UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K/A

Amendment No. 1

10-K

(MARK ONE)

x
☑ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2019
OR
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016
OR
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number file number: 1-14443

GARTNER, INC.

(Exact name of Registrantregistrant as Specifiedspecified in its Charter)

charter)  
Delaware04-3099750
(State or Other Jurisdictionother jurisdiction of Incorporationincorporation or Organization)organization)(I.R.S. Employer Identification Number)No.)
P.O. Box 10212 
56 Top Gallant Road 
P.O. Box 10212
56 Top Gallant Road
Stamford, CT
Connecticut06902-7700
(Address of Principal Executive Offices)principal executive offices)(Zip Code)
(203) 316-1111
(Registrant’s Telephone Number, Including Area Code)

Registrant’s telephone number, including area code: (203) 316-1111
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:each classTrading Symbol
Name of Each Exchange each exchange
on which Registered
registered
Common Stock, $0.0005 par value $0.0005 per shareITNew York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ☑Noo

☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o☐No þ

☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ☑ No o

☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ☑ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerþ☑ Accelerated filero☐ Non-accelerated filero
(Do not check if a smaller		☐
Smaller reporting company)company☐ Smaller reporting
Emerging growth company		☐
If an emerging growth company, oindicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso☐ Noþ

☑

As of June 30, 2016,2019, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $7,771,510,947approximately $14.1 billion, based on the closing sale price as reported on the New York Stock Exchange.

The number

As of January 31, 2020, there were 89,101,606 shares outstanding of the registrant’s common stock was 82,652,880 as of January 31, 2017.

outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Explanatory Note

This Amendment No. 1 on Form 10-K/A (this “Amendment”) amends Gartner, Inc.’s Annual Report on Form 10-KThe definitive Proxy Statement for the year ended December 31, 2016, originally filed with the Securities and Exchange Commission, or SEC,Annual Meeting of Stockholders to be held on February 22, 2017 (the “Original Filing”). We are amending and refilingJune 8, 2020 is incorporated by reference into Part III to include information required by Items 10, 11, 12, 13 and 14. Accordingly, reference to the proxy statement for our annual meeting of stockholders on the cover page has been deleted.

In addition, pursuant to the rules of the SEC, we have also included as exhibits currently dated certifications required under Section 302 of The Sarbanes-Oxley Act of 2002. Because no financial statements are contained within this Amendment, we are not including certifications pursuant to Section 906 of The Sarbanes-Oxley Act of 2002. We are amending and refiling Part IV to reflect the inclusion of those certifications.

Except asextent described above, no other changes have been made to the Original Filing. Except as otherwise indicated herein, this Amendment continues to speak as of the date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events that occurred subsequent to the date of the Original Filing. The filing of this Annual Report on Form 10-K/A is not a representation that any statements contained in items of our Annual Report on Form 10-K other than Part III, Items 10 through 14, and Part IV are true or complete as of any date subsequent to the Original Filing.

2
therein.




GARTNER, INC.

AMENDMENT NO. 1

to

2019 ANNUAL REPORT ON FORM 10-K/A

FOR THE PERIOD ENDED DECEMBER 31, 2016

10-K

TABLE OF CONTENTS

PART IIII
  
4
ITEM 1.
BUSINESS
3
ITEM 101A..
RISK FACTORS
6
ITEM 1B.
UNRESOLVED STAFF COMMENTS
14
ITEM 2.
PROPERTIES
14
ITEM 3.
LEGAL PROCEEDINGS
14
ITEM 4.
MINE SAFETY DISCLOSURES (not applicable)
14
 
PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
15
ITEM 6.
SELECTED FINANCIAL DATA
16
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
18
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
32
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
33
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
33
ITEM 9A.
CONTROLS AND PROCEDURES
34
ITEM 9B.
OTHER INFORMATION
34
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
4
35
ITEM 11.
EXECUTIVE COMPENSATION
8
35
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTTERSMATTERS
36
35
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
38
35
ITEM 14.
PRINCIPAL ACCOUNTINGACCOUNTANT FEES AND SERVICES
39
35
PART IV  40
ITEM 15.PART IV
EXHIBITS, FINANCIAL STATEMENT SCHEDULES40
ITEM 16.FORM 10–K SUMMARY41
SIGNATURES  
42
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
36
3
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
38

PART III

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
39

DIRECTORS

Our Board of Directors, or Board, currently has ten directors who serve for annual terms. Our Chief Executive Officer, Eugene A. Hall, has an employment agreement with the Company that obligates the Company to include him on the slate of nominees to be elected to our Board during the term of the agreement. SeeExecutive Compensation – Employment Agreements with Executive Officers included in Item 11 of this Annual Report on Form 10-K. There are no other arrangements between any director or nominee and any other person pursuant to which the director or nominee was selected. None of our directors or executive officers is related to another director or executive officer by blood, marriage or adoption.

Set forth below are the name, age, principal occupation for the last five years, public company board experience, selected additional biographical information and period of service as a director of the Company of each director, as well as a summary of each director’s experience, qualifications and background which, among other factors, support their respective qualifications to continue to serve on our Board.

Michael J. Bingle,
44, director since
2004
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Mr. Bingle is a Managing Partner and Managing Director of Silver Lake, a private equity firm that he joined in January 2000. Prior thereto, he was a principal with Apollo Management, L.P., a private equity firm, and an investment banker at Goldman, Sachs & Co. He is a former director of TD Ameritrade Holding and Virtu Financial Inc.
41
CONSOLIDATED BALANCE SHEETS
42
CONSOLIDATED STATEMENTS OF OPERATIONS
43
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
44
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
45
CONSOLIDATED STATEMENTS OF CASH FLOWS
46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
47
  
ITEM 16.
Mr. Bingle’s investing, investment banking and capital markets expertise, coupled with his extensive working knowledge of Gartner (a former Silver Lake portfolio company), its financial model and core financial strategies, provide valuable perspective and guidance to our Board and Compensation and Governance Committees.
FORM 10-K SUMMARY
86
  
Peter E. Bisson,
59, director since
August 2016
SIGNATURES
Mr. Bisson recently retired from McKinsey & Company where he last served as Director and Global Leader of the High Tech Practice. Mr. Bisson held a number of other leadership positions at McKinsey & Company, including chair of its knowledge committee, which guides the firm’s knowledge investment and communication strategies, member of the firm’s shareholders committee, and leader of the firm’s strategy and telecommunications practices. In more than 30 years at McKinsey & Company, Mr. Bisson advised a variety of multinational public companies in the technology-based products and services industry. Mr. Bisson is also a director of ADP.
87
  




PART I
ITEM 1. BUSINESS.

GENERAL

Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow. We believe our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and an objective resource for more than 15,000 enterprises in more than 100 countries — across all major functions, in every industry and enterprise size.

Gartner delivers its products and services globally through three business segments – Research, Conferences and Consulting, as described below.

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.

The fiscal year of Gartner is the twelve-month period from January 1 through December 31. All references to 2019, 2018 and 2017 herein refer to the fiscal year unless otherwise indicated. When used in this Annual Report on Form 10-K, the terms “Gartner,” the “Company,” “we,” “us” or “our” refer to Gartner, Inc. and its consolidated subsidiaries.

MARKET OVERVIEW

Enterprise leaders face enormous pressure to stay ahead and grow profitably amidst constant change. Whether it is an impending transition to digital business or large-scale regulatory changes, business leaders today are facing more disruptive change than ever before. No enterprise can be operationally effective unless it incorporates the right strategy, management and technology decisions into every part of its business. This requirement affects all business levels, functions and roles. Chief financial officers, heads of human resources, chief marketing officers, chief information officers, and other executives and leaders across all enterprises turn to Gartner for decision-making guidance and execution support to achieve their mission-critical priorities.

OUR SOLUTION

We believe our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions and actions on the issues that matter most. We employ a diversified business model that utilizes and leverages the breadth and depth of our intellectual capital. The foundation of our business model is our ability to create and distribute our proprietary research content as broadly as possible via published reports, interactive tools, facilitated peer networking, briefings, consulting and advisory services, and our conferences, including the Gartner Symposium/Xpo series.

PRODUCTS AND SERVICES

Our diversified business model provides multiple entry points and sources of value for our clients that facilitate increased client spending on our research and advisory services, conferences and consulting services. A critical part of our long-term strategy is to increase business volume and penetration with our most valuable clients, identifying relationships with the greatest sales potential and expanding those relationships by offering strategically relevant research and advice. We also seek to extend the Gartner brand name to develop new client relationships, augment our sales capacity and expand into new markets around the world. In addition, we seek to increase our revenue and operating cash flow through more effective pricing of our products and services. These initiatives have created additional revenue streams through more effective packaging, campaigning and cross-selling of our products and services.



Our principal products and services are delivered through our three business segments, as described below.

•Mr. Bisson’s experience includes advising clients on corporate strategy
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 M&A, designbenchmarks, and executiondirect access to a network of performance improvement programsapproximately 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.

Our research agenda is defined by clients’ needs, focusing on the critical issues, opportunities and challenges they face every day. We are in steady contact with over 15,000 distinct client enterprises worldwide. We publish tens of thousands of pages of original research annually, and our research experts have more than 400,000 direct client interactions every year. Our size and scale enable us to commit vast resources toward broader and deeper research coverage and to deliver insight to our clients based on what they need and where they are. The ongoing interaction of our research experts with our clients enables us to identify the most pertinent topics to them and develop relevant product and service enhancements to meet the evolving needs of users of our research. Our proprietary research content, presented in the form of reports, briefings, updates and related tools, is delivered directly to the client’s desktop via our website and/or product-specific portals.

Clients normally sign subscription contracts that provide access to our research content and advisory services for individual users over a defined period. We typically have a minimum contract period of twelve months for our research and advisory subscription contracts and, at December 31, 2019, a significant portion of our contracts were multi-year.

•
CONFERENCES. Gartner attracts more than 85,000 business and technology development,professionals to its 70+ destination conferences worldwide each year. Attendees experience sessions led by Gartner research experts, cutting-edge technology solutions, peer exchange workshops, one-on-one analyst and advisor meetings, consulting diagnostic workshops, keynotes and more. Our conferences also provide attendees with an opportunity to interact with business executives from the world’s leading technology companies. In addition to role-specific summits and workshop-style seminars, Gartner hosts the Gartner Symposium/Xpo series, including its unique, flagship IT Symposium/Xpo®, which qualifies him to serve as a director.is held at nine locations worldwide annually. We also host 700+ more intimate live meetings each year for peer collaboration, and 240+ exclusive C-level meetings through the Evanta brand.

•
Richard J. Bressler, 59, director since
2006		Mr. Bressler is President
CONSULTING. Through its experienced consultants, Gartner Consulting serves chief information officers and Chief Financial Officerother senior executives who are driving technology-related strategic initiatives to optimize technology investments and drive business impact. Gartner Consulting combines the power of iHeartMedia, Inc.,Gartner’s market-leading research with custom analysis and Chief Financial Officer of Clear Channel Outdoor Holdings, Inc. Prioron-the-ground support to joining iHeartMedia, he served as Managing Director of Thomas H. Lee Partners, L.P., a Boston-based private equity firm, from 2006help clients to July 2013. He joined Thomas H. Lee Partners from his role as Senior Executive Vice Presidentturn insights and Chief Financial Officer of Viacom Inc., where he managed all strategic, financial, business developmentadvice into action and technology functions. Mr. Bressler has also served in various capacities with Time Warner Inc., including Chairman and Chief Executive Officer of Time Warner Digital Media and Executive Vice President and Chief Financial Officer of Time Warner Inc. Prior to joining Time Inc., he was a partner with the accounting firm of Ernst & Young. Mr. Bressler is currently a Director of iHeartMedia, Inc., and a former director of The Nielsen Company B.V. and Warner Music Group Corp.
Mr. Bressler qualifies as an audit committee financial expert, and his extensive financial and operational roles at large U.S. public companies bring a wealth of management, financial, accounting and professional expertise to our Board and Audit Committee.impact.
4

Raul E. Cesan,
69, director since
2012		Mr. Cesan has been the Founder and Managing Partner of Commercial Worldwide LLC, an investment firm. Prior thereto, he spent 25 years at Schering – Plough Corporation, serving in various capacities of substantial responsibility: the President and Chief Operating Officer (from 1998 to 2001); Executive Vice President of Schering-Plough Corporation and President of Schering-Plough Pharmaceuticals (from 1994 – 1998); President of Schering Laboratories, U.S. Pharmaceutical Operations (from 1992 to 1994); and President of Schering – Plough International (from 1988 to 1992). Mr. Cesan is also a director of The New York Times Company.
Mr. Cesan’s extensive operational and international experiences provide valuable guidance to our Board and Compensation Committee.
Karen E. Dykstra,
58, director since
2007		Ms. Dykstra served as Chief Financial and Administrative Officer from November 2013 to July 2015, and as Chief Financial Officer from September 2012 to November 2013, of AOL, Inc. From January 2007 until December 2010, Ms. Dykstra was a Partner of Plainfield Asset Management LLC (“Plainfield”), and she served as Chief Operating Officer and Chief Financial Officer of Plainfield Direct LLC, Plainfield’s business development company, from May 2006 to 2010, and as a director from 2007 to 2010. Prior thereto, she spent over 25 years with Automatic Data Processing, Inc., serving most recently as Chief Financial Officer from January 2003 to May 2006, and prior thereto as Vice President – Finance, Corporate Controller and in other capacities. Ms. Dykstra is a director of VMware, Inc. and Boston Properties, Inc., and a former director of Crane Co. and AOL, Inc.
Ms. Dykstra qualifies as an audit committee financial expert, and her extensive management, financial, accounting and oversight experience provide important expertise to our Board and Audit Committee.
Anne Sutherland
Fuchs, 69,
director since
July 1999		Ms. Fuchs served as Group President, Growth Brands Division, Digital Ventures, a division of J.C. Penney Company, Inc., from November 2010 until April 2012. She also served as Chair of the Commission on Women’s Issues for New York City during the Bloomberg Administration, a position she held from 2002 through 2013. Previously, Ms. Fuchs served as a consultant to companies on branding and digital initiatives, and as a senior executive with operational responsibility at LVMH Moët Hennessy Louis Vuitton, Phillips de Pury & Luxembourg and several publishing companies, including Hearst Corporation, Conde Nast, Hachette and CBS. Ms. Fuchs is also a director of Pitney Bowes Inc.
Ms. Fuchs’ executive management, content and branding skills plus operations expertise, her knowledge of government operations and government partnerships with the private sector, and her keen interest and knowledge of diversity, governance and executive compensation matters provide important perspective to our Board and its Governance and Compensation Committees.
William O. Grabe, 78, director since 1993Mr. Grabe is an Advisory Director of General Atlantic LLC, a global private equity firm. Prior to joining General Atlantic in 1992, Mr. Grabe was a Vice President and Corporate Officer of IBM Corporation. Mr. Grabe is presently a director of Covisint Corporation, QTS Realty Trust, Inc. and Lenovo Group Limited. He is a former director of Infotech Enterprises Limited, Compuware Corporation and iGate Computer Systems Limited (f/k/a Patni Computer Systems Ltd.).
Mr. Grabe’s extensive senior executive experience, his knowledge of business operations and his vast knowledge of the global information technology industry have made him a valued member of the Board and Governance Committee.
5
Consulting solutions capitalize on Gartner assets that are invaluable to information technology ("IT") decision-making, including: (1) our extensive research, which ensures that our consulting analyses and advice are based on a deep understanding of the IT environment and the business of IT; (2) our market independence, which keeps our consultants focused on our clients' success; and (3) our market-leading benchmarking capabilities, which provide relevant comparisons and best practices to assess and improve performance. Additionally, we provide actionable solutions for a range of IT-related priorities, including IT cost optimization, technology modernization and IT sourcing optimization.

Eugene A. Hall,
60, director since
2004		Mr. Hall is the Chief Executive Officer of Gartner. Prior to joining Gartner in 2004, Mr. Hall was a senior executive at Automatic Data Processing, Inc., a Fortune 500 global technology and service company, serving most recently as President, Employers Services Major Accounts Division, a provider of human resources and payroll services. Prior to joining ADP in 1998, Mr. Hall spent 16 years at McKinsey & Company, most recently as Director.
As Gartner’s CEO, Mr. Hall is responsible for developing and executing on the Company’s operating plan and business strategies in consultation with the Board of Directors and for driving Gartner’s business and financial performance, and is the sole management representative on the Board.
Stephen G.
Pagliuca,62,
director since
1990		Mr. Pagliuca is a Managing Director of Bain Capital Partners, LLC and is also a Managing Partner and an owner of the Boston Celtics basketball franchise. Mr. Pagliuca joined Bain & Company in 1982, and founded the Information Partners private equity fund for Bain Capital in 1989. Prior to joining Bain, Mr. Pagliuca worked as a senior accountant and international tax specialist for Peat Marwick Mitchell & Company in the Netherlands. Mr. Pagliuca is a former director of Burger King Holdings, Inc., HCA, Inc. (Hospital Corporation of America), Quintiles Transnational Corporation and Warner Chilcott PLC.
He has deep subject matter knowledge of Gartner’s history, the development of its business model and the global information technology industry, as well as financial and accounting matters.
James C. Smith,
76, director since
October 2002 and
Chairman of the
Board since 2004		Mr. Smith was Chairman of the Board of First Health Group Corp., a national health benefits company until its sale in 2004. He also served as First Health’s Chief Executive Officer from January 1984 through January 2002 and President from January 1984 to January 2001.
Mr. Smith’s long-time expertise and experience as the founder, senior-most executive and chairman of the board of a successful large public company provides a unique perspective and insight into management and operational issues faced by the Board, Audit Committee and our CEO. This experience, coupled with Mr. Smith’s personal leadership qualities, qualify him to continue to serve as Chairman of the Board.

EXECUTIVE OFFICERS

Set forth below

COMPETITION

We believe that the principal factors that differentiate us from our competitors are as follows:

Superior research content - We believe that we create the broadest, highest-quality and most relevant research coverage across all major functional roles in an enterprise. Our independent operating model and research analysis generates unbiased insight that we believe is timely, thought-provoking and comprehensive, and that is known for its high quality, independence and objectivity.

Our leading brand name age,- We have provided critical, trusted insight under the Gartner name for more than 40 years.

Our global footprint and established customer base - We have a global presence with clients in more than 100 countries on six continents. A substantial portion of our revenue is derived from sales outside of the United States.



Experienced management team - Our management team is comprised of research veterans and experienced industry executives with long tenure at Gartner.

Substantial operating leverage in our business model - We can distribute our intellectual property and expertise across multiple platforms, including research and advisory subscription and membership programs, conferences and consulting engagements, to derive incremental revenue and profitability.

Vast network of research experts and consultants - As of December 31, 2019, we had approximately 2,300 research experts and 780+ experienced consultants located around the world. Our research experts are located in more than 30 countries, enabling us to cover vast aspects of business and technology on a global basis.

Notwithstanding these differentiating factors, we face competition from a significant number of independent providers of information products and services. We compete indirectly with consulting firms and other biographicaldata and information providers, including electronic and print media companies. These indirect competitors could choose to compete directly with us in the future. In addition, we face competition from free sources of eachinformation that are available to our clients through the internet. Limited barriers to entry exist in the markets in which we do business. As a result, new competitors may emerge and existing competitors may start to provide additional or complementary services. While we believe the breadth and depth of our executive officers.

Eugene A. Hall
60		Chief Executive Officer and director since 2004. Prior to joining Gartner, he was a senior executive at Automatic Data Processing, Inc., a Fortune 500 global technology and services company, serving most recently as President, Employers Services Major Accounts Division, a provider of human resources and payroll services. Prior to joining ADP in 1998, Mr. Hall spent 16 years at McKinsey & Company, most recently as Director.
Ken Davis
48		Senior Vice President, Business and IT Leaders, Products & Services since 2008. Previously at Gartner, he has served as Senior Vice President, End User Programs, High Tech & Telecom Programs, and Strategy, Marketing and Business Development. Prior to joining Gartner in 2005, Mr. Davis spent ten years at McKinsey & Company, where he was a partner assisting clients in the IT industry.
Alwyn Dawkins
50		Senior Vice President, Worldwide Events & Marketing since 2008. Previously at Gartner, he has served as Group Vice President, Asia/Pacific Sales, based in Sydney, Australia, and prior thereto, as Group Vice President, Gartner Events, where he held global responsibility for exhibit and sponsorship sales across the portfolio of Gartner events. Prior to joining Gartner in 2002, Mr. Dawkins spent ten years at Richmond Events, culminating in his role as Executive Vice President responsible for its North American business.
6
research positions us well versus our competition, increased competition could result in loss of market share, diminished value in our products and services, reduced pricing, and increased sales and marketing expenditures.
Mike Diliberto
51		Senior Vice President & Chief Information Officersince 2016.Previously, he served as CIO at Priceline, a leader in online travel and related services. Before joining Priceline, he held several senior technology positions at the online division of News Corp, where he was instrumental in establishing an online presence for News Corp brands such as Fox News, Fox Sports, TV Guide and Sky Sports, including launching the first major league baseball website. Previously, he held several leadership positions at Prodigy Services Company, one of the pioneering consumer-focused online services.
David Godfrey
45		Senior Vice President, Worldwide Sales since 2010. Previously at Gartner, he led North American field sales, and prior to this role, he led the Europe, Middle East and Africa (EMEA) and the Americas inside sales organizations. Before joining Gartner in 1999 as a sales executive, Mr. Godfrey spent seven years in business development at Exxon Mobil.
Robin Kranich
46		Senior Vice President, Human Resources since 2008. During her 22 years at Gartner, she has served as Senior Vice President, End User Programs; Senior Vice President, Research Operations and Business Development; Senior Vice President and General Manager of Gartner EXP; Vice President and Chief of Staff to Gartner’s president; and various sales and sales management roles. Prior to joining Gartner, Ms. Kranich was part of the Technology Advancement Group at Marriott International.
David McVeigh
47		Senior Vice President, New Markets Programssince August 2015. Prior to joining Gartner, he was a managing director at Hellman & Friedman LLC, an operating partner at Blackstone Group and a partner at McKinsey & Company.
Daniel S. Peale
44		Senior Vice President, General Counsel & Corporate Secretary since January 2016. Prior to joining Gartner in October 2015, he was a corporate and securities partner with the law firm of Wilson Sonsini Goodrich & Rosati in Washington, D.C., where he was in private practice for 15 years.
Craig W. Safian
48		Senior Vice President & Chief Financial Officer since June 2014. In his 14 years at Gartner, he has served as Group Vice President, Global Finance and Strategy & Business Development from 2007 until his appointment as CFO, and previously as Group Vice President, Strategy and Managing Vice President, Financial Planning and Analysis. Prior to joining Gartner, he held finance positions at Headstrong (now part of Genpact) and Bristol-Myers Squibb, and was an accountant for Friedman, LLP where he achieved CPA licensure.
Peter
Sondergaard
52		Senior Vice President, Research since 2004. During his 28 years at Gartner, he has held various roles, including Head of Research for the Technology & Services Sector, Hardware & Systems Sector, Vice President and General Manager for Gartner Research EMEA. Prior to joining Gartner, Mr. Sondergaard was research director at International Data Corporation in Europe.
Chris Thomas
45		Senior Vice President, Executive Programs since April 2013. During his 15 years at Gartner, he has held various roles, including Group Vice President, Sales, leading the Americas IT, Digital Marketing and Global Supply Chain sales group; head of North America and Europe, Middle East and Africa (EMEA) Small and Medium Business sales organizations, and a number of other roles, including sales operations and field sales leadership. Before joining Gartner, he spent seven years in procurement, sales and marketing at Exxon Mobil.
Per Anders
Waern
55		Senior Vice President, Gartner Consulting since 2008. Since joining Gartner in 1998, he has held senior consulting roles principally in EMEA, and served most recently as head of Gartner’s global core consulting team. Prior to joining Gartner, Mr. Waern led corporate IT strategy at Vattenfall in Sweden.
7

INTELLECTUAL PROPERTY

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a)


Our success has resulted in part from proprietary methodologies, software, reusable knowledge capital and other intellectual property rights. We rely on a combination of patent, copyright, trademark, trade secret, confidentiality, non-compete and other contractual provisions to protect our intellectual property rights. We have policies related to confidentiality, ownership, and the use and protection of Gartner’s intellectual property. We also enter into agreements with our employees and third parties as appropriate that protect our intellectual property, and we enforce these agreements if necessary. We recognize the value of our intellectual property in the marketplace and vigorously identify, create and protect it. Additionally, we actively monitor and enforce contract compliance by our end users.

EMPLOYEES
We had a total of 16,724 employees at December 31, 2019, an increase of 10% when compared to 15,173 employees at December 31, 2018. The overall growth in the number of employees was due, in part, to an increase in the total number of quota-bearing sales associates during 2019.

We had 9,468 employees, or 57% of our total employees, located in the United States at December 31, 2019 in approximately 45 offices. At such date, we had 1,314 employees located at our headquarters facility in Stamford, Connecticut and nearby; 2,040 employees located at our Fort Myers, Florida offices; 1,457 employees located in Arlington, Virginia; 847 employees located in Irving, Texas; and 3,810 employees located elsewhere in the United States.

We had 7,256 employees, or 43% of our total employees, located outside of the United States at December 31, 2019 in approximately 75 offices. At such date, 1,616 employees were located in Gurgaon, India; 1,180 employees were located in Egham, the United Kingdom; and 4,460 employees were located elsewhere in the world.

Our employees may be subject to collective bargaining agreements at a company or industry level, or works councils, in those foreign countries where such arrangements are part of the local labor law or practice. We have experienced no work stoppages and consider our relations with our employees to be favorable.

GOVERNMENT CONTRACTS

Our U.S. government contracts are subject to the approval of appropriations by the U.S. Congress to fund the agencies contracting for our products and services. Additionally, our contracts at the state and local levels, as well as foreign government contracts, are subject to various governmental authorizations and funding approvals and mechanisms. Certain of these contracts may be terminated at any time by the government entity without cause or penalty.






FINANCIAL INFORMATION

The Company's financial information by business segment for the three-year period ended December 31, 2019 is provided in Note 16 — Segment Information in the Notes to Consolidated Financial Statements. Additional information regarding revenues by business segment is provided in Note 9 — Revenue and Related Matters in the Notes to Consolidated Financial Statements.

AVAILABLE INFORMATION

Our internet address is gartner.com and the Investor Relations section of our website is at investor.gartner.com. We make available free of charge, on or through the Investor Relations section of our website, printable copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act requiresof 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). Unless expressly noted, the information on our executive officers, directorswebsite or any other website is not incorporated by reference in this Form 10-K and persons who beneficially own more than 10%should not be considered part of our Common Stock to file reports of ownership and changes of ownershipthis Form 10-K or any other filing we make with the SECSEC.

Also available at investor.gartner.com, under the “Governance” link, are printable and to furnish us withcurrent copies of the reports they file. To assist with this reporting obligation, the Company preparesour: (i) CEO and files ownership reports on behalf of its officers and directors pursuant to powers of attorney issued by the officer or director to the Company. Based solely on our review of these reports, or written representations from certain reporting persons, there were no late filings in 2016.

CORPORATE GOVERNANCE

Code of Ethics and Code of Conduct

Gartner has adopted a CEO & CFO Code of Ethics, which applies to our CEO, CFO, controllerChief Executive Officer, Chief Financial Officer, Controller and other financial managers, and amanagers; (ii) Global Code of Conduct, which applies to all Gartner officers, directors and employees, wherever located. Annually,located; (iii) Principles and Practices of the Board of Directors of Gartner, Inc., the corporate governance principles that have been adopted by our Board; and (iv) charters for each officer, directorof the Board’s standing committees: Audit, Compensation and employee affirmsGovernance/Nominating.


ITEM 1A. RISK FACTORS.

We operate in a highly competitive and rapidly changing environment that involves numerous risks and uncertainties, some of which are beyond our control. In addition, we and our clients are affected by global economic conditions and trends. The following sections address significant factors, events and uncertainties that make an investment in our securities risky. We urge you to consider carefully the factors described below and the risks that they present for our operations, as well as the risks addressed in other reports and materials that we file with the SEC and the other information, included or incorporated by reference in this Form 10-K. When the factors, events and contingencies described below or elsewhere in this Form 10-K materialize there could be a material adverse impact on ourbusiness, prospects, results of operations, financial condition, and cash flows, and couldtherefore have a negative effect on the trading price of our common stock. Additional risks not currently known to us or that we now deem immaterial mayalso harm us and negatively affect your investment.

Our operating results could be negatively impacted by global economicconditions. Our business is impacted by general economic conditions and trends in the United States and abroad. In its recent report, Global Economics Prospects, January 2020: Slow Growth, Policy Challenges, the World Bank reported that global trade and investment are expected to recover modestly this year, but advanced economies are expected to slow. The report also indicated that even if growth in emerging and developing economies occurs as anticipated, the per capita growth is still expected to be less than long-term averages. Among the concerns cited were increasing and accelerated global debt accumulation, slowdown in productivity, price controls in emerging markets and developing economies, risk of re-escalating trade tensions and downturns in major economies. In the United States, the World Bank notes that growth has decelerated in part due to lessening investment and exports, and it is expected that general uncertainty and the diminishing impact of 2017 tax cuts will have a negative effect on growth in the near term. A downturn in growth could negatively and materially affect future demand for our products and services in general, in certain geographic regions, in particular countries, or industry sectors. Such difficulties could negatively impact our ability to maintain or improve the various business measurements we utilize (which are defined in this annual report), such as contract value and consulting backlog growth, client retention, wallet retention, consulting utilization rates, and the number of attendees and exhibitors at our conferences and other meetings. Failure to achieve acceptable levels of these measurements or improve them will negatively impact our financial condition, results of operations, and cash flows.

We face significant competition and our failure to compete successfully couldmaterially adversely affect our results of operations, financial condition, and cash flows. We face direct competition from a significant number of independent providers of information products and services, including information available on the internet free of charge. We also compete indirectly against consulting firms and other information providers, including electronic and print media companies, some of which have greater financial, information gathering and marketing resources than we do. These indirect competitors could also choose to compete directly with us in the future. In addition, low barriers to entry exist in the markets in which we do business. As a result, new competitors may emerge, and existing competitors may start to provide additional or complementary services. Additionally, technological advances may provide increased competition from a variety of sources.



There can be no assurance that we will be able to successfully compete against current and future competitors and our failure to do so will result in loss of market share, diminished value in our products and services, reduced pricing and increased marketing expenditures. Furthermore, we will not be successful if we cannot compete effectively on quality of research and analysis, timely delivery of information, customer service, the ability to offer products to meet changing market needs for information and analysis, or price.

We may not be able to maintain the quality of our existing products and services. We operate in a rapidly evolving market, and our success depends on our ability to deliver high quality and timely research and analysis to our clients. Any failure to continue to provide credible and reliable information and advice that is useful to our clients could have a material adverse effect on future business and operating results. Further, if our published data, opinions or viewpoints prove to be wrong, lack independence, or are not substantiated by appropriate research, our reputation will suffer and demand for our products and services may decline. In addition, we must continue to improve our methods for delivering our products and services in a cost-effective manner via the internet and mobile applications. Failure to maintain state of the art electronic delivery capabilities could materially adversely affect our future business and operating results.

We may not be able to enhance and develop our existing products and services or introduce the new products and services that are needed to remaincompetitive. The market for our products and services is characterized by rapidly changing needs for information and analysis. The development of new products is a complex and time-consuming process. Nonetheless, to maintain our competitive position, we must continue to anticipate the needs of our clients, develop, enhance and improve our existing products, as well as new products and services to address those needs, deliver all products and services in a timely, user-friendly and state of the art manner, and appropriately position and price new products and services relative to the marketplace and our costs of developing them. Any failure to achieve successful client acceptance of new products and services could have a material adverse effect on our business, results of operations and financial position. Additionally, significant delays in new product or service releases or significant problems in creating new products or services could materially adversely affect our business, results of operations and financial position.

Technology is rapidly evolving, and if we do not continue to develop new product and service offerings in response to these changes, our business could suffer. Disruptive technologies are rapidly changing the environment in which we, our clients, and our competitors operate. We will need to continue to respond to these changes by enhancing our product and service offerings to maintain our competitive position. However, we may not be successful in responding to these forces and enhancing our products on a timely basis, and any enhancements we develop may not adequately address the changing needs of our clients. Our future success will depend upon our ability to develop and introduce in a timely manner new or enhanced existing offerings that address the changing needs of this constantly evolving marketplace. Failure to develop products that meet the needs of our clients in a timely manner could have a material adverse effect on our business, results of operations, and financial position.

Our Research business depends on renewals of subscription-based services and sales of newsubscription-based services for a significant portion of our revenue, and ourfailure to renew at historical rates or generate new sales of such serviceswill lead to a decrease in our revenues. A large portion of our success depends on our ability to generate renewals of our subscription-based research products and services and new sales of such products and services, both to new clients and existing clients. These products and services constituted approximately 73% and 72% of total revenues from our on-going operations for 2019 and 2018, respectively. Generating new sales of our subscription-based products and services, both to new and existing clients, is a challenging, costly, and often time-consuming process. If we are unable to generate new sales, due to competition or other factors, our revenues will be adversely affected.

Our research subscription contracts are typically for twelve months or longer. Our ability to maintain contract renewals is subject to numerous factors, including the following:

delivering high-quality and timely analysis and advice to our clients;

understanding and anticipating market trends and the changing needs of our clients; and

providing products and services of the quality and timeliness necessary to withstand competition.

Additionally, as we continue to adjust our products and service offerings to meet our clients’ continuing needs, we may shift the type and pricing of our products which may impact client renewal rates. While our Research client retention rate was 82% and 83% at December 31, 2019 and 2018, respectively, there can be no guarantee that we will continue to maintain this rate of client renewals.



The profitability and success of our conferences and other meetings are subject to external factors beyond our control. Our Conferences business constituted approximately 11% of total revenues from our on-going operations in both 2019 and 2018. The market for desirable dates and locations for our activities is highly competitive. If we cannot secure desirable dates and suitable venues for our conferences their profitability will suffer, and our financial condition and results of operations may be adversely affected. In addition, because our conferences are scheduled in advance and held at specific locations, the success of these activities can be affected by circumstances outside of our control, such as the occurrence of or concerns related to labor strikes, transportation shutdowns and travel restrictions, economic slowdowns, reductions in government spending, geopolitical crises, terrorist attacks, war, weather, natural disasters, communicable diseases, and other occurrences impacting the global, regional, or national economies, the occurrence of any of which could negatively impact the success of the conference or meeting. We also face the challenge of procuring venues that are sizeable enough at a reasonable cost to accommodate some of our major activities.

Our Consulting business depends on non-recurring engagements and our failure to secure newengagements could lead to a decrease in our revenues. Consulting segment revenues constituted approximately 9% of total revenues from our on-going operations in both 2019 and 2018. Consulting engagements typically are project-based and non-recurring. In addition, revenue from our contract optimization business can fluctuate significantly from period to period and is not predictable. Our ability to replace consulting engagements is subject to numerous factors, including the following:

delivering consistent, high-quality consulting services to our clients;

tailoring our consulting services to the changing needs of our clients; and

our ability to match the skills and competencies of our consulting staff to the skills required for the fulfillment of existing or potential consulting engagements.

A material decline in our ability to replace consulting engagements will have an adverse impact on our revenues and our financial condition.

Our sales to governments are subject to appropriations and some may be terminated early. We derive significant revenues from research and consulting contracts with the United States government and its respective agencies, numerous state and local governments and their respective agencies, and foreign governments and their agencies. At December 31, 2019 and 2018, approximately $639 million and $555 million, respectively, of our outstanding revenue contracts were attributable to government entities. Our U.S. government contracts are subject to the approval of appropriations by the U.S. Congress to fund the agencies contracting for our services. Additionally, our contracts at the state and local levels, as well as foreign government contracts, are subject to various governmental authorizations and funding approvals and mechanisms. Certain of these contracts may be terminated at any time by the government entity without cause or penalty (“termination for convenience”). In addition, contracts with U.S. federal, state and local, and foreign governments and their respective agencies are subject to increasingly complex bidding procedures and compliance requirements, as well as intense competition. While terminations by governments have not been significant historically, should appropriations for the various governments and agencies that contract with us be curtailed, or should our government contracts be terminated for convenience, we may experience a significant loss of revenues.

We may not be able to attract and retain qualified personnel which couldjeopardize the quality of our products and services and our future growth plans. Our success is based on attracting and retaining talented employees and we depend heavily upon the quality of our senior management, research analysts, consultants, sales and other key personnel. The market for highly skilled workers and leaders in our industry is extremely competitive. Maintaining our brand and reputation is important to our ability to recruit and retain employees. We face competition for qualified professionals from, among others, technology companies, market research firms, consulting firms, financial services companies and electronic and print media companies, some of which have a greater ability to attract and compensate these professionals. Additionally, some of the personnel that we attempt to hire are subject to non-compete agreements that could impede our short-term recruitment efforts. We may also be limited in our ability to recruit internationally by restrictive domestic immigration laws, and changes to policies that restrain the flow of technical and professional talent could inhibit our ability to adequately staff our research and development and other efforts. An inability to retain key personnel or to hire and train additional qualified personnel could materially adversely affect the quality of our products and services, as well as our future business and operating results. In addition, effective succession planning is important to our long-term success, and failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.

We may not be able to maintain the equity in our brand name. We believe that our “Gartner” brand, in particular our independence, is critical to our efforts to attract and retain clients and top talent, and that the importance of brand recognition will increase as competition increases. We may also discover that our brand, though recognized, is not perceived to be relevant by new market segments we have targeted. We may expand our marketing activities to promote and strengthen the Gartner brand and may need


to increase our marketing budget, hire additional marketing and public relations personnel, and expend additional sums to protect our brand and otherwise increase expenditures to create and maintain client brand loyalty. If we fail to effectively promote, maintain, and protect the Gartner brand, or incur excessive expenses in doing so, our future business and operating results could be materially adversely impacted.

We are subject to risks from operating globally. We have clients in more than 100 countries and a substantial amount of our revenue is earned outside of the United States. Our operating results are subject to all of the risks typically inherent in international business activities, including general political and economic conditions in each country, challenges in staffing and managing foreign operations, changes in regulatory requirements, compliance with numerous and complex foreign laws and regulations, currency restrictions and fluctuations, the Global Codedifficulty of Conduct. The current electronic printable copiesenforcing client agreements, collecting accounts receivable and protecting intellectual property rights including against economic espionage in international jurisdictions. Further, we rely on local distributors or sales agents in some international locations. If any of these arrangements are terminated by our agent or us, we may not be able to replace the arrangement on beneficial terms or on a timely basis, or clients of the full textlocal distributor or sales agent may not want to continue to do business with us or our new agent.

Tariffs, trade barriers and restrictions, and other acts by governments to protect domestic markets or to retaliate against the trade tariffs and restrictions of other nations could negatively affect our business operations. In addition, the withdrawal of nations from existing common markets or trading blocs, such as the exit of the United Kingdom from the European Union (the EU), commonly referred to as Brexit, could be disruptive and negatively impact our business and the business of our clients. We continue to monitor Brexit and its potential impacts on our results of operations and financial condition, but its specific effects on our operations depend in part on what agreements are negotiated between the United Kingdom and the EU regarding post-Brexit access to EU markets. If Brexit leads to legal uncertainty and potentially divergent national laws and regulations in the United Kingdom and EU, then we, as well as our clients who have significant operations in the United Kingdom, may incur additional costs and expenses as we adapt to the divergent regulatory frameworks. For example, if Brexit requires us to change our legal entity structure in the United Kingdom and the EU, our contractual commitments in the United Kingdom and the rest of the EU may be impacted. Additionally, separation from the EU may negatively impact the United Kingdom economy, result in the imposition of tariffs on us or result in currency devaluations in the United Kingdom. The impact of any of these codeseffects of Brexit, among others, could materially harm our business and financial results.

Our failure to comply with complex US and foreign laws and regulations could have a material adverse effect on our operations or financial condition.Our business and operations may be conducted in countries where corruption has historically penetrated the economy. It is our policy to comply, and to require our local partners, distributors, agents, and those with whom we do business to comply, with all applicable anti-bribery and anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and U.K. Bribery Act, and with applicable local laws of the foreign countries in which we operate. There can be found at the investor relations sectionno assurance that all of our website, located at www.investor.gartner.com underemployees, contractors and agents will comply with the “Corporate Governance” link. This information is also available in printCompany’s policies that mandate compliance with these laws. Any determination that we have violated or are responsible for violations of these laws, even if inadvertent, could be costly and disrupt our business, which could have a material adverse effect on our business, results of operations, financial condition, liquidity and cash flows, as well as on our reputation. For example, during the second half of 2018 we cooperated fully with a South African government commission established to any stockholder who makesreview a written request to Investor Relations, Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, CT 06904 - 2212.

DIRECTOR NOMINATIONS

There have been no material changeswide range of issues related to the procedurescountry’s revenue service, including the procurement and fulfillment of consulting agreements we entered into with the revenue service through a sales agent from late 2014 through early 2017. With respect to Gartner, the commission recommended that the revenue service explore lawful options to invalidate the agreements, in whole or in part, and attempt to recover certain payments it made to us. We are in ongoing discussions with the revenue service regarding the matter. In parallel with our cooperation in South Africa, we commenced an internal investigation regarding this matter and voluntarily disclosed to the SEC and Department of Justice (DOJ) in November 2018 that the commission was reviewing our procurement of these agreements. We are cooperating fully with the SEC and DOJ inquiries into this matter. At this time, we do not believe the ultimate outcome of these matters will have a material effect on our financial results, however, an unexpected adverse resolution of these matters could negatively impact our financial condition, results of operations, and liquidity.


We are exposed to volatility in foreign currencyexchange rates from our international operations. A significant portion of our revenues are typically derived from sales outside of the United States. Revenues earned outside the United States are typically transacted in local currencies, which may fluctuate significantly against the U.S. dollar. While we use forward exchange contracts to a limited extent to seek to mitigate foreign currency risk, our revenues and results of operations could be adversely affected by which security holders may recommend nomineesunfavorable foreign currency fluctuations.

Natural disasters, pandemics, terrorist acts, war, actions by governments, and other geopolitical activities could disrupt our operations. We operate in numerous U.S. and international locations, and we have offices in a number of major cities across the globe. The occurrence of, or concerns related to, a major weather event, earthquake, flood, drought, volcanic activity, disease or pandemic, or other natural disaster could significantly disrupt our operations. In addition, acts of civil unrest, failure of critical


infrastructure, terrorism, armed conflict, war, and abrupt political change, as well as responses by various governments and the international community to such acts, can have a negative effect on our business. Such events could cause delays in initiating or completing sales, impede delivery of our products and services to our boardclients, disrupt or shut down the internet or other critical client-facing and business processes, impede the travel of directors since those procedures were describedour personnel and clients, dislocate our critical internal functions and personnel, and in general harm our proxy statement forability to conduct normal business operations, any of which can negatively impact our 2016 annual meetingfinancial condition and operating results. Such events could also impact the timing and budget decisions of stockholders.

AUDIT COMMITTEE

Gartner has a separately designated standing audit committee establishedour clients, which could materially adversely affect our business.


Privacy concerns could damage our reputation and deter current and potential clients from using our products and services or attending our conferences. Concerns relating to global data privacy have the potential todamage our reputation and deter current and prospective clients from using our products and services or attending our conferences. In the ordinary course of our business and in accordance with Section 3(a)(58)(A)applicable laws, we collect personal information (i) from our employees (ii) from the users of our products and services, including conference attendees; and (iii) from prospective clients. We collect only basic personal information from our clients and prospects. While we believe our overall data privacy procedures are adequate, the theft or loss of such data, or concerns about our practices, even if unfounded, with regard to the collection, use, disclosure, or security of this personal information or other data protection related matters could damage our reputation and materially adversely affect our operating results. Any systems failure or compromise of our security that results in the disclosure of our users’ personal data could seriously limit the consumption of our products and services and the attendance at our conferences, as well as harm our reputation and brand and, therefore, our business.

In addition, continuously evolving data protection laws and regulations, such as the European Union General Data Protection Regulation (GDPR), and the new California Consumer Privacy Act (CCPA) (effective January 2020), pose increasingly complex compliance challenges. We have implemented GDPR and CCPA compliance programs. In the meantime, Gartner will continue to maintain and rely upon our comprehensive global data protection compliance program, which includes administrative, technical, and physical controls to safeguard our associates’ and clients' personal data. The interpretation and application of these laws in the United States, the EU and elsewhere are often uncertain, inconsistent and ever changing. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.

We are exposed to risks related to cybersecurity. A significant portion of our business is conducted over the internet and we rely on the secure processing, storage and transmission of confidential, sensitive, proprietary and other types of information relating to our business operations and confidential and sensitive information about its customers and employees in our computer systems and networks, and in those of our third-party vendors. Individuals, groups, and state-sponsored organizations may take steps that pose threats to our operations, our computer systems, our employees, and our customers. The cybersecurity risks we face range from cyber attacks common to most industries, such as the development and deployment of malicious software to gain access to our networks and attempt to steal confidential information, launch distributed denial of service attacks, or attempt other coordinated disruptions, to more advanced threats that target us because of our prominence in the a global research and advisory field.

Like many multinational corporations, we, and some third parties upon which we rely, have experienced cyber attacks on our computer systems and networks in the past and may experience them in the future, likely with more frequency and sophistication, and involving a broader range of devices and modes of attack, all of which will increase the difficulty of detecting and successfully defending against them. To date, none have resulted in any material adverse impact to our business, operations, products, services or customers. We have implemented various security controls to both meet our security compliance obligations, while also defending against constantly evolving security threats. Our security controls help to secure our information systems, including our computer systems, intranet, proprietary websites, email and other telecommunications and data networks, and we scrutinize the security of outsourced website and service providers prior to retaining their services. However, the security measures implemented by us or by our outside service providers may not be effective and our systems (and those of our outside service providers) are vulnerable to theft, loss, damage and interruption from a number of potential sources and events, including unauthorized access or security breaches, cyber attacks, computer viruses, power loss, or other disruptive events. Additionally, the security compliance landscape continues to evolve, requiring us to stay apprised of changes in cybersecurity laws, regulations, and security requirements required by our clients, such as GDPR, CCPA, International Organization for Standardization (ISO), and National Institute of Standards and Technology (NIST). Recent well-publicized security breaches at other companies have led to enhanced government and regulatory scrutiny of the measures taken by companies to protect against cyber attacks, and may in the future result in heightened cybersecurity requirements, including additional regulatory expectations for oversight of vendors and service providers.

A cyber attack, widespread internet failure or internet access limitations, or disruption of our critical information technology systems through denial of service, viruses, or other events could cause delays in initiating or completing sales, impede delivery of our products and services to our clients, disrupt other critical client-facing or business processes or dislocate our critical internal functions. Additionally, any material breaches of cybersecurity or other technology-related catastrophe, or media reports of perceived security vulnerabilities to our systems or those of our third parties, even if no breach has been attempted or occurred,


could cause us to experience reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions or other statutory penalties, litigation, liability for failure to safeguard our customers’ information, or financial losses that are either not insured against or not fully covered through any insurance maintained by us.

Any of the foregoing may have a material adverse effect on our business, operating results and financial condition.

We may experience outages and disruptions of our online services if we fail tomaintain an adequate operations infrastructure. Our increasing user traffic and complexity of our products and services demand more computing power. We have spent and expect to continue to spend substantial amounts for access to data centers and equipment and to move more of our workload into cloud services, to upgrade our technology and network infrastructure to handle increased traffic on our websites, and to deliver our products and services through emerging channels, such as mobile applications. However, any inefficiencies or operational failures could diminish the quality of our products, services, and user experience, resulting in damage to our reputation and loss of current and potential users, subscribers, and advertisers, potentially harming our financial condition and operating results.

Our outstanding debt obligations could negatively impact our financial condition and future operating results. As of December 31, 2019, the Company had outstanding debt of $1.4 billion under its 2016 term loan and revolving credit facility, as amended (the 2016 Credit Agreement) and $800.0 million of Senior Notes Due 2025 (the Senior Notes). Additional information regarding the 2016 Credit Agreement and the Senior Notes is included in Note 6 - Debt in the Notes to Consolidated Financial Statements.

The debt service requirements of these borrowings could impair our future financial condition and operating results. In addition, the affirmative, negative and financial covenants of the 2016 Credit Agreement, as well as the covenants related to the Senior Notes, could limit our future financial flexibility. A failure to comply with these covenants could result in acceleration of all amounts outstanding, which could materially impact our financial condition unless accommodations could be negotiated with our lenders and noteholders. No assurance can be given that we would be successful in doing so, or that any accommodations that we were able to negotiate would be on terms as favorable as those currently in place. The outstanding debt may limit the amount of cash or additional credit available to us, which could restrain our ability to expand or enhance products and services, respond to competitive pressures or pursue future business opportunities requiring substantial investments of additional capital.

In addition, variable-rate borrowings under our 2016 Credit Agreement typically use LIBOR as a benchmark for establishing the rate of interest. LIBOR is the subject of recent national and international regulatory scrutiny which may result in changes that cause LIBOR to disappear entirely after 2021 or to cause it to perform differently than in the past. The consequences of these LIBOR developments on our variable-rate borrowings, including the possible transition to other rates such as the Secured Overnight Financing Rate (SOFR), cannot be predicted at this time, but could include an increase in the cost of our variable-rate indebtedness and volatility in our earnings.

We may require additional cash resources which may not be available onfavorable terms or at all. We may require additional cash resources due to changed business conditions, implementation of our strategy and stock repurchase program, to repay indebtedness or to pursue future business opportunities requiring substantial investments of additional capital, including acquisitions. If our existing financial resources are insufficient to satisfy our requirements, we may seek additional borrowings or issue debt. Prevailing credit and debt market conditions may negatively affect debt availability and cost, and, as a result, financing may not be available in amounts or on terms acceptable to us, if at all. In addition, the incurrence of additional indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would further restrict our operations.

If we are unable to enforce and protect our intellectual property rights, ourcompetitive position may be harmed. We rely on a combination of copyright, trademark, trade secret, patent, confidentiality, non-compete and other contractual provisions to protect our intellectual property rights. Despite our efforts to protect our intellectual property rights, unauthorized third parties may obtain and use technology or other information that we regard as proprietary. Our intellectual property rights may not survive a legal challenge to their validity or provide significant protection for us. The laws of certain countries, particularly in emerging markets, do not protect our proprietary rights to the same extent as the laws of the United States. Accordingly, we may not be able to protect our intellectual property against unauthorized third-party copying or use, which could adversely affect our competitive position. Additionally, there can be no assurance that another party will not assert that we have infringed its intellectual property rights.

Our employees are subject to restrictive covenant agreements (which include restrictions on employees' ability to compete and solicit customers and employees) and assignment of invention agreements, to the extent permitted under applicable law. When the period expires relating to their particular restrictions, former employees may compete against us. If a former employee violates the provisions of his/her restrictive covenant agreement, we seek to enforce the restrictions but there is no assurance that we will be successful in our efforts.



We have grown, and may continue to grow, through acquisitions and strategicinvestments, which could involve substantial risks. We have made and may continue to make acquisitions of, or significant investments in, businesses that offer complementary products and services or otherwise support our growth objectives. The risks involved in each acquisition or investment include the possibility of paying more than the value we derive from the acquisition, dilution of the interests of our current stockholders should we issue stock in the acquisition, decreased working capital, increased indebtedness, the assumption of undisclosed liabilities and unknown and unforeseen risks, the ability to retain key personnel of the acquired company, the inability to integrate the business of the acquired company, increase revenue or fully realize anticipated synergies, the time to train the sales force to market and sell the products of the acquired business, the potential disruption of our ongoing business and the distraction of management from our day to day business. The realization of any of these risks could adversely affect our business. Additionally, we face competition in identifying acquisition targets and consummating acquisitions.

We face risks related to leased office space. We assumed a significant amount of leased office space, in particular in Arlington, Virginia, in connection with the acquisition of CEB Inc. in 2017. In Arlington, we have consolidated all our businesses into a single building and have sublet substantially all of the excess space in our other properties. Through our real estate consolidations and other related activities, we have tried to secure quality sub-tenants with appropriate sub-lease terms. However, if subtenants default on their sublease obligations with us or otherwise terminate their subleases with us, we may experience a loss of planned sublease rental income, which could result in a material charge against our operating results.

We are also in the process of adding new leased spaces to support our continued growth. If the new spaces are not completed on schedule, or if the landlord defaults on its commitments and obligations pursuant to the new leases, we may incur additional expenses. In addition, unanticipated difficulties in initiating operations in a new space, including construction delays, IT system interruptions, or other infrastructure support problems, could result in a delay in moving into the new space, resulting in a loss of employee and operational productivity and a loss of revenue and/or additional expenses, which could also have an adverse, material impact on our operating results.

We face risks related to litigation. We are, and in the future may be, subject to a variety of legal actions, such as employment, breach of contract, intellectual property-related, and business torts, including claims of unfair trade practices and misappropriation of trade secrets. Given the nature of our business, we are also subject to defamation (including libel and slander), negligence, or other claims relating to the information we publish. Regardless of the merits of any claim and despite vigorous efforts to defend any such claim, claims can affect our reputation, and responding to any such claim could be time consuming, result in costly litigation and require us to enter into settlements, royalty and licensing agreements which may not be offered or available on reasonable terms. If a claim is made against us that we cannot defend or resolve on reasonable terms, our business, brand, and financial results could be materially adversely affected.

We face risks related to taxation. We are a global company and a substantial amount of our earnings is generated outside of the United States and taxed at rates less than the U.S. statutory federal income tax rate. Our effective tax rate, financial position and results of operations could be adversely affected by earnings being higher than anticipated in jurisdictions with higher statutory tax rates and, conversely, lower than anticipated in jurisdictions that have lower statutory tax rates, by changes in the valuation of our deferred tax assets and/or by changes in tax laws or accounting principles and their interpretation by relevant authorities.

Corporate tax reform, base-erosion efforts and tax transparency continue to be high priorities in many countries. Tax reform legislation is being proposed or enacted in a number of jurisdictions where we do business. The U.S. Tax Cuts and Jobs Act of 2017 (the Act) adopted broad U.S. corporate income tax reform and introduced several highly complex provisions. The U.S. Treasury Department and other standard-setting bodies will continue to interpret and issue guidance on how provisions of the Act will be applied and administered. We will continue to monitor and reflect the impact of the Act in future financial statements as appropriate.

During 2015, the Organization for Economic Cooperation and Development (OECD) released final reports on various action items associated with its initiative to prevent Base Erosion and Profit Shifting (BEPS). Numerous countries have and continue to propose tax law changes intended to address BEPS. The future enactment by various governments of these and other proposals could significantly increase our tax obligations in many countries where we do business. These actual, potential, and other changes, both individually and collectively, could materially increase our effective tax rate and negatively impact our financial position, results of operations, and cash flows.

In addition, our tax filings for various years are subject to examination by domestic and international taxing authorities and, during the ordinary course of business, we are under audit by various tax authorities. Recent and future actions on the part of the OECD and various governments have increased scrutiny of our tax filings. Although we believe that our tax filings and related accruals are reasonable, the final resolution of tax audits may be materially different from what is reflected in our historical tax provisions


and accruals and could have a material adverse effect on our effective tax rate, financial position, results of operations, and cash flows.

As of December 31, 2019, we had approximately $142.0 million of accumulated undistributed earnings in our non-U.S. subsidiaries. Our cash and cash equivalents are held in numerous locations throughout the world. At December 31, 2019, 92% of our cash and cash equivalents was held overseas, with a substantial portion representing accumulated undistributed earnings of our non-U.S. subsidiaries. Under generally accepted accounting principles in the United States of America, no provision for income taxes that may result from the remittance of accumulated undistributed foreign earnings is required if the Company intends to reinvest such earnings overseas indefinitely. The provisions of the Act significantly changed the way earnings of non-U.S. subsidiaries are taxed in the United States. The Act imposed a one-time transition tax on earnings of foreign subsidiaries that were previously tax deferred, adopted a system of current taxation of foreign global intangible low-taxed income and provided for a deduction on repatriation of dividends from foreign subsidiaries. As a result of and subsequent to the enactment of the Act, the Company has remitted previously undistributed earnings with minimal additional tax cost. The Company intends to continue to reinvest its accumulated undistributed foreign earnings, except in instances where the repatriation of those earnings would result in minimal additional tax. As a result, we have not recognized income tax expense on the amounts deemed permanently reinvested.

Our corporate compliance program cannot guarantee that we are in compliance with all applicable laws and regulations. We operate in a number of countries, including emerging markets, and as a result we are required to comply with numerous, and in many cases, changing international and U.S. federal, state and local laws and regulations. Accordingly, we have a corporate compliance program that includes the creation of appropriate policies defining employee behavior that mandate adherence to laws, employee training, annual affirmations, monitoring and enforcement. However, failure of any employee fails to comply with any of these laws, regulations or our policies, could result in a range of liabilities for the employee and for the Company, including, but not limited to, significant penalties and fines, sanctions and/or litigation, and the expenses associated with defending and resolving any of the foregoing, any of which could have a negative impact on our reputation and business.

Risks related to our common stock

Our operating results may fluctuate from period to period and/or the financial guidance we have given may not meet theexpectations of investors, which may cause the price of our common stock to decline. Our quarterly and annual operating results fluctuate as a result of many factors, including the timing of the execution of research contracts, the extent of completion of consulting engagements, the timing of our conferences, the amount of new business generated, the mix of domestic and international business, currency fluctuations, changes in market demand for our products and services, the timing of the development, introduction and marketing of new products and services, competition in our industry, the impact of our acquisitions, and general economic conditions. An inability to generate sufficient earnings and cash flow, and achieve our forecasts, may impact our operating and other activities. Fluctuations in our operating results could cause period-to-period comparisons of operating results not to be meaningful and may provide an unreliable indication of future operating results. Furthermore, our operating results may not meet the expectations of investors or the financial guidance we have previously provided. If this occurs, the price of our common stock could decline.

Our stock price may be impacted by factors outside of our control and you maynot be able to resell shares of our common stock at or above the price youpaid. The price of our common stock is subject to significant fluctuations in response to, among other factors, developments in the industries in which we do business, general economic conditions, general market conditions, geo-political events, changes in the nature and composition of our stockholder base, changes in securities analysts’ recommendations regarding our securities and our performance relative to securities analysts’ expectations for any quarterly period, as well as other factors outside of our control, including any and all factors that move the securities markets generally. These factors may materially adversely affect the market price of our common stock.

Future sales or issuances of our common stock in the public market could lower our stockprice. Sales of a substantial number of shares of common stock in the public market by our current stockholders, or the threat that substantial sales may occur, could cause the market price of our common stock to decrease significantly or make it difficult for us to raise additional capital by selling stock. The issuance of additional shares of our common stock could also lower the market price of our common stock. Furthermore, we have various equity incentive plans that provide for awards in the form of stock appreciation rights, restricted stock, restricted stock units and other stock-based awards, which have the effect of adding shares of common stock into the public market. We have a board-approved share repurchase program and at December 31, 2019, approximately $715.5 million remained available for share purchases under this program. No assurance can be given that we will continue these share repurchase activities in the future after the current program is completed, or in the event that the price of our common stock reaches levels at which repurchases are not accretive.



Future sales of our common stock from grants and awards could lower our stockprice. As of December 31, 2019, the aggregate number of shares of our common stock issuable pursuant to outstanding grants and awards under our equity incentive plans was approximately 2.6 million shares (approximately 0.6 million of which have vested). In addition, at the present time, approximately 4.5 million shares may be issued in connection with future awards under our equity incentive plans. Shares of common stock issued under these plans are freely transferable and have been registered under the Securities Act of 1933, as amended (the “Securities Act”), except for any shares held by affiliates (as that term is defined in Rule 144 under the Securities Act) which are subject to certain limitations. We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock.

Interests of certain of our significant stockholders may conflict with our interests or the interests of other stockholders. To our knowledge, as of the date hereof, and based upon publicly-available SEC filings, five institutional investors each presently hold over 5% of our common stock. While no stockholder or institutional investor individually holds a majority of our outstanding shares, these significant stockholders may be able, either individually or acting together, to exercise significant influence over matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation, adoption or amendment of equity plans and approval of significant transactions such as mergers, acquisitions, consolidations and sales or purchases of assets. In addition, in the event of a proposed acquisition of the Company by a third party, this concentration of ownership may delay or prevent a change of control in us. Accordingly, the interests of these stockholders may not always coincide with our interests or the interests of other stockholders, or otherwise be in the best interests of us or all stockholders.

Our anti-takeover protections may discourage or prevent a change of control,even if a change in control would be beneficial to our stockholders. Provisions of our restated certificate of incorporation and bylaws and Delaware law may make it difficult for any party to acquire control of us in a transaction not approved by our Board of Directors. These provisions include: (i) the ability of our Board of Directors to issue and determine the terms of preferred stock; (ii) advance notice requirements for inclusion of stockholder proposals at stockholder meetings; and (iii) the anti-takeover provisions of Delaware law. These provisions could discourage or prevent a change of control or change in management that might provide stockholders with a premium to the market price of their common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.
ITEM 2. PROPERTIES.

As of December 31, 2019, we leased approximately 45 domestic and 75 international office properties for our ongoing business operations. These offices, which exclude certain properties that we sublease to others, support our executive and administrative activities, research and consulting, sales, systems support, operations, and other functions. Our corporate office is based in Stamford, Connecticut. We also maintain an important presence in: Fort Myers, Florida; Arlington, Virginia; Egham, the United Kingdom; Gurgaon, India; Irving, Texas; and Barcelona, Spain. The Company does not own any real property.

Our Stamford corporate headquarters is comprised of leased office space in three buildings located on the same campus. Our lease for the Stamford headquarters facility expires in 2027 and contains three five-year renewal options at fair value. Additionally, we lease office space in a fourth building adjacent to our Stamford headquarters facility under a lease designed to be co-terminus with our headquarters lease. We have options for additional space in this fourth building.

We expect to continue to invest in our business by adding headcount and, as a result, we may need additional office space in various locations. Should additional space be necessary, we believe that it will be available on reasonable terms.

ITEM 3. LEGAL PROCEEDINGS.

We are involved in legal and administrative proceedings and litigation arising in the ordinary course of business. We believe that the potential liability, if any, in excess of amounts already accrued from all proceedings, claims and litigation will not have a material effect on our financial position, cash flows or results of operations when resolved in a future period.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.





PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is listed on the New York Stock Exchange under the symbol "IT". As of January 31, 2020, there were 1,113 holders of record of our common stock. Our 2020 Annual Meeting of Stockholders will be held on June 8, 2020 at the Company’s corporate headquarters in Stamford, Connecticut. We did not submit any matter to a vote of our stockholders during the fourth quarter of 2019.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The equity compensation plan information set forth in Part III, Item 12 of this Annual Report on Form 10-K is hereby incorporated by reference into this Part II, Item 5.

SHARE REPURCHASES

The Company has a $1.2 billion board authorization to repurchase its common stock. The Company may repurchase its common stock from time-to-time in amounts, at prices and in the manner that the Company deems appropriate, subject to the availability of stock, prevailing market conditions, the trading price of the stock, the Company’s financial performance and other conditions. Repurchases may be made through open market purchases (which may include repurchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act consisting of Ms. Dykstra1934, as amended), accelerated share repurchases, private transactions or other transactions and Messrs. Bresslerwill be funded by cash on hand and Smith. Our Boardborrowings. Repurchases may also be made from time-to-time in connection with the settlement of the Company's stock-based compensation awards. The table below summarizes the repurchases of our common stock during the three months ended December 31, 2019 pursuant to our $1.2 billion share repurchase authorization and the settlement of stock-based compensation awards.
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.


ITEM 6. SELECTED FINANCIAL DATA.

The fiscal years presented below are for the twelve-month periods from January 1 through December 31. Data for all years was derived or compiled from our audited consolidated financial statements included herein or from submissions of our Forms 10-K in prior years. The selected consolidated financial data should be read in conjunction with our consolidated financial statements and related notes contained in this Annual Report on Form 10-K and prior year filings with the Securities and Exchange Commission.
(In thousands, except per share data) 20192018201720162015
STATEMENT OF OPERATIONS DATA  
   
 
Revenues:  
   
 
Research $3,374,548
$3,105,764
$2,471,280
$1,857,001
$1,614,904
Conferences 476,869
410,461
337,903
268,605
251,835
Consulting 393,904
353,667
327,661
318,934
296,317
Other —
105,562
174,650
—
—
Total revenues $4,245,321
$3,975,454
$3,311,494
$2,444,540
$2,163,056
Operating income (loss) $370,087
$259,715
$(6,329)$305,141
$287,997
Net income $233,290
$122,456
$3,279
$193,582
$175,635
       
PER SHARE DATA  
    
Basic income per share $2.60
$1.35
$0.04
$2.34
$2.09
Diluted income per share $2.56
$1.33
$0.04
$2.31
$2.06
       
Weighted average shares outstanding:  
    
Basic 89,817
90,827
88,466
82,571
83,852
Diluted 90,971
92,122
89,790
83,820
85,056
       
OTHER DATA  
    
Cash and cash equivalents $280,836
$156,368
$538,908
$474,233
$372,976
Total assets 7,151,294
6,201,474
7,283,173
2,367,335
2,168,517
Long-term debt 2,067,796
2,146,514
2,943,341
672,500
790,000
Stockholders’ equity (deficit) 938,593
850,757
983,465
60,878
(132,400)
Cash provided by operating activities $565,436
$471,158
$254,517
$365,632
$345,561
The items described below impacted the presentation and comparability of our selected financial data.
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 determinedbeen recorded in the Other segment in 2019. Note 2 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements provides additional information regarding the Company's 2018 divestitures.

During 2017, the Company acquired CEB Inc. The operating results of CEB Inc. have been included in the Company's operating results since the acquisition date. The Company also made other acquisitions in the years presented in the above table. Note 2 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements provides additional information regarding the Company's recent acquisitions.

During 2019, 2018 and 2017, the Company recognized $9.5 million, $107.2 million and $158.5 million, respectively, of acquisition and integration charges related to its acquisitions. Note 2 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements provides additional information regarding the Company's acquisition and integration charges.

During 2019, the Company recorded a net tax benefit of approximately $38.1 million related to an intercompany sale of certain intellectual property, which increased our diluted earnings per share by $0.42 per share. Note 12 — Income Taxes in the Notes to Consolidated Financial Statements provides additional information regarding the Company's income taxes.



During 2017, the Company recorded a $59.6 million tax benefit related to the U.S. Tax Cuts and Jobs Act of 2017, which increased our diluted earnings per share by $0.66 per share. Note 12 — Income Taxes in the Notes to Consolidated Financial Statements provides additional information regarding the Company's income taxes.

•
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.

During 2017, the Company borrowed approximately $2.8 billion and issued approximately 7.4 million shares of its common stock in connection with the acquisition of CEB Inc. Note 2 — Acquisitions and Divestitures and Note 6 — Debt in the Notes to Consolidated Financial Statements provide additional information regarding the Company's acquisition of CEB Inc. and its debt arrangements, respectively.

The Company repurchased 1.4 million, 2.1 million, 0.4 million, 0.6 million and 6.2 million shares of its common stock in 2019, 2018, 2017, 2016 and 2015, respectively. We used $199.0 million, $260.8 million, $41.3 million, $59.0 million and $509.0 million in cash for share repurchases in 2019, 2018, 2017, 2016 and 2015, respectively. Note 8 — Stockholders’ Equity in the Notes to Consolidated Financial Statements provides additional information regarding the Company's share repurchase activity.


ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The purpose of this Management’s Discussion and Analysis (“MD&A”) is to facilitate an understanding of significant factors influencing the operating results, financial condition and cash flows of Gartner, Inc. Additionally, the MD&A conveys our expectations of the potential impact of known trends, events or uncertainties that both Ms. Dykstramay impact future results. You should read this discussion in conjunction with our consolidated financial statements and Mr. Bressler qualifyrelated notes included in this Annual Report on Form 10-K. Historical results and percentage relationships are not necessarily indicative of operating results for future periods. References to “Gartner,” the "Company,” “we,” “our” and “us” in this MD&A are to Gartner, Inc. and its consolidated subsidiaries.

This MD&Aprovides an analysis of our consolidated financial results, segment results and cash flows for 2019 and 2018 under the headings "Results of Operations," "Segment Results" and "Liquidity and Capital Resources."For a similar detailed discussion comparing 2018 and 2017, refer to those headings under Item 7., "Management’s Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K for the year ended December 31, 2018.

Acquisition of TOPO Research LLC

On October 1, 2019, the Company acquired 100% of the outstanding membership interests of TOPO Research LLC ("TOPO"), a privately-held company based in Redwood City, California, for $25.0 million. TOPO is a subscription-based research and advisory business that helps sales leaders at the world’s fastest-growing companies achieve their growth objectives.

Business Divestitures

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 audit committee financial experts,a result, no operating activity has been recorded in the Other segment in 2019. The Other segment had $105.6 million of revenue during 2018, while gross contribution was $65.1 million.

Note 2 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements provides additional information regarding the TOPO acquisition and the Company's 2018 divestitures.

FORWARD-LOOKING STATEMENTS

In addition to historical information, this Annual Report on Form 10-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as definedamended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are any statements other than statements of historical fact, including statements regarding our expectations, beliefs, hopes, intentions, projections or strategies regarding the future. In some cases, forward-looking statements can be identified by the rulesuse of words such as “may,” “will,” “expect,” “should,” “could,” “believe,” “plan,” “anticipate,” “estimate,” “predict,” “potential,” “continue” or other words of similar meaning.

We operate in a very competitive and rapidly changing environment that involves numerous risks and uncertainties, some of which are beyond our control. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future quarterly and annual revenues, operating income, results of operations and cash flows, as well as any forward-looking statement, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following: the timing of our Gartner Symposium/Xposeries that normally occurs during the fourth quarter, as well as our other conferences and meetings; the amount of new business generated, including from acquisitions; the mix of domestic and international business; domestic and international economic conditions; the U.K.’s exit from the European Union and its impact on our results; the impact of changes in tax policy and heightened scrutiny from various taxing authorities globally; changes in market demand for our products and services; changes in foreign currency rates; the timing of the SEC,development, introduction and marketing of new products and services; competition in the industry; the payment of performance compensation; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; and other factors. The potential fluctuations in our operating income could cause period-to-period comparisons of operating results not to be meaningful and could provide an unreliable indication of future operating results. A description of the risk factors associated with our business is included under “Risk Factors” in Item 1A. of this Annual Report on Form 10-K, which is incorporated herein by reference.

Forward-looking statements are subject to risks, estimates and uncertainties that all members havecould cause actual results to differ materially from those discussed in, or implied by, the requisite accountingforward-looking statements. Factors that might cause such a difference include, but


are not limited to, those listed above or related financial management expertisedescribed under “Risk Factors” in Item 1A. of this Annual Report on Form 10-K. Readers should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Forward-looking statements in this Annual Report on Form 10-K speak only as of the date hereof, and forward-looking statements in documents attached that are financially literateincorporated by reference speak only as of the date of those documents. Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.

BUSINESS OVERVIEW

Gartner, Inc. (NYSE: IT) is the NYSE corporate governance listing standards.

world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission–critical priorities today and build the successful organizations of tomorrow. We believe our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and an objective resource for more than 15,000 enterprises in more than 100 countries — across all major functions, in every industry and enterprise size.

Gartner delivers its products and services globally through three business segments – Research, Conferences and Consulting, as described below.

ITEM 11.EXECUTIVE COMPENSATION
•
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.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion & Analysis, or “CD&A”, describes and explains the Company’s compensation philosophy and executive compensation program, as well as compensation awarded to and earned by,


•
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 MEASUREMENTS

We believe that the following persons who were Named Executive Officers (“NEOs”) in 2016:

business measurements are important performance indicators for our business segments:
Eugene A. HallChief Executive Officer
Craig W. SafianSenior Vice President & Chief Financial Officer
Per Anders WaernSenior Vice President, Gartner Consulting
David GodfreySenior Vice President, Sales
Alwyn DawkinsSenior Vice President, Events

The CD&A is organized into three sections:

·The Executive Summary, which highlights the importance of our Contract Value (herein “CV”) metric, our 2016 corporate performance and our pay-for-performance approach and our compensation practices, all of which we believe are relevant to stockholders as they consider their votes on Proposal Two (advisory vote on executive compensation, or “Say-on-Pay”)
BUSINESS SEGMENT BUSINESS MEASUREMENT
·The Compensation Setting Process for 2016
Research 
·Other Compensation Policies and Information
8

The CD&A is followed by the Compensation Tables and Narrative Disclosures, which report and describe the compensation and benefit amounts paid to our NEOs in 2016.

EXECUTIVE SUMMARY

Contract Value – A Unique Key Performance Metric for Gartner

Total contract value (“CV”) represents 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. CVTotal contract value primarily includes researchResearch deliverables for which revenue is recognized on a ratable basis, and, commencing in 2016, includesas well as other deliverables (primarily eventsConferences tickets) for which revenue is recognized when the deliverable is utilized.

Unique to the business of Gartner, Contract Value is oursingle most important performance metric. It focuses all of our executives on driving bothshort-term andlong - term success for our business and stockholders.

Contract Value = Both Short-Termand Long-Term Measures of Success

Short-TermüMeasures Comparing contract value year-over-year not only measures the valueshort-term growth of allour business, but also signals the long-term health of our Research subscription research contracts in effect at a specific point in time
Long-TermüMeasuresbusiness since it measures revenue that is highly likely to recur over a multi-year period

Comparing CV year over year measures the short term growth of our business. More importantly, CV is also an appropriate measure of long – term performance due to the nature of our Research subscription business. Our Research business is our largest business segment (75% of 2016 gross revenues) with our highest margins (69% for 2016). Our Research enterprise client retention (84% in 2016) and retained contract value (104% enterprise wallet retention in 2016) are consistently very high. The combination of annual contracts and high renewal rates are predictive of revenuehighly likely to recur over a 3 – 5 year period.

Accordingly, growing CV drives bothshort- term andlong – term corporate performance and shareholder value due to these unique circumstances. As such, all Gartner executives and associates are focused at all times on growing CV. This, coupled with the fact that our investors are also focused on this metric, ensures that we are aligned on the long - term success of the Company.

Record 2016 Performance

2016 was another year of record achievements for Gartner:

üCV, Revenue, EBITDA*period. Our total contract value consists of Global Technology Sales contract value, which includes sales to users and EPS* grew 14%providers of technology, and Global Business Sales contract value, 14%, 10% and 24%, respectively, excluding the impact of foreign exchange where applicablewhich includes sales to all other functional leaders.
   
 üCV
Client retention rate represents a measure of client satisfaction and Revenues ended the yearrenewed business relationships at a record $1.93 billion and $2.44 billion, respectively  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.
   
 üFive
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 a year CAGR for CV, EBITDA and EPS was 12%, 10% and 16%, respectively  ago, by the total contract value from a year ago, excluding the impact of foreign currency exchange. When wallet retention exceeds client retention, it is an indication of retention of higher-spending clients, or increased spending by retained clients, or both. Wallet retention is calculated at an enterprise level, which represents a single company or customer.
Conferences
Number of destination conferences represents the total number of hosted destination conferences completed during the period. Single day, local meetings are excluded.
   
 üOur Common Stock rose 11.4% in 2016, as compared
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 the S&P 500, which rose 9.5%,be derived from in-process consulting and NASDAQ Total Return, which rose 7.5%measurement engagements.
   
 üCompound annual growth
Utilization rate represents a measure of productivity of our consultants. Utilization rates on our common stock were 11%, 12% and 24%are calculated for billable headcount on a 1, 3 and 5 yearpercentage basis out-performing the S&P 500 and NASDAQ Total Return indices for the corresponding periods

*In the disclosure included in this Item 11, EBITDA refers to Normalized EBITDA, which represents operating income excluding depreciation, accretion on obligations related to excess facilities, amortization, stock-based compensation expense and acquisition-related adjustments. EPS refers to diluted EPS excluding acquisition adjustments.

9
by dividing total hours billed by total hours available to bill.

Gartner 2016 Performance Charts (CV and EBITDA $ in millions)

The laser focus throughout our global organization on growing CV has resulted in a strong, sustained track record of growth across this measure, as well as EBITDA and EPS, over many years, as the following charts demonstrate.

 

10

These strong results have fueled stock price growth which leads all comparison groups as follows:

Key Attribute of our Executive Compensation Program – Pay for Performance

Our executive compensation plan design has successfully motivated senior management to drive outstanding corporate performance since it was first implemented in 2006. It is heavily weighted towards incentive compensation.

Its key features are as follows:

ü100% of executive equity awards and executive bonus awards are performance-based.
   
 ü70% of our executive equity awards, and 100% of our executive bonus awards are subject to forfeiture in the event the Company fails to achieve performance objectives established
Billing rate represents earned billable revenue divided by our Compensation Committee.total billable hours.
   
 ü91% percent
Average annualized revenue per billable headcount represents a measure of our CEO’s target total compensation (77% in the caserevenue generating ability of our other NEOs)an average billable consultant and is incalculated periodically by multiplying the form of incentive compensation (bonus and equity awards).average billing rate per hour times the utilization percentage times the billable hours available for one year.
   
ü81% of our CEO’s target total compensation (61% in the case of our other NEOs) is in the form of equity awards.
üEarned equity awards may increase or decrease in value based upon stock price movement during the vesting period.
11

Our Compensation Best Practices

Our compensation practices motivate



EXECUTIVE SUMMARY OF OPERATIONS AND FINANCIAL POSITION
We have executed a consistent growth strategy since 2005 to drive revenue and earnings growth. The fundamentals of our executivesstrategy include a focus on creating extraordinary research insight, delivering innovative and highly differentiated product offerings, building a strong sales capability, providing world class client service with a focus on client engagement and retention, and continuously improving our operational effectiveness.

We had total revenues of $4.2 billion in 2019, an increase of 7% compared to achieve2018 on a reported basis and 9% excluding the foreign currency impact. There was $105.6 million of Other segment revenue on a reported basis in 2018 that did not recur in 2019. Net income increased to $233.3 million in 2019 from $122.5 million in 2018 and, as a result, diluted earnings per share was $2.56 in 2019 compared to $1.33 in 2018.

Research revenues increased to $3.4 billion in 2019, an increase of 9% compared to 2018 on a reported basis and 10% excluding the foreign currency impact. The Research gross contribution margin was 70% and 69% in 2019 and 2018, respectively. Total contract value was $3.4 billion at December 31, 2019, an increase of 12% compared to December 31, 2018 on a foreign currency neutral basis.

Conferences revenues increased to $476.9 million in 2019, an increase of 16% compared to 2018 on a reported basis and 18% excluding the foreign currency impact. The Conferences gross contribution margin was 51% and 50% in 2019 and 2018, respectively. We held 72 and 70 destination conferences in 2019 and 2018, respectively.

Consulting revenues increased to $393.9 million in 2019, an increase of 11% compared to 2018 on a reported basis and 14% excluding the foreign currency impact. The Consulting gross contribution margin was 30% and 29% in 2019 and 2018, respectively. Backlog was $115.7 million at December 31, 2019.

Cash provided by operating activities was $565.4 million and $471.2 million during 2019 and 2018, respectively. As of December 31, 2019, we had $280.8 million of cash and cash equivalents and $1.0 billion of available borrowing capacity on our operating plans and execute our corporate strategy without taking undue risks. These practices, which are consistent with “best practices” trends, include the following:

üWe have an independent Compensation Committee.
üWe have an independent compensation consultant that reports directly to the Compensation Committee.
üWe annually assess the Company’s compensation policies to ensure that the features of our program do not encourage undue risk.
üAll executive officers are “at will” employees and only our CEO has an employment agreement.
üWe have a clawback policy applicable to all executive incentive compensation (cash bonus and equity awards).
üWe have robust stock ownership guidelines for our directors and executive officers.
üWe have holding period requirements that require 50% of net after taxrevolving credit facility. During 2019, we repurchased 1.4 million shares from all released equity awards to be held by a director or executive officer until stock ownership guidelines are satisfied.
üWe prohibit hedging and pledging transactions in company securities.
üWe do not provide excise tax gross up payments.
üWe encourage retention by having equity awards vest 25% per year over 4 years, commencing on the grant date anniversary.
üThe potential annual payout on incentive compensation elements is limited to 2 times target.
üOur equity plan prohibits:
oless than a 12 month vesting period on equity awards;
orepricing stock options and surrendering outstanding options for new options with a lower exercise price without stockholder approval;
ocash buyouts of underwater options or stock appreciation rights without stockholder approval; and
ogranting options or stock appreciation rights with an exercise price less than the fair market value of the Company’s common stock on the date of grant.

üWe do not grant equity awards during closed trading windows.

COMPENSATION SETTING PROCESS FOR 2016

This discussion explains the objectives of the Company’s compensation policies; whatCompany's common stock for an aggregate purchase price of approximately $194.0 million.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our consolidated financial statements requires the compensation program is designed to reward; each elementapplication of compensation and why the Company chooses to pay each element; how the Company determines the amount (and, where applicable, the formula) for each element to pay; and how each compensation elementappropriate accounting policies and the Company’s decisions regarding that element fit into the Company’s overall compensation objectives and affect decisions regarding other elements.

The Objectivesuse of the Company’s Compensation Policies

The objectives of our compensationestimates. Our significant accounting policies are threefold:

12
Øto attract, motivate and  retain highly talented, creative and entrepreneurial individuals by paying market-based compensation;
Øto motivate our executives to maximize the performance of our Company through pay-for-performance compensation components based on the achievement of corporate performance targets that are aggressive, but attainable, given economic conditions; and
Øto ensure that, as a public company, our compensation structure and levels are reasonable from a stockholder perspective.

Whatdescribed in Note 1 — Business and Significant Accounting Policies in the Compensation Program Is DesignedNotes to Reward

Our guiding philosophy is thatConsolidated Financial Statements. Management considers the more executive compensation is linked to corporate performance, the stronger the inducement is for management to strive to improve Gartner’s performance. In addition, we believe that the design of the total compensation package must be competitive with the marketplace from which we hire our executive talent in order to achieve our objectives and attract and retain individuals who are critical to our long-term success. Our compensation program for executive officers is designed to compensate individuals for achieving and exceeding corporate performance objectives. We believe this type of compensation encourages outstanding team performance (not simply individual performance), which builds stockholder value.

Both short-term and long-term incentive compensation is earned by executives only upon the achievement by the Company of certain measurable performance objectives that are deemed by the Compensation Committee and managementpolicies discussed below to be critical to the Company’s short-term and long-term success. The amount of compensation ultimately earned will increase or decrease depending upon Company performance and the underlying pricean understanding of our Common Stock (in the caseconsolidated financial statements because their application requires complex and subjective management judgments and estimates. Specific risks for these critical accounting policies are also described below.


The preparation of long-term incentive compensation).

Principal Compensation Elementsour consolidated financial statements requires us to make estimates and Objectives

To achieve the objectives noted above, we have designed executive compensation to consist of three principal elements:

Base SalaryØPay competitive salaries to attract and retain the executive talent necessary to develop and implement our corporate strategy and business plan
ØAppropriately reflect responsibilities of the position,assumptions about future events. We develop our estimates using both current and historical experience, of the executive and marketplace in which we compete for talent
Short-Term Incentive Compensation (cash bonuses)ØMotivate executives to generate outstanding performance and achieve or exceed annual operating plan
ØAlign compensation with results
Long-Term Incentive Compensation (equity awards)ØInduce enhanced performance and promote retention
ØAlign executive rewards with long-term stock price appreciation
ØMake executives stakeholders in the success of Gartner and thereby create alignment with stockholders

How the Company Determines Executive Compensation

In General

The Company set aggressive performance goals in planning 2016 executive compensation. In order for our executives to earn target compensation, the Company needed to exceed double digit growth in two key performance metrics, as discussed below.

13

The Compensation Committee established performance objectives for short-term (bonus) and long-term (equity) incentive awards at levels that it believed would motivate performance and be adequately challenging. The target performance objectives were intended to compel the level of performance necessary to enable the Company to achieve its operating plan for 2016.

As in prior years, the short- and long-term incentive compensation elements provided executives with opportunities to increase their total compensation package based upon the over-achievement of corporate performance objectives; similarly, in the case of under-achievement of corporate performance objectives, the value of these incentive elements would fall below their target value (with the possibility of total forfeiture of the short-term element and 70% of the long-term element), and total compensation would decrease correspondingly. We assigned greater weight to the long-term incentive compensation element, as compared to the salary and short-term elements, in order to promote long-term decision-making that would deliver top corporate performance, align management to stockholder interests and retain executives. We believe that previously granted and unvested equity awards serve as a strong retention incentive.

Salary, short-term and long-term incentive compensation levels for executive officers (other than the CEO) are recommended by the CEO and are subject to approval by the Compensation Committee. In formulating his recommendation to the Compensation Committee, the CEO undertakes a performance review of these executives and considers input from human resources personnel at the Company, as well as benchmarking dataother factors, including the general economic environment and actions we may take in the future. We adjust such estimates when facts and circumstances dictate. However, our estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on our best judgment at a point in time and, as such, they may ultimately differ materially from actual results. Ongoing changes in our estimates could be material and would be reflected in the compensation consultantCompany’s consolidated financial statements in future periods.


Our critical accounting policies are described below.

Accounting for leases — On January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update No. 2016-02, Leases (as amended, "ASU No. 2016-02" or the “new lease standard”), which substantively modifies the accounting and external market data (discussed below).

Salary, short-term and long-term incentive compensation levelsdisclosure requirements for lease arrangements. Prior to the CEO’s compensation are established byissuance of ASU No. 2016-02, generally accepted accounting principles in the Compensation Committee within the parametersUnited States of Mr. Hall’s employment agreement with the Company. In making its determination with respect to Mr. Hall’s compensation, the Compensation Committee evaluates his performance in conjunction with the Governance Committee and after soliciting additional input from the Chairman of the Board and other directors; considers input from the Committee’s compensation consultant; and reviews benchmarking data pertaining to CEO compensation practices at our proxy peer companies and general trends. SeeEmployment Agreements with Executive Officers – Mr. Hall elsewhere in this Item 11 for a detailed discussion of Mr. Hall’s agreement.

Effect of Stockholder Advisory Vote on Executive Compensation, or Say on Pay

2016 Say on Pay Approval = 93.5% of shares voted, and 88.2% of outstanding shares

The Board has resolved to present Say on Pay proposals to stockholdersAmerica under FASB Accounting Standards Codification ("ASC") Topic 840, Leases, provided that lease arrangements meeting certain criteria werenot recorded on an annual basis, respectingentity's balance sheet. ASU No. 2016-02 significantly changes the sentimentaccounting for leases because a right-of-use model is now used wherebya lessee must record a right-of-use asset and a related lease liability on its balance sheet for most of our stockholdersits leases. Under ASU No. 2016-02, leases are classified as expressedeither operating orfinance arrangements, with such classification affecting the pattern of expense recognition in 2011. This year, we are asking our stockholders once againan entity's income statement. ASU No. 2016-02 also requiressignificantly expanded disclosures to indicate their preference formeet the frequencyobjective of Say on Pay proposals; however,enabling users of financial statements to assess the Company is committedamount, timing and uncertainty of cash flows related to annual Say on Pay proposals. leases.




The Company andadopted ASU No. 2016-02 using a modified retrospective approach. We elected to use an optional transition method available under ASU No. 2016-02 to record the Compensation Committee will consider the results on this year’s advisory Say on Pay proposal in future executive compensation planning activities. Over the past several years, stockholders have consistently strongly supported our executive compensation program.

Benchmarking and Peer Group

Executive compensation planning for 2016 began mid-year in 2015. Our Compensation Committee commissioned Exequity, an independent compensation consultant, to perform a competitive analysis of our executive compensation practices (the “Compensation Study”). Exequity’s findings were considered by the Compensation Committee and by management in planning our 2016 executive compensation program. The Compensation Study utilized market data provided by Aon Hewitt pertaining to 2015 compensation paid to individuals occupying senior executive positions at Gartner’s selected peer group of companies for executive compensation benchmarking purposes (the “Peer Group”).

The Compensation Committee reviews the Peer Group annually to ensure comparability based on Gartner’s operating characteristics, labor market relevance and defensibility. The 2016 competitive analysis compared Gartner’s target compensationrequired cumulative effect adjustments to the Peer Group. The Peer Group comprised 14 publicly-traded high tech

14

companies that resemble Gartner in size (in terms of revenues and number of employees), have a similar business model and with whom Gartner competes for executive talent. Gartner ranked at the 36th percentile in revenues and 43rd percentile in market cap relative to the Peer Group. Peer Group companies included:

Adobe Systems IncorporatedIntuit Inc.
Autodesk, Inc.Moody’s Corporation
Cadence Design Systems, Inc.Nuance Communications, Inc.
Citrix Systems, Inc.PTC Inc.
The Dun & Bradstreet Corporationsalesforce.com, inc
Equifax Inc.Synopsys, Inc.
IHS Market LtdVerisign, Inc.

Management and the Compensation Committee concluded that the Peer Group, which remained unchanged from the prior year with the exception of the removal of three companies that no longer reported due to acquisitions or privatization, was appropriate for 2016 executive compensation planning purposes given their continued comparability to Gartner.

The Compensation Committee does not target NEO’s pay to a specified percentile, but rather reviews Peer Group market data at the 25th, 50th and 75th percentile for each element of compensation, including Base Salary, Target Total Cash (Base Salary, plus Target Bonus) and Target Total Compensation (Target Total Cash plus long-term incentives).

The result of the competitive analysis indicated that Gartner’s CEO and NEO Base Salary approximated the Peer Group median, Target Total Cash was below the Peer Group median and Target Total Compensation approximated the median of the Peer Group. As a result, in order to remain competitiveopening balance sheet in the market place and in lightperiod of Gartner’s philosophy to pay a greater percentage of total compensation in the form of performance-based compensation and, in particular, performance-based long-term incentive compensation, the Committee approved a 3% merit increase to base salary, a 5% increase in the short term incentive compensation (bonus) percentage and a 8% merit increase to the long-term incentive compensation award value for all NEOs (other than Mr. Safian). Mr. Safian is relatively new in his role of CFO, and as a result trailed the market median of the Peer Group in all elements of compensation, consistent with the Company’s philosophy of moving executives to fully competitive rates over two to three years. As such, in 2016 the Committee adjusted his compensation to more closely approximate the Peer Group median by increasing his base salary by 10%, increasing his bonus target by 5% and increasing his long-term incentive award by 18.6%.

In addition, the Compensation Committee annually reviews an analysis conducted by Exequity that evaluates the connection between Gartner’s executive pay and Company performance as measured by Total Shareholder Return and Shareholder Value against the relationship exhibited by Gartner’s peer companies. The analysis indicates that pay realized by Gartner’s NEOs is generally well aligned with proven financial results. Gartner has historically performed above its peer group median and has paid at or above median total compensation which is consistent with the Company’s pay-for-performance philosophy.

15

Executive Compensation Elements Generally

Pay Mix

The following pie charts illustrate the relative mix of target compensation elements for the NEOs in 2016. Long-term incentive compensation consists of performance-based restricted stock units (PSUs) and stock appreciation rights (SARs), and represents a majority of the compensation we pay to our NEOs – 81% to the CEO and 60% to all other NEOs. We allocate more heavily to long-term incentive compensation because we believe that it contributes to a greater degree to the delivery of top performance and the retention of employees than does cash and short-term compensation (bonus).

 

Base Salary

We set base salaries of executive officers when they join the Company or are promoted to an executive role, by evaluating the responsibilities of the position, the experience of the individual and the marketplace in which we compete for the executive talent we need. In addition, where possible, we consider salary information for comparable positions for members of our Peer Group or other available benchmarking data. In determining whether to award salary merit increases, we consider published projected U.S. salary increase data for the technology industry and general market, as well as available world-wide salary increase data. Mr. Hall’s salary increase is established each year by the Compensation Committee after completion of Mr. Hall’s performance evaluation for the preceding year.

Short-Term Incentive Compensation (Cash Bonuses)

All bonuses to executive officers are awarded pursuant to Gartner’s stockholder-approved Executive Performance Bonus Plan. This plan is designed to motivate executive officers to achieve goals relating to the performance of Gartner, its subsidiaries or business units, or other objectively determinable goals, and to reward them when those objectives are satisfied. We believe that the relationship between proven performance and the amount of short-term incentive compensation paid promotes, among executives, decision-making that increases stockholder value and promotes Gartner’s success. Bonuses awarded under this plan to eligible employees are designed to qualify as deductible performance-based compensation within the meaning of Code Section 162(m).

In 2016, bonus targets for all executive officers, including Mr. Hall, were based solely upon achievement of 2016 company-wide financial performance objectives (with no individual performance component). The financial objectives and weightings used for 2016 executive officer bonuses were:

2016 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), which measures overall profitability from business operations (weighted 50%), on a foreign exchange neutral basis, and

Contract Value (CV) at December 31, 2016, which measures the long–term prospects of our business (weighted 50%), on a foreign exchange neutral basis.

16

As noted earlier, management and our Compensation Committee continue to believe that EBITDA and CV are the most significant measurements ofprofitabilityand long-term business growth for our Company, respectively. They have been successfully used for several years as performance metrics applicable to short-term incentive compensation that drive business performance and that motivate executive officers to achieve outstanding performance.

For 2016, each executive officer was assigned a bonus target that was expressed as a percentage of salary, varied from 50% to 100% of salary depending upon the executive’s level of responsibility and in most cases was 5% greater than the previous year. Salaries and bonuses were each increased by the amount of the merit increase. With respect to our NEOs, 2016 bonus targets, as a percentage of base salary, were 105% for Mr. Hall and 70% for each of Messrs. Safian, Waern, Godfrey and Dawkins. The maximum payout for 2016 bonus was 200% of target if the maximum level of EBITDA and CV were achieved; the minimum payout was $0 if minimum levels were not achieved.

The chart below describes the performance metrics applicable to our 2016 short–term incentive compensation element. As noted above, for this purpose actual results, measured on a foreign exchange neutral basis, were as follows:

2016 Performance
Objective/ Weight		  Target
(100%)		  Target
Growth
YOY		 < Minimum
(0%)		  =/>
Maximum
(200%)		  Actual
(measured
at 12/31/16)		  Payout
(% of
Target)		 Actual
Growth
YOY
 2016 EBITDA/50%   

$458

million

   13.6%  $363 million   $480 million   $446 million   90.3%  10.7%
                               
 12/31/16 Contract Value/50%   

$1,884

million

   11%  $1,527 million   $1,969 million   $1,930 million   162.0%  13.7%

In 2016, the Company exceeded both the EBITDA and CV target performance objectives. Since each objective was weighted 50%, based on these results, the Compensation Committee determined that earned cash bonuses for executive officers were 126.2% of target bonus amounts. These bonuses were paid in February 2017. SeeSummary Compensation Table – Non-Equity Incentive Plan Compensation elsewhere in this Item 11 for the amount of cash bonuses earned by our Named Executive Officers in 2016. While the Compensation Committee has discretion to eliminate or reduce a bonus award, it did not take any such action in 2016.

Long - Term Incentive Compensation (Equity Awards)

Promoting stock ownership is a key element of our compensation program philosophy. Stock-based incentive compensation awards –especially when they are assigned a combination of performance and time-based vesting criteria – induce enhanced performance, promote retention of executive officers and align executives’ personal rewards with long-term stock price appreciation, thereby integrating management and stockholder interests. We have evaluated different types of long-term incentives based on their motivational value, cost to the Company and appropriate share utilization under our stockholder-approved 2014 Long-Term Incentive Plan (“2014 Plan”) and have determined that stock-settled stock appreciation rights (“SARs”) and performance-based restricted stock units (“PSUs”) create the right balance of motivation, retention, alignment with stockholders and share utilization.

SARs permit executives to benefit from an increase in stock price over time. SAR value can be realized only after the SAR vests. Our SARs are stock-settled and may be exercised seven years from grant. When the SAR is exercised, the executive receives shares of our Common Stock equal in value to the aggregate appreciation in the price of our Common Stock from the date of grant to the exercise date for all SARs exercised. Therefore, SARs only have value to the extent the price of our Common Stock exceeds the grant price of the SAR. In this way, SARs motivate our executives to increase stockholder value and thus align their interests with those of our stockholders.

PSUs offer executives the opportunity to receive our Common Stock contingent on the achievement of performance goals and continued service over the vesting period. PSU recipients are eligible to earn a target fixed number of restricted stock units if and to the extent stipulated one-year performance goals are achieved. They can

17

earn more units if the Company over-performs (up to 200% of their target number of units), and they will earn fewer units (and potentially none) if the Company under-performs. Shares of Common Stock subject to earned PSU awards are released to the executive on the date they vest, or 25% per year over four years, commencing on the anniversary of the grant date, thereby encouraging executives to increase stockholder value while promoting executive retention over the long-term. Released shares have value even if our Common Stock price does not increase, which is not the case with SARs.

Consistent with weightings in prior years, 30% of each executive’s long-term incentive compensation award value was granted in SARs and 70% was granted in PSUs. PSUs deliver value utilizing fewer shares since the executive can earn the full share rather than just the appreciation in value over the grant price (as is the case with SARs). Additionally, the cost efficiency of PSUs enhances the Company’s ability to conservatively utilize the Plan share pool, which is why we convey a larger portion of the 2014 overall long-term incentive compensation value in PSUsadoption rather than in SARs. Forthe earliest comparative period presented. As such, the Company's historical consolidated financial statements have not been restated. Certain permitted practical expedients were used by the Company upon adoption of the new lease standard, including: (i) combining lease and nonlease components as a single lease component for purposes of determining the number of SARs awarded, the allocated SAR award value is divided by the Black-Scholes-Merton valuationrecognition and measurement requirements under ASU No. 2016-02; (ii) not reassessing a lease arrangement to determine if its classification should be changed under ASU No. 2016-02; and (iii) not reassessing initial direct costs for leases that were in existence on the date of grant using assumptions appropriateadoption.


The adoption of ASU No. 2016-02 on January 1, 2019 had a material impact on our consolidated balance sheet because the right-of-use model significantly increased both our assets and liabilities from our lease arrangements (all of which were operating leases that date. For purposes of determining the target number of PSUs awarded, the allocated target PSU award value is divided by the closing price of our Common Stockwere not previously recorded on the date of grant as reported by the New York Stock Exchange.

Both SARs and PSUs vest 25% per year commencing one (1) year from grant and on each anniversary thereof, subject to continued service on the vesting date. We believe that this vesting schedule effectively focuses our executives on delivering long-term value growth for our stockholders and drives retention.Company’s consolidated balance sheets). The maximum payout for 2016 PSUs was 200% of target if the maximum level of CV was achieved; the PSUs are subject to forfeiture if minimum levels are not achieved.

The Compensation Committee approved CV (measured at December 31, 2016) as the performance measure underlying PSUs awarded in 2016. As noted earlier, we continue to believe that CV is the best performance metric to measure the long–term prospects of our business. At the present time, most of these contracts have multi – year terms. For this reason, CV growth continues to be predictive of future revenue for the PSU award.

The chart below describes the performance metrics applicable to the PSU portion of our 2016 long–term incentive compensation element measured on a foreign exchange neutral basis:

2016 Performance
Objective/Weight		  Target
(100%)		  Target
Growth
YOY		 <Minimum
(0%)		  Maximum
(200%)		  Actual
(measured at
12/31/16)		  Payout
(% of
Target)		 Actual
Growth
YOY
 Contract Value/100%   $1,884 million   11%  $1,527 million   $1,969 million   $1,930 million   162.0%  13.7%

As noted above, in 2016 actual CV was $1,930 million, exceeding the target amount. Based on this, the Compensation Committee determined that 162.0% of the target number of PSUs would be awarded. The PSUs were adjusted by this factor in February 2017 after certification of the achievement of this performance measure by the Compensation Committee, and 25% of the adjusted awards vested on the first anniversary of the grant date. SeeGrants of Plan-Based Awards Table – Possible Payouts Under Equity Incentive Plan Awards and accompanying footnotes elsewhere in this Item 11 for the actual number of SARs and PSUs awarded to our Named Executive Officers in 2016.

No performance objectives for any PSU intended to qualify under Code Section 162(m) (i.e., awards to executive officers) may be modified by the Committee. While the Committee does have discretion to modify other aspects of the awards (subject to the terms of the Plan), no modifications were made in 2016.

Additional Compensation Elements

We maintain a non-qualified deferred compensation plan for our highly compensated employees, including our executive officers, to assist eligible participants with retirement and tax planning by allowing them to defer compensation in excess of amounts permitted to be deferred under our 401(k) plan. This plan allows eligible

18

participants to defer up to 50% of base salary and/or 100% of bonus to a future period. In addition, as a further inducement to participation in this plan, the Company presently matches contributions by executive officers, subject to certain limits. For more information concerning this plan, seeNon-Qualified Deferred Compensation Tableand accompanying narrative and footnotes elsewhere in this Item 11.

In order to further achieve our objective of providing a competitive compensation package with great retention value, we provide various other benefits to our executive officers that we believe are typically available to, and expected by, persons in senior business roles. Our basic executive perquisites program includes 35 days paid time off (PTO) annually, severance and change in control benefits (discussed below) and relocation services where necessary due to a promotion. Mr. Hall’s perquisites, severance and change in control benefits are governed by his employment agreement with the Company, which is discussed in detail underEmployment Agreements With Executive Officers – Mr. Hallelsewhere in this Item 11. For more information concerning perquisites, seeOther Compensation Table and accompanying footnotes elsewhere in this Item 11.

OTHER COMPENSATION POLICIES AND INFORMATION

Executive Stock Ownership and Holding Period Guidelines

In order to align management and stockholder interests, the Company has adopted stock ownership guidelines for our executive officers as follows: the CEO is required to hold shares of Common Stock with a value at least equal to six (6) times his base salary, and all other executive officers are required to hold shares of Common Stock with a value at least equal to three (3) times their base salary. For purposes of computing the required holdings, officers may count shares directly held, as well as vested and unvested restricted stock units and PSUs, but not options or SARs.

Additionally, the Company imposes a holding period requirement on our executive officers.If an executive officer of the Company is not in compliance with the stock ownership guidelines, the executive is required to maintain ownership of at least 50% of the net after-tax shares of common stock acquired from the Company pursuant to any equity-based awards – PSUs and SARs - received from the Company, until such individual’s stock ownership requirement is met. At December 31, 2016, our CEO and all other executive officers were in compliance with these guidelines.

Clawback Policy

The Company has adopted a clawback policy which provides that the Board of Directors (or a committee thereof) may seek recoupment to the Company from a current or former executive officer of the Company who engages in fraud, omission or intentional misconduct that results in a required restatement of any financial reporting under the securities or other laws, and that the cash-based or equity-based incentive compensation paid to the officer exceeds the amount that should have been paid based upon the corrected accounting restatement, resulting in an excess payment. Recoupment includes the reimbursement of any cash-based incentive compensation (bonuses) paid to the Executive, cancellation of vested and unvested performance-based restricted stock units, stock options and stock appreciation rights, and reimbursement of any gains realized on the sale of released stock unit awards and the exercise of stock options or stock appreciation rights and subsequent sale of underlying shares

Pursuant to the Dodd-Frank Act, the SEC has issued proposed rules applicable to the national securities exchanges (including the NYSE on which our Common Stock is listed for trading) prohibiting the listing of any security of an issuer that does not provide for the recovery of erroneously awarded incentive-based compensation where there has been an accounting restatement. We are awaiting adoption of the final SEC rules on this matter, at which time we will determine whether an amendment to our policy is necessary.

Hedging and Pledging Policies

The Company’s Insider Trading Policy prohibits all executive officers and directors from engagingnew lease standard resulted in any short selling, hedging and/or pledging transactions with respect to Company securities.

19

Accounting and Tax Impact

In setting compensation, the Compensation Committee and management consider the potential impactrecognition of Code Section 162(m), which precludes a public corporation from deducting on its corporate income tax return individual compensation in excess of $1operating lease liabilities aggregating $851.3 million for its chief executive officer or any of its three other highest-paid officers (other than the chief financial officer). Section 162(m) also provides for certain exemptions to this limitation, specifically compensation that is performance-based (within the meaning of Section 162(m)) and issued under a stockholder-approved plan. Our 2016 short-term incentive (bonus) awards were performance-based and were made pursuant to our stockholder-approved Executive Performance Bonus Plan and, therefore, are deductible under Section 162(m). The PSU component of the 2016 long–term incentive award was performance-based and issued under the 2014 Plan, which has been approved by stockholders and, therefore, is deductible under Section 162(m). Although the Compensation Committee endeavors to maximize deductibility of compensation under Section 162(m), it maintains the discretion in establishing compensation elements to approve compensation that may not be deductible under Section 162(m), if the Committee believes the compensation element to be necessary or appropriate under the circumstances.

Grant of Equity Awards

The Board of Directors has a formal policy with respect to the grant of equity awards under our equity plans. Under our 2014 Long Term Incentive Plan, equity awards may include stock options, stock appreciation rights (SARs), restricted stock awards (RSAs), restricted stock units (RSUs) and performance-based restricted stock units (PSUs). The Committee may not delegate its authority with respect to Section 16 persons, nor in any other way which would jeopardize the plan’s qualification under Code Section 162(m) or Exchange Act Rule 16b-3. Accordingly, our policy specifies that all awards to our Section 16 executive officers must be approved by the Compensation Committee on or prior to the award grant date, and that all such awards will be made and pricedbased on the date of Compensation Committee approval, except in the case of new hires, which is discussed below.

Our equity plan provides for a minimum vesting period of 12 months on all equity awards, subject to certain limited exceptions. It also prohibits the repricing of stock options and the surrender of any outstanding option to the Company as consideration for the grant of a new option with a lower exercise price without stockholder approval. It also prohibits the granting of options with an exercise price less than the fair marketpresent value of the Company’s common stock onremaining minimum lease payments, while the datecorresponding right-of-use assets totaled $651.9 million. Additionally, the Company’s adoption of grant, andASU No. 2016-02 resulted in a cash buyoutnet increase of out-of-the-money options or SARs without stockholder approval.

Consistent with the equity plan, the Compensation Committee annually approves a delegation of authority to the CEO to make equity awards under our equity Plan to Gartner employees (other than Section 16 reporting persons) on account of new hires, retention or promotion without the approval of the Compensation Committee. In 2016, the delegation of authority specified a maximum grant date award value of $500,000 per individual, and a maximum aggregate grant date award value of $2,000,000 for the calendar year. For purposes of this computation,$638.7 million in the case of RSAs, RSUs and PSUs, value is calculated based upon the fair market value (defined as the closing price on the date of grant as reported by the New York Stock Exchange) of a share of our Common Stock, multiplied by the number of RSAs, RSUs or PSUs awarded. In the case of options and SARs, the grant date value of the award will be the Black-Scholes-Merton calculation of the value of the award using assumptions appropriate on the award date. Any awards made under the CEO-delegated authority are reported to the Compensation Committee at the next regularly scheduled committee meeting.

As discussed above, the structure and value of annual long-term incentive awards comprising the long-term incentive compensation element of our compensation package to executive officers are established and approved by the Compensation Committee in the first quarter of each year. The specific terms of the awards (number of PSUs and SARs and related performance criteria) are determined, and the awards are approved and made, on the same date and after the release of the Company’s prior year financial results.

It isTotal Assets and Total Liabilities; however, there was no effect on the Company’s policyTotal Stockholders’ Equity. The Company’s Consolidated Statements of Operations and its cash provided by operating activities in the Consolidated Statements of Cash Flows for 2019 were not to make equity awards to executive officers prior to the release of material non-public information. The 2016 incentive awards to executive officers were approvedmaterially impacted by the Compensation Committee and made on February 8, 2016, after release of our 2015 financial results. Generally speaking, awards for newly hired executives that are given as an inducement to joining the Company are made on the 15th or 30th dayadoption of the month first following the executive’s start date (and after approval by the Compensation Committee),new lease standard. Note 1 — Business and retentionSignificant Accounting Policies and promotion awards are made on the 15th or 30th day of the month first following the date of Compensation Committee approval; however, we may delay making these awards pending the release of material non-public information.

20

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors of Gartner, Inc. has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Compensation Committee of the Board of Directors

Anne Sutherland Fuchs

Michael J. Bingle

Raul E. Cesan

March 6, 2017

The foregoing compensation committee report shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, and shall not otherwise be deemed filed under these acts, except to the extent we specifically incorporate by reference into such filings.

21

COMPENSATION TABLES AND NARRATIVE DISCLOSURES

All compensation data contained in this section is stated in U.S. Dollars.

Summary Compensation Table

This table describes compensation earned by our CEO, CFO and next three most highly compensated executive officers (collectively, the “Named Executive Officers” or “NEOs”) in the years indicated. As you can see from the table and consistent with our compensation philosophy discussed above, long-term incentive compensation in the form of equity awards comprises a significant portion of total compensation.

Name and Principal Position Year Base
Salary
(1)		 Stock
Awards
(2)		 Option
Awards
(2)		 Non-Equity
Incentive Plan
Compensation
(1), (3)		 All Other
Compensation
(4)		 Total 
Eugene A. Hall, Chief Executive Officer (PEO) (5)  2016  $901,584 $5,608,763 $2,403,764 $1,203,451 $141,364 $10,258,926 
   2015   875,324  5,193,290  2,225,705  1,215,044  135,844  9,645,207 
   2014   847,831  4,721,176  2,023,365  1,273,821  115,034  8,981,227 
Craig W. Safian, SVP & Chief Financial Officer (PFO)  2016   503,260  999,949  428,561  454,951  54,712  2,441,433 
   2015   457,402  842,783  361,205  419,223  28,239  2,108,852 
   2014   409,869  949,977  —  321,216  11,349  1,692,411 
Per Anders Waern, SVP, Gartner Consulting  2016   448,115  834,385  357,588  398,769  59,569  2,098,426 
   2015   435,063  772,577  331,090  392,545  50,480  1,981,755 
   2014   418,531  702,314  300,999  379,877  41,991  1,843,712 
David Godfrey, SVP, Sales  2016   448,115  834,385  357,588  398,769  54,742  2,093,599 
Alwyn Dawkins, SVP, Events  2016   448,115  834,385  357,588  398,769  54,065  2,092,922 
   2015   435,063  772,577  331,090  392,545  50,637  1,981,912 
   2014   418,531  702,314  300,999  379,877  41,571  1,843,292 

(1)     All NEOs elected to defer a portion of their 2016 salary and/or 2016 bonus under the Company’s Non-Qualified Deferred Compensation Plan. Amounts reported include the 2016 deferred portion, and accordingly does not include amounts, if any, released in 2016 from prior years’ deferrals. SeeNon-Qualified Deferred Compensation Tableelsewhere in this Item 11.

(2)     Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for performance restricted stock units, or PSUs (Stock Awards) and stock-settled stock appreciation rights, or SARs (Option Awards) granted to Messrs. Hall, Safian, Waern, Godfrey and Dawkins. The value reported for the PSUs is based upon the probable outcome of the performance objective as of the grant date, which is consistent with the grant date estimate of the aggregate compensation cost to be recognized over the service period, excluding the effect of forfeitures, for the target grant date award value. The potential maximum value of the PSUs, assuming attainment of the highest level of the performance conditions, is 200% of the target value, and all PSUs and SARs are subject to forfeiture. There were no forfeitures in 2016. See also Note 8 – Stock-Based Compensation -7 — Leases in the Notes to Consolidated Financial Statements containedprovide additional information regarding the Company's leases and the adoption of ASU No. 2016-02.


Revenue recognition — For 2019 and 2018, revenue was recognized in accordance with the requirements of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (as amended, "ASU No. 2014-09"). Prior to January 1, 2018, the Company recognized revenue in accordance with then-existing generally accepted accounting principles in the United States of America and SEC Staff Accounting Bulletin No. 104, Revenue Recognition (collectively, “Prior GAAP”). Under both ASU No. 2014-09 and Prior GAAP, revenue can only be recognized when all of the required criteria for revenue recognition have been met. Although there were certain changes to the Company’s revenue recognition policies and procedures with the adoption of ASU No. 2014-09 on January 1, 2018, there were no material differences between the pattern and timing of revenue recognition under ASU No. 2014-09 and Prior GAAP.

Our revenue by significant source is accounted for as follows:

Research revenues are mainly derived from subscription contracts for research products. The related revenues are deferred and recognized ratably over the applicable contract term. Fees derived from assisting organizations in selecting the right business software for their needs are recognized when the leads are provided to vendors.

Conferences revenues are deferred and recognized upon the completion of the related conference or meeting.

Consulting revenues are principally generated from fixed fee and time and materials engagements. Revenues from fixed fee contracts are recognized as we work to satisfy our performance obligations. Revenues from time and materials engagements are recognized as work is delivered and/or services are provided. Revenues related to contract optimization engagements are contingent in nature and are only recognized upon satisfaction of all conditions related to their payment.

The majority of our Research contracts are billable upon signing, absent special terms granted on a limited basis from time to time. Research contracts are generally non-cancelable and non-refundable, except for government contracts that may have cancellation or fiscal funding clauses. It is our policy to record the amount of a subscription contract that is billable as a fee receivable at the time the contract is signed with a corresponding amount as deferred revenue because the contract represents a legally enforceable claim.

Note 1 — Business and Significant Accounting Policies and Note 9 — Revenue and Related Matters in the Notes to Consolidated Financial Statements provide additional information regarding our revenues and the adoption of ASU No. 2014-09 on January 1, 2018.

Uncollectible fees receivable — The Company maintains an allowance for losses of uncollectible receivables that is classified in our Annual Reportconsolidated balance sheets as an offset to the gross amount of fees receivable. Increases and decreases to the allowance are recognized in earnings.

The determination of the amount of the allowance is based on Form 10-Khistorical loss experience, an assessment of current economic conditions, the aging of outstanding receivables, the financial health of specific clients and probable losses. This evaluation is


inherently judgmental and requires the use of estimates. The allowance is periodically re-evaluated and adjusted as more information about the ultimate collectability of fees receivable becomes available. Circumstances that could cause the allowance to increase include changes in our clients’ liquidity and credit quality, other factors negatively impacting our clients’ ability to pay their obligations as they come due, and the effectiveness of our collection efforts.

The table below presents our gross fees receivable and the related allowance for losses as of the dates indicated (in thousands).
 December 31,
 2019 2018
Gross fees receivable$1,334,012
 $1,262,818
Allowance for losses(8,000) (7,700)
Fees receivable, net$1,326,012
 $1,255,118

Goodwill and other intangible assets — When we acquire a business, we determine the fair value of the assets acquired and liabilities assumed on the date of acquisition, which may include a significant amount of intangible assets such as customer relationships, software and content, as well as goodwill. When determining the fair values of the acquired intangible assets, we consider, among other factors, analyses of historical financial performance and an estimate of the future performance of the acquired business. The fair values of the acquired intangible assets are primarily calculated using an income approach that relies on discounted cash flows. This method starts with a forecast of the expected future net cash flows for the year ended December 31, 2016asset and then adjusts the forecast to present value by applying a discount rate that reflects the risk factors associated with the cash flow streams. We consider this approach to be the most appropriate valuation technique because the inherent value of an acquired intangible asset is its ability to generate future income. In a typical acquisition, we engage a third-party valuation expert to assist us with the fair value analyses for additional information.

(3)     Represents performance-basedacquired intangible assets.


Determining the fair values of acquired intangible assets requires us to exercise significant judgment. We select reasonable estimates and assumptions based on evaluating a number of factors, including, but not limited to, marketplace participants, consumer awareness and brand history. Additionally, there are significant judgments inherent in discounted cash bonuses earned at December 31flows such as estimating the amount and timing of projected future cash flows, the selection of discount rates, hypothetical royalty rates and contributory asset capital charges. Specifically, the selected discount rates are intended to reflect the risk inherent in the projected future cash flows generated by the underlying acquired intangible assets.

Determining an acquired intangible asset's useful life also requires significant judgment and is based on evaluating a number of factors, including, but not limited to, the expected use of the applicable yearasset, historical client retention rates, consumer awareness and paidtrade name history, as well as any contractual provisions that could limit or extend an asset's useful life.

The Company's goodwill is evaluated in accordance with FASB ASC Topic 350, which requires goodwill to be assessed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. In addition, an impairment evaluation of our amortizable intangible assets may also be performed if events or circumstances indicate potential impairment. Among the factors that could trigger an impairment review are current operating results that do not align with our annual plan or historical performance; changes in our strategic plans or the use of our assets; restructuring charges or other changes in our business segments; competitive pressures and changes in the following February. See footnote (1)general economy or in the markets in which we operate; and a significant decline in our stock price and our market capitalization relative toGrants of Plan-Based Awards Table elsewhere in this Item 11 for additional information.

(4)     SeeOther Compensation Table elsewhere in this Item 11for additional information.

(5)     Mr. Hall is a party to an employment agreement with the Company.See Employment Agreements With Executive Officers – Mr. Hallelsewhere in this Item 11.

22
our net book value.

Other Compensation Table

This table describes each component

When performing our annual assessment of the All Other Compensation columnrecoverability of goodwill, we initially perform a qualitative analysis evaluating whether any events or circumstances occurred or exist that provide evidence that it is more likely than not that the fair value of any of our reporting units is less than the related carrying amount. If we do not believe that it is more likely than not that the fair value of any of our reporting units is less than the related carrying amount, then no quantitative impairment test is performed. However, if the results of our qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its respective carrying amount, then we perform a two-step quantitative impairment test.

Evaluating the recoverability of goodwill requires judgments and assumptions regarding future trends and events. As a result, both the precision and reliability of our estimates are subject to uncertainty. Among the factors that we consider in our qualitative assessment are general economic conditions and the competitive environment; actual and projected reporting unit financial performance; forward-looking business measurements; and external market assessments. To determine the fair values of our reporting units for a quantitative analysis, we typically utilize detailed financial projections, which include significant variables, such as projected rates of revenue growth, profitability and cash flows, as well as assumptions regarding discount rates, the Company's weighted average cost of capital and other data.



Our most recent annual impairment test of goodwill was a qualitative analysis conducted during the quarter ended September 30, 2019 that indicated no impairment. Subsequent to completing our 2019 annual impairment test, no events or changes in circumstances were noted that required an interim goodwill impairment test. Note 1 — Business and Significant Accounting Policies and Note 3 — Goodwill and Intangible Assets in the Summary Compensation Table.

Name Year Company
Match
Under
Defined
Contribution
Plans
(1)		 Company
Match Under
Non-qualified
Deferred
Compensation
Plan
(2)		 Other
(3)		 Total
Eugene A. Hall 2016 7,200 75,951 58,213 141,364
  2015 7,200 78,766 49,878 135,844
  2014 7,000 60,563 47,471 115,034
Craig W. Safian 2016 7,200 28,841 18,671 54,712
  2015 7,200 11,096 9,943 28,239
  2014 7,000 — 4,349 11,349
Per Anders Waern 2016 7,200 25,674 26,695 59,569
  2015 7,200 25,398 17,882 50,480
  2014 7,000 19,495 15,496 41,991
David Godfrey 2016 7,200 25,674 21,868 54,742
Alwyn Dawkins 2016 7,200 25,674 21,191 54,065
  2015 7,200 25,398 18,039 50,637
  2014 7,000 19,495 15,076 41,571

(1)     RepresentsNotes to Consolidated Financial Statements provide additional information regarding the Company’s 4% matching contributionCompany's goodwill and amortizable intangible assets.


Accounting for income taxes — The Company uses the asset and liability method of accounting for income taxes. We estimate our income taxes in all years to the Named Executive Officer’s 401(k) account (subject to limitations).

(2)     Represents the Company’s matching contribution to the executive’s contributions to our Non-Qualified Deferred Compensation Plan. SeeNon-Qualified Deferred Compensation Table elsewhere in this Item 11 for additional information.

(3)     In addition to specified perquisites and benefits, includes other perquisites and personal benefits provided to the executive, none of which individually exceeded the greater of $25,000 or 10%each of the totaljurisdictions where the Company operates. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. When assessing the realizability of deferred tax assets, we consider if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the availability of loss carryforwards, projected reversals of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained based on the technical merits of the position. Recognized tax positions are measured at the largest amount of perquisitesbenefit with greater than a 50% likelihood of being realized. The Company uses estimates in determining the amount of unrecognized tax benefits associated with uncertain tax positions. Significant judgment is required in evaluating tax law and personalmeasuring the benefits for the executive. In 2016, includes a car allowance of $29,204 received by Mr. Hall per the terms of his employment agreement.

Grants of Plan-Based Awards Table

This table provideslikely to be realized. Uncertain tax positions are periodically re-evaluated and adjusted as more information about their ultimate realization becomes available.


Accounting for stock-based compensation — The Company accounts for stock-based compensation awards made to our Named Executive Officers in 2016 pursuant to non-equity incentive plans (our short-term incentive cash bonus program)accordance with FASB ASC Topics 505 and equity incentive plans (performance restricted stock units (PSUs), restricted stock units (RSUs)718 and stock appreciation rights (SARs) awards comprising long-term incentiveSEC Staff Accounting Bulletins No. 107 and No. 110. The Company recognizes stock-based compensation under our 2014 Plan).

23
    Possible Payouts Under Non- Possible Payouts Under Equity Exercise Grant
    Equity Incentive Plan Awards (1) Incentive Plan Awards (2) or Base Date Fair
                Price of Value of
                Option Stock and
                Awards Option
  Grant Threshold Target Maximum Threshold Target Maximum ($/Sh) Awards
Name Date ($) ($) ($) (#) (# ) (#) ($)(3) ($)(4)
Eugene A. Hall 2/8/16 — — — 0 70,057 PSUs 140,114 — 5,608,763
  2/8/16 — — — — 145,703 SARs — 80.06 2,403,764
  — 0 953,607 1,902,2145 — — — — —
Craig W. Safian 2/8/16 — — — 0 12,490 PSUs 24,980 — 999,949
  2/8/16 — — — — 25,977 SARs — 80.06 428,561
  — 0 360,500 721,000 — — — — —
Per Anders Waern 2/8/16 — — — 0 10,422 PSUs 20,844   834,385
  2/8/16 — — — — 21,675 SARs   80.06 357,588
  — 0 315,981 631,962 — — — — —
David Godfrey 2/8/16 — — — 0 10,422 PSUs 20,844   834,385
  2/8/16 — — — — 21,675 SARs   80.06 357,588
  — 0 315,981 631,962 — — — — —
Alwyn Dawkins 2/8/16 — — — 0 10,422 PSUs 20,844   834,385
  2/8/16 — — — — 21,675 SARs   80.06 357,588
  — 0 315,981 631,962 — — — — —

(1)     Represents cash bonuses that could have been earned in 2016expense, which is based solely upon achievementon the fair value of specified financial performance objectives for 2016 and ranging from 0% (threshold) to 200% (maximum)the award on the date of target (100%). Bonus targets (expressed as a percentage of base salary) were 105% for Mr. Hall, and 70% for each of Messrs. Safian, Waern, Godfrey and Dawkins. Performance bonuses earned in 2016 and paid in February 2017 were adjusted to 126.2% of their target bonus and are reported under Non-Equity Incentive Plangrant, over the related service period. Note 10 — Stock-Based Compensation in the Summary Compensation Table. SeeShort-Term Incentive Compensation (Cash Bonuses)Notes to Consolidated Financial Statements provides additional information regarding stock-based compensation. Determining the appropriate fair value model and calculating the fair value of stock-based compensation awards requires the use of certain subjective assumptions, including the expected life of a stock-based compensation award and the Company’s common stock price volatility. In addition, determining the appropriate periodic stock-based compensation expense requires management to estimate the likelihood of the achievement of certain performance targets. The assumptions used in calculating the fair values of stock-based compensation awards and the related periodic expense represent management’s best estimates, which involve inherent uncertainties and the application of judgment. As a result, if circumstances change and the Company deems it necessary in the Compensation Discussion and Analysis included in this Item 11 for additional information.

(2)     Representsfuture to modify the number of performance-based Restricted Stock Units (PSUs) and stock-settled Stock Appreciation Rights (SARs) awarded on February 8, 2016 under our 2014 Plan. The target number of PSUs (100%) originally awarded on that date was subjectassumptions it made or to adjustment ranging from 0% (threshold) to 200% (maximum) based solely upon achievement of an associated financial performance objective, and was adjusted to 162.0% of target in February 2017. The adjusted number of PSUs awarded was: Mr. Hall – 113,942; Mr. Safian – 20,233; and Messrs. Waern, Godfrey and Dawkins – 16,883). The PSUs, SARs and RSUs vest 25% per year commencing one year from grant, subject to continued employment on the vesting date except in the case of death, disability and retirement. SeeLong-Term Incentive Compensation (Equity Awards) in the Compensation Discussion and Analysis included in this Item 11 for additional information.

(3)     Represents the closing price of our Common Stock on the New York Stock Exchange on the grant date.

(4)     See footnote (2) to the Summary Compensation Table included in this Item 11.

Employment Agreements with Executive Officers

Only our Chief Executive Officer, Mr. Hall, is a party to a long-term employment agreement with the Company.

Mr. Hall – Employment Agreement

The Company and Mr. Hall are parties to an Amended and Restated Employment Agreement pursuant to which Mr. Hall has agreed to serve as chief executive officer of the Company and is entitled to be nominated to the board of directors (the “CEO Agreement”) until December 31, 2021. The CEO Agreement provides for automatic one year renewals commencing on January 1, 2022, and continuing each year thereafter, unless either party provides the other with at least 60 days prior written notice of an intention not to extend the term.

Under the CEO Agreement, Mr. Hall is entitled to the following annual compensation components:

24
ComponentDescription
Base SalaryØ$908,197, subject to adjustment on an annual basis by the Compensation Committee
Target Bonus Ø105% of annual base salary (target), adjusted for achievement of specified Company and individual objectives
 ØThe actual bonus paid may be higher or lower than target based upon over - or under - achievement of objectives, subject to a maximum actual bonus of 210% of base salary
Long – term incentive award ØAggregate annual value on the date of grant at least equal to $9,874,375 minus the sum of base salary and target bonus for the year of grant (the “Annual Incentive Award”)
 ØThe Annual Incentive Award will be 100% unvested on the date of grant, and vesting will depend upon the achievement of performance goals to be determined by the Compensation Committee
 ØThe terms and conditions of each Annual Incentive Award will be determined by the Compensation Committee, and will be divided between restricted stock units (RSUs) and stock appreciation rights (SARs)
 Ø

The number of RSUs initially granted each year will be based upon the assumption that specified Company objectives set by the Compensation Committee will be achieved, and may be adjusted so as to be higher or lower than the number initially granted for over- or under- achievement of such specified Company objectives

OtherØ

Car allowance

Ø

All benefits provided to senior executives, executives and employees of the Company generally from time to time, including medical, dental, life insurance and long-term disability

ØEntitled to be nominated for election to the Board
25

Termination and Related Payments – Mr. Hall

Involuntary or Constructive Termination(no Change in Control)

Mr. Hall’s employment is at will and may be terminated by him or us upon 60 days’ notice. If we terminate Mr. Hall’s employment involuntarily (other than within 24 months following a Change In Control (defined below)) and without Business Reasons (as defined in the CEO Agreement) or a Constructive Termination (as defined in the CEO Agreement) occurs,use different assumptions, or if the Company elects not to renew the CEO Agreement upon its expirationquantity and Mr. Hall terminates his employment within 90 days following the expiration of the CEO Agreement, then Mr. Hall will be entitled to receive the following benefits:

ComponentDescription
Base SalaryØaccrued base salary and unused paid time off (“PTO”) through termination
Ø36 months continued base salary paid pursuant to normal payroll schedule
Short-Term
Incentive Award
(Bonus)		Øearned but unpaid bonus
Ø300% of the average of Mr. Hall’s earned annual bonuses for the three years preceding termination, payable in a lump sum
Ø36 months’ continued vesting in accordance with their terms (including achievement of applicable performance objectives) of all outstanding equity awards
Long – Term
Incentive Award		Ø

a lump sum payment in cash equal to the value of any ungranted Annual Incentive Awards, multiplied by the percentage of such award that would vest within 36 months following termination (i.e., 75% in the case of a four year vesting period)

OtherØreimbursement for up to 36 months’ COBRA premiums for Mr. Hall and his family  

Payment of severance amounts is conditioned upon execution of a general release of claims against the Company and compliance with 36 month non-competition and non-solicitation covenants. In certain circumstances, payment will be delayed for six months following termination under Code Section 409A.

Involuntary or Constructive Termination, and Change in Control

Within 24 months of a Change In Control: if Mr. Hall’s employment is terminated involuntarily and without Business Reasons; or a Constructive Termination occurs; or if the Company elects not to renew the CEO Agreement upon its expiration and Mr. Hall terminates his employment within 90 days following the expiration of the CEO Agreement (i.e., double trigger), Mr. Hall will be entitled to receive the following benefits:

26
ComponentDescription
Ø

accrued base salary and unused PTO through termination

Base SalaryØ3 times base salary then in effect, payable 6 months following termination
Short-Term
Incentive Award
(Bonus)		Ø

any earned but unpaid bonus

Ø3 times target bonus for fiscal year in which Change In Control occurs, payable 6 months following termination
Long – Term
Incentive Award		Ø

any ungranted but earned Annual Incentive Awards

Øall unvested outstanding equity will vest in full, all performance goals or other vesting criteria will be deemed achieved at target levels and all stock options and SARs will be exercisable as to all covered shares
OtherØreimbursement for up to 36 months’ COBRA premiums for Mr. Hall and his family  

Immediately upon a Change In Control, all of Mr. Hall’s unvested outstanding equity awards will vest in full, all performance goals or other vesting criteria will be deemed achieved at target levels and all stock options and SARs will be exercisable as to all covered shares. Additionally, any ungranted, but accrued Annual Incentive Awards will be awarded prior to consummation of the Change in Control.

Should any payments received by Mr. Hall upon a Change In Control constitute a “parachute payment” within the meaning of Code Section 280G, Mr. Hall may elect to receive either the full amount of his Change In Control payments, or such lesser amount as will ensure that no portion of his severance and other benefits will be subject to excise tax under Code Section 4999 of the Code. Additionally, certain payments may be delayed for six months following termination under Code Section 409A.

The CEO Agreement utilizes the 2014 Plan definition of “Change In Control” which currently provides that a Change In Control will occur when (i) there is a change in ownership of the Company such that any person (or group) becomes the beneficial owner of 50% of our voting securities, (ii) there is a change in the ownership of a substantial portionnature of the Company’s assetsstock-based compensation awards changes, then the amount of expense may need to be adjusted and (iii) there is a changefuture stock-based compensation expense could be materially different from what has been recorded in the effective control of the Company such that a majority of members of the Board is replaced during any 12 month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of appointment or election.

In the CEO Agreement, Mr. Hall also agrees not to engage in any competitive activitiescurrent period.


Restructuring and not to solicit Gartner employeesother accruals — We may record accruals for 36 months following termination of employment.

27

Terminationseverance costs, contract terminations, asset impairments and Related Payments – Other Executive Officers

In the event of termination for cause, voluntary resignation orother costs as a result of death, disability or retirement, noongoing actions we undertake to streamline our organization, reposition certain businesses and reduce future operating costs. Estimates of costs to be incurred to complete these actions, such as future payments under contractual arrangements, the fair value of assets, and severance and related benefits, are provided. Inbased on assumptions at the event of termination for cause or voluntary resignation, all equity awardstime the actions are forfeited except as discussed below underDeath, Disability and Retirement. Ininitiated. These accruals may need to be adjusted to the event of termination without cause (including in connection with a Change In Control), other executive officers are entitled to receive the following benefits:

ComponentDescription
Base SalaryØaccrued base salary and unused PTO (not to exceed 25 days) through termination
Ø12 months continued base salary paid pursuant to normal payroll schedule
Long – Term
Incentive Awards		ØIf terminated within 12 months of a Change in Control, all unvested outstanding equity will vest in full (upon adjustment if performance adjustment has not occurred on termination), and all stock options and SARs will be exercisable as to all covered shares for 12 months following termination; otherwise unvested awards are forfeited
ØIf no Change in Control, unvested equity awards are forfeited (except in the case of death, disability and retirement, discussed below)
OtherØReimbursement for up to 12 months’ COBRA premiums for executive and family

In order to receive severance benefits, the executive officers who are terminated are required to execute and comply with a separation agreement and release of claims in which, among other things, the executive reaffirms his or her commitment to confidentiality and non-competition obligations (that bind all employees for one year following termination of employment) and releases the Companyextent that actual costs differ from various employment-related claims.such estimates. In addition, in the case of Named Executive Officers (other than Mr. Hall), severance will not be paid to any executive who refuses to accept an offer of comparable employment from Gartner or who does not cooperate or ceases to cooperate when being considered for a new position with Gartner, in each case as determined by the Company. Finally, under certain circumstances, payments and release of sharesthese actions may be delayed for six months following termination under Code Section 409A.

Death, Disability and Retirement

For all equity awards made prior to 2015, in the case of terminationrevised due to death, disability or retirement (as defined), our executive officers are entitled to immediate vesting of all PSUs and SARschanges in business conditions that would have vested (assuming continued service)we did not foresee at the time such plans were approved. We also record accruals during the 12 months following termination. Commencing with the 2015 equity awards,year for our executive officers are entitled to immediate vesting of all outstanding awards in the case of termination due to death or disability, and continued vesting depending upon the age of the officer in the case of retirement (as defined) as described in the following table:

Termination EventTreatment of Unvested Equity Awards
Death or Disability – pre 2015 awardsØ     12 months additional vesting upon event
Death or Disability – 2015 et seq. awardsØ     100% vesting upon event
Retirement – not eligibleØ     Unvested awards forfeited
Retirement – pre 2015 awards - eligibleØ     12 months additional vesting upon event
Termination EventTreatment of Unvested Equity Awards
Retirement – 2015 et seq. awards – eligible

Ø     If < 60 years of age, 12 months continued vesting

Ø     If 60, 24 months continued vesting

Ø     If 61, 36 months continued vesting

Ø     If 62 or more, unvested awards vest in full in accordance with its term

28

In order to receive retirement vesting, an officer must be retirement “eligible” on the date of retirement; if not, all unvested awards are forfeited upon retirement. Retirement eligibility is defined in our current equity award agreements as follows: (i) on the date of retirement the officer must be at least 55 years old and have at least 5 years continued service and (ii) the sum of the officer���s age and years of continued service must be 65 or greater. At December 31, 2016, of our NEOs, only Mr. Hall qualified for the additional vesting benefit upon retirement. Disability is defined in our current equity award agreements as total and permanent disability.

For all SAR awards prior to 2015, the SARs remain exercisable for the earlier of the applicable expiration date or one year from termination in the case of death, disability or retirement. Commencing with the 2015 SAR awards, the SARs remain exercisable for the earlier of the applicable expiration date or one year from termination in the case of death and disability, and through the expiration date in the case of retirement. In each case, upon termination for any other reason, vested SARs remain exercisable for the earlier of the applicable expiration date or 90 days from the date of termination. In the case of death, disability or retirement, unvested and unadjusted PSUs to which the officer is entitled will be adjusted based upon achievement of the related performance metric upon certification by the Compensation Committee. In all cases related to retirement, the officer must be retirement eligible.

Potential Payments Upon Termination or Change in Control

Employment Agreements With Executive Officers above contains a detailed discussion of the payments and other benefits to which our CEO and other Named Executive Officers are entitled in the event of termination of employment or upon a Change In Control, and the amounts payable assuming termination under various circumstances at December 31, 2016 are set forth below. In each case, each Named Executive Officer would also be entitled to receiveemployee cash incentive programs. Amounts accrued personal time off (PTO) and the balance in his deferred compensation plan account.

Mr. Hall, CEO

The table below quantifies (in dollars) amounts that would be payable by the Company, and the value of shares of Common Stock that would be released, to Mr. Hall had his employment been terminated on December 31, 2016 (the “Termination Date”) as a result of (i) involuntary termination without cause and/or constructive termination; (ii) death, disability or retirement; or (iii) a Change In Control. SeeOutstanding Equity Awards At Fiscal Year End Table included in this Item 11 for a list of Mr. Hall’s unvested equity awards at the end of 2016.Mr. Hall was eligible for retirement benefits at December 31, 2016.

Involuntary
termination
(severance
benefits)
(1)

 

Involuntary
termination
(continued
vesting of
equity
awards) (2)

 

Total
Involuntary
termination
(1), (2)

 

Death,
disability or
retirement
(value of
unvested
equity awards) (3)

 

Change in
Control
(severance
benefits) (4)

 

Change in
Control
(acceleration of
unvested
equity awards) (5)

 

Total
Change in
Control (4),
(5)

7,347,612 34,412,566 35,147,327 33,630,984 6,878,322 33,655,560 40,533,882

(1)     Representseach reporting period are based on our estimates and may require adjustment as the sum of (w) three times base salary in effect at Termination Date; (x) 300% of the average actual bonusultimate amount paid for these incentives are sometimes not known with certainty until the prior three years (2013, 2014 and 2015); (y) unpaid 2016 bonus; and (z) the amount of health insurance premiums for Mr. Hall, his spouse and immediate family for 36 months (at rate in effect on the Termination Date).

(2)     Represents (x) the fair market value using the closing priceend of our Common Stock on December 31, 2016, or $101.07 (the “Year End Price”) of unvested PSUs that would have vested within 36 months following the Termination Date, plus (y) the spread between the Year End Price and the exercise price for all in-the-money SARs that would have vested within 36 months following the Termination Date, multiplied by the number of such SARs.

(3)     Represents (x) the fair market value using the Year End Price of (i) unvested PSUs awarded prior to 2015 that would have vested within 12 months following the Termination Date and (ii) all unvested PSUs awarded in 2015 and 2016, plus (y) the spread between the Year End Price and the exercise price for all in-the-money SARs awarded in 2015

29
fiscal year.

and 2016 that would have vested within 12 months following the Termination Date and (ii) all unvested SARs awarded in 2015 and 2016, multiplied by the number of such SARs. 2016 PSUs are adjusted based upon applicable performance metrics.

(4)     Represents the sum of (w) three times base salary in effect at Termination Date, (x) three times 2016 target bonus, (y) unpaid 2016 bonus, and (z) the amount of health insurance premiums for Mr. Hall, his spouse and immediate family for 36 months (at premiums in effect on the Termination Date).

(5)     Represents (x) the fair market value using the Year End Price of all unvested PSUs on the Termination Date (at target in the case of unadjusted 2016 PSUs), plus (y) the spread between the Year End Price and the exercise price of all in-the-money unvested SARs on the Termination Date, multiplied by the number of such SARs.

Other Named Executive Officers



RESULTS OF OPERATIONS

Consolidated Results

The table below quantifies (in dollars) amounts that would be payable by the Company,presents an analysis of selected line items and the valueyear-over-year changes in our Consolidated Statements of shares of Common Stock that would be released, to our Named Executive Officers (other than Mr. Hall) had their employment been terminated on December 31, 2016 (the “Termination Date”) as a result of (i) involuntary termination without cause and/or constructive termination; (ii) death or disability; or (iii) a Change In Control. None of these NEOs were eligible for retirement benefits at December 31, 2016. SeeOutstanding Equity Awards At Fiscal Year End Table included in this Item 11 for a list of unvested equity awards held by each Named Executive Officer at the end of 2016.

Named Executive Officer

 

Involuntary
termination
(severance
benefits)
(1)

 

Value of
unvested equity
awards
(death, disability
or retirement)
(2)

 

Value of
unvested equity
awards (Change
In Control)
(3)

 

Total Change In
Control
(1), (3)

Craig W. Safian 537,096 4,818,667 4,392,151 4,929,247
Per Anders Waern 473,596 4,984,529 4,988,210 5,461,806
David Godfrey 473,596 4,984,529 4,988,210 5,461,806
Alwyn Dawkins 473,596 4,984,529 4,988,210 5,461,806

(1)     Represents 12 months’ base salary in effect on the Termination Date plus the amount of health insurance premiumsOperations for the executive, his spouseyears indicated (in thousands).

 
Year Ended
December 31,
2019
 
Year Ended
December 31,
2018
 Increase (Decrease) 
Percentage Increase
(Decrease)
Total revenues$4,245,321
 $3,975,454
 $269,867
 7 %
Costs and expenses: 
  
  
  
     Cost of services and product development1,550,568
 1,468,800
 81,768
 6
     Selling, general and administrative2,103,424
 1,884,141
 219,283
 12
     Depreciation82,066
 68,592
 13,474
 20
     Amortization of intangibles129,713
 187,009
 (57,296) (31)
     Acquisition and integration charges9,463
 107,197
 (97,734) (91)
Operating income370,087
 259,715
 110,372
 42
Interest expense, net(99,805) (124,208) (24,403) (20)
(Loss) gain from divested operations(2,075) 45,447
 (47,522) >(100)
Other income, net7,532
 167
 7,365
 >100
Provision for income taxes42,449
 58,665
 (16,216) (28)
Net income$233,290
 $122,456
 $110,834
 91 %
Total revenues for 2019 were $4.2 billion, an increase of $269.9 million, or 7% compared to 2018 on a reported basis and immediate family for 12 months (at premiums in effect9% excluding the foreign currency impact. The tables below present (i) revenues by geographic region (based on where the Termination Date) payable in accordance with normal payroll practices. Since the executive must be employed on the bonus payment date (February 2017 in order to receive earned but unpaid 2016 bonus, in the event of termination on December 31, 2016, 2016 bonus would have been forfeited and, therefore,sale is excluded. SeeNon-Equity Incentive Plan Compensation in the Summary Compensation Table included in this Item 11 for these bonus amounts.

(2)     Represents (x) the fair market value using the closing price of our Common Stock on December 31, 2016, or $101.07 (the “Year End Price”) of (i) unvested PSUs awarded prior to 2015 that would have vested within 12 months following the Termination Date,fulfilled) and (ii) 100% of unvested PSUs awarded in 2015 and 2016, plus (y)revenues by segment for the spread between the Year End Price and the exercise price of (i) all in-the-money SARs awarded prior to 2015 that would have vested within 12 months following the Termination Date, and (ii) 100% of unvested SARs awarded in 2015 and 2016, multiplied by the number of such SARs, in the event of death or disability. 2016 PSUs are adjusted based upon applicable performance metrics. Messrs. Safian, Waern, Godfrey and Dawkins were not eligible for retirement benefits on December 31, 2016 and would have forfeited all unvested equity had they retired on the Termination Date.

(3)     Represents (x) the fair market value using the Year End Price of all unvested PSUs on the Termination Date (at target in the case of unadjusted 2016 PSUs), plus (y) the spread between the Year End Price and the exercise price of all in-the-money unvested SARs on the Termination Date, multiplied by the number of such SARs.

years indicated (in thousands).
30
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%

Outstanding Equity Awards at Fiscal Year-End Table

This table provides information on each option (including stock appreciation rights or SARs) and stock (including restricted stock units (RSUs) and performance restricted stock units (PSUs) award held by each Named Executive Officer at December 31, 2016. All performance criteria associated with these awards (except for the 2016 PSU award (see footnote 4)) were fully satisfied as of December 31, 2016, and the award is fixed. The market value of the stock awards is based on the closing price of our Common Stock on the New York Stock Exchange on December 31, 2016, which was $101.07. Upon exercise of, or release of restrictions on, these awards, the number of shares ultimately issued to each executive will be reduced by the number of shares withheld by Gartner for tax withholding purposes and/or as payment of exercise price in the case of options and SARs.

 Option Awards Stock Awards
Named Executive
Officer		 Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)		 Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)		 Option
Exercise
Price
($)		 Option
Expiration
Date		 Number of
Shares or
Units of
Stock
That
Have
Not
Vested
(#)		 Market
Value of
Shares or
Units of
Stock
That Have
Not
Vested
($)		 Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)		 Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units, or
Other
Rights
That Have
Not
Vested
($)
Eugene A. Hall                
 (1), (5) 98,062 32,687 49.37 2/12/20 26,918 2,720,602 — —
(2), (5) 67,491 67,490 64.64 2/10/21 63,031 6,360,543 — —
(3), (5) 31,688 95,062 77.92 2/9/22 79,878 8,073,269 — —
(4), (5) — 145,703 80.60 2/08/23 — — 70,057 7,080,661
Craig W. Safian                
(1) — — — — 2,025 204,667 — —
(2) — — — — 3,480 351,727 — —
(3) — — — — 12,962 1,310,069 — —
(6) — 15,427 77.92 — 3,566 360,416 — —
(4), (5) — 25,977 80.06 2/8/23 — — 12,490 1,262,364
Per Anders Waern                
(1), (5) — 4,726 49.37 2/12/20 3,892 393,364 — —
(2), (5) — 10,040 64.64 2/10/21 9,376 947,632 — —
(3), (5) — 14,141 77.92 2/9/22 11,883 1,201,015 — —
(4), (5) — 21,675 80.60 2/08/23 — — 10,422 1,053,352
David Godfrey • • • • • • • •
(1), (5) — 4,726 49.37 2/12/20 3,892 393,364 — —
(2), (5) 10,040 10,040 64.64 2/10/21 9,376 947,632 — —
(3), (5) 4,714 14,141 77.92 2/9/22 11,883 1,201,015 — —
(4), (5) — 21,675 80.60 2/08/23 — — 10,422 1,053,352
Alwyn Dawkins                
(5) 20,239 — 37.81 2/09/19 —   — —
(1), (5) 14,179 4,726 49.37 2/12/20 3,892 393,364 — —
(2), (5) 10,040 10,040 64.64 2/10/21 9,376 947,632 — —
(3), (5) 4,714 14,141 77.92 2/9/22 11,883 1,201,015 — —
(4), (5) — 21,675 80.60 2/08/23 — — 10,422 1,053,352

(1)Vest 25% per year commencing 2/12/14.
31
(2)Vest 25% per year commencing 2/10/15.

(3)Vest 25% per year commencing 2/9/16.

(4)Vests 25% per year commencing 2/8/17. The market value of the Stock Award is presented at target (100%), and the amount ultimately awarded could range from 0% to 200% of the target award and the maximum payout value is 200% of target. After certification of the applicable performance metric in February 2017, the amount actually awarded on account of Stock Awards was adjusted to 162% of target. The actual number of PSUs awarded to the NEOs is reported in footnote (2) to theGrants of Plan – Based Awards Table.

(5)The amounts shown under Option Awards represent SARs that will be stock-settled upon exercise; accordingly, the number of shares ultimately received upon exercise will be less than the number of SARs held by the executive and reported in this table.

(6)Vest 25% per year commencing 6/13/15.

Option Exercises and Stock Vested Table

This table provides information for the NEOs for the aggregate number of SARs that were exercised, and stock awards that vested and released, during 2016 on an aggregate basis, and does not reflect shares withheld by the Company for exercise price or withholding taxes.

  Option Awards Stock Awards

Name

 

Number of
Shares
Acquired on
Exercise (#)

 

Value
Realized on
Exercise ($)
(1)

 

Number of
Shares
Acquired on
Vesting (#) (2)

 

Value
Realized on
Vesting
($)(3)

Eugene A. Hall 45,594 4,466,844 62,527 5,050,620
Craig W. Safian — — 7,386 613,729
Per Anders Waern 4,198 414,930 10,332 834,974
David Godfrey 9,999 980,625 10,332 834,894
Alwyn Dawkins 4,379 419,990 9,973 805,849

(1)     Represents the spread between (i) the market price of our Common Stock at exercise and (ii) the exercise price for all SARs exercised during the year, multiplied by the number of SARs exercised.

(2)     Represents PSUs awarded in prior years as long-term incentive compensation that released in 2016.

(3)     Represents the number of shares that released multiplied by the market price of our Common Stock on the release date.

Non-Qualified Deferred Compensation Table

The Company maintains a Non-Qualified Deferred Compensation Plan for certain officers and key personnel whose aggregate compensation in 2016 was expected to exceed $325,000. This plan currently allows qualified U.S.-based employees to defer up to 50% of annual salary and/or up to 100% of annual bonus earned in a fiscal year. In addition, in 2016 the Company made a contribution to the account of each Named Executive Officer who deferred compensation equal to the amount of such executive’s contribution (not to exceed 4% of base salary and bonus), less $7,200. Deferred amounts are deemed invested in several independently-managed investment portfolios selected by the participant for purposes of determining the amount of earnings to be credited by the Company to that participant’s account. The Company may, but need not, acquire investments corresponding to the participants’ designations.

Upon termination of employment for any reason, all account balances will be distributed to the participant in a lump sum, except that a participant whose account balance is in excess of $25,000 may defer distributions for an

32

additional year, or elect to receive the balance in 20, 40 or 60 quarterly installments. In the event of an unforeseen emergency (which includes a sudden and unexpected illness or accident of the participant or a dependent, a loss of the participant’s property due to casualty or other extraordinary and unforeseeable circumstance beyond the participant’s control), the participant may request early payment of his or her account balance, subject to approval.

The following table provides information (in dollars) concerning contributions to the Deferred Compensation Plan in 2016 by the participating Named Executive Officers, the Company’s matching contributions, 2016 earnings, aggregate withdrawals and distributions and account balances at year end:

Name

 

Executive
Contributions
in 2016 (1)

 

Company
Contributions
in 2016 (2)

 

Aggregate
Earnings
(loss) in
2016

 

Aggregate Withdrawals/
Distributions
in 2016

 

Aggregate
Balance at
12/31/16

Eugene A. Hall 84,665 75,951 59,669 170,643 606,327
Craig W. Safian 36,899 28,841 7,705 — 102,503
Per Anders Waern 33,626 25,674 37,905 — 472,648
David Godfrey 57,179 25,674 30,258 — 301,385
Alwyn Dawkins 39,254 25,674 33,019 198,844 258,021

(1)   Executive Contributions are included in the “Base Salary” and/or “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table for the NEOs.

(2)   Company Contributions are included in the “All Other Compensation” column of the Summary Compensation Table, and in the “Company Match Under Non-qualified Deferred Compensation Plan” column of the Other Compensation Table for the NEOs.

DIRECTOR COMPENSATION

Compensation of Directors

The Governance Committee annually reviews all forms of independent director compensation and recommends changes to the Board, when appropriate. The Governance Committee is supported in this review by Exequity, LLP. The review examines director compensation in relation to two comparator groups: Proxy Peer Group and General Industry Reference Group. The Proxy Peer Group includes the same companies used to benchmark executive pay (see page 21). The General Industry Reference Group includes 100 companies with median revenues similar to that of Gartner. Regular review of the director compensation program ensures that the director compensation is reasonable, and reflects a mainstream approach to the structure of the compensation components and the method of delivery. No changes have been made to the director compensation program since 2013. The section that follows describes the current director compensation program and components.

Directors who are also employees receive no fees for their services as directors. Non-management directors are reimbursed for their meeting attendance expenses and receive the following compensation for their service as director:

Annual Director Retainer Fee:$60,000 per director and an additional $100,000 for our non-executive Chairman of the Board, payable in arrears in four equal quarterly installments, on the first business day of each quarter. These amounts are paid in common stock equivalents (CSEs) granted under the Company’s 2014 Long-Term Incentive Plan (“2014 Plan”), except that a director may elect to receive up to 50% of this fee in cash. The CSEs convert into Common Stock on the date the director’s continuous status as a director terminates, unless the director elects accelerated release as provided in the 2014 Plan. The number of CSEs awarded is determined by dividing the aggregate director fees owed for a quarter (other than any amount payable in cash) by the closing price of the Common Stock on the first business day following the close of that quarter.
Annual Committee Chair Fee:$10,000 for the chair of our Governance Committee and $15,000 for the chairs of our Audit and Compensation Committees. Amounts are payable in the same manner as the Annual Fee.
Annual Committee Member Fee:$7,500 for our Governance Committee members, $10,000 for our Compensation Committee members and $15,000 for our Audit Committee members. Committee chairs receive both a committee chair fee and a committee member fee. Amounts are payable in the same manner as the Annual Fee.

33
Annual Equity Grant:(1)$200,000During 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 revenue has been recorded in value of restricted stock units (RSUs), awarded annuallythe Other segment in 2019. Revenue from the Company's divested operations was approximately $97.3 million during 2018. Note 9 — Revenue and Related Matters in the Notes to Consolidated Financial Statements provides additional information regarding the Company's revenue by geography and by segment.

Refer to the section of this MD&A below entitled “Segment Results” for a discussion of revenues and results by segment.



Cost of services and product development was $1.6 billion in 2019, an increase of $81.8 million compared to 2018, or 6% on a reported basis and 7% excluding the foreign currency impact. The increase in Cost of services and product development was primarily due to higher payroll and related benefits costs resulting from increased headcount, partially offset by a reduction in expense from certain businesses that were divested during 2018. Cost of services and product development as a percent of revenues was 37% during both 2019 and 2018.

Selling, general and administrative (“SG&A”) expense was $2.1 billion in 2019, an increase of $219.3 million compared to 2018, or 12% on a reported basis and 14% excluding the foreign currency impact. The increase in SG&A expense was primarily due to: (i) higher commissions from increased sales bookings; (ii) more payroll and related benefits costs, which were driven mostly by increased headcount; and (iii) higher facilities and corporate costs. These items were partially offset by a reduction in SG&A expense from certain businesses that were divested during 2018 and a reduction in travel and entertainment expenses during 2019. The overall headcount growth included quota-bearing sales associate increases in Global Technology Sales and Global Business Sales to 3,267 and 869, respectively, at December 31, 2019. On a combined basis, the total number of quota-bearing sales associates increased by 6% when compared to December 31, 2018. SG&A expense as a percent of revenues was 50% and 47% during 2019 and 2018, respectively. SG&A expense increased at a faster pace than our revenue in 2019 as we grew sales capacity and the enabling infrastructure during the year to promote future revenue growth.

Depreciation increased by 20% during 2019 compared to 2018. This increase was due to additional investments, including new leasehold improvements as additional office space went into service and capitalized software.

Amortization of intangibles decreased by 31% during 2019 compared to 2018 due to certain businesses that were divested during 2018, including the related intangible assets, as well as certain intangible assets that became fully amortized in 2018 and 2019.

Acquisition and integration charges declined by $97.7 million during 2019 compared to 2018. This decrease was the result of the Company having completed two acquisitions in 2017, no acquisitions in 2018 and one minor acquisition in late 2019.

Operating income was $370.1 million and $259.7 million during 2019 and 2018, respectively. The increase in operating income reflects several factors, including (i) reduced amortization of intangibles and acquisition and integration charges and (ii) higher segment contributions, primarily in our Research and Conferences segments and, to a lesser extent, Consulting, which were partially offset by higher SG&A expense and Depreciation.

Interest expense, net declined by $24.4 million during 2019 compared to 2018. This decrease was primarily due to lower average outstanding borrowings during 2019 and nominally lower weighted average annual effective interest rates on the Company's total outstanding debt.

Gain from divested operations of $45.4 million in 2018 was due to sales of certain business units and other miscellaneous assets. Loss from divested operations of $2.1 million in 2019 was primarily due to adjustments of certain working capital balances related to the Company's 2018 divestitures. Note 2 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements provides additional information regarding the Company's 2018 divestitures.

Other income, net for the years presented herein included the net impact of foreign currency gains and losses from our hedging activities, as well as sales of certain state tax credits and the recognition of other tax incentives. During 2019, Other income, net also included a pretax gain of $9.1 million from the Company's sale a minority equity investment.

The provision for income taxes was $42.4 million and $58.7 million during 2019 and 2018, respectively, with an effective income tax rate of 15.4% in 2019 and 32.4% in 2018. The 2019 effective tax rate includes a significant benefit from the intercompany sale of certain intellectual property, while no such benefit occurred in 2018. Note 12 — Income Taxes in the Notes to Consolidated Financial Statements provides additional information regarding the Company's income taxes.

Net income was $233.3 million and $122.5 million during 2019 and 2018, respectively. Additionally, our diluted net income per share increased by $1.23 in 2019 compared to 2018. These year-over-year changes reflect: (i) increases in our 2019 operating income; (ii) lower interest expense; and (iii) a lower effective income tax rate in 2019 compared to 2018. Partially offsetting these items was a loss from divested operations during 2019 compared to a corresponding gain during 2018.



SEGMENT RESULTS

We evaluate reportable segment performance and allocate resources based on gross contribution margin. Gross contribution is defined as operating income or loss excluding certain Cost of services and product development expenses, SG&A expenses, Depreciation, Amortization of intangibles, and Acquisition and integration charges. Gross contribution margin is defined as gross contribution as a percent of revenues.

2018 Business Divestitures

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. The Other segment had $105.6 million of revenue during 2018, while gross contribution was $65.1 million. Note 2 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements provides additional information regarding the Company's 2018 divestitures.

Reportable Segments

The Company’s reportable segments are as follows:

•
Research provides trusted, objective insights and advice on the datemission-critical priorities of the Annual Meeting. The numberleaders across all functional areas of RSUs awarded is determined by dividing $200,000 by the closing price of the Common Stock on the award date. The restrictions lapse one year after grant subjectan enterprise through reports, briefings, proprietary tools, access to continued service as director throughour research experts, peer networking services and membership programs that date; release may be deferred at the director’s election.enable our clients to drive organizational performance.

2016 Director Compensation Table

This table sets forth compensation earned or paid in cash,


•
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.

The sections below present the grant date fair valueresults of equity awards made, to our non-management directors on account of services rendered as a director in 2016. Mr. Hall receives no additional compensation for service as director.

Name Fees
Earned Or Paid
($)(1)		 Stock
Awards
($)(2)(3)		 Total
($)
Michael J. Bingle 77,500 200,000 277,500
Peter Bisson 24,822 162,740 187,562
Richard J. Bressler 90,000 200,000 290,000
Raul E. Cesan 70,000 200,000 270,000
Karen E. Dykstra 75,000 200,000 275,000
Anne Sutherland Fuchs 92,500 200,000 292,500
William O. Grabe 77,500 200,000 277,500
Steven G. Pagliuca 60,000 200,000 260,000
James C. Smith 175,000 200,000 375,000
the Company's three reportable business segments.

Research
 
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)$3,374,548
 $3,105,764
 $268,784
 9%
Gross contribution (1)$2,351,720
 $2,144,097
 $207,623
 10%
Gross contribution margin70% 69% 1 point
 —
Business Measurements: 
  
  
  
Global Technology Sales (2):       
Contract value (1), (3)$2,799,000
 $2,492,000
 $307,000
 12%
Client retention82% 83% (1) point
 —
Wallet retention104% 105% (1) point
 —
Global Business Sales (2):       
Contract value (1), (3)$647,000
 $594,000
 $53,000
 9%
Client retention82% 82% —
 —
Wallet retention101% 95% 6 points
 —
 
(1)Includes amounts earnedDollars in 2016 and paid in cash and/or common stock equivalents (CSEs) on account of the Annual Director Retainer Fee, Annual Committee Chair Fee and/or Annual Committee Member Fee, described above. For Mr. Bisson, represents the pro rata Director Retainer Fee from August 2, 2016, the date of his appointment to the board. Does not include reimbursement for meeting attendance expenses.thousands.
(2)Except for Mr. Bisson, represents the grant date valueGlobal Technology Sales includes sales to users and providers of an annual equity award computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, consisting of 1,960 restricted stock units (RSUs) that vest on May 26, 2017, one year from the date of the 2016 Annual Meeting (unless deferred release was elected), subjecttechnology. Global Business Sales includes sales to continued service through that date. Accordingly, the number of RSUs awarded was calculated by dividing $200,000 by the closing price of our Common Stock on May 26, 2016 ($102.02).all other functional leaders.
(3)For Mr. Bisson, representsContract values are on a foreign exchange neutral basis. Contract values as of December 31, 2018 have been calculated using the grant date value of an annual equity award computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, consisting of 1,743 restricted stock units (RSUs) that vest on May 26, 2017, one year from the date of the 2016 Annual Meeting, subject to continued service through that date. The number of RSUs awarded was calculated by dividing $162,740 ($200,000 pro-rated from August 2, 2016, the date of his appointment to the board, to May 26, 2017) by the closing price of our Common Stock on August 15, 2016, the date of grant ($93.32).same foreign currency rates as 2019.
34



Research revenues increased by $268.8 million during 2019 compared to 2018, or 9% on a reported basis and 10% excluding the foreign currency impact. The gross contribution margin was 70% in 2019 compared to 69% in 2018. The increase in revenues during 2019 was primarily due to the same factors driving the trend in our Research contract value, which are discussed below. The improvement in margin was primarily due to strong fourth quarter results in 2019 wherein program costs and travel and entertainment expenses grew at a slower pace than the corresponding quarterly revenue.

Total contract value increased to $3.4 billion at December 31, 2019, or 12% compared to December 31, 2018 on a foreign exchange neutral basis. Total contract value at December 31, 2019 increased by double-digits across more than half of the Company’s client sizes and half of its industry segments when compared to December 31, 2018. Global Technology Sales ("GTS") contract value increased by 12% at December 31, 2019 when compared to December 31, 2018. The increase in GTS contract value was primarily due to additional sales headcount and productivity improvements. Global Business Sales ("GBS") contract value increased by 9% year-over-year (8% on a foreign exchange neutral basis after excluding the effects of the Company's 2019 acquisition of TOPO Research LLC), primarily driven by the combined effect of improved retention and new business, with a large portion of the new business coming from newly launched products.

GTS client retention was 82% and 83% as of December 31, 2019 and 2018, respectively, while wallet retention was 104% and 105%, respectively. GBS client retention was 82% as of both December 31, 2019 and 2018, while wallet retention was 101% and 95%, respectively. The increase in GBS wallet retention was largely due to increased spending by retained clients. The number of GTS client enterprises increased by 1% at December 31, 2019 when compared to December 31, 2018, while GBS client enterprises declined by 6%.

Conferences
 
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)$476,869
 $410,461
 $66,408
 16%
Gross contribution (1)$241,757
 $207,260
 $34,497
 17%
Gross contribution margin51% 50% 1 point
 —
Business Measurements: 
  
  
  
Number of destination conferences (2)72
 70
 2
 3%
Number of destination conferences attendees (2)85,750
 78,136
 7,614
 10%

Director Stock Ownership
(1)Dollars in thousands.
(2)Single day, local meetings are excluded.


Conferences revenues increased by $66.4 million during 2019 compared to 2018, or 16% on a reported basis and Holding Period Guidelines

18% excluding the foreign currency impact. Revenues from both attendees and exhibitors at our destination conferences, as well as revenues from our single day, local meetings, increased by double-digits during 2019 compared to 2018. We held 72 destination conferences in 2019 with a 10% increase in the number of attendees and a 15% increase in exhibitors when compared to 2018, while the average revenue per attendee and exhibitor both increased by 3%. The Board believes directors shouldsegment gross contribution margin was 51% and 50% in 2019 and 2018, respectively. The higher gross contribution margin during 2019 was primarily due to improvements in our average revenue per attendee and exhibitor, improved margins from our single day, local meetings and our continuing efforts to efficiently manage our conference-related expenses. Partially offsetting these items were higher costs associated with increased headcount.














Consulting
 
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)$393,904
 $353,667
 $40,237
 11 %
Gross contribution (1)$118,450
 $102,541
 $15,909
 16 %
Gross contribution margin30% 29% 1 point
 —
Business Measurements: 
  
  
  
Backlog (1), (2)$115,700
 $108,400
 $7,300
 7 %
Billable headcount784 718 66
 9 %
Consultant utilization62% 63% (1) point
 —
Average annualized revenue per billable headcount (1)$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.

Consulting revenues increased 11% during 2019 compared to 2018 on a reported basis and 14% excluding the foreign currency impact, with revenue improvements in labor-based core consulting and contract optimization of 7% and 31%, respectively, on a reported basis. Contract optimization revenue may vary significantly and, as such, 2019 revenues may not be indicative of future results. The segment gross contribution margin was 30% and 29% in 2019 and 2018, respectively. The higher gross contribution margin during 2019 was primarily due to the increase in contract optimization revenue, which has a higher contribution margin than our labor-based core consulting, billing rate increases, improvements in our labor-based consulting margins and benefits derived from certain cost-reduction initiatives, partially offset by increased personnel costs and commissions.

Backlog increased by $7.3 million, or 7%, from December 31, 2018 to December 31, 2019. The $115.7 million of backlog at December 31, 2019 represented approximately four months of backlog, which is in line with the Company's operational target.



LIQUIDITY AND CAPITAL RESOURCES

We finance our operations through cash generated from our operating activities and borrowings. Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company's outstanding debt obligations. At December 31, 2019, we had $280.8 million of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on the revolving credit facility under our 2016 Credit Agreement. We believe that the Company has adequate liquidity to meet its currently anticipated needs.

We have historically generated significant cash flows from our operating activities. Our operating cash flow has been continuously maintained by the leverage characteristics of our subscription-based business model in our Research segment, which is our largest business segment and historically has constituted a significant portion of our total revenues. The majority of our Research customer contracts are paid in advance and, combined with a strong customer retention rate and high incremental margins, has resulted in continuously strong operating cash flow. Cash flow generation has also benefited from our ongoing efforts to improve the operating efficiencies of our businesses as well as a focus on the optimal management of our working capital as we increase sales.

Our cash and cash equivalents are held in numerous locations throughout the world with 92% held overseas at December 31, 2019. The Company intends to reinvest substantially all of its accumulated undistributed foreign earnings, except in instances where repatriation would result in minimal additional tax. As a result of the U.S. Tax Cuts and Jobs Act of 2017, we believe that the income tax impact if such earnings were repatriated would be minimal.

The table below summarizes the changes in the Company's cash balances for the years indicated (in thousands).
 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 cash118,559
 (401,906) 520,465
Effects of exchange rates3,614
 (6,489) 10,103
Beginning cash and cash equivalents and restricted cash158,663
 567,058
 (408,395)
Ending cash and cash equivalents and restricted cash$280,836
 $158,663
 $122,173

Operating

Cash provided by operating activities was $565.4 million and $471.2 million in 2019 and 2018, respectively. This year-over-year increase was primarily due to (i) greater profitability in 2019, including lower cash payments for both acquisition-related costs and interest on our borrowings, and (ii) improved collections of our fees receivable during 2019. Partially offsetting these items were higher payments for income taxes, net of refunds received, during 2019.

Investing

Cash used in investing activities was $160.9 million in 2019 compared to cash provided by investing activities of $384.1 million in 2018. The cash used in 2019 was primarily for capital expenditures and the acquisition of TOPO Research LLC, partially offset by $14.1 million of cash proceeds from the sale of a minority equity investment. During 2018, $526.8 million of net cash was realized from business unit divestitures and other miscellaneous asset sales, partially offset by payments of $126.9 million for capital expenditures and $15.9 million for deferred consideration from a pre-2018 acquisition.

Financing

Cash used in financing activities was $286.0 million in 2019 compared to cash used of $1.3 billion in 2018. During 2019, the Company borrowed $5.0 million under a financial interest inprogram offered by the Company. Accordingly, each director is required to hold sharesState of Gartner common stock with a valueConnecticut and repaid $109.6 million of not less than five (5) times the Annual Director Retainer Fee ($60,000). Directors are required to achieve the guideline within three yearsother borrowings. We also used $199.0 million of joining the Board. In the event a director has not satisfied the guideline within the three year period, he/she will be required to hold 50% of net after-tax shares received fromcash during 2019 for share repurchases. During 2018, the Company eitherpaid $1.0 billion in the form of equity awards or released CSEs until the guideline is achieved. We permit directors to apply deferreddebt principal repayments and unvested equity awards towards satisfying these requirements. $260.8 million for share repurchases.




OBLIGATIONS AND COMMITMENTS

Debt

As of December 31, 2016, all2019, the Company had $2.2 billion of principal amount of debt outstanding. Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company's outstanding debt obligations.

Off-Balance Sheet Arrangements

Through December 31, 2019, the Company has not entered into any material off-balance sheet arrangements or transactions with unconsolidated entities or other persons.

Contractual Cash Commitments

The table below summarizes the Company's future contractual cash commitments as of December 31, 2019 (in thousands).
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) $237,948
 $1,422,379
 $100,141
 $822,585
 $2,583,053
Operating leases (2) 142,352
 273,920
 249,635
 682,883
 1,348,790
Deferred compensation arrangements (3) 10,116
 14,725
 8,784
 45,931
 79,556
Other (4) 30,836
 34,606
 12,712
 35,834
 113,988
Totals $421,252
 $1,745,630
 $371,272
 $1,587,233
 $4,125,387
(1)Principal repayments of the Company's debt obligations were classified in the above table based on the contractual repayment dates. Interest payments were based on the effective interest rates as of December 31, 2019, including the effects of the Company’s interest rate swap contracts. Note 6 — Debt in the Notes to Consolidated Financial Statements provides information regarding the Company's debt obligations and interest rate swap contracts.
(2)The Company leases various facilities, automobiles, computer equipment and other assets under non-cancelable operating lease agreements expiring between 2020 and 2038. The total commitment excludes approximately $360.6 million of estimated future cash receipts from the Company's subleasing arrangements. Note 1 — Business and Significant Accounting Policies and Note 7 — Leases in the Notes to Consolidated Financial Statements provide additional information regarding the Company's leases.
(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 because the Company cannot determine when the amounts will be paid. Note 15 — Employee Benefits in the Notes to Consolidated Financial Statements provides additional information regarding the Company's supplemental deferred compensation arrangements.
(4)Other includes: (i) contractual commitments (a) to secure sites for our Conferences business and (b) for software, telecom and other services; (ii) amounts due for share repurchase transactions that occurred in late December 2019 but were settled in cash in January 2020; and (iii) projected cash contributions to the Company's defined benefit pension plans. Note 15 — Employee Benefits in the Notes to Consolidated Financial Statements provides additional information regarding the Company's defined benefit pension plans.

In addition to the contractual cash commitments included in the above table, the Company has other payables and liabilities that may be legally enforceable but are not considered contractual commitments. Information regarding the Company's payables and liabilities is included in Note 5 — Accounts Payable and Accrued and Other Liabilities in the Notes to Consolidated Financial Statements.










QUARTERLY FINANCIAL DATA
The tables below present our directors arequarterly operating results for the two-year period ended December 31, 2019.
2019        
(In thousands, except per share data) First Second Third Fourth
Revenues $970,444
 $1,070,882
 $1,000,502
 $1,203,493
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 $0.23
 $1.15
 $0.46
 $0.76
Diluted $0.23
 $1.13
 $0.46
 $0.75

2018        
(In thousands, except per share data) First Second Third Fourth
Revenues $963,565
 $1,001,336
 $921,674
 $1,088,878
Operating income (loss) (8,711) 86,096
 52,724
 129,606
Net income (loss) (19,587) 46,270
 11,753
 84,020
Net income (loss) per share:  
  
    
Basic $(0.22) $0.51
 $0.13
 $0.93
Diluted $(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 net income per share may not equal the reported full calendar year amounts due to the effects of share repurchases, dilutive equity compensation and rounding.

RECENTLY ISSUED ACCOUNTING STANDARDS

The FASB has issued accounting standards that had not yet become effective as of December 31, 2019 and may impact the Company’s consolidated financial statements or its disclosures in compliance with these guidelines

Compensation Committee Interlocksfuture periods. Note 1 — Business and Insider Participation.

During 2016, no memberSignificant Accounting Policies in the Notes to Consolidated Financial Statements provides information regarding those accounting standards.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

INTEREST RATE RISK
As of December 31, 2019, the Company had $2.2 billion in total debt principal outstanding. Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company's outstanding debt obligations.

Approximately $1.4 billion of the Compensation Committee servedCompany's total debt outstanding as an officer or employee of December 31, 2019 was based on a floating base rate of interest, which potentially exposes the Company to increases in interest rates. However, we reduce our overall exposure to interest rate increases through our interest rate swap contracts, which effectively convert the floating base interest rates on the borrowings to fixed rates. Thus, we are only exposed to base interest rate risk on floating rate borrowings in excess of any amounts that are not hedged. At December 31, 2019, the Company was formerly an officereffectively fully hedged against the base interest rate risk on its floating rate borrowings.

FOREIGN CURRENCY RISK
A significant portion of our revenues are typically derived from sales outside of the United States. Among the major foreign currencies in which we conduct business are the Euro, the British Pound, the Japanese Yen, the Australian dollar and the Canadian


dollar. The reporting currency of our consolidated financial statements is the U.S. dollar. As the values of the foreign currencies in which we operate fluctuate over time relative to the U.S. dollar, the Company is exposed to both foreign currency translation and transaction risk.

Translation risk arises as our foreign currency assets and liabilities are translated into U.S. dollars because the functional currencies of our foreign operations are generally denominated in the local currency. Adjustments resulting from the translation of these assets and liabilities are deferred and recorded as a component of stockholders’ equity. A measure of the potential impact of foreign currency translation can be determined through a sensitivity analysis of our cash and cash equivalents. At December 31, 2019, we had $280.8 million of cash and cash equivalents, with a substantial portion denominated in foreign currencies. If the exchange rates of the foreign currencies we hold all changed in comparison to the U.S. dollar by 10%, the amount of cash and cash equivalents we would have reported on December 31, 2019 could have increased or decreased by approximately $26.0 million. The translation of our foreign currency revenues and expenses historically has not had any relationshipa material impact on our consolidated earnings because movements in and among the major currencies in which we operate tend to impact our revenues and expenses fairly equally. However, our earnings could be impacted during periods of significant exchange rate volatility, or when some or all of the major currencies in which we operate move in the same direction against the U.S. dollar.
Transaction risk arises when we enter into a transaction that is denominated in a currency that may differ from the local functional currency. As these transactions are translated into the local functional currency, a gain or loss may result, which is recorded in current period earnings. We typically enter into foreign currency forward exchange contracts to mitigate the effects of some of this foreign currency transaction risk. Our outstanding foreign currency forward exchange contracts as of December 31, 2019 had an immaterial net unrealized gain.

CREDIT RISK
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, fees receivable, interest rate swap contracts and foreign currency forward exchange contracts. The majority of the Company’s cash and cash equivalents, interest rate swap contracts and foreign currency forward exchange contracts are with large investment grade commercial banks. Fees receivable balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographic dispersion.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Our financial statements for 2019, 2018 and 2017, together with the reports of KPMG LLP, our independent registered public accounting firm, are included herein in this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURE.

None.



ITEM 9A. CONTROLS AND PROCEDURES.

DISCLOSURE CONTROLS AND PROCEDURES

Management conducted an evaluation, as of December 31, 2019, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a- 15(e) and 15d- 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), under the supervision and with the participation of our chief executive officer and chief financial officer. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that the Company's disclosure controls and procedures are effective in alerting them in a timely manner to material Company information required to be disclosed by us in reports filed under Certain Relationships And Related Transactions disclosedthe Exchange Act.

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Gartner management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Item 13 hereof. Additionally, during 2016, no executive officerExchange Act Rules 13a-15(f) and 15d-15(f). Gartner’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. In making this assessment, management used the criteria set forth in the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Company: (i) served as a memberTreadway Commission (COSO). Management’s assessment was reviewed with the Audit Committee of the compensation committee (or full boardBoard of Directors.

Based on its assessment of internal control over financial reporting, management has concluded that, as of December 31, 2019, Gartner’s internal control over financial reporting was effective. The effectiveness of management’s internal control over financial reporting as of December 31, 2019 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included in this Annual Report on Form 10-K in Part IV, Item 15.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in the absenceCompany's internal control over financial reporting during the quarter ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

Not applicable.


PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required to be furnished pursuant to this item will be set forth under the captions “The Board of such a committee) or as a directorDirectors," "Proposal One: Election of another entity, one of whose executive officers served on our Compensation Committee; or (ii) served as a member of the compensation committee (or full boardDirectors,” “Executive Officers,” “Corporate Governance,” “Delinquent Section 16(a) Reports” (if necessary) and “Proxy and Voting Information — Available Information” in the absenceCompany’s Proxy Statement to be filed with the SEC no later than April 29, 2020. If the Proxy Statement is not filed with the SEC by April 29, 2020, such information will be included in an amendment to this Annual Report filed by April 29, 2020. See also Item 1. Business — Available Information.

ITEM 11. EXECUTIVE COMPENSATION.

The information required to be furnished pursuant to this item is incorporated by reference from the information set forth under the captions “Compensation Discussion & Analysis,” “Compensation Tables and Narrative Disclosures,” “The Board of Directors - Compensation of Directors,” “The Board of Directors - Director Compensation Table,” “Corporate Governance - Risk Oversight - Risk Assessment of Compensation Policies and Practices,” and “Corporate Governance - Compensation Committee” in the Company’s Proxy Statement to be filed with the SEC no later than April 29, 2020. If the Proxy Statement is not filed with the SEC by April 29, 2020, such a committee) of another entity, one of whose executive officers served on our Board.

35
information will be included in an amendment to this Annual Report filed by April 29, 2020.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Based on our reviewMATTERS.


The information required to be furnished pursuant to this item will be set forth under the captions "Compensation Tables and Narrative Disclosures — Equity Compensation Plan Information" and “Security Ownership of information on fileCertain Beneficial Owners and Management” in the Company’s Proxy Statement to be filed with the SEC and our stock records,by April 29, 2020. If the following table provides certainProxy Statement is not filed with the SEC by April 29, 2020, such information about beneficial ownership of shares of our Common Stock as of March 1, 2017 (including shares that will release (RSUs) or become exercisable (SARs) within 60 days following March 1, 2017) held by: (i) each person (or group of affiliated persons) which is known by us to own beneficially more than five percent (5%) of our Common Stock; (ii) each of our directors; (iii) each Named Executive Officer who was employed on that date; and (iv) all directors, Named Executive Officers (who were employed on March 1, 2017) and other current executive officers as a group. Unless otherwise indicated, the address for those listed below is c/o Gartner, Inc., 56 Top Gallant Road, Stamford, CT 06904. The amounts shown do not include CSEs that release upon termination of service as a director, or deferred RSUs that will not release within 60 days. Since all stock appreciation rights (SARs) are stock-settled (i.e., shares are withheld for the payment of exercise price and taxes), the number of shares ultimately issued upon settlement will be less than the number of SARS that were settled. Except as indicatedincluded in an amendment to this Annual Report filed by footnote, and subject to applicable community property laws, the persons named in the table directly own, and have sole voting and investment power with respect to, all shares of Common Stock shown as beneficially owned by them. To the Company’s knowledge, none of these shares has been pledged.

Beneficial Owner Number of Shares
Beneficially
Owned		 Percent
Owned
Michael J. Bingle 25,795 *
Peter Bisson — *
Richard J. Bressler 17,488 *
Raul E. Cesan (1) 92,150 *
Karen E. Dykstra 18,673 *
Anne Sutherland Fuchs 32,736 *
William O. Grabe 128,333 *
Stephen G. Pagliuca 53,438 *
James C. Smith (2) 1,054,628 1.3
Eugene A. Hall (3) 1,505,413 1.8
Craig W. Safian (4) 34,878 *
Per Anders Waern — *
David Godfrey (5) 40,666 *
Alwyn Dawkins (6) 79,297 *
All current directors, Named Executive Officers and other
executive officers as a group (21 persons) (7)		 3,567,053 4.3
Baron Capital Group, Inc. (8)
767 Fifth Avenue, New York, NY 10153		 7,502,738 9.0
Blackrock, Inc. (9)

40 East 52nd Street, New York, NY 10022

 7,796,236 9.4
The Vanguard Group, Inc. (10)
100 Vanguard Blvd., Malvern, PA 19355		 6,388,272 7.7

*     Less than 1%

(1)Includes 30,000 shares held by a family foundation as to which Mr. Cesan may be deemed a beneficial owner.
36
April 29, 2020.
(2)Includes 50,000 shares held by members of Mr. Smith’s immediate family and 211,900 shares held by a family foundation as to which Mr. Smith may be deemed a beneficial owner.
(3)Includes 331,787 shares issuable upon the exercise of stock appreciation rights (“SARs”).
(4)Includes 16,781 shares issuable upon the exercise of SARs.
(5)Includes 34,633 shares issuable upon the exercise of SARs.
(6)Includes 48,812 shares issuable upon the exercise of SARs.
(7)Includes 673,557 shares issuable upon the exercise of SARs
(8)Includes shares beneficially owned by Baron Capital Group, Inc. (“BCG”) and Ronald Baron; also includes 7,260,279 shares beneficially owned by BAMCO, Inc. and 242,459 shares beneficially owned by Baron Capital Management, Inc., subsidiaries of BCG. Ronald Baron owns a controlling interest in BCG.
(9)Includes shares held by various subsidiaries and/or affiliates of Blackrock, Inc.
(10)Includes shares beneficially owned by The Vanguard Group, Inc. as an investment adviser, and includes 43,404 shares beneficially owned by Vanguard Fiduciary Trust Company as investment manager of collective trust accounts, and 66,518 shares beneficially owned by Vanguard Investments Australia, Ltd as investment manager.

EQUITY COMPENSATION PLANS

The following table provides information as of December 31, 2016 regarding the number of shares of our Common Stock that may be issued upon exercise of outstanding options, stock appreciation rights and other rights (including restricted stock units, performance stock units and common stock equivalents) awarded under our equity compensation plans (and, where applicable, related weighted-average exercise price information), as well as shares available for future issuance under our equity compensation plans. All equity plans with outstanding awards or available shares have been approved by our stockholders.

  Column A Column B Column C

Plan Category

 

Number of Securities
to be Issued Upon
Exercise of
Outstanding Options
and Rights

 

Weighted Average
Exercise Price of
Outstanding
Options
and Rights ($)

 

Number of Securities
Remaining Available
For Future Issuance
Under Equity
Compensation Plans
(excluding shares in
Column A)

2003 Long - Term Incentive Plan (1) 1,202,355 54.12 —
2014 Long – Term Incentive Plan (2) 1,513,921 79.08 6,710,331
2011 Employee Stock Purchase Plan — — 907,503
Total 2,716,276 61.28 7,617,834
(1)Award shares under the 2003 plan withheld for taxes, surrendered to pay exercise price or cancelled are retired; at the present time all awards are made under the 2014 Plan.
(2)Award shares under the 2014 Plan withheld for taxes, surrendered to pay exercise price or cancelled are returned to the available share pool.
37

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Gartner is a provider of comprehensive research coverage ofINDEPENDENCE.


The information required to be furnished pursuant to this item will be set forth under the IT industrycaptions “Transactions With Related Persons” and “Corporate Governance — Director Independence” in the Company’s Proxy Statement to over 10,000 distinct enterprises in over 90 countries. Because of our worldwide reach, itbe filed with the SEC by April 29, 2020. If the Proxy Statement is not unusual for Gartner to engage in ordinary course of business transactions involving the sale of research or consulting services with entities in which one of our directors, executive officers or a greater than 5% owner of our stock, or immediate family member of any of them, may also be a director, executive officer, partner or investor, or have some other direct or indirect interest. We will refer to these transactions generally as related party transactions.

Our Governance Committee reviews all related party transactions to determine whether any director, executive officer or a greater than 5% owner of our stock, or immediate family member of any of them, has amaterial direct or indirect interest, or whether the independence from management of our directors may be compromised as a result of the relationship or transaction. Our Board Principles and Practices, which are posted onwww.investor.gartner.com, require directors to disclose all actual or potential conflicts of interest regarding a matter being considered by the Board or any of its committees and to excuse themselves from that portion of the Board or committee meeting at which the matter is addressed to permit independent discussion. Additionally, the memberfiled with the conflict must abstain from voting on anySEC by April 29, 2020, such matter. information will be included in an amendment to this Annual Report filed by April 29, 2020.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The Governance Committee is charged with resolving any conflictinformation required to be furnished pursuant to this item will be set forth under the caption “Proposal Three: Ratification of interest issues broughtAppointment of Independent Registered Public Accounting Firm” in the Company’s Proxy Statement to its attention and has the power to request the Board to take appropriate action, up to and including requesting the involved director to resign. Our Audit Committee and/or Board of Directors reviews and approves all material related party transactions involving our directors in accordance with applicable provisions of Delaware law andbe filed with the advice of counsel, if deemed necessary.

The Company maintains a written conflicts of interest policy whichSEC no later than April 29, 2020. If the Proxy Statement is posted on our intranet and prohibits all Gartner employees, including our executive officers, from engaging in any personal, business or professional activity which conflicts with or appears to conflict with their employment responsibilities and from maintaining financial interests in entities that could create an appearance of impropriety in their dealingsnot filed with the Company. Additionally, the policy prohibits all Gartner employees from entering into agreements on behalf of Gartner with any outside entity if the employee knows that the entity is a related partySEC by April 29, 2020, such information will be included in an amendment to a Gartner employee; i.e., that the contract would confer a financial benefit, either directly or indirectly, on a Gartner employee or his or her relatives. All potential conflicts of interest and related party transactions involving Gartner employees must be reported to, and pre-approved by, the General Counsel.

In 2016, there were no related party transactions in which any director, executive officer or a greater than 5% owner of our stock, or immediate family member of any of them, had or will have a direct or indirect material interest.

DIRECTOR INDEPENDENCE

Our Board Guidelines require that our Board be comprised of a majority of directors who meet the criteria for independence from management set forth by the New York Stock Exchange (“NYSE”) in its corporate governance listing standards.

Our committee charters likewise require that our standing Audit, Compensation and Governance/Nominating Committees be comprised only of independent directors. Additionally, the Audit Committee members must be independent under Section 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Compensation Committee members must be independent under Rule 16b-3 promulgated under the Exchange Act as well as applicable NYSE corporate governance listing standards, and they must qualify as outside directors under regulations promulgated under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”).

Utilizing all of these criteria, as well as all relevant facts and circumstances, the Board annually assesses the independence from management of all non-management directors and committee members by reviewing the

38

commercial, financial, familial, employment and other relationships between each director and the Company, its auditors and other companies that do business with Gartner.

After analysis and recommendation by the Governance Committee, the Board determined that:

all non-management directors (Michael Bingle, Peter Bisson, Richard Bressler, Raul Cesan, Karen Dykstra, Anne Sutherland Fuchs, William Grabe, Stephen Pagliuca and James Smith) are independent under the NYSE listing standards;
our Audit Committee members (Ms. Dykstra and Messrs. Bressler and Smith) are independent under the criteria set forth in Section 10A-3 of the Exchange Act; and
our Compensation Committee members (Ms. Fuchs and Messrs. Bingle and Cesan) are independent under the criteria set forth in Exchange Act Rule 16b-3 as well as under applicable NYSE corporate governance listing standards, and qualify as “outside directors” under Code Section 162(m) regulations.

ITEM 14.     PRINCIPAL ACCOUNTING FEES AND SERVICES

During 2016, KPMG performed recurring audit services, including the audit of our annual consolidated financial statements and the audit of internal controls over financial reporting as of December 31, 2016, reviews of our quarterly financial information, and certain statutory audits and certain tax services for the Company. The aggregate fees billed for professional services by KPMG in 2015 and 2016 for various services performed by them were as follows:

Types of Fees

 

2015 ($)

 2016 ($)
Audit Fees 2,729,400 2,857,000
Audit-Related Fees 7,600 28,000
Tax Fees 513,277 545,000
All Other Fees — 3,000
Total Fees 3,250,277 3,433,000

Audit Fees

Audit fees relate to professional services rendered by KPMG for the audit of the Company’s annual consolidated financial statements contained in itsthis Annual Report on Form 10-K, audit of internal controls over financial reporting and reviews of the Company’s quarterly financial information contained in its Quarterly Reports on Form 10-Q, as well as work performed in connection with statutory and regulatory filings.

Audit-Related Fees

Audit-related fees relate to professional services renderedfiled by KPMG primarily for an agreed upon procedures report and issuance of a consent in connection with the filing of a registration statement.

Tax Fees

Tax fees relate to professional services rendered by KPMG for permissible tax compliance, tax advice and tax planning services.

All Other Fees

This category of fees covers all fees for any permissible service not included in the above categories.

39
April 29, 2020.

Pre-Approval Policies

The Audit Committee’s policy is to pre-approve all audit, audit-related and permissible non-audit services provided by KPMG. These services may include domestic and international audit services, audit-related services, tax services and other services. At the beginning of each fiscal year, the Audit Committee pre-approves aggregate fee limits for specific types of permissible services (e.g., domestic and international tax compliance and tax planning services; transfer pricing services, audit-related services and other permissible services) to allow management to engage KPMG expeditiously as needed as projects arise. At each regular quarterly meeting, KPMG and management report to the Audit Committee regarding the services for which the Company has engaged KPMG in the immediately preceding fiscal quarter in accordance with the pre-approved limits, and the related fees for such services as well as year-to-date cumulative fees for KPMG services. Pre-approved limits may be adjusted as necessary during the year, and the Audit Committee may also pre-approve particular services on a case-by-case basis. All services provided by KPMG in 2016 were pre-approved by the Audit Committee.



PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

SCHEDULES.

(a) 1. and 2. Consolidated Financial Statements and Schedules

The reports of our independent registered public accounting firm and consolidated financial statements listed in the Index to Consolidated Financial Statements herein are filed as part of this report.

All financial statement schedules not listed in the Index have been omitted because the information required is not applicable or is shown in the consolidated financial statements or notes thereto.

3. Exhibits:

Exhibits

EXHIBIT NUMBER

 

DESCRIPTION OF DOCUMENT

3.1(1)
2.1(1)
Agreement and Plan of Merger by and among the Company, Cobra Acquisition Corp. and CEB Inc., dated as of January 5, 2017.
3.1(2)
 Restated Certificate of Incorporation of the Company.
3.2(2) Bylaws as amended through February 2, 2012.
4.1(1)
3.2(3)
By-laws of Gartner, Inc. (January 30, 2020).
4.1(2)
 Form of Certificate for Common Stock as of June 2, 2005.
4.2 (3)
4.2(4)
 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.
4.3 (4)
4.3(4)
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.
4.4(5)
 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.
10.1(5)
4.5(6)
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.
4.6(7)
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.
4.7(8)
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.
4.8*
Description of Gartner, Inc.'s Common Stock.
10.1(9)
 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.
10.2(5)
10.2(9)
 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.
10.3(6)
10.3(10)+
 2011 Employee Stock Purchase Plan.
10.4(7)
10.4(11)+
 2003 Long -TermLong-Term Incentive Plan, as amended and restated effective June 4, 2009.
10.5(8) 2014
10.5(12)+
Gartner, Inc. Long-Term Incentive Plan, as amended and restated effective May 29, 2014.January 31, 2019.
10.6(9)
10.6(12)+
 Amended and Restated Employment Agreement between Eugene A. Hall and the Company dated as of March 19, 2016.February 14, 2019.
40
10.7(13)+
10.7(10) Company Deferred Compensation Plan, effective January 1, 2009.
10.8(11)
10.8(14)+
 Form of 2017 Stock Appreciation Right Agreement for executive officers.
10.9(11)
10.9(14)+
 Form of 2017 Performance Stock Unit Agreement for executive officers.
10.10 (12) Agreement and Plan of Merger by and among Gartner, Inc., Cobra Acquisition Corp. and CEB Inc., dated as of January 5, 2017.
10.11 (12)
10.10(15)+
 Commitment Letter among Gartner, Inc., JPMorgan Chase Bank, N.A. and Goldman Sachs Bank USA, dated January 5, 2017.Form of 2017 Restricted Stock Unit Agreement for certain officers.


10.11(16)+
Form of 2018 Stock Appreciation Right Agreement for executive officers.
10.12(16)+
Form of 2018 Performance Stock Unit Agreement for executive officers.
10.13(12)+
Form of 2019 Stock Appreciation Right Agreement for executive officers.
10.14(12)+
Form of 2019 Performance Stock Unit Agreement for executive officers.
10.15+*
Form of 2020 Stock Appreciation Right Agreement for executive officers.
10.16+*
Form of 2020 Performance Stock Unit Agreement for executive officers.
10.17(17)+
Form of Restricted Stock Unit Agreement for non-employee directors.
10.18+*
Enhanced Executive Rewards Policy.
21.1**
 Subsidiaries of Registrant.
23.1**
 Consent of Independent Registered Public Accounting Firm.
24.1**
 Power of Attorney.Attorney (see Signature Page).
31.1*
 Certification of chief executive officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
 Certification of chief financial officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32**
 Certification under Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
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.
101.SCH*
XBRL Taxonomy Extension Schema Document.
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document.
104*
Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101).
*Filed with this document.
**Previously filed or furnished with the Registrant’s Annual Report on Form 10-K, filed February 22, 2017.
+Management compensation plan or arrangement.
(1)Incorporated by reference from the Company’s Current Report on Form 8-K dated June 29, 2005 as filed on July 6, 2005.January 5, 2017.
(2)Incorporated by reference from the Company’s Current Report on Form 8-K dated February 2, 2012 as filed on February 7, 2012.July 6, 2005.
(3)Incorporated by reference from the Company’s Current Report on Form 8-K dated June 17,filed on February 5, 2020.
(4)Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 4, 2016.
(4)(5)Incorporated by reference from the Company’s Current Report on Form 8-K dated January 20, 2017 and filed on January 24, 2017.
(5)(6)Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 21, 2017.
(7)Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 6, 2017.
(8)Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 30, 2017.
(9)Incorporated by reference from the Company’s Quarterly Report on formForm 10-Q filed on August 9, 2010.
(6)(10)Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 18, 2011.
(7)(11)Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 21, 2009
(8)(12)Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 15, 2014.
(9)Incorporated by reference from the Company’s QuarterlyAnnual Report on Form 10-Q10-K filed on May 5, 2016.February 22, 2019.
(10)(13)Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 20, 2009.
(11)(14)Incorporated by reference from the Company’s Current Report on Form 8-K dated February 6, 2017 and filed on February 7, 2017.
(12)(15)Incorporated by reference from the Company’s CurrentQuarterly Report on Form 8-K dated and10-Q filed January 5,on November 2, 2017.

ITEM 16.     FORM 10–K SUMMARY

None.

41(16)Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on May 8, 2018.
(17)Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 1, 2018.


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
GARTNER, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
39
Report of Independent Registered Public Accounting Firm
41
Consolidated Balance Sheets as of December 31, 2019 and 2018
42
Consolidated Statements of Operations for the Three-Year Period Ended December 31, 2019
43
Consolidated Statements of Comprehensive Income for the Three-Year Period Ended December 31, 2019
44
Consolidated Statements of Stockholders’ Equity for the Three-Year Period Ended December 31, 2019
45
Consolidated Statements of Cash Flows for the Three-Year Period Ended December 31, 2019
46
Notes to Consolidated Financial Statements
47

All financial statement schedules have been omitted because the information required is not applicable or is shown in the consolidated financial statements or notes thereto.

SIGNATURES



Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Gartner, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Gartner, Inc. and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 19, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of ASU No. 2016-02, Leases.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of unrecognized tax benefits

As discussed in Notes 1 and 12 to the consolidated financial statements, the Company has recorded gross unrecognized tax benefits of $102.8 million as of December 31, 2019. The Company recognizes tax positions when it believes there is more than a 50 percent likelihood of such positions being sustained based on the technical merits of the position. Recognized tax positions are measured at the largest amount of benefit greater than 50 percent likely of being realized. The Company uses estimates and assumptions in determining the amount of unrecognized tax benefits associated with uncertain tax positions.




We identified the assessment of unrecognized tax benefits relating to transfer pricing and certain other intercompany transactions as a critical audit matter. Complex auditor judgment was required in evaluating the Company’s interpretation of tax law and its determination of the recognition and measurement of the tax benefits that are recognized. This included judgments about re-measuring liabilities for positions taken in prior years’ tax returns, in light of new information.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s unrecognized tax benefits process, including controls over assessing the tax implications of transfer pricing and certain other intercompany transactions. We involved tax and transfer pricing professionals with specialized skills and knowledge, who assisted in:

Evaluating the Company’s interpretation of tax laws and income tax consequences of intercompany transactions, including internal restructurings and intra-entity transfers of assets;
Assessing intercompany agreements and related transfer pricing studies for compliance with relevant tax laws and regulations;
Performing an independent assessment of the Company’s tax positions and determination of unrecognized tax benefits and comparing the results to the Company’s assessment; and
Inspecting settlement documents with applicable taxing authorities.

In addition, we assessed the Company’s ability to estimate its unrecognized tax benefits by comparing historical unrecognized tax benefits to actual results upon conclusion of tax audits by applicable taxing authorities.

/s/ KPMG LLP
We have served as the Company’s auditor since 1996.

New York, New York
February 19, 2020



Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Gartner, Inc.:
Opinion on Internal Control Over Financial Reporting

We have audited Gartner, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements), and our report dated February 19, 2020 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP
New York, New York
February 19, 2020


GARTNER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
 December 31,
 2019 2018
ASSETS 
  
Current assets: 
  
Cash and cash equivalents$280,836
 $156,368
Fees receivable, net of allowances of $8,000 and $7,700, respectively1,326,012
 1,255,118
Deferred commissions265,867
 235,016
Prepaid expenses and other current assets146,026
 165,237
Total current assets2,018,741
 1,811,739
Property, equipment and leasehold improvements, net344,579
 267,665
Operating lease right-of-use assets702,916
 —
Goodwill2,937,726
 2,923,136
Intangible assets, net925,087
 1,042,565
Other assets222,245
 156,369
Total Assets$7,151,294
 $6,201,474
LIABILITIES AND STOCKHOLDERS’ EQUITY 
  
Current liabilities: 
  
Accounts payable and accrued liabilities$788,796
 $710,113
Deferred revenues1,928,020
 1,745,244
Current portion of long-term debt139,718
 165,578
Total current liabilities2,856,534
 2,620,935
Long-term debt, net of deferred financing fees2,043,888
 2,116,109
Operating lease liabilities832,533
 —
Other liabilities479,746
 613,673
Total Liabilities6,212,701
 5,350,717
Stockholders’ Equity: 
  
Preferred stock: 
  
$0.01 par value, authorized 5,000,000 shares; none issued or outstanding—
 —
Common stock: 
  
$0.0005 par value, 250,000,000 shares authorized; 163,602,067 shares issued for both periods82
 82
Additional paid-in capital1,899,273
 1,823,710
Accumulated other comprehensive loss, net(77,938) (39,867)
Accumulated earnings1,988,722
 1,755,432
Treasury stock, at cost, 74,444,288 and 73,899,977 common shares, respectively(2,871,546) (2,688,600)
Total Stockholders’ Equity938,593
 850,757
Total Liabilities and Stockholders’ Equity$7,151,294
 $6,201,474
See Notes to Consolidated Financial Statements.



GARTNER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

 Year Ended December 31,
 2019 2018 2017
Revenues: 
  
  
Research$3,374,548
 $3,105,764
 $2,471,280
Conferences476,869
 410,461
 337,903
Consulting393,904
 353,667
 327,661
Other—
 105,562
 174,650
Total revenues4,245,321
 3,975,454
 3,311,494
Costs and expenses: 
  
  
Cost of services and product development1,550,568
 1,468,800
 1,320,198
Selling, general and administrative2,103,424
 1,884,141
 1,599,004
Depreciation82,066
 68,592
 63,897
Amortization of intangibles129,713
 187,009
 176,274
Acquisition and integration charges9,463
 107,197
 158,450
Total costs and expenses3,875,234
 3,715,739
 3,317,823
Operating income (loss)370,087
 259,715
 (6,329)
Interest income3,026
 2,566
 3,011
Interest expense(102,831) (126,774) (127,947)
(Loss) gain from divested operations(2,075) 45,447
 —
Other income, net7,532
 167
 3,448
Income (loss) before income taxes275,739
 181,121
 (127,817)
Provision (benefit) for income taxes42,449
 58,665
 (131,096)
Net income$233,290
 $122,456
 $3,279
      
Net income per share: 
  
  
Basic$2.60
 $1.35
 $0.04
Diluted$2.56
 $1.33
 $0.04
Weighted average shares outstanding: 
  
  
Basic89,817
 90,827
 88,466
Diluted90,971
 92,122
 89,790
See Notes to Consolidated Financial Statements.



GARTNER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)

 Year Ended December 31,
 2019 2018 2017
Net income$233,290
 $122,456
 $3,279
Other comprehensive (loss) income, net of tax: 
  
  
Foreign currency translation adjustments4,169
 (31,245) 47,363
Interest rate swaps - net change in deferred gain or loss(39,394) (10,844) 3,892
Pension plans - net change in deferred actuarial loss(2,846) 123
 (64)
Other comprehensive (loss) income, net of tax(38,071) (41,966) 51,191
Comprehensive income$195,219
 $80,490
 $54,470
See Notes to Consolidated Financial Statements.



GARTNER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(IN THOUSANDS)
 
Common
Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive
(Loss) Income, Net
 
Accumulated
Earnings
 
Treasury
Stock
 
Total
Stockholders’
Equity
Balance at December 31, 2016$78
 $863,127
 $(49,683) $1,644,005
 $(2,396,649) $60,878
Net income—
 —
 —
 3,279
 —
 3,279
Other comprehensive income—
 —
 51,191
 —
 —
 51,191
Issuances under stock plans and for an acquisition4
 819,313
 —
 —
 11,129
 830,446
Common share repurchases—
 —
 —
 —
 (41,272) (41,272)
Stock-based compensation expense—
 78,943
 —
 —
 —
 78,943
Balance at December 31, 201782
 1,761,383
 1,508
 1,647,284
 (2,426,792) 983,465
Adoption of ASU No. 2018-02—
 —
 591
 (591) —
 —
Adoption of ASU No. 2016-16—
 —
 —
 (13,717) —
 (13,717)
Net income—
 —
 —
��122,456
 —
 122,456
Other comprehensive loss—
 —
 (41,966) —
 —
 (41,966)
Issuances under stock plans—
 (3,845) —
 —
 14,026
 10,181
Common share repurchases—
 —
 —
 —
 (275,834) (275,834)
Stock-based compensation expense—
 66,172
 —
 —
 —
 66,172
Balance at December 31, 201882
 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
See Notes to Consolidated Financial Statements.



GARTNER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
 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 amortization211,779
 255,601
 240,171
Stock-based compensation expense69,008
 66,172
 78,943
Deferred taxes(55,787) 1,524
 (217,414)
Loss (gain) from divested operations2,075
 (45,447) —
Gain on sale of an equity security(9,120) —
 —
Reduction in the carrying amount of operating lease right-of-use assets86,466
 —
 —
Amortization and write-off of deferred financing fees6,497
 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 assets18,985
 (50,551) 13,251
Other assets(27,303) 11,456
 (18,529)
Deferred revenues181,203
 187,147
 382,852
Accounts payable and accrued and other liabilities(54,613) 55,235
 186,811
Cash provided by operating activities565,436
 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 security14,120
 —
 —
Cash (used in) provided by investing activities(160,885) 384,051
 (2,752,545)
Financing activities: 
  
  
Proceeds from employee stock purchase plan17,629
 14,689
 11,711
Proceeds from borrowings5,000
 —
 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 cash118,559
 (401,906) 41,802
Effects of exchange rates on cash and cash equivalents and restricted cash3,614
 (6,489) 25,902
Cash and cash equivalents and restricted cash, beginning of year158,663
 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


See Notes to Consolidated Financial Statements.



GARTNER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 — BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Business. Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow. We believe our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and an objective resource for more than 15,000 enterprises in more than 100 countries — across all major functions, in every industry and enterprise size.

Segments. Gartner delivers its products and services globally through 3 business segments: Research, Conferences and Consulting. Note 9 — Revenue and Related Matters and Note 16 — Segment Information describe the products and services offered by each of our segments and provide additional financial information for those segments.

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.

Basis of presentation. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for financial information and with the applicable instructions of U.S. Securities and Exchange Commission (“SEC”) Regulation S-X.

The fiscal year of Gartner is the twelve-month period from January 1 through December 31. All references to 2019, 2018 and 2017 herein refer to the fiscal year unless otherwise indicated. When used in these notes, the terms “Gartner,” the “Company,” “we,” “us” or “our” refer to Gartner, Inc. and its consolidated subsidiaries.

Principles of consolidation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.
Use of estimates. The preparation of the accompanying consolidated financial statements requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of fees receivable, goodwill, intangible assets and other long-lived assets, as well as tax accruals and other liabilities. In addition, estimates are used in revenue recognition, income tax expense or benefit, performance-based compensation charges, depreciation and amortization. Management believes its use of estimates in the accompanying consolidated financial statements to be reasonable.

Management continually evaluates and revises its estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. Management adjusts these estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time. As a result, differences between our estimates and actual results could be material and would be reflected in the Company’s consolidated financial statements in future periods.

Business acquisitions. The Company accounts for business acquisitions in accordance with the acquisition method of accounting as prescribed by FASB ASC Topic 805, Business Combinations. The acquisition method of accounting requires the Company to record the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with certain exceptions. Any excess of the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Under the acquisition method, the operating results of acquired companies are included in the Company's consolidated financial statements beginning on the date of acquisition. The Company completed business acquisitions in both 2019 and 2017. Note 2 — Acquisitions and Divestitures provides additional information regarding those business acquisitions.
The determination of the fair values of intangible and other assets acquired in an acquisition requires management judgment and the consideration of a number of factors, including the historical financial performance of acquired businesses and their projected future performance, and estimates surrounding customer turnover, as well as assumptions regarding the level of competition and


the costs necessary to reproduce certain assets. Establishing the useful lives of intangible assets also requires management judgment and the evaluation of a number of factors, including the expected use of an asset, historical client retention rates, consumer awareness and trade name history, as well as any contractual provisions that could limit or extend an asset's useful life.

Charges that are directly related to the Company's acquisitions are expensed as incurred and classified as Acquisition and integration charges in the Consolidated Statements of Operations. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company's Acquisition and integration charges.

Revenue recognition. On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (as amended, "ASU No. 2014-09") using the modified retrospective method of adoption. Under that approach, the cumulative effect of applying the new accounting standard is recorded on the date of initial application, with no restatement of the comparative prior periods presented. Although the adoption of ASU No. 2014-09 did not have a material impact on the Company’s consolidated financial statements, implementation of the new accounting standard resulted in changes in our revenue recognition policies and enhanced footnote disclosures. Note 9 — Revenue and Related Matters (i) provides information regarding our adoption of ASU No. 2014-09 and its impact on the Company's consolidated financial statements and (ii) includes the new enhanced disclosures required by ASU No. 2014-09. Prior to January 1, 2018, the Company recognized revenue in accordance with then-existing U.S. GAAP and SEC Staff Accounting Bulletin No. 104, Revenue Recognition.

Allowance for losses. The Company maintains an allowance for losses that provides for estimated uncollectible fees receivable due to credit and other associated risks. The allowance for losses is classified as an offset to the gross amount of fees receivable. Provisions to the allowance for losses due to credit and other associated risks are recorded as bad debt expense.

The allowance for losses for bad debts is based on historical loss experience, an assessment of current economic conditions, the aging of outstanding receivables, the financial health of specific clients and probable losses. This evaluation is inherently judgmental and requires the use of estimates. The allowance for losses for bad debts is periodically re-evaluated and adjusted as more information about the ultimate collectability of fees receivable becomes available. Circumstances that could cause such allowance for losses to increase include changes in our clients’ liquidity and credit quality, other factors negatively impacting our clients’ ability to pay their obligations as they come due, and the effectiveness of our collection efforts.

Cost of services and product development (“COS”). COS expense includes the direct costs incurred in the creation and delivery of our products and services. These costs primarily relate to personnel.

Selling, general and administrative (“SG&A”). SG&A expense includes direct and indirect selling costs, general and administrative costs, facility costs and bad debt expense.

Commission expense. The Company records deferred commissions upon signing a customer contract and amortizes the deferred amount over a period that aligns with the transfer to the customer of the services to which the commissions relate. Note 9 — Revenue and Related Matters provides additional information regarding deferred commissions and the amortization of such costs.

Stock-based compensation expense. The Company accounts for stock-based compensation awards in accordance with FASB ASC Topics 505 and 718 and SEC Staff Accounting Bulletins No. 107 and No. 110. Stock-based compensation expense for equity awards is based on the fair value of the award on the date of grant. The Company recognizes stock-based compensation expense over the period that the related service is performed, which is generally the same as the vesting period of the underlying award. Forfeitures are recognized as they occur. Note 10 — Stock-Based Compensation provides additional information regarding the Company's stock-based compensation activity.

Other income, net. During 2019, the Company sold a minority equity investment for $14.1 million in cash and recognized a pretax gain of $9.1 million that was recorded in Other income, net in the Consolidated Statements of Operations.

Income taxes. The Company uses the asset and liability method of accounting for income taxes. We estimate our income taxes in each of the jurisdictions where we operate. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. When assessing the realizability of deferred tax assets, we consider if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the availability of loss carryforwards, projected reversals of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained based on the technical merits of the position. Recognized tax positions are measured at the largest amount of benefit with greater than a 50% likelihood of being realized. The Company uses estimates in determining the amount of unrecognized tax benefits associated with uncertain tax


positions. Significant judgment is required in evaluating tax law and measuring the benefits likely to be realized. Uncertain tax positions are periodically re-evaluated and adjusted as more information about their ultimate realization becomes available. Note 12 — Income Taxes provides additional information regarding the Company's income taxes.

On April 1, 2018, the Company early adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU No. 2018-02"). ASU No. 2018-02 provides an entity with the option to reclassify to retained earnings the tax effects from items that have been stranded in accumulated other comprehensive income as a result of the U.S. Tax Cuts and Jobs Act of 2017 (the “Act”). Gartner elected to early adopt ASU No. 2018-02 as of the beginning of the second quarter of 2018, which resulted in a reclassification of $0.6 million of stranded tax amounts related to the Act from Accumulated other comprehensive (loss) income, net to Accumulated earnings. ASU No. 2018-02 had no impact on the Company's operating results in 2019 or 2018.

On January 1, 2018, the Company adopted ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory ("ASU No. 2016-16"). ASU No. 2016-16 accelerates the recognition of taxes on certain intra-entity transactions. U.S. GAAP previously required deferral of the income tax implications of an intercompany sale of assets until the assets were sold to a third party or recovered through use. Under ASU No. 2016-16, a seller’s tax effects and a buyer’s deferred taxes on asset transfers are immediately recognized upon a sale. Pursuant to the transition rules in ASU No. 2016-16, any taxes attributable to pre-2018 intra-entity transfers that were previously deferred should be accelerated and recorded to accumulated earnings on the date of adoption. As a result, certain of the Company's balance sheet income tax accounts pertaining to pre-2018 intra-entity transfers, which aggregated $13.7 million, were reversed against accumulated earnings on January 1, 2018. Additionally, in accordance with the new requirements of SectionASU No. 2016-16, the Company recorded income tax benefits of approximately (i) $38.1 million in 2019 from an intercompany sale of certain intellectual property and (ii) $6.8 million in 2018 related to intra-entity transfers upon the merger of certain foreign subsidiaries. In the future, there could be a material impact from ASU No. 2016-16, depending on the nature, size and tax consequences of intra-entity transfers, if any.

Cash and cash equivalents and restricted cash. Cash and cash equivalents includes cash and all highly liquid investments with original maturities of three months or less, which are considered to be cash equivalents. The carrying value of cash equivalents approximates fair value due to the short-term maturity of such instruments. Investments with maturities of more than three months are classified as marketable securities. Interest earned is recorded in Interest income in the Consolidated Statements of Operations.

U.S. GAAP requires that amounts generally described as restricted cash and restricted cash equivalents be presented with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts presented on an entity's statement of cash flows. Below is a table presenting the beginning-of-period and end-of-period cash amounts from the Company's Consolidated Balance Sheets and the total cash amounts presented in the Consolidated Statements of Cash Flows (in thousands).
  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

(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, which was divested in 2018. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company's 2018 divestitures.

Leases. On January 1, 2019, the Company adopted ASU No. 2016-02, Leases. Prior to January 1, 2019, the Company recognized lease expense in accordance with then-existing U.S. GAAP under FASB ASC Topic 840, Leases. Information regarding the


Company's lease accounting, including our adoption of the new accounting standard, is provided below under the heading "Adoption of new accounting standards" and at Note 7 — Leases.
Property, equipment and leasehold improvements. Equipment, leasehold improvements and other fixed assets owned by the Company are recorded at cost less accumulated depreciation and amortization. Fixed assets, other than leasehold improvements, are depreciated using the straight-line method over the estimated useful life of the underlying asset. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the improvement or the remaining term of the related lease. Depreciation and amortization expense for fixed assets was $82.1 million, $68.6 million and $63.9 million in 2019, 2018 and 2017, respectively. Property, equipment and leasehold improvements, net are presented in the table below (in thousands).
  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


The Company incurs costs to develop internal-use software used in its operations. Certain of those costs that meet the criteria in FASB ASC Topic 350, Intangibles - Goodwill and Other are capitalized and amortized over future periods. Net capitalized internal-use software development costs were $55.7 million and $37.4 million at December 31, 2019 and 2018, respectively, and are included in Computer equipment and software in the table above. Amortization expense for capitalized internal-use software development costs, which is included with Depreciation in the Consolidated Statements of Operations, totaled $20.0 million, $13.2 million and $9.9 million in 2019, 2018 and 2017, respectively.

Goodwill. Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair values of the tangible and identifiable intangible net assets acquired. Evaluations of the recoverability of goodwill are performed in accordance with FASB ASC Topic 350, which requires an annual assessment of potential goodwill impairment at the reporting unit level and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

When performing our annual assessment of the recoverability of goodwill, we initially perform a qualitative analysis evaluating whether any events or circumstances occurred or exist that provide evidence that it is more likely than not that the fair value of any of our reporting units is less than the related carrying amount. If we do not believe that it is more likely than not that the fair value of any of our reporting units is less than the related carrying amount, then no quantitative impairment test is performed. However, if the results of our qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its respective carrying amount, then we perform a two-step quantitative impairment test. Evaluating the recoverability of goodwill requires judgments and assumptions regarding future trends and events. As a result, both the precision and reliability of our estimates are subject to uncertainty.

Our most recent annual impairment test of goodwill was a qualitative analysis conducted during the quarter ended September 30, 2019 that indicated no impairment. Subsequent to completing our 2019 annual impairment test, no events or changes in circumstances were noted that required an interim goodwill impairment test. Note 3 — Goodwill and Intangible Assets provides additional information regarding the Company's goodwill.

Finite-lived intangible assets. The Company has finite-lived intangible assets that are amortized using the straight-line method over the expected useful life of the underlying asset. Note 3 — Goodwill and Intangible Assets provides additional information regarding the Company's finite-lived intangible assets.

Impairment of long-lived assets. The Company's long-lived assets primarily consist of intangible assets other than goodwill and property, equipment and leasehold improvements. The Company reviews its long-lived asset groups for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or an asset group may not be recoverable. Such evaluation may be based on a number of factors, including current and projected operating results and cash flows, and changes in management’s strategic direction as well as external economic and market factors. The Company evaluates the recoverability of assets and asset groups by determining whether their carrying values can be recovered through undiscounted future operating cash flows. If events or circumstances indicate that the carrying values might not be recoverable based on undiscounted future operating


cash flows, an impairment loss may be recognized. The amount of impairment is measured based on the difference between the projected discounted future operating cash flows, using a discount rate reflecting the Company’s average cost of funds, and the carrying value of the asset or asset group. The Company did not record any impairment charges for long-lived assets or asset groups during the three-year period ended December 31, 2019.

Pension obligations. The Company has defined benefit pension plans at several of its international locations. Benefits earned and paid under those plans are generally based on years of service and level of employee compensation. The Company's defined benefit pension plans are accounted for in accordance with FASB ASC Topics 715 and 960. The Company determines the periodic pension expense and related liabilities for its defined benefit pension plans through actuarial assumptions and valuations. The service cost component of pension expense is recorded as SG&A expense and all other components of pension expense are recorded as Other income, net in the Consolidated Statements of Operations. Note 15 — Employee Benefits provides additional information regarding the Company's defined benefit pension plans.
Debt. The Company presents amounts borrowed in the Consolidated Balance Sheets, net of deferred financing fees. Interest accrued on amounts borrowed is recorded as Interest expense in the Consolidated Statements of Operations. Note 6 — Debt provides additional information regarding the Company's debt arrangements.

Foreign currency exposure. The functional currency of our foreign subsidiaries is typically the local currency. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average exchange rates for the year. The resulting translation adjustments are recorded as foreign currency translation adjustments, a component of Accumulated other comprehensive (loss) income, net within Stockholders’ Equity on the Consolidated Balance Sheets.
Currency transaction gains or losses arising from transactions denominated in currencies other than the functional currency of a subsidiary are recognized in results of operations as part of Other income, net in the Consolidated Statements of Operations. The Company had net currency transaction gains (losses) of $(1.1) million, $9.2 million and $(5.5) million in 2019, 2018 and 2017, respectively. The Company enters into foreign currency forward exchange contracts to mitigate the effects of adverse fluctuations in foreign currency exchange rates on certain transactions. Those contracts generally have short durations and are recorded at fair value with both realized and unrealized gains and losses recorded in Other income, net. The net gain (loss) from foreign currency forward exchange contracts was $(2.5) million, $(10.4) million and $0.8 million in 2019, 2018 and 2017, respectively. Note 13 — Derivatives and Hedging provides additional information regarding the Company's foreign currency forward exchange contracts.

Fair value disclosures. The Company has a limited number of assets and liabilities that are adjusted to fair value at each balance sheet date. The Company's required fair value disclosures are provided at Note 14 — Fair Value Disclosures.

Concentrations of credit risk. Assets that may subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, fees receivable, contract assets, interest rate swaps and a pension reinsurance asset. The majority of the Company’s cash equivalent investments and its interest rate swap contracts are with investment grade commercial banks. Fees receivable and contract asset balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographic dispersion. The Company’s pension reinsurance asset (see Note 15 — Employee Benefits) is maintained with a large international insurance company that was rated investment grade as of December 31, 2019 and 2018.

Stock repurchase programs. The Company records the cost to repurchase shares of its own common stock as treasury stock. Shares repurchased by the Company are added to treasury shares and are not retired. Note 8 — Stockholders' Equity provides additional information regarding the Company's common stock repurchase activity.

Adoption of new accounting standards. The Company adopted the accounting standards described below during 2019.

Targeted Improvements to Accounting for Hedging Activities — On January 1, 2019, the Company adopted ASU No. 2017-12, Derivatives and Hedging ("ASU No. 2017-12"). ASU No. 2017-12 is intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition to that main objective, the standard makes certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP. The adoption of the standard had no impact on the Company's consolidated financial statements.

Leases — On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (as amended, "ASU No. 2016-02" or 15(d)the “new lease standard”) using a modified retrospective approach. ASU No. 2016-02 significantly changes the accounting for leases because a right-of-use model is now used whereby a lessee must record a right-of-use asset and a related lease liability on its balance sheet for most of its leases. Under ASU No. 2016-02, leases are classified as either operating or finance arrangements, with such


classification affecting the pattern of expense recognition in an entity's income statement. For operating leases, ASU No. 2016-02 requires recognition in an entity’s income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis.

The adoption of the new lease standard had a material impact on the Company's Consolidated Balance Sheet as of December 31, 2019, while the Consolidated Statement of Operations and the cash provided by operating activities in the Consolidated Statement of Cash Flows in 2019 were not materially impacted. Prior to January 1, 2019, the Company recognized lease expense in accordance with then-existing U.S. GAAP under FASB ASC Topic 840, Leases (“ASC Topic 840”). Although there were significant changes to the Company’s leasing policies and procedures effective January 1, 2019 with the adoption of ASU No. 2016-02, the lease expense recognition patterns under ASU No. 2016-02 in 2019 and ASC Topic 840 in 2018 and 2017 were substantively the same. As required by the new lease standard, the Company's disclosures regardingits leasing activities have been significantly expanded to enable users of our consolidated financial statements to assess the amount, timing and uncertainty of cash flows related to leases. Information regarding our adoption of ASU No. 2016-02 and its impact on the Company's consolidated financial statements and related disclosures is provided at Note 7 — Leases.

Accounting standards issued but not yet adopted. The FASB has issued accounting standards that had not yet become effective as of December 31, 2019 and may impact the Company’s consolidated financial statements or related disclosures in future periods. Those standards and their potential impact are discussed below.

Accounting standards effective in 2020

Implementation Costs in a Cloud Computing Arrangement — In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU No. 2018-15"). ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Costs that are capitalized under ASU No. 2018-15 will be expensed over the term of the cloud computing arrangement. Gartner adopted ASU No. 2018-15 on January 1, 2020 on a prospective basis. We have concluded that the adoption of ASU No. 2018-15 will not have a material impact on the Company's consolidated financial statements; however, the new standard will change the classification of certain items on the Company's consolidated balance sheets, statements of operations and statements of cash flows in future periods.

Defined Benefit Plan Disclosures — In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU No. 2018-14"). ASU No. 2018-14, which is part of the FASB's broader disclosure framework project, modifies and supplements the current U.S. GAAP annual disclosure requirements for employers that sponsor defined benefit pension plans. ASU No. 2018-14 is effective for Gartner in 2020. ASU No. 2018-14 must be adopted on a retroactive basis and applied to each comparative period presented in an entity's financial statements. The adoption of ASU No. 2018-14 is currently not expected to have a material impact on the Company's financial statement disclosures.

Fair Value Measurement Disclosures — In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU No. 2018-13"). ASU No. 2018-13, which is part of the FASB's broader disclosure framework project, modifies and supplements the current U.S. GAAP disclosure requirements pertaining to fair value measurements, with an emphasis on Level 3 disclosures of the valuation hierarchy. Gartner adopted ASU No. 2018-13 on January 1, 2020. We have concluded that the adoption of ASU No. 2018-13 will not have a material impact on the Company's consolidated financial statements.

Goodwill Impairment — In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other - Simplifying the Test for Goodwill Impairment ("ASU No. 2017-04"). ASU No. 2017-04 simplifies the determination of the amount of goodwill to be potentially charged off by eliminating Step 2 of the goodwill impairment test under current U.S. GAAP. Gartner adopted ASU No. 2017-04 on January 1, 2020. We have concluded that the adoption of ASU No. 2017-04 will not have a material impact on the Company's consolidated financial statements.

Financial Instrument Credit Losses — In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses ("ASU No. 2016-13"). ASU No. 2016-13 amends the current financial instrument impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. Gartner adopted ASU No. 2016-13 on January 1, 2020. We have concluded that the adoption of ASU No. 2016-13 will not have a material impact on the Company's consolidated financial statements; however, certain enhanced disclosures required by the standard will be provided in the Company's Form 10-Q filing for the quarterly period ending March 31, 2020.




Accounting standard effective in 2021

Simplifying the Accounting for Income Taxes — In December 2019, the FASB issued ASU No. 2019-12, Income Taxes—Simplifying the Accounting for Income Taxes ("ASU No. 2019-12"). ASU No. 2019-12 provides new guidance to simplify the accounting for income taxes in certain areas, changes the accounting for select income tax transactions and makes minor ASC improvements. ASU No. 2019-12 is effective for Gartner on January 1, 2021, including interim periods in the year of adoption. Early adoption is permitted. The method of adoption varies depending on the component of the new rule that is being adopted. We are currently evaluating the potential impact of ASU No. 2019-12 on our consolidated financial statements.

2 — ACQUISITIONS AND DIVESTITURES

Acquisitions

Year Ended December 31, 2019

On October 1, 2019, the Company acquired 100% of the outstanding membership interests of TOPO Research LLC ("TOPO"), a privately-held company based in Redwood City, California, for $25.0 million. TOPO is a subscription-based research and advisory business. The acquisition of TOPO expanded our market presence, product offerings and other business opportunities.

For cash flow reporting purposes, the Company paid $23.7 million in cash for TOPO after considering the cash acquired with the business and certain other purchase price adjustments at closing. In addition to the purchase price, the Company may also be required to pay up to $6.5 million in cash in the future based on the continuing employment of certain key employees. Such amount will be recognized as compensation expense over two years and will be reported in Acquisition and integration charges in the Consolidated Statements of Operations.

As of December 31, 2019, the allocation of the purchase price for the TOPO acquisition is preliminary with respect to certain tax matters and the finalization of working capital adjustments. The table below summarizes the preliminary purchase price allocation based on the fair value of the assets acquired and liabilities assumed (in thousands).
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)We believe that the recorded goodwill is supported by the anticipated synergies resulting from the acquisition. All of the recorded goodwill is expected to be deductible for tax purposes.
(2)The acquired finite-lived intangible assets primarily consisted of customer relationships and content, which are being amortized over 6 years and 1.5 years, respectively. To determine the fair values of the acquired intangible assets, we primarily relied on income valuation methodologies, in particular, discounted cash flow models.

The operating results of the acquired TOPO business and the related goodwill are being reported as part of the Company's Research and Conferences segments. The operating results of TOPO have been included in the Company's consolidated financial statements since the date of acquisition; however, such operating results were not material to the Company's consolidated operating results and segment results. Had the Company acquired TOPO in prior periods, the impact on the Company's operating results would not have been material and, as a result, pro forma financial information for prior periods has not been presented herein.

During 2019, the Company also paid $2.3 million of restricted cash for deferred consideration from a 2017 acquisition.






Year Ended December 31, 2018

Although the Company did not complete any business acquisitions during 2018, it paid $15.9 million of restricted cash during that year for deferred consideration from a 2017 acquisition.

Year Ended December 31, 2017

CEB Inc. ("CEB")

On April 5, 2017, the Company acquired 100% of the outstanding capital stock of CEB for an aggregate purchase price of $3.5 billion. The consideration transferred by Gartner included approximately $2.7 billion in cash and Gartner common shares with a fair value of $818.7 million. CEB was a publicly-traded company headquartered in Arlington, Virginia with approximately 4,900 employees. CEB's primary business was to serve as a leading provider of subscription-based, best practice research and analysis focusing on human resources, sales, finance, IT and legal. CEB served executives and professionals at corporate and middle market institutions in over 70 countries.

L2, Inc. ("L2")

On March 9, 2017, the Company acquired 100% of the outstanding capital stock of L2, a privately-held company based in New York City with 150 employees, for an aggregate purchase price of $134.2 million. L2 is a subscription-based research business that benchmarks the digital performance of brands.

Total consideration transferred

The table below summarizes the aggregate consideration transferred for the Company's acquisitions during 2017 (in thousands).
Aggregate consideration (1):
CEB L2 Total
Cash paid at close (2), (3)$2,687,704
 $134,199
 $2,821,903
Additional cash paid (2)12,465
 — 12,465
Fair value of Gartner equity (4)818,660
 — 818,660
   Total$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 an additional $12.5 million in cash during the third quarter of 2017. Net of cash acquired and for cash flow reporting purposes, the Company paid a total of approximately $2.64 billion in cash for acquisitions in 2017.
(3)The Company borrowed a total of approximately $2.8 billion in conjunction with the CEB acquisition (see Note 6 — Debt for additional information).
(4)Consists of the fair value of (i) Gartner common stock issued and (ii) stock-based compensation replacement awards. As part of the consideration for the CEB acquisition, the Company issued approximately 7.4 million shares of its common stock at a fair value of $109.65 per common share. The fair value of the Company's common stock was determined based on an average of the high and low prices of the common stock as reported by the New York Stock Exchange on April 5, 2017, the date of the acquisition.



Allocation of Purchase Price

The table below summarizes the allocation of the aggregate purchase price for the CEB and L2 acquisitions to the fair value of the assets acquired and liabilities assumed (in thousands).
 
CEB (3)
 
L2 (4)
 Total
Assets:     
Cash$194,706
 $4,852
 $199,558
Fees receivable175,440
 8,277
 183,717
Prepaid expenses and other current assets53,610
 1,167
 54,777
Property, equipment and leasehold improvements51,399
 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 assets66,818
 13,067
 79,885
Total assets4,475,862
 152,118
 4,627,980
Liabilities:    
Accounts payable and accrued liabilities142,134
 3,050
 145,184
Deferred revenues (current)246,472
 13,200
 259,672
Other liabilities568,427
 1,669
 570,096
Total liabilities957,033
 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 prior to the respective closing dates. For CEB, among the factors contributing to the anticipated synergies were a broader market presence, expanded product offerings and market opportunities, and an acceleration of CEB's growth by leveraging Gartner's global infrastructure and best practices in sales productivity and other areas. None of the goodwill is deductible for tax purposes.
(2)All of the acquired intangible assets were finite-lived. The determination of the fair values of such intangible assets required judgment and the consideration of a number of factors. In determining the fair values, management primarily relied on income valuation methodologies, in particular, discounted cash flow models. The discounted cash flow models required the use of certain estimates, including projected cash flows related to the asset being evaluated; the useful lives of the affected assets; the selection of royalty and discount rates used in the models; and certain published industry benchmark data. When establishing the estimated useful lives of the finite-lived intangible assets, the Company relied on both internally-generated data for similar assets as well as certain published industry benchmark data. We believe that the values assigned to the finite-lived intangible assets are both reasonable and supportable.
(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 have been reported as part of the Company's Research, Conferences and Other segments. Had the Company acquired CEB in prior periods, the impact on the Company's operating results would have been material. If the Company had acquired CEB on January 1, 2016, the pro forma consolidated financial results for 2017 would have approximated the amounts shown in the table below (in thousands, except per share data).
Pro forma total revenue $3,726,470
Pro forma net income 150,167
Pro forma basic and diluted income per share $1.66

The pro forma results have been prepared in accordance with U.S. GAAP and include the following pro forma adjustments:
(a) An increase in interest expense and amortization of debt issuance costs related to the financing of the CEB acquisition. Note 6 — Debt provides further information regarding the Company's borrowings related to the CEB acquisition.
(b) A change in revenue as a result of the required fair value adjustment to deferred revenue.
(c) An adjustment for additional depreciation and amortization expense as a result of the purchase price allocation for finite-lived intangible assets and property, equipment and leasehold improvements.
(4)The Company's consolidated financial statements include the operating results of L2 beginning on March 9, 2017, the date of acquisition. L2's operating results and the related goodwill are being reported as part of the Company's Research segment. For 2017, L2's operating results were not material to the Company's consolidated operating results and segment results. Had the Company acquired L2 in prior periods, the impact on the Company's operating results would not have been material and, as a result, pro forma prior period financial information for L2 has not been presented herein.



Acquisition and Integration Charges

The Company recognized $9.5 million, $107.2 million and $158.5 million of Acquisition and integration charges during 2019, 2018 and 2017, respectively. Acquisition and integration charges reflect additional costs and expenses resulting from our acquisitions and include, among other items, professional fees, severance and stock-based compensation charges. During 2018 and 2017, the charges included $58.3 million and $13.1 million of exit costs for certain acquisition-related office space in Arlington, Virginia that the Company did not occupy. The Company recorded no exit costs for facilities during 2019.

The table below presents a summary of the activity related to our accrual for exit costs at all of our facilities during 2018 and 2017 (in thousands) (1).
 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.

Divestitures

During 2018, the Company completed the divestitures of all 3 of the non-core businesses comprising its Other segment, each of which were acquired in the CEB acquisition. Revenue from those divested operations was approximately $97.3 million and $165.7 million in 2018 and 2017, respectively, while the gross contribution was $60.5 million and $86.5 million, respectively. The Company used the cash proceeds from these divestitures to pay down debt.

Additional information regarding the Other segment divestitures is provided below.

CEB Challenger training business

On August 31, 2018, the Company sold its CEB Challenger training business for $119.1 million and realized approximately $116.0 million in cash, which is net of working capital adjustments and certain closing costs. The Company recorded a pretax gain on the sale of approximately $8.3 million.

CEB Workforce Survey and Analytics business

On May 1, 2018, the Company sold its CEB Workforce Survey and Analytics business for $28.0 million and realized approximately $26.4 million in cash, which is net of certain closing costs. The Company recorded a pretax gain on the sale of approximately $8.8 million.

CEB Talent Assessment business

On April 3, 2018, the Company sold its CEB Talent Assessment business for $403.0 million and realized approximately $375.8 million in cash from the sale, which is net of cash transferred with the business and certain closing costs. The Company recorded a pretax gain of approximately $15.5 million on the sale.

Other asset sales

During 2018, the Company also received $8.6 million in cash proceeds as well as other consideration and recorded a net pretax gain of approximately $12.8 million from the sale of certain non-core assets originally acquired in the CEB transaction. These amounts include the sale of a small Research segment product called Metrics That Matter on October 31, 2018.



3 — GOODWILL AND INTANGIBLE ASSETS

Goodwill. The table below presents changes to the carrying amount of goodwill by segment during the two-year period ended December 31, 2019 (in thousands).
 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, 20182,638,418
 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.

Finite-lived intangible assets. Changes in finite-lived intangible assets during the two-year period ended December 31, 2019 are presented in the tables below (in thousands).
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.



Amortization expense related to finite-lived intangible assets was $129.7 million, $187.0 million and $176.3 million in 2019, 2018 and 2017, respectively. The estimated future amortization expense by year for finite-lived intangible assets is presented in the table below (in thousands).
2020$126,081
2021105,007
202295,194
202395,179
202489,863
2025 and thereafter413,763
 $925,087


4 — OTHER ASSETS
The Company's other assets are summarized in the table below (in thousands).
 December 31,
 2019 2018
Benefit plan-related assets$84,600
 $75,653
Non-current deferred tax assets79,618
 34,494
Other58,027
 46,222
Total other assets$222,245
 $156,369


5 — ACCOUNTS PAYABLE AND ACCRUED AND OTHER LIABILITIES

The Company's Accounts payable and accrued liabilities are summarized in the table below (in thousands).
 December 31,
 2019 2018
Accounts payable$32,995
 $37,508
Payroll and employee benefits payable165,449
 143,803
Severance and retention bonus payable24,281
 28,292
Bonus payable192,100
 170,719
Commissions payable142,499
 126,844
Taxes payable7,878
 19,725
Current portion of operating lease liabilities (1)76,516
 —
Other accrued liabilities147,078
 183,222
Total accounts payable and accrued liabilities$788,796
 $710,113

(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.














The Company's Other liabilities are summarized in the table below (in thousands).
 December 31,
 2019 2018
Non-current deferred revenues$24,409
 $21,194
Long-term taxes payable63,565
 66,304
Benefit plan-related liabilities108,615
 96,033
Lease-related matters prior to the adoption of ASU No. 2016-02 (1)—
 165,374
Non-current deferred tax liabilities189,814
 214,687
Other, including fair value of interest rate swap contracts93,343
 50,081
Total other liabilities$479,746
 $613,673

(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.

6 — DEBT
2016 Credit Agreement

The Company entered into a term loan and revolving credit facility on June 17, 2016 (the "2016 Credit Agreement"). As discussed below, the 2016 Credit Agreement was amended during 2017 in connection with the acquisition of CEB. The 2016 Credit Agreement, as amended, provided for a $1.5 billion Term loan A facility, a $500.0 million Term loan B facility and a $1.2 billion revolving credit facility. The 2016 Credit Agreement contains certain customary restrictive loan covenants, including, among others, financial covenants that apply a maximum leverage ratio and a minimum interest expense coverage ratio, and covenants limiting Gartner’s ability to incur indebtedness, grant liens, make acquisitions, merge, dispose of assets, pay dividends, repurchase stock, make investments and enter into certain transactions with affiliates. The Company was in full compliance with the covenants as of December 31, 2019.

During 2017, the Company borrowed approximately $2.8 billion for the CEB acquisition. The Company borrowed $1.675 billion under the 2016 Credit Agreement, which consisted of $900.0 million under an increased Term loan A facility, $500.0 million under a new Term loan B facility and $275.0 million on an existing revolving credit facility. The $1.675 billion drawn under the 2016 Credit Agreement, along with funds raised through the issuance of $800.0 million Senior Notes due 2025 and a $300.0 million 364-day Bridge Credit Facility, were used to fund the CEB acquisition and related costs. The funds borrowed under the 364-day Bridge Credit Facility were completely repaid during 2017 and the borrowings under the Term loan B facility were completely repaid during 2018.

On January 20, 2017, the Company entered into a first amendment to the 2016 Credit Agreement, which was entered into to permit the acquisition of CEB and the incurrence of additional debt to finance, in part, the acquisition and repay certain debt of CEB, and to modify certain covenants. On March 20, 2017, the Company entered into a second amendment to the 2016 Credit Agreement. The second amendment was also entered into in connection with the acquisition of CEB and was executed primarily to extend the maturity date of the Term loan A facility and the revolving credit facility through March 20, 2022 and to revise the interest rate and amortization schedule. On April 5, 2017, in conjunction with the closing of the CEB acquisition, the Company entered into a third amendment to the 2016 Credit Agreement, which increased the aggregate principal amount of the existing Term loan A facility by $900.0 million and added the Term loan B facility in an aggregate principal amount of $500.0 million.

The Term loan A facility is being repaid in 16 consecutive quarterly installments that commenced on June 30, 2017, plus a final payment to be made on March 20, 2022. The revolving credit facility may be borrowed, repaid and re-borrowed through March 20, 2022, at which time all then-outstanding amounts must be repaid. Amounts borrowed under the Term loan A facility and the revolving credit facility bear interest at a rate equal to, at the Company's option, either:

(i) the greatest of: (x) the Administrative Agent’s prime rate; (y) the rate calculated by the New York Federal Reserve Bank for federal funds transactions plus 1/2 of 1%; and (z) the eurodollar rate (adjusted for statutory reserves) plus 1%, in each case plus a margin equal to between 0.125% and 1.50%, depending on Gartner’s consolidated leverage ratio as of the end of the four consecutive fiscal quarters most recently ended; or



(ii) the eurodollar rate (adjusted for statutory reserves) plus a margin equal to between 1.125% and 2.50%, depending on Gartner’s consolidated leverage ratio as of the end of the four consecutive fiscal quarters most recently ended.

During 2018, the Company repaid the entire $496.3 million that was outstanding under the Term loan B facility. The Term loan B facility was scheduled to mature on April 5, 2024 and the amounts outstanding thereunder bore interest at a rate per annum equal to, at the option of Gartner, (i) adjusted LIBOR plus 2.00% or (ii) an alternate base rate plus 1.00%.
364-day Bridge Credit Facility

On April 5, 2017, the Company entered into a senior unsecured 364-day Bridge Credit Facility in an aggregate principal amount of $300.0 million, which was immediately drawn down to fund a portion of the purchase price associated with the CEB acquisition. The Company repaid the entire $300.0 million of the 364-day Bridge Credit Facility during 2017.

Senior Notes

On March 30, 2017, the Company issued $800.0 million aggregate principal amount of 5.125% Senior Notes due 2025 (the “Senior Notes”). The proceeds of the Senior Notes were used to fund a portion of the purchase price associated with the CEB acquisition.

The Senior Notes were issued at an issue price of 100.0% and bear interest at a fixed rate of 5.125% per annum. Interest on the Senior Notes is payable on April 1 and October 1 of each year. The Senior Notes mature on April 1, 2025. The Company may redeem some or all of the Senior Notes at any time on or after April 1, 2020 for cash at the redemption prices set forth in the Note Indenture, plus accrued and unpaid interest to, but not including, the redemption date. Prior to April 1, 2020, the Company may redeem up to 40% of the aggregate principal amount of the Senior Notes with the proceeds of certain equity offerings at a redemption price of 105.125% plus accrued and unpaid interest to, but not including, the redemption date. In addition, the Company may redeem some or all of the Senior Notes prior to April 1, 2020 at a redemption price of 100% of the principal amount of the Senior Notes plus accrued and unpaid interest to, but not including, the redemption date, plus a “make-whole” premium. If the Company experiences certain kinds of changes of control, it will be required to offer to purchase the Senior Notes at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest.

The Senior Notes are the Company’s general unsecured senior obligations, and are effectively subordinated to all of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness, structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s non-guarantor subsidiaries, equal in right of payment to all of the Company’s and the Company’s guarantor subsidiaries’ existing and future senior indebtedness and senior in right of payment to all of the Company’s future subordinated indebtedness, if any.

Outstanding Borrowings

The table below summarizes the Company’s total outstanding borrowings as of the dates indicated (in thousands).
  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, 2019 on the Term loan A facility and the revolving credit facility was 3.30%, which consisted of a floating eurodollar base rate of 1.80% plus a margin of 1.50%. However, the Company has interest rate swap contracts that effectively convert the floating eurodollar base rates on outstanding amounts to a fixed base rate.
(2)The Company had approximately $1.0 billion of available borrowing capacity on the revolver (not including the expansion feature) as of December 31, 2019.
(3)Consists of 800.0 million principal amount of Senior Notes outstanding. The Senior Notes bear interest at a fixed rate of 5.125% and mature on April 1, 2025.


(4)Consists of 2 State of Connecticut economic development loans as of December 31, 2019. One of the loans originated in 2012, has a 10-year maturity and the outstanding balance of $1.5 million as of December 31, 2019 bears interest at a fixed rate of 3.00%. In connection with an expansion project at its Stamford, Connecticut headquarters, the Company borrowed $5.0 million during 2019 under a financial assistance program offered by the State of Connecticut. This second loan has a 10-year maturity and bears interest at a fixed rate of 1.75%. Principal and interest payments are deferred for the first seven years. The loan has a provision whereby some or all of the $5.0 million principal may be forgiven if the Company meets certain employment targets in the State of Connecticut during the first five years of the loan. Both of these loans may be repaid at any time by the Company without penalty.
(5)The weighted average annual effective rate on the Company's outstanding debt for 2019, including the effects of its interest rate swaps discussed below, was 4.11%.
(6)The contractual due dates of principal amounts by year for the Company's outstanding debt as of December 31, 2019 were as follows: $139.7 million in 2020; $37.6 million in 2021; $1.2 billion in 2022; $800.0 million in 2025 and $5.0 million thereafter.
(7)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 for deferred financing fees and recorded a charge of approximately $6.1 million for the write-off of deferred financing fees related to a prior financing arrangement.

Interest Rate Swaps
As of December 31, 2019, the Company had 4 fixed-for-floating interest rate swap contracts with a total notional value of $1.4 billion that mature through 2025. The Company designates the swaps as accounting hedges of the forecasted interest payments on $1.4 billion of its variable-rate borrowings. The Company pays base fixed rates on these swaps ranging from 2.13% to 3.04% and in return receives a floating eurodollar base rate on 30-day notional borrowings.

The Company accounts for its interest rate swap contracts as cash flow hedges in accordance with FASB ASC Topic 815. Because the swaps hedge forecasted interest payments, changes in the fair values of the swaps are recorded in accumulated other comprehensive income (loss), a component of stockholders' equity, as long as the swaps continue to be highly effective hedges of the designated interest rate risk. Any ineffective portion of a change in the fair value of a hedge is recorded in earnings. All of the Company's interest rate swaps were considered highly effective hedges of the forecasted interest payments as of both December 31, 2019 and 2018. The interest rate swaps had net negative unrealized fair values (liabilities) of $64.8 million and $10.7 million as of December 31, 2019 and 2018, respectively. Such amounts were deferred and recorded in Accumulated other comprehensive loss, net of tax effect. See Note 14 — Fair Value Disclosures for the determination of the fair values of Company's interest rate swaps.

7 — LEASES

As discussed in Note 1 — Business and Significant Accounting Policies, the Company adopted ASU No. 2016-02 on January 1, 2019 using a modified retrospective approach. We elected to use an optional transition method available under ASU No. 2016-02 to record the required cumulative effect adjustments to the opening balance sheet in the period of adoption rather than in the earliest comparative period presented. As such, the Company's historical consolidated financial statements have not been restated.

Under ASC Topic 840, which was the U.S. GAAP lease accounting standard before ASU No. 2016-02, lease arrangements that met certain criteria were considered operating leases and were not recorded on an entity's balance sheet. Prior to January 1, 2019 and through December 31, 2019, all of the Company’s lease arrangements were accounted for as operating leases. The adoption of ASU No. 2016-02 on January 1, 2019 had a material impact on the Company’s consolidated balance sheet due to the recognition of right-of-use assets of $651.9 million and related lease liabilities of $851.3 million. The Company’s adoption of ASU No. 2016-02 resulted in a net increase of $638.7 million in each of Total Assets and Total Liabilities. The adoption of the new lease standard did not affect Stockholders’ Equity.

In connection with our adoption of ASU No. 2016-02, we elected to use certain practical expedients under the new lease standard and made other elections that impact the Company's lease accounting. We elected to use these practical expedients in connection with the adoption of ASU No. 2016-02 because, among other things, they simplified the adoption of the new lease standard, streamlined our internal processes and minimized the associated costs. The critical practical expedients and accounting policy elections used by the Company for all classes of leases accounted for under ASU No. 2016-02 were as follows:

Existing contracts were not reassessed to determine if they contained leases.
Existing leases were not reassessed to determine if their classification should be changed.
Initial direct costs for existing leases were not reassessed.


Lease components and nonlease components (e.g., common area maintenance charges, etc.) for each lease arrangement were accounted for as a single lease component for purposes of the recognition and measurement requirements of ASU No. 2016-02.
The incremental borrowing rate used for the purpose of measuring each of our lease liabilities was derived by reference to the related lease’s remaining minimum payments and remaining lease term on the date of adopting the new lease standard. We used incremental borrowing rates because we were unable to determine the implicit interest rates in our leases.

Leasing Activities

The Company’s leasing activities are primarily for facilities under cancelable and non-cancelable lease agreements expiring during 2020 and through 2038. These facilities support our executive and administrative activities, research and consulting, sales, systems support, operations, and other functions. The Company also has leases for office equipment and other assets, which are not significant. Certain of the Company's lease agreements include (i) renewal options to extend the lease term for up to ten years and/or (ii) options to terminate the agreement within one year. Additionally, certain of the Company’s lease agreements provide standard recurring escalations of lease payments for, among other things, increases in a lessor’s maintenance costs and taxes. Under some lease agreements, the Company may be entitled to allowances, free rent, lessor-financed tenant improvements and other incentives. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Prior to January 1, 2019, the Company recognized lease expense in accordance with ASC Topic 840. Because both ASU No. 2016-02 and ASC Topic 840 generally recognize operating lease expense on a straight-line basis over the term of the lease arrangement and the Company only has operating lease arrangements, the lease expense recognition patterns under the two accounting methodologies during 2019, 2018 and 2017 were substantively the same.

Except for lease arrangements pertaining to facilities, all other operating lease activity is not material. As such, operating leases for office equipment and other assets (collectively, the “Other Leases”) are: (i) not recognized and measured under the relevant provisions of ASU No. 2016-02; (ii) excluded from the right-of-use assets and related lease liabilities on the Consolidated Balance Sheet as of December 31, 2019; and (iii) excluded from the quantitative disclosures provided below, other than the disclosures under the heading "Lease Disclosures Under ASC Topic 840." The Other Leases are accounted for similar to the guidance for operating leases under ASC Topic 840, which generally recognizes lease expense on a straight-line basis over the term of the lease arrangement. As a result, the impact of excluding the Other Leases from the requirements of ASU No. 2016-02 is not significant.

The Company subleases certain office space that it does not intend to occupy. Such sublease arrangements expire during 2020 and through 2032 and primarily relate to facilities in Arlington, Virginia. Certain of the Company’s sublease agreements: (i) include renewal and termination options; (ii) provide for customary escalations of lease payments in the normal course of business; and (iii) grant the subtenant certain allowances, free rent, Gartner-financed tenant improvements and other incentives.

Lease Accounting under ASU No. 2016-02

Under ASU No. 2016-02, a lease is a contract or an agreement, or a part of another arrangement, between two or more parties that, at its inception, creates enforceable rights and obligations that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.

Right-of-use assets represent a right to use an underlying asset for the lease term and the related lease liability represents an obligation to make lease payments pursuant to the contractual terms of the lease agreement. Right-of-use assets and lease liabilities are initially recognized on the lease commencement date based on the present value of the lease payments over the lease term. For all of our facilities leases, we account for both lease components and nonlease components (e.g., common area maintenance charges, etc.) as a single lease component when determining the present value of our lease payments. Variable lease payments that are not dependent on an index or a rate are excluded from the determination of our right-of-use assets and lease liabilities and such payments are recognized as expense in the period when the related obligation is incurred.

The Company’s lease agreements do not provide implicit interest rates. Instead, the Company uses an incremental borrowing rate determined on the lease commencement date to calculate the present value of future lease payments. The incremental borrowing rate is calculated for each individual lease and represents the rate of interest that the Company would have to pay to borrow on a collateralized basis (in the currency that the lease is denominated) over a similar term an amount equal to the lease payments in a similar economic environment. Right-of-use assets also include any initial direct costs incurred by the Company and lease payments made to a lessor on or before the related lease commencement date, less any lease incentives received directly from the lessor.



Certain of the Company’s facility lease agreements include options to extend or terminate the lease. When it is reasonably certain that the Company will exercise a renewal or termination option, the present value of the lease payments for the affected lease is adjusted accordingly. Leases with a term of twelve months or less are accounted for in the same manner as long-term lease arrangements, including any related disclosures. Lease expense for operating leases is generally recognized on a straight-line basis over the lease term, unless the related right-of-use asset was previously impaired.

All of our existing sublease arrangements have been classified as operating leases with sublease income recognized on a straight-line basis over the term of the sublease arrangement. To measure the Company’s periodic sublease income, we elected to use a practical expedient under ASU No. 2016-02 to aggregate nonlease components with the related lease components when (i) the timing and pattern of transfer for the nonlease components and the related lease components are the same and (ii) the lease components, if accounted for separately, would be classified as an operating lease. This practical expedient applies to all of our existing sublease arrangements.

When our projected lease cost for the term of a sublease exceeds our anticipated sublease income for that same period, we treat that circumstance as an indicator that the carrying amount of the related right-of-use assetmay not be fully recoverable. In those situations, we perform an impairment analysis and, if indicated, we record a charge against earnings to reduce the right-of-use asset to the amount deemed to be recoverable in the future. There were no right-of-use asset impairments during 2019.

On the Consolidated Balance Sheet as of December 31, 2019, right-of-use assets are classified and reported in Operating lease right-of-use assets, and the related lease liabilities are included in Accounts payable and accrued liabilities (current) and Operating lease liabilities (long-term). On the Consolidated Statement of Cash Flows for 2019, the reduction in the carrying amount of right-of-use assets is presented separately and the change in operating lease liabilities is included under Accounts payable and accrued and other liabilities in the reconciliation of net income to cash provided by operating activities.

Lease Disclosures Under ASU No. 2016-02

All of the Company’s leasing and subleasing activity for 2019 is recognized in Selling, general and administrative expense in the Consolidated Statements of Operations. The table below presents the Company’s net lease cost and certain other information related to our leasing activities as of and for the year ended December 31, 2019 (dollars in thousands).
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 leases6.7%
(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.








As of December 31, 2019, the (i) maturities of operating lease liabilities under non-cancelable arrangements and (ii) estimated future sublease cash receipts from non-cancelable arrangements were as follows (in thousands):
  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.

The table below indicates where the discounted operating lease payments from the above table are classified in the Consolidated Balance Sheet as of December 31, 2019 (in thousands).
Description  
Accounts payable and accrued liabilities $76,516
Operating lease liabilities 832,533
Total operating lease liabilities per the Consolidated Balance Sheet $909,049


As of December 31, 2019, the Company had additional operating leases for facilities that have not yet commenced. These operating leases, which aggregated $50.2 million of undiscounted lease payments, are scheduled to commence during 2020 and 2021 with lease terms of up to ten years.

Lease Disclosures Under ASC Topic 840

Based on the Company's selected method of adoption for ASU No. 2016-02, the disclosures presented below from ASC Topic 840 are required herein.

As of December 31, 2018, future minimum annual cash payments under non-cancelable operating lease agreements for facilities, office equipment and other assets, which expired in 2019 and through 2038, were as follows (in thousands):
Year ended or ending December 31, 
2019$130,991
2020121,802
2021118,945
2022111,117
2023106,113
Thereafter689,360
Total minimum lease payments (1)$1,278,328
(1) Excludes approximately $372.0 million of sublease income.

The Company's operating lease expense under ASC Topic 840 for its facilities, office equipment and other assets was $93.5 million and $87.9 million in 2018 and 2017, respectively. The cost of such operating leases, including any contractual rent increases, rent concessions and landlord incentives, was recognized ratably over the life of the related lease agreement.



8 — STOCKHOLDERS’ EQUITY
Common stock. Holders of Gartner’s common stock, par value $0.0005 per share, are entitled to 1 vote per share on all matters to be voted by stockholders. The Company does not currently pay cash dividends on its common stock. Also, our 2016 Credit Agreement contains a negative covenant that may limit our ability to pay dividends. The table below summarizes transactions relating to the Company's common stock for the three years ended December 31, 2019.
 
Issued
Shares
 
Treasury
Stock
Shares
Balance at December 31, 2016156,234,415
 73,583,172
Issued in connection with the acquisition of CEB (1)7,367,652
 —
Issuances under stock plans—
 (1,186,150)
Purchases for treasury (2)—
 382,183
Balance at December 31, 2017163,602,067
 72,779,205
Issuances under stock plans—
 (933,246)
Purchases for treasury (2), (3)—
 2,054,018
Balance at December 31, 2018163,602,067
 73,899,977
Issuances under stock plans—
 (825,115)
Purchases for treasury (2), (3)—
 1,369,426
Balance at December 31, 2019163,602,067
 74,444,288
(1)Note 2 — Acquisitions and Divestitures provides additional information regarding the CEB acquisition.
(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 included shares repurchased in December 2018 that settled in January 2019. Additionally, the shares repurchased during 2019 included shares repurchased in December 2019 that settled in January 2020.

Share repurchase authorization. The Company has a $1.2 billion board authorization to repurchase its common stock, of which $0.7 billion remained available as of December 31, 2019. The Company may repurchase its common stock from time-to-time in amounts, at prices and in the manner that the Company deems appropriate, subject to the availability of stock, prevailing market conditions, the trading price of the stock, the Company’s financial performance and other conditions. Repurchases may be made through open market purchases (which may include repurchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended,amended), accelerated share repurchases, private transactions or other transactions and will be funded by cash on hand and borrowings.



Accumulated Other Comprehensive Income (Loss), net ("AOCI/L")

The tables below provide information about the registrantchanges in AOCI/L by component and the related amounts reclassified out of AOCI/L to income during the years indicated (net of tax, in thousands) (1).

Year Ended December 31, 2019
 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)

Year Ended December 31, 2018
 Interest Rate Swaps Defined Benefit Pension Plans Foreign Currency Translation Adjustments Total
Balance - December 31, 2017$2,483
 $(5,861) $4,886
 $1,508
Adoption of ASU No. 2018-02 (4)591
 —
 —
 591
Other comprehensive income (loss) activity during the year:       
   Change in AOCI/L before reclassifications to income(9,447) —
 29,066
 19,619
   Reclassifications from AOCI/L to income (2), (3), (5)(1,397) 123
 (60,311) (61,585)
Other comprehensive income (loss) for the year(10,844) 123
 (31,245) (41,966)
Balance - December 31, 2018$(7,770) $(5,738) $(26,359) $(39,867)
(1) Amounts in parentheses represent debits (deferred losses).
(2) The reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net of tax effect. See Note 6 – Debt and Note 13 – Derivatives and Hedging for information regarding the cash flow hedges.
(3) The reclassifications related to defined benefit pension plans were primarily recorded in Selling, general and administrative expense, net of tax effect. See Note 15 – Employee Benefits for information regarding the Company’s defined benefit pension plans.
(4) See Note 1 – Business and Significant Accounting Policies for additional information regarding the Company's adoption of ASU No. 2018-02.
(5) The reclassification related to foreign currency translation adjustments in 2018 was recorded in (Loss) gain from divested operations. See Note 2 – Acquisitions and Divestitures for information regarding our divestitures in 2018.
9 — REVENUE AND RELATED MATTERS

As discussed in Note 1 — Business and Significant Accounting Policies, the Company adopted ASU No. 2014-09 on January 1, 2018. ASU No. 2014-09 is intended to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in previously existing revenue recognition rules; provide a more robust framework for addressing revenue recognition issues; improve comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and provide more useful information to users of financial statements through improved disclosures.

The adoption of ASU No. 2014-09 did not have a material impact on the Company's consolidated financial statements. However, the new accounting standard requires significantly expanded disclosures around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, which disclosures are provided below. Additionally, the Company's accounting policies have been updated to reflect the adoption of ASU No. 2014-09.



Our Business and Revenues

Gartner delivers its products and services globally through 3 business segments: Research, Conferences and Consulting. Our revenues from those business segments are discussed below.

Research

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.

Research revenues are mainly derived from subscription contracts for research products, representing approximately 90% of the segment’s revenue. The related revenues are deferred and recognized ratably over the applicable contract term (i.e., as we provide services over the contract period). Fees derived from assisting organizations in selecting the right business software for their needs are recognized at a point in time (i.e., when the lead is provided to the vendor).

The Company enters into subscription contracts for research products that generally are for twelve-month periods or longer. Approximately 80% to 85% of our annual and multi-year Research subscription contracts provide for billing of the first full service period upon signing. In subsequent years, multi-year subscription contracts are normally billed prior to the contract’s anniversary date. Our other Research subscription contracts are usually invoiced in advance, commencing with the contract signing, on (i) a quarterly, monthly or other recurring basis or (ii) in accordance with a customized invoicing schedule. Research contracts are generally non-cancelable and non-refundable, except for government contracts that may have cancellation or fiscal funding clauses, which have not historically resulted in material cancellations. It is our policy to record the amount of a subscription contract that is billable as a fee receivable at the time the contract is signed with a corresponding amount as deferred revenue because the contract represents a legally enforceable claim.

Conferences

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.

We earn revenues from both the attendees and exhibitors at our conferences and meetings. Attendees are generally invoiced for the full attendance fee upon their completion of an online registration form or their signing of a contract, while exhibitors typically make several individual payments commencing with the signing of a contract. We collect almost all of the invoiced amounts in advance of the related activity, resulting in the recording of deferred revenue. We recognize both the attendee and exhibitor revenue as we satisfy our related performance obligations (i.e., when the related activity is held).

The Company defers certain costs directly related to specific conferences and meetings and expenses those costs in the period during which the related activity occurs. The Company's policy is to defer only those costs that are incremental and directly attributable to a specific activity, primarily prepaid site and production services costs. Other costs of organizing and producing our conference activities, primarily Company personnel and non-conference specific expenses, are expensed in the period incurred.

Consulting 

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.

Consulting revenues, primarily derived from custom consulting and measurement services, are principally generated from fixed fee or time and materials engagements. Revenues from fixed fee engagements are recognized as we work to satisfy our performance obligations, while revenues from time and materials engagements are recognized as work is delivered and/or services are provided. In both of these circumstances, we satisfy our performance obligations and control of the services are passed to our customers over time (i.e., during the duration of the contract or consulting engagement). On a contract-by-contract basis, we typically use actual labor hours incurred compared to total expected labor hours to measure the Company’s performance in respect of our fixed fee engagements. If our labor and other costs on an individual contract are expected to exceed the total contract value or the contract’s funded ceiling amount, the Company reflects an adjustment to the contract’s overall profitability in the period determined. Revenues related to contract optimization engagements are contingent in nature and are only recognized at the point in time when all of the conditions related to their payment have been satisfied.



Consulting customers are invoiced based on the specific terms and conditions in their underlying contracts. We typically invoice our Consulting customers after we have satisfied some or all of the related performance obligations and the related revenue has dulybeen recognized. We record fees receivable for amounts that are billed or billable. We also record contract assets, which represent amounts for which we have recognized revenue but lack the unconditional right to payment as of the balance sheet date due to our required continued performance under the relevant contract, progress billing milestones or other billing-related restrictions.

General and Overview of ASU No. 2014-09 Adoption

ASU No. 2014-09 requires a five-step evaluative process that consists of the following:

(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.

The Company adopted ASU No. 2014-09 using the modified retrospective method of adoption. Under that approach, the cumulative effect of applying the new accounting standard is recorded on the date of initial application, with no restatement of the comparative prior periods presented. The Company's adoption of ASU No. 2014-09 did not result in a cumulative effect adjustment to its Accumulated earnings. However, the adoption of the new accounting standard required certain changes in the presentation of the Company’s consolidated balance sheet, including the reclassification of a refund liability, which aggregated $6.2 million on January 1, 2018, from the allowance for fees receivable to Accounts payable and accrued liabilities.

Related to our adoption of ASU No. 2014-09, we elected to (i) apply the provisions of the new accounting standard only to contracts that were not completed at the date of initial application and (ii) utilize a practical expedient whereby we reflected the aggregate effect of all contract modifications that occurred prior to January 1, 2018 (rather than retrospectively restating the affected contracts) when identifying our satisfied and unsatisfied performance obligations, determining the transaction prices with our customers and allocating such transaction prices to our satisfied and unsatisfied performance obligations. These two elections had no financial impact.

Prior to January 1, 2018, the Company recognized revenue in accordance with then-existing U.S. GAAP and SEC Staff Accounting Bulletin No. 104, Revenue Recognition (collectively, “Prior GAAP”). Under both ASU No. 2014-09 and Prior GAAP, revenue can only be recognized when all of the required criteria are met. Although there were certain changes to the Company’s revenue recognition policies and procedures effective January 1, 2018 with the adoption of ASU No. 2014-09, there were no material differences between the pattern and timing of revenue recognition under ASU No. 2014-09 and Prior GAAP.

ASU No. 2014-09 requires that we assess at inception all of the promises in a customer contract to determine if a promise is a separate performance obligation. To identify our performance obligations, we consider all of the services promised in a customer contract, regardless of whether they are explicitly stated or implied by customary business practices. If we conclude that a service is separately identifiable and distinct from the other offerings in a contract, we account for it as a separate performance obligation.

If a customer contract has more than one performance obligation, then the total contract consideration is allocated among the separate deliverables based on their stand-alone selling prices, which are determined based on the prices at which the Company discretely sells the stand-alone services. If a contract includes a discount or other pricing concession, the transaction price is allocated among the performance obligations on a proportionate basis using the relative stand-alone selling prices of the individual deliverables being transferred to the customer, unless the discount or other pricing concession can be ascribed to specifically identifiable performance obligations.

The contracts with our customers delineate the final terms and conditions of the underlying arrangements, including product descriptions, subscription periods, deliverables, quantities and the price of each service purchased. Since the transaction price of almost all of our customer contracts is typically agreed upon upfront and generally does not fluctuate during the duration of the contract, variable consideration is insignificant. The Company may engage in certain financing transactions with its customers but those arrangements have been limited in number and not material.

The Consolidated Statements of Operations present revenue net of any sales or value-added taxes that we collect from customers and remit to government authorities.




Disaggregated Revenue

Our disaggregated revenue by reportable segment is presented in the tables below for the years indicated (in thousands).

By Primary Geographic Market(1), (2)

Year Ended December 31, 2019
Primary Geographic MarketResearchConferencesConsultingTotal
United States and Canada$2,199,008
$295,857
$239,625
$2,734,490
Europe, Middle East and Africa751,267
122,591
122,146
996,004
Other International424,273
58,421
32,133
514,827
Total revenues$3,374,548
$476,869
$393,904
$4,245,321

Year Ended December 31, 2018
Primary Geographic MarketResearchConferencesConsultingOtherTotal
United States and Canada$1,994,016
$256,219
$205,874
$58,843
$2,514,952
Europe, Middle East and Africa737,129
105,909
119,258
38,194
1,000,490
Other International374,619
48,333
28,535
8,525
460,012
Total revenues$3,105,764
$410,461
$353,667
$105,562
$3,975,454

Year Ended December 31, 2017
Primary Geographic MarketResearchConferencesConsultingOtherTotal
United States and Canada$1,600,847
$210,698
$188,022
$92,799
$2,092,366
Europe, Middle East and Africa597,943
86,567
111,792
59,119
855,421
Other International272,490
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.

The Company’s revenue is generated primarily through direct sales to clients by domestic and international sales forces and a network of independent international sales agents. Most of the Company’s products and services are provided on an integrated worldwide basis and, because of this integrated delivery approach, it is not practical to precisely separate our revenue by geographic location. Accordingly, revenue information presented in the above tables is based on internal allocations, which involve certain management estimates and judgments.

By Timing of Revenue Recognition (1)

Year Ended December 31, 2019
Timing of Revenue RecognitionResearchConferencesConsultingTotal
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





Year Ended December 31, 2018
Timing of Revenue RecognitionResearchConferencesConsultingOtherTotal
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

Year Ended December 31, 2017
Timing of Revenue RecognitionResearchConferencesConsultingOtherTotal
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.

Determining a measure of progress for performance obligations that are satisfied over time and when control transfers for performance obligations that are satisfied at a point in time requires us to make judgments that affect the timing of when revenue is recognized. A key factor in this determination is when the customer can direct the use of, and can obtain substantially all of the benefits from, the deliverable.

For performance obligations recognized in accordance with a time-elapsed output method, the Company’s efforts are expended consistently throughout the contractual period and the Company transfers control evenly by providing stand-ready services. For performance obligations satisfied under our Consulting fixed fee and time and materials engagements, we believe that labor hours are the best measure of depicting the Company’s progress because labor output corresponds directly to the value of the Company’s performance to date as control is transferred. In our Other segment, we selected a method to assess the completion of our performance obligations that best aligned with the specific characteristics of the individual customer contract. We believe that these methods to measure progress are (i) reasonable and supportable and (ii) provide a faithful depiction of when we transfer products and services to our customers.

For customer contracts that are greater than one year in duration, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2019 was approximately $3.2 billion. The Company expects to recognize $1,942.6 million, $1,028.6 million and $220.0 million of this revenue (most of which pertains to Research) during the year ending December 31, 2020, the year ending December 31, 2021 and thereafter, respectively. The Company applies a practical expedient allowed in ASU No. 2014-09 and, accordingly, it does not disclose such performance obligation information for customer contracts that have original durations of one year or less. Our performance obligations for contracts meeting this ASU No. 2014-09 disclosure exclusion primarily include: (i) stand-ready services under Research subscription contracts; (ii) holding conferences and meetings where attendees and exhibitors can participate; and (iii) providing customized Consulting solutions for clients under fixed fee and time and materials engagements. The remaining duration of these performance obligations is generally less than one year, which aligns with the period that the parties have enforceable rights and obligations under the affected contracts.

Customer Contract Assets and Liabilities

The payment terms and conditions in our customer contracts vary. In some cases, customers prepay and, in other cases, after we conduct a credit evaluation, payment may be due in arrears. Because the timing of the delivery of our services typically differs from the timing of customer payments, the Company recognizes either a contract asset (we perform either fully or partially under


the contract but a contingency remains) or a contract liability (upfront customer payments precede our performance, resulting in deferred revenue). Amounts recorded as contract assets are reclassified to fees receivable when all of the outstanding conditions have been resolved and our right to payment becomes unconditional. Contracts with payments due in arrears are also recognized as fees receivable. As our contractual performance obligations are satisfied, the Company correspondingly relieves its contract liabilities and records the associated revenue.

The table below provides information regarding certain of the Company’s balance sheet accounts that pertain to its contracts with customers (in thousands).
 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).

The Company recognized revenue of $1,436.9 million and $1,287.8 million during 2019 and 2018, respectively, that was attributable to deferred revenues that were recorded at the beginning of each such year. Those amounts primarily consisted of (i) Research revenues and, in 2018, Other revenues that were recognized ratably as control of the goods or services passed to the customer and (ii) Conferences revenue pertaining to conferences and meetings that occurred during the reporting periods. During 2019 and 2018, the Company did not record any material impairments related to its contract assets. The Company does not typically recognize revenue from performance obligations satisfied in prior periods.

Revenue Reserve

The Company maintains a revenue reserve for amounts deemed to be uncollectible for reasons other than bad debt. The revenue reserve is classified as part of Accounts payable and accrued liabilities on the Consolidated Balance Sheet. Provisions to the revenue reserve are recorded as adjustments to revenue.

When determining the amount of the revenue reserve, the Company uses an expected-value method that is based on current estimates and a portfolio of data from its historical experience. Due to the common characteristics and similar attributes of our customers and contracts, which provide relevant and predictive evidence about our projected future liability, an expected-value method is reasonable and appropriate. However, the determination of the revenue reserve is inherently judgmental and requires the use of certain estimates. Changes in estimates are recorded in the period that they are identified. As of December 31, 2019 and 2018, the revenue reserve balance was $7.8 million and $7.4 million, respectively, and adjustments to the account in both 2019 and 2018 were not significant.

Costs of Obtaining and Fulfilling a Customer Contract

When the Company concludes that a liability should be recognized for the costs of obtaining a customer contract and determines how such liability should be measured, certain commissions are capitalized as a recoverable direct incremental cost of obtaining the underlying contract. No other amounts are capitalized as a cost of obtaining or fulfilling a customer contract because no expenditures have been identified that meet the requisite capitalization criteria. For Research, Consulting and Other, we amortize deferred commissions on a systematic basis that aligns with the transfer to our customers of the services to which the commissions relate. For Conferences, deferred commissions are expensed during the period when the related conference or meeting occurs.



During 2019, 2018 and 2017, deferred commission amortization expense was $369.5 million, $304.8 million and $230.5 million, respectively, and was included in Selling, general and administrative expense in the Consolidated Statements of Operations. The Company classifies Deferred commissions as a current asset on the Consolidated Balance Sheets at both December 31, 2019 and 2018 because those costs were, or will be, amortized over the twelve months following the respective balance sheet dates. The Company did not record any material impairments of its deferred commissions during the three-year period ended December 31, 2019.

10 — STOCK-BASED COMPENSATION

The Company grants stock-based compensation awards as an incentive for employees and directors to contribute to the Company’s long-term success. The Company currently awards stock-settled stock appreciation rights, service-based and performance-based restricted stock units, and common stock equivalents. As of December 31, 2019, the Company had 4.5 million shares of its common stock, par value $0.0005 per share, (the "Common Stock") available for stock-based compensation awards under its 2014 Long-Term Incentive Plan. Currently, the Company issues treasury shares upon the exercise, release or settlement of stock-based compensation awards.

Determining the appropriate fair value model and calculating the fair value of stock-based compensation awards requires the use of certain subjective assumptions, including the expected life of a stock-based compensation award and Common Stock price volatility. In addition, determining the appropriate periodic stock-based compensation expense requires management to estimate the likelihood of the achievement of certain performance targets. The assumptions used in calculating the fair values of stock-based compensation awards and the related periodic expense represent management’s best estimates, which involve inherent uncertainties and the application of judgment. As a result, if circumstances change and the Company deems it necessary in the future to modify the assumptions it made or to use different assumptions, or if the quantity and nature of the Company’s stock-based compensation awards changes, then the amount of expense may need to be adjusted and future stock-based compensation expense could be materially different from what has been recorded in the current year.

Stock-Based Compensation Expense

The tables below summarize the Company's stock-based compensation expense by award type and expense category line item during the years ended December 31 (in millions).
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


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

(1)Includes charges of $21.5 million, $19.4 million and $22.9 million during 2019, 2018 and 2017, respectively, for awards to retirement-eligible employees. Those awards vest on an accelerated basis.
(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.

As of December 31, 2019, the Company had $84.9 million of total unrecognized stock-based compensation cost, which is expected to be expensed over the remaining weighted average service period of approximately 2.3 years.

Stock-Based Compensation Awards

The disclosures presented below provide information regarding the Company’s stock-based compensation awards, all of which have been classified as equity awards in accordance with FASB ASC Topic 505.



Stock Appreciation Rights

Stock-settled stock appreciation rights ("SARs") permit the holder to participate in the appreciation of the value of the Common Stock. After the applicable vesting criteria have been satisfied, SARs are settled in shares of Common Stock upon exercise by the employee. SARs vest ratably over a four-year service period and expire seven years from the date of grant. The fair value of a SARs award is recognized as compensation expense on a straight-line basis over four years. SARs have only been awarded to the Company’s executive officers.
When SARs are exercised, the number of shares of Common Stock issued is calculated as follows: (1) the total proceeds from the exercise of the SARs award (calculated as the closing price of the Common Stock as reported on the New York Stock Exchange on the date of exercise less the exercise price of the SARs award, multiplied by the number of SARs exercised) is divided by (2) the closing price of the Common Stock on the date of exercise. Upon exercise, the Company withholds a portion of the shares of the Common Stock to satisfy statutory tax withholding requirements. SARs recipients do not have any stockholder rights until the shares of Common Stock are issued in respect of the award, which is subject to the prior satisfaction of the vesting and other criteria relating to such grants.

The table below summarizes changes in SARs outstanding during the year ended December 31, 2019.
 
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, 20181.2
 $89.45
 $19.88
 4.33
Granted0.3
 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
n/a = not applicable
(1)As of December 31, 2019, 0.7 million of the total SARs outstanding were unvested. The Company expects that substantially all of those unvested awards will vest in future periods.
(2)As of December 31, 2019, the total SARs outstanding had an intrinsic value of $58.9 million. On such date, SARs vested and exercisable had an intrinsic value of $37.1 million.

The fair value of a SARs award is determined on the date of grant using the Black-Scholes-Merton valuation model with the following weighted average assumptions for the years ended December 31:
 2019 2018 2017
Expected dividend yield (1)—% —% —%
Expected stock price volatility (2)21% 21% 22%
Risk-free interest rate (3)2.5% 2.5% 1.8%
Expected life in years (4)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

Restricted stock units ("RSUs") give the awardee the right to receive shares of Common Stock when the vesting conditions are met and certain restrictions lapse. Each RSU that vests entitles the awardee to one share of Common Stock. RSU awardees do not have any of the rights of a Gartner stockholder, including voting rights and the right to receive dividends and distributions, until the shares are released. The fair value of an RSU award is determined on the date of grant based on the closing price of the Common Stock as reported on the New York Stock Exchange on that date. Service-based RSUs vest ratably over four years and are expensed on a straight-line basis over the vesting period. Performance-based RSUs are subject to the satisfaction of both performance and service conditions, vest ratably over four years and are expensed on an accelerated basis over the vesting period.

The table below summarizes the changes in RSUs outstanding during the year ended December 31, 2019.
 
Restricted
Stock Units
("RSUs")
(in millions)
 
Per Share
Weighted
Average
Grant Date
Fair Value
Outstanding at December 31, 20181.4
 $101.75
Granted (1)0.5
 139.86
Vested and released(0.5) 97.33
Forfeited(0.1) 116.79
Outstanding at December 31, 2019 (2) (3)1.3
 $118.89
(1)The 0.5 million of RSUs granted during 2019 consisted of 0.2 million of performance-based RSUs awarded to executives and 0.3 million of service-based RSUs awarded to non-executive employees and non-management board members. The performance-based awards include RSUs in final settlement of 2018 grants and approximately 0.1 million of RSUs representing the target amount of the grant for 2019 that is tied to an increase in Gartner’s total contract value for such year. The number of performance-based RSUs for 2019 that could have been earned ranged from 0% to 200% of the target amount. The actual increase in Gartner’s total contract value for 2019 as measured on December 31, 2019 yielded approximately 142% of the target amount. The incremental awards based on the actual achievement under the 2019 grant will be issued in 2020.
(2)The Company expects that substantially all of the RSUs outstanding will vest in future periods.
(3)As of December 31, 2019, the weighted average remaining contractual term of the RSUs outstanding was approximately 1.1 years.

Common Stock Equivalents

Common stock equivalents ("CSEs") are convertible into Common Stock. Each CSE entitles the holder to one share of Common Stock. Members of our Board of Directors receive their directors’ fees in CSEs unless they opt to receive up to 50% of those fees in cash. Generally, CSEs have no defined term and are converted into shares of Common Stock when service as a director terminates unless the director has elected an accelerated release. The fair value of a CSE award is determined on the date of grant based on the closing price of the Common Stock as reported on the New York Stock Exchange on that date. CSEs vest immediately and, as a result, they are recorded as expense on the date of grant.

The table below summarizes the changes in CSEs outstanding during the year ended December 31, 2019.
 
Common Stock
Equivalents
("CSEs")
 
Per Share
Weighted Average
Grant Date
Fair Value
Outstanding at December 31, 2018109,780
 $24.96
Granted4,521
 153.43
Converted to shares of Common Stock upon grant(2,960) 144.88
Outstanding at December 31, 2019111,341
 $26.99







Employee Stock Purchase Plan

The Company has an employee stock purchase plan (the “ESP Plan”) wherein eligible employees are permitted to purchase shares of Common Stock through payroll deductions, which may not exceed 10% of an employee’s compensation, or $23,750 in any calendar year, at a price equal to 95% of the closing price of the Common Stock as reported on the New York Stock Exchange at the end of each offering period. As of December 31, 2019, the Company had 0.6 million shares available for purchase under the ESP Plan. The ESP Plan is considered non-compensatory under FASB ASC Topic 718 and, as a result, the Company does not record stock-based compensation expense for employee share purchases. The Company received $17.6 million, $14.7 million and $11.7 million in cash from employee share purchases under the ESP Plan during 2019, 2018 and 2017, respectively.

11 — COMPUTATION OF EARNINGS PER SHARE
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS reflects the potential dilution of securities that could share in earnings. When the impact of common stock equivalents is anti-dilutive, they are excluded from the calculation.

The table below sets forth the calculation of basic and diluted income per share for the years ended December 31 (in thousands, except per share data).
 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 share89,817
 90,827
 88,466
Common stock equivalents associated with stock-based compensation plans1,154
 1,295
 1,324
Shares used in the calculation of diluted income per share90,971
 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 income per share for 2019 included a tax benefit of approximately $0.42 per share related to an intercompany sale of certain intellectual property. Additionally, both basic and diluted income per share for 2017 included a tax benefit of approximately $0.66 per share related to the U.S. Tax Cuts and Jobs Act of 2017. Note 12 — Income Taxes provides information about the Company's income taxes.

The table below presents the number of common stock equivalents that were not included in the computations of diluted income per share in the above table because the effect would have been anti-dilutive. During years with net income, the common stock equivalents were anti-dilutive because their exercise prices were greater than the average market price of a share of Common Stock during such year.
 Year Ended December 31,
 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$148.38
 $135.60
 $116.09
(a) The number of anti-dilutive common stock equivalents for 2018 were minimal.











12 — INCOME TAXES

Below is a summary of the components of the Company's income (loss) before income taxes for the years ended December 31 (in thousands).
 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)

The components of the expense (benefit) for income taxes on the above income (loss) are summarized in the table below (in thousands).
 2019 2018 2017
Current tax expense: 
  
  
U.S. federal$30,208
 $2,817
 $48,339
State and local11,630
 6,969
 434
Foreign53,105
 45,042
 38,602
Total current94,943
 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 deferred23,471
 54,753
 (128,932)
Benefit (expense) relating to interest rate swaps used to increase (decrease) equity17,666
 3,840
 (2,477)
Benefit from stock transactions with employees used to increase equity54
 58
 46
Benefit relating to defined-benefit pension adjustments used to increase equity1,258
 14
 267
Total tax expense (benefit)$42,449
 $58,665
 $(131,096)

The components of long-term deferred tax assets (liabilities) are summarized in the table below (in thousands).
 December 31,
 2019 2018
Accrued liabilities$67,577
 $96,292
Operating leases54,860
 —
Loss and credit carryforwards14,372
 14,830
Assets relating to equity compensation16,842
 19,653
Other assets20,364
 14,092
Gross deferred tax assets174,015
 144,867
Property, equipment and leasehold improvements(15,137) (3,421)
Intangible assets(212,498) (263,548)
Prepaid expenses(49,221) (41,926)
Other liabilities(5,799) (12,100)
    Gross deferred tax liabilities(282,655) (320,995)
Valuation allowance(1,556) (4,066)
Net deferred tax liabilities$(110,196) $(180,194)





Net deferred tax assets and net deferred tax liabilities were $79.6 million and $189.8 million as of December 31, 2019, respectively, and $34.5 million and $214.7 million as of December 31, 2018, respectively. These amounts are reported in Other assets and Other liabilities in the Consolidated Balance Sheets. Management has concluded it is more likely than not that the reversal of deferred tax liabilities and results of future operations will generate sufficient taxable income to realize the deferred tax assets, net of the valuation allowance at December 31, 2019.
The valuation allowances of $1.6 million and $4.1 million as of December 31, 2019 and 2018, respectively, primarily related to state credit carryovers and net operating losses that are not likely to be realized.

As of December 31, 2019, the Company had state and local tax net operating loss carryforwards of $26.3 million, of which $0.1 million expires within one to five years, $0.3 million expires within six to fifteen years and $25.9 million expires within sixteen to twenty years. The Company also had state tax credits of $5.3 million, a majority of which will expire in five to six years. As of December 31, 2019, the Company had non-U.S. net operating loss carryforwards of $27.6 million, of which $0.4 million expires over the next 20 years and $27.2 million can be carried forward indefinitely. These amounts have been reduced for associated unrecognized tax benefits, consistent with ASU No. 2013-11, "Income Taxes—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists."

The items comprising the differences between the U.S. federal statutory income tax rate and the Company’s effective tax rate on income before income taxes for the years ended December 31 are summarized in the table below.
 2019 2018 2017
Statutory tax rate21.0 % 21.0 % 35.0 %
State income taxes, net of federal benefit1.5
 —
 3.6
Effect of non-U.S. operations2.7
 (10.7) 5.9
Intercompany sale of intellectual property(13.8) —
 —
Change in the reserve for tax contingencies4.7
 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 costs1.7
 2.7
 (3.5)
Gains/Losses on divested operations and held-for-sale assets—
 12.2
 13.1
Limitation on executive compensation2.4
 2.7
 (0.1)
Global intangible low-taxed income, net of foreign tax credits1.9
 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 rate15.4 % 32.4 % 102.6 %


In April 2019, we completed an intercompany sale of certain intellectual property. As a result, the Company recorded a net tax benefit of approximately $38.1 million in 2019, which represents the benefits of future tax deductions for amortization of the assets in the acquiring jurisdiction. Our tax planning related to our intellectual property is ongoing and may result in tax rate volatility in the future.

In connection with the Company’s adoption of ASU No. 2016-02 on January 1, 2019, operating leases were recorded on the Consolidated Balance Sheet as of December 31, 2019, including the recognition of operating lease liabilities and corresponding right-of-use assets. The corresponding deferred tax assets and deferred tax liabilities were also recorded. The net deferred tax impact was zero. 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.

The U.S. Tax Cuts and Jobs Act of 2017 (the "Act”) was enacted on December 22, 2017. Among other things, the Act reduced the U.S. federal corporation tax rate from 35% to 21%, required companies to pay a one-time transition tax on accumulated deferred foreign income (“ADFI”) of foreign subsidiaries that were previously tax deferred and created a new tax on global intangible low-taxed income (“GILTI”) attributable to foreign subsidiaries.



We remeasured U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. We reduced our income tax expense by $13.8 million and $123.2 million in 2018 and 2017, respectively, for this item.

The tax on ADFI is based on our total post-1986 earnings and profits ("E&P") of our foreign subsidiaries that were previously deferred from U.S. income taxes. We increased income tax expense by $5.5 million, $8.4 million and $63.6 million in 2019, 2018 and 2017, respectively, for this one-time transition tax liability. The Company utilized significant foreign tax credits and net operating loss carryovers to reduce the transition tax liability and the remaining tax balance was paid in full during 2019.

The Act also created a new tax on GILTI attributable to foreign subsidiaries. Companies have the option to account for the GILTI tax as a period cost in the period incurred, or to recognize deferred taxes for temporary differences, including outside basis differences expected to reverse as a result of the GILTI provisions. The Company has elected to account for the GILTI tax as a period cost in the period incurred.

As of December 31, 2019 and 2018, the Company had gross unrecognized tax benefits of $102.8 million and $90.3 million, respectively. The increase is primarily due to positions taken with respect to intercompany transactions. The gross unrecognized tax benefits at December 31, 2019 related primarily to transfer pricing on intercompany transactions, calculations of taxable E&P and related foreign tax credits, the exclusion of stock-based compensation expense from the Company’s cost sharing agreement, and the ability to realize certain refund claims. It is reasonably possible that gross unrecognized tax benefits will decrease by approximately $9.7 million within the next twelve months due to the anticipated closure of audits and the expiration of certain statutes of limitation.
Included in the balance of gross unrecognized tax benefits at December 31, 2019 are potential benefits of $97.5 million that, if recognized, would reduce our effective tax rate on income from continuing operations. Also included in the balance of gross unrecognized tax benefits at December 31, 2019 are potential benefits of $5.3 million that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes.
The table below is a reconciliation of the beginning and ending amounts of gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31 (in thousands).
 2019 2018
Beginning balance$90,349
 $60,269
Additions based on tax positions related to the current year32,072
 27,371
Additions for tax positions of prior years8,564
 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 rates75
 (1,278)
Ending balance$102,770
 $90,349


The Company accrues interest and penalties related to gross unrecognized tax benefits in its income tax provision. As of December 31, 2019 and 2018, the Company had $8.3 million and $6.7 million, respectively, of accrued interest and penalties related to gross unrecognized tax benefits. These amounts are in addition to the gross unrecognized tax benefits disclosed above. The total amount of interest and penalties recognized in the income tax provision during 2019 and 2018 was $1.7 million and $0.7 million, respectively.

The number of years with open statutes of limitation varies depending on the tax jurisdiction. The Company’s statutes are open with respect to the U.S. federal jurisdiction for 2016 and forward, and India for 2003 and forward. For other major taxing jurisdictions, including U.S. states, the United Kingdom, Canada, Japan, France and Ireland, the Company's statutes vary and are open as far back as 2010.

Under U.S. GAAP, no provision for income taxes that may result from the remittance of earnings held overseas is required if the Company has the ability and intent to indefinitely reinvest such funds overseas. The Company continues to assert its intention to reinvest all accumulated undistributed foreign earnings in its non-U.S. operations, except in instances where the repatriation of those earnings would result in minimal additional tax.  Consequently, the Company has not recognized income tax expense that would result from the remittance of those earnings. The accumulated undistributed earnings of non-U.S. subsidiaries were


approximately $142.0 million as of December 31, 2019. As a result of the Act, the income tax that would be payable if such earnings were not indefinitely invested is estimated to be minimal.

13 — DERIVATIVES AND HEDGING
The Company enters into a limited number of derivative contracts to mitigate the cash flow risk associated with changes in interest rates on variable-rate debt and changes in foreign exchange rates on forecasted foreign currency transactions. The Company accounts for its outstanding derivative contracts in accordance with FASB ASC Topic 815, which requires all derivatives, including derivatives designated as accounting hedges, to be recorded on the balance sheet at fair value. The tables below provide information regarding the Company’s outstanding derivative contracts as of the dates indicated (in thousands, except for number of contracts).

December 31, 2019
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)
December 31, 2018
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) 7
 $2,100,000
 $(10,681) Other liabilities $(7,770)
Foreign currency forwards (2) 135
 927,375
 (1,942) Accrued liabilities —
Total 142
 $3,027,375
 $(12,623)   $(7,770)
(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 values of the swaps are deferred and recorded in AOCI/L, net of tax effect. Note 6 — Debt provides additional information regarding the Company's interest rate swap contracts.
(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, 2019 matured before January 31, 2020.
(3)See Note 14 — Fair Value Disclosures for the determination of the fair values of these instruments.

At December 31, 2019, all of the Company’s derivative counterparties were investment grade financial institutions. The Company did not have any collateral arrangements with its derivative counterparties and none of the derivative contracts contained credit-risk related contingent features. The table below provides information regarding amounts recognized in the Consolidated Statements of Operations for derivative contracts for the years ended December 31 (in thousands).
Amount Recorded In 2019 2018 2017
Interest (income) expense, net (1) $(3,361) $(1,920) $7,870
Other expense (income), net (2) 2,488
 10,365
 (801)
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.




14 — FAIR VALUE DISCLOSURES
The Company’s financial instruments include cash equivalents, fees receivable from customers, accounts payable and accrued liabilities, all of which are normally short-term in nature. The Company believes that the carrying amounts of these financial instruments reasonably approximate their fair values due to their short-term nature. The Company’s financial instruments also include its outstanding variable-rate borrowings under the 2016 Credit Agreement. The Company believes that the carrying amounts of its variable-rate borrowings reasonably approximate their fair values because the rates of interest on those borrowings reflect current market rates of interest for similar instruments with comparable maturities.

The Company enters into a limited number of derivatives transactions but does not enter into repurchase agreements, securities lending transactions or master netting arrangements. Receivables or payables that result from derivatives transactions are recorded gross in the Consolidated Balance Sheets.
FASB ASC Topic 820 provides a framework for the measurement of fair value and a valuation hierarchy based on the transparency of inputs used in the valuation of assets and liabilities. Classification within the valuation hierarchy is based on the lowest level of input that is significant to the resulting fair value measurement. The valuation hierarchy contains three levels. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs such as internally-created valuation models. The Company does not currently utilize Level 3 valuation inputs to remeasure any of its assets or liabilities. However, Level 3 inputs may be used by the Company in its required annual impairment review of goodwill. Information regarding the periodic assessment of the Company’s goodwill is included in Note 1 — Business and Significant Accounting Policies. The Company does not typically transfer assets or liabilities between different levels of the valuation hierarchy.

The table below presents the fair value of certain financial assets and liabilities (in thousands).
  December 31,
Description 2019 2018
Assets:  
  
Values based on Level 1 inputs:    
Deferred compensation plan assets (1) $2,277
 $8,956
Total Level 1 inputs 2,277
 8,956
Values based on Level 2 inputs:    
Deferred compensation plan assets (1) 73,419
 57,690
Foreign currency forward contracts (2) 1,558
 1,318
Total Level 2 inputs 74,977
 59,008
Total Assets $77,254
 $67,964
Liabilities:  
  
Values based on Level 2 inputs:    
Deferred compensation plan liabilities (1) $79,556
 $68,570
Foreign currency forward contracts (2) 1,499
 3,260
Interest rate swap contracts (3) 64,831
 10,681
Senior Notes due 2025 (4) 835,384
 776,160
Total Level 2 inputs 981,270
 858,671
Total Liabilities $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 15 — Employee Benefits). The assets consist of investments in money market funds, mutual funds and company-owned life insurance contracts. The money market funds consist of cash equivalents while the mutual fund investments consist of publicly-traded and quoted equity shares. The Company considers the fair values of these assets to be based on Level 1 inputs, and such assets had fair values of $2.3 million and $9.0 million as of December 31, 2019 and 2018, respectively. The carrying amounts of the life insurance contracts equal their cash surrender values. Cash surrender value represents the estimated amount that the Company would receive upon termination of a contract, which approximates fair


value. The Company considers life insurance contracts to be valued based on Level 2 inputs, and such assets had fair values of $73.4 million and $57.7 million at December 31, 2019 and 2018, respectively. The related deferred compensation plan liabilities are recorded at fair value, or the estimated amount needed to settle the liability, which the Company considers to be a Level 2 input.
(2)The Company enters into foreign currency forward exchange contracts to hedge the effects of adverse fluctuations in foreign currency exchange rates (see Note 13 — Derivatives and Hedging). Valuation of these contracts is based on observable foreign currency exchange rates in active markets, which the Company considers to be a Level 2 input.
(3)The Company has interest rate swap contracts that hedge the risk of variability from interest payments on its borrowings (see Note 6 — Debt). The fair values of interest rate swaps are based on mark-to-market valuations prepared by a third-party broker. Those valuations are based on observable interest rates from recently executed market transactions and other observable market data, which the Company considers to be Level 2 inputs. The Company independently corroborates the reasonableness of the valuations prepared by the third-party broker by using an electronic quotation service.
(4)As discussed in Note 6 — Debt, the Company has $800.0 million of principal amount fixed-rate Senior Notes due in 2025. The estimated fair value of the notes was derived from quoted market prices provided by an independent dealer, which the Company considers to be a Level 2 input. The carrying amount of the Senior Notes was $785.0 million as of December 31, 2019.
15 — EMPLOYEE BENEFITS
Defined contribution plans. The Company has savings and investment plans (the “401(k) Plans”) covering substantially all U.S. employees. Company contributions are based on the level of employee contributions, up to a maximum of 4% of an employee’s eligible salary, subject to an annual maximum. For 2019, the maximum Company match was $7,200. Amounts expensed in connection with the 401(k) Plans totaled $44.1 million, $36.7 million and $29.8 million in 2019, 2018 and 2017, respectively.
Deferred compensation plans. The Company has supplemental deferred compensation plans for the benefit of certain highly compensated officers, managers and other key employees. The plans' investment assets are recorded at fair value in Other assets on the Consolidated Balance Sheets. The value of those assets was $75.7 million and $66.6 million at December 31, 2019 and 2018, respectively (see Note 14 — Fair Value Disclosures for fair value information). The related deferred compensation plan liabilities, which were $79.6 million and $68.6 million at December 31, 2019 and 2018, respectively, are carried at fair value and are adjusted with a corresponding charge or credit to compensation expense to reflect the fair value of the amount owed to the employees. Deferred compensation plan liabilities are recorded in Other liabilities on the Consolidated Balance Sheets. Compensation expense recognized for all of the Company's deferred compensation plans was $0.6 million, $1.7 million and $0.4 million in 2019, 2018 and 2017, respectively.

Defined benefit pension plans. The Company has defined benefit pension plans at several of its international locations. Benefits earned and paid under those plans are generally based on years of service and level of employee compensation. The Company's vested benefit obligation is the actuarial present value of the vested benefits to which an employee is entitled based on the employee's expected date of separation or retirement. The Company's defined benefit pension plans are accounted for in accordance with FASB ASC Topics 715 and 960. The table below presents the components of the Company's defined benefit pension plan expense for the years ended December 31 (in thousands).
 2019 2018 2017
Service cost$3,659
 $3,145
 $2,820
Interest cost851
 840
 765
Expected return on plan assets(517) (475) (360)
Recognition of actuarial loss237
 340
 350
Total defined benefit pension plan expense$4,230
 $3,850
 $3,575


The table below presents the key assumptions used in the computation of pension expense for the years ended December 31.
 2019 2018 2017
Weighted average discount rate (1)1.28% 1.81% 1.78%
Expected return on plan assets2.54% 2.45% 2.22%
Average compensation increase2.58% 2.58% 2.66%
(1)Discount rates are typically determined by using the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations.



The table below provides information regarding changes in the projected benefit obligation of the Company's defined benefit pension plans for the years ended December 31 (in thousands).
 2019 2018 2017
Projected benefit obligation at beginning of year$44,890
 $45,450
 $38,400
Service cost3,659
 3,145
 2,820
Interest cost851
 840
 765
Actuarial loss (gain) due to assumption changes and plan experience (1)4,524
 (430) 690
Contractual termination benefits—
 (950) —
Benefits payments (2)(830) (1,400) (1,780)
Foreign currency impact(591) (1,765) 4,555
Projected benefit obligation at end of year (3)$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 benefit payments will be made in future years directly to plan participants as follows: $1.6 million in 2020; $1.7 million in 2021; $1.7 million in 2022; $2.2 million in 2023; $2.2 million in 2024; and $13.6 million in total in the five years thereafter.
(3)Measured as of December 31.

The tables below provide information regarding the funded status of the Company's defined benefit pension plans and the related amounts recorded in the Consolidated Balance Sheets as of December 31(in thousands).
Funded status of the plans2019 2018 2017
Projected benefit obligation$52,503
 $44,890
 $45,450
Pension plan assets at fair value (1)(23,444) (19,460) (18,475)
Funded status – shortfall (2)$29,059
 $25,430
 $26,975
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, high-quality government and corporate bonds, and other investments. The assets are primarily valued based on Level 1 and Level 2 inputs under the fair value hierarchy in FASB ASC Topic 820, with the majority of the invested assets considered to be of low-to-medium investment risk. The Company projects a future long-term rate of return on these plan assets of 2.04%, which it believes is reasonable based on the composition of the assets and both current and projected market conditions. Additional information regarding pension plan asset activity is provided below.
(2)Funded status – shortfall represents the amount of the projected benefit obligation that the Company has not funded with a third-party trustee. These liabilities of the Company are recorded in Other liabilities on the Consolidated Balance Sheets.
(3)The deferred actuarial loss as of December 31, 2019 is recorded in AOCI/L and will be reclassified out of AOCI/L and recognized as pension expense over approximately 14 years, subject to certain limitations set forth in FASB ASC Topic 715. The impact thereof on pension expense is projected to be approximately $0.5 million of additional expense in 2020. The amortization of deferred actuarial losses from AOCI/L to pension expense in each of the years ended December 31, 2019, 2018 and 2017 was immaterial.












The table below provides a rollforward of the Company's defined benefit pension plans assets for the years ended December 31 (in thousands).
 2019 2018 2017
Pension plan assets at the beginning of the year$19,460
 $18,475
 $14,465
Company contributions4,405
 4,478
 3,438
Benefit payments(830) (1,400) (1,780)
Actual return on plan assets714
 (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


The Company also has a reinsurance asset arrangement with a large international insurance company that is intended to fund benefit payments for one of its plans. The reinsurance asset is not a pension plan asset but is an asset of the Company. At December 31, 2019 and 2018, the reinsurance asset was recorded at its cash surrender value of $8.9 million and $9.0 million, respectively, and recorded in Other assets on the Consolidated Balance Sheets. The Company believes that cash surrender value approximates fair value and is equivalent to a Level 2 input under the FASB’s fair value hierarchy in FASB ASC Topic 820.

16 — SEGMENT INFORMATION

Our products and services are delivered through 3 segments – Research, Conferences and Consulting, as described below.
•
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.

The Company evaluates segment performance and allocates resources based on gross contribution margin. Gross contribution, as presented in the table below, is defined as operating income or loss excluding certain Cost of services and product development expenses, Selling, general and administrative expenses, Depreciation, Amortization of intangibles, and Acquisition and integration charges. Certain bonus and fringe benefit costs included in consolidated Cost of services and product development are not allocated to segment expense. The accounting policies used by the reportable segments are the same as those used by the Company. There are no intersegment revenues. The Company does not identify or allocate assets, including capital expenditures, by reportable segment. Accordingly, assets are not reported by segment because the information is not available by segment and is not reviewed in the evaluation of segment performance or in making decisions regarding the allocation of resources.

The Company earns revenue from clients in many countries. Other than the United States, there is no individual country where revenues from external clients represent 10% or more of the Company’s consolidated revenues. Additionally, no single client accounted for 10% or more of the Company’s consolidated revenues and the loss of a single client, in management’s opinion, would not have a material adverse effect on revenues.












The tables below present information about the Company’s reportable segments for the years ended December 31 (in thousands).
 Research Conferences Consulting Consolidated
2019 
  
  
  
Revenues$3,374,548
 $476,869
 $393,904
 $4,245,321
Gross contribution2,351,720
 241,757
 118,450
 2,711,927
Corporate and other expenses 
  
  
 (2,341,840)
Operating income 
  
  
 $370,087
 Research Conferences Consulting Other (1) Consolidated
2018 
  
  
    
Revenues$3,105,764
 $410,461
 $353,667
 $105,562
 $3,975,454
Gross contribution2,144,097
 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 contribution1,653,014
 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.

The table below provides a reconciliation of total segment gross contribution to net income for the years ended December 31 (in thousands).
  2019 2018 2017
Total segment gross contribution $2,711,927
 $2,518,973
 $2,000,386
Costs and expenses:      
Cost of services and product development - unallocated (1) 17,174
 12,319
 9,090
Selling, general and administrative 2,103,424
 1,884,141
 1,599,004
Depreciation and amortization 211,779
 255,601
 240,171
Acquisition and integration charges 9,463
 107,197
 158,450
Operating income (loss) 370,087
 259,715
 (6,329)
Interest expense and other, net (92,273) (124,041) (121,488)
(Loss) gain from divested operations (2,075) 45,447
 —
Provision (benefit) for income taxes 42,449
 58,665
 (131,096)
Net income $233,290
 $122,456
 $3,279
(1)The unallocated amounts consist of certain bonus and fringe costs recorded in consolidated Cost of services and product development that are not allocated to segment expense. The Company's policy is to allocate bonuses to segments at 100% of a segment employee's target bonus. Amounts above or below 100% are absorbed by corporate.



Disaggregated revenue information by reportable segment for the three years ended December 31, 2019 is presented in Note 9 — Revenue and Related Matters. Long-lived asset information by geographic location as of December 31 is summarized in the table below (in thousands).
 2019 2018 2017
Long-lived assets (1): 
  
  
United States and Canada$867,974
 $305,928
 $288,735
Europe, Middle East and Africa242,729
 67,306
 84,840
Other International159,037
 50,800
 41,674
Total long-lived assets$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.

17 — CONTINGENCIES
Legal Matters. The Company is involved in legal proceedings and litigation arising in the ordinary course of business. We record a provision for pending litigation in our consolidated financial statements when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. We believe that the potential liability, if any, in excess of amounts already accrued from all proceedings, claims and litigation will not have a material effect on our financial position, cash flows or results of operations when resolved in a future period.
Indemnifications. The Company has various agreements that may obligate us to indemnify the other party with respect to certain matters. Generally, these indemnification clauses are included in contracts arising in the normal course of business under which we customarily agree to hold the other party harmless against losses arising from a breach of representations related to matters such as title to assets sold and licensed or certain intellectual property rights. It is not possible to predict the maximum potential amount of future payments under these indemnification agreements due to the conditional nature of the Company’s obligations and the unique facts of each particular agreement. Historically, payments made by us under these agreements have not been material. As of December 31, 2019, the Company did not have any material payment obligations under any such indemnification agreements.

18 — VALUATION AND QUALIFYING ACCOUNTS
The Company maintains an allowance for losses that is comprised of a bad debt allowance and, through December 31, 2017, a revenue reserve. Provisions are recorded as either an increase in bad debt expense or, prior to 2018, a reduction in revenues.

The table below summarizes the activity in the Company’s allowance for losses for the years ended December 31 (in thousands).
 
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

(1) The allowance for losses at December 31, 2017 included $6.2 million that was attributable to the Company's revenue reserve. As a result of the Company's adoption of ASU No. 2014-09 on January 1, 2018, the revenue reserve balance is now included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets. Note 9 — Revenue and Related Matters provides additional information regarding the Company's adoption of ASU No. 2014-09.



ITEM 16. FORM 10-K SUMMARY.

None.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this reportReport on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

authorized, in Stamford, Connecticut, on February 19, 2020.
 Gartner, Inc.
  
Date:February 19, 2020By:/s/ Eugene A. Hall
  Eugene A. Hall
  Chief Executive Officer
March 6, 2017

POWER OF ATTORNEY
Each person whose signature appears below appoints Eugene A. Hall and Craig W. Safian and each of them, acting individually, as his or her attorney-in-fact, each with full power of substitution, for him or her in all capacities, to sign all amendments to this Report on Form 10-K, and to file the same, with appropriate exhibits and other related documents, with the Securities and Exchange Commission. Each of the undersigned ratifies and confirms his or her signatures as they may be signed by his or her attorney-in-fact to any amendments to this Report. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this reportReport has been signed below by the following persons on behalf of the registrantRegistrant and in the capacities and on the dates indicated.

indicated:
Signature
Name Title Date
     
/s/ Eugene A. Hall Director and Chief Executive Officer March 6, 2017February 19, 2020
Eugene A. Hall (Principal Executive Officer)  
   Senior Vice President and Chief  
/s/ Craig W. Safian Executive Vice President and Chief Financial Officer February 19, 2020
Craig W. Safian (Principal Financial and Accounting Officer) March 6, 2017
*
Michael J. BingleDirector
*     

/s/ Peter E. Bisson

 Director February 19, 2020
*Peter E. Bisson
     

/s/ Richard J. Bressler

 Director February 19, 2020
*Richard J. Bressler
     
/s/ Raul E. CesanDirectorFebruary 19, 2020
Raul E. Cesan  Director  
*     
/s/ Karen E. DykstraDirectorFebruary 19, 2020
Karen E. Dykstra  Director  
*     
/s/ Anne Sutherland FuchsDirectorFebruary 19, 2020
Anne Sutherland Fuchs  Director  
*     
/s/ William O. GrabeDirectorFebruary 19, 2020
William O. Grabe  Director  
*     
/s/ Stephen G. PagliucaDirectorFebruary 19, 2020
Stephen G. Pagliuca  Director  
*     
/s/ Eileen M. SerraDirectorFebruary 19, 2020
Eileen M. Serra
/s/ James C. SmithDirectorFebruary 19, 2020
James C. Smith  Director  

*By:/s/ Eugene A. HallMarch 6, 2017
Eugene A. Hall,��
Attorney-in-Fact
42


87