fees paid annually at the beginning of each contract term. Patent Management: This performance obligation related to the IPM Product Line. The Company paid patent registration fees for customers in multiple countries to ensure their patents do not expire. Transaction fee revenue was recognized at the time payment is made on the client’s behalf to the applicable patent office. Fees were paid annually at the beginning of each term. Variable Consideration In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as retroactive discounts provided to the customers, indexed or volume-based discounts, and revenue between contract expiration and renewal. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current, and forecasted) that is reasonably available to the Company. Significant Judgments Significant judgments and estimates are necessary for the allocation of the proceeds received from an arrangement to the multiple performance obligations and the appropriate timing of r |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations | |
Business Combinations | 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 sponsor, and 1,500,000 additional ordinary shares of the Company were issued to certain investors. See Note 16 – "Shareholders' Equity" for further information. Upon consummation of the 2019 Transaction, each outstanding share of 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. Certain restrictions were removed following the Secondary Offering on August 14, 2019. See Note 17 – “Employment and Compensation Arrangements” for further information. After giving effect to the satisfaction of the vesting restrictions, the Company Owners held approximately 60% of the issued and outstanding shares of the Company at the close of the 2019 Transaction. See Note 16 – “Shareholders’ Equity” for further information on equity instruments. In September 2019, the Company purchased the key business assets of SequenceBase, an international patent sequence information provider. The SequenceBase acquisition was accounted for as an asset acquisition. As a result of the SequenceBase acquisition, SequenceBase’s identifiable assets were adjusted to their fair market values as of the closing date, which included customer relations intangibles of $1,000 and computer software intangibles of $2,500. The Consolidated Financial Statements include the results of the acquisition subsequent to the closing date. On November 27, 2019, the Company closed on the acquisition of Darts-ip, (“Darts”), a provider of global IP case law data and analytics headquartered in Brussels, Belgium. The Company acquired 100% of the voting equity interest of Darts for cash considerations. The Darts acquisition was accounted for using the acquisition method of accounting. As a result of the Darts acquisition and the application of purchase accounting, Darts' identifiable assets and liabilities were adjusted to their fair market values as of the closing date, which included database intangible assets of $22,012, computer software intangible assets of $9,025, customer relationships intangible assets of $2,641 and finite-lived trade names intangible assets of $1,541. The Consolidated Financial Statements include the results of the acquisition subsequent to the closing date. The excess of the purchase price over the net tangible and intangible assets is recorded to goodwill and primarily reflects the assembled workforce and expected synergies. The weighted-average amortization period for total acquired finite-lived intangible assets is 11.5 years and the weighted-average amortization period by major class of intangible asset is 14.0 years for database and content, 6.0 years for computer software, 18.0 years for trade names, and 5.0 years for customer relationships. On October 25, 2018, Clarivate closed on the acquisition of TrademarkVision USA, LLC (“TrademarkVision”), an artificial intelligence technology start-up organization headquartered in Brisbane, Australia. The total purchase price for the acquisition consisted of $20,042 in closing date net cash consideration, subject to subsequent working capital adjustments, plus potential earn-out cash payments dependent upon achievement of certain milestones and financial performance metrics. The fair market value of the liability associated with the earn-out was $4,115 on the date of acquisition. Additionally, the excess value of the total purchase price over the fair value of our identifiable assets and liabilities upon the closing of the acquisition of $19,205 was allocated to goodwill. The Consolidated Financial Statements include the results of the acquisition subsequent to the closing date. TrademarkVision and its revolutionary image recognition software search tool for trademarks joined the trademark clearance and protection partner CompuMark. The fair value of the earn-out liability was $8,000 and $4,115 at December 31, 2019 and 2018. On March 15, 2018, the Company acquired all of the outstanding stock of Kopernio (“Kopernio”), an artificial-intelligence technology startup, for $3,497. The Kopernio acquisition was accounted for using the acquisition method of accounting. As a result of the Kopernio acquisition and the application of purchase accounting, Kopernio’s identifiable assets and liabilities were adjusted to their fair market values as of the closing date, which included a finite life intangible of $1,258 relating to computer software. Additionally, the excess value of the total purchase price over the fair value of our identifiable assets and liabilities upon the closing of the acquisition of $2,322 was allocated to goodwill. The Consolidated Financial Statements include the results of the acquisition subsequent to the closing date. In conjunction with the acquisition of Kopernio, the Company agreed to pay former shareholders up to an additional $3,500 through 2021. Amounts payable are contingent upon Kopernio’s achievement of certain milestones and performance metrics and will be recognized over the concurrent service period. On June 1, 2017, the Company acquired all assets, liabilities and equity interests of Publons Limited and its wholly-owned subsidiary (“Publons”). Total net cash consideration for the acquisition was $7,401, plus potential future cash payments of up to $9,500 contingent upon Publons achieving certain milestones or financial and non-financial performance targets through 2020, including platform users and reviews. The fair market value of the liability associated with the earn-out was $5,900 on the date of acquisition. Publons is a researcher-facing peer-review data and recognition platform. The acquisition of Publons, its platform and data, is believed to increase the value of multiple existing Company products, while supporting researchers in the process. The Consolidated Financial Statements include the results of the acquisitions subsequent to the closing date. The fair value of the Publons earn-out liability was $3,100, $2,960, and $5,900 at December 31, 2019, 2018, and 2017, respectively. The fair value of identifiable assets acquired and liabilities assumed for all acquisitions at closing during 2019, 2018, and 2017 respectively, net of cash acquired, and contingent consideration liabilities incurred in relation to the acquisitions are summarized below: 2019 (1) 2018 2017 Current assets $ 2,137 $ 706 $ 51 Computer hardware and other property 86 — — Finite-lived intangible assets 38,719 7,928 3,600 Indefinite-lived intangible assets — — 70 Goodwill 44,779 21,527 9,767 Other non-current assets 2 38 14 Total assets 85,723 30,199 13,502 Current liabilities 4,366 491 182 Non-current liabilities 8,920 2,054 19 Total liabilities 13,286 2,545 201 Net assets acquired $ 72,437 $ 27,654 $ 13,301 (1) Net assets acquired includes $3,500 related to the SequenceBase acquisition. None of the goodwill associated with any of the business combinations above will be deductible for income tax purposes. Pro forma information is not presented for these acquisitions as the aggregate operations of the acquired acquisitions were not significant to the overall operations of the Company. |
Assets Held for Sale and Divest
Assets Held for Sale and Divested Operations | 12 Months Ended |
Dec. 31, 2019 | |
Assets Held for Sale and Divested Operations | |
Assets Held for Sale and Divested Operations | Note 5: Assets Held for Sale and 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. At December 31, 2019 the assets and liabilities related to the divestment met the criteria for classification as Assets Held for Sale on the Company’s balance sheet. The divestiture closed on January 1, 2020 for a total purchase price of $3,751 and an impairment charge of $18,431 was recognized in the Statement of Operations during the fourth quarter 2019 to reduce the Assets held for sale to their 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. Accordingly, we do not expect to record a gain or loss on the divestiture in the first quarter of 2020. After impairment, Current Assets of $2,274 and Long Term Assets of $28,345 were reclassified to Current Assets Held for Sale, while Current Liabilities of $21,170 and Long Term Liabilities of $5,698 were reclassified to Current Liabilities Held For Sale. The carrying amount of major classes of assets and liabilities that are included in Assets held for sale and Liabilities held for sale at December 31, 2019 related to the divested Brand Protection, Antipiracy and AntiFraud solutions consist of the following: As of December 31, 2019 Assets: Current assets: Cash and cash equivalents $ 384 Prepaid expenses 1,692 Other current assets 198 Total current assets 2,274 Computer hardware and other property, net 2,961 Other intangible assets, net 18,957 Other non-current assets 1,993 Operating lease right-of-use assets 4,434 Total Assets held for sale $ 30,619 Liabilities: Current liabilities: Accounts payable $ 25 Accrued expenses and other current liabilities 1,764 Current portion of deferred revenues 18,067 Current portion of operating lease liabilities 1,314 Total current liabilities 21,170 Non-current portion of deferred revenues 834 Other non-current liabilities 163 Operating lease liabilities 4,701 Total Liabilities held for sale $ 26,868 On October 1, 2018, all assets, liabilities and equity interest of the IP Management (IPM) Product Line and related assets were sold to CPA Global for a total purchase price of $100,130. As a result of the sale, the Company recorded a net gain on sale of $36,072, inclusive of incurred transaction costs of $3,032 in connection with the divestiture. The gain on sale is included in Other operating income (expense), net within the Consolidated Statement of Operations. As a result of the sale, the Company wrote off Goodwill in the amount of $49,349. The Company used $31,378 of the proceeds to pay down the Term Loan Facility on October 31, 2018. Both the divestitures of the MarkMonitor Brand Protection, Anti-Piracy and AntiFraud solutions, and IPM Product Lines do not represent a strategic shift and is not expected to have a major effect on the Company’s operations or financial results, as defined by ASC 205-20, Discontinued Operations ; as a result, these divestitures do not meet the criteria to be classified as discontinued operations. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable | |
Accounts Receivable | Note 6: Accounts Receivable Our accounts receivable balance consists of the following as of December 31, 2019 and 2018: Year ended December 31, 2019 2018 Accounts receivable 350,369 345,371 Less: Accounts receivable allowance (16,511) (14,076) Accounts receivable, net $ 333,858 $ 331,295 We record an accounts receivable allowance when it is probable that the accounts receivable balance will not be collected. The amounts comprising the allowance are based upon management’s estimates and historical collection trends. The activity in our accounts receivable allowance consists of the following for the years ended December 31, 2019, 2018, and 2017, respectively: Year ended December 31, 2019 2018 2017 Balance at beginning of year $ 14,076 $ 8,495 $ 2,643 Additional provisions 4,662 6,469 6,233 Write-offs and other deductions (2,321) (870) (434) Exchange differences 94 (18) 53 Balance at the end of year $ 16,511 $ 14,076 $ 8,495 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | Note 7: Leases As the lessee, we currently lease real estate space, automobiles, and certain equipment under non-cancelable operating lease agreements. Some of the leases include options to extend the leases for up to an additional 10 years. We do not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility, and we are not reasonably certain we will exercise these renewal options at this time. We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Current portion of operating lease liabilities, and Operating lease liabilities on our Condensed Consolidated Balance Sheets. The Company assesses its ROU asset and other lease-related assets for impairment consistent with other long-lived assets. As of December 31, 2019, we did not record impairment related to these assets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. As such, the Company used judgment to determine an appropriate incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our variable lease payments consist of non-lease services related to the lease and lease payments that are based on annual changes to an index. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. As of December 31, 2019, we have additional operating leases, primarily for real estate, that have not yet commenced of $4,158. These operating leases will commence in fiscal year 2020 with lease terms of one year to five years. December 31, 2019 Lease cost Operating lease cost $ 27,812 Short-term lease cost 296 Variable lease cost 1,213 Total lease cost $ 29,321 December 31, 2019 Other information Cash Paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 24,303 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 6,386 Weighted-average remaining lease term - operating leases 6 Weighted-average discount rate - operating leases 5.8 % The future aggregate minimum lease payments as of December 31, 2019 under all non-cancelable operating leases for the years noted are as follows: Year ending December 31, 2020 $ 21,178 2021 17,854 2022 15,378 2023 12,816 2024 10,476 2025 & Thereafter 25,460 Total operating lease commitments 103,162 Less imputed interest (16,843) Total $ 86,319 In connection with certain leases, the Company guarantees the restoration of the leased property to a specified condition after completion of the lease period. As of December 31, 2019 and December 31, 2018, the liability of $3,455 and $4,100, respectively, associated with these restorations is recorded within Other non-current liabilities. There were no material future minimum sublease payments to be received under non-cancelable subleases at December 31, 2019. There was no material sublease income for the years ended December 31, 2019, 2018 and 2017, respectively. Disclosures related to periods prior to adoption of Topic 842 As discussed above, the Company adopted Topic 842 effective January 1, 2019 using a modified retrospective approach. For comparability purposes, and as required, the following disclosure is provided for periods prior to adoption. The Company’s total future minimum annual rental payments in effect at December 31, 2018 for noncancelable operating leases, which were accounted for under the previous leasing standard, Accounting Standards Codification 840, were as follows: Year ended December 31, 2019 $ 22,140 2020 19,531 2021 17,240 2022 15,333 2023 14,944 Thereafter 40,367 Total operating lease commitments $ 129,555 Total rental expense under operating leases amounted to $25,527 and $17,255 for the years ended December 31, 2018 and 2017, respectively. |
Computer Hardware and Other Pro
Computer Hardware and Other Property, Net | 12 Months Ended |
Dec. 31, 2019 | |
Computer Hardware and Other Property, Net. | |
Computer Hardware and Other Property, Net | Note 8: Computer Hardware and Other Property, Net Computer hardware and other property consisted of the following: December 31, 2019 2018 Computer hardware $ 24,620 $ 18,130 Leasehold improvements 12,496 13,298 Furniture, fixtures and equipment 4,412 6,816 Total computer hardware and other property 41,528 38,244 Accumulated depreciation (23,486) (17,603) Total computer hardware and other property, net $ 18,042 $ 20,641 Depreciation amounted to $9,181, $9,422, and $6,997 for the years ended December 31, 2019, 2018, and 2017, respectively. |
Identifiable Intangible Assets,
Identifiable Intangible Assets, net | 12 Months Ended |
Dec. 31, 2019 | |
Identifiable Intangible Assets, net | |
Identifiable Intangible Assets, net | Note 9: Identifiable Intangible Assets, net The Company’s identifiable intangible assets consist of the following: December 31, 2019 December 31, 2018 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Finite-lived intangible assets Customer relationships $ 280,493 $ (180,571) $ 99,922 $ 291,503 $ (164,611) $ 126,892 Databases and content 1,755,323 (342,385) 1,412,938 1,725,878 (233,733) 1,492,145 Computer software 285,701 (135,919) 149,782 268,704 (97,570) 171,134 Trade names 1,570 — 1,570 — — — Finite-lived intangible assets 2,323,087 (658,875) 1,664,212 2,286,085 (495,914) 1,790,171 Indefinite-lived intangible assets Trade names 164,428 — 164,428 168,349 — 168,349 Total intangible assets $ 2,487,515 $ (658,875) $ 1,828,640 $ 2,454,434 $ (495,914) $ 1,958,520 The Company performed the indefinite-lived impairment test as of October 1, 2019 and 2018. Additionally, the Company reviewed goodwill for indicators of impairment at December 31, 2019 and 2018. As part of this analysis, the Company determined that its trade name, with a carrying value of $164,428, and $168,349 as of December 31, 2019 and 2018, respectively, was not impaired and will continue to be reported as indefinite-lived intangible assets. In September and November 2019, the Company purchased the key business assets of SequenceBase and Darts-ip. As a result of the purchase, customer relations balance increased $3,641, computer software increased $11,525, databases and content increased $22,012 and finite-lived trade names increased $1,541. See Note 4 – “Business Combinations” for further details. On January 1, 2020, all assets, liabilities, and equity interest of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line were sold to OpSec Security for a purchase price of $3,751, which was determined to be the approximation of the fair value. At December 31, 2019, the assets and liabilities related to the divestment met the criteria for classification as Assets held for sale on the Company’s balance sheet, which included $36,924 of intangible assets. In addition, the Company compared the book value of the assets and liabilities to the purchase price and recorded a total impairment charge during the year ended December 31, 2019 of $18,431, which included the write down of the $17,967 intangible assets classified as Assets held for sale. See Note 5 – “Assets Held for Sale and Divested Operations” for further details. The weighted-average amortization period for each class of finite-lived intangible assets and for total finite-lived intangible assets, which range between two and 20 years, is as follows: Remaining Weighted - Average Amortization Period (in years) Customer relationships Databases and content Computer software Trade names Total Amortization amounted to $191,361, $227,803, and 221,466 for the years ended December 31, 2019, 2018, and 2017, respectively. Estimated amortization for each of the five succeeding years as of December 31, 2019 is as follows: 2020 $ 170,343 2021 160,666 2022 122,886 2023 116,665 2024 116,395 Thereafter 935,302 Subtotal finite-lived intangible assets 1,622,257 Internally developed software projects in process 41,955 Total finite-lived intangible assets 1,664,212 Intangibles with indefinite lives 164,428 Total intangible assets $ 1,828,640 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill. | |
Goodwill | Note 10: Goodwill The change in the carrying amount of goodwill is shown below: Balance as of December 31, 2017 $ 1,311,253 Acquisition 21,527 Disposal (49,349) Impact of foreign currency fluctuations and other (512) Balance as of December 31, 2018 $ 1,282,919 Acquisition 44,779 Transferred to Assets held for sale (468) Impact of foreign currency fluctuations and other 815 Balance as of December 31, 2019 $ 1,328,045 The Company performed the goodwill impairment test as of October 1, 2019 and 2018. Additionally, the Company reviewed goodwill for indicators of impairment at December 31, 2019 and 2018. As of December 31, 2019, 2018 and 2017, the accumulated goodwill impairment was $0. Goodwill represents the purchase price in excess of the fair value of the net assets acquired in a business combination. If the carrying value of a reporting unit exceeds the implied fair value of that reporting unit, an impairment charge to goodwill is recognized for the excess. The Company’s reporting units are one level below the operating segment, as determined in accordance with ASC 350. For the years ended December 31, 2019 and 2018, the Company had five reporting units. The Company estimates the fair value of its reporting units using the income approach. Under the income approach, the fair value of a reporting unit is calculated based on the present value of estimated cash flows. No indicators of impairment existed as a result of the Company’s assessments, except for the sale of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line. On January 1, 2020, all assets, liabilities, and equity interest of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line were sold to OpSec Security for a purchase price of $3,751, which was determined to be the approximation of the fair value. At December 31, 2019, the assets and liabilities related to the divestment met the criteria for classification as Assets held for sale on the Company’s balance sheet, which included $468 of goodwill. In addition, the Company compared the book value of the assets and liabilities to the purchase price and recorded a total impairment charge during the year ended December 31, 2019 of $18,431, which included the write down of the $468 goodwill classified as Assets held for sale. See Note 5 – “Assets Held for Sale” for further details. On November 27, 2019, the Company acquired Darts-ip, which included $44,779 of goodwill. See Note 4 – “Business Combinations” for further details. On October 1, 2018, the Company divested the IPM Product Line, which included $49,349 of goodwill. See Note 5 – “Assets Held for Sale and Divested Operations” for further details. On October 25, 2018, Clarivate closed on the acquisition of TrademarkVision USA, LLC (“TrademarkVision”), which included $19,205 of goodwill. See Note 4 – “Business Combinations” for further details. On March 15, 2018, the Company acquired all of the outstanding stock of Kopernio (“Kopernio”), which included $2,322 of goodwill. See Note 4 – “Business Combinations” for further details. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments | |
Derivative Instruments | Note 11: Derivative Instruments The IPM Product Line and related assets, which were divested on October 1, 2018, had forward contracts with notional values of $0 at December 31, 2019 and December 31, 2018. Gains or (losses) on the forward contracts amounted to $0, $240 and $(1,479) for the years ended December 31, 2019, 2018 and 2017 respectively. These amounts were recorded in Revenues, net in the Consolidated Statements of Operations. The cash flows from forward contracts are reported as operating activities in the Consolidated Statements of Cash Flows. The fair value of the forward contracts recorded in Accrued expenses and other current liabilities was $0 as at December 31, 2019 and December 31, 2018. In April 2017, the Company entered into interest rate derivative arrangements with counterparties to reduce its exposure to variability in cash flows relating to interest payments on $300,000 of its term loan, effective April 30, 2021. Additionally, in May 2019, the Company entered into additional interest rate derivative arrangements with counterparties to reduce its exposure to variability in cash flows relating to interest payments on $50,000 of its Term Loan, effective March 2021 and maturing in September 2023. The Company applies hedge accounting by designating the interest rate swaps as a hedge in applicable future quarterly interest payments. Changes in the fair value of interest rate swaps are recorded in Accumulated other comprehensive income (loss) (“AOCI”) and the amounts reclassified out of AOCI are recorded to Interest expense, net. The fair value of the interest rate swaps is recorded in Other non-current assets or liabilities according to the duration of related cash flows. The total fair value of the interest rate swaps was a liability of $2,778 at December 31, 2019 and an asset of $3,644 at December 31, 2018. See Note 12 – “Fair Value Measurements” for additional information on derivative instruments. The following table summarizes the changes in AOCI (net of tax) related to cash flow hedges for the year ended December 31, 2017: Balance at December 31, 2016: $ — Other comprehensive income (loss) 3,011 Amounts reclassified from AOCI to net income (1,904) Balance at December 31, 2017: $ 1,107 The following table summarizes the changes in AOCI (net of tax) related to cash flow hedges for the year ended December 31, 2018: AOCI Balance at December 31, 2017 $ 1,107 Derivative gains (losses) recognized in Other comprehensive income (loss) 2,313 Amount reclassified out of Other comprehensive income (loss) to net loss 224 AOCI Balance at December 31, 2018 $ 3,644 The following table summarizes the changes in AOCI (net of tax) related to cash flow hedges for the year ended December 31, 2019: AOCI Balance at December 31, 2018 $ 3,644 Derivative gains (losses) recognized in Other comprehensive income (loss) (7,107) Amount reclassified out of Other comprehensive income (loss) to net loss 685 AOCI Balance at December 31, 2019 $ (2,778) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | Note 12: Fair Value Measurements The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: · Level 1 - Quoted prices in active markets for identical assets or liabilities. · Level 2 - Observable inputs other than quoted prices include in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. · Level 3 - Unobservable inputs that are support by little or no market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Below is a summary of the valuation techniques used in determining fair value: Derivatives - Derivatives consist of foreign exchange contracts and interest rate swaps. The fair value of foreign exchange contracts is based on observable market inputs of spot and forward rates or using other observable inputs. The fair value of the interest rate swaps is the estimated amount that the Company would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities or using market inputs with mid-market pricing as a practical expedient for bid-ask spread. See Note 11 – “Derivative Instruments” for additional information. Contingent consideration - The Company values contingent consideration related to business combinations using a weighted probability calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows. Key assumptions used to estimate the fair value of contingent consideration include revenue, net new business and operating forecasts and the probability of achieving the specific targets. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments. The carrying value of the Company’s variable interest rate debt, excluding unamortized debt issuance costs and original issue discount, approximates fair value due to the short-term nature of the interest rate benchmark rates. The fair value of the fixed rate debt is estimated based on market observable data for debt with similar prepayment features. The fair value of the Company’s debt was $1,692,750 and $1,950,318 at December 31, 2019 and 2018, respectively. The fair value is considered Level 2 under the fair value hierarchy. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The Company has determined that its foreign exchange forward contracts, included in Other current assets, along with the interest rate swaps, included in Accrued expenses and other current liabilities and Other non-current liabilities according to the duration of related cash flows, reside within Level 2 of the fair value hierarchy. The earn-out liability is recorded in Accrued expenses and other current liabilities and Other non-current liabilities and is classified as Level 3 in the fair value hierarchy. Additionally, the earn-out relates to the TrademarkVision and the Publons acquisitions that occurred in 2018 and 2017, respectively. The amount payable is contingent upon the achievement of certain company specific milestones and performance metrics over a 1-year and 3-year period, respectively, including number of cumulative users, cumulative reviews and annual revenue. In accordance with ASC 805, we estimated the fair value of the earn-outs using a Monte Carlo simulation for the year ended December 31, 2018. As of December 31, 2019, the amount of the earn-outs approximate fair value due to their short term nature of their remaining payments. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. As of December 31, 2019, the Company increased the earn- out liabilities related to Publons and TrademarkVision based on current period performance. Changes in the earn-out are recorded to Transaction expenses in the Consolidated Statements of Operations. There were no transfers of assets or liabilities between levels during the years ended December 31, 2019 and 2018. The following inputs and assumptions were used to value the earn-out liability as of December 31, 2018: TrademarkVision Risk-free rate 2.77 % Discount rate 8.09 % Expected life (in years) 1.54 Publons Risk-free rate 2.34 - 2.63 % Discount rate 9.23 - 9.72 % Expected life (in years) 1.04 - 3.04 The following table presents the changes in the earn-out, the only Level 3 item, for the years ended December 31, 2019 and 2018: Balance at December 31, 2016 $ — Earn-out liability 5,900 Balance at December 31, 2017 $ 5,900 Business combinations 4,115 Payment of earn-out liability (2,470) Revaluations included in earnings (470) Balance at December 31, 2018 $ 7,075 Payment of Earn-out liability (1) (2,371) Revaluations included in earnings 6,396 Balance as of December 31, 2019 $ 11,100 (1) See Note 22 - "Commitments and Contingencies" for further details The following table provides a summary of the Company’s assets and liabilities that were recognized at fair value on a recurring basis as at December 31, 2019 and 2018: December 31, 2019 Total Fair Level 1 Level 2 Level 3 Value Assets Interest rate swap asset $ — $ — $ — $ — — — — — Liabilities Interest rate swap liability — 2,778 — 2,778 Earn-out — — 11,100 11,100 Total $ — $ 2,778 $ 11,100 $ 13,878 December 31, 2018 Total Fair Level 1 Level 2 Level 3 Value Assets Interest rate swap asset — 3,644 — 3,644 — 3,644 — 3,644 Liabilities Earn-out — — 7,075 7,075 Total $ — $ — $ 7,075 $ 7,075 Non-Financial Assets Valued on a Non-Recurring Basis The Company’s long-lived assets, including goodwill, indefinite-lived intangible and finite-lived intangible assets subject to amortization, are measured at fair value on a non-recurring basis. These assets are measured at cost but are written-down to fair value, if necessary, as a result of impairment. Finite-lived Intangible Assets - If a triggering event occurs, the Company determines the estimated fair value of finite-lived intangible assets by determining the present value of the expected cash flows. Indefinite-lived Intangible Asset - If a qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the carrying value of an indefinite-lived intangible asset, the Company determines the estimated fair value of the indefinite-lived intangible asset (trade name) by determining the present value of the estimated royalty payments on an after-tax basis that it would be required to pay the owner for the right to use such trade name. If the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to the excess. Goodwill - Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets resulting from business combinations. The Company evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment or one level below an operating segment, annually as of October 1 or more frequently if impairment indicators arise in accordance with ASC Topic 350. The Company performs qualitative analysis of macroeconomic conditions, industry and market considerations, internal cost factors, financial performance, fair value history and other company specific events. If this qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the book value for the respective reporting unit, the Company applies a two-step impairment test in which the Company determines whether the estimated fair value of the reporting unit is in excess of its carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the estimated fair value of the reporting unit, the Company performs the second step of the impairment test to determine the implied estimated fair value of the reporting unit’s goodwill. The Company determines the implied estimated fair value of goodwill by determining the present value of the estimated future cash flows for each reporting unit and comparing the reporting unit’s risk profile and growth prospects to selected, reasonably similar publicly traded companies. Effective January 1, 2020, all assets, liabilities, and equity interest of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line were sold to OpSec Security for a purchase price of $3,751, which approximates fair value of the assets as of December 31, 2019. To measure the amount of impairment related to the divestiture, the Company compared the fair values of assets and liabilities at the evaluation date to the carrying amounts as of December 31, 2019. The loss on impairment was $18,431 as of December 31, 2019. The sale of the Brand Protection, AntiPiracy, and AntiFraud solutions of the MarkMonitor Product Line assets and liabilities are categorized as Level 2 within the fair value hierarchy. The key assumption included the negotiated sales price of the assets and the assumptions of the liabilities. See Note 5 – “Assets Held for Sale and Divested Operations” for additional information. |
Pension and Other Post-Retireme
Pension and Other Post-Retirement Benefits | 12 Months Ended |
Dec. 31, 2019 | |
Pension and Other Post-Retirement Benefits | |
Pension and Other Post-Retirement Benefits | Note 13: Pension and Other Post ‑ Retirement Benefits Retirement Benefits Defined contribution plans Employees participate in various defined contribution savings plans that provide for Company-matching contributions. Costs for future employee benefits are accrued over the periods in which employees earn the benefits. Total expense related to defined contribution plans was $12,143, $13,170 and $12,488 for the year ended December 31, 2019, 2018 and 2017, respectively, which approximates the cash outlays related to the plans. Defined benefit plans A limited number of employees participate in noncontributory defined benefit pension plans that are maintained in certain international markets. The plans are managed and funded to provide pension benefits to covered employees in accordance with local regulations and practices. The Company’s obligations related to the defined benefit pension plans is in Accrued expenses and other current liabilities and Other non-current liabilities. The following table presents the changes in projected benefit obligations, the plan assets, and the funded status of the defined benefit pension plans: December 31, 2019 2018 Obligation and funded status: Change in benefit obligation Projected benefit obligation at beginning of year $ 14,486 $ 14,258 Service costs 870 888 Interest cost 311 283 Plan participant contributions 114 109 Actuarial losses 1,492 29 Divestiture — (138) Benefit payments (312) (274) Expenses paid from assets (36) (35) Settlements (89) — Curtailment — — Effect of foreign currency translation (273) (634) Projected benefit obligation at end of year $ 16,563 $ 14,486 Change in plan assets Fair value of plan assets at beginning of year $ 5,184 $ 5,062 Actual return on plan assets 198 95 Settlements (89) — Plan participant contributions 113 109 Employer contributions 533 460 Benefit payments (312) (274) Expenses paid from assets (36) (35) Effect of foreign currency translation (104) (233) Fair value of plan assets at end of year 5,487 5,184 Unfunded status $ (11,076) $ (9,302) The following table summarizes the amounts recognized in the Consolidated Balance Sheets related to the defined benefit pension plans: December 31, 2019 2018 Current liabilities $ (635) $ (443) Non-current liabilities $ (10,441) $ (8,859) AOCI $ 470 $ (1,054) The following table provides information for those pension plans with an accumulated benefit obligation in excess of plan assets and projected benefit obligations in excess of plan assets: December 31, 2019 2018 Plans with accumulated benefit obligation in excess of plan assets: Accumulated benefit obligation $ 15,465 $ 13,605 Fair value of plan assets $ 5,487 $ 5,184 Plans with projected benefit obligation in excess of plan assets: Projected benefit obligation $ 16,563 $ 14,486 Fair value of plan assets $ 5,487 $ 5,184 The components of net periodic benefit cost changes in plan assets and benefit obligations recognized as follows: December 31, 2019 2018 2017 Service cost $ 870 $ 888 $ 442 Interest cost 311 283 168 Expected return on plan assets (157) (150) — Amortization of actuarial gains (76) (78) (4) Settlement 7 — — Net periodic benefit cost $ 955 $ 943 $ 606 The following table presents the weighted-average assumptions used to determine the net periodic benefit cost as of: December 31, 2019 2018 Discount rate 2.26 % 2.31 % Expected return on plan assets 3.00 % 3.00 % Rate of compensation increase 3.68 % 3.76 % Social Security increase rate 2.50 % 2.50 % Pension increase rate 1.80 % 1.80 % The following table presents the weighted-average assumptions used to determine the benefit obligations as of: December 31, 2019 2018 Discount rate 1.60 % 2.26 % Rate of compensation increase 3.77 % 3.68 % Social Security increase rate 2.50 % 2.50 % Pension increase rate 1.80 % 1.80 % The Company determines the assumptions used to measure plan liabilities as of the December 31 measurement date. The discount rate represents the interest rate used to determine the present value of the future cash flows currently expected to be required to settle the Company’s defined benefit pension plan obligations. The discount rates are derived using weighted average yield curves on corporate bonds. The cash flows from the Company’s expected benefit obligation payments are then matched to the yield curve to derive the discount rates. At December 31, 2019, the discount rates ranged from 0.45% to 6.45% for the Company’s pension plan and postretirement benefit plan. At December 31, 2018, the discount rates ranged from 0.40% to 7.10% for the Company’s pension plan and postretirement benefit plan. Plan Assets The general investment objective for our plan assets is to obtain a rate of investment return consistent with the level of risk being taken and to earn performance rates of return as required by local regulations for our defined benefit plans. For such plans, the strategy is to invest primarily 100% in insurance contracts. Plan assets held in insurance contracts do not have target asset allocation ranges. The expected long-term return on plan assets is estimated based off of historical and expected returns. As of December 31, 2019, the expected weighted-average long-term rate of return on plan assets was 3%. The fair value of our plan assets and the respective level in the far value hierarchy by asset category is as follows: December 31, 2019 December 31, 2018 Fair value measurement of pension plan assets: Level 1 Level 2 Level 3 Total Assets Level 1 Level 2 Level 3 Total Assets Insurance contract $ — — 5,487 $ 5,487 $ — — 5,184 $ 5,184 The fair value of the insurance contracts is an estimate of the amount that would be received in an orderly sale to a market participant at the measurement date. The amount the plan would receive from the contract holder if the contracts were terminated is the primary input and is unobservable. The insurance contracts are therefore classified as Level 3 investments. The following table provides the estimated pension benefit payments that are payable from the plans to participants as of December 31, 2019 for the following years: 2020 $ 677 2021 550 2022 707 2023 851 2024 829 2025 to 2029 4,943 Total $ 8,557 Based on the current status of our defined benefit obligations, we expect to make payments in the amount of $401 to fund these plans in 2020. However, this estimate may change based on future regulatory changes. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt | |
Debt | Note 14: Debt The following is a summary of the Company’s debt: December 31, 2019 December 31, 2018 Effective Effective Interest Carrying Interest Carrying Type Maturity Rate Value Rate Value Senior Secured Notes (2026) 2026 4.500 % $ 700,000 — % $ — Senior Unsecured Notes (2024) 2024 — % — 7.875 % 500,000 Term Loan Facility (2026) 2026 5.049 % 900,000 — % — Term Loan Facility (2023) 2023 — % — 5.729 % 1,483,993 The Revolving Credit Facility 2024 5.049 % 65,000 — % — The Revolving Credit Facility 2021 — % — 5.754 % 5,000 The Revolving Credit Facility 2021 — % — 5.729 % 40,000 Total debt outstanding 1,665,000 2,028,993 Debt issuance costs (25,205) (34,838) Term Loan Facility, discount (2,184) (3,633) Short-term debt, including current portion of long-term debt (9,000) (60,345) Long-term debt, net of current portion and debt issuance costs $ 1,628,611 $ 1,930,177 The loans were priced at market terms and collectively have a weighted average interest rate and term of 4.818% and 6.259% for the year ended December 31, 2019 and 2018, respectively. Financing Transactions Senior Secured Notes due 2026 On October 31, 2019, we closed a private placement offering of $700,000 in aggregate principal amount of Senior Secured Notes ("Notes") due 2026 bearing interest at 4.50% per annum, payable semi-annually to holders of record in May and November. The first interest payment will be made May 2020. The Notes due 2026 were issued by Camelot Finance S.A., an indirect wholly-owned subsidiary of Clarivate, and are secured on a first-lien pari passu basis with borrowings under the Credit Facilities. These Notes are guaranteed on a joint and several basis by certain Clarivate subsidiaries. The Notes will be general senior secured obligations of the Issuer and will be secured on a first-priority basis by the collateral now owned or hereafter acquired by the Issuer and each of the Guarantors that secures the Issuer’s and such Guarantor’s obligations under the New Senior Credit Facility (subject to permitted liens and other exceptions). We used the net proceeds from the offering of the Notes due 2026, together with proceeds from the $900,000 Term Loan Facility and a $250,000 Revolving Credit Facility with a $40,000 letter of credit sublimit, collectively the "Credit Facilities” discussed below to, among other things, redeem the 7.875% senior notes due 2024 issued by Camelot Finance S.A. ("Prior Notes") in full, refinance all amounts outstanding under the $175,000 revolving credit facility which was governed by the credit agreement dated as of October 3, 2016 ("Prior Revolving Credit Facility") and the $1,550,000 term loan facility ("Prior Term Loan Facility"), collectively the "Prior Credit Facilities", fund in full the TRA Termination Payment pursuant to the TRA Buyout Agreement and pay fees and expenses related to the foregoing. We redeemed the Prior Notes at a fixed price of 103.938%, plus accrued and unpaid interest to the date of the purchase. The total loss on the extinguishment of debt, including the transactions noted below, was $3,179. The Notes are subject to redemption as a result of certain changes in tax laws or treaties of (or their interpretation by) a relevant taxing jurisdiction at 100% of the principal amount, plus accrued and unpaid interest to the date of redemption, and upon certain changes in control at 101% of the principal amount, plus accrued and unpaid interest to the date of purchase. Additionally, at the Company’s election the Notes may be redeemed (i) prior to November 1 , 2022 at a redemption price equal to 100% of the aggregate principal amount of Notes being redeemed plus a “make-whole” premium, plus accrued and unpaid interest to the date of redemption or (ii) prior to November 1, 2022, the Company may use funds in an aggregate amount not exceeding the net cash proceeds of one or more specified equity offerings to redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 104.500% of the aggregate principal amount of the Notes being redeemed, plus accrued and unpaid interest and additional amounts to the date of redemption provided that at least 50% of the original aggregate principal amount of the Notes issued on the Closing Date remains outstanding after the redemption (or all Notes are redeemed substantially concurrently) and the redemption occurs within 120 days of the date of the closing of such equity offering or (iii) on November 1, 2022 of each of the years referenced below based on the call premiums listed below, plus accrued and unpaid interest to the date of redemption. Redemption Price Period (as a percentage of principal) 2022 102.250 % 2023 101.125 % 2024 and thereafter 100.000 % The Indenture governing the senior secured notes due 2026 contains covenants which, among other things, limit the incurrence of additional indebtedness (including acquired indebtedness), issuance of certain preferred stock, the payment of dividends, making restricted payments and investments, the purchase or acquisition or retirement for value of any equity interests, the provision of loans or advances to restricted subsidiaries, the sale or lease or transfer of any properties to any restricted subsidiaries, the transfer or sale of assets, and the creation of certain liens. As of December 31, 2019, we were in compliance with the indenture covenants. Credit Facilities On October 31, 2019, we entered into the Credit Facilities. The Credit Facilities consist of a $900,000 Term Loan Facility, which was fully drawn at closing, and a $250,000 Revolving Credit Facility with a $40,000 letter of credit sublimit, which was undrawn at closing. The Revolving Credit Facility carries an interest rate at LIBOR plus 3.25% per annum or Prime plus a margin of 2.25% per annum, as applicable depending on the borrowing, and matures on October 31, 2024. The Revolving Credit Facility interest rate margins will decrease upon the achievement of certain first lien net leverage ratios (as the term is used in the Credit Agreement). The Term Loan Facility matures on October 31, 2026. Principal repayments under the Term Loan Facility are due quarterly in an amount equal to 0.25% of the aggregate outstanding principal amount borrowed under the Term Loan Facility on October 31, 2019 and on the maturity date, in an amount equal to the aggregate outstanding principal amount on such date, together in each case, with accrued and unpaid interest. The Prior Credit facility and Prior Notes were replaced by the Credit Facility and Notes. $41,980 of old unamortized discount and fees were written off as part of the restructuring, and of the new costs incurred under the Credit Facility and the Notes, $17 was expensed and $25,818 was deferred. Borrowings under the Credit Facility bear interest at a floating rate which can be, at our option, either (i) a Eurocurrency rate plus an applicable margin or (ii) an alternate base rate (equal to the highest of (i) the rate which Bank of America, N.A. announces as its prime lending rate, (ii) the Federal Funds Effective Rate plus one-half of 1.00% and (iii) the Eurocurrency rate for an interest period of one month for loans denominated in dollars plus 1.00% plus an applicable margin, in either case, subject to a Eurocurrency rate floor of 0.00%. Commencing with the last day of the first full quarter ending after the closing date of the Credit Facilities, the Term Loan Facility will amortize in equal quarterly installments in an amount equal to 1.00% per annum of the original par principal amount thereof, with the remaining balance due at final maturity. The Credit Facilities are secured by substantially all of our assets and the assets of all of our U.S. restricted subsidiaries and certain of our non-U.S. subsidiaries, including those that are or may be borrowers or guarantors under the Credit Facilities, subject to customary exceptions. The Credit Agreement governing the Credit Facilities contains customary events of default and restrictive covenants that limit us from, among other things, incurring certain additional indebtedness, issuing preferred stock, making certain restricted payments and investments, certain transfers or sales of assets, entering into certain affiliate transactions or incurring certain liens. The Credit Facilities provide that, upon the occurrence of certain events of default, our obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness (including the senior secured notes due 2026), voluntary and involuntary bankruptcy proceedings, material money judgments, loss of perfection over a material portion of collateral, material ERISA/pension plan events, certain change of control events and other customary events of default, in each case subject to threshold, notice and grace period provisions. The Revolving Credit Facility provides for revolving loans, same-day borrowings and letters of credit pursuant to commitments in an aggregate principal amount of $250,000 with a letter of credit sublimit of $40,000. Proceeds of loans made under the Revolving Credit Facility may be borrowed, repaid and reborrowed prior to the maturity of the Revolving Credit Facility. Our ability to draw under the Revolving Credit Facility or issue letters of credit thereunder will be conditioned upon, among other things, delivery of required notices, accuracy of the representations and warranties contained in the Credit Agreement and the absence of any default or event of default under the Credit Agreement. With respect to the Credit Facilities, the Company may be subject to certain negative covenants, including either a fixed charge coverage ratio, total first lien net leverage ratio, or total net leverage ratio if certain conditions are met. These conditions were not met and the Company was not required to perform these covenants as of December 31, 2019 . The obligations of the borrowers under the Credit Agreement are guaranteed by UK Holdco and certain of its restricted subsidiaries and are collateralized by substantially all of UK Holdco’s and certain of its restricted subsidiaries’ assets (with customary exceptions described in the Credit Agreement). UK Holdco and its restricted subsidiaries are subject to certain covenants including restrictions on UK Holdco’s ability to pay dividends, incur indebtedness, grant a lien over its assets, merge or consolidate, make investments, or make payments to affiliates. As of December 31, 2019, letters of credit totaling $3,918 were collateralized by the Revolving Credit Facility. Notwithstanding the Revolving Credit Facility, as of December 31, 2019 the Company had an unsecured corporate guarantee outstanding for $9,646 and cash collateralized letters of credit totaling $37, all of which were not collateralized by the Revolving Credit Facility. The Company borrowed $65,000 and $45,000 against the Revolving Credit Facility as of December 31, 2019 and 2018, respectively, to support current operations. The Company’s cash from operations is expected to meet repayment needs for the next twelve months. Amounts due under all of the outstanding borrowings as of December 31, 2019 for the next five years are as follows: 2020 $ 9,000 2021 9,000 2022 9,000 2023 9,000 2024 74,000 Thereafter 1,555,000 Total maturities 1,665,000 Less: capitalized debt issuance costs and original issue discount (27,389) Total debt outstanding as of December 31, 2019 $ 1,637,611 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue | |
Revenue Recognition | Note 15: Revenue Disaggregated Revenues The tables below show the Company’s disaggregated revenue for the periods presented: Year ended December 31, 2019 2018 2017 Subscription revenues $ 805,518 $ 794,097 $ 785,717 Transactional revenues 169,265 177,523 181,590 Total revenues, gross 974,783 971,620 967,307 Deferred revenues adjustment (1) (438) (3,152) (49,673) Total Revenues, net $ 974,345 $ 968,468 $ 917,634 (1) This accounting adjustment relates to the 2016 Transaction, which included a revaluation of deferred revenues to account for the difference in value between the customer advances retained by the Company upon the consummation of the 2016 Transaction and our outstanding performance obligations related to those advances. Cost to Obtain a Contract The Company has prepaid sales commissions included in both Prepaid expenses and Other non-current assets on the balance sheets. The amount of prepaid sales commissions included in Prepaid expenses was $12,387 and $10,407 as of December 31, 2019 and 2018, respectively. The amount of prepaid sales commissions included in Other non-current assets was $11,620 and $9,493 as of December 31, 2019 and 2018, respectively. The Company has not recorded any impairments against these prepaid sales commissions. Contract Balances Current portion Non-current portion Accounts of deferred of deferred receivable, net revenues revenues Opening (1/1/2019) $ 331,295 $ 391,102 $ 17,112 Closing (12/31/2019) 333,858 407,325 19,723 (Increase)/decrease $ (2,563) $ (16,223) $ (2,611) Opening (1/1/2018) $ 317,808 $ 361,260 $ 15,796 Closing (12/31/2018) 331,295 391,102 17,112 (Increase)/decrease $ (13,487) $ (29,842) $ (1,316) Opening (1/1/2017) $ 361,586 $ 333,944 $ 18,602 Closing (12/31/2017) 317,808 361,260 15,796 (Increase)/decrease $ 43,778 $ (27,316) $ 2,806 The amounts of revenue recognized in the period that were included in the opening deferred revenues balances were $391,102, $361,260, and $333,944, for years ended 2019, 2018, and 2017, respectively. This revenue consists primarily of subscription revenue. Transaction Price Allocated to the Remaining Performance Obligation As of December 31, 2019, approximately $63,100 of revenue is expected to be recognized in the future from remaining performance obligations, excluding contracts with durations of one year or less. The Company expects to recognize revenue on approximately 65.8% of these performance obligations over the next 12 months. Of the remaining 34.2%, 22.1% is expected to be recognized within the following year, with the final 12.1% expected to be recognized within years three to 10. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders' Equity | |
Shareholders' Equity | Note 16: Shareholders ’ Equity Shareholders’ Equity Pre-2019 Transaction In March 2017, the Company formed the Management Incentive Plan under which certain employees of the Company may be eligible to purchase shares of the Company. In exchange for each share purchase subscription, the purchaser is entitled to a fully vested right to an ordinary share. Additionally, along with a subscription, employees receive a corresponding number of options to acquire additional ordinary shares subject to five year vesting. See Note 17 – “Employment and Compensation Arrangements” for additional detail related to the options. The Company received net subscriptions for 198,602 shares during the year ended December 31, 2018. There were no share subscriptions received prior to or following the close of the 2019 Transaction as of December 31, 2019. Post-2019 Transaction Immediately prior to the closing of the 2019 Transaction, there were 87,749,999 shares of Churchill common stock issued and outstanding, consisting of (i) 68,999,999 public shares (Class A) and (ii) 18,750,000 founder shares (Class B). On May 13, 2019, in connection with the 2019 Transaction, all of the Class B common stock converted into Class A common stock of the post-combination company on a one-for-one basis, and effect the reclassification and conversion of all of the Class A common stock and Class B common stock into a single class of common stock of Clarivate Analytics PLC. One stockholder elected to have one share redeemed in connection with the 2019 Transaction. In June 2019, the Company formed the 2019 Incentive Award Plan under which employees of the Company may be eligible to purchase shares of the Company. See Note 17 – “Employment and Compensation Arrangements” for additional detail related to the 2019 Incentive Award Plan. In exchange for each share subscription purchased, the purchaser is entitled to a fully vested right to an ordinary share. At December 31, 2019 there were unlimited shares of common stock authorized, and 306,874,115 shares issued and outstanding, with a par value of $0.00. The Company did not hold any shares as treasury shares as of December 31, 2019 or December 31, 2018. The Company’s common stockholders are entitled to one vote per share. Warrants Upon consummation of the 2019 Transaction, the Company has warrants outstanding to purchase an aggregate of 52,800,000 ordinary shares. Each outstanding whole warrant of Churchill represents the right to purchase one ordinary share of the Company in lieu of one share of Churchill common stock upon closing of the 2019 Transaction at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing upon the later of (i) 30 days after the completion of the 2019 Transaction and (ii) September 11, 2019. The holder does not have the right to exercise the Warrants to the extent that they would beneficially own in excess of 4.9% or 9.8% (as specified by the holder) of the shares of common stock outstanding immediately after giving effect to such exercise. As of December 31, 2019, 100,114 warrants had been exercised. Merger Shares Upon consummation of the 2019 Transaction, there were 7,000,000 ordinary shares of Clarivate that are issuable to persons designated by Messrs. Stead and Klein, including themselves, if the last sale price of Clarivate’s ordinary shares is at least $20.00 for 40 days over a 60 consecutive trading day period on or before the sixth anniversary of the closing of the 2019 Transaction. On January 31, 2020, our Board agreed to waive this performance vesting condition, and all such merger shares are expected to be issued to persons designated by Messrs. Stead and Klein on or prior to December 31, 2020. |
Employment and Compensation Arr
Employment and Compensation Arrangements | 12 Months Ended |
Dec. 31, 2019 | |
Employment and Compensation Arrangements | |
Employment and Compensation Arrangements | Note 17: Employment and Compensation Arrangements Employee Incentive Plans Prior to the 2019 Transaction, the Company operated under its 2016 Equity Incentive Plan, which provided for certain employees of the Company to be eligible to participate in equity ownership in the Company. On May 8, 2019, in anticipation of the 2019 Transaction, the Board adopted the 2019 Incentive Award Plan, which was an amendment, restatement and continuation of the 2016 Equity Incentive Plan. Upon closing of the 2019 Transaction, awards under the 2016 Equity Incentive Plan were converted using the exchange ratio established during the 2019 Transaction and assumed into the 2019 Incentive Award Plan (See Note 4 – “Business Combinations”). The 2019 Incentive Award Plan permits the granting of awards in the form of incentive stock options, non-qualified stock options, share appreciation rights, restricted shares, restricted share units and other stock-based or cash based awards. Equity awards may be issued in the form of restricted shares or restricted share units with dividend rights or dividend equivalent rights subject to vesting terms and conditions specified in individual award agreements. The Company’s Management Incentive Plan provides for employees of the Company to be eligible to purchase shares of the Company. See Note 16 – “Shareholders’ Equity” for additional information. A maximum aggregate amount of 60,000,000 ordinary shares are reserved for issuance under the 2019 Incentive Award Plan. Equity awards under the 2019 Incentive Award Plan may be issued in the form of options to purchase shares of the Company which are exercisable upon the occurrence of conditions specified within individual award agreements. As of December 31, 2019 and 2018, 37,302,599 and 35,475,302, respectively, awards have not been granted. Total share-based compensation expense included in the Consolidated Statements of Operations amounted to $51,383, $13,715, and $17,663 for the years ended December 31, 2019, 2018, and 2017, respectively. The total associated tax benefits recognized amounted to $751, $2,740, and $3,192 for the years ended December 31, 2019, 2018, and 2017, respectively. The Company’s Management Incentive Plan provides for certain employees of the Company to be eligible to purchase shares of the Company. See Note 16 – “Shareholders’ Equity” for additional information. Along with each subscription, employees may receive a corresponding number of options to acquire additional ordinary shares subject to five year vesting. As of December 31, 2019 and 2018, there was $6,873 and $19,637, respectively, of total unrecognized compensation cost, related to outstanding stock options, which is expected to be recognized through 2024 with a remaining weighted-average service period of 2.6 years. Stock Options The Company’s stock option activity is summarized below: Number Weighted Weighted Average Aggregate of Average Exercise Remaining Intrinsic Options Price per Share Contractual Life Value Outstanding as of December 31, 2018 185,601 $ 1,587.00 8.5 $ 13,293 2019 Transaction Related Modified options 24,339,097 — — — Balance at December 31, 2018, as modified 24,524,698 12.44 8.5 13,293 Granted 2,321,348 17.55 7.7 5,431 Expired (463,919) 11.47 — — Forfeited (2,840,539) 12.97 — — Modified (244,829) 13.36 Exercised (2,416,534) 6.63 — — Outstanding as of December 31, 2019 20,880,225 $ 12.18 7.3 $ 105,119 Vested and exercisable at December 31, 2019 16,110,638 $ 11.12 7.0 $ 94,181 As noted above, options issued and outstanding under the 2016 Equity Incentive Plan prior to the 2019 Transaction were converted to options under the 2019 Incentive Award Plan through the Exchange Ratio established in the 2019 Transaction (See Note 4 – “Business Combinations”). The 24,339,097 of options modified in the above table represent this share conversion. The Company did not recognize any additional expense for the modification of shares related to the 2019 Transaction. The terms to certain stock option awards were amended, and the Company recognized $11,640 of Share-based compensation expense related to the incremental increase in fair value of the amended awards in the year ending December 31, 2019. The aggregate intrinsic value in the table above represents the difference between the Company’s most recent valuation and the exercise price of each in-the-money option on the last day of the period presented. As of December 31, 2019, 2,416,534 stock options were exercised. No stock options were exercised in the years ended December 31, 2018. The total intrinsic value of stock options exercised during the year ended December 31, 2019 was approximately $25,123. The Company accounts for awards issued under the 2019 Incentive Award Plan as additional contributions to equity. Share-based compensation includes expense associated with stock option grants which is estimated based on the grant date fair value of the award issued. Share-based compensation expense related to stock options is recognized over the vesting period of the award which is generally five years, on a graded-scale basis. The weighted-average fair value of options granted per share was $2.94 and $1.87 as of December 31, 2019 and 2018, respectively. The Company uses the Black-Scholes option pricing model to estimate the fair value of options granted. The Black-Scholes model takes into account the fair value of an ordinary share and the contractual and expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate. Prior to becoming a public company, the fair value of the Company’s ordinary shares were determined utilizing an external third-party pricing specialist. The contractual term of the option ranges from the one year to 10 years. Expected volatility is the average volatility over the expected terms of comparable public entities from the same industry. The risk-free interest rate is based on a treasury rate with a remaining term similar to the contractual term of the option. The Company is recently formed and at this time does not expect to distribute any dividends. The Company recognizes forfeitures as they occur. The assumptions used to value the Company’s options granted during the period presented and their expected lives were as follows: December 31, 2019 2018 2017 Weighted-average expected dividend yield — % — % — % Expected volatility 19.52 - 20.26 % 21.00 - 23.05 % 24.84%-27.90 % Weighted-average expected volatility 19.87 % 21.86 % 27.50 % Weighted-average risk-free interest rate 2.43 % 3.02 % 2.53 % Expected life (in years) 7.3 8.5 9.0 Restricted Stock Units (“RSUs”) RSUs typically vest from one to three years and are generally subject to either cliff vesting or graded vesting. RSUs do not have nonforfeitable rights to dividends or dividend equivalents. The fair value of RSUs is typically based on the fair value of our common shares on the date of grant. We amortize the value of these awards to expense over the vesting period on a graded-scale basis. The Company recognizes forfeitures as they occur. Weighted Average Grant Date Fair Number of Shares Value per Share Outstanding as of December 31, 2018 — $ — Granted 327,398 16.66 Vested (34,216) 15.90 Outstanding as of December 31, 2019 293,182 $ 16.75 The total fair value of RSUs that vested during the year ended December 31, 2019 was $544. 2019 Transaction Related Awards The Sponsor Agreement provided that certain ordinary shares of Clarivate available for distribution to persons designated in the Sponsor Agreement in connection with the 2019 Transaction, and certain Clarivate warrants available for distribution to such persons, in each case, were subject to certain time and performance-based vesting provisions described below. In addition, the sponsor agreement provided that the merger shares were granted and are issuable to persons designated by Messrs. Stead and Klein, including themselves, in accordance with the terms in the sponsor agreement. See Note 16 – “Shareholders’ Equity” for details on the respective awards. The vesting conditions added to certain ordinary shares include the following: 5,309,713 ordinary shares of Clarivate held by persons designated in the Sponsor Agreement, will vest in three equal annual installments on the first, second and third anniversaries of the closing of the 2019 Transaction, respectively, and are not contingent on continuing or future service of the respective holders to the Company. 2,654,856 ordinary shares of Clarivate held by such persons will vest at such time as the last sale price of Clarivate’s ordinary shares is at least $15.25 on or before the date that is 42 months after the closing of the 2019 Transaction; provided that none of such Clarivate ordinary shares will vest prior to the first anniversary of the closing of the 2019 Transaction, not more than 1/3 of such Clarivate warrants will vest prior to the second anniversary of the closing of the 2019 Transaction, and not more than 2/3 of such Clarivate warrants will vest prior to the third anniversary of the closing of the 2019 Transaction. Further, such vesting is not contingent on continuing or future service of the respective holders to the Company. 2,654,856 ordinary shares of Clarivate held by such persons will vest at such time as the last sale price of Clarivate’s ordinary shares is at least $17.50 on or before the fifth anniversary of the closing of the 2019 Transaction; provided that none of such Clarivate ordinary shares will vest prior to the first anniversary of the closing of the 2019 Transaction, not more than 1/3 of such Clarivate warrants will vest prior to the second anniversary of the closing of the 2019 Transaction, and not more than 2/3 of such Clarivate warrants will vest prior to the third anniversary of the closing of the 2019 Transaction. Further, such vesting is not contingent on continuing or future service of the respective holders to the Company. The vesting conditions added to certain warrants include the following: 17,265,826 of certain warrants held by persons designated in the Sponsor Agreement, will vest at such time as the last sale price of Clarivate’s ordinary shares is at least $17.50 on or before the fifth anniversary of the closing of the 2019 Transaction; provided that none of such Clarivate warrants will vest prior to the first anniversary of the closing of the 2019 Transaction, not more than 1/3 of such Clarivate warrants will vest prior to the second anniversary of the closing of the 2019 Transaction, and not more than 2/3 of such Clarivate warrants will vest prior to the third anniversary of the closing of the 2019 Transaction. Further, such vesting is not contingent on continuing or future service of the respective holders to the Company. In considering the terms of the transaction related awards, the Company notes that the time based vesting restrictions were not conditioned on any continuing or future service of the holders to the Company, and reflect “lock-up” periods of the issuable shares. Further, the above mentioned performance-based restrictions were considered market conditions pursuant to ASC 718, and are contemplated in the value of the awards. As such vesting restrictions were contemplated in conjunction with the granting of the merger shares (See Note 16 – “Shareholders’ Equity”), the Company considered such terms of the total basket of transaction awards in determination of the fair value of the awards. As no continued or future service was required by the holders of such awards, the Company recognized compensation expense in the second quarter based on the fair value of such awards upon closing of the 2019 Transaction. The Company recognized $25,013 expense, net in Share-based compensation expense as of the date of the 2019 Transaction in accordance with the issuance of the merger shares offset by the addition of vesting terms to certain ordinary shares and warrants, as described above. The expense included the increases in value of $48,102 for the granting of merger shares, the increase in value of $1,193 for ordinary shares with only time vesting conditions, and the increase in value of shares purchased by the Founders immediately prior to the transaction of $4,411, all offset by the reduction in value of $9,396 for ordinary shares with performance vesting condition of $15.25, the reduction in value of $13,101 for ordinary shares with performance vesting condition of $17.50 and the reduction in value of $6,297 related to warrants. Pursuant to the Sponsor Agreement, certain founders of Churchill Capital Corp purchased an aggregate of 1,500,000 shares of Class B common stock of Churchill immediately prior to the closing of the 2019 Transaction for an aggregate purchase price of $15,000. We used a third-party specialist to fair value the awards at the 2019 Transaction close date of May 13, 2019 using the Monte Carlo simulation approach. The assumptions included in the model include, but are not limited to, risk-free interest rate, 2.20%; expected volatility of the Company’s and the peer group’s stock prices, 20.00%; and dividend yield, 0.00%. A discount for lack or marketability (“DLOM”) was applied to shares that are subject to remaining post vesting lock up restrictions. The DLOM was between 3% - 7% dependent on the length of the post vesting restriction period. On August 14, 2019, Clarivate (on its behalf and on behalf of its subsidiaries) agreed to waive the performance and time vesting conditions, described above, subject to the consummation of the secondary offering. These shares and warrants nevertheless remain subject to a lock-up for a period ranging from two to three years following the closing of the Mergers. We used a third-party specialist to fair value the awards at the modification date using the Monte Carlo simulation approach. The assumptions included in the model include, but are not limited to, risk-free interest rate, 1.42%; expected volatility of the Company’s and the peer group’s stock prices, 20.00%; and dividend yield, 0.00%. A discount for lack or marketability (“DLOM”) was applied to shares that are subject to remaining post vesting lock up restrictions. The DLOM was between 3% - 7% dependent on the length of the post vesting restriction period. Waiving the performance and time vesting conditions resulted in an immaterial impact to the Consolidated Statements of Operations. In accordance with the terms of the sponsor agreement and in connection with our merger with Churchill in 2019, the merger shares are issued to persons designated by Messrs. Stead and Klein, and such designated merger shares will be issued on or prior to December 31, 2020. The Company has evaluated and recorded additional stock compensation expense as required upon the assignment of merger shares as applicable. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | Note 18: Income Taxe s Income tax (benefit)/expense on income/(loss) analyzed by jurisdiction is as follows: Year ended December 31, 2019 2018 2017 Current U.K. $ 677 $ 1,014 $ (142) U.S. Federal 6,917 6,395 5,202 U.S. State 988 2,146 833 Other 9,959 11,061 8,552 Total current 18,541 20,616 14,445 Deferred U.K. — 85 (427) U.S. Federal (824) (5,465) (10,648) U.S. State (223) (227) (142) Other (7,293) (9,360) (24,521) Total deferred (8,340) (14,967) (35,738) Total provision (benefit) for income taxes $ 10,201 $ 5,649 $ (21,293) The components of pre-tax loss are as follows: Year ended December 31, 2019 2018 2017 U.K. loss $ (199,032) $ (222,043) $ (211,944) U.S. income (loss) 3,733 (11,880) (58,054) Other loss (5,477) (2,590) (15,225) Pre-tax loss $ (200,776) $ (236,513) $ (285,223) A reconciliation of the statutory U.K. income tax rate to the Company’s effective tax rate is as follows: Year ended December 31, 2019 2018 2017 Loss before tax: $ (200,776) $ (236,513) $ (285,223) Income tax, at statutory rate 10,201 5,649 (54,905) Statutory rate (1) 19.0 % 19.0 % 19.3 % Effect of different tax rates (4.4) % (1.2) % 3.3 % BEAT (1.2) % — % — % Tax rate modifications (2) — % — % 5.7 % Valuation Allowances (17.8) % (18.0) % (20.8) % Other Permanent differences (1.3) % (0.7) % 0.3 % Non-deductible transaction costs (2.1) % — % — % Withholding tax (0.7) % (0.2) % (0.3) % Tax indemnity 3.7 % (2.7) % — % Sale of Subsidiary — % 2.2 % — % Other (0.3) % (0.8) % — % Effective rate (5.1) % (2.4) % 7.5 % (1) The Company performs a reconciliation of the income tax provisions based on its domicile and statutory rate. Reconciliations are based on the U.K. statutory corporate tax rate. (2) Due to rate reductions in the U.S. and Belgium enacted in the 4th quarter of 2017. The tax effects of the significant components of temporary differences giving rise to the Company’s deferred income tax assets and liabilities are as follows: December 31, 2019 2018 Accounts receivable $ 1,346 $ 916 Accrued expenses 4,461 3,735 Deferred revenue 2,679 3,570 Other assets 5,721 9,655 Unrealized gain/loss 94 74 Debt issuance costs 3,176 1,199 Operating losses and tax attributes 177,853 135,219 Total deferred tax assets 195,330 154,368 Valuation allowances (165,157) (133,856) Net deferred tax assets 30,173 20,512 Other identifiable intangible assets, net (32,834) (43,247) Other liabilities (21,012) (7,785) Goodwill (4,233) (42) Fixed Assets, net (1,153) (238) Total deferred tax liabilities (59,232) (51,312) Net deferred tax liabilities $ (29,059) $ (30,800) In the Consolidated Balance Sheets, deferred tax assets and liabilities are shown net if they are in the same jurisdiction. The components of the net deferred tax liabilities as reported on the Consolidated Balance Sheets are as follows: December 31, 2019 2018 Deferred tax asset $ 19,488 $ 12,426 Deferred tax liability (48,547) (43,226) Net deferred tax liability $ (29,059) $ (30,800) The Tax Cuts and Jobs Act (the Act) was enacted in the US on December 22, 2017. Of most relevance to the Company, the Act reduced the US federal corporate income tax rate to 21% from 35%, established a Base Erosion Anti-Abuse Tax (“BEAT”) regime and changed the provisions limiting current interest deductions and use of NOL carryforwards. Certain new provisions are effective for the Company beginning December 1, 2018 and did not have a material impact to the 2018 financial statements. SAB 118 measurement period We applied the guidance in SAB 118 when accounting for the enactment-date effects of the Act in 2017 and throughout 2018. At December 31, 2017, we had not completed our accounting for all of the enactment-date income tax effects of the Act under ASC 740, Income Taxes, for the remeasurement of deferred tax assets and liabilities and recorded a provisional tax benefit amount of $2,237 under SAB 118. At December 31, 2018, we completed our accounting for all of the enactment-date income tax effects of the Act. As further discussed above, during 2018, we did not recognize any adjustments to the provisional amounts recorded at December 31, 2017. Deferred tax assets and liabilities As of December 31, 2017, we remeasured certain deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future (which was generally 21% for the US and 25% for Belgium), by recording a tax benefit amount of $2,237 (provisional) related to the US and $14,290 related to Belgium. Upon further analysis and refinement of our calculations during the 12 months ended December 31, 2018, it was determined that no adjustment to these amounts was necessary. The Company is required to assess the realization of its deferred tax assets and the need for a valuation allowance. The assessment requires judgment on the part of management with respect to benefits that could be realized from future taxable income. The valuation allowance is $165,157 and $133,856 at December 31, 2019 and 2018, respectively against certain deferred tax assets, as it more likely than not that such amounts will not be fully realized. During the years ended December 31, 2019 and 2018, the valuation allowance increased by $31,301 and $40,912, respectively, primarily due to operating losses in certain jurisdictions and an increase in deferred tax assets with a full valuation allowance. The increases were partially offset by the release of valuation allowances in jurisdictions with current year operating income. At December 31, 2019, the Company had U.K. tax loss carryforwards of $470,736, Japan tax loss carryforwards of $64,748, U.S. federal tax loss carryforwards of $127,717, tax loss carryforwards in other foreign jurisdictions of $20,840, and U.S. state tax loss carryforwards of $75,340, respectively. The majority of the unrecognized tax loss carryforwards relate to UK, US, and Japan. The carryforward period for the Japan tax losses is nine years, and the expiration period begins 2025. The carryforward period for the UK tax losses is indefinite. The carryforward period for US federal tax losses is twenty years for losses generated in tax years ended prior to December 31, 2017. The expiration period for these losses begins in 2036. For US losses generated in tax years beginning after January 1, 2018, the carryforward period is indefinite. The carryforward period for US state losses varies, and the expiration period is between 2020 and 2039. The Company has not provided income taxes and withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2019 because the Company has determined that the amount of such taxes would not be significant. The Company is not permanently reinvesting its foreign earnings offshore. Deferred Tax Valuation Allowance The following table shows the change in the deferred tax valuation as follows: December 31, 2019 2018 2017 Beginning Balance, January 1 $ 133,856 $ 92,944 $ 47,185 Change Charged to Expense/(Income) 30,854 41,629 44,790 Change Charged to CTA 447 381 713 Change Charged to OCI — (1,098) 256 Ending Balance, December 31 $ 165,157 $ 133,856 $ 92,944 Uncertain Tax Positions Unrecognized tax benefits represent the difference between the tax benefits that we are able to recognize for financial reporting purposes and the tax benefits that we have recognized or expect to recognize in filed tax returns. The total amount of net unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $1,145 and $1,450 as of December 31, 2019 and 2018, respectively. The Company recognizes accrued interest and penalties associated with uncertain tax positions as part of the tax provision. As of December 31, 2019, the interest and penalties are $354 and as of December 31, 2018, the interest and penalties are $449. It is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months by a range of $291 to $453. The Company files income tax returns in the United Kingdom, the United States, and various other jurisdictions. As of December 31, 2019, the Company’s open tax years subject to examination were 2015 through 2019, which includes the Company’s major jurisdictions in the United Kingdom and the United States. The following table summarizes the Company’s unrecognized tax benefits, excluding interest and penalties: December 31, 2019 2018 2017 Balance at the Beginning of the year $ 1,450 $ 91 211 Increases for tax positions taken in prior years — 1,339 — Increases for tax positions taken in the current year 412 72 — Decreases due to statute expirations — (52) (120) Decrease due to payment (717) — — Balance at the End of the year $ 1,145 $ 1,450 91 |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per Share | |
Earnings per Share | Note 19: Earnings per Share Potential common shares of 80,873,293, 24,524,698, and 22,554,740 of Private Placement Warrants, Public Warrants, Merger Shares, and options and Restricted Stock Units related to the Incentive Award Plan were excluded from diluted EPS for the years ended December 31, 2019, 2018, and 2017, respectively, as the Company had net losses and their inclusion would be anti-dilutive. See Note 16 — “Shareholders” Equity” and Note 17 — "Employment and Compensation Arrangements” for a description. The 2019 Transaction was accounted for as a reverse recapitalization in accordance with U.S. GAAP. See Note 4 – “Business Combinations”. Accordingly, weighted-average shares outstanding for purposes of the EPS calculation have been retroactively recasted as shares reflecting the exchange ratio established in the 2019 Transaction (1.0 Jersey share to 132.13667 Clarivate shares). The basic and diluted EPS computations for our common stock are calculated as follows (in thousands, except share and per share amounts): Year ended December 31, 2019 2018 2017 Basic/Diluted EPS Loss available to common stockholders $ (210,977) $ (242,162) $ (263,930) Basic and diluted weighted-average number of common shares outstanding 273,883,342 217,472,870 216,848,866 Basic and diluted EPS $ (0.77) $ (1.11) $ (1.22) |
Tax Receivable Agreement
Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2019 | |
Tax Receivable Agreement | |
Tax Receivable Agreement | Note 20: Tax Receivable Agreement At the completion of the 2019 Transaction, we recorded an initial liability of $264,600 payable to the pre-business combination equity holders under the TRA, representing approximately 85% of the calculated tax savings based on the portion of the Covered Tax Assets we anticipate being able to utilize in future years. Based on current projections of taxable income, and before deduction of any specially allocated depreciation and amortization, we anticipated having enough taxable income to utilize a significant portion of these specially allocated deductions related to the original Covered Tax Assets (as defined in the TRA). Total payments related to the TRA could be up to a maximum of $507,326 if all Covered Tax Assets are utilized. TRA payments were expected to commence in 2021 (with respect to taxable periods ending in 2019) and would have been subject to deferral, at the Company’s election, for payment amounts in excess of $30,000 for payments to be made in 2021 and 2022, but would not be subject to deferral thereafter. The projection of future taxable income involves significant judgment. Actual taxable income may differ from our estimates, which could significantly impact the liability under the TRA. We have determined it is more-likely-than-not we will be unable to utilize all of our deferred tax assets (“DTAs”) subject to the TRA; therefore, we have not recorded a liability under the TRA related to the tax savings we may realize from the utilization of NOL carryforwards and the amortization related to basis adjustments created by the Transaction. If utilization of these DTAs becomes more-likely-than-not in the future, at such time, we will record liabilities under the TRA of up to an additional $134,377 as a result of basis adjustments under the Internal Revenue Code and up to an additional $108,350 related to the utilization of NOL and credit carryforwards, which will be recorded through charges to our statements of operations. However, if the tax attributes are not utilized in future years, it is possible no amounts would be paid under the TRA. In this scenario, the reduction of the liability under the TRA would result in a benefit to our statements of operations. On August 21, 2019, the Company entered into a Buyout Agreement among the Company and Onex Partners IV LP (“TRA Buyout Agreement”), pursuant to which all future payment obligations of the Company under the Tax Receivable Agreement would terminate in exchange for a payment of $200,000 (the “TRA Termination Payment”), which the Company paid on November 7, 2019 with a portion of the net proceeds from the Refinancing 2019 Transaction. As a result of the payment, a gain was recorded to shareholders equity of $64,600. As of December 31, 2019, our liability under the TRA was $0. |
Product and Geographic Sales In
Product and Geographic Sales Information | 12 Months Ended |
Dec. 31, 2019 | |
Product and Geographic Sales Information | |
Product and Geographic Sales Information | Note 21: Product and Geographic Sales Information The Company’s chief operating decision maker (“CODM”) assesses Company-wide performance and allocates resources based on consolidated financial information. As such, the company has one operating and reportable segment. The CODM evaluates performance based on profitability. No single customer accounted for more than 1% of revenues and our ten largest customers represented only 5%, 6%, and 7% of revenues for the years ended December 31, 2019, 2018, and 2017 respectively. Revenues recognized in the U.S. represented 43%, 37%, and 42% of revenues for the years ended December 31, 2019, 2018, and 2017, respectively and no other country accounted for more than 10% of revenues. Revenue by geography The following table summarizes revenue from external customers by geography, which is based on the location of the customer: Year ended December 31, Revenue: 2019 2018 2017 Americas $ 463,041 $ 475,897 $ 476,729 Europe/Middle East/Africa 278,738 273,744 273,706 APAC 233,004 221,979 216,872 Deferred revenues adjustment (438) (3,152) (49,673) Total $ 974,345 $ 968,468 $ 917,634 Assets by geography Assets are allocated based on operations and physical location. The following table summarizes non-current assets other than financial instruments, operating lease right-of-use assets and deferred tax assets by geography: Year ended December 31, Assets: 2019 2018 Americas $ 992,469 $ 1,037,852 Europe/Middle East/Africa 2,099,777 2,145,950 APAC 101,113 101,191 Total $ 3,193,359 $ 3,284,993 Revenue by product group The following table summarizes revenue by product group (in thousands): Year ended December 31, 2019 2018 2017 Web of Science Product Line $ 380,299 $ 361,957 $ 352,995 Life Sciences Product Line 167,243 165,920 165,995 Science Group 547,542 527,877 518,990 Derwent Product Line 181,949 179,321 176,201 MarkMonitor Product Line 122,841 122,947 120,408 CompuMark Product Line 122,451 121,025 119,854 Intellectual Property Group 427,241 423,293 416,463 IP Management Product Line — 20,450 31,854 Deferred revenue adjustment (438) (3,152) (49,673) Total $ 974,345 $ 968,468 $ 917,634 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 22: Commitments and Contingencies The Company does not have any recorded or unrecorded guarantees of the indebtedness of others. Contingencies Lawsuits and Legal Claims The Company is engaged in various legal proceedings, claims, audits and investigations that have arisen in the ordinary course of business. These matters include, but are not limited to, antitrust/competition claims, intellectual property infringement claims, employment matters and commercial matters. The outcome of all of the matters against the Company is subject to future resolution, including the uncertainties of litigation. Based on information currently known to the Company and after consultation with outside legal counsel, management believes that the ultimate resolution of any such matters, individually or in the aggregate, will not have a material impact on the Company’s financial condition taken as a whole. Contingent Liabilities In conjunction with the acquisition of Publons, the Company agreed to pay former shareholders up to an additional $9,500 through 2020. Amounts payable are contingent upon Publons’ achievement of certain milestones and performance metrics. The Company paid $2,371 and $2,470 of the contingent purchase price in the year ended December 31, 2019 and 2018, respectively, as a result of Publons achieving the first tier of milestones and performance metrics. The Company had an outstanding liability for $3,100 and $2,960 related to the estimated fair value of this contingent consideration as of December 31, 2019 and 2018, respectively. The outstanding balance consisted of $3,100 and $1,600 included in Accrued expenses and other current liabilities, and $0 and $1,360 included in Other non-current liabilities in the Consolidated Balance Sheets as of December 31, 2019 and 2018 respectively. In conjunction with the acquisition of Kopernio, the Company agreed to pay former shareholders up to an additional $3,500 through 2021. Amounts payable are contingent upon Kopernio’s achievement of certain milestones and performance metrics and will be recognized over the concurrent service period. In conjunction with the acquisition of TrademarkVision, the Company agreed to pay former shareholders a potential earn-out dependent upon achievement of certain milestones and financial performance metrics through 2020. Amounts payable are contingent upon TrademarkVision’s achievement of certain milestones and performance metrics. As of December 31, 2019 and 2018, the Company had an outstanding liability for $8,000 and $4,115, respectively, related to the estimated fair value of this contingent consideration. The outstanding balance was included in Accrued expenses and other current liabilities as of December 31, 2019, and in Other non-current liabilities as of December 31, 2018, in the Consolidated Balance Sheets. Tax Indemnity In connection with the 2016 Transaction, the Company recorded certain tax indemnification assets pursuant to the terms of the separation and indemnified liabilities identified therein. As a result of counterparty dispute related to certain of the indemnification claims, the Company wrote off $33,819 during the 4th quarter of 2018, which represented a portion of the amount originally recorded, plus accumulated foreign currency impacts. Management continues to interpret the contractual obligation due from Former Parent and its controlled entities ("Thomson Reuters ") as due in full. The asset write down was recorded within Other operating income (expense), net within the Consolidated Statement of Operations. Legal Settlement In September 2019, the Company settled a confidential claim that resulted in a gain. The net gain was recorded in Legal settlement within the Condensed Consolidated Statement of Operations during the year ended December 31, 2019. Commitments Unconditional purchase obligations Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable pricing provisions and the approximate timing of the transactions. The Company has various purchase obligations for materials, supplies, outsourcing and other services contracted in the ordinary course of business. These items are not recognized as liabilities in our Consolidated Financial Statements but are required to be disclosed. The contractual terms of these purchase obligations extend through 2022. The Company paid $32,231 towards these purchase obligations during the year ended December 31, 2019. The future unconditional purchase obligations as of December 31, 2019 are as follows: Year ended December 31, 2020 37,332 2021 10,186 2022 558 2023 — Total $ 48,076 |
Related Party and Former Parent
Related Party and Former Parent Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party and Former Parent Transactions | |
Related Party and Former Parent Transactions | Note 23: Related Party and Former Parent Transactions Onex Partners Advisor LP (“Onex”), an affiliate of the Company, is considered a related party. Concurrent with the 2016 Transaction, the Company entered into a Consulting Services Agreement with Onex, pursuant to which the Company is provided certain ongoing strategic and financing consulting services in exchange for a quarterly management fee. In connection with this agreement, the Company recognized $470, $920, and $1,230 in operating expenses related to this agreement for the year ended December 31, 2019, 2018, and 2017, respectively. The Company pays 0.1% interest per annum to Onex for the Credit Agreement. For the year ended December 31, 2019, 2018 and 2017, the Company recognized interest expense, for Onex related interest, of $327, $905 and $1,557, respectively. The Company had an outstanding liability of $3 and $450 to Onex as of December 31, 2019 and 2018, respectively. In addition, the Company paid Onex a management fee of $5,400 in connection with the 2019 Transaction in the second quarter of 2019. See Note 4 – “Business Combinations” for additional information. BPEA, an affiliate of the Company, is considered a related party. Concurrently with the 2016 Transaction, the Company entered into a Management Services Agreement with Baring, pursuant to which the Company is provided certain ongoing strategic and financing consulting services. In connection with this agreement, the Company recognized $246, $669, and $854 in operating expenses related to this agreement for the years ended December 31, 2019, 2018 and 2017, respectively. The Company had an outstanding liability of $0 and $334 to Baring as of December 31, 2019 and 2018, respectively. In addition, the Company paid BPEA a management fee of $2,100 in connection with the 2019 Transaction in the second quarter of 2019. See Note 4 – “Business Combinations” for additional information. In connection with the 2016 Transaction, Bidco and a subsidiary of the Former Parent entered into the Transition Service Agreement, which became effective on October 3, 2016, pursuant to which such subsidiary of the Former Parent will, or will cause its affiliates and/or third-party service providers to, provide Bidco, its affiliates and/or third-party service providers with certain technology, facilities management, human resources, sourcing, financial, accounting, data management, marketing and other services to support the operation of the IP&S business as an independent company. Such services are provided by such subsidiary of the Former Parent or its affiliates and/or third-party service providers for various time periods and at various costs based upon the terms set forth in the Transition Service Agreement. A controlled affiliate of Baring is a vendor of ours. Total payments to this vendor were $765, $531 and $388 for the years ended December 31, 2019, 2018 and 2017, respectively. The Company had an outstanding liability of $160, $120 and $199 as of December 31, 2019, 2018 and 2017, respectively. Jerre Stead, Chief Executive Officer of the Company, is the Co-founder of a vendor of ours. Total payments to this vendor were $756 for the year ended December 31, 2019 and the Company had an outstanding liability of $10 as of December 31, 2019. This vendor was not a related party in 2018 and 2017. A former member of our key management is the Co-founder of a vendor of ours.Total payments to this vendor were $278 and $865 for the year ended December 31, 2019 and 2018, respectively. The Company had an outstanding liability of $0 and $332 as of December 31, 2019 and 2018, respectively. This vendor was not a related party in 2017. In connection with our acquisition of Publons, we paid a $716 consulting fee to a former board member and company executive for the year ended December 31, 2017. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring | |
Restructuring | Note 24: Restructuring In accordance with the applicable guidance for ASC 420, Exit or Disposal Cost Obligations , we accounted for termination benefits and recognized liabilities when the loss was considered probable that employees were entitled to benefits and the amounts could be reasonably estimated. We have incurred costs in connection with involuntary termination benefits associated with our corporate-related initiatives and cost-saving opportunities. These amounts are recorded within Restructuring in the Consolidated Statements of Operations. The payments associated with these actions are expected to be completed within 12 months from the balance sheet date. The following table summarizes the activity related to the restructuring reserves and expenses for the years ended December 31, 2019 and 2018: Balance as of December 31, 2018 $ — Expenses recorded 15,670 Payments made (6,323) Foreign currency translation 159 Balance as of December 31, 2019 $ 9,506 Restructuring charges incurred during 2019 included actions to reduce operational costs. Components of the pre-tax charges include $13,959 in severance costs incurred during the year ended December 31, 2019. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Data (Unaudited) | |
Quarterly Financial Data (Unaudited) | Note 25: Quarterly Financial Data (Unaudited) The following table summarizes the Company’s unaudited quarterly results of operations: 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 234,025 $ 242,309 $ 242,998 $ 255,013 Income (loss) from operations $ (25,919) $ (36,581) $ 35,844 $ (16,431) Net income (loss) $ (59,260) $ (77,761) $ 10,831 $ (84,787) Earnings per share: Basic $ (0.27) $ (0.29) $ 0.04 $ (0.28) Diluted $ (0.27) $ (0.29) $ 0.03 $ (0.28) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 237,027 $ 243,297 $ 242,897 $ 245,247 Loss from operations $ (45,892) $ (34,430) $ (18,931) $ (6,455) Net loss $ (77,037) $ (66,944) $ (54,727) $ (43,454) Earnings per share: Basic and diluted $ (0.35) $ (0.31) $ (0.25) $ (0.20) In September 2019, the Company settled a confidential claim that resulted in a gain of $39,399. The net gain was recorded in Legal settlement within the Interim Condensed Consolidated Statement of Operations during the three months ended September 30, 2019 and the year ended December 31, 2019. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | |
Subsequent Events | Note 26: Subsequent Events On January 1, 2020, the Company completed the sale of certain assets and liabilities of the MarkMonitor business to OpSec Security for a total purchase price of $3,751. At December 31, 2019 the assets and liabilities related to the divestment met the criteria for classification as Assets Held for Sale on the Company’s balance sheet. An impairment charge of $18,431 was recognized in the Statement of Operations during the fourth quarter to reduce the Assets Held for Sale to their fair value. Accordingly, we do not expect to record a gain or loss on the divestiture in the first quarter of 2020. Of the total impairment charge, $17,967 related to the write down of intangible assets and $468 to the write down of goodwill. After impairment, Current Assets of $2,274 and Long Term Assets of $28,345 were reclassified to Current Assets Held for Sale, while Current Liabilities of $21,170 and Long Term Liabilities of $5,698 were reclassified to Current Liabilities Held For Sale. On January 17, 2020, the Company announced that it had signed a definitive agreement to acquire 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, part of global business conglomerate Piramal Group. The acquisition closed on February 28, 2020. The aggregate consideration paid in connection with the closing of the DRG acquisition was approximately $950,000, comprised of $900,000 in cash paid on the closing date and approximately $50,000 in Clarivate ordinary shares to be issued to Piramal Enterprises Limited following the one-year anniversary of closing. In February 2020, the Company consummated a public offering of 27,600,000 ordinary shares at $20.25 per share. After this offering, Onex and Baring continue to beneficially own approximately 38.3% of the Company’s ordinary shares, representing approximately 59.3% of the ordinary shares beneficially owned by Onex and Baring immediately after the closing of our merger with Churchill Capital Corp in 2019. We received $540,736 in net proceeds from the sale of ordinary shares, after deducting $18,164 underwriting discounts. We used the net proceeds to fund a portion of the cash consideration for the DRG Acquisition and to pay related fees and expenses. On February 12, 2020, the Company made a repayment of $65,000 on the Revolving Credit Facility. The $250,000 Revolving Credit Facility remains undrawn subsequent to the pay down. On February 28, 2020, we incurred an incremental $360,000 of term loans under our term loan facility and used the net proceeds from such borrowings, together with cash on hand, to fund a portion of the cash consideration for the DRG acquisition and to pay related fees and expenses. During the period January 1, 2020 through February 21, 2020, 24,132,666 of the Company’s outstanding warrants were exercised for one ordinary share per whole warrant at a price of $11.50 per share. We used a portion of the total proceeds of $277,526 from the warrant exercises to fund a portion of the cash consideration for the DRG Acquisition and intend to use the balance for general business purposes. On February 20, 2020, we announced the redemption of all of our outstanding public warrants to purchase our ordinary shares that were issued as part of the units sold in the Churchill Capital Corp initial public offering and remain outstanding at 5:00 p.m. New York City time on March 23, 2020, for a redemption price of $0.01 per public warrant. In addition, our board of directors elected that, upon delivery of the notice of the redemption on February 20, 2020, all public warrants are to be exercised only on a “cashless basis.” Accordingly, by virtue of the cashless exercise of public warrants, exercising public warrant holders will receive 0.4626 of an ordinary share for each public warrant. Assuming all outstanding public warrants called for redemption on March 23, 2020 are exercised prior to redemption, an additional 4,749,616 ordinary shares would be issued. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Business combinations | Business Combinations The Company determines whether substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this threshold is met, the set is not a business. If it is not met, the Company then evaluates whether the set meets the requirement that a business include, at a minimum, an input and as substantive process that together significantly contribute to the ability to create outputs. Business combinations are accounted for using the acquisition method at the acquisition date, which is when control is obtained. The consideration transferred is generally measured at fair value, as are the identifiable assets acquired and liabilities assumed. During the one-year period following the acquisition date, if an adjustment is identified based on new information about facts and circumstances that existed as of the acquisition date, the Company will record measurement-period adjustments related to the acquisitions in the period in which the adjustment is identified. Goodwill is measured at the acquisition date as the fair value of the consideration transferred (including, if applicable, the fair value of any previously held equity interest and any non-controlling interests) less the net recognized amount (which is generally the fair value) of the identifiable assets acquired and liabilities assumed. Transaction costs, other than those associated with the issuance of debt or equity securities incurred in connection with a business combination, are expensed as incurred and included in Transaction expenses in the Consolidated Statements of Operations. |
Principles of Consolidation | Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts and operations of the Company, and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates. The most important of these relate to share-based compensation expenses, revenue recognition, the allowance for doubtful accounts, internally developed computer software, valuation of goodwill and other identifiable intangible assets, determination of the projected benefit obligations of the defined benefit plans, income taxes, fair value of stock options, derivatives and financial instruments, contingent earn-out, and the tax related valuation allowances. On an ongoing basis, management evaluates these estimates, assumptions and judgments, in reference to historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents is comprised of cash on hand and short-term deposits with an original maturity at the date of purchase of three months or less. |
Restricted Cash | Restricted Cash As of December 31, 2019 and 2018, the Company held $9 of restricted cash primarily related to funds from the Company’s Publons transaction. |
Accounts Receivable | Accounts Receivable Accounts receivable are presented net of the allowance for doubtful accounts and any discounts. Accounts receivable are recorded at the invoiced amount and do not bear interest. Collections of accounts receivable are included in cash provided by operating activities in the Consolidated Statements of Cash Flows. The Company maintains an allowance for doubtful accounts for estimated losses and assesses its adequacy each reporting period by evaluating factors such as the length of time receivables are past due, historical collection experience, and the economic and competitive environment. The expense related to doubtful accounts is included within Selling, general and administrative costs, excluding depreciation and amortization in the Consolidated Statements of Operations. Account balances are written off against the allowance when the potential for recovery is considered remote. The Company does not have any off‑balance‑sheet credit exposure related to its customers. |
Concentration of Credit Risk | Concentration of Credit Risk Accounts receivable are the primary financial instrument that potentially subjects the Company to significant concentrations of credit risk. Accounts receivable represents arrangements in which services were transferred to a customer before the customer pays consideration or before payment is due. Contracts with payment in arrears are recognized as receivables after the Company considers whether a significant financing component exists. The Company does not require collateral or other securities to support customer receivables. Management performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed appropriate. Credit losses have been immaterial and reasonable within management’s expectations. No single customer accounted for more than 1% of revenues and our ten largest customers represented only 5% of revenues for the year ended December 31, 2019. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and consequently, the Company believes that such funds are subject to minimal credit risk. |
Prepaid Expenses | Prepaid Expenses Prepaid expenses represent amounts that the Company has paid in advance of receiving benefits or services. Prepaid expenses include amounts for system and service contracts, sales commissions, deposits, prepaid royalties and insurance and are recognized as an expense over the general contractual period that the Company expects to benefit from the underlying asset or service. |
Computer Hardware and Other Property, net | Computer Hardware and Other Property, net Generally, computer hardware and other property are recorded at cost and are depreciated over the respective estimated useful lives. Upon the 2016 Transaction, computer hardware and other property were revalued and recorded at net book value, which approximated fair value at the 2016 Transaction. Depreciation is computed using the straight‑line method. Repair and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of sold or retired assets are removed from the accounts and any gain or loss is included within Loss from operations in the Consolidated Statements of Operations. The estimated useful lives are as follows: Computer hardware 3 years Furniture, fixtures and equipment 5-7 years Leasehold improvements Lesser of lease term or estimated useful life |
Computer Software | Computer Software Development costs related to internally generated software are capitalized once a project has progressed beyond a conceptual, preliminary stage to that of the application development stage. Costs of significant improvements on existing software for internal use, both internally developed and purchased, are also capitalized. Costs related to the preliminary project stage, data conversion and post-implementation/operation stage of an internal use software development project are expensed as incurred. Capitalized costs are amortized over five years, which is the estimated useful life of the related software. Purchased software is amortized over three years, which is the estimated useful life of the related software. The capitalized amounts, net of accumulated amortization, are included in Other intangible assets, net in the Consolidated Balance Sheets. The cost and related accumulated amortization of sold or retired assets are removed from the accounts and any gain or loss is included within Loss from operations in the Consolidated Statements of Operations. Computer software is evaluated for impairment whenever circumstances indicate the carrying amount may not be recoverable. The test for impairment compares the carrying amounts with the sum of undiscounted cash flows related to the asset. If the carrying value is greater than the undiscounted cash flows of the asset, the asset is written down to its estimated fair value. |
Identifiable Intangible Assets, net | Identifiable Intangible Assets, net Upon acquisition, identifiable intangible assets are recorded at fair value and are carried at cost less accumulated amortization or accumulated impairment for indefinite-lived intangible assets. Useful lives are reviewed at the end of each reporting period and adjusted if appropriate. Fully amortized assets are retained at cost and accumulated amortization accounts until such assets are derecognized. Customer Relationships- Customer relationships primarily consist of customer contracts and customer relationships arising from such contracts. Databases and Content - Databases and content primarily consists of repositories of the Company’s specific financial and customer information and intellectual content. Trade Names- Trade names consist of purchased brand names that the Company continues to use. Where applicable, intangible assets are amortized on a straight-line basis over their estimated useful lives as follows: Customer relationships 2 – 14 years Databases and content 13 – 20 years Finite-lived trade names 18 years Indefinite-lived trade names Indefinite |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate. The Company evaluates its long-lived assets, including computer hardware and other property, computer software, and finite-lived intangible assets for impairment whenever circumstances indicate that their carrying amounts may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate over its remaining life. An asset is assessed for impairment at the lowest level that the asset generates cash inflows that are largely independent of cash inflows from other assets. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Management identified an impairment loss in connection with the divestiture of certain assets and liabilities of its MarkMonitor Product Line within its IP Group in the year ended December 31, 2019. Management determined that additional impairment did not exist for any of the periods presented. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets The Company evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment or one level below an operating segment, annually as of October 1 or more frequently if impairment indicators arise in accordance with Accounting Standards Codification ("ASC”) Topic 350. The Company identified five reporting units due to a change in the Company’s reporting structure for the years ended December 31, 2019 and 2018 and one reporting unit for the year ended December 31, 2017. The Company evaluates the recoverability of goodwill at the reporting unit level. The Company assesses various qualitative factors to determine whether the fair value of a reporting unit may be less than its carrying amount. If a determination is made that, based on the qualitative factors, an impairment does not exist, the Company is not required to perform further testing. If the aforementioned qualitative assessment results in the Company concluding that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount, the fair value of the reporting unit will be determined and compared to its carrying value including goodwill. In determining the fair value of a reporting unit, the Company estimates the fair value of a reporting unit using the fair value derived from the income approach. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit; whereas, the income approach uses a discounted cash flow (“DCF”) model. The DCF model determines the fair value of our reporting units based on projected future discounted cash flows, which in turn were based on our views of uncertain variables such as growth rates, anticipated future economic conditions, and the appropriate discount rates relative to risk and estimates of residual values. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired, and the Company is not required to perform further testing. If the fair value of the reporting unit is less than the carrying value, the Company will recognize the difference as an impairment charge. Management concluded that no goodwill impairment existed for any of the periods presented. The Company also has indefinite-lived intangible assets related to trade names. Indefinite-lived intangible assets are subject to impairment testing annually or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. For purposes of impairment testing, the fair value of trade names is determined using an income approach, specifically the relief from royalties method. Management concluded that no indefinite-lived intangible impairment existed for any of the periods presented. |
Other Current and Non-Current Assets and Liabilities | Other Current and Non-Current Assets and Liabilities The Company defines current assets and liabilities as those from which it will benefit from or which it has an obligation for within one year that do not otherwise classify as assets or liabilities separately reported on the Consolidated Balance Sheets. Other non-current assets and liabilities are expected to benefit the Company or cause its obligation beyond one year. The Company classifies the current portion of long-term assets and liabilities as current assets or liabilities. |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) assets, Current portion of operating lease liability, and Operating lease liabilities on our Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. |
Accounts Payable and Accruals | Accounts Payable and Accruals Accounts payable and accruals are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable and accruals are recognized initially at their settlement value, and are classified as current liabilities if payment is due within one year or less. |
Debt | Debt Debt is recognized initially at par value, net of any applicable discounts or financing costs. Debt is subsequently stated at amortized cost with any difference between the proceeds (net of transactions costs) and the redemption value recognized in the Consolidated Statements of Operations over the term of the debt using the effective interest method. Interest on indebtedness is expensed as incurred. Debt is classified as a current liability when due within 12 months after the end of the reporting period. |
Tax Receivable Agreement ("TRA") | Tax Receivable Agreement (“TRA”) Concurrent with the completion of the 2019 Transaction, in May 2019 we became a party to a TRA with our pre-business combination equity holders. Under the TRA, we are generally required to pay to certain pre-business combination equity holders approximately 85% of the amount of calculated tax savings, if any, we are deemed to realize (using the actual applicable U.S. federal income tax rate and an assumed combined state and local income tax rate) as a result of (1) any existing tax attributes associated with Covered Tax Assets acquired in the pre-business combination organizational transactions, the benefit of which is allocable to us as a result of such transactions, (2) net operating loss (NOL) carryforwards available as a result of such transactions and (3) tax benefits related to imputed interest. Further, there may be significant changes, to the estimate of the TRA liability due to various reasons including changes in corporate tax law, changes in estimates of the amount or timing of future taxable income, and other items. Changes in those estimates are recognized as adjustments to the related TRA liability, with offsetting impacts recorded in the Consolidated Statements of Operations as Other operating income (expense), net. On August 21, 2019 the Company entered into a TRA Buyout Agreement to settle the outstanding liability. The settlement of the original TRA liability pursuant to the TRA Buyout Agreement was accounted for as an adjustment to Shareholders' equity. |
Derivative Financial Instruments | Derivative Financial Instruments Foreign Exchange Derivative Contracts Prior to the sale of IPM, the Company used derivative financial instruments to manage foreign currency exchange rate risk in IPM. The Company’s derivative financial instruments consist of foreign currency forward contracts (“forward contracts”). Derivative financial instruments were neither held nor issued by the Company for trading purposes. Interest Rate Swaps The Company has interest rate swaps with counterparties to reduce its exposure to variability in cash flows relating to interest payments on a portion of its outstanding first lien senior secured term loan facility in an aggregate principal amount of $900,000 (“Term Loan Facility”). The Company applies hedge accounting and has designated these instruments as cash flow hedges of the risk associated with floating interest rates on designated future quarterly interest payments. Management assumes the hedge is highly effective and therefore changes in the value of the hedging instrument are recorded in Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. Any ineffectiveness is recorded in earnings. Amounts in Accumulated other comprehensive income (loss) are reclassified into earnings in the same period during which the hedged transactions affect earnings, or upon termination of the hedging relationship. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments In determining fair value, the use of various valuation methodologies, including market, income and cost approaches is permissible. The Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s interest rate swap derivative instruments are classified as Level 2. Earn-out liabilities and defined benefit plan assets are classified as Level 3. |
Contingent Considerations | Contingent Considerations The Company records liabilities for the estimated cost of such contingencies when expenditures are probable and reasonably estimable. A significant amount of judgment is required to estimate and quantify the potential liability in these matters. We engage outside experts as deemed necessary or appropriate to assist in the calculation of the liability, however management is responsible for evaluating the estimate. As information becomes available regarding changes in circumstances for ongoing contingent considerations, our potential liability is reassessed and adjusted as necessary. See Note 22 – “Commitments and Contingencies” for further information on contingencies. |
Pension and Other Post-Retirement Benefits | Pension and Other Post-Retirement Benefits The Company may be required to sponsor pension benefit plans, for certain international markets, which are unfunded and are not material for the Company. The net periodic pension expense is actuarially determined on an annual basis by independent actuaries using the projected unit credit method. The determination of benefit expense requires assumptions such as the discount rate, which is used to measure service cost, benefit plan obligations and the interest expense on the plan obligations. Other significant assumptions include expected mortality, the expected rate of increase with respect to future compensation and pension. Because the determination of the cost and obligations associated with employee future benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results will differ from results which are estimated based on assumptions. The liability recognized in the Consolidated Balance Sheets is the present value of the defined benefit obligation at the end of the reporting period. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability. The defined benefit obligation is included in Other non-current liabilities in the Consolidated Balance Sheets. All actuarial gains and losses that arise in calculating the present value of the defined benefit obligation are recognized immediately in Accumulated deficit and included in the Consolidated Statements of Comprehensive Income (Loss). See Note 13 – “Pension and Other Post Retirement Benefits” for balances and further details including an estimate of the impact on the Consolidated Financial Statements from changes in the most critical assumptions. Employer contributions to defined contribution plans are expensed as incurred, which is as the related employee service is rendered. |
Taxation | Taxation The Company recognizes income taxes under the asset and liability method. Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect our best assessment of estimated current and future taxes to be paid. Significant judgments and estimates are required in determining the consolidated Income tax expense for financial statement purposes. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In assessing the realizability of deferred tax assets, we consider future taxable income by tax jurisdiction and tax planning strategies. The Company records a valuation allowance to reduce our deferred tax assets to equal an amount that is more likely than not to be realized. Changes in tax laws and tax rates could also affect recorded deferred tax assets and liabilities in the future. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. ASC Topic 740, Income Taxes , states that a benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company first records unrecognized tax benefits as liabilities in accordance with ASC 740 and then adjusts these liabilities when our judgment changes as a result of the evaluation of new information not previously available at the time of establishing the liability. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. Interest accrued related to unrecognized tax benefits and income tax-related penalties are included in the Benefit (provision) for income taxes. Deferred tax is provided on taxable temporary differences arising on investments in foreign subsidiaries, except where we intend, and are able, to reinvest such amounts on a permanent basis. |
Revenue Recognition | Revenue Recognition The Company derives revenue by selling information on a subscription and single transaction basis as well as from performing professional services. The Company recognizes revenue when control of these services are transferred to the customer for an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those goods or services. The Company determines revenue recognition utilizing the following five steps: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenue when, or as, the Company transfers control of the product or service for each performance obligation. Revenue is recognized net of discounts and rebates, as well as value added and other sales taxes. Cash received or receivable in advance of the delivery of the services or publications is included in deferred revenues. The Company disaggregates revenue based on revenue recognition pattern. Subscription based revenues recognize revenue over time whereas our transactional revenues recognize revenue at a point in time. The Company believes subscription and transaction is reflective of how the Company manages the business. The revenue recognition policies for the Company’s revenue streams are discussed below. Subscription Revenues Subscription-based revenues are recurring revenues that are earned under annual, evergreen or multi-year contracts pursuant to which we license the right to use our products to our customers. Revenues from the sale of subscription data and analytics solutions are typically invoiced annually in advance and recognized ratably over the year as revenues are earned. Subscription revenues are typically generated either on (i) an enterprise basis, meaning that the organization has a license for the particular product or service offering and then anyone within the organization can use it at no additional cost, (ii) a seat basis, meaning each individual that uses the particular product or service offering has to have his or her own license, or (iii) a unit basis, meaning that incremental revenues are generated on an existing subscription each time the product is used (e.g., a trademark or brand is searched or assessed). Transactional Revenues Transactional revenues are revenues that are earned under contracts for specific deliverables that are typically quoted on a product, data set or project basis and often derived from repeat customers, including customers that also generate subscription-based revenues. Revenues from the sale of transactional products and services are invoiced according to the terms of the contract, typically in arrears. Transactional content sales are usually delivered to the customer instantly or in a short period of time, at which time revenues are recognized. In the case of professional services, these contracts vary in length from several months to years for multi-year projects and customers and typically invoiced based on the achievement of milestones. Transactional revenues are typically generated on a unit basis, although for certain product and service offerings transactional revenues are generated on a seat basis. Transactional revenues may involve sales to the same customer on multiple occasions but with different products or services comprising the order. Performance Obligations Content Subscription: Content subscription performance obligations are most prevalent in the Web of Science, Derwent, and Life Sciences Product Lines. Content subscriptions are subscriptions that can only be accessed through the Company’s on-line platform for a specified period of time through downloads or access codes. In addition to the primary content subscription, these types of performance obligations can often include other performance obligations, such as training subscriptions, access to historical content, maintenance and other optional content. While revenue for these performance obligations are primarily recognized over the length of the contract (subscription revenue) there are instances where revenue could be recognized upon delivery (transactional revenue). Historical content and some optional content can be purchased via a perpetual license, which would be recognized upon delivery. Fees are typically paid annually at the beginning of each term. Domain Registration Services: This performance obligation relates to the MarkMonitor Product Line. This is a service to register domain names with the applicable registries, with the Company being responsible for monitoring the domain name expiration and paying the registry before expiration. In addition, the Company has an ongoing responsibility to ensure the domain name is maintained at the registry. Customers typically sign a one to two year contract, identifying specific domain names to be registered and tracked. Revenue is recognized over the term of the contract and fees are typically invoiced annually at the beginning of each contract term. Search Services: This performance obligation relates to the CompuMark Product Line. It is a comprehensive search report across multiple databases for a proposed trademark. The report is compiled by Clarivate’s analysts and sent to customers. Revenue is recognized upon delivery of the report. Fees are typically paid upon delivery. Trademark Watch: This performance obligation relates to the CompuMark Product Line. Trademark watch service is an annual subscription that allows customers to protect their trademarks from infringement by providing timely notification of newly filed or published trademarks. Revenue is recognized over the term of the contract, with fees paid annually at the beginning of each contract term. Patent Management: This performance obligation related to the IPM Product Line. The Company paid patent registration fees for customers in multiple countries to ensure their patents do not expire. Transaction fee revenue was recognized at the time payment is made on the client’s behalf to the applicable patent office. Fees were paid annually at the beginning of each term. Variable Consideration In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as retroactive discounts provided to the customers, indexed or volume-based discounts, and revenue between contract expiration and renewal. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current, and forecasted) that is reasonably available to the Company. Significant Judgments Significant judgments and estimates are necessary for the allocation of the proceeds received from an arrangement to the multiple performance obligations and the appropriate timing of revenue recognition. Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Determining a standalone selling price that may not be directly observable amongst all the products and performance obligations requires judgment. Specifically, many Web of Science Product Line contracts include multiple product offerings, which may have both subscription and transactional revenues. Judgment is also required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the subscription service and recognized over time for other products. The Company allocates value to primary content subscriptions or licenses and accompanying performance obligations, such as training subscriptions, access to historical content, maintenance and other optional content. When multiple performance obligations exist in a single contract, the transaction price is allocated to each performance obligation based on the standalone selling price of each performance obligation. The Company utilizes its standard price lists to determine the standalone selling price based on the product and country. The Company allocates the transaction price to each performance obligation based on the best estimate of the standalone selling price of each distinct good or service in the contract. The transaction price in the contract is allocated at contract inception to the distinct good or service underlying each performance obligation in proportion to the standalone selling price. The standalone selling prices are based on the Company’s normal pricing practices when sold separately with consideration of market conditions and other factors, including customer demographics and geographic location. Discounts applied to the contract will be allocated based on the same proportion of standalone selling prices. Cost to Obtain a Contract Commission costs represent costs to obtain a contract and are considered contract assets. The Company pays commissions to the sales managers and support teams for earning new customers and renewing contracts with existing customers. These commission costs are capitalized within Prepaid expenses and Other non-current assets on the Consolidated Balance Sheets. The costs are amortized to Selling, general and administrative expenses within the Consolidated Statements of Operations. The amortization period is between one and five years based on the estimated length of the customer relationship. Deferred Revenues The timing of revenue recognition may differ from the timing of invoicing to customers. We record deferred revenues when revenue is recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period and recognize revenue over the term of the coverage period. |
Cost of Revenues, Excluding Depreciation and Amortization | Cost of Revenues, Excluding Depreciation and Amortization Cost of revenues consists of costs related to the production and servicing of the Company’s offerings. These costs primarily relate to information technology, production and maintenance of content and personnel costs relating to professional services and customer service. |
Selling, General and Administrative, Excluding Depreciation and Amortization | Selling, General and Administrative, Excluding Depreciation and Amortization Selling, general and administrative includes compensation for support and administrative functions in addition to rent, office expenses, professional fees and other miscellaneous expenses. In addition, it includes selling and marketing costs associated with acquiring new customers or selling new products or product renewals to existing customers. Such costs primarily relate to wages and commissions for sales and marketing personnel. |
Depreciation | Depreciation Depreciation expense relates to the Company’s fixed assets including furniture & fixtures, hardware, and leasehold improvements. These assets are depreciated over their expected useful lives, and in the case of leasehold improvements over the shorter of their useful life or the life of the related lease. |
Amortization | Amortization Amortization expense relates to the Company’s finite-lived intangible assets including databases and content, customer relationships, computer software, and trade names. These assets are being amortized over periods of two to 20 years. |
Impairment on Assets Held for Sale | Impairment on Assets Held for Sale Impairment on assets held for sale represents an impairment charge recorded for certain assets classified as assets held for sale. |
Share-based Compensation | Share-based Compensation Share-based compensation expense includes cost associated with stock options, restricted share units (“RSUs”), and 2019 Transaction related shares granted to certain members of key management. All share-based awards are recognized in the Consolidated Statements of Operations based on their grant date fair values. We amortize the value of share-based awards to expense over the vesting period on a graded-scale basis. The incremental fair value of modifications to stock awards is estimated at the date of modification. We recognize any additional estimated expense in the period of modification for vested awards and over the remaining vesting period for un-vested awards. The Company elects to recognize forfeitures as they occur. The fair value of stock options is estimated at the date of grant using the Black-Scholes option pricing model, which requires management to make certain assumptions of future expectations based on historical and current data. The assumptions include the expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate. The expected term represents the amount of time that options granted are expected to be outstanding, based on forecasted exercise behavior. The risk-free rate is based on the rate at grant date of zero-coupon U.S. treasury notes with a term comparable to the expected term of the option. Expected volatility is estimated based on the historical volatility of comparable public entities' stock price from the same industry. The Company’s dividend yield is based on forecasted expected payments, which are expected to be zero for current plan. The Company recognizes compensation expense over the vesting period of the award on a graded-scale basis. The share-based compensation cost of time-based RSU grants is calculate by multiplying the grant date fair market value by the number of shares granted. We recognize compensation expense over the vesting period of the award. |
Transaction Expenses | Transaction Expenses Transaction expenses are incurred by the Company to assess and complete business transactions, including acquisitions and disposals, and typically include advisory, legal and other professional and consulting costs. Transaction expenses also include any earn-out related adjustments. |
Transition, Integration and Other | Transition, Integration and Other Transition, integration and other expenses provide for the costs of transitioning certain activities performed by the Former Parent to the Company to enable operation on a stand-alone basis. Transition full time employee expense represents labor costs of full time employees who are currently working on migration projects and being expensed. Their traditional role is application development, which was capitalized. |
Restructuring | Restructuring Restructuring expense includes costs associated with involuntary termination benefits provided to employees under the terms of a one-time benefit arrangement, certain contract termination costs, and other costs associated with an exit or disposal activity. |
Other Operating Income (Expense), Net | Other Operating Income (Expense), Net Other operating income (expense) consists of gains or losses related to the disposal of our assets, asset impairments or write-downs and the consolidated impact of re-measurement of the assets and liabilities of our company and our subsidiaries that are denominated in currencies other than each relevant entity’s functional currency. Other operating income (expense), net includes a tax indemnification write down related to the 2016 Transaction for the year ended December 31, 2018. See Note 22 – “Commitments and Contingencies - Tax Indemnity” for further details. The gain on sale of the divested IPM Product Line and related assets is also included in the year ended December 31, 2018. See Note 5 – “Assets Held for Sale and Divested Operations” for further details. |
Interest Expense, Net | Interest Expense, Net Interest expense consists of interest expense related to our borrowings under the Term Loan Facility and the Notes as well as the amortization of debt issuance costs and interest related to certain derivative instruments. |
Foreign Currency Translation | Foreign Currency Translation The operations of each of the Company’s entities are measured using the currency of the primary economic environment in which the subsidiary operates (“functional currency”). Nonfunctional currency monetary balances are re-measured into the functional currency of the operation with any related gain or loss recorded in Selling, general and administrative costs, excluding depreciation and amortization in the accompanying Consolidated Statements of Operations. Assets and liabilities of operations outside the U.S., for which the functional currency is the local currency, are translated into U.S. dollars using period-end exchange rates. Revenues and expenses are translated at the average exchange rate in effect during each fiscal month during the year. The effects of foreign currency translation adjustments are included as a component of Accumulated other comprehensive income (loss) in the accompanying Consolidated Balance Sheets. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from Net loss, transactions and other events or circumstances from non-owner sources. |
Advertising and Promotion Costs | Advertising and Promotion Costs Advertising and promotion costs are expensed as of the first date that the advertisements take place. Advertising expense was approximately $9,574, $12,150 and $14,416 for the years ended December 31, 2019, 2018, and 2017, respectively. |
Legal Costs | Legal Costs Legal costs are expensed as incurred. |
Debt Issuance Costs | Debt Issuance Costs Fees incurred to issue debt are generally deferred and amortized as a component of interest expense over the estimated term of the related debt using the effective interest rate method. |
Earnings Per Share | Earnings Per Share The calculation of earnings per share is based on the weighted average number of common shares or common stock equivalents outstanding during the applicable period. The dilutive effect of common stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share. Potentially dilutive securities include outstanding stock options. Employee equity share options and similar equity instruments granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of benefits that would be recorded in Ordinary shares when the award becomes deductible for tax purposes are assumed to be used to repurchase shares. |
Newly Adopted Accounting Standards and Recently Issued Accounting Standards | Newly Adopted Accounting Standards In February 2016, the FASB issued new guidance, Accounting Standard Update (“ASU”) 2016-02, related to leases in which lessees are required to recognize assets and liabilities on the balance sheet for leases having a term of more than 12 months. Recognition of these lease assets and lease liabilities represents a change from previous U.S. GAAP, which did not require lease assets and lease liabilities to be recognized for operating leases. Qualitative disclosures along with specific quantitative disclosures are required to provide enough information to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities. The Company adopted the standard, using a modified retrospective approach, on January 1, 2019. The provisions of ASU 2016-02 are effective for the Company’s fiscal year beginning January 1, 2019, including interim periods within that fiscal year. The Company elected the package of practical expedients included in this guidance, which allows it to not reassess whether any expired or existing contracts contain leases, the lease classification for any expired or existing leases, and the initial direct costs for existing leases. The Company does not recognize short-term leases on its Consolidated Balance Sheet, and recognizes those lease payments in Selling, general and administrative costs, excluding depreciation and amortization on the Consolidated Statements of Operations on a straight-line basis over the lease term. In January 2017, the FASB issued new guidance, ASU 2017-04, which simplifies testing goodwill for impairment by eliminating Step 2 from the goodwill impairment test as described in previously issued guidance. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company elected to adopt this standard on January 1, 2019. This standard did not have a material impact on the Company’s Consolidated Financial Statements. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements, as an update to the previously issued guidance. This update added a transition option which allows for the recognition of a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption without recasting the financial statements in periods prior to adoption. The Company elected this transition option. In March 2019, the FASB issued ASU 2019-01, Leases, as an update to the previously issued guidance. This update added a transition option which clarified the interim disclosure requirements as defined in ASC 250-10-50-3. The Company elected to provide the ASU 2016-02 transition disclosures as of the beginning of the period of adoption rather than the beginning of the earliest period presented. The guidance is effective for all entities during the same period that ASU 2016-02 is adopted. The standard had a material impact on our Consolidated Balance Sheet and Consolidated Statement of Cash Flows, but did not have an impact on our Consolidated Statement of Operations. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. In June 2018, the FASB issued guidance, ASU 2018-07, Compensation - Stock Compensation, which simplifies the accounting for nonemployee share-based payment transactions. The guidance is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. This standard did not have a material impact on the Company’s Consolidated Financial Statements. In July 2018, the FASB issued guidance, ASU 2018-09, Codification Improvements, which clarifies guidance that may have been incorrectly or inconsistently applied by certain entities. The guidance is effective for all entities for fiscal years beginning after December 15, 2018. This standard did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued guidance, ASU 2018-13, Fair Value Measurement, which modifies the disclosure requirements on fair value measurements. The guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 with early adoption permitted upon issuance of this update. The Company adopted this standard on January 1, 2019. This standard did not have a material impact on the Company’s Consolidated Financial Statements. Recently Issued Accounting Standards In June 2016, the FASB issued new guidance, ASU 2016-13, 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 guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued guidance, ASU 2018-14, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The guidance is effective for all entities for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its 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 guidance is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted the standard on January 1, 2020. The Company does not expect the standard to have a material impact on the Company’s Consolidated Financial Statements. 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 is currently in the process of evaluating the impact of the adoption of this standard on its Consolidated Financial Statements. In April 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses, which provides targeted transition relief to the accounting standards update previously issued as part of ASU 2016-13 Financial Instruments Credit Losses. The guidance is effective for all entities during the same period that ASU 2016-13 is adopted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its Consolidated Financial Statements. In November 2019, the FASB issued ASU 2019-10, Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which provides improvements or clarification and correction to the ASU 2016-02 Leases, ASU 2016-13 Financial Instruments Credit Losses, and ASU 2017-12 Derivatives and Hedging, accounting standards updates that were previously issued. The guidance is effective upon adoption of the related standards. The Company is currently in the process of evaluating the impact of the adoption of this standard on its Consolidated Financial Statements. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, which provides clarification to certain aspects of the accounting standards update previously issued as part of ASU 2016-13 Financial Instruments Credit Losses. The guidance is effective for all entities during the same period that ASU 2016-13 is adopted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The guidance is effective for all entities for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its Consolidated Financial Statements. There were no other new accounting standards that we expect to have a material impact to our financial position or results of operations upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of property, plant and equipment useful life | Computer hardware 3 years Furniture, fixtures and equipment 5-7 years Leasehold improvements Lesser of lease term or estimated useful life |
Schedule of estimated useful life of Identifiable Intangible Assets, net | Customer relationships 2 – 14 years Databases and content 13 – 20 years Finite-lived trade names 18 years Indefinite-lived trade names Indefinite |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations | |
Schedule of fair value of identifiable assets acquired and liabilities assumed for all acquisitions | 2019 (1) 2018 2017 Current assets $ 2,137 $ 706 $ 51 Computer hardware and other property 86 — — Finite-lived intangible assets 38,719 7,928 3,600 Indefinite-lived intangible assets — — 70 Goodwill 44,779 21,527 9,767 Other non-current assets 2 38 14 Total assets 85,723 30,199 13,502 Current liabilities 4,366 491 182 Non-current liabilities 8,920 2,054 19 Total liabilities 13,286 2,545 201 Net assets acquired $ 72,437 $ 27,654 $ 13,301 (1) Net assets acquired includes $3,500 related to the SequenceBase acquisition. |
Assets Held for Sale and Dive_2
Assets Held for Sale and Divested Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Assets Held for Sale and Divested Operations | |
Schedule of carrying amount of major classes of assets and liabilities that are included in Assets held for sale and Liabilities held for sale related to the divested operations | As of December 31, 2019 Assets: Current assets: Cash and cash equivalents $ 384 Prepaid expenses 1,692 Other current assets 198 Total current assets 2,274 Computer hardware and other property, net 2,961 Other intangible assets, net 18,957 Other non-current assets 1,993 Operating lease right-of-use assets 4,434 Total Assets held for sale $ 30,619 Liabilities: Current liabilities: Accounts payable $ 25 Accrued expenses and other current liabilities 1,764 Current portion of deferred revenues 18,067 Current portion of operating lease liabilities 1,314 Total current liabilities 21,170 Non-current portion of deferred revenues 834 Other non-current liabilities 163 Operating lease liabilities 4,701 Total Liabilities held for sale $ 26,868 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable | |
Schedule of components of accounts receivable balance | Year ended December 31, 2019 2018 Accounts receivable 350,369 345,371 Less: Accounts receivable allowance (16,511) (14,076) Accounts receivable, net $ 333,858 $ 331,295 |
Schedule of activity in accounts receivable allowance | Year ended December 31, 2019 2018 2017 Balance at beginning of year $ 14,076 $ 8,495 $ 2,643 Additional provisions 4,662 6,469 6,233 Write-offs and other deductions (2,321) (870) (434) Exchange differences 94 (18) 53 Balance at the end of year $ 16,511 $ 14,076 $ 8,495 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of leases costs | December 31, 2019 Lease cost Operating lease cost $ 27,812 Short-term lease cost 296 Variable lease cost 1,213 Total lease cost $ 29,321 |
Schedule of other information operating lease cost | December 31, 2019 Other information Cash Paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 24,303 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 6,386 Weighted-average remaining lease term - operating leases 6 Weighted-average discount rate - operating leases 5.8 % |
Schedule of future minimum lease payments for operating leases | Year ending December 31, 2020 $ 21,178 2021 17,854 2022 15,378 2023 12,816 2024 10,476 2025 & Thereafter 25,460 Total operating lease commitments 103,162 Less imputed interest (16,843) Total $ 86,319 |
Schedule of future minimum annual rental payments for operating leases | Year ended December 31, 2019 $ 22,140 2020 19,531 2021 17,240 2022 15,333 2023 14,944 Thereafter 40,367 Total operating lease commitments $ 129,555 |
Computer Hardware and Other P_2
Computer Hardware and Other Property, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Computer Hardware and Other Property, Net. | |
Schedule of computer hardware and other property, net | December 31, 2019 2018 Computer hardware $ 24,620 $ 18,130 Leasehold improvements 12,496 13,298 Furniture, fixtures and equipment 4,412 6,816 Total computer hardware and other property 41,528 38,244 Accumulated depreciation (23,486) (17,603) Total computer hardware and other property, net $ 18,042 $ 20,641 |
Identifiable Intangible Asset_2
Identifiable Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Identifiable Intangible Assets, net | |
Schedule of identifiable intangible assets | December 31, 2019 December 31, 2018 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Finite-lived intangible assets Customer relationships $ 280,493 $ (180,571) $ 99,922 $ 291,503 $ (164,611) $ 126,892 Databases and content 1,755,323 (342,385) 1,412,938 1,725,878 (233,733) 1,492,145 Computer software 285,701 (135,919) 149,782 268,704 (97,570) 171,134 Trade names 1,570 — 1,570 — — — Finite-lived intangible assets 2,323,087 (658,875) 1,664,212 2,286,085 (495,914) 1,790,171 Indefinite-lived intangible assets Trade names 164,428 — 164,428 168,349 — 168,349 Total intangible assets $ 2,487,515 $ (658,875) $ 1,828,640 $ 2,454,434 $ (495,914) $ 1,958,520 |
Schedule of weighted-average amortization period for finite-lived intangible assets | Remaining Weighted - Average Amortization Period (in years) Customer relationships Databases and content Computer software Trade names Total |
Schedule of estimated amortization for five succeeding years | 2020 $ 170,343 2021 160,666 2022 122,886 2023 116,665 2024 116,395 Thereafter 935,302 Subtotal finite-lived intangible assets 1,622,257 Internally developed software projects in process 41,955 Total finite-lived intangible assets 1,664,212 Intangibles with indefinite lives 164,428 Total intangible assets $ 1,828,640 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill. | |
Schedule of change in the carrying amount of goodwill | Balance as of December 31, 2017 $ 1,311,253 Acquisition 21,527 Disposal (49,349) Impact of foreign currency fluctuations and other (512) Balance as of December 31, 2018 $ 1,282,919 Acquisition 44,779 Transferred to Assets held for sale (468) Impact of foreign currency fluctuations and other 815 Balance as of December 31, 2019 $ 1,328,045 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments | |
Summary of the changes in AOCI (net of tax) related to cash flow hedges | The following table summarizes the changes in AOCI (net of tax) related to cash flow hedges for the year ended December 31, 2017: Balance at December 31, 2016: $ — Other comprehensive income (loss) 3,011 Amounts reclassified from AOCI to net income (1,904) Balance at December 31, 2017: $ 1,107 The following table summarizes the changes in AOCI (net of tax) related to cash flow hedges for the year ended December 31, 2018: AOCI Balance at December 31, 2017 $ 1,107 Derivative gains (losses) recognized in Other comprehensive income (loss) 2,313 Amount reclassified out of Other comprehensive income (loss) to net loss 224 AOCI Balance at December 31, 2018 $ 3,644 The following table summarizes the changes in AOCI (net of tax) related to cash flow hedges for the year ended December 31, 2019: AOCI Balance at December 31, 2018 $ 3,644 Derivative gains (losses) recognized in Other comprehensive income (loss) (7,107) Amount reclassified out of Other comprehensive income (loss) to net loss 685 AOCI Balance at December 31, 2019 $ (2,778) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Schedule of inputs and assumptions | The following inputs and assumptions were used to value the earn-out liability as of December 31, 2018: TrademarkVision Risk-free rate 2.77 % Discount rate 8.09 % Expected life (in years) 1.54 Publons Risk-free rate 2.34 - 2.63 % Discount rate 9.23 - 9.72 % Expected life (in years) 1.04 - 3.04 |
Schedule of changes in the earn-out, Level 3 | The following table presents the changes in the earn-out, the only Level 3 item, for the years ended December 31, 2019 and 2018: Balance at December 31, 2016 $ — Earn-out liability 5,900 Balance at December 31, 2017 $ 5,900 Business combinations 4,115 Payment of earn-out liability (2,470) Revaluations included in earnings (470) Balance at December 31, 2018 $ 7,075 Payment of Earn-out liability (1) (2,371) Revaluations included in earnings 6,396 Balance as of December 31, 2019 $ 11,100 (1) See Note 22 - "Commitments and Contingencies" for further details |
Summary of the Company's assets and liabilities that were recognized at fair value on a recurring basis | The following table provides a summary of the Company’s assets and liabilities that were recognized at fair value on a recurring basis as at December 31, 2019 and 2018: December 31, 2019 Total Fair Level 1 Level 2 Level 3 Value Assets Interest rate swap asset $ — $ — $ — $ — — — — — Liabilities Interest rate swap liability — 2,778 — 2,778 Earn-out — — 11,100 11,100 Total $ — $ 2,778 $ 11,100 $ 13,878 December 31, 2018 Total Fair Level 1 Level 2 Level 3 Value Assets Interest rate swap asset — 3,644 — 3,644 — 3,644 — 3,644 Liabilities Earn-out — — 7,075 7,075 Total $ — $ — $ 7,075 $ 7,075 |
Pension and Other Post-Retire_2
Pension and Other Post-Retirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Pension and Other Post-Retirement Benefits | |
Schedule of changes in projected benefit obligations, the plan assets, and the funded | December 31, 2019 2018 Obligation and funded status: Change in benefit obligation Projected benefit obligation at beginning of year $ 14,486 $ 14,258 Service costs 870 888 Interest cost 311 283 Plan participant contributions 114 109 Actuarial losses 1,492 29 Divestiture — (138) Benefit payments (312) (274) Expenses paid from assets (36) (35) Settlements (89) — Curtailment — — Effect of foreign currency translation (273) (634) Projected benefit obligation at end of year $ 16,563 $ 14,486 Change in plan assets Fair value of plan assets at beginning of year $ 5,184 $ 5,062 Actual return on plan assets 198 95 Settlements (89) — Plan participant contributions 113 109 Employer contributions 533 460 Benefit payments (312) (274) Expenses paid from assets (36) (35) Effect of foreign currency translation (104) (233) Fair value of plan assets at end of year 5,487 5,184 Unfunded status $ (11,076) $ (9,302) |
Summary of the amounts recognized in the consolidated balance sheets | December 31, 2019 2018 Current liabilities $ (635) $ (443) Non-current liabilities $ (10,441) $ (8,859) AOCI $ 470 $ (1,054) |
Schedule of accumulated benefit obligation in excess of plan assets and projected benefit obligations in excess of plan assets | December 31, 2019 2018 Plans with accumulated benefit obligation in excess of plan assets: Accumulated benefit obligation $ 15,465 $ 13,605 Fair value of plan assets $ 5,487 $ 5,184 Plans with projected benefit obligation in excess of plan assets: Projected benefit obligation $ 16,563 $ 14,486 Fair value of plan assets $ 5,487 $ 5,184 |
Schedule of net periodic benefit cost changes in plan assets and benefit obligations recognized in other comprehensive loss | December 31, 2019 2018 2017 Service cost $ 870 $ 888 $ 442 Interest cost 311 283 168 Expected return on plan assets (157) (150) — Amortization of actuarial gains (76) (78) (4) Settlement 7 — — Net periodic benefit cost $ 955 $ 943 $ 606 |
Summary of weighted-average assumptions used to determine the net periodic benefit cost | December 31, 2019 2018 Discount rate 2.26 % 2.31 % Expected return on plan assets 3.00 % 3.00 % Rate of compensation increase 3.68 % 3.76 % Social Security increase rate 2.50 % 2.50 % Pension increase rate 1.80 % 1.80 % |
Summary of weighted-average assumptions used to determine the benefit obligations | December 31, 2019 2018 Discount rate 1.60 % 2.26 % Rate of compensation increase 3.77 % 3.68 % Social Security increase rate 2.50 % 2.50 % Pension increase rate 1.80 % 1.80 % |
Schedule of fair value of our plan assets and the respective level in the far value hierarchy by asset category | December 31, 2019 December 31, 2018 Fair value measurement of pension plan assets: Level 1 Level 2 Level 3 Total Assets Level 1 Level 2 Level 3 Total Assets Insurance contract $ — — 5,487 $ 5,487 $ — — 5,184 $ 5,184 |
Schedule of estimated pension benefit payments | 2020 $ 677 2021 550 2022 707 2023 851 2024 829 2025 to 2029 4,943 Total $ 8,557 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt | |
Schedule of debt | December 31, 2019 December 31, 2018 Effective Effective Interest Carrying Interest Carrying Type Maturity Rate Value Rate Value Senior Secured Notes (2026) 2026 4.500 % $ 700,000 — % $ — Senior Unsecured Notes (2024) 2024 — % — 7.875 % 500,000 Term Loan Facility (2026) 2026 5.049 % 900,000 — % — Term Loan Facility (2023) 2023 — % — 5.729 % 1,483,993 The Revolving Credit Facility 2024 5.049 % 65,000 — % — The Revolving Credit Facility 2021 — % — 5.754 % 5,000 The Revolving Credit Facility 2021 — % — 5.729 % 40,000 Total debt outstanding 1,665,000 2,028,993 Debt issuance costs (25,205) (34,838) Term Loan Facility, discount (2,184) (3,633) Short-term debt, including current portion of long-term debt (9,000) (60,345) Long-term debt, net of current portion and debt issuance costs $ 1,628,611 $ 1,930,177 |
Schedule of Senior Unsecured Notes redemption price as a percentage of principal | Redemption Price Period (as a percentage of principal) 2022 102.250 % 2023 101.125 % 2024 and thereafter 100.000 % |
Schedule of maturities of outstanding borrowings | 2020 $ 9,000 2021 9,000 2022 9,000 2023 9,000 2024 74,000 Thereafter 1,555,000 Total maturities 1,665,000 Less: capitalized debt issuance costs and original issue discount (27,389) Total debt outstanding as of December 31, 2019 $ 1,637,611 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue | |
Schedule of disaggregated revenues | Year ended December 31, 2019 2018 2017 Subscription revenues $ 805,518 $ 794,097 $ 785,717 Transactional revenues 169,265 177,523 181,590 Total revenues, gross 974,783 971,620 967,307 Deferred revenues adjustment (1) (438) (3,152) (49,673) Total Revenues, net $ 974,345 $ 968,468 $ 917,634 (1) This accounting adjustment relates to the 2016 Transaction, which included a revaluation of deferred revenues to account for the difference in value between the customer advances retained by the Company upon the consummation of the 2016 Transaction and our outstanding performance obligations related to those advances. |
Schedule of contract balances | Current portion Non-current portion Accounts of deferred of deferred receivable, net revenues revenues Opening (1/1/2019) $ 331,295 $ 391,102 $ 17,112 Closing (12/31/2019) 333,858 407,325 19,723 (Increase)/decrease $ (2,563) $ (16,223) $ (2,611) Opening (1/1/2018) $ 317,808 $ 361,260 $ 15,796 Closing (12/31/2018) 331,295 391,102 17,112 (Increase)/decrease $ (13,487) $ (29,842) $ (1,316) Opening (1/1/2017) $ 361,586 $ 333,944 $ 18,602 Closing (12/31/2017) 317,808 361,260 15,796 (Increase)/decrease $ 43,778 $ (27,316) $ 2,806 |
Employment and Compensation A_2
Employment and Compensation Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Employment and Compensation Arrangements | |
Summary of stock option activity | Number Weighted Weighted Average Aggregate of Average Exercise Remaining Intrinsic Options Price per Share Contractual Life Value Outstanding as of December 31, 2018 185,601 $ 1,587.00 8.5 $ 13,293 2019 Transaction Related Modified options 24,339,097 — — — Balance at December 31, 2018, as modified 24,524,698 12.44 8.5 13,293 Granted 2,321,348 17.55 7.7 5,431 Expired (463,919) 11.47 — — Forfeited (2,840,539) 12.97 — — Modified (244,829) 13.36 Exercised (2,416,534) 6.63 — — Outstanding as of December 31, 2019 20,880,225 $ 12.18 7.3 $ 105,119 Vested and exercisable at December 31, 2019 16,110,638 $ 11.12 7.0 $ 94,181 |
Summary of assumption used to value options granted during the period presented and their expected lives | December 31, 2019 2018 2017 Weighted-average expected dividend yield — % — % — % Expected volatility 19.52 - 20.26 % 21.00 - 23.05 % 24.84%-27.90 % Weighted-average expected volatility 19.87 % 21.86 % 27.50 % Weighted-average risk-free interest rate 2.43 % 3.02 % 2.53 % Expected life (in years) 7.3 8.5 9.0 |
Schedule of restricted stock units activity | Weighted Average Grant Date Fair Number of Shares Value per Share Outstanding as of December 31, 2018 — $ — Granted 327,398 16.66 Vested (34,216) 15.90 Outstanding as of December 31, 2019 293,182 $ 16.75 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of income tax (benefit)/expense on income/(loss) | Year ended December 31, 2019 2018 2017 Current U.K. $ 677 $ 1,014 $ (142) U.S. Federal 6,917 6,395 5,202 U.S. State 988 2,146 833 Other 9,959 11,061 8,552 Total current 18,541 20,616 14,445 Deferred U.K. — 85 (427) U.S. Federal (824) (5,465) (10,648) U.S. State (223) (227) (142) Other (7,293) (9,360) (24,521) Total deferred (8,340) (14,967) (35,738) Total provision (benefit) for income taxes $ 10,201 $ 5,649 $ (21,293) |
Schedule of components of pre-tax loss | Year ended December 31, 2019 2018 2017 U.K. loss $ (199,032) $ (222,043) $ (211,944) U.S. income (loss) 3,733 (11,880) (58,054) Other loss (5,477) (2,590) (15,225) Pre-tax loss $ (200,776) $ (236,513) $ (285,223) |
Schedule of reconciliation of the statutory "U.K." income tax rate to effective tax rate | Year ended December 31, 2019 2018 2017 Loss before tax: $ (200,776) $ (236,513) $ (285,223) Income tax, at statutory rate 10,201 5,649 (54,905) Statutory rate (1) 19.0 % 19.0 % 19.3 % Effect of different tax rates (4.4) % (1.2) % 3.3 % BEAT (1.2) % — % — % Tax rate modifications (2) — % — % 5.7 % Valuation Allowances (17.8) % (18.0) % (20.8) % Other Permanent differences (1.3) % (0.7) % 0.3 % Non-deductible transaction costs (2.1) % — % — % Withholding tax (0.7) % (0.2) % (0.3) % Tax indemnity 3.7 % (2.7) % — % Sale of Subsidiary — % 2.2 % — % Other (0.3) % (0.8) % — % Effective rate (5.1) % (2.4) % 7.5 % (1) The Company performs a reconciliation of the income tax provisions based on its domicile and statutory rate. Reconciliations are based on the U.K. statutory corporate tax rate. (2) Due to rate reductions in the U.S. and Belgium enacted in the 4th quarter of 2017. |
Schedule of deferred income tax assets and liabilities | The tax effects of the significant components of temporary differences giving rise to the Company’s deferred income tax assets and liabilities are as follows: December 31, 2019 2018 Accounts receivable $ 1,346 $ 916 Accrued expenses 4,461 3,735 Deferred revenue 2,679 3,570 Other assets 5,721 9,655 Unrealized gain/loss 94 74 Debt issuance costs 3,176 1,199 Operating losses and tax attributes 177,853 135,219 Total deferred tax assets 195,330 154,368 Valuation allowances (165,157) (133,856) Net deferred tax assets 30,173 20,512 Other identifiable intangible assets, net (32,834) (43,247) Other liabilities (21,012) (7,785) Goodwill (4,233) (42) Fixed Assets, net (1,153) (238) Total deferred tax liabilities (59,232) (51,312) Net deferred tax liabilities $ (29,059) $ (30,800) In the Consolidated Balance Sheets, deferred tax assets and liabilities are shown net if they are in the same jurisdiction. The components of the net deferred tax liabilities as reported on the Consolidated Balance Sheets are as follows: December 31, 2019 2018 Deferred tax asset $ 19,488 $ 12,426 Deferred tax liability (48,547) (43,226) Net deferred tax liability $ (29,059) $ (30,800) |
Schedule of change in the deferred tax valuation | December 31, 2019 2018 2017 Beginning Balance, January 1 $ 133,856 $ 92,944 $ 47,185 Change Charged to Expense/(Income) 30,854 41,629 44,790 Change Charged to CTA 447 381 713 Change Charged to OCI — (1,098) 256 Ending Balance, December 31 $ 165,157 $ 133,856 $ 92,944 |
Summary of unrecognized tax benefits, excluding interest and penalties: | December 31, 2019 2018 2017 Balance at the Beginning of the year $ 1,450 $ 91 211 Increases for tax positions taken in prior years — 1,339 — Increases for tax positions taken in the current year 412 72 — Decreases due to statute expirations — (52) (120) Decrease due to payment (717) — — Balance at the End of the year $ 1,145 $ 1,450 91 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per Share | |
Schedule of basic and diluted EPS computations for our common stock | Year ended December 31, 2019 2018 2017 Basic/Diluted EPS Loss available to common stockholders $ (210,977) $ (242,162) $ (263,930) Basic and diluted weighted-average number of common shares outstanding 273,883,342 217,472,870 216,848,866 Basic and diluted EPS $ (0.77) $ (1.11) $ (1.22) |
Product and Geographic Sales _2
Product and Geographic Sales Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Product and Geographic Sales Information | |
Schedule of summarizes revenues from external customers by geography | Year ended December 31, Revenue: 2019 2018 2017 Americas $ 463,041 $ 475,897 $ 476,729 Europe/Middle East/Africa 278,738 273,744 273,706 APAC 233,004 221,979 216,872 Deferred revenues adjustment (438) (3,152) (49,673) Total $ 974,345 $ 968,468 $ 917,634 |
Schedule of summarizes non-current assets other than financial instruments and deferred tax assets by geography | Year ended December 31, Assets: 2019 2018 Americas $ 992,469 $ 1,037,852 Europe/Middle East/Africa 2,099,777 2,145,950 APAC 101,113 101,191 Total $ 3,193,359 $ 3,284,993 |
Schedule of summarizes revenue by product group | Year ended December 31, 2019 2018 2017 Web of Science Product Line $ 380,299 $ 361,957 $ 352,995 Life Sciences Product Line 167,243 165,920 165,995 Science Group 547,542 527,877 518,990 Derwent Product Line 181,949 179,321 176,201 MarkMonitor Product Line 122,841 122,947 120,408 CompuMark Product Line 122,451 121,025 119,854 Intellectual Property Group 427,241 423,293 416,463 IP Management Product Line — 20,450 31,854 Deferred revenue adjustment (438) (3,152) (49,673) Total $ 974,345 $ 968,468 $ 917,634 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Summary of future unconditional purchase obligations | The future unconditional purchase obligations as of December 31, 2019 are as follows: Year ended December 31, 2020 37,332 2021 10,186 2022 558 2023 — Total $ 48,076 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring | |
Summary of activity related to restructuring reserves and expenses | Balance as of December 31, 2018 $ — Expenses recorded 15,670 Payments made (6,323) Foreign currency translation 159 Balance as of December 31, 2019 $ 9,506 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Data (Unaudited) | |
Schedule Of Quarterly Financial Data (Unaudited) | 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 234,025 $ 242,309 $ 242,998 $ 255,013 Income (loss) from operations $ (25,919) $ (36,581) $ 35,844 $ (16,431) Net income (loss) $ (59,260) $ (77,761) $ 10,831 $ (84,787) Earnings per share: Basic $ (0.27) $ (0.29) $ 0.04 $ (0.28) Diluted $ (0.27) $ (0.29) $ 0.03 $ (0.28) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 237,027 $ 243,297 $ 242,897 $ 245,247 Loss from operations $ (45,892) $ (34,430) $ (18,931) $ (6,455) Net loss $ (77,037) $ (66,944) $ (54,727) $ (43,454) Earnings per share: Basic and diluted $ (0.35) $ (0.31) $ (0.25) $ (0.20) |
Background and Nature of Oper_2
Background and Nature of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 09, 2019 | Sep. 10, 2019 | Jul. 10, 2016 |
Transaction & Prior Period Expense | |||
Issuance of common stock, net (in shares) | 49,680,000 | 39,675,000 | |
Share price (in dollars per share) | $ 17.25 | $ 16 | |
The 2016 Transaction | |||
Transaction & Prior Period Expense | |||
Total consideration | $ 3,566,599 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash and Concentration of credit risk (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)customer | Dec. 31, 2018USD ($) | |
Summary of Significant Accounting Policies | ||
Restricted Cash | $ | $ 9 | $ 9 |
Number of largest customers | customer | 10 | |
Revenue | ||
Summary of Significant Accounting Policies | ||
Revenue from contract with customer (as a percent) | 5.00% | |
Revenue | Maximum | ||
Summary of Significant Accounting Policies | ||
Revenue from contract with customer (as a percent) | 1.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Other Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | |
Summary of Significant Accounting Policies | |||
Number of reporting units | item | 5 | 5 | 1 |
Impairment of goodwill | $ 468 | ||
Percentage payment of calculated tax savings to pre-business combination equity holders | 85.00% | ||
Aggregate principal amount | $ 1,665,000 | $ 2,028,993 | |
Advertising expense | $ 9,574 | $ 12,150 | $ 14,416 |
Minimum | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 2 years | ||
Customers contract period (in years) | 1 year | ||
Maximum | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 20 years | ||
Customers contract period (in years) | 2 years | ||
Term Loan Facility | |||
Summary of Significant Accounting Policies | |||
Aggregate principal amount | $ 900,000 | ||
Capitalized computer software | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 5 years | ||
Purchased computer software | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 3 years | ||
Customer relationships | Minimum | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 2 years | ||
Customer relationships | Maximum | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 14 years | ||
Databases and content | Minimum | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 13 years | ||
Databases and content | Maximum | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 20 years | ||
Finite-lived trade names | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | 18 years | ||
Computer hardware | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | P3Y | ||
Furniture, fixtures and equipment | Minimum | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | P5Y | ||
Furniture, fixtures and equipment | Maximum | |||
Summary of Significant Accounting Policies | |||
Estimated Useful lives (in years) | P7Y |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ / shares in Units, $ in Thousands | Mar. 13, 2019USD ($)$ / sharesshares | Mar. 12, 2019USD ($)shares | Dec. 31, 2019shares | Aug. 14, 2019 | Jun. 30, 2019shares |
Business Combinations | |||||
Stock conversion ratio | 0.00757 | 0.00757 | |||
Warrants to purchase shares of common stock | 52,800,000 | 52,800,000 | |||
Shareholders of Jersey (Company Owners) | |||||
Business Combinations | |||||
Aggregate stock consideration issued | $ | $ 3,052,500 | $ 2,175,000 | |||
Number of shares issued | 305,250,000 | 217,500,000 | |||
Share price | $ / shares | $ 10 | ||||
Ownership percentage | 74.00% | 60.00% | |||
Warrants to purchase shares of common stock | 52,800,000 | ||||
Compensatory options issued | 24,806,793 | ||||
Number of ordinary shares owned of record by the sponsor | 10,600,000 | ||||
Churchill public shareholders | |||||
Business Combinations | |||||
Aggregate stock consideration issued | $ | $ 690,000 | ||||
Number of shares issued | 68,999,999 | ||||
Ownership percentage | 26.00% | ||||
Churchill Sponsor | |||||
Business Combinations | |||||
Aggregate stock consideration issued | $ | $ 187,500 | ||||
Number of shares issued | 17,250,000 | ||||
Certain investors | |||||
Business Combinations | |||||
Number of shares issued | 1,500,000 |
Business Combinations - Net of
Business Combinations - Net of cash acquired, and contingent consideration liabilities incurred in relation to the acquisitions (Details) - USD ($) $ in Thousands | Nov. 27, 2019 | Oct. 25, 2018 | Mar. 15, 2018 | Jun. 01, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 |
Business Combinations | ||||||||
Fair market value of the liability associated with the earn-out | $ 4,115 | |||||||
Goodwill | $ 1,328,045 | 1,282,919 | $ 1,311,253 | |||||
Finite life intangible | 38,719 | 7,928 | 3,600 | |||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Current assets | 2,137 | 706 | 51 | |||||
Computer hardware and other property | 86 | |||||||
Finite-lived intangible assets | $ 38,719 | 7,928 | 3,600 | |||||
Weighted-Average Amortization Period (in Years) | 13 years 29 days | |||||||
Indefinite-lived intangible assets | 70 | |||||||
Goodwill | $ 44,779 | 21,527 | 9,767 | |||||
Other non-current assets | 2 | 38 | 14 | |||||
Total assets | 85,723 | 30,199 | 13,502 | |||||
Current liabilities | 4,366 | 491 | 182 | |||||
Non-current liabilities | 8,920 | 2,054 | 19 | |||||
Total liabilities | 13,286 | 2,545 | 201 | |||||
Net assets acquired | 72,437 | 27,654 | 13,301 | |||||
Net assets acquired related to SequenceBase acquisition | 3,500 | |||||||
TrademarkVision | ||||||||
Business Combinations | ||||||||
Total purchase price | $ 20,042 | |||||||
Fair market value of the liability associated with the earn-out | 4,115 | 8,000 | 4,115 | |||||
Goodwill | $ 19,205 | |||||||
Kopernio | ||||||||
Business Combinations | ||||||||
Total purchase price | $ 3,497 | |||||||
Goodwill | 2,322 | |||||||
Finite life intangible | 1,258 | |||||||
Potential future cash payments | 3,500 | 3,500 | ||||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Finite-lived intangible assets | $ 1,258 | |||||||
Publons | ||||||||
Business Combinations | ||||||||
Total purchase price | $ 7,401 | |||||||
Fair market value of the liability associated with the earn-out | 5,900 | 3,100 | $ 2,960 | $ 5,900 | ||||
Potential future cash payments | $ 9,500 | $ 9,500 | ||||||
Darts-ip | ||||||||
Business Combinations | ||||||||
Goodwill | $ 44,779 | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Weighted-Average Amortization Period (in Years) | 11 years 6 months | |||||||
Customer relationships | ||||||||
Business Combinations | ||||||||
Finite life intangible | $ 1,000 | |||||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Finite-lived intangible assets | 1,000 | |||||||
Weighted-Average Amortization Period (in Years) | 12 years 8 months 12 days | |||||||
Customer relationships | Darts-ip | ||||||||
Business Combinations | ||||||||
Finite life intangible | $ 2,641 | |||||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Finite-lived intangible assets | $ 2,641 | |||||||
Weighted-Average Amortization Period (in Years) | 5 years | |||||||
Computer software | ||||||||
Business Combinations | ||||||||
Finite life intangible | 2,500 | |||||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Finite-lived intangible assets | $ 2,500 | |||||||
Weighted-Average Amortization Period (in Years) | 3 years 10 months 21 days | |||||||
Computer software | Darts-ip | ||||||||
Business Combinations | ||||||||
Finite life intangible | $ 9,025 | |||||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Finite-lived intangible assets | $ 9,025 | |||||||
Weighted-Average Amortization Period (in Years) | 6 years | |||||||
Database | Darts-ip | ||||||||
Business Combinations | ||||||||
Finite life intangible | $ 22,012 | |||||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Finite-lived intangible assets | $ 22,012 | |||||||
Weighted-Average Amortization Period (in Years) | 14 years | |||||||
Trade names | Darts-ip | ||||||||
Business Combinations | ||||||||
Finite life intangible | $ 1,541 | |||||||
Fair value of identifiable assets acquired and liabilities assumed for all acquisitions | ||||||||
Finite-lived intangible assets | $ 1,541 | |||||||
Weighted-Average Amortization Period (in Years) | 18 years |
Assets Held for Sale and Dive_3
Assets Held for Sale and Divested Operations (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - Brand Protection, Antipiracy and AntiFraud solutions of MarkMonitor Product Line $ in Thousands | Dec. 31, 2019USD ($) |
Current assets: | |
Cash and cash equivalents | $ 384 |
Prepaid expenses | 1,692 |
Other current assets | 198 |
Total current assets | 2,274 |
Computer hardware and other property, net | 2,961 |
Other intangible assets, net | 18,957 |
Other non-current assets | 1,993 |
Operating lease right-of-use assets | 4,434 |
Total Assets held for sale | 30,619 |
Current liabilities: | |
Accounts payable | 25 |
Accrued expenses and other current liabilities | 1,764 |
Current portion of deferred revenues | 18,067 |
Current portion of operating lease liabilities | 1,314 |
Total current liabilities | 21,170 |
Non-current portion of deferred revenues | 834 |
Other non-current liabilities | 163 |
Operating lease liabilities | 4,701 |
Total Liabilities held for sale | $ 26,868 |
Assets Held for Sale and Dive_4
Assets Held for Sale and Divested Operations - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Oct. 31, 2018 | Oct. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2020 |
Assets Held for Sale and Divested Operations | ||||||||
Impairment on assets held for sale | $ 18,431 | $ 18,431 | $ 0 | $ 0 | ||||
Write down of intangible assets | 17,967 | |||||||
Write down of goodwill | 468 | |||||||
Net gain on sale | 0 | $ 39,104 | $ 0 | |||||
IP Management (IPM) Product Line | ||||||||
Assets Held for Sale and Divested Operations | ||||||||
Net gain on sale | $ 36,072 | |||||||
Transaction costs | 3,032 | |||||||
Goodwill | 49,349 | |||||||
Repayment of term loan | $ 31,378 | |||||||
IP Management (IPM) Product Line | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||
Assets Held for Sale and Divested Operations | ||||||||
Total purchase price | 100,130 | |||||||
Goodwill | $ 49,349 | |||||||
Brand Protection, Antipiracy and AntiFraud solutions of MarkMonitor Product Line | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||
Assets Held for Sale and Divested Operations | ||||||||
Impairment on assets held for sale | $ 18,431 | |||||||
Write down of intangible assets | 17,967 | |||||||
Current Assets reclassified to Current Assets Held for Sale | 2,274 | 2,274 | 2,274 | |||||
Long Term Assets reclassified to Current Assets Held for Sale | 28,345 | 28,345 | 28,345 | |||||
Current Liabilities reclassified to Current Liabilities Held For Sale | 21,170 | 21,170 | 21,170 | |||||
Long Term Liabilities reclassified to Current Liabilities Held For Sale | 5,698 | 5,698 | 5,698 | |||||
Goodwill | $ 468 | $ 468 | $ 468 | |||||
Brand Protection, Antipiracy and AntiFraud solutions of MarkMonitor Product Line | Disposal Group, Held-for-sale, Not Discontinued Operations | Subsequent Event | ||||||||
Assets Held for Sale and Divested Operations | ||||||||
Total purchase price | $ 3,751 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Receivable | ||||
Accounts receivable | $ 350,369 | $ 345,371 | ||
Less: Accounts receivable allowance | (16,511) | (14,076) | $ (8,495) | $ (2,643) |
Accounts receivable, net | $ 333,858 | $ 331,295 | $ 317,808 | $ 361,586 |
Accounts Receivable - Allowance
Accounts Receivable - Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Activity in accounts receivable allowance | |||
Balance at beginning of year | $ 14,076 | $ 8,495 | $ 2,643 |
Additional provisions | 4,662 | 6,469 | 6,233 |
Write-offs and other deductions | (2,321) | (870) | (434) |
Exchange differences | 94 | (18) | 53 |
Balance at the end of year | $ 16,511 | $ 14,076 | $ 8,495 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease cost | |
Operating lease cost | $ 27,812 |
Short-term lease cost | 296 |
Variable lease cost | 1,213 |
Total lease cost | 29,321 |
Cash Paid for amounts included in measurement of lease liabilities | |
Operating cash flows from operating leases | 24,303 |
Right-of-use assets obtained in exchange for lease obligations | $ 6,386 |
Weighted-average remaining lease term - operating leases | 6 years |
Weighted-average discount rate - operating leases | 5.80% |
Leases - Future minimum lease p
Leases - Future minimum lease payments for operating leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases | |
2020 | $ 21,178 |
2021 | 17,854 |
2022 | 15,378 |
2023 | 12,816 |
2024 | 10,476 |
2025 & Thereafter | 25,460 |
Total operating lease payments | 103,162 |
Less imputed interest | (16,843) |
Total | $ 86,319 |
Leases - Future minimum annual
Leases - Future minimum annual rental payments under ASC 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases | |
2019 | $ 22,140 |
2020 | 19,531 |
2021 | 17,240 |
2022 | 15,333 |
2023 | 14,944 |
Thereafter | 40,367 |
Total operating lease commitments | $ 129,555 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases | |||
Operating leases, options to extend | true | ||
Operating leases, renewal lease term (in years) | 10 years | ||
Operating lease expense, not yet commenced | $ 4,158 | ||
Operating lease liability under restoration | 3,455 | $ 4,100 | |
Material sublease income | $ 0 | 0 | $ 0 |
Rental expense under operating leases | $ 25,527 | $ 17,255 | |
Minimum | |||
Leases | |||
Operating leases, lease term (in years) | 1 year | ||
Maximum | |||
Leases | |||
Operating leases, lease term (in years) | 5 years |
Computer Hardware and Other P_3
Computer Hardware and Other Property, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Computer Hardware and Other Property, Net. | |||
Computer hardware | $ 24,620 | $ 18,130 | |
Leasehold improvements | 12,496 | 13,298 | |
Furniture, fixtures and equipment | 4,412 | 6,816 | |
Total computer hardware and other property | 41,528 | 38,244 | |
Accumulated depreciation | (23,486) | (17,603) | |
Total computer hardware and other property, net | 18,042 | 20,641 | |
Depreciation | $ 9,181 | $ 9,422 | $ 6,997 |
Identifiable Intangible Asset_3
Identifiable Intangible Assets, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill And Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross | $ 2,323,087 | $ 2,286,085 |
Finite-lived intangible assets, Accumulated Amortization | (658,875) | (495,914) |
Total finite-lived intangible assets | 1,664,212 | 1,790,171 |
Indefinite-lived intangible | 164,428 | |
Intangible asset, Gross | 2,487,515 | 2,454,434 |
Intangible, Net, Total | $ 1,828,640 | 1,958,520 |
Remaining Weighted-Average Amortization Period (in Years) | 13 years 29 days | |
Minimum | ||
Goodwill And Intangible Assets [Line Items] | ||
Remaining Weighted-Average Amortization Period (in Years) | 2 years | |
Maximum | ||
Goodwill And Intangible Assets [Line Items] | ||
Remaining Weighted-Average Amortization Period (in Years) | 20 years | |
Trade names | ||
Goodwill And Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross | $ 1,570 | |
Total finite-lived intangible assets | 1,570 | |
Indefinite-lived intangible | $ 164,428 | 168,349 |
Remaining Weighted-Average Amortization Period (in Years) | 18 years | |
Customer relationships | ||
Goodwill And Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross | $ 280,493 | 291,503 |
Finite-lived intangible assets, Accumulated Amortization | (180,571) | (164,611) |
Total finite-lived intangible assets | $ 99,922 | 126,892 |
Remaining Weighted-Average Amortization Period (in Years) | 12 years 8 months 12 days | |
Databases and content | ||
Goodwill And Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross | $ 1,755,323 | 1,725,878 |
Finite-lived intangible assets, Accumulated Amortization | (342,385) | (233,733) |
Total finite-lived intangible assets | $ 1,412,938 | 1,492,145 |
Remaining Weighted-Average Amortization Period (in Years) | 13 years 9 months 18 days | |
Computer software | ||
Goodwill And Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross | $ 285,701 | 268,704 |
Finite-lived intangible assets, Accumulated Amortization | (135,919) | (97,570) |
Total finite-lived intangible assets | $ 149,782 | $ 171,134 |
Remaining Weighted-Average Amortization Period (in Years) | 3 years 10 months 21 days |
Identifiable Intangible Asset_4
Identifiable Intangible Assets, net - Estimated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Estimated amortization for five succeeding years | ||
2020 | $ 170,343 | |
2021 | 160,666 | |
2022 | 122,886 | |
2023 | 116,665 | |
2024 | 116,395 | |
Thereafter | 935,302 | |
Subtotal finite-lived intangible assets | 1,622,257 | |
Internally developed software projects in process | 41,955 | |
Total finite-lived intangible assets | 1,664,212 | $ 1,790,171 |
Intangibles with indefinite lives | 164,428 | |
Intangible, Net, Total | $ 1,828,640 | $ 1,958,520 |
Identifiable Intangible Asset_5
Identifiable Intangible Assets, net - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2019 | Nov. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2020 |
Identifiable Intangible Assets, net | |||||||
Impairment on assets held for sale | $ 18,431 | $ 18,431 | $ 0 | $ 0 | |||
Write down of intangible assets | 17,967 | ||||||
Amortization expense | 191,361 | $ 227,803 | $ 221,466 | ||||
Brand Protection, Antipiracy and AntiFraud solutions of MarkMonitor Product Line | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Identifiable Intangible Assets, net | |||||||
Intangibles assets held for sale | $ 36,924 | $ 36,924 | $ 36,924 | ||||
Impairment on assets held for sale | 18,431 | ||||||
Write down of intangible assets | $ 17,967 | ||||||
Brand Protection, Antipiracy and AntiFraud solutions of MarkMonitor Product Line | Disposal Group, Held-for-sale, Not Discontinued Operations | Subsequent Event | |||||||
Identifiable Intangible Assets, net | |||||||
Total purchase price | $ 3,751 | ||||||
Customer relationships | |||||||
Identifiable Intangible Assets, net | |||||||
Increase through business acquisitions | $ 3,641 | ||||||
Databases and content | |||||||
Identifiable Intangible Assets, net | |||||||
Increase through business acquisitions | 22,012 | ||||||
Computer software | |||||||
Identifiable Intangible Assets, net | |||||||
Increase through business acquisitions | 11,525 | ||||||
Trade names | |||||||
Identifiable Intangible Assets, net | |||||||
Increase through business acquisitions | $ 1,541 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 27, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 25, 2018USD ($) | Oct. 01, 2018USD ($) | Mar. 15, 2018USD ($) | Dec. 31, 2017USD ($) |
Goodwill | |||||||||||||
Goodwill, Beginning Balance | $ 1,282,919 | $ 1,311,253 | |||||||||||
Acquisition | 44,779 | 21,527 | $ 9,767 | ||||||||||
Transferred to Assets held for sale | (468) | ||||||||||||
Disposals | (49,349) | ||||||||||||
Impact of foreign currency fluctuations and other | 815 | (512) | |||||||||||
Goodwill, Ending Balance | $ 1,328,045 | $ 1,328,045 | $ 1,328,045 | $ 1,282,919 | $ 1,311,253 | ||||||||
Accumulated goodwill impairment | $ 0 | $ 0 | $ 0 | ||||||||||
Number of reporting unit | item | 5 | 5 | 1 | ||||||||||
Impairment of Long-Lived Assets to be Disposed of | 18,431 | $ 18,431 | $ 0 | $ 0 | |||||||||
Write down of goodwill | 468 | ||||||||||||
Goodwill acquired through business combinations | 1,328,045 | $ 1,328,045 | $ 1,328,045 | $ 1,282,919 | $ 1,311,253 | 1,328,045 | $ 1,282,919 | $ 1,311,253 | |||||
Brand Protection, Antipiracy and AntiFraud solutions of MarkMonitor Product Line | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||||||||
Goodwill | |||||||||||||
Goodwill | $ 468 | ||||||||||||
Impairment of Long-Lived Assets to be Disposed of | $ 18,431 | ||||||||||||
Brand Protection, Antipiracy and AntiFraud solutions of MarkMonitor Product Line | Disposal Group, Held-for-sale, Not Discontinued Operations | Subsequent Event | |||||||||||||
Goodwill | |||||||||||||
Total purchase price | $ 3,751 | ||||||||||||
IP Management (IPM) Product Line | |||||||||||||
Goodwill | |||||||||||||
Goodwill | $ 49,349 | ||||||||||||
IP Management (IPM) Product Line | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||||||||
Goodwill | |||||||||||||
Total purchase price | 100,130 | ||||||||||||
Goodwill | $ 49,349 | ||||||||||||
Darts-ip | |||||||||||||
Goodwill | |||||||||||||
Goodwill acquired through business combinations | $ 44,779 | ||||||||||||
TrademarkVision | |||||||||||||
Goodwill | |||||||||||||
Goodwill acquired through business combinations | $ 19,205 | ||||||||||||
Kopernio | |||||||||||||
Goodwill | |||||||||||||
Goodwill acquired through business combinations | $ 2,322 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
May 31, 2019 | Apr. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest rate swap | |||||
Derivative Instruments | |||||
Interest payments | $ 50,000 | $ 300,000 | |||
Noncurrent assets | Interest rate swap | |||||
Derivative Instruments | |||||
Fair value of interest rate swap liability | $ 2,778 | $ 3,644 | |||
Forward contracts | |||||
Derivative Instruments | |||||
Notional values | 0 | 0 | |||
Forward contracts | Accrued expenses and other current liabilities | |||||
Derivative Instruments | |||||
Fair value of the forward contracts | 0 | 0 | |||
Revenues, net | Forward contracts | |||||
Derivative Instruments | |||||
Losses/(gains) on the forward contracts | $ 0 | $ 240 | $ (1,479) |
Derivative Instruments - Change
Derivative Instruments - Changes in AOCI (net of tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning | $ 1,050,607 | $ 1,286,106 | $ 1,505,361 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (10,237) | (8,626) | 17,454 |
Balance at the end | 1,360,412 | 1,050,607 | 1,286,106 |
AOCI (net of tax) related to cash flow hedges | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning | 3,644 | 1,107 | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (7,107) | 2,313 | 3,011 |
Balance at the end | (2,778) | 3,644 | 1,107 |
Amount reclassified out of Other comprehensive income (loss) to net loss | AOCI (net of tax) related to cash flow hedges | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ 685 | $ 224 | $ (1,904) |
Fair Value Measurements - Input
Fair Value Measurements - Inputs and assumptions used to value the earn-out liability (Details) | 12 Months Ended |
Dec. 31, 2018Rate | |
TrademarkVision | Risk free rate | |
Inputs and assumptions | |
Earn-out liability, Fair value input (as a percent) | 0.0277 |
TrademarkVision | Discount Rate | |
Inputs and assumptions | |
Earn-out liability, Fair value input (as a percent) | 0.0809 |
TrademarkVision | Expected life | |
Inputs and assumptions | |
Expected life (in years) | 1 year 6 months 15 days |
Publons | Risk free rate | Minimum | |
Inputs and assumptions | |
Earn-out liability, Fair value input (as a percent) | 0.0234 |
Publons | Risk free rate | Maximum | |
Inputs and assumptions | |
Earn-out liability, Fair value input (as a percent) | 0.0263 |
Publons | Discount Rate | Minimum | |
Inputs and assumptions | |
Earn-out liability, Fair value input (as a percent) | 0.0923 |
Publons | Discount Rate | Maximum | |
Inputs and assumptions | |
Earn-out liability, Fair value input (as a percent) | 0.0972 |
Publons | Expected life | Minimum | |
Inputs and assumptions | |
Expected life (in years) | 1 year 15 days |
Publons | Expected life | Maximum | |
Inputs and assumptions | |
Expected life (in years) | 3 years 15 days |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in the earn-out, Level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at the beginning of the period | $ 7,075 | $ 5,900 | $ 0 |
Earn-out liability | 5,900 | ||
Business combinations | 4,115 | ||
Payment of Earn-out liability | (2,371) | (2,470) | |
Revaluations included in earnings | 6,396 | (470) | |
Balance at the end of the period | $ 11,100 | $ 7,075 | $ 5,900 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and liabilities that were recognized at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Fair value of assets | $ 3,644 | |
Liabilities | ||
Fair value of liabilities | $ 13,878 | 7,075 |
Earn-out | ||
Liabilities | ||
Fair value of liabilities | 11,100 | 7,075 |
Interest rate swap | ||
Assets | ||
Fair value of assets | 3,644 | |
Liabilities | ||
Fair value of liabilities | 2,778 | |
Level 2 | ||
Assets | ||
Fair value of assets | 3,644 | |
Liabilities | ||
Fair value of liabilities | 2,778 | |
Level 2 | Interest rate swap | ||
Assets | ||
Fair value of assets | 3,644 | |
Liabilities | ||
Fair value of liabilities | 2,778 | |
Level 3 | ||
Liabilities | ||
Fair value of liabilities | 11,100 | 7,075 |
Level 3 | Earn-out | ||
Liabilities | ||
Fair value of liabilities | $ 11,100 | $ 7,075 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Measurements | |||
MarkMonitor Product Line were sold to OpSec Security for a purchase price | $ 3,751 | ||
Loss on impairment | $ 18,431 | ||
Level 2 | |||
Fair Value Measurements | |||
Fair value of company's debt | $ 1,692,750 | $ 1,950,318 |
Pension and Other Post-Retire_3
Pension and Other Post-Retirement Benefits - Defined contribution plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension and Other Post-Retirement Benefits | |||
Defined contribution plan expense | $ 12,143 | $ 13,170 | $ 12,488 |
Pension and Other Post-Retire_4
Pension and Other Post-Retirement Benefits - Projected benefit obligations, the plan assets, and the funded status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change in benefit obligation | |||
Projected benefit obligation at beginning of year | $ 14,486 | $ 14,258 | |
Service costs | 870 | 888 | $ 442 |
Interest cost | 311 | 283 | 168 |
Plan participant contributions | 114 | 109 | |
Actuarial losses | 1,492 | 29 | |
Divestiture | 0 | (138) | |
Benefit payments | (312) | (274) | |
Expenses paid from assets | (36) | (35) | |
Settlements | (89) | 0 | |
Curtailment | 0 | 0 | |
Effect of foreign currency translation | (273) | (634) | |
Projected benefit obligation at end of year | 16,563 | 14,486 | 14,258 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 5,184 | 5,062 | |
Actual return on plan assets | 198 | 95 | |
Settlements | (89) | 0 | |
Plan participant contributions | 113 | 109 | |
Employer contributions | 533 | 460 | |
Benefit payments | (312) | (274) | |
Expenses paid from assets | (36) | (35) | |
Effect of foreign currency translation | (104) | (233) | |
Fair value of plan assets at end of year | 5,487 | 5,184 | $ 5,062 |
Unfunded status | $ (11,076) | $ (9,302) |
Pension and Other Post-Retire_5
Pension and Other Post-Retirement Benefits - Balance sheets presentation (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Pension and Other Post-Retirement Benefits | ||
Current liabilities | $ (635) | $ (443) |
Non current liabilities | (10,441) | (8,859) |
AOCI | $ 470 | $ (1,054) |
Pension and Other Post-Retire_6
Pension and Other Post-Retirement Benefits - Accumulated benefit obligation (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Plans with accumulated benefit obligation in excess of plan assets: | ||
Accumulated benefit obligation | $ 15,465 | $ 13,605 |
Fair value of plan assets | 5,487 | 5,184 |
Plans with projected benefit obligation in excess of plan assets: | ||
Projected benefit obligation | 16,563 | 14,486 |
Fair value of plan assets | $ 5,487 | $ 5,184 |
Pension and Other Post-Retire_7
Pension and Other Post-Retirement Benefits - Net periodic benefit cost changes in plan assets and benefit obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension and Other Post-Retirement Benefits | |||
Service costs | $ 870 | $ 888 | $ 442 |
Interest cost | 311 | 283 | 168 |
Expenses paid from assets | (157) | (150) | 0 |
Amortization of actuarial gains | (76) | (78) | (4) |
Settlement | 7 | 0 | 0 |
Net period benefit cost | $ 955 | $ 943 | $ 606 |
Pension and Other Post-Retire_8
Pension and Other Post-Retirement Benefits - Periodic benefit cost assumptions (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | ||
Discount rate | 2.26% | 2.31% |
Expected return on plan assets | 3.00% | 3.00% |
Rate of compensation increase | 3.68% | 3.76% |
Social Security increase rate | 2.50% | 2.50% |
Pension increase rate | 1.80% | 1.80% |
Pension and Other Post-Retire_9
Pension and Other Post-Retirement Benefits - Benefit obligations assumptions (Details) | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ||
Discount rate | 1.60% | 2.26% |
Rate of compensation increase | 3.77% | 3.68% |
Social Security increase rate | 2.50% | 2.50% |
Pension increase rate | 1.80% | 1.80% |
Maximum | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ||
Discount rate | 6.45% | 7.10% |
Minimum | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ||
Discount rate | 0.45% | 0.40% |
Pension and Other Post-Retir_10
Pension and Other Post-Retirement Benefits - Plan assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined benefit plans | |||
Plan asset investment | 100.00% | ||
Expected weighted-average long-term rate of return on plan assets | 3.00% | 3.00% | |
Fair value measurement of pension plan assets: | |||
Fair value measurement of pension plan assets | $ 5,487 | $ 5,184 | $ 5,062 |
Insurance contract | |||
Fair value measurement of pension plan assets: | |||
Fair value measurement of pension plan assets | 5,487 | 5,184 | |
Level 3 | Insurance contract | |||
Fair value measurement of pension plan assets: | |||
Fair value measurement of pension plan assets | $ 5,487 | $ 5,184 |
Pension and Other Post-Retir_11
Pension and Other Post-Retirement Benefits - Estimated pension benefit payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2020 | $ 677 |
2021 | 550 |
2022 | 707 |
2023 | 851 |
2024 | 829 |
Years 2025 - 2029 | 4,943 |
Total | 8,557 |
Estimated payments in 2020 | $ 401 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt | ||
Total debt outstanding | $ 1,665,000 | $ 2,028,993 |
Debt issuance costs | (25,205) | (34,838) |
Term Loan Facility, discount | (2,184) | (3,633) |
Short-term debt, including current portion of long-term debt | (9,000) | (60,345) |
Long-term debt, net of current portion and deferred financing charges | $ 1,628,611 | $ 1,930,177 |
Weighted average interest rate | 4.818% | 6.259% |
Senior Unsecured Notes (2026) | ||
Debt | ||
Effective Interest Rate | 4.50% | |
Total debt outstanding | $ 700,000 | |
Senior Unsecured Notes (2024) | ||
Debt | ||
Effective Interest Rate | 7.875% | |
Total debt outstanding | $ 500,000 | |
Term Loan Facility (2026) | ||
Debt | ||
Effective Interest Rate | 5.049% | |
Total debt outstanding | $ 900,000 | |
Term Loan Facility (2023) | ||
Debt | ||
Effective Interest Rate | 5.729% | |
Total debt outstanding | $ 1,483,993 | |
The Revolving Credit Facility | ||
Debt | ||
Effective Interest Rate | 5.049% | |
Total debt outstanding | $ 65,000 | |
The Revolving Credit Facility | ||
Debt | ||
Effective Interest Rate | 5.754% | |
Total debt outstanding | $ 5,000 | |
The Revolving Credit Facility | ||
Debt | ||
Effective Interest Rate | 5.729% | |
Total debt outstanding | $ 40,000 |
Debt - Summary of Debt - Senior
Debt - Summary of Debt - Senior Secured Credit Facility (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt | ||||
Aggregate principal amount | $ 1,665,000 | $ 2,028,993 | ||
Loss on the extinguishment of debt | $ 3,179 | (50,676) | 0 | $ 0 |
Term Loan Facility | ||||
Debt | ||||
Aggregate principal amount | 900,000 | |||
Repayments of debt | 1,550,000 | |||
Revolving Credit Facility | ||||
Debt | ||||
Aggregate principal amount | 250,000 | 65,000 | 45,000 | |
Repayments of debt | 175,000 | |||
Collateralized amount | $ 3,918 | |||
Senior Unsecured Notes | ||||
Debt | ||||
Redemption Price (as a percentage of principal) | 100.00% | |||
Redemption (as a percent) | 100.00% | |||
Changes in control (as a percent) | 101.00% | |||
Collateralized amount | $ 9,646 | |||
Senior Unsecured Notes (2026) | ||||
Debt | ||||
Aggregate principal amount | $ 700,000 | |||
Aggregate principal amount | $ 700,000 | |||
Bearing Interest | 4.50% | |||
Effective Interest Rate | 4.50% | |||
Redemption through equity offerings, maximum (as a percent) | 40.00% | |||
Redemption through equity offerings, Redemption Price (as a percentage of principal) | 104.50% | |||
Threshold minimum original aggregate principal amount of the Notes issued on the Closing Date remaining outstanding (as a percent) | 50.00% | |||
Threshold maximum redemption period | 120 days | |||
Senior Unsecured Notes (2024) | ||||
Debt | ||||
Aggregate principal amount | $ 500,000 | |||
Effective Interest Rate | 7.875% | |||
Redemption Price (as a percentage of principal) | 103.938% | |||
Letter of credit | ||||
Debt | ||||
Collateralized amount | $ 37 | |||
Sublimit | $ 40,000 | |||
LIBOR | Revolving Credit Facility | ||||
Debt | ||||
Interest rate spread (as a percentage) | 3.25% | |||
Prime | Revolving Credit Facility | ||||
Debt | ||||
Interest rate spread (as a percentage) | 2.25% |
Debt - Summary of Debt - Seni_2
Debt - Summary of Debt - Senior Unsecured Notes - Redemption Price (Details) | 12 Months Ended |
Dec. 31, 2019 | |
2022 | |
Debt Instrument, Redemption | |
Redemption Price (as a percentage of principal) | 102.25% |
2023 | |
Debt Instrument, Redemption | |
Redemption Price (as a percentage of principal) | 101.125% |
2024 and thereafter | |
Debt Instrument, Redemption | |
Redemption Price (as a percentage of principal) | 100.00% |
Senior Unsecured Notes | |
Debt Instrument, Redemption | |
Redemption Price (as a percentage of principal) | 100.00% |
Debt - Summary of Debt - Credit
Debt - Summary of Debt - Credit Facilities (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt | |||
Aggregate principal amount | $ 1,665,000 | $ 2,028,993 | |
Debt Issuance Costs, Net | $ 25,205 | 34,838 | |
Write off of Deferred Debt Issuance Cost | $ 41,980 | ||
Term Loan Facility | |||
Debt | |||
Aggregate principal amount | 900,000 | ||
Senior Unsecured Notes | |||
Debt | |||
Redemption (as a percent) | 100.00% | ||
Collateralized amount | $ 9,646 | ||
Credit facilities | |||
Debt | |||
Amortization of Debt Issuance Costs | 17 | ||
Debt Issuance Costs, Net | 25,818 | ||
Revolving Credit Facility | |||
Debt | |||
Aggregate principal amount | 250,000 | 65,000 | $ 45,000 |
Collateralized amount | 3,918 | ||
Letter of credit | |||
Debt | |||
Sublimit | $ 40,000 | ||
Collateralized amount | 37 | ||
Term Loan Facility (2026) | |||
Debt | |||
Aggregate principal amount | $ 900,000 | ||
Redemption (as a percent) | 0.25% | ||
Amortization rate (as a percentage) | 1.00% | ||
LIBOR | Revolving Credit Facility | |||
Debt | |||
Interest rate spread (as a percentage) | 3.25% | ||
Prime | Revolving Credit Facility | |||
Debt | |||
Interest rate spread (as a percentage) | 2.25% | ||
Federal Funds Effective Rate | Credit facilities | |||
Debt | |||
Interest rate spread (as a percentage) | 0.50% | ||
Eurocurrency rate | Credit facilities | |||
Debt | |||
Interest rate spread (as a percentage) | 1.00% | ||
Interest period | 1 month | ||
Interest rate floor (as a percentage) | 0.00% |
Debt - Summary of Debt - Seni_3
Debt - Summary of Debt - Senior Secured Credit Facility - Outstanding borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt | ||
2020 | $ 9,000 | |
2021 | 9,000 | |
2022 | 9,000 | |
2023 | 9,000 | |
2024 | 74,000 | |
Thereafter | 1,555,000 | |
Total debt outstanding | 1,665,000 | $ 2,028,993 |
Less: capitalized debt issuance costs and original issue discount | (27,389) | |
Total debt outstanding as of December 31, 2019 | $ 1,637,611 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of revenues | |||
Total revenues, gross | $ 974,783 | $ 971,620 | $ 967,307 |
Deferred revenues adjustment | (438) | (3,152) | (49,673) |
Total Revenues, net | 974,345 | 968,468 | 917,634 |
Prepaid expenses | |||
Disaggregation of revenues | |||
Prepaid sales commissions | 12,387 | 10,407 | |
Noncurrent assets | |||
Disaggregation of revenues | |||
Prepaid sales commissions | 11,620 | 9,493 | |
Subscription revenues | |||
Disaggregation of revenues | |||
Total revenues, gross | 805,518 | 794,097 | 785,717 |
Transaction revenues | |||
Disaggregation of revenues | |||
Total revenues, gross | $ 169,265 | $ 177,523 | $ 181,590 |
Revenue - Contract Balances and
Revenue - Contract Balances and Transaction Price Allocated to the Remaining Performance Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable | |||
Accounts receivables, net - Opening | $ 331,295 | $ 317,808 | $ 361,586 |
Accounts receivables, net - Closing | 333,858 | 331,295 | 317,808 |
Accounts Receivables - Increase/(decrease) | (2,563) | (13,487) | 43,778 |
Current portion of deferred revenues | |||
Current portion of deferred revenues - Opening | 391,102 | 361,260 | 333,944 |
Current portion of deferred revenues - Closing | 407,325 | 391,102 | 361,260 |
Increase Decrease In Contract With Customer, Current Liability | (16,223) | (29,842) | (27,316) |
Non-current portion of deferred revenues | |||
Non-current portion of deferred revenues - Opening | 17,112 | 15,796 | 18,602 |
Non-current portion of deferred revenues - Closing | 19,723 | 17,112 | 15,796 |
Increase Decrease In Contract With Customer, Non Current Liability | $ (2,611) | $ (1,316) | $ 2,806 |
Revenue - Transaction Price All
Revenue - Transaction Price Allocated to the Remaining Performance Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Transaction Price Allocated to the Remaining Performance Obligation | |||
Percentage of remaining performance obligation | 34.20% | ||
Contract with Customer, Liability | $ 391,102 | $ 361,260 | $ 333,944 |
Deferred Revenue Recognized In Future | $ 63,100 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |||
Transaction Price Allocated to the Remaining Performance Obligation | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months | ||
Percentage of remaining performance obligation | 65.80% | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |||
Transaction Price Allocated to the Remaining Performance Obligation | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | ||
Percentage of remaining performance obligation | 22.10% | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |||
Transaction Price Allocated to the Remaining Performance Obligation | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 7 years | ||
Percentage of remaining performance obligation | 12.10% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Dec. 31, 2019$ / sharesshares | Mar. 13, 2019shares | Dec. 31, 2018$ / sharesshares | Jun. 30, 2019$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 30, 2019shares |
Shareholders' Equity | ||||||
Subscribed number of shares | 0 | 198,602 | ||||
Issued and outstanding | 87,749,999 | 87,749,999 | 87,749,999 | |||
Common Stock, Shares, Issued | 306,874,115 | 217,526,425 | 306,874,115 | |||
Common Stock, Shares, Outstanding | 306,874,115 | 217,526,425 | 306,874,115 | |||
Treasury Stock, Shares | 0 | 0 | ||||
Merger, Conversion Ratio | 0.00757 | 0.00757 | ||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0 | $ 0 | $ 0 | |||
Common Stock, Votes Per Share | 1 | 1 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 52,800,000 | 52,800,000 | 52,800,000 | |||
Class of Warrant or Right, Days from which Warrants or Rights Exercisable | 30 days | |||||
Warrants Issued During Period Exercised | 100,114 | |||||
Sponsor Agreement [Member] | ||||||
Shareholders' Equity | ||||||
Common Stock, Shares, Issued | 7,000,000 | 7,000,000 | 7,000,000 | |||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 20 | $ 20 | $ 20 | |||
Minimum | ||||||
Shareholders' Equity | ||||||
Warrants, Beneficial Interest | 4.90% | 4.90% | ||||
Consecutive Trading Day Period | 40 days | 40 days | ||||
Maximum | ||||||
Shareholders' Equity | ||||||
Warrants, Beneficial Interest | 9.80% | 9.80% | ||||
Consecutive Trading Day Period | 60 days | 60 days | ||||
Churchill public shareholders | ||||||
Shareholders' Equity | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 68,999,999 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 11.50 | $ 11.50 | $ 11.50 | |||
Common Class A [Member] | ||||||
Shareholders' Equity | ||||||
Common Stock, Shares, Issued | 68,999,999 | 68,999,999 | 68,999,999 | |||
Common Stock, Shares, Outstanding | 68,999,999 | 68,999,999 | 68,999,999 | |||
Common Class B [Member] | ||||||
Shareholders' Equity | ||||||
Common Stock, Shares, Issued | 18,750,000 | 18,750,000 | 18,750,000 | |||
Common Stock, Shares, Outstanding | 18,750,000 | 18,750,000 | 18,750,000 | |||
Management Incentive Plan | ||||||
Shareholders' Equity | ||||||
Vesting period | 5 years |
Employment and Compensation A_3
Employment and Compensation Arrangements (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 14, 2019 | May 13, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 09, 2019 | Sep. 10, 2019 | Jun. 30, 2019 |
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 2,416,534 | |||||||
Common Stock, Shares, Issued | 306,874,115 | 217,526,425 | ||||||
Shares Issued, Price Per Share | $ 17.25 | $ 16 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.43% | 3.02% | 2.53% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | |||||
Common Class B [Member] | ||||||||
Employment and Compensation Arrangements | ||||||||
Common Stock, Shares, Issued | 18,750,000 | 18,750,000 | ||||||
Management Incentive Plan | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | |||||||
Incentive Award Plan 2019 | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | |||||||
Common Stock, Capital Shares Reserved for Future Issuance | 60,000,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 37,302,599 | 35,475,302 | ||||||
Allocated Share-based Compensation Expense | $ 51,383 | $ 13,715 | $ 17,663 | |||||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | 751 | 2,740 | $ 3,192 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 6,873 | $ 19,637 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 7 months 6 days | |||||||
Share Based Compensation Expense For Incremental Increase in Fair Value of Amended Awards | $ 11,640 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Exercised | $ 25,123 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 2.94 | $ 1.87 | ||||||
Incentive Award Plan 2019 | Minimum | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 1 year | |||||||
Incentive Award Plan 2019 | Maximum | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 10 years | |||||||
Sponsor Agreement [Member] | ||||||||
Employment and Compensation Arrangements | ||||||||
Common Stock, Shares, Issued | 7,000,000 | 7,000,000 | ||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | ||||||||
Employment and Compensation Arrangements | ||||||||
Allocated Share-based Compensation Expense | $ 25,013 | |||||||
Increase Decrease in Expense Relating Granting of Incentive Shares | 48,102 | |||||||
Increase Decrease in Expense Relating To Shares Purchased By Founders | $ 4,411 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.42% | 2.20% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 20.00% | 20.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | ||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Common Class B [Member] | ||||||||
Employment and Compensation Arrangements | ||||||||
Common Stock, Shares, Issued | 1,500,000 | |||||||
Shares Issued, Price Per Share | $ 15,000 | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Share Capital | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 5,309,713 | |||||||
Increase Decrease in Expense Relating To Vesting of Ordinary Shares | $ 1,193 | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Common Stock Issued Price Atleast $15.25 [Member] | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 2,654,856 | |||||||
Sale of Stock, Price Per Share | $ 15.25 | |||||||
Increase Decrease in Expense Relating To Vesting of Ordinary Shares | $ 9,396 | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Common Stock Issued Price Atleast $15.25 [Member] | Second anniversary | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.33% | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Common Stock Issued Price Atleast $15.25 [Member] | Third anniversary | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.66% | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Common Stock Issued Price Atleast $17.50 [Member] | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 2,654,856 | |||||||
Sale of Stock, Price Per Share | $ 17.50 | |||||||
Increase Decrease in Expense Relating To Vesting of Ordinary Shares | $ 13,101 | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Common Stock Issued Price Atleast $17.50 [Member] | Second anniversary | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.33% | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Common Stock Issued Price Atleast $17.50 [Member] | Third anniversary | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.66% | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Warrant [Member] | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 17,265,826 | |||||||
Sale of Stock, Price Per Share | $ 17.50 | |||||||
Increase Decrease in Expense Relating To Vesting of Warrants | $ 6,297 | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Warrant [Member] | Second anniversary | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.33% | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Warrant [Member] | Third anniversary | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.66% | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Minimum | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Discount for Lack Of Marketability | 3.00% | 3.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 2 years | |||||||
Sponsor Agreement [Member] | Transaction Related Awards 2019 [Member] | Maximum | ||||||||
Employment and Compensation Arrangements | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Discount for Lack Of Marketability | 7.00% | 7.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 3 years |
Employment and Compensation A_4
Employment and Compensation Arrangements - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Number of Options | |||
Outstanding at beginning of year | 24,524,698 | ||
Modified options | 24,339,097 | ||
Granted | 2,321,348 | ||
Expired | (463,919) | ||
Forfeited | (2,840,539) | ||
Exercised | (2,416,534) | ||
Modified | (244,829) | ||
Outstanding at end of year | 24,524,698 | 20,880,225 | 24,524,698 |
Vested and exercisable | 16,110,638 | ||
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of year | $ 12.44 | ||
Granted | 17.55 | ||
Expired | 11.47 | ||
Forfeited | 12.97 | ||
Exercised | 6.63 | ||
Modified | 13.36 | ||
Outstanding at end of year | $ 12.44 | 12.18 | $ 12.44 |
Vested and exercisable | $ 11.12 | ||
Weighted Average Remaining Contractual Life | |||
Outstanding | 7 years 3 months 18 days | 8 years 6 months | |
Granted | 7 years 8 months 12 days | ||
Vested and exercisable | 7 years | ||
Aggregate Intrinsic Value | |||
Outstanding at beginning of year | $ 13,293 | ||
Granted | 5,431 | ||
Outstanding at end of year | $ 13,293 | 105,119 | $ 13,293 |
Vested and exercisable | $ 94,181 | ||
Originally Reported | |||
Number of Options | |||
Outstanding at beginning of year | 185,601 | ||
Outstanding at end of year | 185,601 | 185,601 | |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of year | $ 1,587 | ||
Outstanding at end of year | $ 1,587 | $ 1,587 | |
Weighted Average Remaining Contractual Life | |||
Outstanding | 8 years 6 months | ||
Aggregate Intrinsic Value | |||
Outstanding at beginning of year | $ 13,293 | ||
Outstanding at end of year | $ 13,293 | $ 13,293 |
Employment and Compensation A_5
Employment and Compensation Arrangements - Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employment and Compensation Arrangements | |||
Weighted-average expected dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average expected volatility | 19.87% | 21.86% | 27.50% |
Weighted-average risk-free interest rate | 2.43% | 3.02% | 2.53% |
Expected life (in years) | 7 years 3 months 18 days | 8 years 6 months | 9 years |
Maximum | |||
Employment and Compensation Arrangements | |||
Expected volatility - Maximum | 20.26% | 23.05% | 27.90% |
Minimum | |||
Employment and Compensation Arrangements | |||
Expected volatility - Minimum | 19.52% | 21.00% | 24.84% |
Employment and Compensation A_6
Employment and Compensation Arrangements - Transactions Related Awards (Details) - USD ($) $ in Thousands | Dec. 09, 2019 | Sep. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Employment and Compensation Arrangements | |||||
Aggregate purchase of shares | 49,680,000 | 39,675,000 | |||
Aggregate purchase price of shares | $ 1,582 | $ 1,574 | $ 9,558 | ||
Risk-free interest rate | 2.43% | 3.02% | 2.53% | ||
Expected dividend rate | 0.00% | 0.00% | 0.00% | ||
Management Incentive Plan | |||||
Employment and Compensation Arrangements | |||||
Vesting period | 5 years |
Employment and Compensation A_7
Employment and Compensation Arrangements - Restricted Stock Units (RSUs) (Details) - Restricted Stock Units (RSUs) [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding as of December 31, 2018 | shares | 0 |
Granted | shares | 327,398 |
vested | shares | (34,216) |
Outstanding as of December 31, 2019 | shares | 293,182 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding as of December 31, 2018 | $ / shares | $ 0 |
Granted | $ / shares | 16.66 |
Vested | $ / shares | 15.90 |
Outstanding as of December 31, 2019 | $ / shares | $ 16.75 |
Fair value of RSUs vested | $ | $ 544 |
Income Taxes - Income tax (bene
Income Taxes - Income tax (benefit)/expense on income/(loss)by jurisdiction (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
Total current | $ 18,541 | $ 20,616 | $ 14,445 |
Total deferred | (8,340) | (14,967) | (35,738) |
Income tax expense | 10,201 | 5,649 | (21,293) |
U.K. | |||
Income Taxes | |||
U.K., Current | 677 | 1,014 | (142) |
U.K., Deferred | 0 | 85 | (427) |
U.S. | |||
Income Taxes | |||
U.S. Federal, Current | 6,917 | 6,395 | 5,202 |
U.S. State, Current | 988 | 2,146 | 833 |
U.S. Federal, Deferred | (824) | (5,465) | (10,648) |
U.S. State, Deferred | (223) | (227) | (142) |
Other | |||
Income Taxes | |||
Other, Current | 9,959 | 11,061 | 8,552 |
Other, Deferred | $ (7,293) | $ (9,360) | $ (24,521) |
Income Taxes - Components of pr
Income Taxes - Components of pre-tax loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
Pre-tax loss | $ (200,776) | $ (236,513) | $ (285,223) |
U.K. | |||
Income Taxes | |||
Pre-tax loss | (199,032) | (222,043) | (211,944) |
U.S. | |||
Income Taxes | |||
Pre-tax loss | 3,733 | (11,880) | (58,054) |
Other | |||
Income Taxes | |||
Other loss | $ (5,477) | $ (2,590) | $ (15,225) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the statutory tax rate to effective tax rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RATE | |||
Loss before tax: | $ (200,776) | $ (236,513) | $ (285,223) |
Income tax, at the statutory rate | $ 10,201 | $ 5,649 | $ (54,905) |
Income tax expense based on federal statutory rate | 19.00% | 19.00% | 19.30% |
Effect of different tax rates | (4.40%) | (1.20%) | 3.30% |
BEAT | (1.20%) | ||
Tax rate modifications | 5.70% | ||
Valuation Allowances | (17.80%) | (18.00%) | (20.80%) |
Other Permanent differences | (1.30%) | (0.70%) | 0.30% |
Non-deductible transaction costs | (2.10%) | ||
Withholding tax | (0.70%) | (0.20%) | (0.30%) |
Tax indemnity | 3.70% | (2.70%) | |
Sale of Subsidiary | 2.20% | ||
Other | (0.30%) | (0.80%) | |
Effective rate | (5.10%) | (2.40%) | 7.50% |
Income taxes - Tax effects of t
Income taxes - Tax effects of the significant components of temporary differences (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Taxes | ||
Accounts Receivable | $ 1,346 | $ 916 |
Accrued expenses | 4,461 | 3,735 |
Deferred revenues | 2,679 | 3,570 |
Other assets | 5,721 | 9,655 |
Unrealized gain/loss | 94 | 74 |
Debt issuance costs | 3,176 | 1,199 |
Operating losses and tax attributes | 177,853 | 135,219 |
Total deferred tax assets | 195,330 | 154,368 |
Valuation allowances | (165,157) | (133,856) |
Total tax assets | 30,173 | 20,512 |
Other identifiable intangible assets, net | (32,834) | (43,247) |
Other liabilities | (21,012) | (7,785) |
Goodwill | (4,233) | (42) |
Fixed Assets, net | (1,153) | (238) |
Total deferred tax liabilities | (59,232) | (51,312) |
Net deferred tax liabilities | $ (29,059) | $ (30,800) |
Income taxes - Balance Sheet Pr
Income taxes - Balance Sheet Presentation (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Line Items] | ||||
Deferred income taxes | $ 19,488 | $ 12,426 | ||
Deferred tax liability | (48,547) | (43,226) | ||
Total tax liabilities | $ (29,059) | $ (30,800) | ||
US federal corporate income tax rate | 19.00% | 19.00% | 19.30% | |
U.S. | ||||
Income Tax Disclosure [Line Items] | ||||
US federal corporate income tax rate | 35.00% | 21.00% | 21.00% |
Income taxes - SAB 118 (Details
Income taxes - SAB 118 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Income Taxes | |
Provision benefit under SAP 118 | $ 2,237 |
Income taxes - Deferred tax ass
Income taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Line Items] | |||||
Income tax rate | 19.00% | 19.00% | 19.30% | ||
Provisional tax benefit | $ 2,237 | ||||
Deferred tax asset valuation allowance | $ 133,856 | $ 165,157 | $ 133,856 | ||
Valuation allowance increase | 31,301 | $ 40,912 | |||
U.K. | |||||
Income Tax Disclosure [Line Items] | |||||
Tax loss carryforwards | 470,736 | ||||
U.S. | |||||
Income Tax Disclosure [Line Items] | |||||
Income tax rate | 35.00% | 21.00% | 21.00% | ||
Provisional tax benefit | $ 2,237 | ||||
Tax loss carryforwards | 127,717 | ||||
State Tax Loss Carry Forward | 75,340 | ||||
Operating loss expiration period | 20 years | ||||
BELGIUM | |||||
Income Tax Disclosure [Line Items] | |||||
Income tax rate | 25.00% | ||||
Change in corporate tax rate | $ 14,290 | ||||
JAPAN | |||||
Income Tax Disclosure [Line Items] | |||||
Tax loss carryforwards | $ 64,748 | ||||
Operating loss expiration period | 9 years | ||||
Other | |||||
Income Tax Disclosure [Line Items] | |||||
Tax loss carryforwards | $ 20,840 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Uncertain tax positions | |||
Net unrecognized tax benefits that, if recognized, would impact the Company's effective tax rate | $ 1,145 | $ 1,450 | |
Accrued interest and penalties | 354 | 449 | |
Balance at the Beginning of the year | 1,450 | 91 | $ 211 |
Increases for tax positions taken in prior years | 1,339 | ||
Increases for tax positions taken in the current year | 412 | 72 | |
Decreases due to statute expirations | (52) | (120) | |
Decrease due to payment | (717) | ||
Balance at the End of the year | 1,145 | $ 1,450 | $ 91 |
Minimum | |||
Uncertain tax positions | |||
Reasonable change of unrecognized tax benefits in the next 12 months | 291 | ||
Maximum | |||
Uncertain tax positions | |||
Reasonable change of unrecognized tax benefits in the next 12 months | $ 453 |
Income taxes - Deferred tax val
Income taxes - Deferred tax valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
Beginning Balance, January 1 | $ 133,856 | $ 92,944 | $ 47,185 |
Change Charged to Expense/(Income) | 30,854 | 41,629 | 44,790 |
Change Charged to CTA | 447 | 381 | 713 |
Change Charged to OCI | (1,098) | 256 | |
Ending Balance December 31 | $ 165,157 | $ 133,856 | $ 92,944 |
Earnings per Share (Details)
Earnings per Share (Details) $ / shares in Units, $ in Thousands | Mar. 13, 2019 | Dec. 31, 2018$ / shares | Sep. 30, 2018$ / shares | Jun. 30, 2018$ / shares | Mar. 31, 2018$ / shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares |
Earnings per Share | ||||||||
Stock conversion ratio | 0.00757 | 0.00757 | ||||||
Potential common shares related to options under the employee incentive plan | 80,873,293 | 24,524,698 | 22,554,740 | |||||
Basic/Diluted EPS | ||||||||
Loss available to common stockholders | $ | $ (210,977) | $ (242,162) | $ (263,930) | |||||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 273,883,342 | 217,472,870 | 216,848,866 | |||||
Earnings Per Share, Basic and Diluted | $ / shares | $ (0.20) | $ (0.25) | $ (0.31) | $ (0.35) | $ (0.77) | $ (1.11) | $ (1.22) |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Tax Receivable Agreement | |
Tax receivable agreement | $ 264,600 |
Percentage payment of calculated tax savings to pre-business combination equity holders | 85.00% |
Total maximum payments related to the TRA | $ 507,326 |
Deferred tax receivable agreement | 30,000 |
Maximum charges under the TRA as a result of basis adjustments under the Internal Revenue Code | 134,377 |
Maximum charges under the TRA related to the utilization of NOL and credit carryforwards | 108,350 |
Tax receivable agreement termination payment | 200,000 |
Gain on payment recorded to shareholders equity | 64,600 |
Tax receivable agreement liability | $ 0 |
Product and Geographic Sales _3
Product and Geographic Sales Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Disaggregation of Revenue | |||
Number of operating segment | item | 1 | ||
Number of reportable segment | item | 1 | ||
Total revenues, gross | $ 974,783 | $ 971,620 | $ 967,307 |
Deferred revenues adjustment | (438) | (3,152) | (49,673) |
Total Revenues, net | 974,345 | 968,468 | 917,634 |
Non-current assets other than financial instruments and deferred tax assets | $ 3,193,359 | 3,284,993 | |
Revenue | |||
Disaggregation of Revenue | |||
Concentration Risk, Percentage | 5.00% | ||
Life Sciences Product Line | |||
Disaggregation of Revenue | |||
Total revenues, gross | $ 167,243 | 165,920 | 165,995 |
Science Group | |||
Disaggregation of Revenue | |||
Total revenues, gross | 547,542 | 527,877 | 518,990 |
Web of Science Product Line | |||
Disaggregation of Revenue | |||
Total revenues, gross | 380,299 | 361,957 | 352,995 |
Derwent Product Line | |||
Disaggregation of Revenue | |||
Total revenues, gross | 181,949 | 179,321 | 176,201 |
MarkMonitor Product Line | |||
Disaggregation of Revenue | |||
Total revenues, gross | 122,841 | 122,947 | 120,408 |
CompuMark Product Line | |||
Disaggregation of Revenue | |||
Total revenues, gross | 122,451 | 121,025 | 119,854 |
Intellectual Property Group | |||
Disaggregation of Revenue | |||
Total revenues, gross | 427,241 | 423,293 | 416,463 |
IP Management (IPM) Product Line | |||
Disaggregation of Revenue | |||
Total revenues, gross | 0 | 20,450 | 31,854 |
Americas | |||
Disaggregation of Revenue | |||
Total revenues, gross | 463,041 | 475,897 | 476,729 |
Non-current assets other than financial instruments and deferred tax assets | 992,469 | 1,037,852 | |
Europe | |||
Disaggregation of Revenue | |||
Total revenues, gross | 278,738 | 273,744 | 273,706 |
Non-current assets other than financial instruments and deferred tax assets | 2,099,777 | 2,145,950 | |
APAC | |||
Disaggregation of Revenue | |||
Total revenues, gross | 233,004 | 221,979 | $ 216,872 |
Non-current assets other than financial instruments and deferred tax assets | $ 101,113 | $ 101,191 | |
U.S. | Revenue | |||
Disaggregation of Revenue | |||
Concentration Risk, Percentage | 43.00% | 37.00% | 42.00% |
One Customer | Revenue | Customer Concentration Risk | |||
Disaggregation of Revenue | |||
Concentration Risk, Percentage | 1.00% | 1.00% | 1.00% |
Ten Customers | Revenue | Customer Concentration Risk | |||
Disaggregation of Revenue | |||
Concentration Risk, Percentage | 5.00% | 6.00% | 7.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 15, 2018 | Jun. 01, 2017 | |
Commitments and Contingencies | |||||
Contingent purchase price paid | $ 2,371 | $ 2,470 | |||
Write off of accumulated foreign currency impacts | $ 33,819 | ||||
Publons | |||||
Commitments and Contingencies | |||||
Additional payments to acquire business | 9,500 | $ 9,500 | |||
Contingent purchase price paid | 2,371 | 2,470 | |||
Estimated fair value of contingent consideration | 2,960 | 3,100 | 2,960 | ||
Kopernio | |||||
Commitments and Contingencies | |||||
Additional payments to acquire business | 3,500 | $ 3,500 | |||
TrademarkVision | |||||
Commitments and Contingencies | |||||
Estimated fair value of contingent consideration | 4,115 | 8,000 | 4,115 | ||
Accrued expenses and other current liabilities | Publons | |||||
Commitments and Contingencies | |||||
Estimated fair value of contingent consideration | 1,600 | 3,100 | 1,600 | ||
Other non-current liabilities | Publons | |||||
Commitments and Contingencies | |||||
Estimated fair value of contingent consideration | $ 1,360 | $ 0 | $ 1,360 |
Commitments and Contingencies -
Commitments and Contingencies - Unconditional Purchase Obligations (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Unconditional purchase obligations | |
Payments towards purchase obligations | $ 32,231 |
Future unconditional purchase obligations | |
2020 | 37,332 |
2021 | 10,186 |
2022 | 558 |
2023 | 0 |
Total | $ 48,076 |
Related Party and Former Pare_2
Related Party and Former Parent Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party and Former Parent Transactions | |||
Tax receivable agreement | $ 264,600 | ||
Onex Partners Advisor LP | |||
Related Party and Former Parent Transactions | |||
Consulting fee in operating expenses | $ 470 | $ 920 | $ 1,230 |
Interest per annum (as a percent) | 0.10% | ||
Interest expense | $ 327 | 905 | 1,557 |
Outstanding liability | 3 | 450 | |
Management Fee Expense | 5,400 | ||
Baring | |||
Related Party and Former Parent Transactions | |||
Consulting fee in operating expenses | 246 | 669 | 854 |
Outstanding liability | 0 | 334 | |
Management Fee Expense | 2,100 | ||
Controlled affiliate of Baring | |||
Related Party and Former Parent Transactions | |||
Outstanding liability | 160 | 120 | 199 |
Payments to related party | 765 | 531 | 388 |
Chief Executive Officer | |||
Related Party and Former Parent Transactions | |||
Outstanding liability | 10 | ||
Payments to related party | 756 | ||
Member of key management | |||
Related Party and Former Parent Transactions | |||
Outstanding liability | 0 | 332 | |
Payments to related party | $ 278 | $ 865 | |
Publons | Chief Executive Officer | |||
Related Party and Former Parent Transactions | |||
Payments to related party | $ 716 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring reserves and expenses | |||
Balance at beginning of the year | |||
Expenses recorded | 15,670 | $ 0 | $ 0 |
Payments made | (6,323) | ||
Foreign currency translation | 159 | ||
Balance at end of the year | $ 9,506 |
Restructuring - Additional info
Restructuring - Additional information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Restructuring | |
Severance costs | $ 13,959 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Data (Unaudited) | |||||||||||
Revenues | $ 255,013 | $ 242,998 | $ 242,309 | $ 234,025 | $ 245,247 | $ 242,897 | $ 243,297 | $ 237,027 | $ 974,345 | $ 968,468 | $ 917,634 |
Income (loss) from operations | (16,431) | 35,844 | (36,581) | (25,919) | (6,455) | (18,931) | (34,430) | (45,892) | (43,087) | (105,708) | (147,027) |
Net income (loss) | $ (84,787) | $ 10,831 | $ (77,761) | $ (59,260) | $ (43,454) | $ (54,727) | $ (66,944) | $ (77,037) | $ (210,977) | $ (242,162) | $ (263,930) |
Earnings per share: | |||||||||||
Basic | $ (0.28) | $ 0.04 | $ (0.29) | $ (0.27) | |||||||
Diluted | $ (0.28) | $ 0.03 | $ (0.29) | $ (0.27) | |||||||
Basic and diluted | $ (0.20) | $ (0.25) | $ (0.31) | $ (0.35) | $ (0.77) | $ (1.11) | $ (1.22) |
Quarterly Financial Data (Una_4
Quarterly Financial Data (Unaudited) Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Data (Unaudited) | ||||
Legal settlement | $ 39,399 | $ 39,399 | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 12, 2020 | Jan. 17, 2020 | Dec. 09, 2019 | Sep. 10, 2019 | Mar. 23, 2020 | Feb. 29, 2020 | Feb. 21, 2020 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 28, 2020 | Feb. 20, 2020 | Jan. 01, 2020 |
Subsequent Events | ||||||||||||||
Impairment on assets held for sale | $ 18,431 | $ 18,431 | $ 0 | $ 0 | ||||||||||
Write down of intangible assets | 17,967 | |||||||||||||
Goodwill, Impairment Loss | 468 | |||||||||||||
Stock Issued During Period, Shares, New Issues | 49,680,000 | 39,675,000 | ||||||||||||
Proceeds from Warrant Exercises | 1,582 | $ 1,574 | $ 9,058 | |||||||||||
Markmonitor Business | ||||||||||||||
Subsequent Events | ||||||||||||||
Impairment on assets held for sale | 18,431 | |||||||||||||
Write down of intangible assets | 17,967 | |||||||||||||
Goodwill, Impairment Loss | 468 | |||||||||||||
Current Assets Reclassified To Assets Held-for-sale, Not Part of Disposal Group, Current | 2,274 | 2,274 | ||||||||||||
Noncurrent Assets Reclassified To Assets Held-for-sale, Not Part of Disposal Group, Current | 28,345 | 28,345 | ||||||||||||
Current Liabilities Reclassified To Liabilities Held-for-sale, Not Part of Disposal Group, Current | 21,170 | 21,170 | ||||||||||||
Noncurrent Liabilities Reclassified To Liabilities Held-for-sale, Not Part of Disposal Group, Current | $ 5,698 | $ 5,698 | ||||||||||||
Subsequent Event | ||||||||||||||
Subsequent Events | ||||||||||||||
Stock Issued During Period, Shares, New Issues | 4,749,616 | |||||||||||||
Class of Warrant or Right, Outstanding | 24,132,666 | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 1 | 0.4626 | ||||||||||||
Proceeds from Warrant Exercises | $ 277,526 | |||||||||||||
Subsequent Event | The Revolving Credit Facility | ||||||||||||||
Subsequent Events | ||||||||||||||
Repayments of Lines of Credit | $ 65,000 | |||||||||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 250,000 | |||||||||||||
Subsequent Event | Onex and Baring [Member] | ||||||||||||||
Subsequent Events | ||||||||||||||
Beneficial Ownership Interest Percentage | 38.30% | |||||||||||||
Ownership interest in combined entity | 59.30% | |||||||||||||
Subsequent Event | Public Offering [Member] | ||||||||||||||
Subsequent Events | ||||||||||||||
Stock Issued During Period, Shares, New Issues | 27,600,000 | |||||||||||||
Sale of Stock, Price Per Share | $ 20.25 | |||||||||||||
Proceeds from Issuance of Common Stock | $ 540,736 | |||||||||||||
Stock Issuance Costs | $ 18,164 | |||||||||||||
Class of Warrant or Right, Redemption Price Per Warrant | $ 0.01 | |||||||||||||
Subsequent Event | Decision Resources Group | ||||||||||||||
Subsequent Events | ||||||||||||||
Business Combination, Consideration Transferred | $ 950,000 | |||||||||||||
Payments to Acquire Businesses, Gross | 900,000 | |||||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 50,000 | |||||||||||||
Subsequent Event | Decision Resources Group | Term Loan Facility | ||||||||||||||
Subsequent Events | ||||||||||||||
Debt Instrument, Face Amount | $ 360,000 | |||||||||||||
Subsequent Event | Markmonitor Business | ||||||||||||||
Subsequent Events | ||||||||||||||
Purchase price | $ 3,751 |