QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. | |||||
For the quarterly period ended | |||||
OR | |||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
(State or other jurisdiction of | (I.R.S. Employer | ||||||||||
incorporation or organization) | Identification Number) | ||||||||||
(Zip Code) | |||||||||||
(Address of principal executive offices) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||||||||
Smaller reporting company | Emerging growth company | ||||||||||||||||||||||
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. ☐ | |||||||||||||||||||||||
Page | |||||
PART II. OTHER INFORMATION | |||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Fees receivable, net of allowances of $10,000 and $8,000, 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, 5,000,000 shares authorized; 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, 74,193,907 and 74,444,288 common shares, respectively | ( | ( | |||||||||
Total Stockholders’ Equity | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Research | $ | $ | $ | $ | |||||||||||||||||||
Conferences | |||||||||||||||||||||||
Consulting | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Loss from divested operations | ( | ||||||||||||||||||||||
Loss on extinguishment of debt | ( | ( | |||||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
(Benefit) provision for income taxes | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), 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 income (loss), net of tax | ( | ( | ( | ||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss, Net | Accumulated Earnings | Treasury Stock | Total | |||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | ||||||||||||||
Issuances under stock plans | — | ( | — | — | ||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | ||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||
Issuances under stock plans | — | — | — | |||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | ||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||
Issuances under stock plans | — | — | — | |||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | ||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss, Net | Accumulated Earnings | Treasury Stock | Total | |||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | ||||||||||||||
Issuances under stock plans | — | ( | — | — | ||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | ||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | ||||||||||||||
Issuances under stock plans | — | — | — | |||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | ||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | ||||||||||||||
Issuances under stock plans | — | — | — | |||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | ||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | ( | $ | $ | ( | $ |
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2020 | 2019 | ||||||||||
Operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Deferred taxes | ( | ( | |||||||||
Loss from divested operations | |||||||||||
Loss on extinguishment of debt | |||||||||||
Fair value adjustment - equity security | ( | ||||||||||
Reduction in the carrying amount of operating lease right-of-use assets | |||||||||||
Amortization and write-off of deferred financing fees | |||||||||||
Amortization of deferred swap losses from de-designation | |||||||||||
Loss on de-designated swaps | |||||||||||
Changes in assets and liabilities: | |||||||||||
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) | ( | ||||||||||
Cash used in investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Proceeds from employee stock purchase plan | |||||||||||
Proceeds from borrowings | |||||||||||
Early redemption premium payment | ( | ||||||||||
Payments of deferred financing fees | ( | ||||||||||
Proceeds from revolving credit facility | |||||||||||
Payments on revolving credit facility | ( | ( | |||||||||
Payments on borrowings | ( | ( | |||||||||
Purchases of treasury stock | ( | ( | |||||||||
Cash used in financing activities | ( | ( | |||||||||
Net increase in cash and cash equivalents | |||||||||||
Effects of exchange rates on cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents and restricted cash, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ |
Primary Geographic Market | Research | Conferences | Consulting | Total | ||||||||||
United States and Canada | $ | $ | $ | $ | ||||||||||
Europe, Middle East and Africa | ||||||||||||||
Other International | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Primary Geographic Market | Research | Conferences | Consulting | Total | ||||||||||
United States and Canada | $ | $ | $ | $ | ||||||||||
Europe, Middle East and Africa | ||||||||||||||
Other International | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Primary Geographic Market | Research | Conferences | Consulting | Total | ||||||||||
United States and Canada | $ | $ | $ | $ | ||||||||||
Europe, Middle East and Africa | ||||||||||||||
Other International | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Primary Geographic Market | Research | Conferences | Consulting | Total | ||||||||||
United States and Canada | $ | $ | $ | $ | ||||||||||
Europe, Middle East and Africa | ||||||||||||||
Other International | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Timing of Revenue Recognition | Research | Conferences | Consulting | Total | ||||||||||
Transferred over time (1) | $ | $ | $ | $ | ||||||||||
Transferred at a point in time (2) | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Timing of Revenue Recognition | Research | Conferences | Consulting | Total | ||||||||||
Transferred over time (1) | $ | $ | $ | $ | ||||||||||
Transferred at a point in time (2) | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Timing of Revenue Recognition | Research | Conferences | Consulting | Total | ||||||||||
Transferred over time (1) | $ | $ | $ | $ | ||||||||||
Transferred at a point in time (2) | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Timing of Revenue Recognition | Research | Conferences | Consulting | Total | ||||||||||
Transferred over time (1) | $ | $ | $ | $ | ||||||||||
Transferred at a point in time (2) | ||||||||||||||
Total revenues | $ | $ | $ | $ |
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
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 | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
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 (1) | |||||||||||||||||||||||
Shares used in the calculation of diluted income per share | |||||||||||||||||||||||
Basic income per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted income per share | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
Award type | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Stock appreciation rights | $ | $ | $ | $ | ||||||||||||||||||||||
Restricted stock units | ||||||||||||||||||||||||||
Common stock equivalents | ||||||||||||||||||||||||||
Total (1) | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
Expense category line item | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Cost of services and product development | $ | $ | $ | $ | ||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||
Acquisition and integration charges (2) | ||||||||||||||||||||||||||
Total (1) | $ | $ | $ | $ |
Three Months Ended September 30, 2020 | Research | Conferences | Consulting | Consolidated | ||||||||||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Gross contribution | ||||||||||||||||||||||||||
Corporate and other expenses | ( | |||||||||||||||||||||||||
Operating income | $ |
Three Months Ended September 30, 2019 | Research | Conferences | Consulting | Consolidated | ||||||||||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Gross contribution | ||||||||||||||||||||||||||
Corporate and other expenses | ( | |||||||||||||||||||||||||
Operating income | $ |
Nine Months Ended September 30, 2020 | Research | Conferences | Consulting | Consolidated | ||||||||||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Gross contribution | ( | |||||||||||||||||||||||||
Corporate and other expenses | ( | |||||||||||||||||||||||||
Operating income | $ |
Nine Months Ended September 30, 2019 | Research | Conferences | Consulting | Consolidated | ||||||||||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Gross contribution | ||||||||||||||||||||||||||
Corporate and other expenses | ( | |||||||||||||||||||||||||
Operating income | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
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 | |||||||||||||||||||||||
Interest expense and other, net | ( | ( | ( | ( | |||||||||||||||||||
Loss from divested operations | ( | ||||||||||||||||||||||
Loss on extinguishment of debt | ( | ( | |||||||||||||||||||||
Less: (Benefit) provision for income taxes | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ |
Research | Conferences | Consulting | Total | |||||||||||||||||||||||
Balance at December 31, 2019 (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency translation impact | ( | |||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ |
September 30, 2020 | Customer Relationships | Software | Content | Other | Total | |||||||||||||||||||||||||||
Gross cost at December 31, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Intangible assets fully amortized | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Foreign currency translation impact | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Gross cost | ||||||||||||||||||||||||||||||||
Accumulated amortization (1) | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | $ |
December 31, 2019 | Customer Relationships | Software | Content | Other | Total | |||||||||||||||||||||||||||
Gross cost | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Accumulated amortization (1) | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ |
2020 (remaining three months) | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
$ |
September 30, | December 31, | |||||||||||||
Description: | 2020 | 2019 | ||||||||||||
2020 Credit Agreement - Term loan facility (1) | $ | $ | ||||||||||||
2020 Credit Agreement - Revolving credit facility (2) | ||||||||||||||
2016 Credit Agreement - Term Loan A facility | ||||||||||||||
2016 Credit Agreement - Revolving credit facility | ||||||||||||||
2025 Notes | ||||||||||||||
2028 Notes (3) | ||||||||||||||
2030 Notes (4) | ||||||||||||||
Other (5) | ||||||||||||||
Principal amount outstanding (6) | ||||||||||||||
Less: deferred financing fees (7) | ( | ( | ||||||||||||
Net balance sheet carrying amount | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Number of shares repurchased (1) | |||||||||||||||||||||||
Cash paid for repurchased shares (in thousands) (2) | $ | $ | $ | $ |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||||||||||
Balance – June 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) activity during the period: | |||||||||||||||||||||||
Change in AOCI/L before reclassifications to income | ( | ||||||||||||||||||||||
Reclassifications from AOCI/L to income (2), (3) | |||||||||||||||||||||||
Other comprehensive income (loss) for the period | |||||||||||||||||||||||
Balance – September 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||||||||||
Balance – June 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) activity during the period: | |||||||||||||||||||||||
Change in AOCI/L before reclassifications to income | ( | ( | |||||||||||||||||||||
Reclassifications from AOCI/L to income (2), (3) | ( | ( | |||||||||||||||||||||
Other comprehensive income (loss) for the period | ( | ( | |||||||||||||||||||||
Balance – September 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||||||||||
Balance – December 31, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) activity during the period: | |||||||||||||||||||||||
Change in AOCI/L before reclassifications to income | ( | ( | ( | ||||||||||||||||||||
Reclassifications from AOCI/L to income (2), (3) | |||||||||||||||||||||||
Other comprehensive income (loss) for the period | ( | ( | ( | ||||||||||||||||||||
Balance – September 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||||||||||
Balance – December 31, 2018 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) activity during the period: | |||||||||||||||||||||||
Change in AOCI/L before reclassifications to income | ( | ( | |||||||||||||||||||||
Reclassifications from AOCI/L to income (2), (3) | ( | ( | |||||||||||||||||||||
Other comprehensive income (loss) for the period | ( | ( | |||||||||||||||||||||
Balance – September 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( |
September 30, 2020 | ||||||||||||||||||||||||||||||||
Derivative Contract Type | Number of Contracts | Notional Amounts | Fair Value Asset (Liability), Net (3) | Balance Sheet Line Item | Unrealized Loss Recorded in AOCI/L, net of tax | |||||||||||||||||||||||||||
Interest rate swaps (1) | $ | $ | ( | Other liabilities | $ | ( | ||||||||||||||||||||||||||
( | Accrued liabilities | |||||||||||||||||||||||||||||||
Foreign currency forwards (2) | ( | Accrued liabilities | ||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | ( |
December 31, 2019 | ||||||||||||||||||||||||||||||||
Derivative Contract Type | Number of Contracts | Notional Amounts | Fair Value Asset (Liability), Net (3) | Balance Sheet Line Item | Unrealized Loss Recorded in AOCI/L, net of tax | |||||||||||||||||||||||||||
Interest rate swaps (1) | $ | $ | ( | Other liabilities | $ | ( | ||||||||||||||||||||||||||
Foreign currency forwards (2) | Other current assets | |||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | ( |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
Amount recorded in: | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Interest expense (income), net (1) | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Other expense, net (2) | ||||||||||||||||||||||||||
Total expense (income), net | $ | $ | $ | $ | ( |
Description | September 30, 2020 | December 31, 2019 | |||||||||
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) | |||||||||||
2025 Notes (4) | |||||||||||
2028 Notes (5) | |||||||||||
2030 Notes (6) | |||||||||||
Total Level 2 inputs | |||||||||||
Total Liabilities | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
Description: | 2020 | 2019 | 2020 | 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 | $ | $ | $ | $ | ||||||||||||||||||||||
Description: | ||||||||
$ | ||||||||
Operating leases - liabilities | ||||||||
Total operating lease liabilities per the Condensed Consolidated Balance Sheet | $ |
BUSINESS SEGMENT | BUSINESS MEASUREMENT | |||||||
Research | 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 virtual or in-person 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 virtual or in-person 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. |
Three Months Ended September 30, 2020 | Three Months Ended September 30, 2019 | Increase (Decrease) | Increase (Decrease) % | ||||||||||||||||||||
Total revenues | $ | 994,618 | $ | 1,000,502 | $ | (5,884) | (1) | % | |||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of services and product development | 329,767 | 365,056 | (35,289) | (10) | |||||||||||||||||||
Selling, general and administrative | 521,508 | 512,159 | 9,349 | 2 | |||||||||||||||||||
Depreciation | 22,743 | 20,704 | 2,039 | 10 | |||||||||||||||||||
Amortization of intangibles | 31,228 | 31,694 | (466) | (1) | |||||||||||||||||||
Acquisition and integration charges | 1,722 | 1,742 | (20) | (1) | |||||||||||||||||||
Operating income | 87,650 | 69,147 | 18,503 | 27 | |||||||||||||||||||
Interest expense, net | (30,538) | (24,073) | 6,465 | 27 | |||||||||||||||||||
Loss on extinguishment of debt | (44,814) | — | 44,814 | nm | |||||||||||||||||||
Other income, net | 1,869 | 8,024 | 6,155 | (77) | |||||||||||||||||||
Less: (Benefit) provision for income taxes | (2,797) | 11,710 | (14,507) | nm | |||||||||||||||||||
Net income | $ | 16,964 | $ | 41,388 | $ | (24,424) | (59) | % |
Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | Increase (Decrease) | Increase (Decrease) % | ||||||||||||||||||||
Total revenues | $ | 2,986,644 | $ | 3,041,828 | $ | (55,184) | (2) | % | |||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of services and product development | 993,596 | 1,099,700 | (106,104) | (10) | |||||||||||||||||||
Selling, general and administrative | 1,512,987 | 1,545,905 | (32,918) | (2) | |||||||||||||||||||
Depreciation | 67,988 | 60,578 | 7,410 | 12 | |||||||||||||||||||
Amortization of intangibles | 94,615 | 97,541 | (2,926) | (3) | |||||||||||||||||||
Acquisition and integration charges | 5,438 | 4,156 | 1,282 | 31 | |||||||||||||||||||
Operating income | 312,020 | 233,948 | 78,072 | 33 | |||||||||||||||||||
Interest expense, net | (87,182) | (73,669) | 13,513 | 18 | |||||||||||||||||||
Loss from divested operations | — | (2,075) | (2,075) | nm | |||||||||||||||||||
Loss on extinguishment of debt | (44,814) | — | 44,814 | nm | |||||||||||||||||||
Other (expense) income, net | (10,046) | 6,953 | 16,999 | nm | |||||||||||||||||||
Less: Provision (benefit) for income taxes | 22,840 | (432) | (23,272) | nm | |||||||||||||||||||
Net income | $ | 147,138 | $ | 165,589 | $ | (18,451) | (11) | % | |||||||||||||||
As Of And For The Three Months Ended September 30, 2020 | As Of And For The Three Months Ended September 30, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Nine Months Ended September 30, 2020 | As Of And For The Nine Months Ended September 30, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | |||||||||||||||||||||||||||||||||||||
Financial Measurements: | ||||||||||||||||||||||||||||||||||||||||||||
Revenues (1) | $ | 892,719 | $ | 840,998 | $ | 51,721 | 6 | % | $ | 2,677,339 | $ | 2,492,427 | $ | 184,912 | 7 | % | ||||||||||||||||||||||||||||
Gross contribution (1) | $ | 642,328 | $ | 582,502 | $ | 59,826 | 10 | % | $ | 1,928,422 | $ | 1,729,967 | $ | 198,455 | 11 | % | ||||||||||||||||||||||||||||
Gross contribution margin | 72 | % | 69 | % | 3 points | — | 72 | % | 69 | % | 3 points | — | ||||||||||||||||||||||||||||||||
Business Measurements: | ||||||||||||||||||||||||||||||||||||||||||||
Global Technology Sales (2): | ||||||||||||||||||||||||||||||||||||||||||||
Contract value (1), (3) | $ | 2,786,000 | $ | 2,649,000 | $ | 137,000 | 5 | % | ||||||||||||||||||||||||||||||||||||
Client retention | 80 | % | 82 | % | (2) points | — | ||||||||||||||||||||||||||||||||||||||
Wallet retention | 99 | % | 105 | % | (6) points | — | ||||||||||||||||||||||||||||||||||||||
Global Business Sales (2): | ||||||||||||||||||||||||||||||||||||||||||||
Contract value (1), (3) | $ | 656,000 | $ | 621,000 | $ | 35,000 | 6 | % | ||||||||||||||||||||||||||||||||||||
Client retention | 82 | % | 81 | % | 1 point | — | ||||||||||||||||||||||||||||||||||||||
Wallet retention | 99 | % | 97 | % | 2 points | — |
As Of And For The Three Months Ended September 30, 2020 | As Of And For The Three Months Ended September 30, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Nine Months Ended September 30, 2020 | As Of And For The Nine Months Ended September 30, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues (1) | $ | 12,738 | $ | 66,286 | $ | (53,548) | (81) | % | $ | 26,925 | $ | 259,392 | $ | (232,467) | (90) | % | |||||||||||||||||||||||||||||||
Gross contribution (1) | $ | 2,044 | $ | 27,465 | $ | (25,421) | (93) | % | $ | (15,246) | $ | 126,910 | $ | (142,156) | (112) | % | |||||||||||||||||||||||||||||||
Gross contribution margin | 16 | % | 41 | % | (25) points | — | (57) | % | 49 | % | nm | — | |||||||||||||||||||||||||||||||||||
Business Measurements: | |||||||||||||||||||||||||||||||||||||||||||||||
Number of destination conferences (2) | 2 | 18 | (16) | (89) | % | 7 | 57 | (50) | (88) | % | |||||||||||||||||||||||||||||||||||||
Number of destination conferences attendees (2) | 2,584 | 14,739 | (12,155) | (82) | % | 5,948 | 52,685 | (46,737) | (89) | % |
As Of And For The Three Months Ended September 30, 2020 | As Of And For The Three Months Ended September 30, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | As Of And For The Nine Months Ended September 30, 2020 | As Of And For The Nine Months Ended September 30, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues (1) | $ | 89,161 | $ | 93,218 | $ | (4,057) | (4) | % | $ | 282,380 | $ | 290,009 | $ | (7,629) | (3) | % | |||||||||||||||||||||||||||||||
Gross contribution (1) | $ | 28,161 | $ | 26,538 | $ | 1,623 | 6 | % | $ | 91,086 | $ | 89,493 | $ | 1,593 | 2 | % | |||||||||||||||||||||||||||||||
Gross contribution margin | 32 | % | 28 | % | 4 points | — | 32 | % | 31 | % | 1 point | — | |||||||||||||||||||||||||||||||||||
Business Measurements: | |||||||||||||||||||||||||||||||||||||||||||||||
Backlog (1), (2) | $ | 96,000 | $ | 109,400 | $ | (13,400) | (12) | % | |||||||||||||||||||||||||||||||||||||||
Billable headcount | 737 | 809 | (72) | (9) | % | ||||||||||||||||||||||||||||||||||||||||||
Consultant utilization | 60 | % | 57 | % | 3 points | — | 61 | % | 63 | % | (2) points | — | |||||||||||||||||||||||||||||||||||
Average annualized revenue per billable headcount (1) | $ | 364 | $ | 351 | $ | 13 | 4 | % | $ | 361 | $ | 376 | $ | (15) | (4) | % |
Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | Increase (Decrease) | |||||||||||||||
Cash provided by operating activities | $ | 642,830 | $ | 482,601 | $ | 160,229 | |||||||||||
Cash used in investing activities | (60,845) | (97,996) | 37,151 | ||||||||||||||
Cash used in financing activities | (318,025) | (232,813) | (85,212) | ||||||||||||||
Net increase in cash and cash equivalents | 263,960 | 151,792 | 112,168 | ||||||||||||||
Effects of exchange rates | 8,919 | (3,728) | 12,647 | ||||||||||||||
Beginning cash and cash equivalents | 280,836 | 158,663 | 122,173 | ||||||||||||||
Ending cash and cash equivalents | $ | 553,715 | $ | 306,727 | $ | 246,988 | |||||||||||
Period | Total Number of Shares Purchased (#) | Average Price Paid Per Share ($) | Total Number of Shares Purchased Under Announced Programs (#) | Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) | ||||||||||||||||||||||
July 1, 2020 to July 31, 2020 | 636 | $ | 125.03 | — | $ | 681,062 | ||||||||||||||||||||
August 1, 2020 to August 31, 2020 | 10,857 | 131.09 | — | 681,062 | ||||||||||||||||||||||
September 1, 2020 to September 30, 2020 | 5,674 | 132.56 | — | $ | 681,062 | |||||||||||||||||||||
Total for the quarter (1) | 17,167 | $ | 131.35 | — |
EXHIBIT NUMBER | DESCRIPTION OF DOCUMENT | |||||||
4.1 (1) | ||||||||
10.1 (1) | ||||||||
10.2 (1) | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32* | ||||||||
101.INS* | Inline XBRL Instance Document | |||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104* | Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101). |
Gartner, Inc. | ||||||||
Date: | November 3, 2020 | /s/ Craig W. Safian | ||||||
Craig W. Safian | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
/s/ Eugene A. Hall | ||
Eugene A. Hall | ||
Chief Executive Officer | ||
Date: November 3, 2020 |
/s/ Craig W. Safian | ||
Craig W. Safian | ||
Chief Financial Officer | ||
Date: November 3, 2020 |
/s/ Eugene A. Hall | |||||
Name: Eugene A. Hall | |||||
Title: Chief Executive Officer | |||||
Date: November 3, 2020 | |||||
/s/ Craig W. Safian | |||||
Name: Craig W. Safian | |||||
Title: Chief Financial Officer | |||||
Date: November 3, 2020 |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 10,000 | $ 8,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 163,602,067 | 163,602,067 |
Treasury stock, common shares (in shares) | 74,193,907 | 74,444,288 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Revenues: | ||||
Total revenues | $ 994,618 | $ 1,000,502 | $ 2,986,644 | $ 3,041,828 |
Costs and expenses: | ||||
Cost of services and product development | 329,767 | 365,056 | 993,596 | 1,099,700 |
Selling, general and administrative | 521,508 | 512,159 | 1,512,987 | 1,545,905 |
Depreciation | 22,743 | 20,704 | 67,988 | 60,578 |
Amortization of intangibles | 31,228 | 31,694 | 94,615 | 97,541 |
Acquisition and integration charges | 1,722 | 1,742 | 5,438 | 4,156 |
Total costs and expenses | 906,968 | 931,355 | 2,674,624 | 2,807,880 |
Operating income | 87,650 | 69,147 | 312,020 | 233,948 |
Interest expense, net | (30,538) | (24,073) | (87,182) | (73,669) |
Loss from divested operations | 0 | 0 | 0 | (2,075) |
Loss on extinguishment of debt | (44,814) | 0 | (44,814) | 0 |
Other income (expense), net | 1,869 | 8,024 | (10,046) | 6,953 |
Income before income taxes | 14,167 | 53,098 | 169,978 | 165,157 |
(Benefit) provision for income taxes | (2,797) | 11,710 | 22,840 | (432) |
Net income | $ 16,964 | $ 41,388 | $ 147,138 | $ 165,589 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.19 | $ 0.46 | $ 1.65 | $ 1.84 |
Diluted (in dollars per share) | $ 0.19 | $ 0.46 | $ 1.63 | $ 1.82 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 89,378 | 89,846 | 89,307 | 89,947 |
Diluted (in shares) | 89,955 | 90,887 | 90,002 | 91,089 |
Research | ||||
Revenues: | ||||
Total revenues | $ 892,719 | $ 840,998 | $ 2,677,339 | $ 2,492,427 |
Conferences | ||||
Revenues: | ||||
Total revenues | 12,738 | 66,286 | 26,925 | 259,392 |
Consulting | ||||
Revenues: | ||||
Total revenues | $ 89,161 | $ 93,218 | $ 282,380 | $ 290,009 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 16,964 | $ 41,388 | $ 147,138 | $ 165,589 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 7,498 | 3,553 | (15,066) | 9,078 |
Interest rate swaps – net change in deferred gain or loss | 4,379 | (11,379) | (37,453) | (50,599) |
Pension plans – net change in deferred actuarial loss | 85 | 41 | 244 | 124 |
Other comprehensive income (loss), net of tax | 11,962 | (7,785) | (52,275) | (41,397) |
Comprehensive income | $ 28,926 | $ 33,603 | $ 94,863 | $ 124,192 |
Business and Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation 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 14,000 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. Revenues and other financial information for our segments are discussed in Note 5 — Segment Information. Basis of presentation. The accompanying interim condensed 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270 for interim financial information and with the applicable instructions of U.S. Securities and Exchange Commission (“SEC”) Rule 10-01 of Regulation S-X on Form 10-Q, and should be read in conjunction with the consolidated financial statements and related notes of the Company in its Annual Report on Form 10-K for the year ended December 31, 2019. The fiscal year of Gartner is the twelve-month period from January 1 through December 31. In the opinion of management, all normal recurring accruals and adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented herein have been included. The results of operations for the three and nine months ended September 30, 2020 may not be indicative of the results of operations for the remainder of 2020 or beyond. 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 interim condensed 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 interim condensed 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 these interim condensed 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. In December 2019, a novel coronavirus disease (“COVID-19”) was reported in Wuhan, China and on March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. Any future asset impairment charges, increase in allowance for doubtful accounts, or restructuring charges could be more likely if the negative effects of the COVID-19 pandemic continue and will be dependent on the severity and duration of this crisis. To date, the Company has not observed any material impairments of its assets or a significant change in the fair value of assets due to the COVID-19 pandemic. Revenue recognition. Revenue is recognized in accordance with the requirements of FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). Revenue is only recognized when all of the required criteria for revenue recognition have been met. The accompanying Condensed Consolidated Statements of Operations present revenue net of any sales or value-added taxes that we collect from customers and remit to government authorities. ASC Topic 270 requires certain disclosures in interim financial statements around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Note 2 — Revenue and Related Matters provides additional information regarding the Company’s revenues. Acquisition and divestiture activities. The Company recognized $1.7 million of Acquisition and integration charges during each of the three months ended September 30, 2020 and 2019. The Company recognized $5.4 million and $4.2 million of Acquisition and integration charges during the nine months ended September 30, 2020 and 2019, 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. Although the Company did not complete any business acquisitions during the nine months ended September 30, 2020 or 2019, it paid $2.3 million of restricted cash in 2019 for deferred consideration from a 2017 acquisition. During the nine months ended September 30, 2019, the Company recorded a pretax Loss from divested operations of $2.1 million, primarily due to adjustments of certain working capital balances related to divestitures that were completed in 2018. Adoption of new accounting standards. The Company adopted the accounting standards described below during the nine months ended September 30, 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. The adoption of ASU No. 2018-15 did not have a material impact on the Company’s condensed consolidated financial statements. 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, modified and supplemented the previous 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. The adoption of ASU No. 2018-13 did not have a material impact on the Company’s condensed 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 simplified the determination of the amount of goodwill to be potentially charged off by eliminating Step 2 of the goodwill impairment test under previous U.S. GAAP. Gartner adopted ASU No. 2017-04 on January 1, 2020. The adoption of ASU No. 2017-04 did not have a material impact on the Company’s condensed consolidated financial statements. Financial Instrument Credit Losses — In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (“ASU No. 2016-13”). ASU No. 2016-13 amended the previous 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 with no cumulative effect adjustment to the Company’s opening retained earnings. The Company applied the expected credit loss model to its fees receivable balance on January 1, 2020 using a historical loss rate method. The Company’s trade receivables are collected fairly quickly and its credit losses have historically been low. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s condensed consolidated financial statements. Accounting standards issued but not yet adopted. The FASB has issued accounting standards that have not yet become effective 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 standard effective immediately upon voluntary election by Gartner Reference Rate Reform — In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform—Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No. 2020-04”). ASU No. 2020-04 provides that an entity can elect not to apply certain required modification accounting in U.S. GAAP to contracts where all changes to the critical terms relate to reference rate reform (e.g., the expected discontinuance of LIBOR and the transition to an alternative reference interest rate, etc.). In addition, the rule provides optional expedients and exceptions that enable entities to continue to apply hedge accounting for hedging relationships where one or more of the critical terms change due to reference rate reform. The rule became effective for all entities as of March 12, 2020 and will generally no longer be available to apply after December 31, 2022. The Company is currently evaluating the potential impact of ASU No. 2020-04 on its consolidated financial statements, including the rule’s potential impact on any debt modifications or other contractual changes in the future that may result from reference rate reform. Accounting standard effective in the fourth quarter of 2020 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 the fourth quarter of 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. 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. The Company is currently evaluating the potential impact of ASU No. 2019-12 on our consolidated financial statements.
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Revenue and Related Matters |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Related Matters | Revenue and Related Matters Disaggregated Revenue — The Company’s disaggregated revenue by reportable segment is presented in the tables below for the periods indicated (in thousands). By Primary Geographic Market (1) Three Months Ended September 30, 2020
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2020
Nine Months Ended September 30, 2019
(1)Revenue is reported based on where the sale is fulfilled. 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 Three Months Ended September 30, 2020
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2020
Nine Months Ended September 30, 2019
(1)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. (2)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. Performance Obligations — 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 September 30, 2020 was approximately $2.9 billion. The Company expects to recognize $554.0 million, $1,622.4 million and $695.9 million of this revenue (most of which pertains to Research) during the remainder of 2020, the year ending December 31, 2021 and thereafter, respectively. The Company applies a practical expedient that is permitted under ASC Topic 606 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 ASC Topic 606 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 timing of the recognition of revenue and the amount and timing of our billings and cash collections, including upfront customer payments, result in the recognition of both assets and liabilities on our consolidated balance sheet. The table below provides information regarding certain of the Company’s balance sheet accounts that pertain to its contracts with customers (in thousands).
(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 $681.6 million and $675.2 million during the three months ended September 30, 2020 and 2019, respectively, and $1,354.2 million and $1,312.3 million during the nine months ended September 30, 2020 and 2019, respectively, that was attributable to deferred revenues that were recorded at the beginning of each such period. Those amounts primarily consisted of (i) Research 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 each of the three and nine months ended September 30, 2020 and 2019, 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.
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Computation of Earnings Per Share |
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Computation of Earnings Per Share | 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 share 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 periods indicated (in thousands, except per share data).
(1)Certain common stock equivalents were not included in the computation of diluted income per share because the effect would have been anti-dilutive. For the three and nine months ended September 30, 2020, approximately 0.5 million and 0.8 million, respectively, common stock equivalents were excluded from the calculation of diluted income per share because they were anti-dilutive. These common share equivalents totaled approximately 0.3 million and 0.2 million for the three and nine months ended September 30, 2019, respectively.
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Stock-Based Compensation |
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Stock-Based Compensation | 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 September 30, 2020, the Company had 4.3 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. The tables below summarize the Company’s stock-based compensation expense by award type and expense category line item during the periods indicated (in millions).
(1) Includes charges of $3.4 million and $0.4 million during the three months ended September 30, 2020 and 2019, respectively, and $20.2 million and $21.8 million during the nine months ended September 30, 2020 and 2019, respectively, for awards to retirement-eligible employees. Those awards vest on an accelerated basis. (2) Includes charges related to acquisitions and related integration efforts.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company’s 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. •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 tables 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 tables below present information about the Company’s reportable segments for the periods indicated (in thousands).
The table below provides a reconciliation of total segment gross contribution to net income for the periods indicated (in thousands).
(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.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets 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 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, 2020 that indicated no impairment. Subsequent to completing our 2020 annual impairment test, there were no events or changes in circumstances noted that required an interim impairment test. The table below presents changes to the carrying amount of goodwill by segment during the nine months ended September 30, 2020 (in thousands).
(1)The Company does not have any accumulated goodwill impairment losses. Finite-Lived Intangible Assets The tables below present reconciliations of the carrying amounts of the Company’s finite-lived intangible assets as of the dates indicated (in thousands).
(1) Finite-lived intangible assets are amortized using the straight-line method over the following periods: Customer relationships—3 to 13 years; Software—2 to 7 years; Content—2 to 3 years; and Other—2 to 11 years. Amortization expense related to finite-lived intangible assets was $31.2 million and $31.7 million during the three months ended September 30, 2020 and 2019, respectively, and $94.6 million and $97.5 million during the nine months ended September 30, 2020 and 2019, respectively. The estimated future amortization expense by year for finite-lived intangible assets is presented in the table below (in thousands).
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Debt |
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Debt | Debt 2030 Notes On September 28, 2020, the Company issued $800 million aggregate principal amount of 3.75% Senior Notes due 2030 (the “2030 Notes”). The 2030 Notes were issued pursuant to an indenture, dated as of September 28, 2020 (the “2030 Note Indenture”), among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee. The 2030 Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers (as defined in the Securities Act of 1933, as amended (the “Securities Act”)) pursuant to Rule 144A under the Securities Act and outside the United States only to non-U.S. persons in accordance with Regulation S under the Securities Act. The 2030 Notes were issued at an issue price of 100.0% and bear interest at a rate of 3.75% per annum. Interest on the 2030 Notes is payable on April 1 and October 1 of each year, beginning on April 1, 2021. The 2030 Notes will mature on October 1, 2030. The net proceeds of the 2030 Notes, together with cash on hand, were used to redeem the Company’s existing 5.125% senior notes due 2025 and pay related fees and expenses. The Company may redeem some or all of the 2030 Notes at any time on or after October 1, 2025 for cash at the redemption prices set forth in the 2030 Note Indenture, plus accrued and unpaid interest to, but excluding, the redemption date. Prior to October 1, 2025, the Company may redeem up to 40% of the aggregate principal amount of the 2030 Notes with the proceeds of certain equity offerings at a redemption price of 103.75% plus accrued and unpaid interest to, but excluding, the redemption date. In addition, the Company may redeem some or all of the 2030 Notes prior to October 1, 2025, at a redemption price of 100.0% of the principal amount of the 2030 Notes plus accrued and unpaid interest to, but excluding, the redemption date, plus a “make-whole” premium. If the Company experiences specific kinds of change of control and a ratings decline, it will be required to offer to repurchase the 2030 Notes at a price equal to 101.0% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the repurchase date. The 2030 Notes are the Company’s general unsecured senior obligations, and are effectively subordinated to all of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness, structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s non-guarantor subsidiaries, equal in right of payment to all of the Company’s and Company’s guarantor subsidiaries’ existing and future senior indebtedness and senior in right of payment to all of the Company’s future subordinated indebtedness, if any. The 2030 Notes are jointly and severally guaranteed on a senior unsecured basis by certain of the Company’s domestic subsidiaries that have outstanding indebtedness or guarantee other specified indebtedness. The 2030 Note Indenture contains covenants that limit, among other things, the Company’s ability and the ability of some of the Company’s subsidiaries to: •create liens; and •merge or consolidate with other entities. These covenants are subject to a number of exceptions and qualifications. The 2030 Note Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, and interest on all the then outstanding 2030 Notes issued under the 2030 Note Indenture to be due and payable. 2028 Notes On June 22, 2020, the Company issued $800 million aggregate principal amount of 4.50% Senior Notes due 2028 (the “2028 Notes”). The 2028 Notes were issued pursuant to an indenture, dated as of June 22, 2020 (the “2028 Note Indenture”), among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee. The 2028 Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers (as defined in the Securities Act) pursuant to Rule 144A under the Securities Act and outside the United States only to non-U.S. persons in accordance with Regulation S under the Securities Act. The 2028 Notes were issued at an issue price of 100.0% and bear interest at a rate of 4.50% per annum. Interest on the 2028 Notes is payable on January 1 and July 1 of each year, beginning on January 1, 2021. The Notes will mature on July 1, 2028. The Company may redeem some or all of the 2028 Notes at any time on or after July 1, 2023 for cash at the redemption prices set forth in the 2028 Note Indenture, plus accrued and unpaid interest to, but excluding, the redemption date. Prior to July 1, 2023, the Company may redeem up to 40% of the aggregate principal amount of the 2028 Notes with the proceeds of certain equity offerings at a redemption price of 104.5% plus accrued and unpaid interest to, but excluding, the redemption date. In addition, the Company may redeem some or all of the 2028 Notes prior to July 1, 2023, at a redemption price of 100.0% of the principal amount of the 2028 Notes plus accrued and unpaid interest to, but excluding, the redemption date, plus a “make-whole” premium. If the Company experiences specific kinds of change of control and a ratings decline, it will be required to offer to repurchase the 2028 Notes at a price equal to 101.0% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the repurchase date. The 2028 Notes are the Company’s general unsecured senior obligations, and are effectively subordinated to all of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness, structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s non-guarantor subsidiaries, equal in right of payment to all of the Company’s and Company’s guarantor subsidiaries’ existing and future senior indebtedness and senior in right of payment to all of the Company’s future subordinated indebtedness, if any. The 2028 Notes are jointly and severally guaranteed on a senior unsecured basis by certain of the Company’s domestic subsidiaries that have outstanding indebtedness or guarantee other specified indebtedness. The 2028 Note Indenture contains covenants that limit, among other things, the Company’s ability and the ability of some of the Company’s subsidiaries to: •create liens; and •merge or consolidate with other entities. These covenants are subject to a number of exceptions and qualifications. The 2028 Note Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, and interest on all the then outstanding 2028 Notes issued under the 2028 Note Indenture to be due and payable. 2020 Credit Agreement On September 28, 2020, the Company entered into an agreement among the Company, as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent,” and such agreement, the “2020 Credit Agreement”), which amended and restated the Company’s existing credit facility, dated as of June 17, 2016 (as amended, supplemented or otherwise modified from time to time, the “2016 Credit Agreement”). The 2020 Credit Agreement provides for a $400 million senior secured five-year term loan facility and a $1.0 billion senior secured five-year revolving facility. The term and revolving facilities may be increased, at the Company’s option and under certain conditions, by up to an additional $1.0 billion in the aggregate plus additional amounts subject to the satisfaction of certain conditions, including a maximum secured leverage ratio. The term loan will be repaid in consecutive quarterly installments commencing December 31, 2020, plus a final payment due on September 28, 2025, and may be prepaid at any time without penalty or premium (other than applicable breakage costs) at the option of the Company. The revolving credit facility may be used for loans, and up to $75.0 million may be used for letters of credit. The revolving loans may be borrowed, repaid and re-borrowed until September 28, 2025, at which time all amounts borrowed must be repaid. On September 28, 2020, the Company drew down $400 million in term loans. The initial drawdown was used to refinance the outstanding amounts under the 2016 Credit Agreement. Additional amounts drawn down under the 2020 Credit Agreement will be used for general corporate purposes, including the funding of acquisitions, payment of capital expenditures and the repurchase of shares. The Company’s obligations under the 2020 Credit Agreement are guaranteed, on a secured basis, by certain existing and future direct and indirect U.S. subsidiaries (the “Subsidiary Guarantors”), pursuant to the Amended and Restated Guarantee and Collateral Agreement, dated September 28, 2020 (the “2020 Guarantee and Collateral Agreement”), which was entered into by the Company and the Subsidiary Guarantors in favor of the Administrative Agent and amended and restated the Guarantee and Collateral Agreement, dated as of June 17, 2016 (as amended, supplemented or otherwise modified from time to time) in its entirety. Pursuant to the 2020 Guarantee and Collateral Agreement, the Company’s obligations under the 2020 Credit Agreement and the guarantees of the Subsidiary Guarantors are secured by first priority security interests in substantially all of the assets of the Company and the Subsidiary Guarantors, including pledges of all stock and other equity interests in direct subsidiaries owned by the Company and the Subsidiary Guarantors (but only up to 66% of the voting stock of each direct foreign subsidiary or foreign subsidiary holding company owned by the Company or any Subsidiary Guarantor). The security and pledges are subject to certain exceptions. Loans under the 2020 Credit Agreement bear interest at a rate equal to, at the Company’s option, either (i) the greatest of: (x) the Wall Street Journal prime rate; (y) the average rate on Federal Reserve Board of New York rate plus 1/2 of 1%; and (z) and the adjusted LIBO rate (adjusted for statutory reserves) for a one-month interest period plus 1%, in each case plus a margin equal to between 0.125% and 1.25% depending on the Company’s consolidated leverage ratio as of the end of the four consecutive fiscal quarters most recently ended, or (ii) the adjusted LIBO rate (adjusted for statutory reserves) plus a margin equal to between 1.125% and 2.25%, depending on the Company’s leverage ratio as of the end of the four consecutive fiscal quarters most recently ended. The commitment fee payable on the unused portion of the revolving credit facility is equal to between 0.175% and 0.40% based on utilization of the revolving credit facility. The Company has also agreed to pay customary letter of credit fees. The 2020 Credit Agreement contains certain customary restrictive loan covenants, including, among others, a financial covenant requiring a maximum leverage ratio, and covenants limiting the Company’s ability to incur indebtedness, grant liens, make acquisitions, be acquired, dispose of assets, pay dividends, repurchase stock, make capital expenditures, make investments and enter into certain transactions with affiliates. The 2020 Credit Agreement contains customary events of default that include, among others, non-payment of principal, interest or fees, material inaccuracy of representations and warranties, violation of covenants, cross defaults to certain other indebtedness, bankruptcy and insolvency events, ERISA defaults, material judgments, and events constituting a change of control. The occurrence of an event of default will increase the applicable rate of interest by 2.0%, allow the lenders to terminate their obligations to lend under the 2020 Credit Agreement and could result in the acceleration of the Company’s obligations under the credit facilities and an obligation of any or all of the guarantors to pay the full amount of the Company’s obligations under the credit facilities. 2016 Credit Agreement Prior to September 28, 2020, the Company had a credit facility that provided for a $1.5 billion Term loan A facility (the “Term Loan A facility”) and a $1.2 billion revolving credit facility. On June 30, 2020, the Company used proceeds from the 2028 Notes offering to prepay $787.9 million outstanding under the Term Loan A facility. The remaining amounts outstanding under the 2016 Credit Agreement were repaid when the Company entered into the 2020 Credit Agreement on September 28, 2020. 2025 Notes Prior to September 28, 2020, the Company had $800.0 million aggregate principal amount of 5.125% Senior Notes due 2025 (the “2025 Notes”). The 2025 Notes were issued at an issue price of 100.0% and bore interest at a fixed rate of 5.125% per annum. In conjunction with the issuance of the 2030 Notes, the Company redeemed all of the 2025 Notes on September 28, 2020 for cash, and the Company recorded $30.8 million of charges for the early redemption premium and and $14.0 million of charges for the write-off of deferred financing costs related to the 2025 Notes and the 2016 Credit Agreement, which are recorded in Loss on extinguishment of debt on the Condensed Consolidated Statements of Operations. Outstanding Borrowings The table below summarizes the Company’s total outstanding borrowings as of the dates indicated (in thousands).
(1)The contractual annualized interest rate as of September 30, 2020 on the 2020 Credit Agreement term loan facility and the revolving credit facility was 1.69%, which consisted of a floating Eurodollar base rate of 0.19% 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 2020 Credit Agreement revolver (not including the expansion feature) as of September 30, 2020. (3)Consists of $800.0 million principal amount of 2028 Notes outstanding. The 2028 Notes bear interest at a fixed rate of 4.50% and mature on July 1, 2028. (4)Consists of $800.0 million principal amount of 2030 Notes outstanding. The 2030 Notes bear interest at a fixed rate of 3.75% and mature on October 1, 2030. (5)Consists of two State of Connecticut economic development loans. One of the loans originated in 2012, has a 10-year maturity and the outstanding balance of $1.2 million as of September 30, 2020 bears interest at a fixed rate of 3.00%. The second loan, originated in 2019, has a 10-year maturity and bears interest at a fixed rate of 1.75%. Both of these loans may be repaid at any time by the Company without penalty. (6)The weighted average annual effective rate on the Company’s outstanding debt for the three and nine months ended September 30, 2020, including the effects of its interest rate swaps discussed below, was 5.48% and 4.69%, respectively. (7)Deferred financing fees are being amortized to Interest expense, net over the term of the related debt obligation. Interest Rate Swaps As of September 30, 2020, the Company had four fixed-for-floating interest rate swap contracts with a total notional value of $1.4 billion that mature through 2025. Prior to June 30, 2020, the Company designated the swaps as accounting hedges of the forecasted interest payments on 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. Prior to the repayment of all amounts outstanding under the 2016 Credit Agreement revolving credit facility and the prepayment of $787.9 million under the Term Loan A facility on June 30, 2020, the Company accounted for its interest rate swap contracts as cash flow hedges in accordance with FASB ASC Topic 815. Because the swaps hedged forecasted interest payments, changes in the fair values of the swaps were recorded in accumulated other comprehensive income (loss), a component of stockholders’ equity, as long as the swaps continued to be highly effective hedges of the designated interest rate risk. Any ineffective portion of a change in the fair value of a hedge was recorded in earnings. Upon the prepayment of $787.9 million under the Company’s Term Loan A facility and repayment of all amounts outstanding under the 2016 Credit Agreement revolving credit facility, the Company determined that it was probable that forecasted interest payments on $200.0 million of variable rate debt would not occur. Additionally, as the variable rate debt under the Term Loan A facility was replaced by $800.0 million of fixed rate debt under the 2028 Notes, the Company de-designated all of its interest rate swaps. As a result, the Company accelerated the release of $10.3 million from Accumulated other comprehensive loss, net related to the forecasted interest payments that were no longer probable. The loss was recorded in Other income (expense), net on the Condensed Consolidated Statement of Operations for the nine months ended September 30, 2020. The remaining $111.2 million as of September 30, 2020 is classified within Accumulated other comprehensive loss, net and will be amortized into Interest expense, net over the terms of the hedged forecasted interest payments. Subsequent changes to fair value of the interest rate swaps will be recorded in Other income (expense), net. The interest rate swaps had negative unrealized fair values (liabilities) of $120.5 million and $64.8 million as of September 30, 2020 and December 31, 2019, respectively, of which $84.6 million and $47.2 million were recorded in Accumulated other comprehensive loss, net of tax effect, as of September 30, 2020 and December 31, 2019, respectively. See Note 11 — Fair Value Disclosures for the determination of the fair values of Company’s interest rate swaps.
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Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Share Repurchase Authorization The Company has a $1.2 billion board authorization to repurchase its common stock on the open market, of which $0.7 billion remained available as of September 30, 2020. 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. The Company’s share repurchase activity is presented in the table below for the periods indicated.
(1) The average purchase price for repurchased shares was $131.35 and $134.42 for the three months ended September 30, 2020 and 2019, respectively, and $149.97 and $136.05 for the nine months ended September 30, 2020 and 2019, respectively. All of the shares repurchased during the three months ended September 30, 2020 related to the settlement of the Company’s stock-based compensation awards. The repurchased shares during the three months ended September 30, 2019 included purchases for both stock-based compensation awards and open market purchases. The repurchased shares during the nine months ended September 30, 2020 and 2019 included purchases for both stock-based compensation awards and open market purchases. (2) The cash paid for repurchased shares during the nine months ended September 30, 2020 included open market purchases with trade dates in December 2019 that settled in January 2020. 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 periods indicated (net of tax, in thousands) (1). Three Months Ended September 30, 2020
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2020
Nine Months Ended September 30, 2019
(1)Amounts in parentheses represent debits (deferred losses). (2)$7.2 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the three months ended September 30, 2020. $10.3 million and $17.7 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Other income (expense), net and Interest expense, net, respectively for the nine months ended September 30, 2020. The reclassifications related to interest rate swaps (cash flow hedges) were recorded as Interest expense, net for the three and nine months ended September 30, 2019. See Note 7 — Debt and Note 10 — Derivatives and Hedging for information regarding the cash flow hedges. (3)The reclassifications related to defined benefit pension plans were recorded in Other income (expense), net. See Note 12 – Employee Benefits for information regarding the Company’s defined benefit pension plans. The estimated net amount of the existing losses on the Company’s interest rate swaps that are reported in Accumulated other comprehensive loss, net at September 30, 2020 that is expected to be reclassified into earnings within the next 12 months is $28.9 million.
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Income Taxes |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the three months ended September 30, 2020 and 2019 was a benefit of $2.8 million and an expense of $11.7 million, respectively. The provision for income taxes for the nine months ended September 30, 2020 was an expense of $22.8 million compared to a benefit of $0.4 million for the nine months ended September 30, 2019. The effective income tax rate was a benefit of 19.7% and an expense of 22.1% for the three months ended September 30, 2020 and 2019, respectively. The effective income tax rate was an expense of 13.4% for the nine months ended September 30, 2020 compared to a benefit of 0.3% for the nine months ended September 30, 2019. The year to date results for both years include material benefits from intercompany sales of certain intellectual property. The three and nine months results for both years also include movements in unrecognized tax benefits as well as changes in estimated geographical mix of earnings. The changes in effective tax rates are largely attributable to the differences in the relative impacts of these items period over period. The Company completed intercompany sales of certain intellectual property in both 2020 and 2019. As a result, the Company recorded tax benefits of approximately $28.3 million and $38.1 million during the nine months ended September 30, 2020 and 2019, respectively. These benefits represent the value of future tax deductions for amortization of the assets in the acquiring jurisdiction. In July 2020, the Company completed an intercompany contribution of a significant amount of intellectual property. The Company’s intellectual property footprint continues to evolve and may result in tax rate volatility in the future. The Company had gross unrecognized tax benefits of $118.5 million on September 30, 2020 and $102.8 million on December 31, 2019. It is reasonably possible that gross unrecognized tax benefits will decrease by approximately $9.9 million within the next twelve months due to the anticipated closure of audits and the expiration of certain statutes of limitation.
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Derivatives and Hedging |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging | 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).
(1)Prior to June 30, 2020, the interest rate swaps were designated and accounted for as cash flow hedges of the forecasted interest payments on borrowings. As a result, changes in the fair values of the swaps were deferred and recorded in AOCI/L, net of tax effect. Upon the prepayment of $787.9 million under the Company’s Term Loan A facility and repayment of all amounts outstanding under the 2016 Credit Agreement revolving credit facility, the Company determined that it was probable that forecasted interest payments on $200.0 million of variable rate debt would not occur. Additionally, as the variable rate debt under the Term Loan A facility was replaced by $800.0 million of fixed rate debt under the 2028 Notes, the Company de-designated all of its interest rate swaps. Note 7 — 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 (expense), net because the Company does not designate these contracts as hedges for accounting purposes. All of the outstanding foreign currency forward exchange contracts at September 30, 2020 matured before October 31, 2020. (3)See Note 11 — Fair Value Disclosures for the determination of the fair values of these instruments. At September 30, 2020, 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 accompanying Condensed Consolidated Statements of Operations for derivative contracts for the periods indicated (in thousands).
(1)Consists of interest expense (income) from interest rate swap contracts. (2)Consists of net realized and unrealized gains and losses on foreign currency forward contracts, gains and losses on de-designated interest rate swaps and $10.3 million of expense during the nine months ended September 30, 2020 on interest rate swap contracts due to forecasted interest payments no longer being probable as a result of the repayment of all amounts outstanding under the 2016 Credit Agreement revolving credit facility and the prepayment of $787.9 million under the Term Loan A facility and on June 30, 2020.
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Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures | 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 2020 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 Company’s 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 6 — Goodwill and Intangible Assets. The Company does not typically transfer assets or liabilities between different levels of the valuation hierarchy. The table below presents the fair values of certain financial assets and liabilities (in thousands).
(1)The Company has a deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees. The assets consist of investments in money market funds, mutual funds and company-owned life insurance contracts, which are valued based on Level 1 or Level 2 inputs. 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 10 — 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 7 — 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 7 — Debt, prior to September 28, 2020, the Company had $800.0 million of principal amount with 5.125% fixed-rate 2025 Notes due in 2025. The estimated fair values of the notes were 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 2025 Notes was $785.0 million as of December 31, 2019. (5)As discussed in Note 7 — Debt, on June 22, 2020 the Company issued $800 million aggregate principal amount of 4.50% fixed-rate 2028 Notes due in 2028. The estimated fair values 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 amounts of the 2028 Notes were $790.5 million as of September 30, 2020. (6)As discussed in Note 7 — Debt, on September 28, 2020 the Company issued $800 million aggregate principal amount of 3.75% fixed-rate 2030 Notes due in 2030. The estimated fair values 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 amounts of the 2030 Notes were $790.5 million as of September 30, 2020.
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Employee Benefits |
9 Months Ended |
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Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee BenefitsThe 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. Net periodic pension expense was $1.2 million and $0.9 million for the three months ended September 30, 2020 and 2019, respectively. Net periodic pension expense was $3.3 million and $2.6 million for the nine months ended September 30, 2020 and 2019, respectively. |
Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 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 September 30, 2020, the Company did not have any material payment obligations under any such indemnification agreements.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases 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, sales, systems support, operations, and other functions. The Company also has leases for office equipment and other assets, which are not significant. Certain of these lease agreements include (i) renewal options to extend the lease term for up to five 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. The Company subleases certain office space that it does not intend to occupy. Such sublease arrangements expire during 2021 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. All of the Company’s leasing and subleasing activity is recognized in Selling, general and administrative expense in the accompanying Condensed Consolidated Statements of Operations. The table below presents the Company’s net lease cost and certain other information related to the Company’s leasing activities as of and for the periods indicated (dollars in thousands).
(1)Included in operating lease cost was $10.5 million and $10.8 million for the three months ended September 30, 2020 and 2019, respectively, and $31.7 million and $32.5 million during the nine months ended September 30, 2020, and 2019, respectively, for costs related to subleasing activities. (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 the three and nine months ended September 30, 2020. The table below indicates where the discounted operating lease payments from the above table are classified in the accompanying Condensed Consolidated Balance Sheet as of September 30, 2020 (in thousands).
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Leases | Leases 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, sales, systems support, operations, and other functions. The Company also has leases for office equipment and other assets, which are not significant. Certain of these lease agreements include (i) renewal options to extend the lease term for up to five 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. The Company subleases certain office space that it does not intend to occupy. Such sublease arrangements expire during 2021 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. All of the Company’s leasing and subleasing activity is recognized in Selling, general and administrative expense in the accompanying Condensed Consolidated Statements of Operations. The table below presents the Company’s net lease cost and certain other information related to the Company’s leasing activities as of and for the periods indicated (dollars in thousands).
(1)Included in operating lease cost was $10.5 million and $10.8 million for the three months ended September 30, 2020 and 2019, respectively, and $31.7 million and $32.5 million during the nine months ended September 30, 2020, and 2019, respectively, for costs related to subleasing activities. (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 the three and nine months ended September 30, 2020. The table below indicates where the discounted operating lease payments from the above table are classified in the accompanying Condensed Consolidated Balance Sheet as of September 30, 2020 (in thousands).
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Business and Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Segments | Segments. Gartner delivers its products and services globally through three business segments: Research, Conferences and Consulting. Revenues and other financial information for our segments are discussed in Note 5 — Segment Information. |
Basis of presentation | Basis of presentation. The accompanying interim condensed 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270 for interim financial information and with the applicable instructions of U.S. Securities and Exchange Commission (“SEC”) Rule 10-01 of Regulation S-X on Form 10-Q, and should be read in conjunction with the consolidated financial statements and related notes of the Company in its Annual Report on Form 10-K for the year ended December 31, 2019.The fiscal year of Gartner is the twelve-month period from January 1 through December 31. In the opinion of management, all normal recurring accruals and adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented herein have been included. The results of operations for the three and nine months ended September 30, 2020 may not be indicative of the results of operations for the remainder of 2020 or beyond. 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 | Principles of consolidation. The accompanying interim condensed 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 | Use of estimates. The preparation of the accompanying interim condensed 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 these interim condensed 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. In December 2019, a novel coronavirus disease (“COVID-19”) was reported in Wuhan, China and on March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. Any future asset impairment charges, increase in allowance for doubtful accounts, or restructuring charges could be more likely if the negative effects of the COVID-19 pandemic continue and will be dependent on the severity and duration of this crisis. To date, the Company has not observed any material impairments of its assets or a significant change in the fair value of assets due to the COVID-19 pandemic.
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Revenue recognition | Revenue recognition. Revenue is recognized in accordance with the requirements of FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). Revenue is only recognized when all of the required criteria for revenue recognition have been met. The accompanying Condensed Consolidated Statements of Operations present revenue net of any sales or value-added taxes that we collect from customers and remit to government authorities. ASC Topic 270 requires certain disclosures in interim financial statements around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. |
Acquisitions | Acquisition and divestiture activities. The Company recognized $1.7 million of Acquisition and integration charges during each of the three months ended September 30, 2020 and 2019. The Company recognized $5.4 million and $4.2 million of Acquisition and integration charges during the nine months ended September 30, 2020 and 2019, 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. Although the Company did not complete any business acquisitions during the nine months ended September 30, 2020 or 2019, it paid $2.3 million of restricted cash in 2019 for deferred consideration from a 2017 acquisition. During the nine months ended September 30, 2019, the Company recorded a pretax Loss from divested operations of $2.1 million, primarily due to adjustments of certain working capital balances related to divestitures that were completed in 2018.
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Divestitures | Acquisition and divestiture activities. The Company recognized $1.7 million of Acquisition and integration charges during each of the three months ended September 30, 2020 and 2019. The Company recognized $5.4 million and $4.2 million of Acquisition and integration charges during the nine months ended September 30, 2020 and 2019, 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. Although the Company did not complete any business acquisitions during the nine months ended September 30, 2020 or 2019, it paid $2.3 million of restricted cash in 2019 for deferred consideration from a 2017 acquisition. During the nine months ended September 30, 2019, the Company recorded a pretax Loss from divested operations of $2.1 million, primarily due to adjustments of certain working capital balances related to divestitures that were completed in 2018.
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Adoption of new accounting standards | Adoption of new accounting standards. The Company adopted the accounting standards described below during the nine months ended September 30, 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. The adoption of ASU No. 2018-15 did not have a material impact on the Company’s condensed consolidated financial statements. 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, modified and supplemented the previous 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. The adoption of ASU No. 2018-13 did not have a material impact on the Company’s condensed 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 simplified the determination of the amount of goodwill to be potentially charged off by eliminating Step 2 of the goodwill impairment test under previous U.S. GAAP. Gartner adopted ASU No. 2017-04 on January 1, 2020. The adoption of ASU No. 2017-04 did not have a material impact on the Company’s condensed consolidated financial statements. Financial Instrument Credit Losses — In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (“ASU No. 2016-13”). ASU No. 2016-13 amended the previous 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 with no cumulative effect adjustment to the Company’s opening retained earnings. The Company applied the expected credit loss model to its fees receivable balance on January 1, 2020 using a historical loss rate method. The Company’s trade receivables are collected fairly quickly and its credit losses have historically been low. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s condensed consolidated financial statements. Accounting standards issued but not yet adopted. The FASB has issued accounting standards that have not yet become effective 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 standard effective immediately upon voluntary election by Gartner Reference Rate Reform — In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform—Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No. 2020-04”). ASU No. 2020-04 provides that an entity can elect not to apply certain required modification accounting in U.S. GAAP to contracts where all changes to the critical terms relate to reference rate reform (e.g., the expected discontinuance of LIBOR and the transition to an alternative reference interest rate, etc.). In addition, the rule provides optional expedients and exceptions that enable entities to continue to apply hedge accounting for hedging relationships where one or more of the critical terms change due to reference rate reform. The rule became effective for all entities as of March 12, 2020 and will generally no longer be available to apply after December 31, 2022. The Company is currently evaluating the potential impact of ASU No. 2020-04 on its consolidated financial statements, including the rule’s potential impact on any debt modifications or other contractual changes in the future that may result from reference rate reform. Accounting standard effective in the fourth quarter of 2020 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 the fourth quarter of 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. 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. The Company is currently evaluating the potential impact of ASU No. 2019-12 on our consolidated financial statements.
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Revenue and Related Matters (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue by Reportable Segment | Disaggregated Revenue — The Company’s disaggregated revenue by reportable segment is presented in the tables below for the periods indicated (in thousands). By Primary Geographic Market (1) Three Months Ended September 30, 2020
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2020
Nine Months Ended September 30, 2019
(1)Revenue is reported based on where the sale is fulfilled.
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Schedule of Disaggregation of Revenue | By Timing of Revenue Recognition Three Months Ended September 30, 2020
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2020
Nine Months Ended September 30, 2019
(1)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. (2)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.
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Schedule for Contract with Customer, Asset and Liability | The table below provides information regarding certain of the Company’s balance sheet accounts that pertain to its contracts with customers (in thousands).
(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).
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Computation of Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of basic and diluted (loss) earnings per share calculations | The table below sets forth the calculation of basic and diluted income per share for the periods indicated (in thousands, except per share data).
(1)Certain common stock equivalents were not included in the computation of diluted income per share because the effect would have been anti-dilutive. For the three and nine months ended September 30, 2020, approximately 0.5 million and 0.8 million, respectively, common stock equivalents were excluded from the calculation of diluted income per share because they were anti-dilutive. These common share equivalents totaled approximately 0.3 million and 0.2 million for the three and nine months ended September 30, 2019, respectively.
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock-based compensation expense by award type | The tables below summarize the Company’s stock-based compensation expense by award type and expense category line item during the periods indicated (in millions).
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Schedule of stock-based compensation expense by expense category |
(1) Includes charges of $3.4 million and $0.4 million during the three months ended September 30, 2020 and 2019, respectively, and $20.2 million and $21.8 million during the nine months ended September 30, 2020 and 2019, respectively, for awards to retirement-eligible employees. Those awards vest on an accelerated basis. (2) Includes charges related to acquisitions and related integration efforts.
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information, by segment | The tables below present information about the Company’s reportable segments for the periods indicated (in thousands).
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Schedule of reconciliation of segment gross contribution to net income (loss) | The table below provides a reconciliation of total segment gross contribution to net income for the periods indicated (in thousands).
(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.
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Goodwill and Intangible Assets (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes to the carrying amount of goodwill by reporting unit | The table below presents changes to the carrying amount of goodwill by segment during the nine months ended September 30, 2020 (in thousands).
(1)The Company does not have any accumulated goodwill impairment losses.
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Schedule of amortizable intangible assets | The tables below present reconciliations of the carrying amounts of the Company’s finite-lived intangible assets as of the dates indicated (in thousands).
(1) Finite-lived intangible assets are amortized using the straight-line method over the following periods: Customer relationships—3 to 13 years; Software—2 to 7 years; Content—2 to 3 years; and Other—2 to 11 years.
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Schedule of estimated future amortization expense by year | The estimated future amortization expense by year for finite-lived intangible assets is presented in the table below (in thousands).
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | The table below summarizes the Company’s total outstanding borrowings as of the dates indicated (in thousands).
(1)The contractual annualized interest rate as of September 30, 2020 on the 2020 Credit Agreement term loan facility and the revolving credit facility was 1.69%, which consisted of a floating Eurodollar base rate of 0.19% 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 2020 Credit Agreement revolver (not including the expansion feature) as of September 30, 2020. (3)Consists of $800.0 million principal amount of 2028 Notes outstanding. The 2028 Notes bear interest at a fixed rate of 4.50% and mature on July 1, 2028. (4)Consists of $800.0 million principal amount of 2030 Notes outstanding. The 2030 Notes bear interest at a fixed rate of 3.75% and mature on October 1, 2030. (5)Consists of two State of Connecticut economic development loans. One of the loans originated in 2012, has a 10-year maturity and the outstanding balance of $1.2 million as of September 30, 2020 bears interest at a fixed rate of 3.00%. The second loan, originated in 2019, has a 10-year maturity and bears interest at a fixed rate of 1.75%. Both of these loans may be repaid at any time by the Company without penalty. (6)The weighted average annual effective rate on the Company’s outstanding debt for the three and nine months ended September 30, 2020, including the effects of its interest rate swaps discussed below, was 5.48% and 4.69%, respectively. (7)Deferred financing fees are being amortized to Interest expense, net over the term of the related debt obligation.
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Equity (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share repurchase activity | The Company’s share repurchase activity is presented in the table below for the periods indicated.
(1) The average purchase price for repurchased shares was $131.35 and $134.42 for the three months ended September 30, 2020 and 2019, respectively, and $149.97 and $136.05 for the nine months ended September 30, 2020 and 2019, respectively. All of the shares repurchased during the three months ended September 30, 2020 related to the settlement of the Company’s stock-based compensation awards. The repurchased shares during the three months ended September 30, 2019 included purchases for both stock-based compensation awards and open market purchases. The repurchased shares during the nine months ended September 30, 2020 and 2019 included purchases for both stock-based compensation awards and open market purchases. (2) The cash paid for repurchased shares during the nine months ended September 30, 2020 included open market purchases with trade dates in December 2019 that settled in January 2020.
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Schedule of the changes in Accumulated Other Comprehensive (Loss) Income by component (net of tax) | 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 periods indicated (net of tax, in thousands) (1). Three Months Ended September 30, 2020
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2020
Nine Months Ended September 30, 2019
(1)Amounts in parentheses represent debits (deferred losses). (2)$7.2 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the three months ended September 30, 2020. $10.3 million and $17.7 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Other income (expense), net and Interest expense, net, respectively for the nine months ended September 30, 2020. The reclassifications related to interest rate swaps (cash flow hedges) were recorded as Interest expense, net for the three and nine months ended September 30, 2019. See Note 7 — Debt and Note 10 — Derivatives and Hedging for information regarding the cash flow hedges. (3)The reclassifications related to defined benefit pension plans were recorded in Other income (expense), net. See Note 12 – Employee Benefits for information regarding the Company’s defined benefit pension plans. The estimated net amount of the existing losses on the Company’s interest rate swaps that are reported in Accumulated other comprehensive loss, net at September 30, 2020 that is expected to be reclassified into earnings within the next 12 months is $28.9 million.
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Derivatives and Hedging (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of information regarding outstanding derivative contracts | The tables below provide information regarding the Company’s outstanding derivative contracts as of the dates indicated (in thousands, except for number of contracts).
(1)Prior to June 30, 2020, the interest rate swaps were designated and accounted for as cash flow hedges of the forecasted interest payments on borrowings. As a result, changes in the fair values of the swaps were deferred and recorded in AOCI/L, net of tax effect. Upon the prepayment of $787.9 million under the Company’s Term Loan A facility and repayment of all amounts outstanding under the 2016 Credit Agreement revolving credit facility, the Company determined that it was probable that forecasted interest payments on $200.0 million of variable rate debt would not occur. Additionally, as the variable rate debt under the Term Loan A facility was replaced by $800.0 million of fixed rate debt under the 2028 Notes, the Company de-designated all of its interest rate swaps. Note 7 — 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 (expense), net because the Company does not designate these contracts as hedges for accounting purposes. All of the outstanding foreign currency forward exchange contracts at September 30, 2020 matured before October 31, 2020. (3)See Note 11 — Fair Value Disclosures for the determination of the fair values of these instruments.
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Schedule of amounts recognized in statement of operations | The table below provides information regarding amounts recognized in the accompanying Condensed Consolidated Statements of Operations for derivative contracts for the periods indicated (in thousands).
(1)Consists of interest expense (income) from interest rate swap contracts. (2)Consists of net realized and unrealized gains and losses on foreign currency forward contracts, gains and losses on de-designated interest rate swaps and $10.3 million of expense during the nine months ended September 30, 2020 on interest rate swap contracts due to forecasted interest payments no longer being probable as a result of the repayment of all amounts outstanding under the 2016 Credit Agreement revolving credit facility and the prepayment of $787.9 million under the Term Loan A facility and on June 30, 2020.
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Fair Value Disclosures (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities that are remeasured to fair value | The table below presents the fair values of certain financial assets and liabilities (in thousands).
(1)The Company has a deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees. The assets consist of investments in money market funds, mutual funds and company-owned life insurance contracts, which are valued based on Level 1 or Level 2 inputs. 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 10 — 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 7 — 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 7 — Debt, prior to September 28, 2020, the Company had $800.0 million of principal amount with 5.125% fixed-rate 2025 Notes due in 2025. The estimated fair values of the notes were 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 2025 Notes was $785.0 million as of December 31, 2019. (5)As discussed in Note 7 — Debt, on June 22, 2020 the Company issued $800 million aggregate principal amount of 4.50% fixed-rate 2028 Notes due in 2028. The estimated fair values 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 amounts of the 2028 Notes were $790.5 million as of September 30, 2020. (6)As discussed in Note 7 — Debt, on September 28, 2020 the Company issued $800 million aggregate principal amount of 3.75% fixed-rate 2030 Notes due in 2030. The estimated fair values 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 amounts of the 2030 Notes were $790.5 million as of September 30, 2020.
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Leases (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease costs | The table below presents the Company’s net lease cost and certain other information related to the Company’s leasing activities as of and for the periods indicated (dollars in thousands).
(1)Included in operating lease cost was $10.5 million and $10.8 million for the three months ended September 30, 2020 and 2019, respectively, and $31.7 million and $32.5 million during the nine months ended September 30, 2020, and 2019, respectively, for costs related to subleasing activities. (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 the three and nine months ended September 30, 2020.
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Supplemental balance sheet information | The table below indicates where the discounted operating lease payments from the above table are classified in the accompanying Condensed Consolidated Balance Sheet as of September 30, 2020 (in thousands).
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Business and Basis of Presentation - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
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Sep. 30, 2020
USD ($)
enterprise
country
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Sep. 30, 2019
USD ($)
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Sep. 30, 2020
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enterprise
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country
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Sep. 30, 2019
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Dec. 31, 2019
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of organizations Company serves | enterprise | 14,000 | 14,000 | |||
Number of countries in which entity operates | country | 100 | 100 | |||
Number of reportable segments | segment | 3 | ||||
Acquisition and integration charges | $ 1,722 | $ 1,742 | $ 5,438 | $ 4,156 | |
Deferred consideration | $ 2,300 | ||||
Loss from divested operations | $ 0 | $ 0 | $ 0 | $ 2,075 |
Revenue and Related Matters - Schedule of Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
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Assets: | |||||
Fees receivable, gross | $ 958,864 | $ 958,864 | $ 1,334,012 | ||
Contract assets recorded in Prepaid expenses and other current assets | 23,990 | 23,990 | 21,350 | ||
Contract liabilities: | |||||
Deferred revenues (current liability) | 1,710,791 | 1,710,791 | 1,928,020 | ||
Non-current deferred revenues recorded in Other liabilities | 26,051 | 26,051 | 24,409 | ||
Total contract liabilities | 1,736,842 | 1,736,842 | $ 1,952,429 | ||
Revenue recognized previously attributable to deferred revenues | $ 681,600 | $ 675,200 | $ 1,354,200 | $ 1,312,300 |
Computation of Earnings Per Share - Calculations Of Basic And Diluted (Loss) Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
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Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Numerator: | ||||||||
Net income used for calculating basic and diluted income per common share | $ 16,964 | $ 55,077 | $ 75,097 | $ 41,388 | $ 103,406 | $ 20,795 | $ 147,138 | $ 165,589 |
Denominator: | ||||||||
Weighted average number of common shares used in the calculation of basic income per share (in shares) | 89,378 | 89,846 | 89,307 | 89,947 | ||||
Common stock equivalents associated with stock-based compensation plans (in shares) | 577 | 1,041 | 695 | 1,142 | ||||
Shares used in the calculation of diluted income per share (in shares) | 89,955 | 90,887 | 90,002 | 91,089 | ||||
Basic income per share (in dollars per share) | $ 0.19 | $ 0.46 | $ 1.65 | $ 1.84 | ||||
Diluted income per share (in dollars per share) | $ 0.19 | $ 0.46 | $ 1.63 | $ 1.82 |
Computation of Earnings Per Share - Additional information (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of (loss) income per share (in shares) | 0.5 | 0.3 | 0.8 | 0.2 |
Stock-Based Compensation - Additional Information (Details) - $ / shares shares in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Share-based Payment Arrangement [Abstract] | ||
Number of shares available for grant (in shares) | 4.3 | |
Common stock par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Segment Information - Information About Reportable Segments (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
segment
|
Sep. 30, 2019
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Operating income | $ 87,650,000 | $ 69,147,000 | $ 312,020,000 | $ 233,948,000 |
Intersegment revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Reportable segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 994,618,000 | 1,000,502,000 | 2,986,644,000 | 3,041,828,000 |
Operating income | 672,533,000 | 636,505,000 | 2,004,262,000 | 1,946,370,000 |
Corporate and other expenses | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | (584,883,000) | (567,358,000) | (1,692,242,000) | (1,712,422,000) |
Research | Reportable segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 892,719,000 | 840,998,000 | 2,677,339,000 | 2,492,427,000 |
Operating income | 642,328,000 | 582,502,000 | 1,928,422,000 | 1,729,967,000 |
Conferences | Reportable segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 12,738,000 | 66,286,000 | 26,925,000 | 259,392,000 |
Operating income | 2,044,000 | 27,465,000 | (15,246,000) | 126,910,000 |
Consulting | Reportable segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 89,161,000 | 93,218,000 | 282,380,000 | 290,009,000 |
Operating income | $ 28,161,000 | $ 26,538,000 | $ 91,086,000 | $ 89,493,000 |
Segment Information - Reconciliation of Segment Gross Contribution to Net Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Costs and expenses: | ||||||||
Cost of services and product development | $ 329,767 | $ 365,056 | $ 993,596 | $ 1,099,700 | ||||
Selling, general and administrative | 521,508 | 512,159 | 1,512,987 | 1,545,905 | ||||
Acquisition and integration charges | 1,722 | 1,742 | 5,438 | 4,156 | ||||
Operating income | 87,650 | 69,147 | 312,020 | 233,948 | ||||
Interest expense and other, net | (28,669) | (16,049) | (97,228) | (66,716) | ||||
Loss from divested operations | 0 | 0 | 0 | (2,075) | ||||
Loss on extinguishment of debt | (44,814) | 0 | (44,814) | 0 | ||||
Less: (Benefit) provision for income taxes | (2,797) | 11,710 | 22,840 | (432) | ||||
Net income | 16,964 | $ 55,077 | $ 75,097 | 41,388 | $ 103,406 | $ 20,795 | 147,138 | 165,589 |
Reportable segments | ||||||||
Costs and expenses: | ||||||||
Operating income | 672,533 | 636,505 | $ 2,004,262 | 1,946,370 | ||||
Reportable segments | Maximum | ||||||||
Costs and expenses: | ||||||||
Percent of target bonus allocated to segments | 100.00% | |||||||
Corporate and other expenses | ||||||||
Costs and expenses: | ||||||||
Cost of services and product development | 7,682 | 1,059 | $ 11,214 | 4,242 | ||||
Selling, general and administrative | 521,508 | 512,159 | 1,512,987 | 1,545,905 | ||||
Depreciation and amortization | 53,971 | 52,398 | 162,603 | 158,119 | ||||
Acquisition and integration charges | 1,722 | 1,742 | 5,438 | 4,156 | ||||
Operating income | $ (584,883) | $ (567,358) | $ (1,692,242) | $ (1,712,422) |
Goodwill and Intangible Assets - Changes to Carrying Amount of Goodwill by Reporting Unit (Details) - USD ($) |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2020 |
|
Goodwill [Line Items] | ||
Goodwill impairment | $ 0 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 2,937,726,000 | |
Foreign currency translation impact | 982,000 | |
Ending balance | 2,938,708,000 | |
Goodwill, accumulated impairment losses | $ 0 | |
Research | ||
Goodwill [Roll Forward] | ||
Beginning balance | 2,651,060,000 | |
Foreign currency translation impact | 1,187,000 | |
Ending balance | 2,652,247,000 | |
Conferences | ||
Goodwill [Roll Forward] | ||
Beginning balance | 189,641,000 | |
Foreign currency translation impact | 29,000 | |
Ending balance | 189,670,000 | |
Consulting | ||
Goodwill [Roll Forward] | ||
Beginning balance | 97,025,000 | |
Foreign currency translation impact | (234,000) | |
Ending balance | $ 96,791,000 |
Goodwill and Intangible Assets - Estimated Future Amortization Expense By Year From Amortizable Intangibles (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2020 (remaining three months) | $ 30,226 | |
2021 | 104,109 | |
2022 | 94,288 | |
2023 | 94,272 | |
2024 | 88,975 | |
Thereafter | 409,124 | |
Finite-lived intangible assets, net | $ 820,994 | $ 925,087 |
Equity - Share Repurchase Program and Share Repurchase Activity (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Stockholders' Equity Note [Abstract] | ||||
Stock repurchase program, authorized amount | $ 1,200,000,000 | $ 1,200,000,000 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 700,000,000 | $ 700,000,000 | ||
Number of shares repurchased (in shares) | 17,167 | 705,800 | 440,873 | 929,311 |
Cash paid for repurchased shares | $ 2,255,000 | $ 94,878,000 | $ 76,117,000 | $ 141,436,000 |
Treasury stock, average price paid per share (in dollars per share) | $ 131.35 | $ 134.42 | $ 149.97 | $ 136.05 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||||
(Benefit) provision for income taxes | $ (2,797) | $ 11,710 | $ 22,840 | $ (432) | |
Effective income tax rate | (19.70%) | 22.10% | 13.40% | (0.30%) | |
Tax benefit from intercompany sale of intellectual property | $ 28,300 | $ 38,100 | |||
Unrecognized tax benefits | $ 118,500 | 118,500 | $ 102,800 | ||
Decrease in unrecognized tax benefits is reasonably possible | $ 9,900 | $ 9,900 |
Employee Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Retirement Benefits [Abstract] | ||||
Net periodic pension expense | $ 1.2 | $ 0.9 | $ 3.3 | $ 2.6 |
Leases - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Leases [Abstract] | |
Renewal term | 5 years |
Option to terminate, term | 1 year |
Leases - Net Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 34,290 | $ 35,443 | $ 107,424 | $ 106,958 |
Variable lease cost | 4,006 | 3,902 | 12,382 | 11,517 |
Sublease income | (6,777) | (10,205) | (28,587) | (30,767) |
Total lease cost, net | 31,519 | 29,140 | 91,219 | 87,708 |
Cash paid for amounts included in the measurement of operating lease liabilities | 34,763 | 32,294 | 103,725 | 100,172 |
Cash receipts from sublease arrangements | 9,592 | 9,000 | 28,512 | 25,131 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 527 | 38,571 | 19,061 | 67,756 |
Cost for subleasing activities | $ 10,500 | $ 10,800 | $ 31,700 | $ 32,500 |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Accounts payable and accrued liabilities | $ 82,391 | |
Operating leases - liabilities | 785,705 | $ 832,533 |
Total operating lease liabilities per the Condensed Consolidated Balance Sheet | $ 868,096 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent |
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