ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 04-3099750 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
P.O. Box 10212 | |
56 Top Gallant Road | |
Stamford, | |
Connecticut | 06902-7700 |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Common Stock, | IT | New York Stock Exchange |
Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | ||||
Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||
• | RESEARCH. Gartner delivers independent, objective advice to leaders across an enterprise through subscription services that include on-demand access to published research content, data and benchmarks, and direct access to a network of approximately 2,300 research experts located around the globe. Gartner research is the fundamental building block for all Gartner products and services. We combine our proprietary research methodologies with extensive industry and academic relationships to create Gartner products and services that address each role across an enterprise. Within the Research segment, Global Technology Sales ("GTS") sells products and services to users and providers of technology, while Global Business Sales ("GBS") sells products and services to all other functional leaders, such as supply chain, marketing, HR, finance, legal and sales. |
• | CONFERENCES. Gartner attracts more than |
• | CONSULTING. Through its experienced consultants, Gartner Consulting serves chief information officers and other senior executives who are driving technology-related strategic initiatives to optimize technology investments and drive business impact. Gartner Consulting combines the power of Gartner’s market-leading research with custom analysis and on-the-ground support to help clients to turn insights and advice into action and impact. |
Period | Total Number of Shares Purchased (#) | Average Price Paid Per Share ($) | Total Number of Shares Purchased Under Announced Program (#) | Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in billions) | |||||||||
October | 424,708 | $ | 145.46 | 424,400 | $ | 1.0 | |||||||
November | 80,944 | 143.50 | 71,011 | 1.0 | |||||||||
December | 733,365 | 133.68 | 733,044 | $ | 0.9 | ||||||||
Total for the quarter | 1,239,017 | $ | 138.36 | 1,228,455 |
Period | Total Number of Shares Purchased (#) | Average Price Paid Per Share ($) | Total Number of Shares Purchased Under Announced Programs (#) | Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) | ||||||||||
October 1, 2019 to October 31, 2019 | 25,240 | $ | 138.99 | 25,094 | $ | 773,017 | ||||||||
November 1, 2019 to November 30, 2019 | 54,039 | 158.83 | 15,006 | 770,680 | ||||||||||
December 1, 2019 to December 31, 2019 | 360,836 | 153.85 | 358,877 | $ | 715,473 | |||||||||
Total for the quarter (1) | 440,115 | $ | 153.61 | 398,977 |
(1) | The repurchased shares during the three months ended December 31, 2019 included purchases for both the settlement of stock-based compensation awards and open market purchases. |
(In thousands, except per share data) | 2018 | 2017 | 2016 | 2015 | 2014 | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||
STATEMENT OF OPERATIONS DATA: | ||||||||||||||||||||||||||||||||||||
STATEMENT OF OPERATIONS DATA | ||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||
Research | $ | 3,105,764 | $ | 2,471,280 | $ | 1,857,001 | $ | 1,614,904 | $ | 1,479,976 | $ | 3,374,548 | $ | 3,105,764 | $ | 2,471,280 | $ | 1,857,001 | $ | 1,614,904 | ||||||||||||||||
Conferences | 410,461 | 337,903 | 268,605 | 251,835 | 227,707 | 476,869 | 410,461 | 337,903 | 268,605 | 251,835 | ||||||||||||||||||||||||||
Consulting | 353,667 | 327,661 | 318,934 | 296,317 | 313,758 | 393,904 | 353,667 | 327,661 | 318,934 | 296,317 | ||||||||||||||||||||||||||
Other | 105,562 | 174,650 | — | — | — | — | 105,562 | 174,650 | — | — | ||||||||||||||||||||||||||
Total revenues | $ | 3,975,454 | $ | 3,311,494 | $ | 2,444,540 | $ | 2,163,056 | $ | 2,021,441 | $ | 4,245,321 | $ | 3,975,454 | $ | 3,311,494 | $ | 2,444,540 | $ | 2,163,056 | ||||||||||||||||
Operating income (loss) | $ | 259,715 | $ | (6,329 | ) | $ | 305,141 | $ | 287,997 | $ | 286,162 | $ | 370,087 | $ | 259,715 | $ | (6,329 | ) | $ | 305,141 | $ | 287,997 | ||||||||||||||
Net income | $ | 122,456 | $ | 3,279 | $ | 193,582 | $ | 175,635 | $ | 183,766 | $ | 233,290 | $ | 122,456 | $ | 3,279 | $ | 193,582 | $ | 175,635 | ||||||||||||||||
PER SHARE DATA: | ||||||||||||||||||||||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||||||||||||||||
Basic income per share | $ | 1.35 | $ | 0.04 | $ | 2.34 | $ | 2.09 | $ | 2.06 | $ | 2.60 | $ | 1.35 | $ | 0.04 | $ | 2.34 | $ | 2.09 | ||||||||||||||||
Diluted income per share | $ | 1.33 | $ | 0.04 | $ | 2.31 | $ | 2.06 | $ | 2.03 | $ | 2.56 | $ | 1.33 | $ | 0.04 | $ | 2.31 | $ | 2.06 | ||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||||||||||||
Basic | 90,827 | 88,466 | 82,571 | 83,852 | 89,337 | 89,817 | 90,827 | 88,466 | 82,571 | 83,852 | ||||||||||||||||||||||||||
Diluted | 92,122 | 89,790 | 83,820 | 85,056 | 90,719 | 90,971 | 92,122 | 89,790 | 83,820 | 85,056 | ||||||||||||||||||||||||||
OTHER DATA: | ||||||||||||||||||||||||||||||||||||
OTHER DATA | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 156,368 | 538,908 | $ | 474,233 | $ | 372,976 | $ | 365,302 | $ | 280,836 | $ | 156,368 | $ | 538,908 | $ | 474,233 | $ | 372,976 | |||||||||||||||||
Total assets | 6,201,474 | 7,283,173 | 2,367,335 | 2,168,517 | 1,904,351 | 7,151,294 | 6,201,474 | 7,283,173 | 2,367,335 | 2,168,517 | ||||||||||||||||||||||||||
Long-term debt | 2,146,514 | 2,943,341 | 672,500 | 790,000 | 385,000 | 2,067,796 | 2,146,514 | 2,943,341 | 672,500 | 790,000 | ||||||||||||||||||||||||||
Stockholders’ equity (deficit) | 850,757 | 983,465 | 60,878 | (132,400 | ) | 161,171 | 938,593 | 850,757 | 983,465 | 60,878 | (132,400 | ) | ||||||||||||||||||||||||
Cash provided by operating activities | $ | 471,158 | 254,517 | $ | 365,632 | $ | 345,561 | $ | 346,779 | $ | 565,436 | $ | 471,158 | $ | 254,517 | $ | 365,632 | $ | 345,561 |
• | On January 1, 2019, the Company adopted Accounting Standards Update No. 2016-02, Leases, which resulted in a net increase of $638.7 million in its total assets on that date. The adoption of this new lease standard did not affect the Company's stockholders’ equity. Note 1 — Business and Significant Accounting Policies and Note 7 — Leases provide additional information regarding the Company's adoption of Accounting Standards Update No. 2016-02. |
• | Research provides trusted, objective insights and advice on the mission-critical priorities of leaders across all functional areas of an enterprise through reports, briefings, proprietary tools, access to our research experts, peer networking services and membership programs that enable our clients to drive organizational performance. |
• | Conferences provides business professionals across an organization the opportunity to learn, share and network. From our Gartner Symposium/Xpo series, to industry-leading conferences focused on specific business roles and topics, to peer-driven sessions, our offerings enable attendees to experience the best of Gartner insight and advice live. |
• | Consulting combines the power of Gartner market-leading research with custom analysis and on-the-ground support to help chief information officers and other senior executives driving technology-related strategic initiatives move confidently from insight to action. |
BUSINESS SEGMENT | BUSINESS | |
Research | Total contract valuerepresents the value attributable to all of our subscription-related contracts. It is calculated as the annualized value of all contracts in effect at a specific point in time, without regard to the duration of the contract. Total contract value primarily includes Research deliverables for which revenue is recognized on a ratable basis, as well as other deliverables (primarily Conferences tickets) for which revenue is recognized when the deliverable is utilized. Comparing contract value year-over-year not only measures the short-term growth of our business, but also signals the long-term health of our Research subscription business since it measures revenue that is highly likely to recur over a multi-year period. Our total contract value consists of Global Technology Sales contract value, which includes sales to users and providers of technology, and Global Business Sales contract value, which includes sales to all other functional leaders. | |
Client retention rate represents a measure of client satisfaction and renewed business relationships at a specific point in time. Client retention is calculated on a percentage basis by dividing our current clients, who were also clients a year ago, by all clients from a year ago. Client retention is calculated at an enterprise level, which represents a single company or customer. | ||
Wallet retention rate represents a measure of the amount of contract value we have retained with clients over a twelve-month period. Wallet retention is calculated on a percentage basis by dividing the contract value of our current clients, who were also clients | ||
Conferences | Number of destination conferencesrepresents the total number of hosted destination conferences completed during the period. Single day, local meetings are excluded. | |
Number of destination conferences attendees represents the total number of people who attend destination conferences. Single day, local meetings are excluded. | ||
Consulting | Consulting backlog represents future revenue to be derived from in-process consulting and measurement engagements. | |
Utilization rate represents a measure of productivity of our consultants. Utilization rates are calculated for billable headcount on a percentage basis by dividing total hours billed by total hours available to bill. | ||
Billing rate represents earned billable revenue divided by total billable hours. | ||
Average annualized revenue per billable headcount represents a measure of the revenue generating ability of an average billable consultant and is calculated periodically by multiplying the average billing rate per hour times the utilization percentage times the billable hours available for one year. | ||
December 31, | December 31, | |||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||
Total fees receivable (1) | $ | 1,262,818 | $ | 1,189,543 | ||||||||||
Gross fees receivable | $ | 1,334,012 | $ | 1,262,818 | ||||||||||
Allowance for losses | (7,700 | ) | (12,700 | ) | (8,000 | ) | (7,700 | ) | ||||||
Fees receivable, net | $ | 1,255,118 | $ | 1,176,843 | $ | 1,326,012 | $ | 1,255,118 |
Year Ended December 31, 2018 | Year Ended December 31, 2017 | Effect on Net Income - Increase (Decrease) | Increase (Decrease) % | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Increase (Decrease) | Percentage Increase (Decrease) | |||||||||||||||||||||
Total revenues | $ | 3,975,454 | $ | 3,311,494 | $ | 663,960 | 20 | % | $ | 4,245,321 | $ | 3,975,454 | $ | 269,867 | 7 | % | ||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||
Cost of services and product development | 1,468,800 | 1,320,198 | (148,602 | ) | (11 | ) | 1,550,568 | 1,468,800 | 81,768 | 6 | ||||||||||||||||||
Selling, general and administrative | 1,884,141 | 1,599,004 | (285,137 | ) | (18 | ) | 2,103,424 | 1,884,141 | 219,283 | 12 | ||||||||||||||||||
Depreciation | 68,592 | 63,897 | (4,695 | ) | (7 | ) | 82,066 | 68,592 | 13,474 | 20 | ||||||||||||||||||
Amortization of intangibles | 187,009 | 176,274 | (10,735 | ) | (6 | ) | 129,713 | 187,009 | (57,296 | ) | (31 | ) | ||||||||||||||||
Acquisition and integration charges | 107,197 | 158,450 | 51,253 | 32 | 9,463 | 107,197 | (97,734 | ) | (91 | ) | ||||||||||||||||||
Operating income (loss) | 259,715 | (6,329 | ) | 266,044 | >100 | |||||||||||||||||||||||
Operating income | 370,087 | 259,715 | 110,372 | 42 | ||||||||||||||||||||||||
Interest expense, net | (124,208 | ) | (124,936 | ) | 728 | 1 | (99,805 | ) | (124,208 | ) | (24,403 | ) | (20 | ) | ||||||||||||||
Gain from divested operations | 45,447 | — | 45,447 | >100 | ||||||||||||||||||||||||
(Loss) gain from divested operations | (2,075 | ) | 45,447 | (47,522 | ) | >(100) | ||||||||||||||||||||||
Other income, net | 167 | 3,448 | (3,281 | ) | (95 | ) | 7,532 | 167 | 7,365 | >100 | ||||||||||||||||||
Provision (benefit) for income taxes | 58,665 | (131,096 | ) | (189,761 | ) | >(100) | ||||||||||||||||||||||
Provision for income taxes | 42,449 | 58,665 | (16,216 | ) | (28 | ) | ||||||||||||||||||||||
Net income | $ | 122,456 | $ | 3,279 | $ | 119,177 | >100% | $ | 233,290 | $ | 122,456 | $ | 110,834 | 91 | % |
Geographic Region | Year Ended December 31, 2018 | Year Ended December 31, 2017 | Increase (Decrease) $ | Increase (Decrease) % | ||||||||||||
United States and Canada | $ | 2,514,952 | $ | 2,092,366 | $ | 422,586 | 20 | % | ||||||||
Europe, Middle East and Africa | 1,000,490 | 855,421 | 145,069 | 17 | ||||||||||||
Other International | 460,012 | 363,707 | 96,305 | 26 | ||||||||||||
Totals | $ | 3,975,454 | $ | 3,311,494 | $ | 663,960 | 20 | % |
Segment | Year Ended December 31, 2018 | Year Ended December 31, 2017 | Increase (Decrease) $ | Increase (Decrease) % | ||||||||||||
Research | $ | 3,105,764 | $ | 2,471,280 | $ | 634,484 | 26 | % | ||||||||
Conferences | 410,461 | 337,903 | 72,558 | 21 | ||||||||||||
Consulting | 353,667 | 327,661 | 26,006 | 8 | ||||||||||||
Other (1) | 105,562 | 174,650 | (69,088 | ) | (40 | ) | ||||||||||
Totals | $ | 3,975,454 | $ | 3,311,494 | $ | 663,960 | 20 | % |
Primary Geographic Market | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Increase (Decrease) | Percentage Increase (Decrease) | |||||||||||
United States and Canada | $ | 2,734,490 | $ | 2,514,952 | $ | 219,538 | 9 | % | |||||||
Europe, Middle East and Africa | 996,004 | 1,000,490 | (4,486 | ) | — | ||||||||||
Other International | 514,827 | 460,012 | 54,815 | 12 | |||||||||||
Total revenues (1) | $ | 4,245,321 | $ | 3,975,454 | $ | 269,867 | 7 | % |
Segment | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Increase (Decrease) | Percentage Increase (Decrease) | |||||||||||
Research | $ | 3,374,548 | $ | 3,105,764 | $ | 268,784 | 9 | % | |||||||
Conferences | 476,869 | 410,461 | 66,408 | 16 | |||||||||||
Consulting | 393,904 | 353,667 | 40,237 | 11 | |||||||||||
Other (1) | — | 105,562 | (105,562 | ) | >(100) | ||||||||||
Total revenues (1) | $ | 4,245,321 | $ | 3,975,454 | $ | 269,867 | 7 | % |
(1) | During 2018, the Company divested all |
Year Ended December 31, 2017 | Year Ended December 31, 2016 | Effect on Net Income - Increase (Decrease) | Increase (Decrease) % | |||||||||||
Total revenues | $ | 3,311,494 | $ | 2,444,540 | $ | 866,954 | 35 | % | ||||||
Costs and expenses: | ||||||||||||||
Cost of services and product development | 1,320,198 | 945,648 | (374,550 | ) | (40 | ) | ||||||||
Selling, general and administrative | 1,599,004 | 1,089,184 | (509,820 | ) | (47 | ) | ||||||||
Depreciation | 63,897 | 37,172 | (26,725 | ) | (72 | ) | ||||||||
Amortization of intangibles | 176,274 | 24,797 | (151,477 | ) | >(100) | |||||||||
Acquisition and integration charges | 158,450 | 42,598 | (115,852 | ) | >(100) | |||||||||
Operating (loss) income | (6,329 | ) | 305,141 | (311,470 | ) | >(100) | ||||||||
Interest expense, net | (124,936 | ) | (25,116 | ) | (99,820 | ) | >(100) | |||||||
Other income, net | 3,448 | 8,406 | (4,958 | ) | (59 | ) | ||||||||
(Benefit) provision for income taxes | (131,096 | ) | 94,849 | 225,945 | >100 | |||||||||
Net income | $ | 3,279 | $ | 193,582 | $ | (190,303 | ) | (98 | )% |
Geographic Region | Year Ended December 31, 2017 | Year Ended December 31, 2016 | Increase (Decrease) $ | Increase (Decrease) % | ||||||||||
United States and Canada | $ | 2,092,366 | $ | 1,519,748 | $ | 572,618 | 38 | % | ||||||
Europe, Middle East and Africa | 855,421 | 616,721 | 238,700 | 39 | ||||||||||
Other International | 363,707 | 308,071 | 55,636 | 18 | ||||||||||
Totals | $ | 3,311,494 | $ | 2,444,540 | $ | 866,954 | 35 | % |
Segment | Year Ended December 31, 2017 | Year Ended December 31, 2016 | Increase (Decrease) $ | Increase (Decrease) % | ||||||||||
Research | $ | 2,471,280 | $ | 1,857,001 | $ | 614,279 | 33 | % | ||||||
Conferences | 337,903 | 268,605 | 69,298 | 26 | ||||||||||
Consulting | 327,661 | 318,934 | 8,727 | 3 | ||||||||||
Other | 174,650 | — | 174,650 | 100 | ||||||||||
Totals | $ | 3,311,494 | $ | 2,444,540 | $ | 866,954 | 35 | % |
• | Research provides trusted, objective insights and advice on the mission-critical priorities of leaders across all functional areas of an enterprise through reports, briefings, proprietary tools, access to our research experts, peer networking services and membership programs that enable our clients to drive organizational performance. |
• | Conferences provides business professionals across an organization the opportunity to learn, share and network. From our Gartner Symposium/Xpo series, to industry-leading conferences focused on specific business roles and topics, to peer-driven sessions, our offerings enable attendees to experience the best of Gartner insight and advice live. |
• | Consulting combines the power of Gartner market-leading research with custom analysis and on-the-ground support to help chief information officers and other senior executives driving technology-related strategic initiatives move confidently from insight to action. |
As Of And For The Year Ended December 31, 2018 | As Of And For The Year Ended December 31, 2017 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Year Ended December 31, 2017 | As Of And For The Year Ended December 31, 2016 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Year Ended December 31, 2019 | As Of And For The Year Ended December 31, 2018 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||||||||||||||||||
Revenues (1) | $3,105,764 | $2,471,280 | $ | 634,484 | 26 | % | $2,471,280 | $1,857,001 | $ | 614,279 | 33 | % | $ | 3,374,548 | $ | 3,105,764 | $ | 268,784 | 9 | % | |||||||||||||||||||
Gross contribution (1) | $2,144,097 | $1,653,014 | $ | 491,083 | 30 | % | $1,653,014 | $1,285,611 | $ | 367,403 | 29 | % | $ | 2,351,720 | $ | 2,144,097 | $ | 207,623 | 10 | % | |||||||||||||||||||
Gross contribution margin | 69 | % | 67 | % | 2 points | — | 67 | % | 69 | % | (2) points | — | 70 | % | 69 | % | 1 point | — | |||||||||||||||||||||
Business Measurements: | |||||||||||||||||||||||||||||||||||||||
Global Technology Sales (2): | |||||||||||||||||||||||||||||||||||||||
Contract value (1), (3) | $2,556,000 | $2,238,000 | $ | 318,000 | 14 | % | $2,238,000 | $1,975,000 | $ | 263,000 | 13 | % | $ | 2,799,000 | $ | 2,492,000 | $ | 307,000 | 12 | % | |||||||||||||||||||
Client retention | 83 | % | 83 | % | — | — | 83 | % | 82 | % | 1 point | — | 82 | % | 83 | % | (1) point | — | |||||||||||||||||||||
Wallet retention | 105 | % | 105 | % | — | — | 105 | % | 103 | % | 2 points | — | 104 | % | 105 | % | (1) point | — | |||||||||||||||||||||
Global Business Sales (2): | |||||||||||||||||||||||||||||||||||||||
Contract value (1), (3) | $607,000 | $601,000 | $ | 6,000 | 1 | % | $601,000 | $568,000 | 33,000 | 6 | % | $ | 647,000 | $ | 594,000 | $ | 53,000 | 9 | % | ||||||||||||||||||||
Client retention | 82 | % | 81 | % | 1 point | — | 81 | % | 76 | % | 5 points | — | 82 | % | 82 | % | — | — | |||||||||||||||||||||
Wallet retention | 95 | % | 100 | % | (5) points | — | 100 | % | 95 | % | 5 points | — | 101 | % | 95 | % | 6 points | — |
(1) | Dollars in thousands. |
(2) | Global Technology Sales |
(3) | Contract values are on a foreign exchange neutral |
As Of And For The Year Ended December 31, 2018 | As Of And For The Year Ended December 31, 2017 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Year Ended December 31, 2017 | As Of And For The Year Ended December 31, 2016 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Year Ended December 31, 2019 | As Of And For The Year Ended December 31, 2018 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||||||||||||||||||
Revenues (1) | $410,461 | $337,903 | $ | 72,558 | 21 | % | $337,903 | $268,605 | $ | 69,298 | 26 | % | $ | 476,869 | $ | 410,461 | $ | 66,408 | 16 | % | |||||||||||||||||||
Gross contribution (1) | $207,260 | $163,480 | $ | 43,780 | 27 | % | $163,480 | $136,655 | $ | 26,825 | 20 | % | $ | 241,757 | $ | 207,260 | $ | 34,497 | 17 | % | |||||||||||||||||||
Gross contribution margin | 50 | % | 48 | % | 2 points | — | 48 | % | 51 | % | (3) points | — | 51 | % | 50 | % | 1 point | — | |||||||||||||||||||||
Business Measurements: | |||||||||||||||||||||||||||||||||||||||
Number of destination conferences (2) | 70 | 69 | 1 | 1 | % | 69 | 66 | 3 | 5 | % | 72 | 70 | 2 | 3 | % | ||||||||||||||||||||||||
Number of destination conferences attendees (2) | 78,136 | 67,401 | 10,735 | 16 | % | 67,401 | 54,602 | 12,799 | 23 | % | 85,750 | 78,136 | 7,614 | 10 | % |
(1) | Dollars in thousands. |
(2) | Single day, local meetings are excluded. |
As Of And For The Year Ended December 31, 2018 | As Of And For The Year Ended December 31, 2017 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Year Ended December 31, 2017 | As Of And For The Year Ended December 31, 2016 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Year Ended December 31, 2019 | As Of And For The Year Ended December 31, 2018 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||||||||||||||||||||||
Revenues (1) | $353,667 | $327,661 | $ | 26,006 | 8 | % | $327,661 | $318,934 | $ | 8,727 | 3 | % | $ | 393,904 | $ | 353,667 | $ | 40,237 | 11 | % | |||||||||||||||||||||||
Gross contribution (1) | $102,541 | $93,643 | $ | 8,898 | 10 | % | $93,643 | $89,734 | $ | 3,909 | 4 | % | $ | 118,450 | $ | 102,541 | $ | 15,909 | 16 | % | |||||||||||||||||||||||
Gross contribution margin | 29 | % | 29 | % | — | — | 29 | % | 28 | % | 1 point | — | 30 | % | 29 | % | 1 point | — | |||||||||||||||||||||||||
Business Measurements: | |||||||||||||||||||||||||||||||||||||||||||
Backlog (1) | $110,700 | $95,200 | $ | 15,500 | 16 | % | $95,200 | $88,600 | $ | 6,600 | 7 | % | |||||||||||||||||||||||||||||||
Backlog (1), (2) | $ | 115,700 | $ | 108,400 | $ | 7,300 | 7 | % | |||||||||||||||||||||||||||||||||||
Billable headcount | 718 | 669 | 49 | 7 | % | 669 | 628 | 41 | 7 | % | 784 | 718 | 66 | 9 | % | ||||||||||||||||||||||||||||
Consultant utilization | 63 | % | 64 | % | (1) point | — | 64 | % | 66 | % | (2) points | — | 62 | % | 63 | % | (1) point | — | |||||||||||||||||||||||||
Average annualized revenue per billable headcount (1) | $ | 375 | $ | 366 | $ | 9 | 2 | % | $ | 366 | $ | 383 | $ | (17 | ) | (4 | )% | $ | 373 | $ | 375 | $ | (2 | ) | (1 | )% |
(1) | Dollars in thousands. |
(2) | Backlog is on a foreign exchange neutral basis. Backlog as of December 31, 2018 has been calculated using the same foreign currency rates as 2019. |
As Of And For The Year Ended December 31, 2018 | As Of And For The Year Ended December 31, 2017 | Increase (Decrease) | Percentage Increase (Decrease) | |||||||||
Financial Measurements: | ||||||||||||
Revenues (1) | $105,562 | $174,650 | $ | (69,088 | ) | (40 | )% | |||||
Gross contribution (1) | $65,075 | $90,249 | $ | (25,174 | ) | (28 | )% | |||||
Gross contribution margin | 62 | % | 52 | % | 10 points | — |
2018 vs. 2017 | 2017 vs. 2016 | ||||||||||||||||||||||
Year Ended December 31, 2018 | Year Ended December 31, 2017 | Increase (Decrease) | Year Ended December 31, 2017 | Year Ended December 31, 2016 | Increase (Decrease) | ||||||||||||||||||
Cash provided by operating activities | $ | 471,158 | $ | 254,517 | $ | 216,641 | $ | 254,517 | $ | 365,632 | $ | (111,115 | ) | ||||||||||
Cash provided by (used in) investing activities | 384,051 | (2,752,545 | ) | 3,136,596 | (2,752,545 | ) | (98,059 | ) | (2,654,486 | ) | |||||||||||||
Cash (used in) provided by financing activities | (1,257,115 | ) | 2,539,830 | (3,796,945 | ) | 2,539,830 | (174,686 | ) | 2,714,516 | ||||||||||||||
Net (decrease) increase in cash and cash equivalents | (401,906 | ) | 41,802 | (443,708 | ) | 41,802 | 92,887 | (51,085 | ) | ||||||||||||||
Effects of exchange rate changes | (6,489 | ) | 25,902 | (32,391 | ) | 25,902 | (5,640 | ) | 31,542 | ||||||||||||||
Beginning cash and cash equivalents | 567,058 | 499,354 | 67,704 | 499,354 | 412,107 | 87,247 | |||||||||||||||||
Ending cash and cash equivalents (1) | $ | 158,663 | $ | 567,058 | $ | (408,395 | ) | $ | 567,058 | $ | 499,354 | $ | 67,704 |
Year Ended December 31, | Increase (Decrease) | ||||||||||
2019 | 2018 | ||||||||||
Cash provided by operating activities | $ | 565,436 | $ | 471,158 | $ | 94,278 | |||||
Cash (used in) provided by investing activities | (160,885 | ) | 384,051 | (544,936 | ) | ||||||
Cash used in financing activities | (285,992 | ) | (1,257,115 | ) | 971,123 | ||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | 118,559 | (401,906 | ) | 520,465 | |||||||
Effects of exchange rates | 3,614 | (6,489 | ) | 10,103 | |||||||
Beginning cash and cash equivalents and restricted cash | 158,663 | 567,058 | (408,395 | ) | |||||||
Ending cash and cash equivalents and restricted cash | $ | 280,836 | $ | 158,663 | $ | 122,173 |
Commitment Description: | Due In Less Than 1 Year | Due In 2-3 Years | Due In 4-5 Years | Due In More Than 5 Years | Total | |||||||||||||||||||||||||||||||||||
Commitment Description | Due In Less Than 1 Year | Due In 2-3 Years | Due In 4-5 Years | Due In More Than 5 Years | Total | |||||||||||||||||||||||||||||||||||
Debt – principal and interest (1) | $ | 200,431 | $ | 372,973 | $ | 1,327,960 | $ | 884,030 | $ | 2,785,394 | $ | 237,948 | $ | 1,422,379 | $ | 100,141 | $ | 822,585 | $ | 2,583,053 | ||||||||||||||||||||
Operating leases (2) | 130,991 | 240,747 | 217,231 | 689,359 | 1,278,328 | 142,352 | 273,920 | 249,635 | 682,883 | 1,348,790 | ||||||||||||||||||||||||||||||
Deferred compensation arrangements (3) | 10,857 | 11,852 | 7,549 | 42,450 | 72,708 | 10,116 | 14,725 | 8,784 | 45,931 | 79,556 | ||||||||||||||||||||||||||||||
U.S. Tax Cuts and Job Act - transition tax (4) | 785 | 1,569 | 1,569 | 5,885 | 9,808 | |||||||||||||||||||||||||||||||||||
Other (5) | 38,753 | 35,133 | 16,474 | 24,654 | 115,014 | |||||||||||||||||||||||||||||||||||
Other (4) | 30,836 | 34,606 | 12,712 | 35,834 | 113,988 | |||||||||||||||||||||||||||||||||||
Totals | $ | 381,817 | $ | 662,274 | $ | 1,570,783 | $ | 1,646,378 | $ | 4,261,252 | $ | 421,252 | $ | 1,745,630 | $ | 371,272 | $ | 1,587,233 | $ | 4,125,387 |
(1) | Principal repayments of the Company's debt obligations |
(2) | The Company leases various facilities, |
(3) | The Company has supplemental deferred compensation arrangements with certain of its employees. Amounts payable with known payment dates have been classified in the above table based on those scheduled payment dates. Amounts payable whose payment dates are unknown have been included in the Due In More Than 5 Years category |
(4) |
Other |
2018 | ||||||||||||||||||||||||||||||||
2019 | ||||||||||||||||||||||||||||||||
(In thousands, except per share data) | First | Second | Third | Fourth | First | Second | Third | Fourth | ||||||||||||||||||||||||
Revenues | $ | 963,565 | $ | 1,001,336 | $ | 921,674 | $ | 1,088,878 | $ | 970,444 | $ | 1,070,882 | $ | 1,000,502 | $ | 1,203,493 | ||||||||||||||||
Operating (loss) income | (8,711 | ) | 86,096 | 52,724 | 129,606 | |||||||||||||||||||||||||||
Net (loss) income | (19,587 | ) | 46,270 | 11,753 | 84,020 | |||||||||||||||||||||||||||
Net (loss) income per share (1): | ||||||||||||||||||||||||||||||||
Operating income | 48,799 | 116,002 | 69,147 | 136,139 | ||||||||||||||||||||||||||||
Net income (1) | 20,795 | 103,406 | 41,388 | 67,701 | ||||||||||||||||||||||||||||
Net income per share (1), (2): | ||||||||||||||||||||||||||||||||
Basic | $ | (0.22 | ) | $ | 0.51 | $ | 0.13 | $ | 0.93 | $ | 0.23 | $ | 1.15 | $ | 0.46 | $ | 0.76 | |||||||||||||||
Diluted | $ | (0.22 | ) | $ | 0.50 | $ | 0.13 | $ | 0.92 | $ | 0.23 | $ | 1.13 | $ | 0.46 | $ | 0.75 |
2017 | ||||||||||||||||||||||||||||||||
2018 | ||||||||||||||||||||||||||||||||
(In thousands, except per share data) | First | Second | Third | Fourth | First | Second | Third | Fourth | ||||||||||||||||||||||||
Revenues | $ | 625,169 | $ | 843,731 | $ | 828,085 | $ | 1,014,509 | $ | 963,565 | $ | 1,001,336 | $ | 921,674 | $ | 1,088,878 | ||||||||||||||||
Operating income (loss) | 53,514 | (98,388 | ) | (24,349 | ) | 62,894 | (8,711 | ) | 86,096 | 52,724 | 129,606 | |||||||||||||||||||||
Net income (loss) | 36,433 | (92,281 | ) | (48,180 | ) | 107,307 | (19,587 | ) | 46,270 | 11,753 | 84,020 | |||||||||||||||||||||
Net income (loss) per share (1), (2): | ||||||||||||||||||||||||||||||||
Net income (loss) per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.44 | $ | (1.03 | ) | $ | (0.53 | ) | $ | 1.18 | $ | (0.22 | ) | $ | 0.51 | $ | 0.13 | $ | 0.93 | |||||||||||||
Diluted | $ | 0.43 | $ | (1.03 | ) | $ | (0.53 | ) | $ | 1.16 | $ | (0.22 | ) | $ | 0.50 | $ | 0.13 | $ | 0.92 |
(1) | In April 2019, we completed an intercompany sale of certain intellectual property and, as a result, the Company recorded a net tax benefit of approximately $38.1 million. The tax benefit increased our net income and each of our basic and diluted net income per share for the second quarter of 2019 by approximately $0.42 per share. Note 12 — Income Taxes in the Notes to Consolidated Financial Statements provides additional information regarding the tax impact of our intercompany sale of certain intellectual property. |
(2) | The aggregate of the four quarters’ basic and diluted |
EXHIBIT NUMBER | DESCRIPTION OF DOCUMENT | |
Agreement and Plan of Merger by and among the Company, Cobra Acquisition Corp. and CEB Inc., dated as of January 5, 2017. | ||
Restated Certificate of Incorporation of the Company. | ||
Form of Certificate for Common Stock as of June 2, 2005. | ||
Credit Agreement, dated as of June 17, 2016, among the Company, the several lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A. as administrative agent. | ||
Guarantee and Collateral Agreement, dated as of June 17, 2016, among the Company and certain of its subsidiaries, in favor of JPMorgan Chase Bank, N.A. as administrative agent. | ||
First Amendment to Credit Agreement, dated as of January 20, 2017, among the Company, the several lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A. as administrative agent, filed as of January 24, 2017. | ||
Second Amendment, dated as of March 20, 2017, among the Company, each other Loan Party party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. | ||
Incremental Amendment, dated as of April 5, 2017, among the Company, each other Loan Party party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. | ||
Indenture (including form of Notes), dated as of March 30, 2017, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee, relating to the $800,000,000 aggregate principal amount of 5.125% Senior Notes due 2025. | ||
Description of Gartner, Inc.'s Common Stock. | ||
Amended and Restated Lease dated April 16, 2010 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut. | ||
First Amendment to Amended and Restated Lease dated April 16, 2010 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut. | ||
2011 Employee Stock Purchase Plan. | ||
2003 | ||
Gartner, Inc. Long-Term Incentive Plan, as amended and restated effective January 31, 2019. | ||
Amended and Restated Employment Agreement between Eugene A. Hall and the Company dated as of February 14, 2019. | ||
Company Deferred Compensation Plan, effective January 1, 2009. | ||
Form of 2017 Stock Appreciation Right Agreement for executive officers. |
Form of 2017 Performance Stock Unit Agreement for executive officers. | ||
Form of 2017 Restricted Stock Unit Agreement for certain officers. |
Form of 2018 Stock Appreciation Right Agreement for executive officers. | ||
Form of 2018 Performance Stock Unit Agreement for executive officers. | ||
Form of 2019 Stock Appreciation Right Agreement for executive officers. | ||
Form of 2019 Performance Stock Unit Agreement for executive officers. | ||
Form of 2020 Stock Appreciation Right Agreement for executive officers. | ||
Form of 2020 Performance Stock Unit Agreement for executive officers. | ||
Form of Restricted Stock Unit Agreement for non-employee directors. | ||
Subsidiaries of Registrant. | ||
Consent of Independent Registered Public Accounting Firm. | ||
Power of Attorney (see Signature Page). | ||
Certification of chief executive officer under Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification of chief financial officer under Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification under Section 906 of the Sarbanes-Oxley Act of 2002. | ||
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||
XBRL Taxonomy Extension Schema Document. | ||
XBRL Taxonomy Extension Calculation Linkbase Document. | ||
XBRL Taxonomy Extension Label Linkbase Document. | ||
XBRL Taxonomy Extension Presentation Linkbase Document. | ||
XBRL Taxonomy Extension Definition Linkbase Document. | ||
Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101). |
* | Filed with this document. |
+ | Management compensation plan or arrangement. |
(1) | Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 5, 2017. |
(2) | Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 6, 2005. |
(3) | Incorporated by reference from the Company’s Current Report on Form 8-K filed on February |
5, 2020. | |
(4) | Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 4, 2016. |
(5) | Incorporated by reference from the Company’s Current Report on |
(6) | Incorporated by reference from the Company’s Current Report on |
(7) | Incorporated by reference from the Company’s Current Report on |
(8) | Incorporated by reference from the Company’s Current Report on |
(9) | Incorporated by reference from the Company’s Quarterly Report on |
(10) | Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 18, 2011. |
(11) | Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 21, 2009 |
(12) | Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 22, 2019. |
Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 20, 2009. | |
Incorporated by reference from the Company’s Current Report on Form 8-K dated on February 7, 2017. | |
Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on November 2, 2017. | |
Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on May 8, 2018. | |
Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 1, 2018. | |
December 31, | December 31, | |||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 156,368 | $ | 538,908 | $ | 280,836 | $ | 156,368 | ||||||
Fees receivable, net of allowances of $7,700 and $12,700, respectively | 1,255,118 | 1,176,843 | ||||||||||||
Fees receivable, net of allowances of $8,000 and $7,700, respectively | 1,326,012 | 1,255,118 | ||||||||||||
Deferred commissions | 235,016 | 205,260 | 265,867 | 235,016 | ||||||||||
Prepaid expenses and other current assets | 165,237 | 124,632 | 146,026 | 165,237 | ||||||||||
Assets held-for-sale | — | 542,965 | ||||||||||||
Total current assets | 1,811,739 | 2,588,608 | 2,018,741 | 1,811,739 | ||||||||||
Property, equipment and leasehold improvements, net | 267,665 | 221,507 | 344,579 | 267,665 | ||||||||||
Operating lease right-of-use assets | 702,916 | — | ||||||||||||
Goodwill | 2,923,136 | 2,987,294 | 2,937,726 | 2,923,136 | ||||||||||
Intangible assets, net | 1,042,565 | 1,292,022 | 925,087 | 1,042,565 | ||||||||||
Other assets | 156,369 | 193,742 | 222,245 | 156,369 | ||||||||||
Total Assets | $ | 6,201,474 | $ | 7,283,173 | $ | 7,151,294 | $ | 6,201,474 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ | 710,113 | $ | 666,821 | $ | 788,796 | $ | 710,113 | ||||||
Deferred revenues | 1,745,244 | 1,630,198 | 1,928,020 | 1,745,244 | ||||||||||
Current portion of long-term debt | 165,578 | 379,721 | 139,718 | 165,578 | ||||||||||
Liabilities held-for-sale | — | 145,845 | ||||||||||||
Total current liabilities | 2,620,935 | 2,822,585 | 2,856,534 | 2,620,935 | ||||||||||
Long-term debt, net of deferred financing fees | 2,116,109 | 2,899,124 | 2,043,888 | 2,116,109 | ||||||||||
Operating lease liabilities | 832,533 | — | ||||||||||||
Other liabilities | 613,673 | 577,999 | 479,746 | 613,673 | ||||||||||
Total Liabilities | 5,350,717 | 6,299,708 | 6,212,701 | 5,350,717 | ||||||||||
Stockholders’ Equity: | ||||||||||||||
Preferred stock: | ||||||||||||||
$.01 par value, authorized 5,000,000 shares; none issued or outstanding | — | — | ||||||||||||
$0.01 par value, authorized 5,000,000 shares; none issued or outstanding | — | — | ||||||||||||
Common stock: | ||||||||||||||
$.0005 par value, 250,000,000 shares authorized; 163,602,067 shares issued for both periods | 82 | 82 | ||||||||||||
$0.0005 par value, 250,000,000 shares authorized; 163,602,067 shares issued for both periods | 82 | 82 | ||||||||||||
Additional paid-in capital | 1,823,710 | 1,761,383 | 1,899,273 | 1,823,710 | ||||||||||
Accumulated other comprehensive (loss) income, net | (39,867 | ) | 1,508 | |||||||||||
Accumulated other comprehensive loss, net | (77,938 | ) | (39,867 | ) | ||||||||||
Accumulated earnings | 1,755,432 | 1,647,284 | 1,988,722 | 1,755,432 | ||||||||||
Treasury stock, at cost, 73,899,977 and 72,779,205 common shares, respectively | (2,688,600 | ) | (2,426,792 | ) | ||||||||||
Treasury stock, at cost, 74,444,288 and 73,899,977 common shares, respectively | (2,871,546 | ) | (2,688,600 | ) | ||||||||||
Total Stockholders’ Equity | 850,757 | 983,465 | 938,593 | 850,757 | ||||||||||
Total Liabilities and Stockholders’ Equity | $ | 6,201,474 | $ | 7,283,173 | $ | 7,151,294 | $ | 6,201,474 |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
Revenues: | ||||||||||||||||||||||
Research | $ | 3,105,764 | $ | 2,471,280 | $ | 1,857,001 | $ | 3,374,548 | $ | 3,105,764 | $ | 2,471,280 | ||||||||||
Conferences | 410,461 | 337,903 | 268,605 | 476,869 | 410,461 | 337,903 | ||||||||||||||||
Consulting | 353,667 | 327,661 | 318,934 | 393,904 | 353,667 | 327,661 | ||||||||||||||||
Other | 105,562 | 174,650 | — | — | 105,562 | 174,650 | ||||||||||||||||
Total revenues | 3,975,454 | 3,311,494 | 2,444,540 | 4,245,321 | 3,975,454 | 3,311,494 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Cost of services and product development | 1,468,800 | 1,320,198 | 945,648 | 1,550,568 | 1,468,800 | 1,320,198 | ||||||||||||||||
Selling, general and administrative | 1,884,141 | 1,599,004 | 1,089,184 | 2,103,424 | 1,884,141 | 1,599,004 | ||||||||||||||||
Depreciation | 68,592 | 63,897 | 37,172 | 82,066 | 68,592 | 63,897 | ||||||||||||||||
Amortization of intangibles | 187,009 | 176,274 | 24,797 | 129,713 | 187,009 | 176,274 | ||||||||||||||||
Acquisition and integration charges | 107,197 | 158,450 | 42,598 | 9,463 | 107,197 | 158,450 | ||||||||||||||||
Total costs and expenses | 3,715,739 | 3,317,823 | 2,139,399 | 3,875,234 | 3,715,739 | 3,317,823 | ||||||||||||||||
Operating income (loss) | 259,715 | (6,329 | ) | 305,141 | 370,087 | 259,715 | (6,329 | ) | ||||||||||||||
Interest income | 2,566 | 3,011 | 2,449 | 3,026 | 2,566 | 3,011 | ||||||||||||||||
Interest expense | (126,774 | ) | (127,947 | ) | (27,565 | ) | (102,831 | ) | (126,774 | ) | (127,947 | ) | ||||||||||
Gain from divested operations | 45,447 | — | — | |||||||||||||||||||
(Loss) gain from divested operations | (2,075 | ) | 45,447 | — | ||||||||||||||||||
Other income, net | 167 | 3,448 | 8,406 | 7,532 | 167 | 3,448 | ||||||||||||||||
Income (loss) before income taxes | 181,121 | (127,817 | ) | 288,431 | 275,739 | 181,121 | (127,817 | ) | ||||||||||||||
Provision (benefit) for income taxes | 58,665 | (131,096 | ) | 94,849 | 42,449 | 58,665 | (131,096 | ) | ||||||||||||||
Net income | $ | 122,456 | $ | 3,279 | $ | 193,582 | $ | 233,290 | $ | 122,456 | $ | 3,279 | ||||||||||
Net income per share: | ||||||||||||||||||||||
Basic | $ | 1.35 | $ | 0.04 | $ | 2.34 | $ | 2.60 | $ | 1.35 | $ | 0.04 | ||||||||||
Diluted | $ | 1.33 | $ | 0.04 | $ | 2.31 | $ | 2.56 | $ | 1.33 | $ | 0.04 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||
Basic | 90,827 | 88,466 | 82,571 | 89,817 | 90,827 | 88,466 | ||||||||||||||||
Diluted | 92,122 | 89,790 | 83,820 | 90,971 | 92,122 | 89,790 |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
Net income | $ | 122,456 | $ | 3,279 | $ | 193,582 | $ | 233,290 | $ | 122,456 | $ | 3,279 | ||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||||
Foreign currency translation adjustments | (31,245 | ) | 47,363 | (5,986 | ) | 4,169 | (31,245 | ) | 47,363 | |||||||||||||
Interest rate swaps - net change in deferred gain or loss | (10,844 | ) | 3,892 | 1,670 | (39,394 | ) | (10,844 | ) | 3,892 | |||||||||||||
Pension plans - net change in deferred actuarial loss | 123 | (64 | ) | (965 | ) | (2,846 | ) | 123 | (64 | ) | ||||||||||||
Other comprehensive (loss) income, net of tax | (41,966 | ) | 51,191 | (5,281 | ) | (38,071 | ) | (41,966 | ) | 51,191 | ||||||||||||
Comprehensive income | $ | 80,490 | $ | 54,470 | $ | 188,301 | $ | 195,219 | $ | 80,490 | $ | 54,470 |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income, Net | Accumulated Earnings | Treasury Stock | Total Stockholders’ Equity (Deficit) | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income, Net | Accumulated Earnings | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2015 | $ | 78 | $ | 818,546 | $ | (44,402 | ) | $ | 1,450,684 | $ | (2,357,306 | ) | $ | (132,400 | ) | |||||||||||||||||||||||||||||||
Adoption of ASU No. 2016-09 | — | — | — | (261 | ) | — | (261 | ) | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 193,582 | — | 193,582 | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | (5,281 | ) | — | — | (5,281 | ) | ||||||||||||||||||||||||||||||||||||||
Issuances under stock plans | — | (2,080 | ) | — | — | 12,419 | 10,339 | |||||||||||||||||||||||||||||||||||||||
Common share repurchases | — | — | — | — | (51,762 | ) | (51,762 | ) | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | 46,661 | — | — | — | 46,661 | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2016 | 78 | 863,127 | (49,683 | ) | 1,644,005 | (2,396,649 | ) | 60,878 | $ | 78 | $ | 863,127 | $ | (49,683 | ) | $ | 1,644,005 | $ | (2,396,649 | ) | $ | 60,878 | ||||||||||||||||||||||||
Net income | — | — | — | 3,279 | — | 3,279 | — | — | — | 3,279 | — | 3,279 | ||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | 51,191 | — | — | 51,191 | — | — | 51,191 | — | — | 51,191 | ||||||||||||||||||||||||||||||||||
Issuances under stock plans and for acquisition | 4 | 819,313 | — | — | 11,129 | 830,446 | ||||||||||||||||||||||||||||||||||||||||
Issuances under stock plans and for an acquisition | 4 | 819,313 | — | — | 11,129 | 830,446 | ||||||||||||||||||||||||||||||||||||||||
Common share repurchases | — | — | — | — | (41,272 | ) | (41,272 | ) | — | — | — | — | (41,272 | ) | (41,272 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | — | 78,943 | — | — | — | 78,943 | — | 78,943 | — | — | — | 78,943 | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | 82 | 1,761,383 | 1,508 | 1,647,284 | (2,426,792 | ) | 983,465 | 82 | 1,761,383 | 1,508 | 1,647,284 | (2,426,792 | ) | 983,465 | ||||||||||||||||||||||||||||||||
Adoption of ASU No. 2018-02 | — | — | 591 | (591 | ) | — | — | — | — | 591 | (591 | ) | — | — | ||||||||||||||||||||||||||||||||
Adoption of ASU No. 2016-16 | — | — | — | (13,717 | ) | — | (13,717 | ) | — | — | — | (13,717 | ) | — | (13,717 | ) | ||||||||||||||||||||||||||||||
Net income | — | — | — | 122,456 | — | 122,456 | — | — | — | �� | 122,456 | — | 122,456 | |||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | (41,966 | ) | — | — | (41,966 | ) | — | — | (41,966 | ) | — | — | (41,966 | ) | ||||||||||||||||||||||||||||||
Issuances under stock plans | — | (3,845 | ) | — | — | 14,026 | 10,181 | — | (3,845 | ) | — | — | 14,026 | 10,181 | ||||||||||||||||||||||||||||||||
Common share repurchases | — | — | — | — | (275,834 | ) | (275,834 | ) | — | — | — | — | (275,834 | ) | (275,834 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | — | 66,172 | — | — | — | 66,172 | — | 66,172 | — | — | — | 66,172 | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | 82 | $ | 1,823,710 | $ | (39,867 | ) | $ | 1,755,432 | $ | (2,688,600 | ) | $ | 850,757 | 82 | 1,823,710 | (39,867 | ) | 1,755,432 | (2,688,600 | ) | 850,757 | ||||||||||||||||||||||||
Net income | — | — | — | 233,290 | — | 233,290 | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | (38,071 | ) | — | — | (38,071 | ) | ||||||||||||||||||||||||||||||||||||||
Issuances under stock plans | — | 6,555 | — | — | 11,094 | 17,649 | ||||||||||||||||||||||||||||||||||||||||
Common share repurchases | — | — | — | — | (194,040 | ) | (194,040 | ) | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | 69,008 | — | — | — | 69,008 | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | 82 | $ | 1,899,273 | $ | (77,938 | ) | $ | 1,988,722 | $ | (2,871,546 | ) | $ | 938,593 |
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Operating activities: | |||||||||||
Net income | $ | 233,290 | $ | 122,456 | $ | 3,279 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 211,779 | 255,601 | 240,171 | ||||||||
Stock-based compensation expense | 69,008 | 66,172 | 78,943 | ||||||||
Deferred taxes | (55,787 | ) | 1,524 | (217,414 | ) | ||||||
Loss (gain) from divested operations | 2,075 | (45,447 | ) | — | |||||||
Gain on sale of an equity security | (9,120 | ) | — | — | |||||||
Reduction in the carrying amount of operating lease right-of-use assets | 86,466 | — | — | ||||||||
Amortization and write-off of deferred financing fees | 6,497 | 13,815 | 15,062 | ||||||||
Changes in assets and liabilities, net of acquisitions and divestitures: | |||||||||||
Fees receivable, net | (66,729 | ) | (115,003 | ) | (368,516 | ) | |||||
Deferred commissions | (30,315 | ) | (31,247 | ) | (61,393 | ) | |||||
Prepaid expenses and other current assets | 18,985 | (50,551 | ) | 13,251 | |||||||
Other assets | (27,303 | ) | 11,456 | (18,529 | ) | ||||||
Deferred revenues | 181,203 | 187,147 | 382,852 | ||||||||
Accounts payable and accrued and other liabilities | (54,613 | ) | 55,235 | 186,811 | |||||||
Cash provided by operating activities | 565,436 | 471,158 | 254,517 | ||||||||
Investing activities: | |||||||||||
Additions to property, equipment and leasehold improvements | (149,016 | ) | (126,873 | ) | (110,765 | ) | |||||
Acquisitions - cash paid (net of cash acquired) | (25,989 | ) | (15,855 | ) | (2,641,780 | ) | |||||
Divestitures - cash received (net of cash transferred) | — | 526,779 | — | ||||||||
Proceeds from the sale of an equity security | 14,120 | — | — | ||||||||
Cash (used in) provided by investing activities | (160,885 | ) | 384,051 | (2,752,545 | ) | ||||||
Financing activities: | |||||||||||
Proceeds from employee stock purchase plan | 17,629 | 14,689 | 11,711 | ||||||||
Proceeds from borrowings | 5,000 | — | 3,025,000 | ||||||||
Payments for deferred financing fees | — | — | (51,171 | ) | |||||||
Payments on borrowings | (109,579 | ) | (1,010,972 | ) | (404,438 | ) | |||||
Purchases of treasury stock | (199,042 | ) | (260,832 | ) | (41,272 | ) | |||||
Cash (used in) provided by financing activities | (285,992 | ) | (1,257,115 | ) | 2,539,830 | ||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | 118,559 | (401,906 | ) | 41,802 | |||||||
Effects of exchange rates on cash and cash equivalents and restricted cash | 3,614 | (6,489 | ) | 25,902 | |||||||
Cash and cash equivalents and restricted cash, beginning of year | 158,663 | 567,058 | 499,354 | ||||||||
Cash and cash equivalents and restricted cash, end of year | $ | 280,836 | $ | 158,663 | $ | 567,058 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the year for: | |||||||||||
Interest | $ | 102,298 | $ | 117,500 | $ | 98,500 | |||||
Income taxes, net of refunds received | $ | 119,156 | $ | 95,800 | $ | 76,100 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Operating activities: | |||||||||||
Net income | $ | 122,456 | $ | 3,279 | $ | 193,582 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 255,601 | 240,171 | 61,969 | ||||||||
Stock-based compensation expense | 66,172 | 78,943 | 46,661 | ||||||||
Deferred taxes | 1,524 | (217,414 | ) | (2,648 | ) | ||||||
Gain on extinguishment of debt | — | — | (2,500 | ) | |||||||
Gain from divested operations | (45,447 | ) | — | — | |||||||
Amortization and write-off of deferred financing fees | 13,815 | 15,062 | 3,082 | ||||||||
Changes in assets and liabilities, net of acquisitions and divestitures: | |||||||||||
Fees receivable, net | (115,003 | ) | (368,516 | ) | (68,661 | ) | |||||
Deferred commissions | (31,247 | ) | (61,393 | ) | (18,673 | ) | |||||
Prepaid expenses and other current assets | (50,551 | ) | 13,251 | (21,604 | ) | ||||||
Other assets | 11,456 | (18,529 | ) | 20,005 | |||||||
Deferred revenues | 187,147 | 382,852 | 97,979 | ||||||||
Accounts payable, accrued, and other liabilities | 55,235 | 186,811 | 56,440 | ||||||||
Cash provided by operating activities | 471,158 | 254,517 | 365,632 | ||||||||
Investing activities: | |||||||||||
Additions to property, equipment and leasehold improvements | (126,873 | ) | (110,765 | ) | (49,863 | ) | |||||
Acquisitions - cash paid (net of cash acquired) | (15,855 | ) | (2,641,780 | ) | (48,196 | ) | |||||
Divestitures - cash received (net of cash transferred) | 526,779 | — | — | ||||||||
Cash provided by (used in) in investing activities | 384,051 | (2,752,545 | ) | (98,059 | ) | ||||||
Financing activities: | |||||||||||
Proceeds from employee stock purchase plan | 14,689 | 11,711 | 9,250 | ||||||||
Proceeds from borrowings | — | 3,025,000 | 715,000 | ||||||||
Payments for deferred financing fees | — | (51,171 | ) | (4,975 | ) | ||||||
Payments on borrowings | (1,010,972 | ) | (404,438 | ) | (835,000 | ) | |||||
Purchases of treasury stock | (260,832 | ) | (41,272 | ) | (58,961 | ) | |||||
Cash (used in) provided by financing activities | (1,257,115 | ) | 2,539,830 | (174,686 | ) | ||||||
Net (decrease) increase in cash and cash equivalents and restricted cash | (401,906 | ) | 41,802 | 92,887 | |||||||
Effects of exchange rates on cash and cash equivalents and restricted cash | (6,489 | ) | 25,902 | (5,640 | ) | ||||||
Cash and cash equivalents and restricted cash, beginning of period | 567,058 | 499,354 | 412,107 | ||||||||
Cash and cash equivalents and restricted cash, end of period | $ | 158,663 | $ | 567,058 | $ | 499,354 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 117,500 | $ | 98,500 | $ | 23,400 | |||||
Income taxes, net of refunds received | $ | 95,800 | $ | 76,100 | $ | 86,300 |
Useful Life | December 31, | |||||||||
Category | (Years) | 2018 | 2017 | |||||||
Computer equipment and software | 2-7 | $ | 210,955 | $ | 189,015 | |||||
Furniture and equipment | 3-8 | 85,002 | 67,288 | |||||||
Leasehold improvements | 2-15 | 218,405 | 175,716 | |||||||
514,362 | 432,019 | |||||||||
Less — accumulated depreciation and amortization | (246,697 | ) | (210,512 | ) | ||||||
Property, equipment and leasehold improvements, net | $ | 267,665 | $ | 221,507 |
December 31, 2018 | Customer Relationships | Software | Content | Other | Total | |||||||||||||||
Gross cost at December 31, 2017 (1) | $ | 1,200,316 | $ | 123,424 | $ | 104,313 | $ | 54,929 | $ | 1,482,982 | ||||||||||
Divestitures (2) | (45,175 | ) | (321 | ) | (473 | ) | (160 | ) | (46,129 | ) | ||||||||||
Write-off of fully amortized intangible assets | (303 | ) | (11,715 | ) | (669 | ) | (3,311 | ) | (15,998 | ) | ||||||||||
Foreign currency translation impact and other (3) | (23,182 | ) | (687 | ) | (4,329 | ) | 204 | (27,994 | ) | |||||||||||
Gross cost | 1,131,656 | 110,701 | 98,842 | 51,662 | 1,392,861 | |||||||||||||||
Accumulated amortization (4) | (184,918 | ) | (38,901 | ) | (92,717 | ) | (33,760 | ) | (350,296 | ) | ||||||||||
Balance at December 31, 2018 | $ | 946,738 | $ | 71,800 | $ | 6,125 | $ | 17,902 | $ | 1,042,565 |
December 31, 2017 | Customer Relationships | Software | Content | Other | Total | |||||||||||||||
Gross cost at December 31, 2016 | $ | 63,369 | $ | 16,025 | $ | 3,728 | $ | 33,645 | $ | 116,767 | ||||||||||
Additions due to acquisitions (5) | 1,253,312 | 180,787 | 141,707 | 24,384 | 1,600,190 | |||||||||||||||
Write-off of fully amortized intangible assets | — | — | (4,227 | ) | — | (4,227 | ) | |||||||||||||
Reclassified as held-for-sale (6) | (140,156 | ) | (69,012 | ) | (38,593 | ) | (2,711 | ) | (250,472 | ) | ||||||||||
Foreign currency translation impact | 23,791 | (4,376 | ) | 1,698 | (389 | ) | 20,724 | |||||||||||||
Gross cost (1) | 1,200,316 | 123,424 | 104,313 | 54,929 | 1,482,982 | |||||||||||||||
Accumulated amortization (4) | (92,983 | ) | (26,344 | ) | (47,475 | ) | (24,158 | ) | (190,960 | ) | ||||||||||
Balance at December 31, 2017 (1) | $ | 1,107,333 | $ | 97,080 | $ | 56,838 | $ | 30,771 | $ | 1,292,022 |
2019 | $ | 129,394 | |
2020 | 122,756 | ||
2021 | 102,338 | ||
2022 | 92,801 | ||
2023 and thereafter | 595,276 | ||
$ | 1,042,565 |
Research | Conferences | Consulting | Other | Total | |||||||||||||||
Balance at December 31, 2016 (1) | $ | 595,450 | $ | 46,523 | $ | 96,480 | $ | — | $ | 738,453 | |||||||||
Additions due to acquisitions (2) | 2,042,514 | 140,914 | — | 274,363 | 2,457,791 | ||||||||||||||
Reclassified as held-for-sale (3) | — | — | — | (212,994 | ) | (212,994 | ) | ||||||||||||
Foreign currency translation impact | (18,287 | ) | 483 | 1,318 | 20,530 | 4,044 | |||||||||||||
Balance at December 31, 2017 | 2,619,677 | 187,920 | 97,798 | 81,899 | 2,987,294 | ||||||||||||||
Divestitures (4) | (2,500 | ) | — | — | (90,078 | ) | (92,578 | ) | |||||||||||
Foreign currency translation impact and other (5) | 21,241 | (266 | ) | (734 | ) | 8,179 | 28,420 | ||||||||||||
Balance at December 31, 2018 | $ | 2,638,418 | $ | 187,654 | $ | 97,064 | $ | — | $ | 2,923,136 |
December 31, | ||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||
Cash and cash equivalents | $ | 280,836 | $ | 156,368 | $ | 538,908 | $ | 474,233 | ||||||||
Restricted cash classified in (1), (2): | ||||||||||||||||
Prepaid expenses and other current assets | — | 2,295 | 15,148 | 25,121 | ||||||||||||
Other assets | — | — | 3,002 | — | ||||||||||||
Cash classified as held-for-sale (3) | — | — | 10,000 | — | ||||||||||||
Cash and cash equivalents and restricted cash per the Consolidated Statements of Cash Flows | $ | 280,836 | $ | 158,663 | $ | 567,058 | $ | 499,354 |
December 31, | ||||||||||||||||
2018 | 2017 | 2016 | 2015 | |||||||||||||
Cash and cash equivalents | $ | 156,368 | $ | 538,908 | $ | 474,233 | $ | 372,976 | ||||||||
Restricted cash classified in (1), (2): | ||||||||||||||||
Prepaid expenses and other current assets | 2,295 | 15,148 | 25,121 | 13,505 | ||||||||||||
Other assets | — | 3,002 | — | 25,626 | ||||||||||||
Cash classified as held-for-sale (3) | — | 10,000 | — | — | ||||||||||||
Cash and cash equivalents and restricted cash per the Consolidated Statements of Cash Flows | $ | 158,663 | $ | 567,058 | $ | 499,354 | $ | 412,107 |
(1) | Restricted cash consists of escrow accounts established in connection with certain of the Company's business acquisitions. Generally, such cash is restricted to use due to provisions contained in the underlying stock or asset purchase agreement. The Company will disburse the restricted cash to the sellers of the businesses upon satisfaction of any contingencies described in such agreements (e.g., potential indemnification claims, etc.). |
(2) | Restricted cash is recorded in Prepaid expenses and other current assets and Other assets in the Company's consolidated balance sheets with the short-term or long-term classification dependent on the projected timing of disbursements to the sellers. |
(3) | Represents cash classified as a held-for-sale asset for the CEB Talent Assessment business, |
Useful Life | December 31, | |||||||||
Category | (Years) | 2019 | 2018 | |||||||
Computer equipment and software | 2-7 | $ | 256,451 | $ | 210,955 | |||||
Furniture and equipment | 3-8 | 104,370 | 85,002 | |||||||
Leasehold improvements | 2-15 | 275,114 | 218,405 | |||||||
Total cost | 635,935 | 514,362 | ||||||||
Less — accumulated depreciation and amortization | (291,356 | ) | (246,697 | ) | ||||||
Property, equipment and leasehold improvements, net | $ | 344,579 | $ | 267,665 |
Research | Conferences | Consulting | Other (1) | Total | |||||||||||
Primary Geographic Markets: (2) | |||||||||||||||
United States and Canada | $ | 1,994,016 | $ | 256,219 | $ | 205,874 | $ | 58,843 | $ | 2,514,952 | |||||
Europe, Middle East and Africa | 737,129 | 105,909 | 119,258 | 38,194 | 1,000,490 | ||||||||||
Other International | 374,619 | 48,333 | 28,535 | 8,525 | 460,012 | ||||||||||
Total revenues | $ | 3,105,764 | $ | 410,461 | $ | 353,667 | $ | 105,562 | $ | 3,975,454 |
Research | Conferences | Consulting | Other (1) | Total | |||||||||||
Primary Geographic Markets: (2) | |||||||||||||||
United States and Canada | $ | 1,600,847 | $ | 210,698 | $ | 188,022 | $ | 92,799 | $ | 2,092,366 | |||||
Europe, Middle East and Africa | 597,943 | 86,567 | 111,792 | 59,119 | 855,421 | ||||||||||
Other International | 272,490 | 40,638 | 27,847 | 22,732 | 363,707 | ||||||||||
Total revenues | $ | 2,471,280 | $ | 337,903 | $ | 327,661 | $ | 174,650 | $ | 3,311,494 |
Research | Conferences | Consulting | Other | Total | |||||||||||
Primary Geographic Markets: (2) | |||||||||||||||
United States and Canada | $ | 1,178,575 | $ | 162,162 | $ | 179,011 | $ | — | $ | 1,519,748 | |||||
Europe, Middle East and Africa | 434,753 | 72,926 | 109,042 | — | 616,721 | ||||||||||
Other International | 243,673 | 33,517 | 30,881 | — | 308,071 | ||||||||||
Total revenues | $ | 1,857,001 | $ | 268,605 | $ | 318,934 | $ | — | $ | 2,444,540 |
Research | Conferences | Consulting | Other | Total | |||||||||||
Timing of Revenue Recognition: | |||||||||||||||
Transferred over time (1) | $ | 2,851,176 | $ | — | $ | 294,397 | $ | 86,667 | $ | 3,232,240 | |||||
Transferred at a point in time (2) | 254,588 | 410,461 | 59,270 | 18,895 | 743,214 | ||||||||||
Total revenues | $ | 3,105,764 | $ | 410,461 | $ | 353,667 | $ | 105,562 | $ | 3,975,454 |
Research | Conferences | Consulting | Other | Total | |||||||||||
Timing of Revenue Recognition: | |||||||||||||||
Transferred over time (1) | $ | 2,275,377 | $ | — | $ | 269,720 | $ | 141,331 | $ | 2,686,428 | |||||
Transferred at a point in time (2) | 195,903 | 337,903 | 57,941 | 33,319 | 625,066 | ||||||||||
Total revenues | $ | 2,471,280 | $ | 337,903 | $ | 327,661 | $ | 174,650 | $ | 3,311,494 |
Research | Conferences | Consulting | Other | Total | |||||||||||
Timing of Revenue Recognition: | |||||||||||||||
Transferred over time (1) | $ | 1,710,786 | $ | — | $ | 267,809 | $ | — | $ | 1,978,595 | |||||
Transferred at a point in time (2) | 146,215 | 268,605 | 51,125 | — | 465,945 | ||||||||||
Total revenues | $ | 1,857,001 | $ | 268,605 | $ | 318,934 | $ | — | $ | 2,444,540 |
December 31, | |||||||
2018 | 2017 | ||||||
Assets: | |||||||
Fees receivable, gross (1) | $ | 1,262,818 | $ | 1,162,871 | |||
Contract assets (2) | $ | 26,119 | $ | 26,672 | |||
Contract liabilities: | |||||||
Deferred revenues (current liability) (3) | $ | 1,745,244 | $ | 1,630,198 | |||
Non-current deferred revenues (3) | 21,194 | 16,205 | |||||
Total contract liabilities | $ | 1,766,438 | $ | 1,646,403 | |||
2018 | 2017 | ||||||
Liability balance at beginning of the period | $ | 12,961 | $ | — | |||
Charges and adjustments, net (1) | 69,790 | 13,087 | |||||
Payments, net of $2,515 in sublease rent during 2018 | (26,087 | ) | (126 | ) | |||
Liability balance at end of the period (2) | $ | 56,664 | $ | 12,961 |
Assets: | ||||
Cash | $ | 1,281 | ||
Fees receivable | 1,402 | |||
Prepaid expenses and other assets | 166 | |||
Goodwill (1) | 19,293 | |||
Finite-lived intangible assets (2) | 5,250 | |||
Total assets acquired | 27,392 | |||
Total liabilities assumed (primarily deferred revenues) | 2,417 | |||
Net assets acquired | $ | 24,975 |
(1) |
(2) |
Aggregate consideration (1): | CEB | L2 | Total | CEB | L2 | Total | ||||||||||||||||
Cash paid at close (2), (3) | $ | 2,687,704 | $ | 134,199 | $ | 2,821,903 | $ | 2,687,704 | $ | 134,199 | $ | 2,821,903 | ||||||||||
Additional cash paid (2) | 12,465 | — | 12,465 | 12,465 | — | 12,465 | ||||||||||||||||
Fair value of Gartner equity (4) | 818,660 | — | 818,660 | 818,660 | — | 818,660 | ||||||||||||||||
Total | $ | 3,518,829 | $ | 134,199 | $ | 3,653,028 | $ | 3,518,829 | $ | 134,199 | $ | 3,653,028 |
(1) | Includes the total consideration transferred for 100% of the outstanding capital stock of the acquired businesses. |
(2) | The cash paid at close represents the gross contractual amount paid. The Company paid |
(3) | The Company borrowed a total of approximately $2.8 billion in conjunction with the CEB acquisition (see Note |
(4) | Consists of the fair value of (i) Gartner common stock issued |
CEB (3) | L2 (4) | Total | |||||||||
Assets: | |||||||||||
Cash | $ | 194,706 | $ | 4,852 | $ | 199,558 | |||||
Fees receivable | 175,440 | 8,277 | 183,717 | ||||||||
Prepaid expenses and other current assets | 53,610 | 1,167 | 54,777 | ||||||||
Property, equipment and leasehold improvements | 51,399 | 663 | 52,062 | ||||||||
Goodwill (1) | 2,349,589 | 108,202 | 2,457,791 | ||||||||
Finite-lived intangible assets (2) | 1,584,300 | 15,890 | 1,600,190 | ||||||||
Other assets | 66,818 | 13,067 | 79,885 | ||||||||
Total assets | 4,475,862 | 152,118 | 4,627,980 | ||||||||
Liabilities: | |||||||||||
Accounts payable and accrued liabilities | 142,134 | 3,050 | 145,184 | ||||||||
Deferred revenues (current) | 246,472 | 13,200 | 259,672 | ||||||||
Other liabilities | 568,427 | 1,669 | 570,096 | ||||||||
Total liabilities | 957,033 | 17,919 | 974,952 | ||||||||
Net assets acquired | $ | 3,518,829 | $ | 134,199 | $ | 3,653,028 |
(1) | The Company believes that the goodwill resulting from the CEB and L2 acquisitions is supportable based on synergies that were anticipated |
(2) | All of the acquired intangible assets |
(3) | The Company's consolidated financial statements include the operating results of CEB beginning on April 5, 2017, the date of acquisition. CEB's operating results and the related goodwill |
Pro forma total revenue | $ | 3,726,470 | ||
Pro forma net income | 150,167 | |||
Pro forma basic and diluted income per share | $ | 1.66 |
Twelve Months Ended | ||||||||
December 31, | ||||||||
2017 | 2016 | |||||||
Pro forma total revenue | $ | 3,726,470 | $ | 3,183,070 | ||||
Pro forma net income (loss) | 150,167 | (241,423 | ) | |||||
Pro forma basic and diluted income (loss) per share | $ | 1.66 | $ | (2.68 | ) |
(4) | The Company's consolidated financial statements include the operating results of L2 beginning on March 9, 2017, the |
2018 | 2017 | ||||||
Liability balance at beginning of the year | $ | 12,961 | $ | — | |||
Charges and adjustments, net (2) | 69,790 | 13,087 | |||||
Payments, net of $2,515 in sublease rent during 2018 | (26,087 | ) | (126 | ) | |||
Liability balance at end of the year (3) | $ | 56,664 | $ | 12,961 |
(1) | With the adoption of ASU No. 2016-02 on January 1, 2019, the accrual for exit costs was reclassified to offset the Company's right-of-use assets and the present value of our remaining lease payments was recorded as an operating lease liability. Moreover, there were no new exit cost activities during 2019. Note 1 — Business and Significant Accounting Policies and Note 7 — Leases provide additional information regarding the Company's leases and the adoption of ASU No. 2016-02. |
(2) | During 2018, the Company recognized $7.5 million of expense for changes in the original estimates of its exit cost obligations. The corresponding amount for 2017 was a benefit of $10.1 million. |
(3) | Through December 31, 2018, in the aggregate, we had expensed $82.9 million and had net cash outlays of $26.2 million related to the exit cost activities at all of our facilities. |
Research | Conferences | Consulting | Other | Total | |||||||||||||||
Balance at December 31, 2017 (1) | $ | 2,619,677 | $ | 187,920 | $ | 97,798 | $ | 81,899 | $ | 2,987,294 | |||||||||
Divestitures (2) | (2,500 | ) | — | — | (90,078 | ) | (92,578 | ) | |||||||||||
Foreign currency translation impact and other (3) | 21,241 | (266 | ) | (734 | ) | 8,179 | 28,420 | ||||||||||||
Balance at December 31, 2018 | 2,638,418 | 187,654 | 97,064 | — | 2,923,136 | ||||||||||||||
Additions due to an acquisition (4) | 17,557 | 1,736 | — | — | 19,293 | ||||||||||||||
Foreign currency translation impact | (4,915 | ) | 251 | (39 | ) | — | (4,703 | ) | |||||||||||
Balance at December 31, 2019 | $ | 2,651,060 | $ | 189,641 | $ | 97,025 | $ | — | $ | 2,937,726 |
(1) | The Company does not have any accumulated goodwill impairment losses. The goodwill balance at December 31, 2017 excludes certain amounts related to held-for-sale operations. |
(2) | Represents amounts related to divested businesses. See Note 2 — Acquisitions and Divestitures for additional information. |
(3) | Includes the foreign currency translation impact and certain measurement period adjustments related to the acquisition of CEB. See Note 2 — Acquisitions and Divestitures for additional information. |
(4) | The 2019 additions are due to the acquisition of TOPO. See Note 2 – Acquisitions and Divestitures for additional information. |
December 31, 2019 | Customer Relationships | Software | Content | Other | Total | |||||||||||||||
Gross cost at December 31, 2018 | $ | 1,131,656 | $ | 110,701 | $ | 98,842 | $ | 51,662 | $ | 1,392,861 | ||||||||||
Additions due to an acquisition (1) | 3,600 | — | 1,200 | 450 | 5,250 | |||||||||||||||
Intangible assets fully amortized | — | — | (85,900 | ) | (21,358 | ) | (107,258 | ) | ||||||||||||
Foreign currency translation impact | 9,853 | 332 | (2 | ) | 84 | 10,267 | ||||||||||||||
Gross cost | 1,145,109 | 111,033 | 14,140 | 30,838 | 1,301,120 | |||||||||||||||
Accumulated amortization (2) | (283,369 | ) | (61,564 | ) | (11,225 | ) | (19,875 | ) | (376,033 | ) | ||||||||||
Balance at December 31, 2019 | $ | 861,740 | $ | 49,469 | $ | 2,915 | $ | 10,963 | $ | 925,087 |
December 31, 2018 | Customer Relationships | Software | Content | Other | Total | |||||||||||||||
Gross cost at December 31, 2017 (3) | $ | 1,200,316 | $ | 123,424 | $ | 104,313 | $ | 54,929 | $ | 1,482,982 | ||||||||||
Intangible assets fully amortized | (303 | ) | (11,715 | ) | (669 | ) | (3,311 | ) | (15,998 | ) | ||||||||||
Divestitures (4) | (45,175 | ) | (321 | ) | (473 | ) | (160 | ) | (46,129 | ) | ||||||||||
Foreign currency translation impact and other (5) | (23,182 | ) | (687 | ) | (4,329 | ) | 204 | (27,994 | ) | |||||||||||
Gross cost | 1,131,656 | 110,701 | 98,842 | 51,662 | 1,392,861 | |||||||||||||||
Accumulated amortization (2) | (184,918 | ) | (38,901 | ) | (92,717 | ) | (33,760 | ) | (350,296 | ) | ||||||||||
Balance at December 31, 2018 | $ | 946,738 | $ | 71,800 | $ | 6,125 | $ | 17,902 | $ | 1,042,565 |
(1) | The 2019 additions are due to the acquisition of TOPO. See Note 2 – Acquisitions and Divestitures for additional information. |
(2) | Finite-lived intangible assets are amortized using the straight-line method over the following periods: Customer relationships—4 to 13 years; Software—3 to 7 years; Content—1.5 to 4 years; and Other —2 to 11 years. |
(3) | Excludes certain amounts related to held-for-sale operations. |
(4) | Represents amounts related to divested businesses. See Note 2 — Acquisitions and Divestitures for additional information. |
(5) | Includes the foreign currency translation impact and certain other adjustments. |
2020 | $ | 126,081 | |
2021 | 105,007 | ||
2022 | 95,194 | ||
2023 | 95,179 | ||
2024 | 89,863 | ||
2025 and thereafter | 413,763 | ||
$ | 925,087 |
December 31, | |||||||
2019 | 2018 | ||||||
Benefit plan-related assets | $ | 84,600 | $ | 75,653 | |||
Non-current deferred tax assets | 79,618 | 34,494 | |||||
Other | 58,027 | 46,222 | |||||
Total other assets | $ | 222,245 | $ | 156,369 |
December 31, | |||||||
2018 | 2017 | ||||||
Benefit plan-related assets | $ | 75,653 | $ | 97,525 | |||
Non-current deferred tax assets | 34,494 | 31,067 | |||||
Other | 46,222 | 65,150 | |||||
Total other assets | $ | 156,369 | $ | 193,742 |
December 31, | |||||||
2019 | 2018 | ||||||
Accounts payable | $ | 32,995 | $ | 37,508 | |||
Payroll and employee benefits payable | 165,449 | 143,803 | |||||
Severance and retention bonus payable | 24,281 | 28,292 | |||||
Bonus payable | 192,100 | 170,719 | |||||
Commissions payable | 142,499 | 126,844 | |||||
Taxes payable | 7,878 | 19,725 | |||||
Current portion of operating lease liabilities (1) | 76,516 | — | |||||
Other accrued liabilities | 147,078 | 183,222 | |||||
Total accounts payable and accrued liabilities | $ | 788,796 | $ | 710,113 |
December 31, | |||||||
2018 | 2017 | ||||||
Accounts payable | $ | 37,508 | $ | 49,000 | |||
Payroll and employee benefits payable | 143,803 | 120,278 | |||||
Severance and retention bonus payable | 28,292 | 44,685 | |||||
Bonus payable | 170,719 | 162,710 | |||||
Commissions payable | 126,844 | 108,969 | |||||
Taxes payable | 19,725 | 46,758 | |||||
Other accrued liabilities | 183,222 | 134,421 | |||||
Total accounts payable and accrued liabilities | $ | 710,113 | $ | 666,821 |
(1) | Note 1 — Business and Significant Accounting Policies and Note 7 — Leases provide additional information regarding the Company's leases and certain changes in lease accounting effective January 1, 2019. |
December 31, | |||||||
2019 | 2018 | ||||||
Non-current deferred revenues | $ | 24,409 | $ | 21,194 | |||
Long-term taxes payable | 63,565 | 66,304 | |||||
Benefit plan-related liabilities | 108,615 | 96,033 | |||||
Lease-related matters prior to the adoption of ASU No. 2016-02 (1) | — | 165,374 | |||||
Non-current deferred tax liabilities | 189,814 | 214,687 | |||||
Other, including fair value of interest rate swap contracts | 93,343 | 50,081 | |||||
Total other liabilities | $ | 479,746 | $ | 613,673 |
December 31, | |||||||
2018 | 2017 | ||||||
Non-current deferred revenue | $ | 21,194 | $ | 16,205 | |||
Long-term taxes payable | 66,304 | 66,386 | |||||
Benefit plan-related liabilities | 96,033 | 118,868 | |||||
Lease-related matters | 165,374 | 115,840 | |||||
Non-current deferred tax liabilities | 214,687 | 206,338 | |||||
Other | 50,081 | 54,362 | |||||
Total other liabilities | $ | 613,673 | $ | 577,999 |
(1) | With the adoption of ASU No. 2016-02 on January 1, 2019, the accrual for lease-related matters was reclassified to offset the Company's right-of-use assets and the present value of our remaining lease payments was recorded as an operating lease liability. Note 1 — Business and Significant Accounting Policies and Note 7 — Leases provide additional information regarding the Company's leases and the adoption of ASU No. 2016-02. |
December 31, | ||||||||
Description: | 2018 | 2017 | ||||||
2016 Credit Agreement - Term loan A facility (1) | $ | 1,355,062 | $ | 1,429,312 | ||||
2016 Credit Agreement - Term loan B facility (2) | — | 496,250 | ||||||
2016 Credit Agreement - Revolving credit facility (1), (3) | 155,000 | 595,000 | ||||||
Senior notes (4) | 800,000 | 800,000 | ||||||
Other (5) | 2,030 | 2,500 | ||||||
Principal amount outstanding (6), (7) | 2,312,092 | 3,323,062 | ||||||
Less: deferred financing fees (8) | (30,405 | ) | (44,217 | ) | ||||
Net balance sheet carrying amount | $ | 2,281,687 | $ | 3,278,845 |
December 31, | ||||||||
Description | 2019 | 2018 | ||||||
2016 Credit Agreement - Term loan A facility (1) | $ | 1,252,969 | $ | 1,355,062 | ||||
2016 Credit Agreement - Revolving credit facility (1), (2) | 148,000 | 155,000 | ||||||
Senior notes (3) | 800,000 | 800,000 | ||||||
Other (4) | 6,545 | 2,030 | ||||||
Principal amount outstanding (5), (6) | 2,207,514 | 2,312,092 | ||||||
Less: deferred financing fees (7) | (23,908 | ) | (30,405 | ) | ||||
Net balance sheet carrying amount | $ | 2,183,606 | $ | 2,281,687 |
(1) | The contractual annualized interest rate as of December 31, |
(2) | The |
Consists of |
Consists of |
The weighted average annual effective rate on the Company's |
The contractual due dates of principal amounts by year |
Deferred financing fees are being amortized to Interest expense over the term of the related debt obligation. The Company wrote off approximately $6.9 million of deferred financing fees in 2018 related to the repayment of the Term loan B facility. During 2017, the Company paid $51.2 million |
Description | |||
Year Ended December 31, 2019: | |||
Operating lease cost (1) | $ | 144,727 | |
Variable lease cost (2) | 16,404 | ||
Sublease income | (38,901 | ) | |
Total lease cost, net (3) | $ | 122,230 | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 135,799 | |
Cash receipts from sublease arrangements | $ | 34,441 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 136,997 | |
As of December 31, 2019: | |||
Weighted average remaining lease term for operating leases (in years) | 10.2 | ||
Weighted average discount rate for operating leases | 6.7 | % |
(1) | Included in operating lease cost was $43.2 million of costs for subleasing activities during 2019. |
(2) | These amounts are primarily variable lease and nonlease costs that were not fixed at the lease commencement date or are dependent on something other than an index or a rate. |
(3) | The Company did not capitalize any operating lease costs during 2019. |
Operating | Sublease | |||||||
Lease | Cash | |||||||
Period ending December 31, | Payments | Receipts | ||||||
2020 | $ | 134,579 | $ | 39,941 | ||||
2021 | 134,707 | 44,382 | ||||||
2022 | 129,741 | 45,582 | ||||||
2023 | 126,435 | 46,520 | ||||||
2024 | 114,948 | 40,643 | ||||||
Thereafter | 643,129 | 143,547 | ||||||
Total future minimum operating lease payments and estimated sublease cash receipts (1) | 1,283,539 | $ | 360,615 | |||||
Imputed interest | (374,490 | ) | ||||||
Total operating lease liabilities per the Consolidated Balance Sheet | $ | 909,049 |
(1) | Approximately 82% of the operating lease payments pertain to properties in the United States. |
Description | ||||
Accounts payable and accrued liabilities | $ | 76,516 | ||
Operating lease liabilities | 832,533 | |||
Total operating lease liabilities per the Consolidated Balance Sheet | $ | 909,049 |
Year ended December 31, | ||||||
Year ended or ending December 31, | ||||||
2019 | $ | 130,991 | $ | 130,991 | ||
2020 | 121,802 | 121,802 | ||||
2021 | 118,945 | 118,945 | ||||
2022 | 111,117 | 111,117 | ||||
2023 | 106,113 | 106,113 | ||||
Thereafter | 689,360 | 689,360 | ||||
Total minimum lease payments (1) | $ | 1,278,328 | $ | 1,278,328 |
Issued Shares | Treasury Stock Shares | Issued Shares | Treasury Stock Shares | |||||||
Balance at December 31, 2015 | 156,234,415 | 73,896,245 | ||||||||
Balance at December 31, 2016 | 156,234,415 | 73,583,172 | ||||||||
Issued in connection with the acquisition of CEB (1) | 7,367,652 | — | ||||||||
Issuances under stock plans | — | (923,696 | ) | — | (1,186,150 | ) | ||||
Purchases for treasury (1) | — | 610,623 | ||||||||
Balance at December 31, 2016 | 156,234,415 | 73,583,172 | ||||||||
Issued in connection with the acquisition of CEB | 7,367,652 | — | ||||||||
Issuances under stock plans | — | (1,186,150 | ) | |||||||
Purchases for treasury (1) | — | 382,183 | ||||||||
Purchases for treasury (2) | — | 382,183 | ||||||||
Balance at December 31, 2017 | 163,602,067 | 72,779,205 | 163,602,067 | 72,779,205 | ||||||
Issuances under stock plans | — | (933,246 | ) | — | (933,246 | ) | ||||
Purchases for treasury (1), (2) | — | 2,054,018 | ||||||||
Purchases for treasury (2), (3) | — | 2,054,018 | ||||||||
Balance at December 31, 2018 | 163,602,067 | 73,899,977 | 163,602,067 | 73,899,977 | ||||||
Issuances under stock plans | — | (825,115 | ) | |||||||
Purchases for treasury (2), (3) | — | 1,369,426 | ||||||||
Balance at December 31, 2019 | 163,602,067 | 74,444,288 |
(1) |
(2) | The Company used a total of $199.0 million, $260.8 million and $41.3 million in cash for share repurchases during 2019, 2018 and 2017, respectively. |
(3) | The number of shares repurchased in 2018 |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||
Balance - December 31, 2018 | $ | (7,770 | ) | $ | (5,738 | ) | $ | (26,359 | ) | $ | (39,867 | ) | |||
Other comprehensive income (loss) activity during the year: | |||||||||||||||
Change in AOCI/L before reclassifications to income | (36,949 | ) | (3,011 | ) | 4,169 | (35,791 | ) | ||||||||
Reclassifications from AOCI/L to income (2), (3) | (2,445 | ) | 165 | — | (2,280 | ) | |||||||||
Other comprehensive income (loss) for the year | (39,394 | ) | (2,846 | ) | 4,169 | (38,071 | ) | ||||||||
Balance - December 31, 2019 | $ | (47,164 | ) | $ | (8,584 | ) | $ | (22,190 | ) | $ | (77,938 | ) |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | |||||||||||||||||||||||
Balance - December 31, 2017 | $ | 2,483 | $ | (5,861 | ) | $ | 4,886 | $ | 1,508 | $ | 2,483 | $ | (5,861 | ) | $ | 4,886 | $ | 1,508 | ||||||||||||
Adoption of ASU No. 2018-02 | 591 | — | — | 591 | 591 | — | — | 591 | ||||||||||||||||||||||
Other comprehensive income (loss) activity during the period: | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) activity during the year: | ||||||||||||||||||||||||||||||
Change in AOCI/L before reclassifications to income | (9,447 | ) | — | 29,066 | 19,619 | (9,447 | ) | — | 29,066 | 19,619 | ||||||||||||||||||||
Reclassifications from AOCI/L to income (3), (4), (5) | (1,397 | ) | 123 | (60,311 | ) | (61,585 | ) | |||||||||||||||||||||||
Other comprehensive income (loss) for the period | (10,844 | ) | 123 | (31,245 | ) | (41,966 | ) | |||||||||||||||||||||||
Reclassifications from AOCI/L to income (2), (3), (5) | (1,397 | ) | 123 | (60,311 | ) | (61,585 | ) | |||||||||||||||||||||||
Other comprehensive income (loss) for the year | (10,844 | ) | 123 | (31,245 | ) | (41,966 | ) | |||||||||||||||||||||||
Balance - December 31, 2018 | $ | (7,770 | ) | $ | (5,738 | ) | $ | (26,359 | ) | $ | (39,867 | ) | $ | (7,770 | ) | $ | (5,738 | ) | $ | (26,359 | ) | $ | (39,867 | ) |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||
Balance - December 31, 2016 | $ | (1,409 | ) | $ | (5,797 | ) | $ | (42,477 | ) | $ | (49,683 | ) | |||
Other comprehensive income (loss) activity during the period: | |||||||||||||||
Change in AOCI/L before reclassifications to income | (1,492 | ) | — | 47,363 | 45,871 | ||||||||||
Reclassifications from AOCI/L to income (3), (4) | 5,384 | (64 | ) | — | 5,320 | ||||||||||
Other comprehensive income (loss) for the period | 3,892 | (64 | ) | 47,363 | 51,191 | ||||||||||
Balance - December 31, 2017 | $ | 2,483 | $ | (5,861 | ) | $ | 4,886 | $ | 1,508 |
(1) | Identifying the contract with the customer; |
(2) | Identifying the performance obligations in the contract; |
(3) | Determining the transaction price for the contract; |
(4) | Allocating the transaction price to the performance obligations in the contract; and |
(5) | Recognizing revenue when (or as) performance obligations are satisfied. |
Primary Geographic Market | Research | Conferences | Consulting | Total | ||||||||
United States and Canada | $ | 2,199,008 | $ | 295,857 | $ | 239,625 | $ | 2,734,490 | ||||
Europe, Middle East and Africa | 751,267 | 122,591 | 122,146 | 996,004 | ||||||||
Other International | 424,273 | 58,421 | 32,133 | 514,827 | ||||||||
Total revenues | $ | 3,374,548 | $ | 476,869 | $ | 393,904 | $ | 4,245,321 |
Primary Geographic Market | Research | Conferences | Consulting | Other | Total | ||||||||||
United States and Canada | $ | 1,994,016 | $ | 256,219 | $ | 205,874 | $ | 58,843 | $ | 2,514,952 | |||||
Europe, Middle East and Africa | 737,129 | 105,909 | 119,258 | 38,194 | 1,000,490 | ||||||||||
Other International | 374,619 | 48,333 | 28,535 | 8,525 | 460,012 | ||||||||||
Total revenues | $ | 3,105,764 | $ | 410,461 | $ | 353,667 | $ | 105,562 | $ | 3,975,454 |
Primary Geographic Market | Research | Conferences | Consulting | Other | Total | ||||||||||
United States and Canada | $ | 1,600,847 | $ | 210,698 | $ | 188,022 | $ | 92,799 | $ | 2,092,366 | |||||
Europe, Middle East and Africa | 597,943 | 86,567 | 111,792 | 59,119 | 855,421 | ||||||||||
Other International | 272,490 | 40,638 | 27,847 | 22,732 | 363,707 | ||||||||||
Total revenues | $ | 2,471,280 | $ | 337,903 | $ | 327,661 | $ | 174,650 | $ | 3,311,494 |
(1) | Revenue is reported based on where the sale is fulfilled. |
(2) | During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company's 2018 divestitures. |
Timing of Revenue Recognition | Research | Conferences | Consulting | Total | ||||||||
Transferred over time (2) | $ | 3,083,936 | $ | — | $ | 316,042 | $ | 3,399,978 | ||||
Transferred at a point in time (3) | 290,612 | 476,869 | 77,862 | 845,343 | ||||||||
Total revenues | $ | 3,374,548 | $ | 476,869 | $ | 393,904 | $ | 4,245,321 |
Timing of Revenue Recognition | Research | Conferences | Consulting | Other | Total | ||||||||||
Transferred over time (2) | $ | 2,851,176 | $ | — | $ | 294,397 | $ | 86,667 | $ | 3,232,240 | |||||
Transferred at a point in time (3) | 254,588 | 410,461 | 59,270 | 18,895 | 743,214 | ||||||||||
Total revenues | $ | 3,105,764 | $ | 410,461 | $ | 353,667 | $ | 105,562 | $ | 3,975,454 |
Timing of Revenue Recognition | Research | Conferences | Consulting | Other | Total | ||||||||||
Transferred over time (2) | $ | 2,275,377 | $ | — | $ | 269,720 | $ | 141,331 | $ | 2,686,428 | |||||
Transferred at a point in time (3) | 195,903 | 337,903 | 57,941 | 33,319 | 625,066 | ||||||||||
Total revenues | $ | 2,471,280 | $ | 337,903 | $ | 327,661 | $ | 174,650 | $ | 3,311,494 |
(1) | During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company's 2018 divestitures. |
(2) | Research revenues were recognized in connection with performance obligations that were satisfied over time using a time-elapsed output method to measure progress. Consulting revenues were recognized over time using labor hours as an input measurement basis. During 2018 and 2017, Other revenues were recognized using either a time-elapsed output method, performance-based milestone approach or labor hours, depending on the nature of the underlying customer contract. |
(3) | The revenues in this category were recognized in connection with performance obligations that were satisfied at the point in time that the contractual deliverables were provided to the customer. |
December 31, | |||||||
2019 | 2018 | ||||||
Assets: | |||||||
Fees receivable, gross (1) | $ | 1,334,012 | $ | 1,262,818 | |||
Contract assets recorded in Prepaid expenses and other current assets (2) | $ | 21,350 | $ | 26,119 | |||
Contract liabilities: | |||||||
Deferred revenues (current liability) (3) | $ | 1,928,020 | $ | 1,745,244 | |||
Non-current deferred revenues recorded in Other liabilities (3) | 24,409 | 21,194 | |||||
Total contract liabilities | $ | 1,952,429 | $ | 1,766,438 | |||
(1) | Fees receivable represent an unconditional right of payment from our customers and include both billed and unbilled amounts. |
(2) | Contract assets represent recognized revenue for which we do not have an unconditional right to payment as of the balance sheet date because the project may be subject to a progress billing milestone or some other billing restriction. |
(3) | Deferred revenues represent amounts (i) for which the Company has received an upfront customer payment or (ii) that pertain to recognized fees receivable. Both situations occur before the completion of our performance obligation(s). |
Award type | 2019 | 2018 | 2017 | |||||||||
Stock appreciation rights | $ | 6.7 | $ | 6.3 | $ | 5.6 | ||||||
Restricted stock units | 61.6 | 59.2 | 72.6 | |||||||||
Common stock equivalents | 0.7 | 0.7 | 0.7 | |||||||||
Total (1) | $ | 69.0 | $ | 66.2 | $ | 78.9 |
Award type | 2018 | 2017 | 2016 | |||||||||
Stock appreciation rights | $ | 6.3 | $ | 5.6 | $ | 5.6 | ||||||
Restricted stock units | 59.2 | 72.6 | 40.4 | |||||||||
Common stock equivalents | 0.7 | 0.7 | 0.7 | |||||||||
Total (1) | $ | 66.2 | $ | 78.9 | $ | 46.7 |
Expense category line item | 2019 | 2018 | 2017 | |||||||||
Cost of services and product development | $ | 29.1 | $ | 28.1 | $ | 25.8 | ||||||
Selling, general and administrative | 39.4 | 36.2 | 35.5 | |||||||||
Acquisition and integration charges (2) | 0.5 | 1.9 | 17.6 | |||||||||
Total (1) | $ | 69.0 | $ | 66.2 | $ | 78.9 |
Expense category line item | 2018 | 2017 | 2016 | |||||||||
Cost of services and product development | $ | 28.1 | $ | 25.8 | $ | 21.9 | ||||||
Selling, general and administrative | 36.2 | 35.5 | 24.8 | |||||||||
Acquisition and integration charges (2) | 1.9 | 17.6 | — | |||||||||
Total (1) | $ | 66.2 | $ | 78.9 | $ | 46.7 |
(1) | Includes charges of $21.5 million, $19.4 million and $22.9 million during 2019, 2018 and |
(2) | These charges are the result of (i) the acceleration of the vesting of certain restricted stock units related to the CEB acquisition and (ii) restricted stock units granted in connection with the CEB integration process. |
Stock Appreciation Rights ("SARs") (in millions) | Per Share Weighted Average Exercise Price | Per Share Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (Years) | |||||||||
Outstanding at December 31, 2017 | 1.2 | $ | 76.73 | $ | 17.35 | 4.28 | ||||||
Granted | 0.3 | 114.26 | 25.63 | 6.11 | ||||||||
Exercised | (0.3 | ) | 60.67 | 15.10 | n/a | |||||||
Outstanding at December 31, 2018 (1) (2) | 1.2 | $ | 89.45 | $ | 19.88 | 4.33 | ||||||
Vested and exercisable at December 31, 2018 (2) | 0.5 | $ | 75.73 | $ | 17.02 | 3.24 |
Stock Appreciation Rights ("SARs") (in millions) | Per Share Weighted Average Exercise Price | Per Share Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (Years) | |||||||||
Outstanding at December 31, 2018 | 1.2 | $ | 89.45 | $ | 19.88 | 4.33 | ||||||
Granted | 0.3 | 143.23 | 32.62 | 6.11 | ||||||||
Forfeited | (0.1 | ) | 118.31 | 26.52 | n/a | |||||||
Exercised | (0.2 | ) | 73.64 | 16.92 | n/a | |||||||
Outstanding at December 31, 2019 (1) (2) | 1.2 | $ | 104.05 | $ | 23.18 | 4.21 | ||||||
Vested and exercisable at December 31, 2019 (2) | 0.5 | $ | 85.79 | $ | 18.87 | 3.13 |
(1) | As of December 31, |
(2) | As of December 31, |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||
Expected dividend yield (1) | — | % | — | % | — | % | — | % | — | % | — | % | ||||
Expected stock price volatility (2) | 21 | % | 22 | % | 22 | % | 21 | % | 21 | % | 22 | % | ||||
Risk-free interest rate (3) | 2.5 | % | 1.8 | % | 1.1 | % | 2.5 | % | 2.5 | % | 1.8 | % | ||||
Expected life in years (4) | 4.52 | 4.53 | 4.39 | 4.59 | 4.52 | 4.53 |
(1) | The expected dividend yield assumption was based on both the Company's historical and anticipated dividend payouts. Historically, the Company has not paid cash dividends on its Common Stock. |
(2) | The determination of expected stock price volatility was based on both historical Common Stock prices and implied volatility from publicly traded options in the Common Stock. |
(3) | The risk-free interest rate was based on the yield of a U.S. Treasury security with a maturity similar to the expected life of the award. |
(4) | The expected life represents the Company’s estimate of the weighted average period of time the SARs are expected to be outstanding (that is, the period between the service inception date and the expected exercise date). |
Restricted Stock Units ("RSUs") (in millions) | Per Share Weighted Average Grant Date Fair Value | Restricted Stock Units ("RSUs") (in millions) | Per Share Weighted Average Grant Date Fair Value | |||||||||
Outstanding at December 31, 2017 | 1.5 | $ | 91.47 | |||||||||
Outstanding at December 31, 2018 | 1.4 | $ | 101.75 | |||||||||
Granted (1) | 0.7 | 112.96 | 0.5 | 139.86 | ||||||||
Vested and released | (0.7 | ) | 88.69 | (0.5 | ) | 97.33 | ||||||
Forfeited | (0.1 | ) | 104.95 | (0.1 | ) | 116.79 | ||||||
Outstanding at December 31, 2018 (2) (3) | 1.4 | $ | 101.75 | |||||||||
Outstanding at December 31, 2019 (2) (3) | 1.3 | $ | 118.89 |
(1) | The |
(2) | The Company expects that substantially all of the RSUs outstanding will vest in future periods. |
(3) | As of December 31, |
Common Stock Equivalents ("CSEs") | Per Share Weighted Average Grant Date Fair Value | |||||
Outstanding at December 31, 2018 | 109,780 | $ | 24.96 | |||
Granted | 4,521 | 153.43 | ||||
Converted to shares of Common Stock upon grant | (2,960 | ) | 144.88 | |||
Outstanding at December 31, 2019 | 111,341 | $ | 26.99 |
Common Stock Equivalents ("CSEs") | Per Share Weighted Average Grant Date Fair Value | |||||
Outstanding at December 31, 2017 | 110,013 | $ | 23.19 | |||
Granted | 5,550 | 131.49 | ||||
Converted to shares of Common Stock upon grant | (5,783 | ) | 93.45 | |||
Outstanding at December 31, 2018 | 109,780 | $ | 24.96 |
2018 | 2017 | 2016 | |||||||||
Numerator: | |||||||||||
Net income used for calculating basic and diluted earnings per common share | $ | 122,456 | $ | 3,279 | $ | 193,582 | |||||
Denominator: (1) | |||||||||||
Weighted average common shares used in the calculation of basic earnings per share | 90,827 | 88,466 | 82,571 | ||||||||
Common share equivalents associated with stock-based compensation plans | 1,295 | 1,324 | 1,249 | ||||||||
Shares used in the calculation of diluted earnings per share | 92,122 | 89,790 | 83,820 | ||||||||
Earnings per share: (2) | |||||||||||
Basic | $ | 1.35 | $ | 0.04 | $ | 2.34 | |||||
Diluted | $ | 1.33 | $ | 0.04 | $ | 2.31 |
2019 | 2018 | 2017 | |||||||||
Numerator: | |||||||||||
Net income used for calculating basic and diluted income per common share | $ | 233,290 | $ | 122,456 | $ | 3,279 | |||||
Denominator: | |||||||||||
Weighted average common shares used in the calculation of basic income per share | 89,817 | 90,827 | 88,466 | ||||||||
Common stock equivalents associated with stock-based compensation plans | 1,154 | 1,295 | 1,324 | ||||||||
Shares used in the calculation of diluted income per share | 90,971 | 92,122 | 89,790 | ||||||||
Income per share (1): | |||||||||||
Basic | $ | 2.60 | $ | 1.35 | $ | 0.04 | |||||
Diluted | $ | 2.56 | $ | 1.33 | $ | 0.04 |
(1) |
Both basic and diluted |
2018 | 2017 | 2016 | Year Ended December 31, | |||||||||||||||||||
Anti-dilutive common share equivalents as of December 31 (in millions): (a) | — | 0.3 | 0.2 | |||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||||
Anti-dilutive common stock equivalents (in millions) (a) | 0.2 | — | 0.3 | |||||||||||||||||||
Average market price per share of Common Stock during the year | $ | 135.60 | $ | 116.09 | $ | 92.58 | $ | 148.38 | $ | 135.60 | $ | 116.09 |
2019 | 2018 | 2017 | |||||||||
U.S. | $ | 115,543 | $ | 34,159 | $ | (135,757 | ) | ||||
Non-U.S. | 160,196 | 146,962 | 7,940 | ||||||||
Income (loss) before income taxes | $ | 275,739 | $ | 181,121 | $ | (127,817 | ) |
2018 | 2017 | 2016 | |||||||||
U.S. | $ | 34,159 | $ | (135,757 | ) | $ | 182,178 | ||||
Non-U.S. | 146,962 | 7,940 | 106,253 | ||||||||
Income (loss) before income taxes | $ | 181,121 | $ | (127,817 | ) | $ | 288,431 |
2019 | 2018 | 2017 | |||||||||
Current tax expense: | |||||||||||
U.S. federal | $ | 30,208 | $ | 2,817 | $ | 48,339 | |||||
State and local | 11,630 | 6,969 | 434 | ||||||||
Foreign | 53,105 | 45,042 | 38,602 | ||||||||
Total current | 94,943 | 54,828 | 87,375 | ||||||||
Deferred tax (benefit) expense: | |||||||||||
U.S. federal | (16,389 | ) | 12,462 | (176,046 | ) | ||||||
State and local | (6,897 | ) | 1,258 | (14,363 | ) | ||||||
Foreign | (48,186 | ) | (13,795 | ) | (25,898 | ) | |||||
Total deferred | (71,472 | ) | (75 | ) | (216,307 | ) | |||||
Total current and deferred | 23,471 | 54,753 | (128,932 | ) | |||||||
Benefit (expense) relating to interest rate swaps used to increase (decrease) equity | 17,666 | 3,840 | (2,477 | ) | |||||||
Benefit from stock transactions with employees used to increase equity | 54 | 58 | 46 | ||||||||
Benefit relating to defined-benefit pension adjustments used to increase equity | 1,258 | 14 | 267 | ||||||||
Total tax expense (benefit) | $ | 42,449 | $ | 58,665 | $ | (131,096 | ) |
2018 | 2017 | 2016 | |||||||||
Current tax expense: | |||||||||||
U.S. federal | $ | 2,817 | $ | 48,339 | $ | 58,616 | |||||
State and local | 6,969 | 434 | 11,292 | ||||||||
Foreign | 45,042 | 38,602 | 27,536 | ||||||||
Total current | 54,828 | 87,375 | 97,444 | ||||||||
Deferred tax (benefit) expense: | |||||||||||
U.S. federal | 12,462 | (176,046 | ) | (61 | ) | ||||||
State and local | 1,258 | (14,363 | ) | (349 | ) | ||||||
Foreign | (13,795 | ) | (25,898 | ) | (1,626 | ) | |||||
Total deferred | (75 | ) | (216,307 | ) | (2,036 | ) | |||||
Total current and deferred | 54,753 | (128,932 | ) | 95,408 | |||||||
Benefit (expense) relating to interest rate swaps used to increase (decrease) equity | 3,840 | (2,477 | ) | (1,113 | ) | ||||||
Benefit from stock transactions with employees used to increase equity | 58 | 46 | 52 | ||||||||
Benefit relating to defined-benefit pension adjustments used to increase equity | 14 | 267 | 502 | ||||||||
Total tax expense (benefit) | $ | 58,665 | $ | (131,096 | ) | $ | 94,849 |
December 31, | |||||||
2019 | 2018 | ||||||
Accrued liabilities | $ | 67,577 | $ | 96,292 | |||
Operating leases | 54,860 | — | |||||
Loss and credit carryforwards | 14,372 | 14,830 | |||||
Assets relating to equity compensation | 16,842 | 19,653 | |||||
Other assets | 20,364 | 14,092 | |||||
Gross deferred tax assets | 174,015 | 144,867 | |||||
Property, equipment and leasehold improvements | (15,137 | ) | (3,421 | ) | |||
Intangible assets | (212,498 | ) | (263,548 | ) | |||
Prepaid expenses | (49,221 | ) | (41,926 | ) | |||
Other liabilities | (5,799 | ) | (12,100 | ) | |||
Gross deferred tax liabilities | (282,655 | ) | (320,995 | ) | |||
Valuation allowance | (1,556 | ) | (4,066 | ) | |||
Net deferred tax liabilities | $ | (110,196 | ) | $ | (180,194 | ) |
December 31, | |||||||
2018 | 2017 | ||||||
Accrued liabilities | $ | 96,292 | $ | 80,557 | |||
Loss and credit carryforwards | 14,830 | 59,502 | |||||
Assets relating to equity compensation | 19,653 | 24,874 | |||||
Other assets | 14,092 | 30,236 | |||||
Gross deferred tax assets | 144,867 | 195,169 | |||||
Property, equipment, and leasehold improvements | (3,421 | ) | (962 | ) | |||
Intangible assets | (214,580 | ) | (372,542 | ) | |||
Prepaid expenses | (41,926 | ) | (35,126 | ) | |||
Other liabilities | (61,068 | ) | (6,584 | ) | |||
Gross deferred tax liabilities | (320,995 | ) | (415,214 | ) | |||
Valuation allowance | (4,066 | ) | (3,192 | ) | |||
Net deferred tax liabilities | $ | (180,194 | ) | $ | (223,237 | ) |
2019 | 2018 | 2017 | ||||||
Statutory tax rate | 21.0 | % | 21.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 1.5 | — | 3.6 | |||||
Effect of non-U.S. operations | 2.7 | (10.7 | ) | 5.9 | ||||
Intercompany sale of intellectual property | (13.8 | ) | — | — | ||||
Change in the reserve for tax contingencies | 4.7 | 15.7 | (2.8 | ) | ||||
Law changes | — | (1.3 | ) | 41.8 | ||||
Stock-based compensation expense | (3.9 | ) | (5.3 | ) | 11.0 | |||
Nondeductible acquisition costs | — | 0.9 | (7.9 | ) | ||||
Nondeductible meals and entertainment costs | 1.7 | 2.7 | (3.5 | ) | ||||
Gains/Losses on divested operations and held-for-sale assets | — | 12.2 | 13.1 | |||||
Limitation on executive compensation | 2.4 | 2.7 | (0.1 | ) | ||||
Global intangible low-taxed income, net of foreign tax credits | 1.9 | 0.1 | — | |||||
Foreign-derived intangible income | (1.0 | ) | (2.0 | ) | — | |||
Change in the valuation allowance | (0.9 | ) | 0.5 | 3.0 | ||||
Goodwill | — | (3.8 | ) | — | ||||
Other items, net | (0.9 | ) | (0.3 | ) | 3.5 | |||
Effective tax rate | 15.4 | % | 32.4 | % | 102.6 | % |
2018 | 2017 | 2016 | ||||||
Statutory tax rate | 21.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | — | 3.6 | 2.3 | |||||
Effect of non-U.S. operations | (10.6 | ) | 5.9 | (6.1 | ) | |||
Change in the reserve for tax contingencies | 15.7 | (2.8 | ) | 3.2 | ||||
Law changes | (1.3 | ) | 41.8 | — | ||||
Stock-based compensation expense | (5.3 | ) | 11.0 | (3.8 | ) | |||
Nondeductible acquisition costs | 0.9 | (7.9 | ) | 2.6 | ||||
Nondeductible meals and entertainment costs | 2.7 | (3.5 | ) | 1.1 | ||||
Gains/Losses on divested operations and held-for-sale assets | 12.2 | 13.1 | — | |||||
Limitation on executive compensation | 2.7 | (0.1 | ) | — | ||||
Foreign-derived intangible income | (2.0 | ) | — | — | ||||
Change in the valuation allowance | 0.5 | 3.0 | (0.2 | ) | ||||
Goodwill | (3.8 | ) | — | — | ||||
Other items, net | (0.3 | ) | 3.5 | (1.2 | ) | |||
Effective tax rate | 32.4 | % | 102.6 | % | 32.9 | % |
2019 | 2018 | ||||||
Beginning balance | $ | 90,349 | $ | 60,269 | |||
Additions based on tax positions related to the current year | 32,072 | 27,371 | |||||
Additions for tax positions of prior years | 8,564 | 14,691 | |||||
Reductions for tax positions of prior years | (16,942 | ) | (3,939 | ) | |||
Reductions for expiration of statutes | (7,481 | ) | (6,293 | ) | |||
Settlements | (3,867 | ) | (472 | ) | |||
Change in foreign currency exchange rates | 75 | (1,278 | ) | ||||
Ending balance | $ | 102,770 | $ | 90,349 |
2018 | 2017 | ||||||
Beginning balance | $ | 60,269 | $ | 37,099 | |||
Additions based on tax positions related to the current year | 27,371 | 10,883 | |||||
Additions for tax positions of prior years | 14,691 | 24,299 | |||||
Reductions for tax positions of prior years | (3,939 | ) | (10,613 | ) | |||
Reductions for expiration of statutes | (6,293 | ) | (1,368 | ) | |||
Settlements | (472 | ) | (1,769 | ) | |||
Change in foreign currency exchange rates | (1,278 | ) | 1,738 | ||||
Ending balance | $ | 90,349 | $ | 60,269 |
Derivative Contract Type | Number of Contracts | Notional Amounts | Fair Value Asset (Liability), Net (3) | Balance Sheet Line Item | Unrealized Loss Recorded in AOCI/L | ||||||||||||
Interest rate swaps (1) | 4 | $ | 1,400,000 | $ | (64,831 | ) | Other liabilities | $ | (47,164 | ) | |||||||
Foreign currency forwards (2) | 176 | 604,858 | 59 | Other current assets | — | ||||||||||||
Total | 180 | $ | 2,004,858 | $ | (64,772 | ) | $ | (47,164 | ) |
Derivative Contract Type | Number of Contracts | Notional Amounts | Fair Value Asset (Liability), Net (3) | Balance Sheet Line Item | Unrealized Loss Recorded in AOCI/L | Number of Contracts | Notional Amounts | Fair Value Asset (Liability), Net (3) | Balance Sheet Line Item | Unrealized Loss Recorded in AOCI/L | ||||||||||||||||||||||||
Interest rate swaps (1) | 7 | $ | 2,100,000 | $ | (10,681 | ) | Other liabilities | $ | (7,770 | ) | 7 | $ | 2,100,000 | $ | (10,681 | ) | Other liabilities | $ | (7,770 | ) | ||||||||||||||
Foreign currency forwards (2) | 135 | 927,375 | (1,942 | ) | Accrued liabilities | — | 135 | 927,375 | (1,942 | ) | Accrued liabilities | — | ||||||||||||||||||||||
Total | 142 | $ | 3,027,375 | $ | (12,623 | ) | $ | (7,770 | ) | 142 | $ | 3,027,375 | $ | (12,623 | ) | $ | (7,770 | ) |
Derivative Contract Type | Number of Contracts | Notional Amounts | Fair Value Asset (Liability), Net (3) | Balance Sheet Line Item | Unrealized Gain Recorded in AOCI/L | ||||||||||||
Interest rate swaps (1) | 5 | $ | 1,400,000 | $ | 3,412 | Other assets | $ | 2,483 | |||||||||
Foreign currency forwards (2) | 137 | 686,764 | 448 | Other current assets | — | ||||||||||||
Total | 142 | $ | 2,086,764 | $ | 3,860 | $ | 2,483 |
(1) | The interest rate swaps have been designated and are accounted for as cash flow hedges of the forecasted interest payments on borrowings. As a result, changes in the fair |
(2) | The Company has foreign exchange transaction risk because it typically enters into transactions in the normal course of business that are denominated in foreign currencies that differ from the local functional currency. The Company enters into short-term foreign currency forward exchange contracts to mitigate the cash flow risk associated with changes in foreign currency rates on forecasted foreign currency transactions. These contracts are accounted for at fair value with realized and unrealized gains and losses recognized in Other income, net because the Company does not designate these contracts as hedges for accounting purposes. All of the outstanding foreign currency forward exchange contracts at December 31, |
(3) | See Note |
Amount recorded in: | 2018 | 2017 | 2016 | |||||||||||||||||||||
Amount Recorded In | 2019 | 2018 | 2017 | |||||||||||||||||||||
Interest (income) expense, net (1) | $ | (1.9 | ) | $ | 7.9 | $ | 7.6 | $ | (3,361 | ) | $ | (1,920 | ) | $ | 7,870 | |||||||||
Other expense (income), net (2) | 10.4 | (0.8 | ) | 0.3 | 2,488 | 10,365 | (801 | ) | ||||||||||||||||
Total expense, net | $ | 8.5 | $ | 7.1 | $ | 7.9 | ||||||||||||||||||
Total (income) expense, net | $ | (873 | ) | $ | 8,445 | $ | 7,069 |
(1) | Consists of interest (income) expense from interest rate swap contracts. |
(2) | Consists of net realized and unrealized gains and losses on foreign currency forward contracts. |
Description: | December 31, 2018 | December 31, 2017 | ||||||||||||||
December 31, | ||||||||||||||||
Description | 2019 | 2018 | ||||||||||||||
Assets: | ||||||||||||||||
Values based on Level 1 inputs: | ||||||||||||||||
Deferred compensation plan assets (1) | $ | 8,956 | $ | 29,108 | $ | 2,277 | $ | 8,956 | ||||||||
Total Level 1 inputs | 8,956 | 29,108 | 2,277 | 8,956 | ||||||||||||
Values based on Level 2 inputs: | ||||||||||||||||
Deferred compensation plan assets (1) | 57,690 | 59,017 | 73,419 | 57,690 | ||||||||||||
Foreign currency forward contracts (2) | 1,318 | 2,053 | 1,558 | 1,318 | ||||||||||||
Interest rate swap contracts (3) | — | 3,412 | ||||||||||||||
Total Level 2 inputs | 59,008 | 64,482 | 74,977 | 59,008 | ||||||||||||
Total Assets | $ | 67,964 | $ | 93,590 | $ | 77,254 | $ | 67,964 | ||||||||
Liabilities: | ||||||||||||||||
Values based on Level 2 inputs: | ||||||||||||||||
Deferred compensation plan liabilities (1) | $ | 68,570 | $ | 89,900 | $ | 79,556 | $ | 68,570 | ||||||||
Foreign currency forward contracts (2) | 3,260 | 1,605 | 1,499 | 3,260 | ||||||||||||
Interest rate swap contracts (3) | 10,681 | — | 64,831 | 10,681 | ||||||||||||
Senior Notes due 2025 (4) | 776,160 | 837,560 | 835,384 | 776,160 | ||||||||||||
Total Level 2 inputs | 858,671 | 929,065 | 981,270 | 858,671 | ||||||||||||
Total Liabilities | $ | 858,671 | $ | 929,065 | $ | 981,270 | $ | 858,671 |
(1) | The Company has a deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees (see Note |
(2) | The Company enters into foreign currency forward exchange contracts to hedge the effects of adverse fluctuations in foreign currency exchange rates (see Note |
(3) | The Company has interest rate swap contracts that hedge the risk of variability from interest payments on its borrowings (see Note |
(4) | As discussed in Note |
2019 | 2018 | 2017 | |||||||||
Service cost | $ | 3,659 | $ | 3,145 | $ | 2,820 | |||||
Interest cost | 851 | 840 | 765 | ||||||||
Expected return on plan assets | (517 | ) | (475 | ) | (360 | ) | |||||
Recognition of actuarial loss | 237 | 340 | 350 | ||||||||
Total defined benefit pension plan expense | $ | 4,230 | $ | 3,850 | $ | 3,575 |
2018 | 2017 | 2016 | |||||||||
Service cost | $ | 3,145 | $ | 2,820 | $ | 2,780 | |||||
Interest cost | 840 | 765 | 850 | ||||||||
Expected return on plan assets | (475 | ) | (360 | ) | (375 | ) | |||||
Recognition of actuarial loss | 340 | 350 | 200 | ||||||||
Total defined benefit pension plan expense | $ | 3,850 | $ | 3,575 | $ | 3,455 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||
Weighted average discount rate (1) | 1.81 | % | 1.78 | % | 1.78 | % | 1.28 | % | 1.81 | % | 1.78 | % | ||||
Expected return on plan assets | 2.54 | % | 2.45 | % | 2.22 | % | ||||||||||
Average compensation increase | 2.58 | % | 2.66 | % | 2.67 | % | 2.58 | % | 2.58 | % | 2.66 | % |
(1) | Discount rates are typically determined by |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
Projected benefit obligation at beginning of year | $ | 45,450 | $ | 38,400 | $ | 35,870 | $ | 44,890 | $ | 45,450 | $ | 38,400 | ||||||||||
Service cost | 3,145 | 2,820 | 2,780 | 3,659 | 3,145 | 2,820 | ||||||||||||||||
Interest cost | 840 | 765 | 850 | 851 | 840 | 765 | ||||||||||||||||
Actuarial loss (gain) due to assumption changes and plan experience | (430 | ) | 690 | 1,480 | 4,524 | (430 | ) | 690 | ||||||||||||||
Additions and contractual termination benefits | (950 | ) | (860 | ) | — | |||||||||||||||||
Benefits paid (1) | (1,400 | ) | (920 | ) | (1,640 | ) | ||||||||||||||||
Contractual termination benefits | — | (950 | ) | — | ||||||||||||||||||
Benefits payments (2) | (830 | ) | (1,400 | ) | (1,780 | ) | ||||||||||||||||
Foreign currency impact | (1,765 | ) | 4,555 | (940 | ) | (591 | ) | (1,765 | ) | 4,555 | ||||||||||||
Projected benefit obligation at end of year | $ | 44,890 | $ | 45,450 | $ | 38,400 | $ | 52,503 | $ | 44,890 | $ | 45,450 |
(1) | The actuarial loss in 2019 was primarily due to a reduction in our weighted average discount rate assumption. |
(2) | The Company projects |
Measured as of December 31. |
Funded status of the plans: | 2018 | 2017 | 2016 | |||||||||||||||||||
Funded status of the plans | 2019 | 2018 | 2017 | |||||||||||||||||||
Projected benefit obligation | $ | 44,890 | $ | 45,450 | $ | 38,400 | $ | 52,503 | $ | 44,890 | $ | 45,450 | ||||||||||
Pension plan assets at fair value (1) | (19,460 | ) | (18,475 | ) | (14,465 | ) | (23,444 | ) | (19,460 | ) | (18,475 | ) | ||||||||||
Funded status – shortfall (2) | $ | 25,430 | $ | 26,975 | $ | 23,935 | $ | 29,059 | $ | 25,430 | $ | 26,975 |
Amounts recorded in the Consolidated Balance Sheets for the plans: | |||||||||||
Other liabilities — accrued pension obligation (2) | $ | 25,430 | $ | 26,975 | $ | 23,935 | |||||
Stockholders’ equity — deferred actuarial loss (3) | $ | (5,738 | ) | $ | (5,861 | ) | $ | (5,797 | ) |
Amounts recorded in the Consolidated Balance Sheets for the plans | |||||||||||
Other liabilities – accrued pension obligation (2) | $ | 29,059 | $ | 25,430 | $ | 26,975 | |||||
Stockholders’ equity – deferred actuarial loss (3) | $ | (8,584 | ) | $ | (5,738 | ) | $ | (5,861 | ) |
(1) | The pension plan assets are held by third-party trustees and are invested in a diversified portfolio of equities, Additional information regarding pension plan asset activity is provided below. |
(2) |
(3) | The deferred actuarial loss as of December 31, |
2019 | 2018 | 2017 | |||||||||
Pension plan assets at the beginning of the year | $ | 19,460 | $ | 18,475 | $ | 14,465 | |||||
Company contributions | 4,405 | 4,478 | 3,438 | ||||||||
Benefit payments | (830 | ) | (1,400 | ) | (1,780 | ) | |||||
Actual return on plan assets | 714 | (164 | ) | 547 | |||||||
Contractual termination benefits | — | (950 | ) | — | |||||||
Foreign currency impact | (305 | ) | (979 | ) | 1,805 | ||||||
Pension plan assets at the end of the year | $ | 23,444 | $ | 19,460 | $ | 18,475 |
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Research | Conferences | Consulting | Other | Consolidated | Research | Conferences | Consulting | Consolidated | ||||||||||||||||||||||||||
2018 | ||||||||||||||||||||||||||||||||||
2019 | ||||||||||||||||||||||||||||||||||
Revenues | $ | 3,105,764 | $ | 410,461 | $ | 353,667 | $ | 105,562 | $ | 3,975,454 | $ | 3,374,548 | $ | 476,869 | $ | 393,904 | $ | 4,245,321 | ||||||||||||||||
Gross contribution | 2,144,097 | 207,260 | 102,541 | 65,075 | 2,518,973 | 2,351,720 | 241,757 | 118,450 | 2,711,927 | |||||||||||||||||||||||||
Corporate and other expenses | (2,259,258 | ) | (2,341,840 | ) | ||||||||||||||||||||||||||||||
Operating income | $ | 259,715 | $ | 370,087 | ||||||||||||||||||||||||||||||
Research | Conferences | Consulting | Other | Consolidated | ||||||||||||||||||||||||||||||
2017 | ||||||||||||||||||||||||||||||||||
Revenues | $ | 2,471,280 | $ | 337,903 | $ | 327,661 | $ | 174,650 | $ | 3,311,494 | ||||||||||||||||||||||||
Gross contribution | 1,653,014 | 163,480 | 93,643 | 90,249 | 2,000,386 | |||||||||||||||||||||||||||||
Corporate and other expenses | (2,006,715 | ) | ||||||||||||||||||||||||||||||||
Operating loss | $ | (6,329 | ) | |||||||||||||||||||||||||||||||
Research | Conferences | Consulting | Other | Consolidated | ||||||||||||||||||||||||||||||
2016 | ||||||||||||||||||||||||||||||||||
Revenues | $ | 1,857,001 | $ | 268,605 | $ | 318,934 | $ | — | $ | 2,444,540 | ||||||||||||||||||||||||
Gross contribution | 1,285,611 | 136,655 | 89,734 | — | 1,512,000 | |||||||||||||||||||||||||||||
Corporate and other expenses | (1,206,859 | ) | ||||||||||||||||||||||||||||||||
Operating income | $ | 305,141 |
Research | Conferences | Consulting | Other (1) | Consolidated | |||||||||||||||
2018 | |||||||||||||||||||
Revenues | $ | 3,105,764 | $ | 410,461 | $ | 353,667 | $ | 105,562 | $ | 3,975,454 | |||||||||
Gross contribution | 2,144,097 | 207,260 | 102,541 | 65,075 | 2,518,973 | ||||||||||||||
Corporate and other expenses | (2,259,258 | ) | |||||||||||||||||
Operating income | $ | 259,715 | |||||||||||||||||
Research | Conferences | Consulting | Other (1) | Consolidated | |||||||||||||||
2017 | |||||||||||||||||||
Revenues | $ | 2,471,280 | $ | 337,903 | $ | 327,661 | $ | 174,650 | $ | 3,311,494 | |||||||||
Gross contribution | 1,653,014 | 163,480 | 93,643 | 90,249 | 2,000,386 | ||||||||||||||
Corporate and other expenses | (2,006,715 | ) | |||||||||||||||||
Operating loss | $ | (6,329 | ) |
(1) | During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company's 2018 divestitures. |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||||
Total segment gross contribution | $ | 2,518,973 | $ | 2,000,386 | $ | 1,512,000 | $ | 2,711,927 | $ | 2,518,973 | $ | 2,000,386 | ||||||||||||
Costs and expenses: | ||||||||||||||||||||||||
Cost of services and product development - unallocated (1) | 12,319 | 9,090 | 13,108 | 17,174 | 12,319 | 9,090 | ||||||||||||||||||
Selling, general and administrative | 1,884,141 | 1,599,004 | 1,089,184 | 2,103,424 | 1,884,141 | 1,599,004 | ||||||||||||||||||
Depreciation and amortization | 255,601 | 240,171 | 61,969 | 211,779 | 255,601 | 240,171 | ||||||||||||||||||
Acquisition and integration charges | 107,197 | 158,450 | 42,598 | 9,463 | 107,197 | 158,450 | ||||||||||||||||||
Operating income (loss) | 259,715 | (6,329 | ) | 305,141 | 370,087 | 259,715 | (6,329 | ) | ||||||||||||||||
Interest expense and other, net | 124,041 | 121,488 | 16,710 | (92,273 | ) | (124,041 | ) | (121,488 | ) | |||||||||||||||
Gain from divested operations | 45,447 | — | — | |||||||||||||||||||||
(Loss) gain from divested operations | (2,075 | ) | 45,447 | — | ||||||||||||||||||||
Provision (benefit) for income taxes | 58,665 | (131,096 | ) | 94,849 | 42,449 | 58,665 | (131,096 | ) | ||||||||||||||||
Net income | $ | 122,456 | $ | 3,279 | $ | 193,582 | $ | 233,290 | $ | 122,456 | $ | 3,279 |
(1) | The unallocated amounts consist of certain bonus and |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
Long-lived assets: (1) | ||||||||||||||||||||||
Long-lived assets (1): | ||||||||||||||||||||||
United States and Canada | $ | 305,928 | $ | 288,735 | $ | 143,921 | $ | 867,974 | $ | 305,928 | $ | 288,735 | ||||||||||
Europe, Middle East and Africa | 67,306 | 84,840 | 42,326 | 242,729 | 67,306 | 84,840 | ||||||||||||||||
Other International | 50,800 | 41,674 | 24,630 | 159,037 | 50,800 | 41,674 | ||||||||||||||||
Total long-lived assets | $ | 424,034 | $ | 415,249 | $ | 210,877 | $ | 1,269,740 | $ | 424,034 | $ | 415,249 |
(1) | Excludes goodwill and intangible assets for all dates and, as of December 31, 2017, held-for-sale assets. Additionally, long-lived assets as of December 31, 2019 included $702.9 million of operating lease right-of-use assets. Note 1 — Business and Significant Accounting Policies and Note 7 — Leases provide additional information regarding the Company's leases and certain changes in lease accounting effective January 1, 2019. |
Balance at Beginning of Year | Additions Charged to Expense | Additions Charged Against Revenues | Deductions from the Reserve | Reclassification to Accounts Payable and Accrued Liabilities (1) | Balance at End of Year | ||||||||||||||||||
2019: | |||||||||||||||||||||||
Bad debt allowance | $ | 7,700 | $ | 14,000 | $ | — | $ | (13,700 | ) | $ | — | $ | 8,000 | ||||||||||
2018: | |||||||||||||||||||||||
Bad debt allowance | $ | 12,700 | $ | 12,500 | $ | — | $ | (11,300 | ) | $ | (6,200 | ) | $ | 7,700 | |||||||||
2017: | |||||||||||||||||||||||
Bad debt allowance and revenue reserve | $ | 7,400 | $ | 16,600 | $ | 5,500 | $ | (16,800 | ) | $ | — | $ | 12,700 |
Balance at Beginning of Year | Additions Charged to Expense | Additions Charged Against Revenues | Deductions from Reserve | Reclassification to Accounts Payable and Accrued Liabilities | Balance at End of Year | ||||||||||||||||||
2018: | |||||||||||||||||||||||
Bad debt allowance (1) | $ | 12,700 | $ | 12,500 | $ | — | $ | (11,300 | ) | $ | (6,200 | ) | $ | 7,700 | |||||||||
2017: | |||||||||||||||||||||||
Bad debt allowance and revenue reserve (1) | $ | 7,400 | $ | 16,600 | $ | 5,500 | $ | (16,800 | ) | $ | — | $ | 12,700 | ||||||||||
2016: | |||||||||||||||||||||||
Bad debt allowance and revenue reserve | $ | 6,900 | $ | 4,750 | $ | 4,850 | $ | (9,100 | ) | $ | — | $ | 7,400 |
Gartner, Inc. | |||
Date: | February | By: | /s/ Eugene A. Hall |
Eugene A. Hall | |||
Chief Executive Officer |
Name | Title | Date | ||
/s/ Eugene A. Hall | Director and Chief Executive Officer | February | ||
Eugene A. Hall | (Principal Executive Officer) | |||
/s/ Craig W. Safian | Executive Vice President and Chief Financial Officer | February | ||
Craig W. Safian | (Principal Financial and Accounting Officer) | |||
/s/ Peter E. Bisson | Director | February | ||
Peter E. Bisson | ||||
/s/ Richard J. Bressler | Director | February | ||
Richard J. Bressler | ||||
/s/ Raul E. Cesan | Director | February | ||
Raul E. Cesan | ||||
/s/ Karen E. Dykstra | Director | February | ||
Karen E. Dykstra | ||||
/s/ Anne Sutherland Fuchs | Director | February | ||
Anne Sutherland Fuchs | ||||
/s/ William O. Grabe | Director | February | ||
William O. Grabe | ||||
/s/ Stephen G. Pagliuca | Director | February | ||
Stephen G. Pagliuca | ||||
/s/ Eileen M. Serra | Director | February | ||
Eileen M. Serra | ||||
/s/ James C. Smith | Director | February | ||
James C. Smith |