Debt | Debt 2016 Credit Agreement The Company entered into the 2016 Credit Agreement on June 17, 2016, which provided for a $600.0 million Term loan A facility and a $1.2 billion revolving credit facility. As of March 31, 2017, the Company had $585.0 million outstanding under the Term loan A facility and $270.0 million of outstanding revolver loans under the 2016 Credit Agreement. 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 loan covenants as of March 31, 2017. As discussed below, the 2016 Credit Agreement was amended twice in the first quarter of 2017 to permit the acquisition of CEB and the incurrence of additional debt, as well as to extend the maturity date of the Term loan A facility and revolving credit facility through March 20, 2022 and to revise the interest rate and repayment schedule. On January 20, 2017, the Company entered into a First Amendment of 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 of 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 revolving credit facility through March 20, 2022 and to revise the interest rate and amortization schedule. The Term loan A facility will be repaid in 16 consecutive quarterly installments commencing 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 amounts must be repaid. Loans will 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 average rate on Federal Reserve Board of New York rate 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 leverage ratio as of the end of the four consecutive fiscal quarters most recently ended. $800.0 million Principal Amount Senior Notes On March 30, 2017 , in conjunction with the acquisition of CEB, the Company issued $800.0 million aggregate principal amount of 5.125% Senior Notes due 2025 (the “Senior Notes”). The Senior Notes were issued at an issue price of 100.00% 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, beginning on October 1, 2017. The Senior Notes will 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 specific kinds of change 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 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. Acquisition of CEB On April 5, 2017, the Company completed the CEB acquisition and borrowed in total approximately $2.8 billion to complete the transaction, including the Senior Notes discussed above. The Company also entered into a third amendment to the 2016 Credit Agreement in conjunction with and on the same date as the CEB acquisition. The Company's total indebtedness after the close of the CEB acquisition was approximately $3.6 billion . Note 14 — Subsequent Events provides additional information regarding the CEB acquisition and the third amendment to the 2016 Credit Agreement. Outstanding Borrowings March 31, 2017 The following table summarizes the Company’s total outstanding borrowings (in thousands): Balance Balance March 31, December 31, Description: 2017 2016 2016 Credit Agreement - Term loan A facility (1) $ 585,000 $ 585,000 2016 Credit Agreement - Revolving credit facility (1), (2) 270,000 115,000 Senior Notes, $800.0 million principal amount (3) 800,000 — Other (4) 2,500 2,500 Subtotal (5) 1,657,500 702,500 Less: deferred financing fees (6) (28,803 ) (8,109 ) Net carrying amount (7) $ 1,628,697 $ 694,391 (1) The contractual annualized interest rate as of March 31, 2017 on both the Term loan A facility and revolving credit facility was 2.23% , which consisted of a floating eurodollar base rate of 0.98% plus a margin of 1.25% . However, the Company has interest rate swap contracts, accounted for as cash flow hedges, which effectively convert the floating eurodollar base rates to a fixed base rate. (2) The Company had $927.0 million of available borrowing capacity on the revolver (not including the expansion feature) as of March 31, 2017 . (3) Consists of $800.0 million principal amount of Senior Notes outstanding, which the Company issued on March 30, 2017 to finance in part the CEB acquisition. The Senior Notes pay a fixed rate of 5.125% and have an eight year maturity. (4) Consists of a $2.5 million State of Connecticut economic development loan with a 3.00% fixed rate of interest. The loan was originated in 2012 and has a 10 year maturity. Principal payments are deferred for the first five years and the loan may be repaid at any point by the Company without penalty. (5) The average annual effective rate on the Company's total debt outstanding for the three months ended March 31, 2017 , including the effect of its interest rate swaps discussed below, was approximately 2.89% . (6) The deferred financing fees are being amortized to Interest Expense, net over the term of the respective debt obligation. (7) On April 5, 2017, the Company completed the acquisition of CEB. The Company had approximately $3.6 billion in total debt outstanding after the close of the acquisition. Note 14 — Subsequent Events provides additional information regarding the CEB acquisition and the additional amounts borrowed. Interest Rate Swaps The Company has fixed-for-floating interest rate swap contracts which it designates as accounting hedges of the forecasted interest payments on the Company’s variable rate borrowings. The Company pays base fixed rates on the swaps and in return receives a floating eurodollar base rate on 30 day notional borrowings. The Company accounts for the interest rate swaps as cash flow hedges in accordance with FASB ASC Topic 815. Since the swaps hedge forecasted interest payments, changes in the fair value of the swaps are recorded in accumulated other comprehensive income (loss), a component of equity, as long as the swaps continue to be highly effective hedges of the designated interest rate risk. Any ineffective portion of change in the fair value of the hedges is recorded in earnings. All of the swaps were highly effective hedges of the forecasted interest payments as of March 31, 2017 . The interest rate swaps had a total negative fair value (liability) to the Company of $6.6 million at March 31, 2017 , which is deferred and recorded in Accumulated other comprehensive loss, net of tax effect. |