Gartner
Annual Report 2019

Plain-text annual report

2019 Annual Report Dear Shareholders: Gene Hall Chief Executive Officer Craig Safian Chief Financial Officer “ Gartner equips business leaders with indispensable insights, advice and tools to achieve their mission- critical priorities and build the successful organizations of tomorrow.” Our clients are experiencing more disruptive change than ever before. There has never been more pressure for companies to innovate and succeed. Clients are experiencing disruptive change and they are feeling pressure both internally and externally to innovate. Our clients need the right strategy — and strong execution — to succeed. This means clients need Gartner now more than ever before. We would like to take a moment to reflect on Gartner’s strengths and performance in 2019, even as we acknowledge the humanitarian and economic impact the COVID-19 pandemic is having. Gartner provides the insight and advice to navigate these disruptive times. Gartner equips business leaders with indispensable insights, advice and tools to achieve their mission- critical priorities and build the successful organizations of tomorrow. Our unmatched combination of expert-led, practitioner-sourced and data-driven research empowers clients across all major enterprise functions — including Information Technology (IT), HR, Finance, Marketing, Supply Chain, Sales and Legal — to make the right decisions on issues that matter most. Because of our independence and objectivity, we’re a highly trusted advisor. Our strategic advice and pragmatic tools — peer benchmarks, best-practice cases and step-by-step implementation guides — are free from vendor bias and rooted in the data, analytics and insights of our objective research. By consistently applying the Gartner Formula across our business, we increased our penetration of the addressable market. We made progress on our core strategy of establishing leading market positions in every role across the enterprise while continuing to drive innovation. 2019 was a strong year. For the full year 2019, we drove double-digit top-line growth for each of our business segments and concluded a period of increased investment. We generated $4.2 billion of adjusted revenue and $684 million of adjusted EBITDA,1 representing year-over-year growth of 11% and 2%, respectively, excluding the impact of foreign exchange. Adjusted diluted earnings per share was $3.90 in 2019, and free cash flow was $462 million. Gartner Research, our largest and most profitable segment, represents about 80% of our revenue. Gartner Research is the core of our unrivaled client value proposition, providing subscription, cloud- based, on-demand, indispensable research and advisory services. We deliver incredible insights at a price that’s extremely low relative to the value. There is no other place that our clients can get such valuable insights on demand and at a very modest cost. This is why our clients stay with us, renew at high rates and spend more with us year after year. The Research segment closed another double-digit growth year with adjusted revenue of $3.4 billion, an increase of 11% year over year, excluding the impact of foreign exchange. We closed 2019 with contract value of $3.4 billion, an increase of 12% year over year. We report contract value excluding the impact of foreign exchange. We have a vast and under-penetrated market opportunity. We estimate our total market opportunity to be almost $200 billion. Our contract value (the annualized amount of revenue under contract at a point in time) is about $3.4 billion. This means we can grow at double-digit rates for a very long time. Over the past decade, we’ve developed the Gartner Formula to drive long-term, sustained double-digit growth. The Gartner Formula has four elements: 1) Indispensable insights, 2) Exceptional talent, 3) Sales excellence, and 4) Enabling infrastructure. For each of these elements, we drive globally consistent execution of best practices and continuous improvement and innovation. By consistently applying the Gartner Formula across our business, we’re able to capture our vast market opportunity. We have an attractive business model, with recurring revenue, high renewal rates and strong contribution margins. This business model, paired with the Gartner Formula, enables us to generate long-term, sustained double-digit growth in contract value, revenue, earnings and free cash flow. We sustained a decade of double-digit revenue growth. 2019 marked a decade of double-digit revenue growth and an expansion of the practice areas we serve. In 2010, we were a $1.3 billion-dollar company that served information technology and supply chain leaders. Today, we’re a $4.2 billion-dollar company serving 11 practices with more than 15,000 client enterprises in more than 100 countries. We provide great jobs to nearly 17,000 associates around the world and position our company for the long-term benefit of our shareholders. 1 Reconciliations of all non-GAAP financial measures used in this letter to the most directly comparable GAAP measures are available on investor.gartner.com. We delivered another year of double- digit contract value growth, led by Global Technology Sales (GTS). Global Technology Sales, or GTS, serves leaders and their teams within IT and represents about 80% of our total contract value. In GTS, contract value was strong in 2019 with 12% growth. We continue to serve a vast market opportunity across all sectors, sizes and geographies. We’ve made investments over the past two years, including sales head count, that position us well to capture that market opportunity. Global Business Sales (GBS) accelerated and the foundation is in place for future growth. Global Business Sales, or GBS, represents about 20% of our total contract value. The GBS sales organization supports all the enterprise functions beyond IT. This includes Supply Chain and Marketing, which we’ve addressed for several years, as well as other major enterprise roles including HR, Finance, Legal, Sales and more. Each of these roles has the same need for our insight and advice as IT. Over the past three years, we launched enhanced subscription products for individual enterprise function leaders, we expanded service capabilities and we grew the sales force. We applied the Gartner Formula to build the foundation to drive sustained double-digit growth and we ended 2019 with record organic contract value growth of 8%, an increase in the growth rate of 6.7 percentage points from the prior year. Conferences and Consulting both had double-digit revenue growth years. Gartner Conferences delivers incredible insights to our attendees, while building our brand and making a profit. This segment represents about 11% of our business. We combine the outstanding value of our research insights and advice with unparalleled peer networking and the immersion of live events to create the most important annual gatherings for the executives we serve. The Conferences segment had another great year with revenue of $477 million, up more than 18%, excluding the impact of foreign exchange. Gartner Consulting, which serves as an extension of Gartner Research for chief information officers and other senior executives driving technology- related strategic initiatives, makes up about 9% of our business. Gartner Consulting provides a deeper level of involvement through extended, project-based work. During 2019, we generated revenue of about $394 million, an increase of 14% year over year, excluding the impact of foreign exchange. We closed the year with $116 million of backlog (a leading indicator of future growth for Consulting). We continue to focus on prudent capital allocation. Our capital deployment strategy has been consistent over time. After ensuring that we have appropriately invested in our business to sustain long-term double- digit growth, we use our free cash flow and available balance sheet flexibility to return capital to our shareholders through our share buyback programs and through strategic, value-generating tuck-in acquisitions. During 2019, we repurchased $199 million of stock, repaid about $110 million of our outstanding debt balance and also acquired TOPO, a provider of insight and advice for sales leaders, for around $25 million. “ 2019 was a great year for Gartner. We had strong operating results across all three of our segments: Research, Conferences and Consulting.” Gartner is a growth company. 2019 was a great year for Gartner. We had strong operating results across all three of our segments: Research, Conferences and Consulting. We delivered incredible value to every major function in the enterprise. We have a vast market opportunity. We’ve made investments over the past few years that position us well to capture that market opportunity. We’re aligning our cost growth with revenue growth. With the great strategic positioning of GTS and GBS, together with leveraging the investments we’ve made, we are well-positioned for sustained long-term double-digit growth. Gartner’s attractive business model, with recurring revenue, high renewal rates and strong contribution margins, enables us to generate long-term, sustained double-digit growth in contract value, revenue, earnings and free cash flow. Over the medium term, our objective is double-digit growth in revenue and EBITDA growth as fast or faster than revenue growth. And because of our low capital intensity and upfront billing, we expect to grow free cash flow as fast or faster than EBITDA growth. We remain excited about our business, our prospects for growth and our strategy to create value for our shareholders over the long term. On behalf of everyone at Gartner, we thank you for your support. Gene Hall Chief Executive Officer Craig Safian Chief Financial Officer The Numbers: Highlights Segment Revenue 2019 ($ in millions) Total Contract Value1 ($ in millions) $394 Consulting $477 Conferences $3,375 Research $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $3,446 $3,086 $2,770 $1,923 $1,691 ’15 ’16 ’17 ’18 ’19 1 All contract values have been calculated using the same foreign currency rates as December 31, 2019. Comparison of Five-Year Cumulative Total Return* Among Gartner, Inc., the S&P 500 Index and the Dow Jones U.S. Business Support Services Index $250 $200 $150 $100 $50 $0 12/14 The graph matches the cumulative five-year total return of holders (including reinvestment of dividends) of Gartner, Inc.’s common stock with the cumulative total returns of the S&P 500 Index and the Dow Jones U.S. Business Support Services Index. *$100 invested on 12/31/14 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2020 Standard & Poor’s, a division of S&P Global. All rights reserved. Copyright© 2020 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. 12/15 12/16 12/17 12/18 12/19 Gartner, Inc. S&P 500 Index Dow Jones U.S. Business Support Services Index (In thousands, except income per share, employees and research client enterprises) Year ended December 31, 2019 2018 20171 2016 2015 Statement of Operations Data Total revenues Net income2,3 $ 4,245,321 $ 3,975,454 $ 3,311,494 $ 2,444,550 $ 2,163,056 233,290 122,456 3,279 193,582 175,635 Diluted income per common share2,3 $ 2.56 $ 1.33 $ 0.04 $ 2.31 $ 2.06 Weighted average shares outstanding (diluted) Common shares outstanding at year-end 90,971 89,158 92,122 89,702 89,790 83,820 90,823 82,651 85,056 82,338 Cash Flow Data Operating cash flows Balance Sheet Data $ 565,436 $ 471,158 $ 254,517 $ 365,632 $ 345,561 20194 2018 20171 2016 2015 As of December 31, Cash and cash equivalents $ 280,836 $ 156,368 $ 538,908 $ 474,233 $ 372,976 Current assets Total assets Current liabilities 2,018,741 1,811,739 2,588,608 1,343,196 1,140,997 7,151,294 6,201,474 7,283,173 2,367,335 2,168,517 2,856,534 2,620,935 2,822,585 1,460,249 1,323,492 Total debt principal outstanding 2,207,514 2,312,092 3,323,062 702,500 825,000 Total liabilities 6,212,701 5,350,717 6,299,708 2,306,457 2,300,917 Stockholders’ equity (deficit) $ 938,593 $ 850,757 $ 983,465 $ 60,878 $ (132,400) Statistical data Total contract value5 $ 3,446,000 $ 3,086,000 $ 2,770,000 $ 1,923,000 $ 1,691,000 Research client enterprises 15,400 15,600 12,000+ 11,122 10,796 Consulting backlog5 Employees $ 115,700 $ 108,400 $ 97,100 $ 89,200 $ 98,300 16,724 15,173 15,131 8,813 7,834 1 Gartner acquired CEB Inc. on April 5, 2017. The results are included beginning on that date. 2 A net tax benefit of $38.1 million from an intercompany sale of certain intellectual property is included in the 2019 results. 3 A tax benefit of $59.6 million related to the U.S. Tax Cuts and Jobs Act of 2017 is included in the 2017 results. 4 Gartner adopted a new lease accounting standard in 2019, which increased certain assets and liabilities. 5 All contract values and backlog amounts have been calculated using the same foreign currency rates as December 31, 2019. Investor Relations As a Gartner shareholder, you’re invited to take advantage of shareholder services or to request more information about Gartner. Account Questions Our transfer agent can help you with a variety of shareholder-related services, including: • Account information • Transfer instructions • Change of address • Lost certificates • Direct share registration You can call our transfer agent at: 1 800 937 5449 (toll-free; U.S. shareholders only) +1 718 921 8124 (non-U.S. shareholders) You can also write our transfer agent and registrar at: American Stock Transfer & Trust Company, LLC Shareholder Relations 6201 15th Avenue Brooklyn, NY 11219 USA help@astfinancial.com Shareholders of record who receive more than one copy of this annual report can contact our transfer agent and arrange to have their accounts consolidated. Shareholders who own Gartner stock through a brokerage firm can contact their broker to request consolidation of their accounts. Contact Information To contact Gartner Investor Relations, call +1 203 316 6537. We can be contacted during U.S. East Coast business hours to answer investment-oriented questions about Gartner. In addition, you can write us at: Gartner Investor Relations 56 Top Gallant Road P.O. Box 10212 Stamford, CT 06904-2212 USA Or send us an email at investor.relations@gartner.com. To get financial information online, visit investor.gartner.com. Independent Registered Public Accounting Firm KPMG LLP 345 Park Avenue New York, NY 10154 USA April 22, 2020 Dear Stockholder: On behalf of the Board of Directors and Management of Gartner, Inc., you are invited to attend our 2020 Annual Meeting of Stockholders to be held on Monday, June 8, 2020, at 10 a.m. local time, at our corporate headquarters at 56 Top Gallant Road, Stamford, Connecticut. However, in light of the emerging public health concerns of the COVID-19 (Coronavirus) outbreak, we may hold a Virtual Annual Meeting in lieu of a physical meeting in Stamford, Connecticut. If we decide to hold a Virtual Annual Meeting, we will announce it in a press release available at https://investor.gartner.com as soon as practicable prior to the Annual Meeting. Details of the business to be conducted at the meeting are given in the Notice of Annual Meeting of Stockholders and Proxy Statement which follow this letter. The 2019 Annual Report to Stockholders is also included with these materials. We have mailed to many of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our 2020 Proxy Statement and our 2019 Annual Report to Stockholders, and how to vote online on the three management Proposals put before you this year. The Notice also includes instructions on how to request a paper or email copy of the proxy materials, including the Notice of Annual Meeting, Proxy Statement and Annual Report, and proxy card or voting instruction card. Stockholders who the proxy materials or elected to receive the proxy materials previously either requested paper copies of electronically did not receive a Notice and will receive the proxy materials in the format requested. In addition, by following the e-consent instructions in the proxy card, stockholders may go paperless in future solicitations and request proxy materials electronically by email on an ongoing basis. Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to review the proxy materials and vote your shares, regardless of the number of shares you hold, as soon as possible. You may vote by proxy over the internet or by telephone using the instructions provided in the Notice. Alternatively, if you received paper copies of the proxy materials by mail, you can also vote by following the instructions on the proxy card or voting instruction card. Instructions regarding the three methods of voting are contained in the Notice, proxy card or voting instruction card. the meeting, please contact our Investor Relations Department at If you have any questions about (203) 316-6537. Sincerely, Eugene A. Hall Chief Executive Officer 2020 Proxy Statement | NOTICE OF ANNUAL MEETING OF STOCKHOLDERS Date: Time: Location: Monday, June 8, 2020 10:00 a.m. local time 56 Top Gallant Road Stamford, Connecticut 06902 Matters To Be Voted On: (1) Election of ten members of our Board of Directors; (2) Approval, on an advisory basis, of the compensation of our named executive officers; and (3) Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the 2020 fiscal year. Record Date: April 14, 2020 – You are eligible to vote if you were a stockholder of record on this date. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on June 8, 2020: We are making this Notice of Annual Meeting, this Proxy Statement and our 2019 Annual Report available on the Internet at www.proxyvote.com and mailing copies of these Proxy Materials to certain stockholders on or about April 22, 2020. Stockholders of record at the close of business on April 14, 2020 are entitled to notice of, and to vote at, the Annual Meeting. In light of the emerging public health concerns of the COVID-19 (Coronavirus) outbreak, we may hold a Virtual Annual Meeting in lieu of a physical meeting in Stamford, Connecticut. If we decide to hold a Virtual Annual Meeting, we will announce it in a press release available at https://investor.gartner.com as soon as practicable prior to the Annual Meeting. In that event, the 2020 Annual Meeting of Stockholders would be held in a virtual meeting format only, on the above date and time, via live audio webcast. Stockholders or their legal proxy holders could participate, submit questions, vote, and examine our stockholder list at the Virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/IT2020 and using your 16-digit control number, but only if the meeting is held virtually and not in Stamford, Connecticut. If you are planning to attend our Annual Meeting, please monitor our website prior to the meeting date. As always, we encourage you to vote your shares prior to the Annual Meeting. By Order of the Board of Directors, Jules Kaufman Secretary Stamford, Connecticut April 22, 2020 2020 Proxy Statement | TABLE OF CONTENTS GENERAL INFORMATION COMPENSATION TABLES AND NARRATIVE The Annual Meeting and Proposals . . . . . . . . . . 1 DISCLOSURES THE BOARD OF DIRECTORS General Information About Our Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director Skills, Experience and Expertise . . . . . Majority Vote Standard . . . . . . . . . . . . . . . . . . . . Compensation of Directors . . . . . . . . . . . . . . . . . Director Compensation Table . . . . . . . . . . . . . . . Director Stock Ownership and Holding Period Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORPORATE GOVERNANCE Board Principles and Practices . . . . . . . . . . . . . Director Independence . . . . . . . . . . . . . . . . . . . . Board Leadership Structure . . . . . . . . . . . . . . . . Risk Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . Board and Committee Meetings and Annual 2 5 5 5 6 7 8 8 9 9 Meeting Attendance . . . . . . . . . . . . . . . . . . . . 10 . . . . . . . . 10 Committees Generally and Charters Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . 10 Compensation Committee . . . . . . . . . . . . . . . . . 11 Governance/Nominating Committee . . . . . . . . . 12 . . . . . . . . 13 Code of Ethics and Code of Conduct PROPOSAL ONE: ELECTION OF DIRECTORS Nominees for Election to the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 EXECUTIVE OFFICERS General Information about our Current Executive Officers . . . . . . . . . . . . . . . . . . . . . 15 COMPENSATION DISCUSSION & ANALYSIS Executive Summary . . . . . . . . . . . . . . . . . . . . . . 17 Compensation Setting Process for 2019 . . . . . . 21 Other Compensation Policies and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Executive Stock Ownership and Holding Period Guidelines . . . . . . . . . . . . . . . . . . . . 29 Clawback Policy . . . . . . . . . . . . . . . . . . . . . . . 29 Hedging and Pledging Policies . . . . . . . . . . . 29 Accounting and Tax Impact . . . . . . . . . . . . . . 29 Grant of Equity Awards . . . . . . . . . . . . . . . . . . 30 Compensation Committee Report . . . . . . . . . . . 31 Summary Compensation Table . . . . . . . . . . . . . 32 Other Compensation Table . . . . . . . . . . . . . . . . 33 Grants of Plan-Based Awards Table . . . . . . . . . 34 Certain Employment Agreements with Executive Officers . . . . . . . . . . . . . . . . . . . . . . 35 Potential Payments upon Termination or Change in Control . . . . . . . . . . . . . . . . . . . . . 39 Outstanding Equity Awards at Fiscal Year-End Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Option Exercises and Stock Vested Table . . . . 42 Non-Qualified Deferred Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Pay Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Equity Compensation Plan Information . . . . . . . 44 PROPOSAL TWO: APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . 45 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 46 TRANSACTIONS WITH RELATED PERSONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Principal Accountant Fees and Services . . . . . . 49 Audit Committee Report . . . . . . . . . . . . . . . . . . . 50 PROXY AND VOTING INFORMATION Information Concerning Proxy Materials and the Voting of Proxies . . . . . . . . . . . . . . . . . . . . 51 Stockholder Communications . . . . . . . . . . . . . . . 55 Available Information . . . . . . . . . . . . . . . . . . . . . . 55 Process for Submission of Stockholder Proposals for our 2021 Annual Meeting . . . . 55 Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 2020 Proxy Statement | 56 Top Gallant Road Stamford, Connecticut 06902 PROXY STATEMENT For the Annual Meeting of Stockholders to be held on June 8, 2020 GENERAL INFORMATION The Annual Meeting and Proposals time, for the purposes set The 2020 Annual Meeting of Stockholders of Gartner, Inc. will be held on Monday, June 8, 2020, at 10:00 a.m. local forth in the accompanying Notice of Annual Meeting of Stockholders and described in greater detail below. This Proxy Statement and form of proxy, together with our 2019 Annual Report to Stockholders, are being furnished in connection with the solicitation by the Board of Directors of proxies to be used at the meeting and any adjournment of the meeting, and are first being made available to our stockholders on or around April 22, 2020. We will refer to your company in this Proxy Statement as “we”, “us”, the “Company” or “Gartner.” The three proposals to be considered and acted upon at the Annual Meeting, which are described in more detail in this Proxy Statement, are: • • • Election of ten (10) nominees to our Board of Directors; Approval, on an advisory basis, of the compensation of our named executive officers; and Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the 2020 fiscal year. Management does not intend to present any other items of business and is not aware of any matters other than those set forth in this Proxy Statement for action at the 2020 Annual Meeting of Stockholders. However, if any other matters properly come before the Annual Meeting, the persons designated by the Company as proxies may vote the shares of common stock (“Common Stock”) they represent in their discretion. Public Health Concerns of the COVID-19 Outbreak In light of the emerging public health concerns of the COVID-19 (Coronavirus) outbreak, we may hold a Virtual Annual Meeting in lieu of a physical meeting in Stamford, Connecticut. If we decide to hold a Virtual Annual Meeting, we will announce it in a press release available at https://investor.gartner.com as soon as practicable prior to the Annual Meeting. In that event, the 2020 Annual Meeting of Stockholders would be held in a virtual meeting format only, on the above date and time, via live audio webcast. Stockholders or their legal proxy holders could participate, submit questions, vote, and examine our stockholder list at the Virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/IT2020 and using your 16-digit control number, but only if the meeting is held virtually and not in Stamford, Connecticut. If you are planning to attend our Annual Meeting, please monitor our website prior to the meeting date. As always, we encourage you to vote your shares prior to the Annual Meeting. 2020 Proxy Statement | 1 THE BOARD OF DIRECTORS General Information about our Board of Directors Our Board of Directors of Gartner, Inc. (the “Board”) currently has ten directors who serve for annual terms. Our CEO, 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. See Executive Compensation – Certain Employment Agreements with Executive Officers – Mr. Hall below. 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. Each member of our Board has been nominated for re-election at the 2020 Annual Meeting. See Proposal One – Election of Directors on page 14. 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. Peter E. Bisson, 62, director since 2016 including chair of Mr. Bisson retired from McKinsey & Company, a global management consulting business, in 2016 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 & its knowledge committee, which guides the firm’s Company, 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 Automatic Data Processing, Inc. Mr. Bisson’s experience includes advising clients on corporate strategy and M&A, design and execution of performance improvement programs and marketing and technology development, which qualifies him to serve as a director. Richard J. Bressler, 62, director since 2006 Mr. Bressler is President, Chief Operating Officer and Chief Financial Officer of iHeartMedia, Inc., a mass media company. iHeartMedia, Inc. filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in March 2018 and emerged from bankruptcy in May 2019. From July 2013 to April 2019, Mr. Bressler also served as the Chief Financial Officer of Clear Channel Outdoor Holdings, Inc., an outdoor advertising company. Prior to joining iHeartMedia, he served as Managing Director of Thomas H. Lee Partners, L.P., a Boston-based private equity firm, from 2006 to July 2013. He joined Thomas H. Lee Partners from his role as Senior Executive Vice President and Chief Financial Officer of Viacom Inc., where he managed all strategic, financial, business development 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. 2020 Proxy Statement | 2 Raul E. Cesan, 72, director since 2012 Karen E. Dykstra, 61, director since 2007 Anne Sutherland Fuchs, 73, director since 1999 William O. Grabe, 81, director since 1993 The Board of Directors Mr. Cesan is 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 to 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 was until April 2018 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. 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., an online service provider. 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. 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. Mr. 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 QTS Realty Trust, Inc. and Lenovo Group Limited. He is a former director of Infotech Enterprises Limited, Compuware Corporation, Patni Computer Systems Ltd. (now known as iGate Computer Systems Limited) and Covisint Corporation. Mr. Grabe is also a trustee of the Nature Conservatory in Florida and the NYU Entrepreneurial Institute, as well as a member of the Board of Grand Canyon Trust and the UCLA Anderson School of Management Board of Visitors. 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. 2020 Proxy Statement | 3 The Board of Directors Eugene A. Hall, 63, director since 2004 Stephen G. Pagliuca, 65, director since 1990 (except for six months in 2009 when he entered the U.S. Senate race for Massachusetts) Eileen M. Serra, 65, director since 2017 Mr. Hall is the Chief Executive Officer of Gartner. Prior to joining Gartner as Chief Executive Officer in 2004, Mr. Hall 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. 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. Mr. Pagliuca is a Managing Director of Bain Capital Private Equity, LP, a global private equity firm, and Co-Chairman of Bain Capital, L.P. He is also a Managing Partner and the Boston Celtics basketball franchise. Mr. Pagliuca joined Bain & an owner of 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, Warner Chilcott PLC and the Weather Company. He currently serves on the Board of Directors of Axis Bank, Ltd., Kioxia Holdings Corporation and Virgin Voyages. the Mr. Pagliuca has deep subject matter knowledge of Gartner’s history, development of its business model and the global information technology industry, as well as financial and accounting matters. Ms. Serra retired from JPMorgan Chase & Co., an international financial services company, in February 2018, where she last served as a Senior Advisor focusing on strategic growth initiatives across Chase Consumer and Community Banking businesses. From 2012 to 2016, she served as the CEO of Chase Card Services. Prior to joining Chase Card Services in 2006, Ms. Serra was a Managing Director at Merrill Lynch. She was a Senior Vice President at American Express and a partner at McKinsey & Company earlier in her career. She is currently a director of Capital One Financial Corporation. Ms. Serra has extensive operational and management experience, having held senior positions at some of the world’s largest companies, which allows her to provide valuable guidance to our Board. James C. Smith, 79, director since 2002 and Chairman of the Board since 2004 Mr. Smith was Chairman of the Board of First Health Group Corp., a national health its sale in 2004. He also served as First Health’s Chief benefits company until 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. 2020 Proxy Statement | 4 The Board of Directors Director Skills, Experience and Expertise The matrix below summarizes what our Board believes are desirable types of experience, qualifications, attributes and skills possessed by one or more of Gartner’s directors, because of their particular relevance to the Company’s business and structure. The following matrix does not encompass all the experience, qualifications, attributes or skills of our directors. Bisson Bressler Cesan Dykstra Fuchs Grabe Hall Pagliuca Serra Smith Total Industry Experience Technology Public Company Boards International Leadership Corporate Governance Accounting Capital Markets Executive Compensation Diversity Strategic Planning/ Business Development/ M&A Operations Sales & Marketing X X X X X X X X Majority Vote Standard X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 5 5 8 9 10 4 5 3 8 4 10 10 5 X X X X X X X X The Company has adopted a majority vote standard for the election of directors which provides that a nominee must receive more FOR votes than AGAINST votes for election as a director. Should a nominee fail to achieve this threshold, the nominee must immediately tender his or her resignation to the Chairman. The Board, in its discretion, can determine whether or not to accept the resignation. Compensation of Directors The Compensation Committee, in consultation with the Governance Committee, reviews all forms of independent director compensation and approves changes, when appropriate. The Compensation and Governance Committees are supported in this review by Exequity, LLP. The review examines director compensation in relation to two comparator groups: Peer Group and General Industry Reference Group. The Peer Group includes the same companies used to benchmark executive pay. 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. Director compensation is primarily reviewed in relation to the Peer Group. Gartner did not adjust director compensation in 2019 after adjusting it in 2018 to close an identified shortfall from the Peer Group median, increasing the director annual equity grant from $200,000 to $240,000. An increase in equity compensation was the only change made to director compensation in following with Gartner’s philosophy to provide more value in equity compensation than cash. Director compensation in 2019 was determined to approximate the median of the Peer Group. The section that follows describes the current director compensation program and components. 2020 Proxy Statement | 5 The Board of Directors 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: Annual Committee Chair Fee: Annual Committee Member Fee: Annual Equity Grant: $60,000 per director and an additional $100,000 for our non-executive Chairman of the Board, payable in arrears in four equal quarterly instalments, 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 (the “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. $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 Director Retainer 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 Director Retainer Fee. $240,000 in value of restricted stock units (“RSUs”), awarded annually on the date of the Annual Meeting. The number of RSUs awarded is determined by dividing $240,000 by the closing price of the Common Stock on the award date. The RSUs vest one year after grant subject to continued service as director through that date; release may be deferred beyond the vesting date at the director’s election. Director Compensation Table This table sets forth compensation earned or paid in cash, and the grant date fair value of equity awards made, to our non-management directors on account of services rendered as a director in 2019. Mr. Hall receives no additional compensation for service as director. Name Peter E. Bisson Richard J. Bressler Raul E. Cesan Karen E. Dykstra Anne Sutherland Fuchs William O. Grabe Stephen G. Pagliuca Eileen M. Serra James C. Smith Fees Earned Or Paid ($)(1) 67,504 89,900 69,966 74,927 92,592 77,471 60,000 69,966 174,898 Stock Awards ($)(2) 240,129 240,129 240,129 240,129 240,129 240,129 240,129 240,129 240,129 Total ($) 307,633 330,029 310,095 315,056 332,721 317,600 300,129 310,095 415,027 2020 Proxy Statement | 6 The Board of Directors (1) Includes amounts earned in 2019 and paid in cash and/or CSEs on account of the Annual Director Retainer Fee, Annual Committee Chair Fee and/or Annual Committee Member Fee, described above. Does not include reimbursement for meeting attendance expenses. (2) Represents 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 1,574 RSUs that vest on May 30, 2020, one year from the date of the 2019 Annual Meeting (unless deferred release was elected), subject to continued service through that date. The number of RSUs awarded was calculated by dividing $240,000 by the price of our Common Stock on May 30, 2019 ($152.56) (rounded up to the nearest whole number). Director Stock Ownership and Holding Period Guidelines The Board believes directors should have a financial interest in the Company. Accordingly, each director is required to hold shares of Gartner common stock with a value of not less than five (5) times the Annual Director Retainer Fee ($60,000). Directors are required to achieve the guideline within three years of joining the Board. In the event a director has not satisfied the guideline within such three-year period, he/she will be required to hold 50% of net after-tax shares received from the Company either in the form of equity awards or released CSEs until the guideline is achieved. We permit directors to apply deferred and unvested equity awards towards satisfying these requirements. As of December 31, 2019, all of our directors were in compliance with these guidelines. 2020 Proxy Statement | 7 CORPORATE GOVERNANCE Gartner is committed to maintaining strong corporate governance practices. Corporate Governance Highlights: ➣ Independent Chairman of the Board ➣ Majority voting for directors ➣ Annual election of directors ➣ Annual Board and Committee performance evaluation ➣ Executive sessions after each Board and Committee meeting ➣ 9 out of 10 directors are independent ➣ 3 out of 10 directors are women ➣ Fully independent Board committees ➣ Annual director affirmation of compliance with Code of Conduct ➣ Annual director evaluation of CEO Board Principles and Practices Our Board Principles and Practices (the “Board Guidelines”) are reviewed annually and revised in light of legal, regulatory or other developments, as well as emerging best practices, by our Governance Committee and Board. The Board Guidelines, which are posted on https://investor.gartner.com, describe the Board’s responsibilities, its role in strategic development and other matters, discussed below. 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 (the “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 commercial, financial, familial, employment and other relationships between each director and the Company, its auditors and other companies that do business with Gartner. Because of our worldwide reach, it is not unusual for Gartner to engage in ordinary course of business transactions involving the sale of research or consulting services with entities affiliated with one of our directors, or their immediate family members. The Board considered these transactions in determining director independence and determined that such transactions did not impair any director’s independence. After analysis and recommendation by the Governance Committee, the Board determined that: • all non-management directors who served during the 2019 fiscal year (Peter Bisson, Richard Bressler, Raul Cesan, Karen Dykstra, Anne Sutherland Fuchs, William Grabe, Stephen Pagliuca, Eileen Serra and James Smith) are independent under the NYSE listing standards; 2020 Proxy Statement | 8 Corporate Governance • • 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 (Mr. Cesan and Mses. Fuchs and Serra) 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. Board Leadership Structure The leadership of our Board rests with our independent Chairman of the Board, Mr. James C. Smith. Gartner believes that the separation of functions between the CEO and Chairman of the Board provides independent leadership of the Board in the exercise of its management oversight responsibilities, increases the accountability of the CEO and creates transparency into the relationship among executive management, the Board of Directors and stockholders. Additionally, in view of Mr. Smith’s extensive experience as a chief executive officer of a major corporation, he is able to provide an independent point of view to our CEO on important management and operational issues. Risk Oversight The Board of Directors, together with management, oversees risk (including cybersecurity risk) at Gartner. The Company’s strategic objectives and activities are presented by executive management to the Board and approved annually and more frequently as necessary. The Board regularly receives updates on cybersecurity matters from the Company’s Chief Information Officer and discusses identified issues at its meetings. The Risk (Internal Audit) function reports directly to the Audit Committee and provides quarterly reports to the committee. The committee reviews the results of the internal audit annual risk assessment and the proposed internal audit plan. Subsequent quarterly meetings include an update on ongoing internal audit activities, including results of audits and any changes to the audit plan. Risk also meets with the Audit Committee in executive session on a quarterly basis. The General Counsel, who serves as Chief Compliance Officer, also reports directly to the Audit Committee on a quarterly basis concerning the effectiveness and status of the Company’s legal and ethical compliance program and initiatives, hotline activities and litigation matters. The Company maintains internal controls and procedures over financial reporting, as well as enterprise wide internal controls, which are updated and tested annually by management and our independent registered public accounting firm. Any internal control deficiencies and the status of remediation efforts as well as any findings of the Disclosure Controls Committee are reported to the Audit Committee on a quarterly basis. Risk Assessment of Compensation Policies and Practices Management conducts an annual risk assessment of the Company’s compensation policies and practices, including all executive, non-executive and business unit compensation policies and practices, as well as the variable compensation policies applicable to our global sales force. The results of this assessment are reported to the Compensation Committee. For 2019, management concluded, and the Compensation Committee agreed, that no Company compensation policies and practices created risks that were reasonably likely to have a material adverse effect on the Company. Management Succession Planning Succession planning is one of the Board’s most critical functions—to develop leaders who will successfully build the Company’s business. The Board and its Committees regularly review and discuss management development 2020 Proxy Statement | 9 Corporate Governance and succession plans for the Chief Executive Officer and his direct reports. This review includes an assessment of senior executives and their potential as successor to the Chief Executive Officer. Board and Committee Meetings and Annual Meeting Attendance Our Board held four meetings in 2019. During 2019, all of our directors attended at least 75% of the Board and committee meetings held during the periods in which such director served as a director and/or committee member. At each regular quarterly Board and committee meeting, time is set aside for the non-management directors to meet in executive session without management present. James C. Smith, our non-executive Chairman of the Board, presides over the executive sessions at the Board meetings, and each committee chairperson presides over the executive sessions at their respective committee meetings. Directors are not required, but are invited, to attend the Annual Meeting of Stockholders. In 2019, Mr. Hall and other executive officers of the Company attended the 2019 Annual Meeting of Stockholders. Committees Generally and Charters As noted above, our Board has three standing committees: Audit, Compensation and Governance/Nominating, and all committee members have been determined by our Board to be independent under applicable standards. Our Board has approved a written charter for each standing committee, which is reviewed annually and revised as appropriate. The table below provides information for each Board committee in 2019: Name Audit Compensation Governance/Nominating Peter E. Bisson Richard J. Bressler Raul E. Cesan Karen E. Dykstra Anne Sutherland Fuchs William O. Grabe Stephen G. Pagliuca Eileen M. Serra James C. Smith Meetings Held in 2019: Audit Committee X (Chair) X X 5 X X (Chair) X 5 X X X (Chair) 4 Our Audit Committee serves as an independent body to assist in Board oversight of: ✓ the integrity of the Company’s financial statements; ✓ the Company’s compliance with legal and regulatory requirements; ✓ the independent registered public accounting firm’s retention, qualifications and independence; and ✓ the Company’s Risk, Compliance and Internal Audit functions. Gartner has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. Our Board has determined that both Ms. Dykstra and Mr. Bressler qualify as audit committee financial experts, as defined by the rules of the Securities and Exchange Commission (the “SEC”), and that all members have the requisite accounting or related financial management expertise and are financially literate as required by the NYSE corporate governance listing standards. 2020 Proxy Statement | 10 Corporate Governance Additionally, the Audit Committee is directly responsible for the appointment, compensation and oversight of our independent registered public accounting firm, KPMG; approves the engagement letter describing the scope of the annual audit; approves fees for audit and non-audit services; provides an open avenue of communication among the independent registered public accounting firm, the Risk and Internal Audit functions, management and the Board; resolves disagreements, if any, between management and the independent registered public accounting firm regarding financial reporting for the purpose of issuing an audit report in connection with our financial statements and our internal control over financial reporting; and prepares the Audit Committee Report required by the SEC and included in this Proxy Statement on page 50 below. The independent registered public accounting firm reports directly to the Audit Committee. By meeting with the independent registered public accounting firm, the internal auditor, and operating and financial management personnel, the Audit Committee oversees matters relating to accounting standards, policies and practices, any changes thereto and the effects of any changes on our financial statements, financial reporting practices and the quality and adequacy of internal controls. Additionally, our internal audit and compliance functions report directly to the Audit Committee. After each Audit Committee meeting, the Committee meets separately with the CFO, the independent registered public accounting firm, the Chief Compliance Officer and the internal auditor without management present. The Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. A toll-free phone number and web-submission form, in local language, managed by a third party is available for confidential and anonymous submission of concerns relating to accounting, auditing and illegal or unethical matters, as well as alleged violations of Gartner’s Code of Conduct or any other policies. All submissions on the hotline are reported to the General Counsel (or designee, who determines the mode of investigation), the internal auditor and the Audit Committee at each regular meeting. The Audit Committee has the power and funding to retain independent counsel and other advisors as it deems necessary to carry out its duties. Compensation Committee Our Compensation Committee has responsibility for: ✓ ✓ ✓ ✓ ✓ ✓ ✓ administering and approving all elements of compensation for the Chief Executive Officer and other executive officers; approving, by direct action or through delegation, all equity awards, grants, and related actions under the provisions of our equity plan, and administering the plan; participating in the evaluation of CEO and other executive officer performance (with the input and oversight of the Governance Committee and the Chairman of the Board); approving the peer group used for executive compensation benchmarking purposes; evaluating the independence of all compensation committee advisers; providing oversight in connection with company-wide compensation programs; and approving the form and amount of director compensation in consultation with the Governance/Nominating Committee. 2020 Proxy Statement | 11 Corporate Governance The Compensation Committee reviewed and approved the Compensation Discussion and Analysis contained in this Proxy Statement, recommended its inclusion herein (and in our 2019 Annual Report on Form 10-K) and issued the related report to stockholders as required by the SEC (see Compensation Committee Report on page 31 below). Exequity LLP (“Exequity”) was retained by the Compensation Committee to provide information, analyses and advice to the Committee during various stages of 2019 executive compensation planning. Exequity reports directly to the Compensation Committee chair. In the course of conducting its activities, Exequity attended meetings of the Compensation Committee and briefed the Committee on executive compensation trends generally. The Compensation Committee has assessed the independence of Exequity and has concluded that Exequity is independent and that its retention presents no conflicts of interest either to the Committee or the Company. Final decisions with respect to determining the amount or form of executive compensation under the Company’s executive compensation programs are made by the Compensation Committee alone and may reflect factors and considerations other to the Compensation Discussion & Analysis beginning on page 17 for a more detailed discussion of the Compensation Committee’s activities with respect to executive compensation. than the information and advice provided by its consultants. Please refer Compensation Committee Interlocks and Insider Participation. During 2019, no member of the Compensation Committee served as an officer or employee of the Company, was formerly an officer of the Company or had any relationship with the Company required to be disclosed under Transactions with Related Persons below. Additionally, during 2019, no executive officer of the Company: (i) served as a member of the compensation committee (or full board in the absence of such a committee) or as a director 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 board in the absence of such a committee) of another entity, one of whose executive officers served on our Board. Governance/Nominating Committee Our Governance/Nominating Committee (the “Governance Committee”) has responsibility for: ✓ the size, composition and organization of our Board; ✓ the independence of directors and committee members under applicable standards; ✓ our corporate governance policies, including our Board Principles and Practices; ✓ the criteria for directors and the selection of nominees for election to the Board; ✓ committee assignments; ✓ assisting the Compensation Committee in determining the form and amount of director compensation; ✓ the performance evaluation of our CEO and management succession planning; and ✓ the annual Board and Committee performance evaluations. While the Governance Committee has not specified minimum qualifications for candidates it recommends, it will consider the qualifications, skills, expertise, qualities, diversity, age, gender, availability and experience of all candidates that are presented for consideration. At the present time, three of our ten directors are women. The Board utilizes a concept of diversity that extends beyond race, gender and national origin to encompass the viewpoints, professional experience and other individual qualities and attributes of candidates that will enable the 2020 Proxy Statement | 12 Corporate Governance Board to select candidates who are best able to carry out the Board’s responsibilities and complement the mix of talent and experience represented on the Board. In connection with its annual evaluation, the Board considers the appropriateness of the qualifications of existing directors given then current needs. Candidates for Board nomination may be brought to the attention of the Governance Committee by current Board members, management, stockholders or other persons. All potential new candidates are fully evaluated by the Governance Committee using the criteria described above, and then considered by the entire Board for nomination. Director Candidates submitted by Stockholders: Stockholders wishing to recommend director candidates for the Governance/ consideration by the Governance Committee may do so by writing to the Chairman of Nominating Committee, c/o Corporate Secretary, Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, CT 06904-2212, and indicating the recommended candidate’s name, biographical data, professional experience and any other qualifications. In addition, stockholders wishing to propose candidates for election must follow our advance notice provisions. See Process for Submission of Stockholder Proposals for our 2021 Annual Meeting on page 55. Code of Ethics and Code of Conduct Gartner has adopted a CEO & CFO Code of Ethics which applies to our CEO, CFO, controller and other financial managers, and a Global Code of Conduct, which applies to all Gartner officers, directors and employees, wherever located. Annually, each officer, director and employee affirms compliance with the Global Code of Conduct. See Proxy and Voting Information—Available Information below. 2020 Proxy Statement | 13 PROPOSAL ONE: ELECTION OF DIRECTORS Nominees for Election to the Board of Directors Our Board, acting through the Governance Committee, is responsible for presenting for stockholder consideration each year a group of nominees that, taken together, has the experience, qualifications, attributes and skills appropriate and necessary to carry out the duties and responsibilities of, and to function effectively as, the board of directors of Gartner. The Governance Committee regularly reviews the composition of the Board in light of the needs of the Company, its assessment of board and committee performance, and the input of stockholders and other key stakeholders. The Governance Committee looks for certain common characteristics in all nominees, including integrity, strong professional experience and reputation, a record of achievement, constructive and collegial personal attributes and the ability and commitment to devote sufficient time and effort to board service. In addition, the Governance Committee seeks to include on the Board a complementary mix of individuals with diverse backgrounds and skills that will enable the Board as a whole to effectively manage the array of issues it will confront in furtherance of its duties. These individual qualities can include matters such as experience in the technology industry; experience managing and operating large public companies; international operating experience; financial, accounting, executive compensation and capital markets expertise; and leadership skills and experience. All of the nominees listed below are incumbent directors who have been nominated by the Governance Committee and Board for re-election and have agreed to serve another term. For additional information about the nominees and their qualifications, please see General Information about our Board of Directors on page 2 above. If any nominee is unable or declines unexpectedly to stand for election as a director at the Annual Meeting, proxies may be voted for a nominee designated by the present Board to fill the vacancy. Each person elected as a director will continue to be a director until the 2021 Annual Meeting of Stockholders or a successor has been elected. Peter E. Bisson Richard J. Bressler Raul E. Cesan Karen E. Dykstra Anne Sutherland Fuchs William O. Grabe Eugene A. Hall Stephen G. Pagliuca Eileen M. Serra James C. Smith RECOMMENDATION OF OUR BOARD Our Board unanimously recommends that you vote FOR the election of each of the ten nominees to our Board of Directors. 2020 Proxy Statement | 14 EXECUTIVE OFFICERS General Information about our Current Executive Officers: Eugene A. Hall 63 Kenneth Allard 49 Joe Beck 59 Ken Davis 51 Alwyn Dawkins 54 Mike Diliberto, 54 Michael Harris 50 Scott Hensel 47 Chief Executive Officer and director since 2004. Prior to joining Gartner as Chief Executive Officer, 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. Executive Vice President, New Market Programs since April 2019. Mr. Allard joined Gartner as Group Vice President, Consulting in 2017 following the acquisition of L2, Inc., where he was CEO. Previously, he was a Managing Director at Huge Inc., a full service digital agency, and held senior leadership positions at research and consulting companies including Edgewater Technology Inc., Jupiter Media Metrix Inc. and Gartner, where he started his career. Executive Vice President, Global Technology Sales since November 2017. In his more than 20 years at Gartner, he has served as Senior Vice President, Americas End User Sales and Managing Vice President. Mr. Beck joined Gartner in 1997 when we acquired Datapro Information Services. He held sales positions at McGraw-Hill earlier in his career. Executive Vice President, Products & Services has been leading the Products & Services function 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. Executive Vice President, Conferences has been leading the Conferences function 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. Executive Vice President & Chief Information Officer has been our Chief Information Officer since 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. Executive Vice President, Research & Advisory since August 2018. Mr. Harris has more than 20 years of experience at Gartner and has held a number of management positions in Research & Advisory. Most recently, he led the Company’s global team of IT industry experts and researchers as Senior Vice President, IT Leaders & Tech Professionals Research. Prior to joining Gartner, Mr. Harris held various roles in Centel, Sprint and AT&T. Executive Vice President, Consulting since October 2017. Prior to joining Gartner, he served as President, Terex Services, Parts and Customer Solutions, at Terex Corporation, a global manufacturer of lifting and material processing products and services. Previously, he spent 14 years at McKinsey & Company where he was a partner assisting clients in the IT and Advanced Industries sectors. 2020 Proxy Statement | 15 Executive Officers Jules Kaufman 62 Executive Vice President, General Counsel & Secretary since August 2017. Prior to joining Gartner, he was the Chief Legal Officer and Secretary at Coty Inc., a beauty products manufacturer, from 2008 through 2016. Previously, he spent 18 years at Colgate-Palmolive, last serving as General Counsel Europe/South Pacific. Robin Kranich 49 Executive Vice President, Human Resources has been leading Human Resources since 2008. During her more than 25 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 52 Executive Vice President, Global Business Sales since April 2019. Previously, Mr. McVeigh served as Executive Vice President, New Market Programs and led the New Markets function since August 2015. Prior to joining Gartner, he was a managing director at Hellman & Friedman LLC, a private equity firm and an operating partner at Blackstone Group, and a partner at McKinsey & Company. Craig W. Safian 51 Executive Vice President & Chief Financial Officer has been our Chief Financial Officer since June 2014. In his more than 17 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. 2020 Proxy Statement | 16 COMPENSATION DISCUSSION & 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, the following persons who were Named Executive Officers (“NEOs”) in 2019: Eugene A. Hall Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh Chief Executive Officer Executive Vice President & Chief Financial Officer Executive Vice President, Conferences Executive Vice President, Human Resources Executive Vice President, Global Business Sales The CD&A is organized into three sections: • The Executive Summary, which highlights the strong year we had in 2019, the importance of our Contract Value (herein “CV”) metric, 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”) • The Compensation Setting Process for 2019 • Other Compensation Policies and Information 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 2019. EXECUTIVE SUMMARY 2019 – Another Year of Strong Performance In 2019, we continued to deliver strong top-line performances across our business. Total revenues showed strong growth, when comparing 2019 to 2018, fueled by double-digit growth (on an FX neutral basis) in each of our continuing business segments – Research, Conferences and Consulting. Research, our largest and most profitable segment, was up 10% year-over-year in revenues on an FX neutral basis. Contract Value of Global Technology Sales, or GTS, which sells products and services to users and providers of technology and represents more than 80% of our total Research contract value, grew 12% on an FX neutral basis. Contract Value of Global Business Sales, or GBS, which sells products and services to all other functional leaders and represents approximately 20% of our total Research contract value, accelerated growth through the year to finish up 8% organically on an FX neutral basis, compared to a growth rate of 1.1% in the investments we have made in GBS products, services and sales are same quarter of 2018. The substantial paying off. Our Conferences business had a strong year as well, delivering revenue growth of 18% on an FX neutral basis and destination conference attendee growth of 10%. Our Consulting segment also achieved double-digit growth in 2019 with revenues up 14% on an FX neutral basis. We’ve made investments over the past two years across the company that position us well to capture our market opportunity. In some cases, we invested ahead of the growth which resulted in a modest increase of costs. Going forward, we’re shifting to realizing returns from those investments so we are well-positioned for sustained long- term growth. 2020 Proxy Statement | 17 Compensation Discussion & Analysis With the great strategic position of GTS and GBS, together with leveraging the investments we have made, we expect continued strong growth in the future. Our results continued to fuel double digit-stock price growth of 20.5% in 2019 and average annual growth of 15.1% and 12.8% on a compounded basis, over the trailing three and five year periods, respectively. Comparison of Gartner Cumulative Five Year Total Shareholder Return Versus Market Indices Gartner Proxy Peers Tech Sector S&P500 $300 $200 $100 FYE 2014 FYE 2015 FYE 2016 FYE 2017 FYE 2018 FYE 2019 “Proxy Peers” represents the proxy peer group disclosed on page 23. “Tech Sector” represents the S&P Technology Select Sector Industry Index (XLK). All comparisons are on a total return basis, including dividends. 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 contracts in effect at a specific point in time, without regard to the duration of the contract. CV primarily includes research deliverables for which revenue is recognized on a ratable basis and other deliverables (primarily conferences tickets) included with subscription-based research products for which revenue is recognized when the deliverable is utilized. Unique to Gartner, CV is our single most important performance metric. It focuses all of our executives on driving both short-term and long-term success for our business and stockholders. Contract Value = Both Short-Term and Long-Term Measures of Success Short-Term ✓ Measures the value of all subscription research contracts in effect at a specific point in time. Long-Term ✓ 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 and, more important, also signals the long-term health of our Research subscription business. We believe that CV is our best, most informed and leading indicator of long-term Research revenue growth. 2020 Proxy Statement | 18 Compensation Discussion & Analysis Our Research business comprises 79% of our overall revenue and is also our highest contribution margin business (70% for 2019). Further, many of our Research contracts are multi-year agreements, and our Research enterprise client retention and retained contract value (or wallet retention) are consistently high. As a result, CV is predictive of revenue highly likely to recur over a 3 – 5 year period, and a high CV growth rate translates to high, long-term revenue and profit growth. In addition, many of our clients pay us upfront when they purchase our research subscription services, which drives strong cash flow. For all these reasons, the Board believes that CV growth, which translates to Research revenue growth, is the most important driver of the Company’s profit growth. Accordingly, growing CV drives both short-term and long-term corporate performance and stockholder value. 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. However, for 2020, we have decided to make a change to our short-term incentive plan to focus on profitable growth by eliminating CV as a metric in favor of revenue. The change reflects our current business strategy of growth, while ensuring that CV remains a focus in our long-term plan. This also ensures a balance of metrics in our incentive plans, without an overweighting on any one measure. We believe this balanced approach is right for the business to achieve our long-term objectives of growth and profitability. Key Attributes 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. Key features of our compensation program are as follows: ✓ 100% of executive incentive awards, including annual bonus and equity awards, are performance-based. ✓ 70% of executive equity awards, and 100% of executive bonus awards are subject to forfeiture the Company fails to achieve performance objectives established by the in the event Compensation Committee. ✓ 92% of the CEO’s target total compensation (82% in the case of other NEOs) is in the form of incentive compensation (bonus and equity awards). ✓ 84% of our CEO’s target total compensation (67% in the case of other NEOs) is in the form of equity awards, with a focus on long-term performance. ✓ We use a longer than typical vesting period of 4 years on earned equity awards, with awards subject to increases or decreases in value based upon stock price movement. 2020 Proxy Statement | 19 Compensation Discussion & Analysis Our Compensation Best Practices Our compensation practices motivate our executives to achieve our operating plans and execute our corporate strategy without taking undue risks. These practices, which are consistent with “best practices” trends, include the following: ✓ We have an independent compensation consultant that reports directly to the Compensation Committee. ✓ We annually assess the Company’s compensation policies to ensure that the features of our program do not encourage undue risk. ✓ All executive officers are “at will” employees and only our CEO has an employment agreement. ✓ “Double-trigger” change in control vesting of all equity awards with limited exceptions for certain awards granted prior to 2019. ✓ We have a clawback policy applicable to all executive incentive compensation (cash bonus and equity awards). ✓ We have robust stock ownership guidelines for our directors and executive officers. ✓ We have holding period requirements that require 50% of net after tax shares from all released equity awards to be held by a director or executive officer until stock ownership guidelines are satisfied. ✓ We prohibit hedging and pledging transactions in company securities. ✓ We do not provide excise tax gross up payments. ✓ We encourage retention by providing for equity awards that vest 25% per year over 4 years. ✓ We cap payouts on incentive compensation awards to two times target. ✓ We explicitly prohibit in our equity plan: O Vesting period of less than 12 months on equity awards; O Repricing of stock options and surrendering outstanding options for new options with a lower exercise price without stockholder approval; O Cash buyouts of underwater options or stock appreciation rights without stockholder approval; O “Liberal share recycling;” O Granting 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. ✓ We do not grant equity awards to our directors or executive officers during closed trading windows. Effect of Stockholder Advisory Vote on Executive Compensation, or Say on Pay 2019 Say on Pay Approval = 97% of votes cast The Board has resolved to present Say on Pay proposals to stockholders on an annual basis, respecting the sentiment of our stockholders as expressed in 2017. The Company and 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. We also engage our stockholders periodically to solicit their feedback on executive compensation and corporate governance matters. As such, no changes were made to the core structure of our compensation program as a result of the 2019 Say on Pay vote. 2020 Proxy Statement | 20 Compensation Discussion & Analysis COMPENSATION SETTING PROCESS FOR 2019 This discussion explains the objectives of the Company’s compensation policies; what the compensation program is designed to reward; each element 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 of pay; and how each compensation element and the Company’s decisions regarding that element fit into the Company’s overall compensation objectives and affect decisions regarding other elements. The Objectives of the Company’s Compensation Policies The objectives of our compensation policies are threefold: ➣ To attract, motivate and retain highly talented, creative and entrepreneurial individuals by paying market-based compensation. ➣ To 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. ➣ To ensure that, as a public company, our compensation structure and levels are reasonable from a stockholder perspective. What the Compensation Program Is Designed to Reward Our guiding philosophy is that 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 of certain measurable performance objectives that are deemed by the Compensation Committee and management 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 price of our Common Stock (in the case of long-term equity-based incentive compensation). 2020 Proxy Statement | 21 Compensation Discussion & Analysis Principal Compensation Elements and Objectives To achieve the objectives noted above, we have designed executive compensation to consist of three principal elements: Base Salary Short-Term Incentive Compensation (cash bonuses) Long-Term Incentive Compensation (equity awards) ➣ Pay competitive salaries to attract and retain the executive talent necessary to develop and implement our corporate strategy and business plan responsibilities of the position, experience of ➣ Reflect the executive and marketplace in which we compete for talent ➣ Motivate executives to generate outstanding performance and achieve or exceed annual operating plan ➣ Align compensation with results ➣ Ensure rewards are commensurate with long-term performance and promote retention ➣ Align executive rewards with long-term stock price appreciation ➣ Facilitate the accumulation of Gartner shares by executives, thereby enhancing ownership and ensuring greater alignment with stockholders How the Company Determines Executive Compensation In General The Company set aggressive performance goals in planning 2019 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. 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 2019. In order to achieve target compensation, executives must achieve performance objectives that were set at growth rates that significantly exceeded market norms. In other words, if we were to achieve market norm financial performance, our delivered compensation would be well below target compensation and well below payouts achieved at peer companies. If we achieved our plan targets, which were higher than market, executives would earn average pay. If we exceeded our plan targets, we would have out-performed the majority of peer companies and, at that point, executives would earn pay that exceeded market compensation. For example, in establishing Gartner’s 2019 target CV growth rate, we compared our CV growth rate target against the revenue growth rate of the broader market (i.e., S&P 500) as well as our peer group. On a trailing 3 and 5 year basis, the broader market grew by a rate that was 5% under our target growth rate. In fact, our target growth rate was higher than the 75th percentile of the broader market. Additionally, our target growth rate exceeded the median of our proxy peer group over the same time periods. The combination validated that we had a high performing proxy peer group and that we set strong targets. 2020 Proxy Statement | 22 Compensation Discussion & Analysis The Compensation Committee believes that using a one-year performance period for our long-term incentive awards helps accelerate growth and sustain performance. If we have a strong year, the goals for the following year are established on top of the high bar that was already set. If we had a three-year performance period and the Company overachieved in the first year, the bar would be set lower in years 2 and 3 and may demotivate our executives. A three-year performance period may also be less aggressive if business cycle risks are factored into long-term goals, while a one-year performance period allows us to more readily factor in changes in market conditions. The short-term and long-term incentive objectives provide executives with opportunity to increase their total compensation package based upon the over-achievement of Company performance; similarly, in the case of under-achievement of corporate performance, the value of incentive awards will fall below their target value, decreasing the total compensation opportunity. In addition, we assign a greater weighting to long-term incentives than short-term awards in order to promote long-term decision-making to deliver top corporate performance, align management to stockholder interests and retain executives. We believe that long-term equity-based awards with vesting terms that are based on the achievement of pre-set financial targets serve as a strong retention incentive. Determining Awards 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, these executives and considers input from human resources personnel at the Company, as well as benchmarking data from the compensation consultant and external market data (discussed below). the CEO undertakes a performance review of Salary, short-term and long-term incentive compensation levels for the CEO’s compensation are established by the Compensation Committee within the parameters 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 from the performance in conjunction with the Governance Committee and after soliciting additional 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 peer companies and general trends. See Certain Employment Agreements with Executive Officers – Mr. Hall below for a detailed discussion of Mr. Hall’s agreement. input Benchmarking and Peer Group Executive compensation planning for 2019 began mid-year in 2018. 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 2019 executive compensation program. The Compensation Study utilized market data provided by Aon’s Radford Global Technology Survey for Gartner’s selected peer group of companies for executive compensation benchmarking purposes (the “Peer Group”), effective as of January 1, 2019. The Compensation Committee reviews the Peer Group annually to ensure comparability based on Gartner’s operating characteristics, labor market relevance and defensibility. The Peer Group was modestly revised from the previous year to exclude three companies and include three new companies in recognition of Gartner’s enhanced capabilities in HR and marketing, as well as enhanced revenues. The Peer Group comprised 16 publicly-traded 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 54th percentile in revenues relative to the Peer Group. The Peer Group companies included: 2020 Proxy Statement | 23 Compensation Discussion & Analysis Adobe Inc. Autodesk, Inc. Aon plc CA Inc.* Citrix Systems, Inc. The Interpublic Group of Companies, Inc. Equifax Inc. IHS Markit Ltd Intuit Inc. Moody’s Corporation Nielsen Holdings plc Red Hat Inc.* salesforce.com, inc. Synopsis, Inc. Verisk Analytics, Inc. VMWare, Inc. *CA Inc. and RedHat were acquired in 2018 and 2019, respectively. The 2018 competitive benchmarking analysis used for setting 2019 pay levels compared Gartner’s target compensation to that of the Peer Group. The Compensation Committee does not target NEO’s pay to a specified percentile relative to the Peer Group, 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). Individual total target compensation may be higher or lower than the 50th percentile based on a number of factors, including experience and tenure, retention and succession planning considerations. In addition to the compensation benchmarking, the Compensation Committee considers Company and individual performance and internal equity in evaluating and determining executive compensation recommendations. 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 the Peer Group. The analysis indicates that pay realized by Gartner’s NEOs is generally well aligned with Company performance. Executive Compensation Elements Generally Pay Mix The following charts illustrate the relative mix of target compensation elements for the NEOs in 2019. Long-term incentive compensation consists of stock-settled stock appreciation rights (“SARs”), performance-based restricted stock units (“PSUs”) and time-based restricted stock units (“RSUs”), and represents a majority of the compensation we pay to our NEOs – 84% to the CEO, 72% to the CFO and 65% to all other NEOs. We weight compensation more heavily to long-term incentives 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). 2020 Proxy Statement | 24 Compensation Discussion & Analysis CEO 8% 8% ALL OTHER NEO’S 18% 15% 84% 67% Base Bonus Equity Base Bonus Equity 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 In addition, where possible, we consider salary information for compete for the executive talent we need. 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. The following table sets forth the 2018 and 2019 base salary of each NEO and the corresponding year-over-year percentage increase: NEO 2018 Base Salary ($) 2019 Base Salary ($) Percentage Increase Eugene A. Hall Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh 908,197 575,000 480,000 478,892 480,000 908,197 600,000 495,000 495,000 495,000 0% 4.3% 3.1% 3.4% 3.1% 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. 2020 Proxy Statement | 25 Compensation Discussion & Analysis In 2019, bonus targets for all NEOs, including Mr. Hall, were based solely upon achievement of 2019 company- wide financial performance objectives (with no individual performance component). The financial objectives and weightings used for 2019 executive officer bonuses were: • • 2019 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, 2019 which, as described above, measures the long–term prospects of our business (weighted 50%), on a foreign exchange neutral basis. Management and our Compensation Committee continue to believe that CV and EBITDA and are the most significant measurements of long-term business growth and profitability and 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. Beginning in 2020, the Compensation Committee has changed the financial objectives for executive officer bonuses to EBIDTA (weighted 50%) and Revenue (weighted 50%). The Compensation Committee believes that changing one of the financial metrics from CV to Revenue, which is a good indicator of short-term performance, will reinforce our 2020 business objective to grow EBITDA at least commensurate with revenue. Further, the change eliminates the overlap of short-term and long-term performance metrics and is better aligned with best practice. For 2019, each executive officer was assigned a bonus target that was expressed as a percentage of salary, which varied from 60% to 105% of salary depending upon the executive’s level of responsibility and in most cases was 5% greater than the previous year. With respect to our NEOs, 2019 bonus targets as a percentage of base salary, were 105% for Mr. Hall and 85% for each of Messrs. Safian, Dawkins, McVeigh and Ms. Kranich. The maximum payout for 2019 bonus was 200% of target if the maximum level of EBITDA and CV were achieved; the minimum payout was $0 if minimum levels were not achieved. The following table sets forth the threshold, target and maximum payout amounts for each NEO: NEO Threshold ($) Target ($) Maximum ($) Eugene A. Hall Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh 0 0 0 0 0 953,607 510,000 420,750 420,750 420,750 1,907,214 1,020,000 841,500 841,500 841,500 The chart below describes the performance metrics applicable to our 2019 short–term incentive compensation element. When adopting these financial metrics, the Compensation Committee expressly reserved the authority to adjust the performance goals to reflect the effect of any merger, acquisition and divestiture activity. In February 2020, the Compensation Committee certified that the results for each performance metric under the bonus plan were as follows: 2019 Performance Objective/ Weight Target (100%) < Minimum (0%) 2019 EBITDA/50% $744 million $608 million =/> Maximum (200%) $791 million Actual Results $684 million 12/31/19 Contract Value/50% $3,402 million $2,555 million $3,544 million $3,446 million 2020 Proxy Statement | 26 Compensation Discussion & Analysis The Contract Value results in the table above translated to a payout percentage of 141.7%. For the EBITDA component, the results above translated to a payout percentage of 50.0%. Since each objective was weighted 50%, based on these results, the Compensation Committee determined that earned cash bonuses for each NEO were 95.8% of target bonus amounts. These bonuses were paid in February 2020. See Summary Compensation Table – Non-Equity Incentive Plan Compensation for the amount of cash bonuses earned by our NEOs in 2019. 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 (the “2014 Plan”) and have determined that SARs and 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 vested SARs may be exercised up to seven years from grant date. 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 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. PSUs encourage 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. The value of long-term incentive awards granted to executives each year is based on several factors, including external market practices, the Company’s financial performance, the value of awards granted in prior years, succession considerations and individual performance. For 2019, the Compensation Committee increased LTI awards for NEOs from last year based on those factors considered. The CEO’s LTI award increased by 7% (no other increase in any other element of compensation was provided), the CFO’s LTI award increased by 21%, and all other NEO’s LTI awards increased by 6%. The greatest increase in LTI was reserved for the CFO in recognition of the shortfall of his compensation relative to the market, due to his limited tenure in the role. It is the Company’s philosophy to move an executive to fully competitive rates over time. Consistent with weightings in prior years, when the compensation program was established in early 2019, 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 2014 Plan share pool, which is why we conveyed a larger portion of the 2019 overall long-term incentive compensation value in PSUs rather than in SARs. For purposes of determining the number of SARs awarded, the allocated SAR award value is divided by the Black- Scholes-Merton valuation on the date of grant using assumptions appropriate on 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 Stock on the date of grant as reported by the New York Stock Exchange. 2020 Proxy Statement | 27 Compensation Discussion & Analysis All SARs and PSUs are earned, vest and, with respect to PSUs, release 25% per year commencing one (1) year from grant and on each anniversary thereof, subject to continued service on the applicable vesting date. We believe that this vesting schedule effectively focuses our executives on delivering long-term value growth for our stockholders and drives retention. The maximum payout for the 2019 PSUs was 200% of target if the maximum level of CV was achieved; the PSUs are subject to forfeiture if minimum levels of performance are not achieved. The Compensation Committee approved CV (measured at December 31, 2019) as the performance measure underlying PSUs awarded in 2019. As noted earlier, we continue to believe that CV is the best performance metric to measure the long–term prospects of our business because it is predictive of future revenue. The chart below describes the performance metrics applicable to the PSU portion of our 2019 long–term incentive compensation element measured on a foreign exchange neutral basis. When adopting the performance metrics, the Compensation Committee expressly reserved the authority to adjust the performance goals to reflect the effects of any merger, acquisition and divestiture activity. the Compensation Committee certified the result as follows: In February 2020, 2019 Performance Objective/Weight Target (100%) Target Growth YOY < Minimum (0%) =/> Maximum (200%) Actual (measured at 12/31/19) Payout (% of Target) Actual Growth YOY Contract Value/100% $3,402 million 10.2% $2,555 million $3,544 million $3,446 million 141.7% 11.7% The CV target represented double digit growth. Actual CV certified by the Compensation Committee in early 2020 was $3,446 million, exceeding the target amount. Based on this, the Compensation Committee determined that 141.7% of the target number of PSUs was earned based on the established performance goals. The PSUs were adjusted by this factor in early 2020 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. See Grants of Plan-Based Awards Table – Possible Payouts Under Equity Incentive Plan Awards and accompanying footnotes below for the actual number of SARs and PSUs awarded to our NEOs in 2019. 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. The non-qualified deferred compensation plan allows eligible participants to defer up to 50% of base salary and/or 100% of bonus to a future period. the Company presently matches contributions by executive officers, subject to certain limits. For more information concerning this plan, see Non-Qualified Deferred Compensation Table and accompanying narrative and footnotes below. In addition, as a further inducement to participation in this plan, 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 below under Certain Employment Agreements with Executive Officers – Mr. Hall. For more information concerning perquisites, see Other Compensation Table and accompanying footnotes below. 2020 Proxy Statement | 28 Compensation Discussion & Analysis 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 all equity-based awards received from the Company, until such individual’s stock ownership requirement is met. At December 31, 2019, all the NEOs were in compliance with these guidelines. Clawback Policy The Company has adopted a clawback policy which provides that the Board (or a committee thereof) may seek recoupment on behalf of 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. Hedging and Pledging Policies The Company’s Insider Trading Policy prohibits all directors, executive officers and other employees from engaging in any short selling, hedging and/or pledging transactions with respect to Company securities. Accounting and Tax Impact In setting 2019 compensation, the Compensation Committee and management considered that for taxable years beginning after December 31, 2017, the exemption from Code Section 162(m)’s deduction limit that formerly for certain grandfathered existed for certain “performance-based” compensation was repealed (except that compensation arrangements that were in effect as of November 2, 2017). Accordingly, we expect compensation awarded to our executives who are “covered employees” under Section 162(m) in 2018 and subsequent years will not be deductible to the extent that it results in compensation above the $1 million threshold established under Section 162(m). Furthermore, the rules and regulations promulgated under Section 162(m) are complicated and subject to change. As such, there can be no assurance that any grandfathered compensation awarded in prior years will be fully tax deductible when paid. Notwithstanding repeal of the exemption for “performance-based” compensation, the Compensation Committee intends to operate our executive compensation program in a manner that they believe best aligns compensation with our pay-for-performance philosophy. 2020 Proxy Statement | 29 Compensation Discussion & Analysis Grant of Equity Awards The Board has a formal policy with respect to the grant of equity awards under our equity plans. Under our 2014 Plan, equity awards may include stock options, stock appreciation rights, restricted stock awards (RSAs), restricted stock units (RSUs) and performance-based restricted stock units. The Compensation Committee may not delegate its authority with respect to Section 16 persons, nor in any other way that would jeopardize the plan’s qualification under Code Section 162(m) (as in effect prior to 2018 for grandfathered awards) 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 priced on the date of Compensation Committee approval, except in the case of new hires, which is discussed below. Consistent with the 2014 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 2019, 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 $5,000,000 for the calendar year. For purposes of this computation, 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 NYSE) 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 is the Company’s policy not to make equity awards to executive officers prior to the release of material non-public information. Generally speaking, awards for newly hired executives that are given as an inducement to joining the Company are made on the 15th or 30th day of the month first following the executive’s start date, and retention 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. 2020 Proxy Statement | 30 Compensation Discussion & Analysis COMPENSATION COMMITTEE REPORT Inc. has reviewed and discussed the The Compensation Committee of the Board of Directors of Gartner, the Compensation Discussion and Analysis with management. Based upon this review and discussion, 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, 2019 and the Company’s proxy statement for the 2020 Annual Meeting of Stockholders. Compensation Committee of the Board of Directors Anne Sutherland Fuchs Raul E. Cesan Eileen M. Serra 2020 Proxy Statement | 31 COMPENSATION TABLES AND NARRATIVE DISCLOSURES All compensation data contained in this Proxy Statement is stated in U.S. Dollars. Summary Compensation Table This table describes compensation earned by our 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 Eugene A. Hall, Chief Executive Officer (PEO) (5) Craig W. Safian, EVP & Chief Financial Officer (PFO) Alwyn Dawkins, EVP, Conferences Robin Kranich, EVP, Human Resources David McVeigh, EVP, Global Business Sales Base Salary (1) Stock Awards (2) Option Awards (2) Year 2019 908,197 7,007,347 3,003,182 2018 908,197 6,537,043 2,801,583 2017 908,197 6,889,130 2,523,939 2019 593,750 1,991,128 853,343 2018 568,750 1,644,887 704,983 2017 541,250 1,374,873 492,851 2019 491,250 1,201,570 514,983 2018 476,236 1,133,573 485,861 2017 461,559 1,076,004 386,189 2019 490,973 1,201,570 514,983 2018 475,405 1,133,573 485,861 2019 491.250 1,201,570 514,983 2018 476,236 1,133,573 485,861 2017 461,559 1,076,004 386,189 Non-Equity Incentive Plan Compensation (1), (3) All Other Compensation (4) Total 913,555 1,119,534 1,432,317 488,580 540,040 619,575 403,078 450,816 523,759 403,078 449,775 403,078 450,816 523,759 127,964 11,960,245 136,160 11,502,517 120,647 11,874,230 55,287 3,982,088 47,533 3,506,193 47,158 3,075,707 48,961 2,659,842 49,414 2,595,900 43,530 2,491,041 37,630 2,648,234 39,967 2,584,581 44,358 2,655,239 40,000 2,586,486 34,675 2,482,186 (1) All NEOs elected to defer a portion of their 2019 salary and/or 2019 bonus under the Company’s Non-Qualified Deferred Compensation Plan. Amounts reported include the 2019 deferred portion, and accordingly does not include amounts, if any, released in 2019 from prior years’ deferrals. See Non-Qualified Deferred Compensation Table below. (2) Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of performance-based restricted stock units, or PSUs (Stock Awards), time-based restricted stock units, or RSUs (Stock Awards), and stock-settled stock appreciation rights, or SARs (Option Awards), granted to the NEOs. The value reported for the annual PSU awards 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 all PSUs, assuming attainment of the highest level of the performance conditions, is 200% of the target value. For 2019, the grant date fair value of these PSUs assuming maximum payout is as follows: $14,014,694 (Mr. Hall); $3,982,256 (Mr. Safian); $2,403,140 (Messrs. Dawkins and McVeigh and Ms. Kranich). All equity grants are subject to forfeiture. See footnote (2) to Grants of Plan-Based Awards Table below for additional information. See also Note 10 – Stock-Based Compensation - in the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information. (3) Represents performance-based cash bonuses earned at December 31 of the applicable year and paid in the following February. See footnote (1) to Grants of Plan-Based Awards Table below for additional information. 2020 Proxy Statement | 32 (4) See Other Compensation Table below for additional information. (5) Mr. Hall is a party to an employment agreement with the Company. See Certain Employment Agreements Compensation Tables and Narrative Disclosures with Executive Officers – Mr. Hall below. Other Compensation Table This table describes each component of the All Other Compensation column in the Summary Compensation Table for 2019. Company Match Under Defined Contribution Plans (1) Company Match Under Non-qualified Deferred Compensation Plan (2) 7,200 7,200 7,200 7,200 7,200 73,909 38,152 30,483 30,430 30,483 Other (3) Total 46,855 127,964 9,935 11,278 — 6,675 55,287 48,961 37,630 44,358 Name Eugene A. Hall Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh (1) Represents the Company’s 4% matching contribution to the NEO’s 401(k) account (subject to limitations). (2) Represents the Company’s matching contribution to the NEO’s contributions to our Non-Qualified Deferred Compensation Plan. See Non-Qualified Deferred Compensation Table below for additional information. (3) In addition to perquisites and benefits specified below, includes other perquisites and personal benefits provided to the NEO. For Mr. Hall, includes a car allowance of $30,996 received by him per the terms of his employment agreement. Also includes a tax gross-up payment of $7,382 that the Company paid to reimburse him on an after-tax basis for the income imputed in respect of his spouse’s trip to the Company’s Winner’s Circle, which is a reward event for the Company’s top sales associates. For Messrs. Safian, Dawkins, and McVeigh, includes tax gross-up payments of $4,865, $4,638, and $3,269, respectively, that the Company paid to reimburse each of them on an after-tax basis for the income imputed in respect of their spouse’s trip to the Company’s Winner’s Circle. For Mr. Dawkins, also includes $864 of tax gross-up payment that the Company paid to reimburse him on an after-tax basis for the income imputed in respect of certain tax services he received. 2020 Proxy Statement | 33 Compensation Tables and Narrative Disclosures Grants of Plan-Based Awards Table This table provides information about awards made to our NEOs in 2019 pursuant to non-equity incentive plans (our short-term incentive cash bonus program) and equity incentive plans (performance restricted stock units (PSUs), and stock appreciation rights (SARs) awards comprising long-term incentive compensation under our 2014 Plan). Possible Payouts Under Non- Equity Incentive Plan Awards (1) Possible Payouts Under Equity Incentive Plan Awards (2) Grant Date Threshold ($) Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#) All other option awards: Number of securities underlying options (#)(2) Exercise or Base Price of Option Awards ($/Sh) ($) (3) Grant Date Fair Value of Stock and Option Awards ($) (4) 2/6/19 - 2/6/19 2/6/19 - 2/6/19 2/6/19 - 2/6/19 2/6/19 - 2/6/19 2/6/19 - - - 0 - - 0 - - 0 - - 0 - - 0 - - - - 953,607 1,907,214 - - - - 510,000 1,020,000 - - - - 420,750 841,500 - - - - 420,750 841,500 - - - - 420,750 841,500 0 - - 0 - - 0 - - 0 - - 0 - - 48,999 PSUs 97,998 PSUs - - 7,007,347 - - - - 13,923 PSUs 27,846 PSUs - - - - 8,402 PSUs 16,804 PSUs - - - - 8,402 PSUs 16,804 PSUs - - - - 8,402 PSUs 16,804 PSUs - - - - 92,192 SARs 143.01 3,003,182 - - - - - 1,991,128 26,196 SARs 143.01 853,343 - - - - - 1,201,570 15,809 SARs 143.01 514,983 - - - - - 1,201,570 15,809 SARs 143.01 514,983 - - - - - 1,201,570 15,809 SARs 143.01 514,983 - - Name Eugene A. Hall Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh (1) Represents cash bonuses that could have been earned in 2019 based solely upon achievement of specified financial performance objectives for 2019 and ranging from 0% (threshold) to 200% (maximum) of target (100%). Bonus targets (expressed as a percentage of base salary) were 105% for Mr. Hall, and 85% for each of Messrs. Safian, Dawkins and McVeigh and Ms. Kranich. Performance bonuses earned in 2019 and paid in February 2020 were adjusted to 95.8% of their target bonus. The cash bonuses are reported under Non-Equity Incentive Plan Compensation in the Summary Compensation Table. See Short-Term Incentive Compensation (Cash Bonuses) in the CD&A for additional information. (2) Represents the number of PSUs and SARs awarded to the NEOs on February 6, 2019. The target number of PSUs (100%) for the annual PSU award was subject to adjustment ranging from 0% (threshold) to 200% (maximum) based solely upon achievement of an associated financial performance objective, and was adjusted to 141.7% of target in February 2020. The adjusted number of such PSUs awarded was: Mr. Hall – 69,431; Mr. Safian – 19,728; Messrs. Dawkins and McVeigh and Ms. Kranich – 11,905. All PSUs and SARs 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. See Long-Term Incentive Compensation (Equity Awards) in the CD&A 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. 2020 Proxy Statement | 34 Compensation Tables and Narrative Disclosures Certain Employment Agreements with Executive Officers Our Chief Executive Officer, Mr. Hall, is a party to a long-term employment agreement with the Company. No other NEO has an employment agreement with the Company. Mr. Hall – Employment Agreement The Company and Mr. Hall are parties to a Second 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: Component Base Salary Description ➣ $908,197, subject to adjustment on an annual basis by the Compensation Committee Target Bonus ➣ 105% of annual base salary (target), adjusted for achievement of specified Company and individual objectives ➣ The 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 ➣ Aggregate 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”) ➣ The 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 ➣ The 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) ➣ 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 Other ➣ Car allowance ➣ 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 ➣ Entitled to be nominated for election to the Board 2020 Proxy Statement | 35 Compensation Tables and Narrative Disclosures 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, 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, then Mr. Hall will be entitled to receive the following benefits: Component Base Salary Short-Term Incentive Award (Bonus) Long – Term Incentive Award Description ➣ accrued base salary and unused paid time off (“PTO”) through termination ➣ 36 months continued base salary paid pursuant to normal payroll schedule ➣ earned but unpaid bonus ➣ 300% of the average of Mr. Hall’s earned annual bonuses for the three years preceding termination, payable in a lump sum ➣ 36 months’ continued vesting in accordance with their terms (including achievement of applicable performance objectives) of all outstanding equity awards ➣ 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) Other ➣ reimbursement 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 Company and compliance with 36-month non-competition and non-solicitation covenants. circumstances, payment will be delayed for six months following termination under Code Section 409A. the In certain 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: Component Base Salary Short-Term Incentive Award (Bonus) Long – Term Incentive Award Description ➣ accrued base salary and unused PTO through termination ➣ 3 times base salary then in effect, payable 6 months following termination ➣ any earned but unpaid bonus ➣ 3 times target bonus for fiscal year in which Change In Control occurs, payable 6 months following termination ➣ any ungranted but earned Annual Incentive Awards will be granted ➣ all unvested outstanding equity will have the service requirement deemed fully satisfied, all performance goals or other vesting criteria will be deemed achieved (i) if the performance period has been completed, at actual level of performance, or (ii) if the performance period has not been completed, at target level of performance, and all stock options and SARs will be exercisable as to all covered shares Other ➣ reimbursement for up to 36 months’ COBRA premiums for Mr. Hall and his family 2020 Proxy Statement | 36 Compensation Tables and Narrative Disclosures For equity awards granted after February 7, 2019, Mr. Hall’s unvested outstanding equity awards will only vest in connection with a Change in Control if Mr. Hall’s employment is terminated under the circumstances described above within 24 months following the Change in Control (i.e., if a “double trigger” occurs). For equity awards granted on or prior to February 7, 2019, immediately upon a Change in Control (regardless of whether there is a termination of employment), 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. 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 portion of the Company’s assets or (iii) there is a change 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 activities and not to solicit Gartner employees for 36 months following termination of employment. Termination and Related Payments – Other Executive Officers In the event of termination for cause, voluntary resignation or as a result of death, disability or retirement, no severance benefits are provided. In the event of termination for cause or voluntary resignation, all equity awards are forfeited except as discussed below under Death, Disability and Retirement. In the event of termination without cause (including in connection with a Change in Control), other executive officers are entitled to receive the following benefits: Component Base Salary Description ➣ accrued base salary and unused PTO (not to exceed 25 days) through termination ➣ 12 months continued base salary paid pursuant to normal payroll schedule Long–Term Incentive Awards ➣ If terminated within 12 months of a Change In Control, all unvested outstanding equity will vest 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 (upon adjustment in full ➣ If no Change In Control, unvested equity awards are forfeited (except in the case of death, disability and retirement, discussed below) Other ➣ Reimbursement 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 to confidentiality, non-competition and non-solicitation obligations and releases the his or her commitment Company from various employment-related claims. In addition, in the case of NEOs (other than Mr. Hall), severance will not be paid to any executive who refuses to accept an offer of comparable employment from 2020 Proxy Statement | 37 Compensation Tables and Narrative Disclosures 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 shares may be delayed for six months following termination under Code Section 409A. Death, Disability and Retirement 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 Event Treatment of Unvested Equity Awards Death or Disability Retirement – not eligible Retirement – eligible (awards granted prior to 2020) ➣ Retirement eligible if: (i) on the date of retirement the officer is at least 55 years old and has at least 5 years of service and (ii) the sum of the officer’s age and years of service is 65 or greater Retirement – eligible (awards granted in 2020 or after) ➣ Retirement eligible if on the date of retirement, the officer is at least 55 years old and has at least 10 years of service ➣ 100% vesting upon event ➣ Unvested awards forfeited ➣ If < 60 years of age, 12 months of continued vesting ➣ If 60, 24 months of continued vesting ➣ If 61, 36 months of continued vesting ➣ If 62 or older, unvested awards will continue to vest in full in accordance with their terms ➣ For a retirement in the year that an award is granted, the unvested portion of such award that is eligible to vest will be prorated based on the number of days in the year of grant during which the officer was employed ➣ Unvested awards continue to vest in full in accordance with their terms (subject to certain conditions) ➣ For a retirement in the year that an award is granted, the unvested portion of such award that is eligible to vest will be prorated based on the number of days in the year of grant during which the officer was employed In order to receive retirement vesting, an officer must be retirement “eligible” on the date of retirement, as described in the table above; if not, all unvested awards are forfeited upon retirement. At December 31, 2019, of our NEOs, only Mr. Hall would have qualified for the additional vesting benefit upon retirement for his outstanding equity awards. Disability is defined in our current equity award agreements as total and permanent disability. For all SAR awards granted prior to 2015, the SARs remain exercisable through 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 through 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. Upon termination for any other reason, vested SARs remain exercisable through the earlier of the applicable expiration date or 90 days from the date of termination. In the case of death, disability or retirement, unvested PSUs held by an officer that are eligible to vest will be earned, the related performance metric upon certification by the Compensation Committee. if at all, based upon achievement of 2020 Proxy Statement | 38 Compensation Tables and Narrative Disclosures Potential Payments upon Termination or Change in Control Certain Employment Agreements with Executive Officers above contains a detailed discussion of the payments and other benefits to which our CEO and other NEOs 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, 2019 are set forth below. In each case, each NEO would also be entitled to receive accrued personal time off (PTO) and the balance in his or her 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 underlying the equity awards that would vest, to Mr. Hall had his employment been terminated on December 31, 2019 (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. See Outstanding Equity Awards At Fiscal Year End Table below for a list of Mr. Hall’s unvested equity awards at the end of 2019. Mr. Hall was eligible for retirement benefits at December 31, 2019. Involuntary termination (severance benefits) (1) Involuntary termination (continued vesting of equity awards) (2) Death or disability (value of unvested equity awards) (3) Retirement (value of unvested equity awards) (4) Change in Control (severance benefits) (5) Total Involuntary termination (1), (2) Change in Control (acceleration of unvested equity awards) (6) Total Change in Control (5), (6) 7,449,452 43,982,031 51,431,483 43,982,031 43,982,031 6,554,969 40,833,460 47,388,429 (1) Represents the sum of (w) three times base salary in effect at Termination Date; (x) 300% of the average actual bonus paid for the prior three years (2016, 2017 and 2018); (y) earned but unpaid 2019 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). (2) Represents (y) the fair market value using the closing price of our Common Stock on December 31, 2019 (the last NYSE trading in 2019), or $154.10 (the “Year End Price”) of unvested PSUs that would have vested within 48 months following the Termination Date, plus (z) the spread between the Year End Price and the exercise price for all in-the-money SARs that would have vested within 48 months following the Termination Date, multiplied by the number of such SARs. Since Mr. Hall is retirement-eligible, his termination would be treated as a retirement for purpose of determining additional vesting of his PSUs and SARs and he would receive full vesting of his equity awards. 2019 PSUs are adjusted based upon the performance factor determined by the Compensation Committee in early 2020. (3) Represents (y) the fair market value using the Year End Price of all unvested PSUs, plus (z) the spread between the Year End Price and the exercise price for all in-the-money, unvested SARs, multiplied by the number of such SARs. 2019 PSUs are adjusted based upon the performance factor determined by the Compensation Committee in early 2020. (4) Represents (y) the fair market value using the Year End Price of all unvested PSUs, plus (z) the spread between the Year End Price and the exercise price for all in-the-money, unvested SARs, multiplied by the number of such SARs. 2019 PSUs are adjusted based upon the performance factor determined by the Compensation Committee in early 2020. (5) Represents the sum of (w) three times base salary in effect at Termination Date, (x) three times 2019 target bonus, (y) unpaid 2019 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). 2020 Proxy Statement | 39 Compensation Tables and Narrative Disclosures (6) Represents (y) the fair market value using the Year End Price of all unvested PSUs on the Termination Date (at target in the case of unadjusted 2019 PSUs), plus (z) 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 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 our NEOs (other than Mr. Hall) had their employment been terminated on December 31, 2019 (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, 2019. See Outstanding Equity Awards At Fiscal Year End Table below for a list of unvested equity awards held by each NEO at the end of 2019. Involuntary termination (severance benefits) (1) 616,633 511,633 511,157 517,252 Value of unvested equity awards (death, disability or retirement) (2) Value of unvested equity awards (Change In Control) (3) 10,150,488 7,114,252 7,114,252 7,114,252 9,329,905 6,631,919 6,631,919 6,631,919 Total Change In Control (1), (3) 9,946,538 7,143,552 7,143,076 7,149,170 Named Executive Officer Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh (1) Represents 12 months’ base salary in effect on the Termination Date, plus the amount of health insurance premiums for the executive, his or her spouse and immediate family for 12 months (at premiums in effect on the Termination Date) payable in accordance with normal payroll practices. (2) Represents (x) the fair market value using the Year End Price ($154.10) of 100% of unvested PSUs, plus in-the money unvested SARs, (y) the spread between the Year End Price and the exercise price of all multiplied by the number of such SARs, plus (z) the fair market value using the Year End Price of all unvested RSUs. 2019 PSUs are adjusted based upon applicable performance metrics. Messrs. Safian, Dawkins and McVeigh and Ms. Kranich were not eligible for retirement benefits on December 31, 2019 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 and RSUs on the Termination Date (at target in the case of unadjusted 2019 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. 2020 Proxy Statement | 40 Compensation Tables and Narrative Disclosures Outstanding Equity Awards at Fiscal Year-End Table This table provides information on each option (including SARs) and stock (including RSUs and PSUs) award held by each NEO at December 31, 2019. All performance criteria associated with these awards (except for the 2019 PSU award (see footnote 4)) were fully satisfied as of December 31, 2019, 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, 2019 (the last business day of the year), which was $154.10. Upon exercise of, or release of restrictions on, these awards, the number of shares ultimately issued to each executive will be reduced by the number of shares withheld by Gartner for tax withholding purposes and/or as payment of the exercise price in the case of options and SARs. Option Awards Stock Awards Number of Securities Underlying Unexercised Options Exercisable (#) Number of Securities Underlying Unexercised Options Unexercisable (#) Option Exercise Price ($) Option Expiration Date Name Executive Officer Eugene A. Hall Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh (1), (5) (2), (5) (3), (5) (4), (5) (6) (5) (1), (5) (2), (5) (3), (5) (4), (5) (7) (5) (1), (5) (2), (5) (3), (5) (4), (5) (7) (1), (5) (2), (5) (3), (5) (4), (5) (7) (1), (5) (2), (5) (3), (5) (4), (5) (7) 109,278 57,300 27.329 - - 20,570 19,483 11,190 6,877 - - 18,855 16,257 8,768 4,740 - - 10,838 8,768 4,740 - - 6,257 8,768 4,740 - - 36,425 57,300 81,987 92,192 - - 6,494 11,188 20,631 26,196 - - 5,418 8,767 14,218 15,809 - 5,418 8,767 14,218 15,809 - 5,418 8,767 14,218 15,809 - 80.06 99.07 114.26 143.01 - 77.92 80.06 99.07 114.26 143.01 - 77.92 80.06 99.07 114.26 143.01 - 80.06 99.07 114.26 143.01 - 80.06 99.07 114.26 143.01 - 2/8/23 2/6/24 2/8/25 2/6/26 - 2/9/22 2/8/23 2/6/24 2/8/25 2/6/26 - 2/9/22 2/8/23 2/6/24 2/8/25 2/6/26 - 2/8/23 2/6/24 2/8/25 2/6/26 - 2/8/23 2/6/24 2/8/25 2/6/26 - Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) 28,373 4,372,279 55,194 8,505,395 61,574 9,488,553 - 777,589 - 5,046 - 5,058 - 779,438 10,776 1,660,582 15,493 2,387,471 - 147,936 - 960 - - 650,302 4,220 8,444 1,301,220 10,677 1,645,326 - 114,959 - 746 4,220 650,302 8,444 1,301,220 10,677 1,645,326 - 114,959 - 746 4,220 650,302 8,444 1,301,220 10,677 1,645,326 - 114,959 - 746 Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) - - - - - - 97,998 15,101,492 - - - - - - 27,846 - - - - - 16,804 - - - - 16,804 - - - - 16,804 - - - - - 4,291,069 - - - - - 2,589,496 - - - - 2,589,496 - - - - 2,589,496 - 2020 Proxy Statement | 41 Compensation Tables and Narrative Disclosures (1) Vest 25% per year commencing 2/8/17. (2) Vest 25% per year commencing 2/6/18. (3) Vest 25% per year commencing 2/8/19. (4) Vests 25% per year commencing 2/6/20. The market value of the Stock Award is presented at maximum level (200%), and the amount ultimately awarded could range from 0% to 200% of the target award. After certification of the applicable performance metric in February 2020, the amount actually awarded on account of Stock Awards was adjusted to 141.7% of target. The actual number of PSUs awarded to the NEOs is reported in footnote (2) to the Grants 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 2/6/18. (7) Vest 25% per year commencing 8/10/18. 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 2019 on an aggregate basis, and does not reflect shares withheld by the Company for exercise price or withholding taxes. Option Awards Stock Awards Number of Shares Acquired on Exercise (#) 126,750 - 20,080 10,132 10,000 Value Realized on Exercise ($) (1) 10,482,225 - 1,869,247 769,074 778,600 Number of Shares Acquired on Vesting (#) (2) 105,644 20,412 16,337 16,337 13,806 Value Realized on Vesting ($) (3) 14,785,661 2,851,055 2,281,571 2,281,571 1,928,075 Name Eugene A. Hall Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh (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 and RSUs awarded in prior years as long-term incentive compensation that released in 2019. (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 grade profile was a 130 or higher in 2019, or those who have been previously grandfathered into the plan. 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 2019 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. 2020 Proxy Statement | 42 Compensation Tables and Narrative Disclosures 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 additional year, and/or elect to receive the balance in 20, 40 or 60 quarterly instalments. 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 2019 by the participating Named Executive Officers, the Company’s matching contributions, 2019 earnings, aggregate withdrawals and distributions and account balances at year end(1): Name Eugene A. Hall Craig W. Safian Alwyn Dawkins Robin Kranich David McVeigh Executive Contributions in 2019 (2) 80,057 56,055 44,022 46,509 37,259 Company Contributions in 2019 (3) 73,909 38,152 30,483 30,430 30,483 Aggregate Earnings (loss) in 2019 79,034 68,864 43,556 158,673 24,511 Aggregate Withdrawals/ Distributions in 2019 (388,040) - (74,879) - (47,620) Aggregate Balance at 12/31/19 (4) 516,416 448,750 226,448 943,064 207,317 (1) Contribution amounts in this table have been reflected in the Summary Compensation Table and prior years’ summary compensation tables, as applicable. Aggregate earnings are not reflected in the Summary Compensation Table and were not reflected in prior years’ summary compensation tables. (2) Executive Contributions are included in the “Base Salary” and/or “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table for the NEOs. (3) 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. (4) Amounts reported in the Aggregate Balance column reflect the cumulative value of the NEOs’ deferral activities, including executive contributions, company contributions, withdrawals and investment earnings thereon as of December 31, 2019. Pay Ratio The 2019 annual total compensation of the median compensated of all our employees who were employed as of December 31, 2019, other than our CEO, Mr. Hall, was $110,383; Mr. Hall’s 2019 annual total compensation was $11,960,245 and the ratio of these amounts was 1-to-108. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records, and the methodology described herein. For these purposes, we identified 2020 Proxy Statement | 43 Compensation Tables and Narrative Disclosures the median compensated employee using the base salary determined as of December 31, 2019 and target cash incentives for the 2019 performance year, which amounts were annualized for any employee who did not work for the entire year. We considered all of our worldwide associates when examining the pay ratio. Based on our consistently applied compensation measure, we identified a group of 10 associates within 0.1% of the median amount and calculated annual total compensation in accordance with Summary Compensation Table requirements for these associates to identify our median compensated employee. EQUITY COMPENSATION PLAN INFORMATION The following table provides information as of December 31, 2019 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 Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights (1) 54,998 Weighted Average Exercise Price of Outstanding Options and Rights ($) (1) 60.96 1,777,465 107.13 Plan Category 2003 Long - Term Incentive Plan 2014 Long – Term Incentive Plan 2011 Employee Stock Purchase Plan - Total (3) 1,832,463 104.05 Column C Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (excluding shares in Column A)(2) - 5,343,211 558,608 5,901,819 (1) Includes 381,902 SARs, 1,339,220 PSUs and RSUs, and 111,341 CSEs. Because there is no exercise price associated with PSUs, RSUs or CSEs, these stock awards are not included in the weighted-average exercise price calculation presented in column B. For SARs, includes the number of shares of Common Stock that would be issuable based on the difference between the closing price of our Common Stock on December 31, 2019 ($154.10) and the exercise price of in-the-money SARs as of that date. (2) With respect to SARs, includes the number of shares of Common Stock that would be withheld for the exercise price of in-the-money SARs based on the closing price of our Common Stock on December 31, 2019 ($154.10). (3) In addition, the Company has outstanding equity compensation awards that the Company assumed in the acquisition of CEB, Inc. These awards were granted by CEB under its 2012 Stock Incentive Plan (the “CEB Plan”) in the period between 2012 to the closing of the acquisition by the Company and were converted into an adjusted number of Company shares. As of December 31, 2019, there were a total of 48,315 Company shares subject to assumed CEB restricted stock units. No additional restricted stock units, options or other awards have been granted under the CEB Plan since the closing of the acquisition and no new awards will be granted in the future under that plan. 2020 Proxy Statement | 44 PROPOSAL TWO: APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Act) and the related rules of the SEC, we are including in this Proxy Statement a separate resolution subject to stockholder vote to approve the compensation of our NEOs. The stockholder vote on this resolution is advisory only. However, the Compensation Committee and the Board will consider the voting results when making future executive compensation decisions. The text of the resolution in respect of Proposal No. 2 is as follows: Resolved, that the compensation of Gartner’s Named Executive Officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved. In considering your vote, stockholders may wish to review with care the information on Gartner’s compensation policies and decisions regarding the NEOs presented in the CD&A on pages 17-30, including, in particular, the information concerning Company performance included in the Executive Summary on pages 17-19 and highlights of our Compensation Practices on page 19-20. In particular, stockholders should note that the Compensation Committee bases its executive compensation decisions on the following: ➣ the need to attract, motivate and retain highly talented, creative and entrepreneurial individuals in a highly competitive industry and marketplace; ➣ the need to motivate our executives to maximize the performance of our Company through pay-for-performance compensation components which have led executives to deliver outstanding performance for the past several years; ➣ comparability to the practices of peers in our industry and other comparable companies generally based upon available benchmarking data; and ➣ the alignment of our executive compensation programs with stockholder value through heavily weighted performance-based compensation elements. As noted in the Executive Summary commencing on page 17, 2019 was another year of strong performance for Gartner, largely as a result of the achievements, focus and skill of our executive leadership team. The Board believes that Gartner’s executive compensation program has a proven record of effectively driving superior levels of financial performance, stockholder value, alignment of pay with performance, high ethical standards and attraction and retention of highly talented executives. RECOMMENDATION OF OUR BOARD Our Board unanimously recommends that you vote FOR the foregoing resolution to approve, on an advisory basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement. 2020 Proxy Statement | 45 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Based on our review of information on file with the SEC and our stock records, the following table provides certain information about beneficial ownership of shares of our Common Stock as of April 10, 2020 (including shares that will release or are or will become exercisable within 60 days following April 10, 2020) 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 NEO; and (iv) all directors, NEOs and other current executive officers as a group. Percentage computations are based on 89,174,399 shares of Common Stock outstanding on April 10, 2020. 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 exercised. Except as indicated 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 Peter E. Bisson Richard J. Bressler (1) Raul E. Cesan (2)(3) Karen E. Dykstra Anne Sutherland Fuchs (2) William O. Grabe (2)(4) Stephen G. Pagliuca (2) Eileen M. Serra James C. Smith (2)(5) Eugene A. Hall (6) Craig W. Safian (7) Alwyn Dawkins (8) Robin Kranich (9)(10) David McVeigh (11) All current directors, NEOs and other executive officers as a group (21 persons) (12) The Vanguard Group, Inc. (13) 100 Vanguard Blvd., Malvern, PA 19355 Blackrock, Inc. (14) 55 East 52nd Street, New York, NY 10055 Baron Capital Group, Inc. (15) 767 Fifth Avenue, New York, NY 10153 T. Rowe Price Group, Inc. (16) Polen Capital Management, LLC (17) 1825 NW Corporate Blvd., Suite 300, Boca Raton, FL 33431 * Less than 1% (1) Includes 2,812 RSU shares that will release within 60 days. (2) Includes 1,574 RSU shares that will release within 60 days. Number of Shares Beneficially Owned 1,743 26,870 100,928 19,198 22,891 137,299 61,965 999 1,066,042 1,506,855 126,675 108,168 56,246 55,787 3,612,266 Percent Owned * * * * * * * * 1.2 1.7 * * * * 4.0 9,720,893 10.9 6,722,386 6,428,061 6,027,013 5,272,635 7.5 7.2 6.8 5.9 2020 Proxy Statement | 46 Security Ownership of Certain Beneficial Owners and Management Includes 30,000 shares held by a family foundation as to which Mr. Cesan may be deemed a beneficial owner. Includes 135,388 shares held by three grantor retained annuity trusts (GRATs). These shares are held in trust for the benefit of Mr. Grabe and his children. Mr. Grabe is the Trustee of the GRATs. 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. Includes 309,359 vested and exercisable stock appreciation rights (“SARs”). Includes 83,634 vested and exercisable SARs. Includes 67,115 vested and exercisable SARs. Includes 42,841 vested and exercisable SARs. (3) (4) (5) (6) (7) (8) (9) (10) Includes 40 shares as to which Ms. Kranich may be deemed to share voting and investment power. Ms. Kranich disclaims beneficial ownership of such shares. (11) Includes 38,260 vested and exercisable SARs. (12) Includes 13,245 RSUs shares that will release within 60 days, and 667,003 vested and exercisable SARs. (13) Beneficial ownership information is based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 12, 2020. The Vanguard Group has sole voting power over 136,438 shares and has sole dispositive power over 9,560,185 shares. The Vanguard Group has shared voting power over 30,964 shares and shared dispositive power over 160,708 shares. Vanguard Fiduciary Trust Company (“VFTC”), a wholly- owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 105,875 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd. (“VIA”), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 83,832 shares as a result of its serving as investment manager of Australian investment offerings. (14) Beneficial ownership information is based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 5, 2020. BlackRock, Inc. has sole voting power over 5,943,359 shares and sole dispositive power over 6,722,386 shares. (15) Beneficial ownership information is based on a Schedule 13G/A filed by Baron Capital Group, Inc., BAMCO, Inc., a subsidiary of Baron Capital Group, Inc., Baron Capital Management, Inc., a subsidiary of Baron Capital Group, Inc., and Ronald Baron, who owns a controlling interest in Baron Capital Group, Inc., with the SEC on February 14, 2020. BAMCO, Inc. has shared voting power of 5,965,317 shares and shared dispositive power of 6,148,717 shares. Baron Capital Group, Inc. has shared voting power of 6,244,661 shares and shared dispositive power of 6,428,061 shares. Baron Capital Management, Inc. has shared voting power and shared dispositive power of 279,344 shares. Mr. Baron has shared voting power of 6,244,661 shares and shared dispositive power of 6,428,061 shares. (16) Beneficial ownership information is based on a Schedule 13G filed by T. Rowe Price Associates, Inc. on February 14, 2020. T. Rowe Price Associates, Inc. has sole voting power over 1,791,519 shares and sole dispositive power over 6,027,013 shares. (17) Beneficial ownership information is based on a Schedule 13G/A filed by Polen Capital Management, LLC with the SEC on February 5, 2020. Polen Capital Management, LLC has shared voting power and shared dispositive power with respect to all of the shares. 2020 Proxy Statement | 47 TRANSACTIONS WITH RELATED PERSONS Gartner provides products and services to over 15,000 enterprises in more than 100 countries. Because of our worldwide reach, it 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. the relationship or 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 a material direct or indirect interest, or whether the independence from management of our directors may be compromised as a transaction. Our Board Principles and Practices, which are posted on result of https://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 member with the conflict must abstain from voting on any such matter. The Governance Committee is charged with resolving any conflict of interest issues brought 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 reviews and approves all material related party transactions involving our directors in accordance with applicable provisions of Delaware law and with the advice of counsel, if deemed necessary. The Company maintains a written conflict of interest policy which 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 dealings 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 party 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. Since January 1, 2019, 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. 2020 Proxy Statement | 48 PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee of the Board of Directors has appointed KPMG LLP (“KPMG”) to serve as the Company’s independent registered public accounting firm for the 2020 fiscal year. Additional information concerning the Audit Committee and its activities with KPMG can be found in the Audit Committee Report and the Principal Accountant Fees and Services below. The Audit Committee is directly responsible for the appointment, compensation and oversight of the Company’s independent registered public accounting firm. Ratification by the stockholders of the appointment of KPMG is not the Board of Directors is submitting the required by law, appointment of KPMG for stockholder ratification to ascertain stockholders’ views on the matter. Representatives of KPMG will attend the Annual Meeting to respond to appropriate questions and to make a statement if they desire to do so. the Company’s bylaws or otherwise. However, Principal Accountant Fees and Services The following table presents fees for professional services rendered by KPMG for the integrated audit of the Company’s consolidated financial statements and internal control over financial reporting during the years ended December 31, 2019 and 2018, and fees for other services rendered by KPMG during those periods: Types of Fees Audit Fees Audit-Related Fees Tax Fees All Other Fees Total Fees Audit Fees 2018 ($) 5,025,500 - 1,664,000 - 2019 ($) 5,724,000 36,000 1,186,000 - 6,689,500 6,946,000 Audit fees relate to professional services rendered by KPMG for the audit of the Company’s annual consolidated financial statements contained in its Annual Report on Form 10-K, audit of internal controls over financial reporting as of December 31, 2019, and the review of the Company’s quarterly financial statements contained in its Quarterly Reports on Form 10-Q, as well as work performed in connection with statutory and regulatory filings. The amounts noted above include reimbursement for direct out-of-pocket travel and other sundry expenses. Audit-Related Fees Audit-related fees consist of fees for assurance and audit-related services performed for the Company or its subsidiaries but not directly related to the audits. Audit-Related fees include attestation or agreed upon procedures related to certain statutory requirements or local reporting requirements. Tax Fees Tax fees relate to professional services rendered by KPMG for permissible tax compliance in international and domestic locations, tax planning, and routine tax advice. All Other Fees This category of fees covers all fees for any permissible service not included in the above categories. 2020 Proxy Statement | 49 Proposal Three: Ratification of Appointment of Independent Registered Public Accounting Firm 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 transfer pricing services, audit-related services and other permissible services) to allow planning services; management to engage KPMG expeditiously as needed when 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 2019 were pre-approved by the Audit Committee. AUDIT COMMITTEE REPORT Pursuant to its responsibilities as set forth in the Audit Committee Charter, the Audit Committee has reviewed and discussed with management and with KPMG Gartner’s audited consolidated financial statements for the year ended December 31, 2019. The Audit Committee has discussed with KPMG the matters required to be discussed under applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission. The Audit Committee has received the written disclosures and letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence and has discussed with KPMG that firm’s independence. Based on the review and discussions noted above, as well as discussions regarding Gartner’s internal control over financial reporting and discussions with Gartner’s Internal Audit function, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the year ended December 31, 2019 be included in Gartner’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for filing with the Securities and Exchange Commission. Audit Committee of the Board of Directors Richard J. Bressler Karen E. Dykstra James C. Smith RECOMMENDATION OF OUR BOARD Our Board unanimously recommends that you vote FOR ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2020 fiscal year. 2020 Proxy Statement | 50 PROXY AND VOTING INFORMATION Information Concerning Proxy Materials and the Voting of Proxies Why is it Important to Vote? Voting your shares is important to ensure that you have a say in the governance of the Company. Additionally, repeated failure to vote may subject your shares to risk of escheatment. Please review the proxy materials and follow the relevant instructions to vote your shares. We hope you will exercise your rights and fully participate as a stockholder in the future of Gartner. Why Did You Receive a Notice Regarding Availability of Proxy Materials? The Securities and Exchange Commission (“SEC”) rules allow companies to furnish proxy materials to their stockholders via the Internet. This “e-proxy” process expedites stockholders’ receipt of proxy materials, while significantly lowering the costs and reducing the environmental impact of our annual meeting. Accordingly, on April 22, 2020, we mailed to our stockholders (other than those who previously have requested printed proxy materials) a Notice of Internet Availability of Proxy Materials (the “Notice”). If you received a Notice, you will not receive a printed copy of the proxy materials unless you request one. The Notice provides instructions on how to access our proxy materials for the Annual Meeting on a website, how to request a printed copy of the proxy materials and how to vote your shares. We will mail printed copies of our proxy materials to those stockholders who have already elected to receive printed proxy materials. If Your Shares Are Held in “Street Name,” How Are Your Shares Voted? If you are the beneficial owner of shares (meaning that your shares are held in the name of a bank, brokerage or other nominee; i.e., “street name” accounts), you may receive a Notice of Internet Availability of Proxy Materials from that firm containing instructions you must follow in order for your shares to be voted. Additionally, under applicable New York Stock Exchange (“NYSE”) rules relating to the discretionary voting of proxies, banks, brokers and other nominees are not permitted to vote shares with respect to “non-routine” matters, such as the election of directors and the say on pay proposal presented this year without instructions from the beneficial owner, except they are able to vote without instructions on “routine” matters, such as the ratification of the appointment of an independent registered public accounting firm. Therefore, beneficial holders are advised that, if they do not timely provide instructions to their bank, broker or other nominee, their shares will not be voted in connection with Proposals One and Two, but may be voted in connection with Proposal Three. Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. If You Are the Holder of Record of Your Shares, How Are Your Shares Voted? If you are the holder of record of your shares, you will either receive a Notice or printed proxy materials if you have already elected to receive printed materials. The Notice will contain instructions you must follow to vote your shares. If you received proxy materials in paper form, the materials include a proxy card instructing the holder of record how to vote the shares. How Can You Get Electronic Access to Proxy Materials? The Notice provides instructions regarding how to view our proxy materials for the Annual Meeting online. Additionally, proxy materials are available on www.proxyvote.com, 24 hours a day, seven days a week. You will need the 12-digit Control number(s) located on your Notice to access the proxy materials online. How Can You Request Paper or Email Copies of Proxy Materials? If you received a Notice by mail, you will not receive a printed copy of the proxy materials. If you want to receive paper or email copies of the proxy materials, you must request them. There is no charge for requesting a copy. To facilitate timely delivery, please make your request on or before May 24, 2020. To request paper or email copies, stockholders to sendmaterial@proxyvote.com. Please note that if you request materials by email, send a blank email with your 12-digit Control number(s) (located on your Notice) in the subject line. to www.proxyvote.com, 1-800-579-1639 email send can call an go or 2020 Proxy Statement | 51 Proxy and Voting Information How Can You Sign Up to Receive Future Proxy Materials Electronically? You have the option to receive all future proxy statements, proxy cards and annual reports electronically via email or the Internet. If you elect this option, the Company will only mail printed materials to you in the future if you request that we do so. To sign up for electronic delivery, please follow the instructions below under How Can You Vote to vote using the Internet and vote your shares. After submitting your vote, follow the prompts to sign up for electronic delivery. What is “Householding”? We have adopted “householding” procedures that allow us to deliver proxy materials more cost-effectively. If you are a beneficial owner of shares and you and other residents at your mailing address share the same last name and also own shares of common stock in an account at the same bank, brokerage, or other nominee, your nominee delivered a single Notice or set of proxy materials to your address. This method of delivery is known as householding. Householding reduces the number of mailings you receive, saves on printing and postage costs and helps the environment. Stockholders participating in householding continue to receive separate proxy cards and control numbers for voting electronically. We will deliver promptly a separate copy of the Notice or proxy materials to a stockholder at a shared address to which a single copy was delivered. A stockholder who received a single Notice or set of proxy materials to a shared address may request a separate copy of the Notice or proxy materials be sent to him or her by contacting in writing Broadridge Financial Solutions, Inc. (“Broadridge”), Householding Department at 51 Mercedes Way, Edgewood, New York, 11717, or calling 1-866-540-7095. If you would like to opt out of householding for future deliveries of proxy materials, please contact your broker, bank or other nominee. Beneficial owners of shares who share an address and receive multiple copies of the proxy materials but want to receive only a single copy of these materials in the future should contact their bank, brokerage or other nominee and make this request. Who Can Vote at the Annual Meeting? Only stockholders of record at the close of business on April 14, 2020 (the “Record Date”) may vote at the Annual Meeting. As of the Record Date, there were 89,174,399 shares of Common Stock outstanding and eligible to be voted. This amount does not include treasury shares which are not voted. 2020 Proxy Statement | 52 How Can You Vote? You may vote using one of the following methods: Proxy and Voting Information ➣ Internet ➣ Telephone ➣ Mail ➣ At the meeting You may vote on the Internet up until 11:59 PM Eastern Time on June 7, 2020 by going to the website for Internet voting on the Notice or your proxy card (www.proxyvote.com) and following the instructions on your screen. Have your Notice or proxy card available when you access the web page. If you vote by the Internet, you should not return your proxy card. number You may vote by telephone by calling the toll-free telephone card on (1-800-690-6903), 24 hours a day and up until 11:59 PM Eastern Time on June 7, 2020, and following card pre-recorded instructions. Have your proxy available when you call. If you vote by telephone, you should not return your proxy card. proxy your If you received your proxy materials by mail, you may vote by mail by marking the enclosed proxy card, dating in the postage-paid and signing it, and returning it envelope provided or c/o Broadridge, 51 Mercedes Way, Edgewood, N.Y. 11717. to Vote Processing, If there is a physical meeting in Stamford, Connecticut, you may vote your shares in person by attending the Annual Meeting and submitting your proxy at the meeting. Each stockholder may appoint only one proxy holder or representative to attend the Annual Meeting on his or her behalf. If we decide to hold a Virtual Annual Meeting we will announce it in a press release available at https://investor.gartner.com, you can vote by visiting www.virtualshareholdermeeting.com/IT2020 and using your 16-digit control number, but only if the meeting is held virtually and not in Stamford, Connecticut. If you are planning to attend our Annual Meeting, please monitor our website prior to the meeting date. All shares that have been voted properly by an unrevoked proxy will be voted at the Annual Meeting in accordance with your instructions. If you sign and submit your proxy card, but do not give voting instructions, the shares represented by that proxy will be voted for each proposal as our Board recommends. How to Revoke Your Proxy or Change Your Vote A later vote by any means will cancel an earlier vote. You can revoke your proxy or change your vote before your proxy is voted at the Annual Meeting by giving written notice of revocation to: Corporate Secretary, Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, Connecticut 06904-2212; or submitting another timely proxy by the Internet, telephone or mail; or attending the Annual Meeting. If there is a physical meeting in Stamford, Connecticut and your shares are held in the name of a bank, broker or other holder of record, to vote at the 2020 Proxy Statement | 53 Proxy and Voting Information Annual Meeting you must obtain a proxy executed in your favor from your bank, broker or other holder of record and bring it to the Annual Meeting in order to vote. Attendance at the Annual Meeting will not, by itself, revoke your prior proxy. How Many Votes You Have Each stockholder has one vote for each share of our Common Stock owned on the Record Date for all matters being voted on. Quorum A quorum is constituted by the presence, in person or by proxy, of holders of our Common Stock representing a majority of the number of shares of Common Stock entitled to vote. Abstentions and broker non-votes (described above) will be considered present to determine a quorum. Votes Required Proposal One: Each nominee must receive more “FOR” votes than “AGAINST” votes to be elected. Abstentions and broker non-votes will have no effect on the outcome of the election. Any nominee who fails to achieve this threshold must tender his or her resignation from the Board pursuant to the Company’s majority vote standard. Proposals Two and Three: The affirmative “FOR” vote of a majority of the votes of shares of Common Stock present in person or represented by proxy is required to approve Proposal Two—the advisory (non-binding) approval of the Company’s executive compensation; and Proposal Three—the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020. For Proposals Two and Three, abstentions have the same effect as “AGAINST” votes. Broker non-votes, if any, will have no effect on the outcome of these matters. If any other matters are brought properly before the Annual Meeting, the persons named as proxies in the accompanying proxy card will have the discretion to vote on those matters for you. If for any reason any of the nominees is not available as a candidate for director at the Annual Meeting, the persons named as proxies will vote your proxy for such other candidate or candidates as may be nominated by the Board of Directors. As of the date of this Proxy Statement, we were unaware of any other matter to be raised at the Annual Meeting. What Are the Recommendations of the Board? The Board of Directors recommends that you vote: ✓ FOR ✓ FOR ✓ FOR Election of each of the ten nominees to our Board of Directors Approval, on an advisory basis, of the compensation of our named executive officers Ratification of registered public accounting firm for the 2020 fiscal year the appointment of KPMG LLP as our independent Who Is Distributing Proxy Materials and Bearing the Cost of the Solicitation? This solicitation of proxies is being made by the Board of Directors and we will bear the entire cost of this solicitation, including costs associated with mailing the Notice and related Internet access to proxy materials, the preparation, assembly, printing, and mailing of the proxy card, and any additional solicitation material that we may provide to stockholders. Gartner will request brokerage firms, fiduciaries and custodians holding shares in their names that are beneficially owned by others to solicit proxies from these persons and will pay the costs associated with such activities. The original solicitation of proxies may be supplemented by solicitation by telephone, electronic mail and other means by our directors, officers and employees. No additional compensation will be paid to these individuals for any such services. We have also retained Georgeson LLC to assist with the solicitation of proxies at an anticipated cost of $8,000, which will be paid by the Company. this Proxy Statement, 2020 Proxy Statement | 54 Proxy and Voting Information Where can I find the voting results of the Annual Meeting? We will disclose voting results on a Form 8-K that will be filed with the SEC within four business days after the Annual Meeting, which will also be available on our investor relations website – https://investor.gartner.com. Who Can Answer Your Questions? If you have questions about this Proxy Statement or the Annual Meeting, please call our Investor Relations Department at (203) 316-6537. Stockholder Communications Stockholders and other interested parties may communicate with any of our directors by writing to them c/o Corporate Secretary, Gartner, Inc., 56 Top Gallant Road, P.O. 10212, Stamford, CT 06904-2212. All communications other than those which on their face are suspicious, inappropriate or illegible will be delivered to the director to whom they are addressed. Available Information Our website address is www.gartner.com. The investor relations section of our website is located at https://investor.gartner.com and contains, under the “Governance Documents” link, which can be found on the “Governance” tab, current electronic printable copies of our: ➣ ➣ ➣ ➣ ➣ ➣ CEO & CFO Code of Ethics, which applies to our Chief Executive Officer, Chief Financial Officer, controller and other financial managers Code of Conduct, which applies to all Gartner officers, directors and employees Principles and Practices of the Board of Directors, the corporate governance principles that have been adopted by our Board Audit Committee Charter Compensation Committee Charter Governance/Nominating Committee Charter This information is also available in print to any stockholder who makes a written request to Investor Relations, Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, CT 06904-2212. Process for Submission of Stockholder Proposals for our 2021 Annual Meeting The Company has adopted advance notice requirements related to stockholder business, including director nominations. These requirements are contained in our Bylaws, which can be found at https:// investor.gartner.com, under the “Governance Documents” link, which can be found on the “Governance” tab and are summarized below. This summary is qualified by reference to the full Bylaw provision. If you are a stockholder of record and you want to nominate a director or introduce a proposal on other business at the 2021 Annual Meeting without having it included in our proxy materials, you must deliver written notice no earlier than the close of business on February 8, 2021 and no later than the close of business on March 10, 2021; provided, however, that if the date of the 2021 Annual Meeting is more than 30 days before or after the anniversary date of this year’s Annual Meeting, then you must deliver your written notice no earlier than the close of business 120 days prior to the 2021 Annual Meeting and no later than the close of business 90 days prior to the 2021 Annual Meeting or the 10th day after the Company publicly announces the date of the 2021 Annual Meeting. The notice of such nomination or proposal must comply with the Bylaws. 2020 Proxy Statement | 55 Proxy and Voting Information If you do not comply with all of the provisions of our advance notice requirements, then your proposal may not be brought before the 2021 Annual Meeting. All stockholder notices should be addressed to the Corporate Secretary, Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, CT 06904-2212. Additionally, if you want to make a proposal for consideration at next year’s Annual Meeting and have it included in our proxy materials for that meeting, we must receive your proposal no later than the close of business on December 23, 2020, and it must comply with the requirements of Exchange Act Rule 14a-8. All stockholder proposals submitted pursuant to Exchange Act Rule 14a-8 should be addressed to the Corporate Secretary, Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, CT 06904-2212. Annual Report A copy of our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 10-K”) has been filed with the Securities and Exchange Commission and is available at www.sec.gov. You may also obtain a copy at https://investor.gartner.com. A copy of the 2019 10-K is also contained in our 2019 Annual Report to Stockholders, which accompanies this Proxy Statement. A copy of the 2019 10-K will be mailed, without charge, to any stockholder who makes a written request to Investor Relations, Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, CT 06904-2212. By Order of the Board of Directors Jules Kaufman Secretary Stamford, Connecticut April 22, 2020 2020 Proxy Statement | 56 2019 Annual Report UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR Commission file number: 1-14443 GARTNER, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) P.O. Box 10212 04-3099750 (I.R.S. Employer Identification No.) 56 Top Gallant Road Stamford, Connecticut (Address of principal executive offices) 06902-7700 (Zip 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 Trading Symbol Common Stock, $0.0005 par value per share IT Securities registered pursuant to Section 12(g) of the Act: None Name of each exchange on which registered New York Stock Exchange Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No 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 No 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 No uu Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted d 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 such files). Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Smaller reporting company Accelerated filer Emerging growth company Non-accelerated filer If an emerging growth company, indicate 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. ff Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No As of June 30, 2019, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $14.1 billion, based on the closing price as reported on the New York Stock Exchange. As of January 31, 2020, there were 89,101,606 shares of the registrant’s common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE The definitive Proxy Statement for the Annual Meeting of Stockholders to be held on June 8, 2020 is incorporated by reference into Part III to the extent described therein. GARTNER, INC. 2019 ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS PART I ITEM 1. BUSINESS ITEM 1A. RISK FACTORS ITEM 1B. UNRESOLVED STAFF COMMENTS ITEM 2. ITEM 3. ITEM 4. PART II ITEM 5. ITEM 6. ITEM 7. ITEM 7A. ITEM 8. ITEM 9. PROPERTIES LEGAL PROCEEDINGS MINE SAFETY DISCLOSURES (not applicable) MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES SELECTED FINANCIAL DATA MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ITEM 11. EXECUTIVE COMPENSATION ITEM 12. ITEM 13. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF OPERATIONS CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ITEM 16. FORM 10-K SUMMARY SIGNATURES 3 4 7 15 15 15 15 16 17 19 33 34 34 35 35 36 36 36 36 36 37 39 40 42 43 44 45 46 47 48 87 88 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. ff 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. g 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. n 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. dd 4 Our principal products and services are delivered through our three business segments, as described below. • • • RESEARCH. Gartner delivers independent, objective advice to leaders across an enterprise through subscription services that include on-demand access to published research content, data and benchmarks, and direct access to a network of approximately 2,300 research experts located around the globe. Gartner research is the fundamental building block for all Gartner products and services. We combine our proprietary research methodologies with extensive industry and academic relationships to create Gartner products and services that address each role across an enterprise. Within the Research segment, Global Technology Sales ("GTS") sells products and services to users and providers of technology, while Global Business Sales ("GBS") sells products and services to all other functional leaders, such as supply chain, marketing, HR, finance, legal and sales. 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 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 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. CONSULTING. Through its experienced consultants, Gartner Consulting serves chief information officers and other senior executives who are driving technology-related strategic initiatives to optimize technology investments and drive business impact. Gartner Consulting combines the power of Gartner’s market-leading research with custom analysis and on-the-ground support to help clients to turn insights and advice into action and impact. 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. 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 - 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. 5 • 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 data 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 information 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 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. dd INTELLECTUAL PROPERTY 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. d 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. 6 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 of 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 website or any other website is not incorporated by reference in this Form 10-K and should not be considered part of this Form 10-K or any other filing we make with the SEC. Also available at investor.gartner.com, under the “Governance” link, are printable and current copies of our: (i) CEO and CFO Code of Ethics, which applies to our Chief Executive Officer, Chief Financial Officer, Controller and other financial managers; (ii) Global Code of Conduct, which applies to all Gartner officers, directors and employees, wherever 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 of the Board’s standing committees: Audit, Compensation and Governance/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 our business, prospects, results of operations, financial condition, and cash flows, and could therefore 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 may also harm us and negatively affect your investment. Our operating results could be negatively impacted by global economic conditions. 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 could materially 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. 7 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. ff 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 remain competitive. 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 new subscription-based services for a significant portion of our revenue, and our failure to renew at historical rates or generate new sales of such services will 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: b • 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. tt 8 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 new engagements 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. r We may not be able to attract and retain qualified personnel which could jeopardize 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. y 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 9 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 difficulty of enforcing 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 local distributor or sales agent may not want to continue to do business with us or our new agent. aa 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 effects 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 no assurance that all of our employees, contractors and agents will comply with the Company’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 review a wide range of issues related to the country’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. f We are exposed to volatility in foreign currency exchange 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 unfavorable 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 10 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 clients, disrupt or shut down the internet or other critical client-facing and business processes, impede the travel of our personnel and clients, dislocate our critical internal functions and personnel, and in general harm our ability to conduct normal business operations, any of which can negatively impact our financial condition and operating results. Such events could also impact the timing and budget decisions of our 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 to damage 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 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 securitytt 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. qq uu 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, 11 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 to maintain 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. u 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. d 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 on favorable 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. t If we are unable to enforce and protect our intellectual property rights, our competitive 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. 12 We have grown, and may continue to grow, through acquisitions and strategic investments, 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 subtenantsaa 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 13 and accruals and could have a material adverse effect on our effective tax rate, financial position, results of operations, and cash flows. d 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 the expectations 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 may not be able to resell shares of our common stock at or above the price you paid. 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 stock price. 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. y tt 14 Future sales of our common stock from grants and awards could lower our stock price. 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. a 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. yy 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. t ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 15 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 of 1934, as amended), accelerated share repurchases, private transactions or other transactions and will be funded by cash on hand and borrowings. 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 $1.2 billion share repurchase authorization and the settlement of stock-based compensation awards. Period October 1, 2019 to October 31, 2019 November 1, 2019 to November 30, 2019 December 1, 2019 to December 31, 2019 Total for the quarter (1) Total Number of Shares Purchased (#) Average Price Paid Per Share ($) 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) 25,240 $ 54,039 360,836 440,115 $ 138.99 158.83 153.85 153.61 25,094 $ 15,006 358,877 $ 398,977 773,017 770,680 715,473 (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. 16 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) STATEMENT OF OPERATIONS DATA 2019 2018 2017 2016 2015 Revenues: Research Conferences Consulting Other Total revenues Operating income (loss) Net income PER SHARE DATA Basic income per share Diluted income per share Weighted average shares outstanding: Basic Diluted OTHER DATA Cash and cash equivalents Total assets Long-term debt Stockholders’ equity (deficit) Cash provided by operating activities $3,374,548 $3,105,764 $2,471,280 $1,857,001 $1,614,904 476,869 393,904 410,461 353,667 — 105,562 337,903 327,661 174,650 268,605 318,934 — 251,835 296,317 — $ 370,087 $ 259,715 $ $4,245,321 $3,975,454 $3,311,494 $2,444,540 $2,163,056 (6,329) $ 305,141 $ 287,997 3,279 $ 193,582 $ 175,635 $ 233,290 $ 122,456 $ $ $ 2.60 $ 2.56 $ 1.35 $ 1.33 $ 0.04 $ 0.04 $ 2.34 $ 2.31 $ 2.09 2.06 89,817 90,971 90,827 92,122 88,466 89,790 82,571 83,820 83,852 85,056 $ 280,836 $ 156,368 $ 538,908 $ 474,233 $ 372,976 7,151,294 6,201,474 7,283,173 2,367,335 2,168,517 2,146,514 2,067,796 790,000 (132,400) $ 565,436 $ 471,158 $ 254,517 $ 365,632 $ 345,561 2,943,341 672,500 983,465 850,757 938,593 60,878 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 been 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. 17 • 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. 18 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 may impact future results. You should read thist discussion in conjunction with our consolidated financial statements and related 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&A provides 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 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 amended, 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 use 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/Xpo series 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 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. aa Forward-looking statements are subject to risks, estimates and uncertainties that could cause actual results to differ materially from those discussed in, or implied by, the forward-looking statements. Factors that might cause such a difference include, but 19 are not limited to, those listed above or described 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 incorporated 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 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. ff 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. 20 BUSINESS MEASUREMENTS We believe that the following business measurements are important performance indicators for our business segments: BUSINESS SEGMENT Research BUSINESS MEASUREMENT Total contract value 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. Total contract value primarily includes Research deliverables for which revenue is recognized on a ratable basis, as well as other deliverables (primarily Conferences tickets) for which revenue is recognized when the deliverable is utilized. Comparing contract value year-over-year not only measures the short-term growth of our business, but also signals the long-term health of our Research subscription business since it measures revenue that is highly likely to recur over a multi-year period. Our total contract value consists of Global Technology Sales contract value, which includes sales to users and providers of technology, and Global Business Sales contract value, which includes sales to all other functional leaders. Client retention rate represents a measure of client satisfaction and renewed business relationships at a specific point in time. Client retention is calculated on a percentage basis by dividing our current clients, who were also clients a year ago, by all clients from a year ago. Client retention is calculated at an enterprise level, which represents a single company or customer. Wallet retention rate represents a measure of the amount of contract value we have retained with clients over a twelve-month period. Wallet retention is calculated on a percentage basis by dividing the contract value of our current clients, who were also clients a year 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. Number of destination conferences attendees represents the total number of people who attend destination conferences. Single day, local meetings are excluded. Consulting Consulting backlog represents future revenue to be derived from in-process consulting and measurement engagements. Utilization rate represents a measure of productivity of our consultants. Utilization rates are calculated for billable headcount on a percentage basis by dividing total hours billed by total hours available to bill. Billing rate represents earned billable revenue divided by total billable hours. Average annualized revenue per billable headcount represents a measure of the revenue generating ability of an average billable consultant and is calculated periodically by multiplying the average billing rate per hour times the utilization percentage times the billable hours available for one year. 21 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 strategy 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 2018 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 (cid:7)(cid:20)(cid:17)(cid:22)(cid:22) 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 revolving credit facility. During 2019, we repurchased 1.4 million shares of the Company'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 application of appropriate accounting policies and the use of estimates. Our significant accounting policies are described in Note 1 — Business and Significant Accounting Policies in the Notes to Consolidated Financial Statements. Management considers the policies discussed below to be critical to an understanding of our consolidated 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 our consolidated financial statements requires us to make estimates and assumptions about future events. We develop our estimates using both current and historical experience, as well as other 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 Company’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 disclosure requirements for lease arrangements. Prior to the issuance of ASU No. 2016-02, generally accepted accounting principles in the United States of America under FASB Accounting Standards Codification ("ASC") Topic 840, Leases, provided that lease arrangements meeting certain criteria were not recorded on an entity's balance sheet. 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. ASU No. 2016-02 also requires significantly expanded disclosures to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows related to leases. 22 The Company adopted 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 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. 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 the recognition 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 adoption. 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 were not previously recorded on the Company’s consolidated balance sheets). The adoption of the new lease standard resulted in the recognition of operating lease liabilities aggregating $851.3 million based on the present value of the Company’s remaining minimum lease payments, while the corresponding right-of-use assets totaled $651.9 million. Additionally, the Company’s adoption of ASU No. 2016-02 resulted in a net increase of $638.7 million in each of the Company’s Total Assets and Total Liabilities; however, there was no effect on the Company’s Total 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 materially impacted by the adoption of the new lease standard. 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 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 consolidated 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 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 isn 23 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). Gross fees receivable Allowance for losses Fees receivable, net December 31, 2019 $ $ 1,334,012 (8,000) 1,326,012 (cid:7) (cid:7) 2018 (cid:20)(cid:15)(cid:21)(cid:25)(cid:21)(cid:15)(cid:27)(cid:20)(cid:27) (7,700) (cid:20)(cid:15)(cid:21)(cid:24)(cid:24)(cid:15)(cid:20)(cid:20)(cid:27) 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 asset 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 acquired 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 flows 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. tt 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 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. 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 general economy or in the markets in which we operate; and a significant decline in our stock price and our market capitalization relative to our net book value. t 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. 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. 24 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 Notes to Consolidated Financial Statements provide additional information regarding the Company'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 each of the jurisdictions 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 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. d rr Accounting for stock-based compensation — 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. The Company recognizes stock-based compensation expense, which is based on the fair value of the award on the date of grant, over the related service period. Note 10 — Stock-Based Compensation in the 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 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 period. Restructuring and other accruals — We may record accruals for severance costs, contract terminations, asset impairments and other costs as a result of ongoing 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 based on assumptions at the time the actions are initiated. These accruals may need to be adjusted to the extent that actual costs differ from such estimates. In addition, these actions may be revised due to changes in business conditions that we did not foresee at the time such plans were approved. We also record accruals during the year for our various employee cash incentive programs. Amounts accrued at the end of each reporting period are based on our estimates and may require adjustment as the ultimate amount paid for these incentives are sometimes not known with certainty until the end of our fiscal year. 25 RESULTS OF OPERATIONS Consolidated Results The table below presents an analysis of selected line items and year-over-year changes in our Consolidated Statements of Operations for the years indicated (in thousands). Total revenues Costs and expenses: Cost of services and product development Selling, general and administrative Depreciation Amortization of intangibles Acquisition and integration charges Operating income Interest expense, net (Loss) gain from divested operations Other income, net Provision for income taxes Net income Year Ended December 31, 2019 Year Ended December 31, 2018 Increase (Decrease) Percentage Increase (Decrease) $ 4,245,321 $ 3,975,454 $ 269,867 7% 1,550,568 2,103,424 82,066 129,713 9,463 370,087 (99,805) (2,075) 7,532 42,449 1,468,800 1,884,141 68,592 187,009 107,197 259,715 (124,208) 45,447 167 58,665 $ 233,290 $ 122,456 $ 81,768 219,283 13,474 (57,296) (97,734) 110,372 (24,403) (47,522) 7,365 (16,216) 110,834 6 12 20 (31) (91) 42 (20) >(100) >100 (28) 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 9% excluding the foreign currency impact. The tables below present (i) revenues by geographic region (based on where the sale is fulfilled) and (ii) revenues by segment for the years indicated (in thousands). Primary Geographic Market United States and Canada Europe, Middle East and Africa Other International Total revenues (1) Segment Research Conferences Consulting Other (1) Year Ended December 31, 2019 Year Ended December 31, 2018 2,734,490 $ 2,514,952 996,004 514,827 1,000,490 460,012 Increase (Decrease) $ 219,538 (4,486) 54,815 4,245,321 $ 3,975,454 $ 269,867 $ $ Percentage Increase (Decrease) 9% — 12 7% Year Ended December 31, 2019 (cid:22)(cid:15)(cid:22)(cid:26)(cid:23)(cid:15)(cid:24)(cid:23)(cid:27) 476,869 (cid:7) 393,904 — Year Ended December 31, 2018 3,105,764 $ 410,461 353,667 105,562 Increase (Decrease) $ 268,784 66,408 40,237 (105,562) $ 269,867 Percentage Increase (Decrease) 9% 16 11 >(100) 7% Total revenues (1) $ 4,245,321 $ 3,975,454 (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 revenue has been recorded in the 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. 26 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. 27 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 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. • g 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 results of the Company's three reportable business segments. Research Financial Measurements: Revenues (1) Gross contribution (1) Gross contribution margin Business Measurements: Global Technology Sales (2): Contract value (1), (3) Client retention Wallet retention Global Business Sales (2): Contract value (1), (3) Client retention Wallet retention 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) $ $ $ $ 3,374,548 2,351,720 $ $ 70% 3,105,764 2,144,097 69% $ 268,784 $ 207,623 1 point 2,799,000 $ 2,492,000 82% 104% 83% 105% $ 307,000 (1) point (1) point 647,000 $ 594,000 $ 82% 101% 82% 95% 53,000 — 6 points 9% 10% — 12% — — 9% — — (1) Dollars in thousands. (2) Global Technology Sales includes sales to users and providers of technology. Global Business Sales includes sales to all other functional leaders. (3) Contract values are on a foreign exchange neutral basis. Contract values as of December 31, 2018 have been calculated using the same foreign currency rates as 2019. 28 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) $ $ 476,869 241,757 $ $ 51% 410,461 207,260 $ $ 50% 66,408 34,497 1 point 72 85,750 70 78,136 2 7,614 16% 17% — 3% 10% Financial Measurements: Revenues (1) Gross contribution (1) Gross contribution margin Business Measurements: Number of destination conferences (2) Number of destination conferences attendees (2) (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 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 segment 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. 29 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) Gross contribution (1) Gross contribution margin Business Measurements: Backlog (1), (2) Billable headcount Consultant utilization Average annualized revenue per billable headcount (1) $ $ $ $ 393,904 118,450 $ $ 30% 353,667 102,541 29% 115,700 $ 108,400 784 62% 373 $ 718 63% 375 $ $ $ $ 40,237 15,909 1 point 7,300 66 (1) point (2) 11 % 16 % — 7 % 9 % — (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. 30 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). Cash provided by operating activities Cash (used in) provided by investing activities Cash used in financing activities Net increase (decrease) in cash and cash equivalents and restricted cash Effects of exchange rates Beginning cash and cash equivalents and restricted cash Ending cash and cash equivalents and restricted cash $ $ Year Ended December 31, 2019 565,436 (160,885) (285,992) 118,559 3,614 158,663 280,836 $ $ 2018 471,158 384,051 (1,257,115) (401,906) (6,489) 567,058 158,663 $ $ Increase (Decrease) 94,278 (544,936) 971,123 520,465 10,103 (408,395) 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 program offered by the State of Connecticut and repaid $109.6 million of other borrowings. We also used $199.0 million of cash during 2019 for share repurchases. During 2018, the Company paid $1.0 billion in debt principal repayments and $260.8 million for share repurchases. 31 OBLIGATIONS AND COMMITMENTS Debt As of December 31, 2019, 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) Deferred compensation arrangements (3) Other (4) Totals 142,352 10,116 30,836 273,920 14,725 34,606 249,635 8,784 12,712 682,883 1,348,790 45,931 35,834 79,556 113,988 (cid:7) (cid:23)(cid:21)(cid:20)(cid:15)(cid:21)(cid:24)(cid:21) $ 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. 32 QUARTERLY FINANCIAL DATA The tables below present our quarterly operating results for the two-year period ended December 31, 2019. 2019 (In thousands, except per share data) First Second Third Fourth Revenues Operating income Net income (1) Net income per share (1), (2): Basic Diluted 2018 (In thousands, except per share data) Revenues Operating income (loss) Net income (loss) Net income (loss) per share: Basic Diluted $ 970,444 $ 1,070,882 $ 1,000,502 (cid:7) (cid:20)(cid:15)(cid:21)(cid:19)(cid:22)(cid:15)(cid:23)(cid:28)(cid:22) 48,799 20,795 116,002 103,406 69,147 41,388 (cid:20)(cid:22)(cid:25)(cid:15)(cid:20)(cid:22)(cid:28) (cid:25)(cid:26)(cid:15)(cid:26)(cid:19)(cid:20) $ $ $ $ $ 0.23 0.23 $ $ 1.15 1.13 $ $ 0.46 0.46 (cid:7) (cid:7) (cid:19)(cid:17)(cid:26)(cid:25) (cid:19)(cid:17)(cid:26)(cid:24) First Second Third Fourth 963,565 (8,711) (19,587) $ 1,001,336 $ 921,674 $ 1,088,878 86,096 46,270 52,724 11,753 129,606 84,020 (0.22) $ (0.22) $ 0.51 0.50 $ $ 0.13 0.13 $ $ 0.93 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 future periods. Note 1 — Business and Significant 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 Company's total debt outstanding as 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 effectively fully hedged against the base interest rate risk on its floating rate borrowings. n 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 33 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 a 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. ff 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 ind 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 AND FINANCIAL DISCLOSURE. None. 34 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 the 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 Exchange 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 Treadway Commission (COSO). Management’s assessment was reviewed with the Audit Committee of the Board 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. a CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There have been no changes in the Company'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. 35 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 Directors," "Proposal One: Election of Directors,” “Executive Officers,” “Corporate Governance,” “Delinquent Section 16(a) Reports” (if necessary) and “Proxy and Voting Information — Available Information” 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 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 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 MATTERS. 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 Certain Beneficial Owners and Management” in the Company’s Proxy Statement to be filed with the SEC by 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. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE. The information required to be furnished pursuant to this item will be set forth under the captions “Transactions With Related Persons” and “Corporate Governance — Director Independence” in the Company’s Proxy Statement to be filed with the SEC by 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. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The information required to be furnished pursuant to this item will be set forth under the caption “Proposal Three: Ratification of Appointment of Independent Registered Public Accounting Firm” 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 information will be included in an amendment to this Annual Report filed by April 29, 2020. 36 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) 1. and 2. Financial Statements and Schedules The reports of our independent registered public accounting firm and 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 EXHIBIT NUMBER DESCRIPTION OF DOCUMENT 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) 3.2(3) 4.1(2) 4.2(4) 4.3(4) 4.4(5) 4.5(6) 4.6(7) 4.7(8) 4.8* 10.1(9) 10.2(9) 10.3(10)+ 10.4(11)+ 10.5(12)+ 10.6(12)+ 10.7(13)+ 10.8(14)+ 10.9(14)+ 10.10(15)+ Restated Certificate of Incorporation of the Company. By-laws of Gartner, Inc. (January 30, 2020). Form of Certificate for Common Stock as of June 2, 2005. Credit Agreement, dated as of June 17, 2016, among the Company, the several lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A. as administrative agent. Guarantee and Collateral Agreement, dated as of June 17, 2016, among the Company and certain of its subsidiaries, in favor of JPMorgan Chase Bank, N.A. as administrative agent. First Amendment to Credit Agreement, dated as of January 20, 2017, among the Company, the several lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A. as administrative agent, filed as of January 24, 2017. Second Amendment, dated as of March 20, 2017, among the Company, each other Loan Party party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. Incremental Amendment, dated as of April 5, 2017, among the Company, each other Loan Party party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. Indenture (including form of Notes), dated as of March 30, 2017, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee, relating to the $800,000,000 aggregate principal amount of 5.125% Senior Notes due 2025. Description of Gartner, Inc.'s Common Stock. Amended and Restated Lease dated April 16, 2010 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut. First Amendment to Amended and Restated Lease dated April 16, 2010 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut. 2011 Employee Stock Purchase Plan. 2003 Long-Term Incentive Plan, as amended and restated effective June 4, 2009. Gartner, Inc. Long-Term Incentive Plan, as amended and restated effective January 31, 2019. Amended and Restated Employment Agreement between Eugene A. Hall and the Company dated as of February 14, 2019. Company Deferred Compensation Plan, effective January 1, 2009. Form of 2017 Stock Appreciation Right Agreement for executive officers. Form of 2017 Performance Stock Unit Agreement for executive officers. Form of 2017 Restricted Stock Unit Agreement for certain officers. 37 10.11(16)+ 10.12(16)+ 10.13(12)+ 10.14(12)+ 10.15+* 10.16+* Form of 2018 Stock Appreciation Right Agreement for executive officers. Form of 2018 Performance Stock Unit Agreement for executive officers. Form of 2019 Stock Appreciation Right Agreement for executive officers. Form of 2019 Performance Stock Unit Agreement for executive officers. Form of 2020 Stock Appreciation Right Agreement for executive officers. Form of 2020 Performance Stock Unit Agreement for executive officers. 10.17(17)+ Form of Restricted Stock Unit Agreement for non-employee directors. 10.18+* Enhanced Executive Rewards Policy. 21.1* 23.1* 24.1* 31.1* 31.2* 32* 101.INS* 101.SCH* 101.CAL* 101.LAB* 101.PRE* 101.DEF* 104* Subsidiaries of Registrant. Consent of Independent Registered Public Accounting Firm. Power of Attorney (see Signature Page). Certification of chief executive officer under Section 302 of the Sarbanes-Oxley Act of 2002. Certification of chief financial officer under Section 302 of the Sarbanes-Oxley Act of 2002. Certification under Section 906 of the Sarbanes-Oxley Act of 2002. XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. XBRL Taxonomy Extension Schema Document. XBRL Taxonomy Extension Calculation Linkbase Document. XBRL Taxonomy Extension Label Linkbase Document. XBRL Taxonomy Extension Presentation Linkbase Document. XBRL Taxonomy Extension Definition Linkbase Document. Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101). Filed with this document. * + Management compensation plan or arrangement. Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 5, 2017. (1) Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 6, 2005. (2) Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 5, 2020. (3) Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 4, 2016. (4) Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 24, 2017. (5) Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 21, 2017. (6) Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 6, 2017. (7) Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 30, 2017. (8) (9) Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 9, 2010. (10) Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 18, 2011. (11) Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 21, 2009 (12) Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 22, 2019. (13) Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 20, 2009. (14) Incorporated by reference from the Company’s Current Report on Form 8-K dated on February 7, 2017. (15) Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on November 2, 2017. (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. 38 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS GARTNER, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2019 and 2018 Consolidated Statements of Operations for the Three-Year Period Ended December 31, 2019 Consolidated Statements of Comprehensive Income for the Three-Year Period Ended December 31, 2019 Consolidated Statements of Stockholders’ Equity for the Three-Year Period Ended December 31, 2019 Consolidated Statements of Cash Flows for the Three-Year Period Ended December 31, 2019 Notes to Consolidated Financial Statements 40 42 43 44 45 46 47 48 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. 39 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. a 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. 40 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: ff • 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 41 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 necessaryrr in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ff 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. a 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 42 GARTNER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) ASSETS Current assets: Cash and cash equivalents Fees receivable, net of allowances of $8,000 and $7,700, respectively Deferred commissions Prepaid expenses and other current assets Total current assets Property, equipment and leasehold improvements, net Operating lease right-of-use assets Goodwill Intangible assets, net Other assets Total Assets LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities Deferred revenues Current portion of long-term debt Total current liabilities Long-term debt, net of deferred financing fees Operating lease liabilities Other liabilities Total Liabilities 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 periods Additional paid-in capital Accumulated other comprehensive loss, net Accumulated earnings Treasury stock, at cost, 74,444,288 and 73,899,977 common shares, respectively Total Stockholders’ Equity Total Liabilities and Stockholders’ Equity See Notes to Consolidated Financial Statements. 43 December 31, 2019 2018 $ 280,836 $ 156,368 1,326,012 1,255,118 265,867 146,026 235,016 165,237 2,018,741 1,811,739 344,579 267,665 (cid:26)(cid:19)(cid:21)(cid:15)(cid:28)(cid:20)(cid:25) 2,937,726 925,087 222,245 (cid:178) 2,923,136 1,042,565 156,369 $ 7,151,294 $ 6,201,474 $ 788,796 $ 710,113 1,928,020 1,745,244 139,718 2,856,534 2,043,888 (cid:27)(cid:22)(cid:21)(cid:15)(cid:24)(cid:22)(cid:22) 479,746 165,578 2,620,935 2,116,109 (cid:178) 613,673 6,212,701 5,350,717 — 82 — 82 1,899,273 (77,938) 1,988,722 (2,871,546) 938,593 1,823,710 (39,867) 1,755,432 (2,688,600) 850,757 $ 7,151,294 $ 6,201,474 GARTNER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) Revenues: Research Conferences Consulting Other Total revenues Costs and expenses: Cost of services and product development Selling, general and administrative Depreciation Amortization of intangibles Acquisition and integration charges Total costs and expenses Operating income (loss) Interest income Interest expense (Loss) gain from divested operations Other income, net Income (loss) before income taxes Provision (benefit) for income taxes Net income Net income per share: Basic Diluted Weighted average shares outstanding: Basic Diluted See Notes to Consolidated Financial Statements. Year Ended December 31, 2019 2018 2017 $ 3,374,548 $ 3,105,764 $ 2,471,280 476,869 393,904 — 410,461 353,667 105,562 337,903 327,661 174,650 4,245,321 3,975,454 3,311,494 1,550,568 2,103,424 82,066 129,713 9,463 1,468,800 1,884,141 68,592 187,009 107,197 3,875,234 3,715,739 370,087 3,026 (102,831) (2,075) 7,532 275,739 42,449 259,715 2,566 (126,774) (cid:23)(cid:24)(cid:15)(cid:23)(cid:23)(cid:26) 167 181,121 58,665 233,290 $ 122,456 $ 2.60 2.56 $ $ 1.35 1.33 $ $ 89,817 90,971 90,827 92,122 1,320,198 1,599,004 63,897 176,274 158,450 3,317,823 (6,329) 3,011 (127,947) (cid:178) 3,448 (127,817) (131,096) 3,279 0.04 0.04 88,466 89,790 $ $ $ 44 GARTNER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (IN THOUSANDS) Net income Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments Interest rate swaps - net change in deferred gain or loss Pension plans - net change in deferred actuarial loss Other comprehensive (loss) income, net of tax Comprehensive income See Notes to Consolidated Financial Statements. Year Ended December 31, 2019 2018 2017 $ 233,290 $ 122,456 $ 3,279 4,169 (39,394) (2,846) (38,071) 195,219 $ (31,245) (10,844) 123 (41,966) 80,490 $ $ 47,363 3,892 (64) 51,191 54,470 45 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 $ Net income Other comprehensive income Issuances under stock plans and for an acquisition Common share repurchases Stock-based compensation expense Balance at December 31, 2017 Adoption of ASU No. 2018-02 Adoption of ASU No. 2016-16 Net income Other comprehensive loss Issuances under stock plans Common share repurchases Stock-based compensation expense Balance at December 31, 2018 Net income Other comprehensive loss Issuances under stock plans Common share repurchases Stock-based compensation expense Balance at December 31, 2019 (cid:7) 78 — — 4 — — 82 — — — — — — — 82 (cid:178) (cid:178) (cid:178) (cid:178) (cid:178) (cid:27)(cid:21) See Notes to Consolidated Financial Statements. $ 863,127 $ — — 819,313 — 78,943 1,761,383 — — — — (3,845) — 66,172 1,823,710 (cid:178) (cid:178) (cid:25)(cid:15)(cid:24)(cid:24)(cid:24) (cid:178) (cid:25)(cid:28)(cid:15)(cid:19)(cid:19)(cid:27) (49,683) $ — 51,191 1,644,005 3,279 — — — — 1,508 591 — — (41,966) — — — (39,867) (cid:178) (cid:11)(cid:22)(cid:27)(cid:15)(cid:19)(cid:26)(cid:20)(cid:12) (cid:178) (cid:178) (cid:178) — — — 1,647,284 (591) (13,717) 122,456 — — — — 1,755,432 (cid:21)(cid:22)(cid:22)(cid:15)(cid:21)(cid:28)(cid:19) (cid:178) (cid:178) (cid:178) (cid:178) $ (2,396,649) $ — — 11,129 (41,272) — (2,426,792) — — — — 14,026 (275,834) — (2,688,600) (cid:178) (cid:178) (cid:20)(cid:20)(cid:15)(cid:19)(cid:28)(cid:23) 60,878 3,279 51,191 830,446 (41,272) 78,943 983,465 — (13,717) 122,456 (41,966) 10,181 (275,834) 66,172 850,757 (cid:21)(cid:22)(cid:22)(cid:15)(cid:21)(cid:28)(cid:19) (cid:11)(cid:22)(cid:27)(cid:15)(cid:19)(cid:26)(cid:20)(cid:12) (cid:20)(cid:26)(cid:15)(cid:25)(cid:23)(cid:28) (cid:11)(cid:20)(cid:28)(cid:23)(cid:15)(cid:19)(cid:23)(cid:19)(cid:12) (cid:11)(cid:20)(cid:28)(cid:23)(cid:15)(cid:19)(cid:23)(cid:19)(cid:12) (cid:178) (cid:25)(cid:28)(cid:15)(cid:19)(cid:19)(cid:27) (cid:7)(cid:20)(cid:15)(cid:27)(cid:28)(cid:28)(cid:15)(cid:21)(cid:26)(cid:22) (cid:7) (cid:11)(cid:26)(cid:26)(cid:15)(cid:28)(cid:22)(cid:27)(cid:12) (cid:7) (cid:20)(cid:15)(cid:28)(cid:27)(cid:27)(cid:15)(cid:26)(cid:21)(cid:21) (cid:7) (cid:11)(cid:21)(cid:15)(cid:27)(cid:26)(cid:20)(cid:15)(cid:24)(cid:23)(cid:25)(cid:12) (cid:7) (cid:28)(cid:22)(cid:27)(cid:15)(cid:24)(cid:28)(cid:22) 46 GARTNER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) Operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Stock-based compensation expense Deferred taxes Loss (gain) from divested operations Gain on sale of an equity security Reduction in the carrying amount of operating lease right-of-use assets Amortization and write-off of deferred financing fees Changes in assets and liabilities, net of acquisitions and divestitures: Fees receivable, net Deferred commissions Prepaid expenses and other current assets Other assets Deferred revenues Accounts payable and accrued and other liabilities Cash provided by operating activities Investing activities: Additions to property, equipment and leasehold improvements Acquisitions - cash paid (net of cash acquired) Divestitures - cash received (net of cash transferred) Proceeds from the sale of an equity security Cash (used in) provided by investing activities Financing activities: Proceeds from employee stock purchase plan Proceeds from borrowings Payments for deferred financing fees Payments on borrowings Purchases of treasury stock Cash (used in) provided by financing activities Net increase (decrease) in cash and cash equivalents and restricted cash Effects of exchange rates on cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash, beginning of year Year Ended December 31, 2019 2018 2017 $ 233,290 $ 122,456 $ 3,279 211,779 69,008 (55,787) 2,075 (cid:11)(cid:28)(cid:15)(cid:20)(cid:21)(cid:19)(cid:12) (cid:27)(cid:25)(cid:15)(cid:23)(cid:25)(cid:25) 6,497 (66,729) (30,315) 18,985 (27,303) 181,203 (54,613) 565,436 255,601 66,172 1,524 (45,447) (cid:178) (cid:178) 13,815 (115,003) (31,247) (50,551) 11,456 187,147 55,235 471,158 240,171 78,943 (217,414) — (cid:178) (cid:178) 15,062 (368,516) (61,393) 13,251 (18,529) 382,852 186,811 254,517 (149,016) (126,873) (110,765) (cid:11)(cid:21)(cid:24)(cid:15)(cid:28)(cid:27)(cid:28)(cid:12) (cid:11)(cid:20)(cid:24)(cid:15)(cid:27)(cid:24)(cid:24)(cid:12) (cid:11)(cid:21)(cid:15)(cid:25)(cid:23)(cid:20)(cid:15)(cid:26)(cid:27)(cid:19)(cid:12) (cid:178) (cid:20)(cid:23)(cid:15)(cid:20)(cid:21)(cid:19) (160,885) 17,629 5,000 — (109,579) (199,042) (285,992) 118,559 3,614 158,663 (cid:24)(cid:21)(cid:25)(cid:15)(cid:26)(cid:26)(cid:28) (cid:178) 384,051 (cid:178) (cid:178) (2,752,545) 14,689 11,711 — 3,025,000 — (1,010,972) (260,832) (1,257,115) (401,906) (6,489) 567,058 (51,171) (404,438) (41,272) 2,539,830 41,802 25,902 499,354 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 Income taxes, net of refunds received See Notes to Consolidated Financial Statements. 47 $ $ 102,298 119,156 $ $ 117,500 95,800 $ $ 98,500 76,100 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 three 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. tt 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 48 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. ff Cost of services and product development (“COS” of our products and services. These costs primarily relate to personnel. (( ).” COS expense includes the direct costs incurred in the creation and delivery Selling, general and administrative (“SG&A” costs, facility costs and bad debt expense. (( ).” SG&A expense includes direct and indirect selling costs, general and administrative 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 49 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 ASU 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 monthstt 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). Cash and cash equivalents Restricted cash classified in (1), (2): Prepaid expenses and other current assets Other assets Cash classified as held-for-sale (3) Cash and cash equivalents and restricted cash per the Consolidated Statements of Cash Flows December 31, 2019 $ 280,836 2018 $156,368 2017 $ 538,908 2016 $ 474,233 (cid:178) — — (cid:21)(cid:15)(cid:21)(cid:28)(cid:24) — — (cid:20)(cid:24)(cid:15)(cid:20)(cid:23)(cid:27) 3,002 10,000 (cid:21)(cid:24)(cid:15)(cid:20)(cid:21)(cid:20) — — $ 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 50 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 aa 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). Category Computer equipment and software Furniture and equipment Leasehold improvements Total cost Less — accumulated depreciation and amortization Property, equipment and leasehold improvements, net Useful Life December 31, (Years) 2019 2018 (cid:21)(cid:16)(cid:26) (cid:22)(cid:16)(cid:27) (cid:21)(cid:16)(cid:20)(cid:24) (cid:7) (cid:21)(cid:24)(cid:25)(cid:15)(cid:23)(cid:24)(cid:20) (cid:7) (cid:21)(cid:20)(cid:19)(cid:15)(cid:28)(cid:24)(cid:24) (cid:20)(cid:19)(cid:23)(cid:15)(cid:22)(cid:26)(cid:19) (cid:21)(cid:26)(cid:24)(cid:15)(cid:20)(cid:20)(cid:23) (cid:25)(cid:22)(cid:24)(cid:15)(cid:28)(cid:22)(cid:24) (cid:27)(cid:24)(cid:15)(cid:19)(cid:19)(cid:21) (cid:21)(cid:20)(cid:27)(cid:15)(cid:23)(cid:19)(cid:24) (cid:24)(cid:20)(cid:23)(cid:15)(cid:22)(cid:25)(cid:21) (cid:11)(cid:21)(cid:28)(cid:20)(cid:15)(cid:22)(cid:24)(cid:25)(cid:12) 344,579 $ (cid:11)(cid:21)(cid:23)(cid:25)(cid:15)(cid:25)(cid:28)(cid:26)(cid:12) 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. a r 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 51 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. g Leases — On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (as amended, "ASU No. 2016-02" or 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 52 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 regarding its 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. t 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. 53 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. r 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 u 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 Fees receivable Prepaid expenses and other assets Goodwill (1) Finite-lived intangible assets (2) Total assets acquired Total liabilities assumed (primarily deferred revenues) Net assets acquired $ $ 1,281 1,402 166 19,293 5,250 27,392 2,417 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. rr 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. 54 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). (1): gg g Aggregate consideration Cash paid at close (2), (3) Additional cash paid (2) Fair value of Gartner equity (4) Total CEB $ 2,687,704 12,465 818,660 $ 3,518,829 $ $ L2 134,199 — — 134,199 Total $ 2,821,903 12,465 818,660 $ 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. 55 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). Assets: Cash Fees receivable Prepaid expenses and other current assets Property, equipment and leasehold improvements Goodwill (1) Finite-lived intangible assets (2) Other assets Total assets Liabilities: Accounts payable and accrued liabilities Deferred revenues (current) Other liabilities Total liabilities Net assets acquired CEB (3)( )( ) L2 (4)( )( ) Total $ 194,706 175,440 53,610 51,399 2,349,589 1,584,300 66,818 4,475,862 142,134 246,472 568,427 957,033 , $ 3,518,829 , $ $ 4,852 8,277 1,167 663 108,202 15,890 13,067 152,118 3,050 13,200 1,669 17,919 , 134,199 $ 199,558 183,717 54,777 52,062 2,457,791 1,600,190 79,885 4,627,980 145,184 259,672 570,096 974,952 , $ 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. qq (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 Pro forma net income Pro forma basic and diluted income per share $ 3,726,470 150,167 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. 56 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). aa Liability balance at beginning of the year Charges and adjustments, net (2) Payments, net of $2,515 in sublease rent during 2018 Liability balance at end of the year (3) 2018 2017 $ $ 12,961 69,790 (26,087) 56,664 $ $ — 13,087 (126) 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 three 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. 57 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) Divestitures (2) Foreign currency translation impact and other (3) Balance at December 31, 2018 Additions due to an acquisition (4) Foreign currency translation impact Balance at December 31, 2019 $ 2,619,677 (2,500) 21,241 2,638,418 17,557 (4,915) $ 2,651,060 $ 187,920 $ 97,798 $ — (266) 187,654 1,736 251 $ 189,641 $ — (734) 97,064 — (39) 97,025 $ 81,899 (90,078) 8,179 — — — $ — $ 2,987,294 (92,578) 28,420 2,923,136 19,293 (4,703) 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) Intangible assets fully amortized Foreign currency translation impact Gross cost Accumulated amortization (2) Balance at December 31, 2019 3,600 — 9,853 — — 332 1,145,109 (283,369) 861,740 $ $ 111,033 (61,564) 49,469 $ 1,200 (85,900) (2) 14,140 (11,225) 2,915 December 31, 2018 Customer Relationships Software Content Gross cost at December 31, 2017 (3) $ 1,200,316 $ Intangible assets fully amortized Divestitures (4) Foreign currency translation impact and other (5) Gross cost Accumulated amortization (2) Balance at December 31, 2018 (cid:11)(cid:22)(cid:19)(cid:22)(cid:12) (45,175) (23,182) 1,131,656 (184,918) 946,738 $ $ 123,424 (11,715) (321) (687) 110,701 (38,901) 71,800 $ 104,313 (669) (473) (4,329) 98,842 (92,717) 6,125 $ 450 (21,358) 84 30,838 (19,875) 10,963 5,250 (107,258) 10,267 1,301,120 (376,033) $ 925,087 Other Total 54,929 (3,311) (160) 204 51,662 (33,760) 17,902 $ 1,482,982 (15,998) (46,129) (27,994) 1,392,861 (350,296) $ 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. 58 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 2021 2022 2023 2024 2025 and thereafter 4 — OTHER ASSETS The Company's other assets are summarized in the table below (in thousands). Benefit plan-related assets Non-current deferred tax assets Other Total other assets $ $ 126,081 105,007 95,194 95,179 (cid:27)(cid:28)(cid:15)(cid:27)(cid:25)(cid:22) (cid:23)(cid:20)(cid:22)(cid:15)(cid:26)(cid:25)(cid:22) 925,087 December 31, 2019 2018 $ $ 84,600 $ 79,618 58,027 75,653 34,494 46,222 222,245 $ 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). Accounts payable Payroll and employee benefits payable Severance and retention bonus payable Bonus payable Commissions payable Taxes payable Current portion of operating lease liabilities (1) Other accrued liabilities Total accounts payable and accrued liabilities December 31, 2019 2018 $ 32,995 $ 165,449 24,281 192,100 142,499 7,878 (cid:26)(cid:25)(cid:15)(cid:24)(cid:20)(cid:25) 147,078 $ 788,796 $ 37,508 143,803 28,292 170,719 126,844 19,725 (cid:178) 183,222 710,113 (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. 59 The Company's Other liabilities are summarized in the table below (in thousands). Non-current deferred revenues Long-term taxes payable Benefit plan-related liabilities Lease-related matters prior to the adoption of ASU No. 2016-02 (1) Non-current deferred tax liabilities Other, including fair value of interest rate swap contracts December 31, 2019 2018 $ 24,409 $ 63,565 108,615 — 189,814 93,343 21,194 66,304 96,033 165,374 214,687 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. u aa 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 60 (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. mm 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). Description 2016 Credit Agreement - Term loan A facility (1) 2016 Credit Agreement - Revolving credit facility (1), (2) Senior notes (3) Other (4) Principal amount outstanding (5), (6) Less: deferred financing fees (7) Net balance sheet carrying amount December 31, 2019 2018 $ 1,252,969 $ 1,355,062 148,000 800,000 6,545 2,207,514 (23,908) 2,183,606 $ $ 155,000 800,000 2,030 2,312,092 (30,405) 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. 61 (4) Consists of two 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 (cid:73)(cid:82)(cid:88)(cid:85) 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. (cid:85) 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. 62 • 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. 63 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 asset may 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. rr 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). t Description Year Ended December 31, 2019: Operating lease cost (1) Variable lease cost (2) Sublease income Total lease cost, net (3) Cash paid for amounts included in the measurement of operating lease liabilities Cash receipts from sublease arrangements Right-of-use assets obtained in exchange for new operating lease liabilities As of December 31, 2019: Weighted average remaining lease term for operating leases (in years) Weighted average discount rate for operating leases $ $ $ $ $ 144,727 16,404 (38,901) 122,230 135,799 34,441 136,997 10.2 6.7% (1) Included in operating lease cost was $43.2 million of costs for subleasing activities during 2019. (2) These amounts are primarily variable lease and nonlease costs that were not fixed at the lease commencement date or are dependent on something other than an index or a rate. (3) The Company did not capitalize any operating lease costs during 2019. 64 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): Period ending December 31, 2020 2021 2022 2023 2024 Thereafter Total future minimum operating lease payments and estimated sublease cash receipts (1) Imputed interest Total operating lease liabilities per the Consolidated Balance Sheet Operating Lease Payments Sublease Cash Receipts $ 134,579 $ 134,707 129,741 126,435 114,948 643,129 $ 1,283,539 (374,490) 909,049 $ 39,941 44,382 45,582 46,520 40,643 143,547 360,615 (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 Operating lease liabilities Total operating lease liabilities per the Consolidated Balance Sheet $ $ 76,516 832,533 909,049 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 2020 2021 2022 2023 Thereafter Total minimum lease payments (1) (1) Excludes approximately $372.0 million of sublease income. $ 130,991 121,802 118,945 111,117 106,113 689,360 $ 1,278,328 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. 65 8 — STOCKHOLDERS’ EQUITY Common stock. Holders of Gartner’s common stock, par value $0.0005 per share, are entitled to one 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. Balance at December 31, 2016 Issued in connection with the acquisition of CEB (1) Issuances under stock plans Purchases for treasury (2) Balance at December 31, 2017 Issuances under stock plans Purchases for treasury (2), (3) Balance at December 31, 2018 Issuances under stock plans Purchases for treasury (2), (3) Balance at December 31, 2019 Issued Shares Treasury Stock Shares 156,234,415 73,583,172 (cid:26)(cid:15)(cid:22)(cid:25)(cid:26)(cid:15)(cid:25)(cid:24)(cid:21) — — 163,602,067 — — 163,602,067 — — (cid:178) (1,186,150) 382,183 (cid:26)(cid:21)(cid:15)(cid:26)(cid:26)(cid:28)(cid:15)(cid:21)(cid:19)(cid:24) (933,246) 2,054,018 73,899,977 (825,115) 1,369,426 (cid:20)(cid:25)(cid:22)(cid:15)(cid:25)(cid:19)(cid:21)(cid:15)(cid:19)(cid:25)(cid:26) (cid:26)(cid:23)(cid:15)(cid:23)(cid:23)(cid:23)(cid:15)(cid:21)(cid:27)(cid:27) (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), accelerated share repurchases, private transactions or other transactions and will be funded by cash on hand and borrowings. 66 Accumulated Other Comprehensive Income (Loss), net ("AOCI/L") The tables below provide information about the changes 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 (cid:7) (cid:11)(cid:26)(cid:15)(cid:26)(cid:26)(cid:19)(cid:12) (cid:7) (cid:11)(cid:24)(cid:15)(cid:26)(cid:22)(cid:27)(cid:12) (cid:7) (cid:11)(cid:21)(cid:25)(cid:15)(cid:22)(cid:24)(cid:28)(cid:12) (cid:7) (cid:11)(cid:22)(cid:28)(cid:15)(cid:27)(cid:25)(cid:26)(cid:12) Other comprehensive income (loss) activity during the year: Change in AOCI/L before reclassifications to income Reclassifications from AOCI/L to income (2), (3) Other comprehensive income (loss) for the year (cid:11)(cid:22)(cid:25)(cid:15)(cid:28)(cid:23)(cid:28)(cid:12) (cid:11)(cid:21)(cid:15)(cid:23)(cid:23)(cid:24)(cid:12) (cid:11)(cid:22)(cid:28)(cid:15)(cid:22)(cid:28)(cid:23)(cid:12) (cid:11)(cid:22)(cid:15)(cid:19)(cid:20)(cid:20)(cid:12) (cid:20)(cid:25)(cid:24) (cid:11)(cid:21)(cid:15)(cid:27)(cid:23)(cid:25)(cid:12) (cid:23)(cid:15)(cid:20)(cid:25)(cid:28) (cid:178) (cid:23)(cid:15)(cid:20)(cid:25)(cid:28) (cid:11)(cid:22)(cid:24)(cid:15)(cid:26)(cid:28)(cid:20)(cid:12) (cid:11)(cid:21)(cid:15)(cid:21)(cid:27)(cid:19)(cid:12) (cid:11)(cid:22)(cid:27)(cid:15)(cid:19)(cid:26)(cid:20)(cid:12) Balance - December 31, 2019 (cid:7) (cid:11)(cid:23)(cid:26)(cid:15)(cid:20)(cid:25)(cid:23)(cid:12) (cid:7) (cid:11)(cid:27)(cid:15)(cid:24)(cid:27)(cid:23)(cid:12) (cid:7) (cid:11)(cid:21)(cid:21)(cid:15)(cid:20)(cid:28)(cid:19)(cid:12) (cid:7) (cid:11)(cid:26)(cid:26)(cid:15)(cid:28)(cid:22)(cid:27)(cid:12) Year Ended December 31, 2018 Balance - December 31, 2017 Adoption of ASU No. 2018-02 (4) Other comprehensive income (loss) activity during the year: Change in AOCI/L before reclassifications to income Reclassifications from AOCI/L to income (2), (3), (5) Other comprehensive income (loss) for the year Balance - December 31, 2018 Interest Rate Swaps Defined Benefit Pension Plans Foreign Currency Translation Adjustments Total $ 2,483 $ 591 (5,861) $ — 4,886 $ 1,508 — 591 (9,447) (1,397) (10,844) (7,770) $ $ — 123 123 (5,738) $ 19,619 29,066 (61,585) (60,311) (41,966) (31,245) (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. 67 Our Business and Revenues Gartner delivers its products and services globally through three 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. rr 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). tt 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. t 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. 68 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 been 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. aa aa 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. d aa 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. t 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. 69 Disaggregated Revenue Our disaggregated revenue by reportable segment is presented in the tables below for the years indicated (in thousands). By Primary Geographic Market g p y y ( ), ( ) (1), (2) Year Ended December 31, 2019 Primary Geographic Market United States and Canada Europe, Middle East and Africa Other International Total revenues Year Ended December 31, 2018 Primary Geographic Market United States and Canada Europe, Middle East and Africa Other International Total revenues Year Ended December 31, 2017 Primary Geographic Market United States and Canada Europe, Middle East and Africa Other International Total revenues Research Conferences Consulting Total $ 2,199,008 $ 295,857 $ 239,625 $ 2,734,490 751,267 424,273 122,591 58,421 122,146 32,133 996,004 514,827 $ 3,374,548 $ 476,869 $ 393,904 $ 4,245,321 Research Conferences Consulting Other Total $ 1,994,016 $ 256,219 $ 205,874 $ 58,843 $ 2,514,952 737,129 374,619 105,909 48,333 119,258 28,535 38,194 1,000,490 8,525 460,012 $ 3,105,764 $ 410,461 $ 353,667 $ 105,562 $ 3,975,454 Research Conferences Consulting Other Total $ 1,600,847 $ 210,698 $ 188,022 $ 92,799 $ 2,092,366 597,943 272,490 86,567 40,638 111,792 27,847 59,119 22,732 855,421 363,707 $ 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) g f g y Year Ended December 31, 2019 Timing of Revenue Recognition Transferred over time (2) Transferred at a point in time (3) Total revenues Research Conferences Consulting Total $ $ 3,083,936 $ — $ 316,042 $ 3,399,978 290,612 476,869 77,862 845,343 3,374,548 $ 476,869 $ 393,904 $ 4,245,321 70 Year Ended December 31, 2018 Timing of Revenue Recognition Research Conferences Consulting Other Total Transferred over time (2) Transferred at a point in time (3) Total revenues Year Ended December 31, 2017 Timing of Revenue Recognition Transferred over time (2) Transferred at a point in time (3) Total revenues $ $ $ $ 2,851,176 $ 254,588 3,105,764 $ — $ 294,397 $ 86,667 $ 3,232,240 410,461 410,461 $ 59,270 353,667 $ 18,895 743,214 105,562 $ 3,975,454 Research Conferences Consulting Other Total 2,275,377 $ — $ 269,720 $ 141,331 $ 2,686,428 195,903 337,903 57,941 33,319 625,066 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 71 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). Assets: Fees receivable, gross (1) Contract assets recorded in Prepaid expenses and other current assets (2) Contract liabilities: Deferred revenues (current liability) (3) Non-current deferred revenues recorded in Other liabilities (3) Total contract liabilities December 31, 2019 2018 $ $ $ $ 1,334,012 21,350 1,928,020 24,409 1,952,429 $ $ $ $ 1,262,818 26,119 1,745,244 21,194 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. a 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. 72 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 Stock appreciation rights Restricted stock units Common stock equivalents Total (1) Expense category line item Cost of services and product development Selling, general and administrative Acquisition and integration charges (2) Total (1) 2019 2018 2017 6.7 $ 6.3 $ 61.6 0.7 59.2 0.7 69.0 $ 66.2 $ 2019 2018 2017 $ 29.1 39.4 0.5 $ 28.1 36.2 1.9 69.0 $ 66.2 $ 5.6 72.6 0.7 78.9 25.8 35.5 17.6 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. 73 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. t 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, 2018 1.2 $ 89.45 $ Granted Forfeited Exercised Outstanding at December 31, 2019 (1) (2) Vested and exercisable at December 31, 2019 (2) 0.3 (0.1) (0.2) 1.2 0.5 $ $ 143.23 118.31 73.64 104.05 85.79 $ $ 19.88 32.62 26.52 16.92 23.18 18.87 4.33 6.11 n/a n/a 4.21 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: Expected dividend yield (1) Expected stock price volatility (2) Risk-free interest rate (3) Expected life in years (4) 2019 2018 2017 —% 21% 2.5% 4.59 —% 21% 2.5% 4.52 —% 22% 1.8% 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 volatilitytt 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). 74 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. Outstanding at December 31, 2018 Granted (1) Vested and released Forfeited Outstanding at December 31, 2019 (2) (3) Restricted Stock Units ("RSUs") (in millions) Per Share Weighted Average Grant Date Fair Value 1.4 $ 0.5 (0.5) (0.1) 1.3 $ 101.75 139.86 97.33 116.79 118.89 (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. Outstanding at December 31, 2018 Granted Converted to shares of Common Stock upon grant Outstanding at December 31, 2019 Common Stock Equivalents ("CSEs") Per Share Weighted Average Grant Date Fair Value 109,780 $ 4,521 (2,960) 111,341 $ 24.96 153.43 144.88 26.99 75 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). Numerator: Net income used for calculating basic and diluted income per common share Denominator: Weighted average common shares used in the calculation of basic income per share Common stock equivalents associated with stock-based compensation plans Shares used in the calculation of diluted income per share Income per share (1): Basic Diluted 2019 2018 2017 $ 233,290 $ 122,456 $ 3,279 89,817 1,154 90,971 90,827 1,295 92,122 88,466 1,324 89,790 $ $ 2.60 2.56 $ $ 1.35 1.33 $ $ 0.04 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. 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 Year Ended December 31, 2019 2018 2017 (a) The number of anti-dilutive common stock equivalents for 2018 were minimal. 76 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). U.S. Non-U.S. Income (loss) before income taxes 2019 2018 $ $ 115,543 160,196 275,739 $ $ 34,159 146,962 181,121 $ $ 2017 (135,757) 7,940 (127,817) The components of the expense (benefit) for income taxes on the above income (loss) are summarized in the table below (in thousands). Current tax expense: U.S. federal State and local Foreign Total current Deferred tax (benefit) expense: U.S. federal State and local Foreign Total deferred Total current and deferred Benefit (expense) relating to interest rate swaps used to increase (decrease) equity Benefit from stock transactions with employees used to increase equity Benefit relating to defined-benefit pension adjustments used to increase equity 2019 2018 2017 $ 30,208 $ 2,817 $ 48,339 11,630 53,105 94,943 (16,389) (6,897) (48,186) (71,472) 23,471 17,666 54 1,258 6,969 45,042 54,828 12,462 1,258 (13,795) (75) 54,753 3,840 58 14 434 38,602 87,375 (176,046) (14,363) (25,898) (216,307) (128,932) (2,477) 46 267 (131,096) Total tax expense (benefit) $ 42,449 $ 58,665 $ The components of long-term deferred tax assets (liabilities) are summarized in the table below (in thousands). Accrued liabilities Operating leases Loss and credit carryforwards Assets relating to equity compensation Other assets Gross deferred tax assets Property, equipment and leasehold improvements Intangible assets Prepaid expenses Other liabilities Gross deferred tax liabilities Valuation allowance Net deferred tax liabilities 77 December 31, 2019 2018 $ 67,577 $ 96,292 54,860 14,372 16,842 20,364 174,015 (15,137) (212,498) (49,221) (5,799) (282,655) (1,556) (110,196) $ — 14,830 19,653 14,092 144,867 (3,421) (263,548) (41,926) (12,100) (320,995) (4,066) (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. rr 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 rate State income taxes, net of federal benefit Effect of non-U.S. operations Intercompany sale of intellectual property Change in the reserve for tax contingencies Law changes Stock-based compensation expense Nondeductible acquisition costs Nondeductible meals and entertainment costs Gains/Losses on divested operations and held-for-sale assets Limitation on executive compensation Global intangible low-taxed income, net of foreign tax credits Foreign-derived intangible income Change in the valuation allowance Goodwill Other items, net Effective tax rate 21.0% 1.5 2.7 (13.8) 4.7 — (3.9) — 1.7 — 2.4 1.9 (1.0) (0.9) — (0.9) 15.4% 21.0% — (10.7) — 15.7 (1.3) (5.3) 0.9 2.7 12.2 2.7 0.1 (2.0) 0.5 (3.8) (0.3) 32.4% 35.0% 3.6 5.9 — (2.8) 41.8 11.0 (7.9) (3.5) 13.1 (0.1) — — 3.0 — 3.5 102.6% 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. 78 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). Beginning balance Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years Reductions for expiration of statutes Settlements Change in foreign currency exchange rates Ending balance 2019 2018 $ 90,349 $ 32,072 8,564 (16,942) (7,481) (3,867) 75 102,770 $ $ 60,269 27,371 14,691 (3,939) (6,293) (472) (1,278) 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 79 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 Interest rate swaps (1) Foreign currency forwards (2) Total Number of Contracts 4 176 180 Notional Amounts $ 1,400,000 604,858 $ 2,004,858 December 31, 2018 Derivative Contract Type Interest rate swaps (1) Foreign currency forwards (2) Total Number of Contracts 7 135 142 Notional Amounts $ 2,100,000 927,375 $ 3,027,375 Fair Value Asset (Liability), Net (3) (64,831) 59 (64,772) Fair Value Asset (Liability), Net (3) (10,681) (1,942) (12,623) $ $ $ $ Balance Sheet Line Item Other liabilities Other current assets Unrealized Loss Recorded in AOCI/L $ $ (47,164) — (47,164) Balance Sheet Line Item Other liabilities Accrued liabilities Unrealized Loss Recorded in AOCI/L $ $ (7,770) — (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 Interest (income) expense, net (1) Other expense (income), net (2) Total (income) expense, net 2019 2018 2017 $ $ (3,361) $ 2,488 (873) $ (1,920) $ 10,365 8,445 $ 7,870 (801) 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. 80 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. t The table below presents the fair value of certain financial assets and liabilities (in thousands). Description Assets: Values based on Level 1 inputs: Deferred compensation plan assets (1) Total Level 1 inputs Values based on Level 2 inputs: Deferred compensation plan assets (1) Foreign currency forward contracts (2) Total Level 2 inputs Total Assets Liabilities: Values based on Level 2 inputs: Deferred compensation plan liabilities (1) Foreign currency forward contracts (2) Interest rate swap contracts (3) Senior Notes due 2025 (4) Total Level 2 inputs Total Liabilities December 31, 2019 2018 $ $ $ 2,277 $ 2,277 73,419 1,558 (cid:26)(cid:23)(cid:15)(cid:28)(cid:26)(cid:26) 77,254 $ 79,556 $ 1,499 64,831 835,384 981,270 $ 981,270 $ 8,956 (cid:27)(cid:15)(cid:28)(cid:24)(cid:25) 57,690 1,318 (cid:24)(cid:28)(cid:15)(cid:19)(cid:19)(cid:27) 67,964 68,570 3,260 10,681 776,160 (cid:27)(cid:24)(cid:27)(cid:15)(cid:25)(cid:26)(cid:20) 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 81 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). Service cost Interest cost Expected return on plan assets Recognition of actuarial loss Total defined benefit pension plan expense 2019 2018 2017 $ $ 3,659 851 (517) 237 4,230 $ $ 3,145 840 (475) 340 3,850 $ $ 2,820 765 (360) 350 3,575 The table below presents the key assumptions used in the computation of pension expense for the years ended December 31. Weighted average discount rate (1) Expected return on plan assets Average compensation increase 2019 2018 2017 1.28% (cid:21)(cid:17)(cid:24)(cid:23)(cid:8) 2.58% 1.81% (cid:21)(cid:17)(cid:23)(cid:24)(cid:8) 2.58% 1.78% (cid:21)(cid:17)(cid:21)(cid:21)(cid:8) 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. 82 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 $ Service cost Interest cost Actuarial loss (gain) due to assumption changes and plan experience (1) Contractual termination benefits Benefits payments (2) Foreign currency impact Projected benefit obligation at end of year (3) $ 3,659 851 4,524 — (830) (591) 52,503 $ 3,145 840 (430) (950) (1,400) (1,765) 44,890 $ 38,400 2,820 765 690 — (1,780) 4,555 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 plans Projected benefit obligation Pension plan assets at fair value (1) Funded status – shortfall (2) Amounts recorded in the Consolidated Balance Sheets for the plans Other liabilities – accrued pension obligation (2) Stockholders’ equity – deferred actuarial loss (3) 2019 2018 2017 52,503 (23,444) 29,059 $ $ 44,890 (19,460) 25,430 $ $ 45,450 (18,475) 26,975 29,059 $ (8,584) $ 25,430 $ (5,738) $ 26,975 (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. 83 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 (cid:51)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85) $ 19,460 $ 18,475 $ (cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86) (cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86) (cid:36)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:87)(cid:88)(cid:85)(cid:81)(cid:3)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86) (cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86) (cid:41)(cid:82)(cid:85)(cid:72)(cid:76)(cid:74)(cid:81)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:70)(cid:92)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87) (cid:51)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85) $ 4,405 (830) 714 — (305) 23,444 $ 4,478 (1,400) (164) (950) (979) 19,460 $ 14,465 3,438 (1,780) 547 — 1,805 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 three 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. g 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. 84 The tables below present information about the Company’s reportable segments for the years ended December 31 (in thousands). 2019 Revenues Gross contribution Corporate and other expenses Operating income Research Conferences Consulting Consolidated $ 3,374,548 $ 476,869 $ 393,904 $ 4,245,321 2,351,720 241,757 118,450 2,711,927 (2,341,840) 370,087 $ 2018 Revenues Gross contribution Corporate and other expenses Operating income 2017 Revenues Gross contribution Corporate and other expenses Operating loss Research Conferences Consulting Other (1) Consolidated $ 3,105,764 $ 410,461 $ 353,667 $ 105,562 $ 3,975,454 2,144,097 207,260 102,541 65,075 2,518,973 (2,259,258) 259,715 $ Research Conferences Consulting Other (1) Consolidated $ 2,471,280 $ 337,903 $ 327,661 $ 174,650 $ 3,311,494 1,653,014 163,480 93,643 90,249 2,000,386 (2,006,715) (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). Total segment gross contribution Costs and expenses: Cost of services and product development - unallocated (1) Selling, general and administrative Depreciation and amortization Acquisition and integration charges Operating income (loss) Interest expense and other, net (Loss) gain from divested operations Provision (benefit) for income taxes Net income 2019 2,711,927 $ 2018 2,518,973 2017 $ 2,000,386 $ 17,174 12,319 9,090 2,103,424 1,884,141 1,599,004 211,779 9,463 370,087 (92,273) (2,075) 42,449 255,601 107,197 259,715 (124,041) 45,447 58,665 $ 233,290 $ 122,456 $ 240,171 158,450 (6,329) (121,488) — (131,096) 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. 85 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). Long-lived assets (1): United States and Canada Europe, Middle East and Africa Other International Total long-lived assets 2019 2018 2017 $ 867,974 $ 305,928 $ 288,735 242,729 159,037 67,306 50,800 84,840 41,674 $ 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 2018: Bad debt allowance 2017: $ 7,700 $ 14,000 $ 12,700 $ 12,500 Bad debt allowance and revenue reserve $ 7,400 $ 16,600 $ $ $ — $ (13,700) $ — $ 8,000 — $ (11,300) $ (6,200) $ 7,700 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. 86 ITEM 16. FORM 10-K SUMMARY. None. 87 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this Report on Form 10-K to be signed on its behalf by the undersigned, duly authorized, in Stamford, Connecticut, on February 19, 2020. Date: February 19, 2020 POWER OF ATTORNEY Gartner, Inc. By: /s/ Eugene A. Hall Eugene A. Hall Chief Executive Officer 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, this Report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: a Name Title /s/ Eugene A. Hall Director and Chief Executive Officer Eugene A. Hall (Principal Executive Officer) Date February 19, 2020 /s/ Craig W. Safian Executive Vice President and Chief Financial Officer February 19, 2020 Craig W. Safian (Principal Financial and Accounting Officer) /s/ Peter E. Bisson Director Peter E. Bisson /s/ Richard J. Bressler Director Richard J. Bressler /s/ Raul E. Cesan Raul E. Cesan Director /s/ Karen E. Dykstra Director Karen E. Dykstra /s/ Anne Sutherland Fuchs Director Anne Sutherland Fuchs /s/ William O. Grabe Director William O. Grabe /s/ Stephen G. Pagliuca Director Stephen G. Pagliuca /s/ Eileen M. Serra Director Eileen M. Serra /s/ James C. Smith Director James C. 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(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72) (cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:85)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:86)(cid:87)(cid:68)(cid:73)(cid:73)(cid:3)(cid:88)(cid:83)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:72)(cid:86)(cid:87)(cid:17) (cid:71) [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] Board of Directors Peter Bisson Former Director McKinsey & Company Richard J. Bressler President, Chief Operating Officer and Chief Financial Officer iHeartMedia, Inc. Raul E. Cesan Founder and Managing Partner Commercial Worldwide, LLC Former President and COO Schering-Plough Corporation Karen E. Dykstra Former Chief Financial and Administrative Officer AOL Former Chief Financial Officer ADP Anne Sutherland Fuchs Consultant Former Chair Commission on Women’s Issues for New York City William O. Grabe Advisory Director General Atlantic Eugene A. Hall Chief Executive Officer Gartner Stephen G. Pagliuca Managing Director Bain Capital Private Equity, LP Co-Chairman Bain Capital, LP Managing Partner Boston Celtics Eileen M. Serra Former Senior Advisor JPMorgan Chase & Co. Former Chief Executive Officer Chase Card Services James C. Smith Chairman of the Board Gartner Retired Chairman and CEO First Health Group Corp. Gartner Headquarters Corporate Headquarters Gartner, Inc. 56 Top Gallant Road Stamford, CT 06902 USA +1 203 964 0096 Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 18 40 Mount Street North Sydney NSW 2060 Australia +61 2 9459 4600 Japan Headquarters Gartner Japan Ltd. Atago Green Hills MORI Tower 5F 2-5-1 Atago, Minato-ku Tokyo 105-6205, Japan +81 3 6430 1800 Europe Headquarters Gartner UK Limited Tamesis, The Glanty Egham, Surrey TW20 9AH United Kingdom +44 1784 431611 Latin America Headquarters Gartner do Brasil Servicos De Pesquisas LTDA 8th Floor, FL Corporate Building Avenida Brigadeiro Faria Lima 4300 Itaim Bibi São Paulo 04538-132 Brazil +55 11 3043 7544 © 2020 Gartner, Inc. and/or its affiliates. All rights reserved. Legal_891551 

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