ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the fiscal year ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
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. ☐ |
Period | Total Number of Shares Purchased (#) | Average Price Paid Per Share ($) | Total Number of Shares Purchased Under Announced Programs (#) | Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) | ||||||||||||||||||||||
October 1, 2020 to October 31, 2020 | 195 | $ | 122.10 | — | $ | 681,062 | ||||||||||||||||||||
November 1, 2020 to November 30, 2020 | 39,406 | 149.28 | — | 681,062 | ||||||||||||||||||||||
December 1, 2020 to December 31, 2020 | 655,288 | 156.08 | 650,030 | $ | 579,610 | |||||||||||||||||||||
Total for the quarter (1) | 694,889 | $ | 155.69 | 650,030 |
(In thousands, except per share data) | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||
STATEMENT OF OPERATIONS DATA | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Research | $ | 3,602,892 | $ | 3,374,548 | $ | 3,105,764 | $ | 2,471,280 | $ | 1,857,001 | ||||||||||
Conferences | 120,140 | 476,869 | 410,461 | 337,903 | 268,605 | |||||||||||||||
Consulting | 376,371 | 393,904 | 353,667 | 327,661 | 318,934 | |||||||||||||||
Other | — | — | 105,562 | 174,650 | — | |||||||||||||||
Total revenues | $ | 4,099,403 | $ | 4,245,321 | $ | 3,975,454 | $ | 3,311,494 | $ | 2,444,540 | ||||||||||
Operating income (loss) | $ | 490,150 | $ | 370,087 | $ | 259,715 | $ | (6,329) | $ | 305,141 | ||||||||||
Net income | $ | 266,745 | $ | 233,290 | $ | 122,456 | $ | 3,279 | $ | 193,582 | ||||||||||
PER SHARE DATA | ||||||||||||||||||||
Basic income per share | $ | 2.99 | $ | 2.60 | $ | 1.35 | $ | 0.04 | $ | 2.34 | ||||||||||
Diluted income per share | $ | 2.96 | $ | 2.56 | $ | 1.33 | $ | 0.04 | $ | 2.31 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 89,315 | 89,817 | 90,827 | 88,466 | 82,571 | |||||||||||||||
Diluted | 90,017 | 90,971 | 92,122 | 89,790 | 83,820 | |||||||||||||||
OTHER DATA | ||||||||||||||||||||
Cash and cash equivalents | $ | 712,583 | $ | 280,836 | $ | 156,368 | $ | 538,908 | $ | 474,233 | ||||||||||
Total assets | 7,315,967 | 7,151,294 | 6,201,474 | 7,283,173 | 2,367,335 | |||||||||||||||
Long-term debt | 1,985,531 | 2,067,796 | 2,146,514 | 2,943,341 | 672,500 | |||||||||||||||
Stockholders’ equity | 1,090,428 | 938,593 | 850,757 | 983,465 | 60,878 | |||||||||||||||
Cash provided by operating activities | $ | 903,278 | $ | 565,436 | $ | 471,158 | $ | 254,517 | $ | 365,632 |
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 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 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. | ||||||||
Year Ended December 31, 2020 | Year Ended December 31, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||
Total revenues | $ | 4,099,403 | $ | 4,245,321 | $ | (145,918) | (3) | % | |||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of services and product development | 1,345,024 | 1,550,568 | (205,544) | (13) | |||||||||||||||||||
Selling, general and administrative | 2,038,963 | 2,103,424 | (64,461) | (3) | |||||||||||||||||||
Depreciation | 93,925 | 82,066 | 11,859 | 14 | |||||||||||||||||||
Amortization of intangibles | 125,059 | 129,713 | (4,654) | (4) | |||||||||||||||||||
Acquisition and integration charges | 6,282 | 9,463 | (3,181) | (34) | |||||||||||||||||||
Operating income | 490,150 | 370,087 | 120,063 | 32 | |||||||||||||||||||
Interest expense, net | (113,549) | (99,805) | 13,744 | 14 | |||||||||||||||||||
Loss from divested operations | — | (2,075) | 2,075 | nm | |||||||||||||||||||
Loss on extinguishment of debt | (44,814) | — | (44,814) | nm | |||||||||||||||||||
Other (expense) income, net | (5,654) | 7,532 | (13,186) | >(100) | |||||||||||||||||||
Less: Provision for income taxes | 59,388 | 42,449 | 16,939 | 40 | |||||||||||||||||||
Net income | $ | 266,745 | $ | 233,290 | $ | 33,455 | 14 | % |
Primary Geographic Market | Year Ended December 31, 2020 | Year Ended December 31, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||||
United States and Canada | $ | 2,637,824 | $ | 2,734,490 | $ | (96,666) | (4) | % | ||||||||||||||||||
Europe, Middle East and Africa | 966,273 | 996,004 | (29,731) | (3) | ||||||||||||||||||||||
Other International | 495,306 | 514,827 | (19,521) | (4) | ||||||||||||||||||||||
Total revenues | $ | 4,099,403 | $ | 4,245,321 | $ | (145,918) | (3) | % |
Segment | Year Ended December 31, 2020 | Year Ended December 31, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||||
Research | $ | 3,602,892 | $ | 3,374,548 | $ | 228,344 | 7 | % | ||||||||||||||||||
Conferences | 120,140 | 476,869 | (356,729) | (75) | ||||||||||||||||||||||
Consulting | 376,371 | 393,904 | (17,533) | (4) | ||||||||||||||||||||||
Total revenues | $ | 4,099,403 | $ | 4,245,321 | $ | (145,918) | (3) | % |
As Of And For The Year Ended December 31, 2020 | As Of And For The Year Ended December 31, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||
Revenues (1) | $ | 3,602,892 | $ | 3,374,548 | $ | 228,344 | 7 | % | |||||||||||||||
Gross contribution (1) | $ | 2,597,852 | $ | 2,351,720 | $ | 246,132 | 10 | % | |||||||||||||||
Gross contribution margin | 72 | % | 70 | % | 2 | points | — | ||||||||||||||||
Business Measurements: | |||||||||||||||||||||||
Global Technology Sales (2): | |||||||||||||||||||||||
Contract value (1), (3) | $ | 2,909,000 | $ | 2,801,000 | $ | 108,000 | 4 | % | |||||||||||||||
Client retention | 83 | % | 82 | % | 1 | point | — | ||||||||||||||||
Wallet retention | 98 | % | 104 | % | (6) | points | — | ||||||||||||||||
Global Business Sales (2): | |||||||||||||||||||||||
Contract value (1), (3) | $ | 696,000 | $ | 649,000 | $ | 47,000 | 7 | % | |||||||||||||||
Client retention | 83 | % | 82 | % | 1 | point | — | ||||||||||||||||
Wallet retention | 101 | % | 101 | % | — | — |
As Of And For The Year Ended December 31, 2020 | As Of And For The Year Ended December 31, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||
Revenues (1) | $ | 120,140 | $ | 476,869 | $ | (356,729) | (75) | % | |||||||||||||||
Gross contribution (1) | $ | 57,302 | $ | 241,757 | $ | (184,455) | (76) | % | |||||||||||||||
Gross contribution margin | 48 | % | 51 | % | (3) | points | — | ||||||||||||||||
Business Measurements: | |||||||||||||||||||||||
Number of destination conferences (2) | 20 | 72 | (52) | (72) | % | ||||||||||||||||||
Number of destination conferences attendees (2) | 42,273 | 85,750 | (43,477) | (51) | % |
As Of And For The Year Ended December 31, 2020 | As Of And For The Year Ended December 31, 2019 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||
Revenues (1) | $ | 376,371 | $ | 393,904 | $ | (17,533) | (4) | % | |||||||||||||||
Gross contribution (1) | $ | 115,744 | $ | 118,450 | $ | (2,706) | (2) | % | |||||||||||||||
Gross contribution margin | 31 | % | 30 | % | 1 | point | — | ||||||||||||||||
Business Measurements: | |||||||||||||||||||||||
Backlog (1), (2) | $ | 100,300 | $ | 115,700 | $ | (15,400) | (13) | % | |||||||||||||||
Average billable headcount | 768 | 784 | (16) | (2) | % | ||||||||||||||||||
Consultant utilization | 61 | % | 62 | % | (1) | point | — | ||||||||||||||||
Average annualized revenue per billable headcount (1) | $ | 368 | $ | 373 | $ | (5) | (1) | % |
Year Ended December 31, | Increase (Decrease) | ||||||||||||||||
2020 | 2019 | ||||||||||||||||
Cash provided by operating activities | $ | 903,278 | $ | 565,436 | $ | 337,842 | |||||||||||
Cash used in investing activities | (83,888) | (160,885) | 76,997 | ||||||||||||||
Cash used in financing activities | (416,224) | (285,992) | (130,232) | ||||||||||||||
Net increase in cash and cash equivalents and restricted cash | 403,166 | 118,559 | 284,607 | ||||||||||||||
Effects of exchange rates | 28,581 | 3,614 | 24,967 | ||||||||||||||
Beginning cash and cash equivalents and restricted cash | 280,836 | 158,663 | 122,173 | ||||||||||||||
Ending cash and cash equivalents | $ | 712,583 | $ | 280,836 | $ | 431,747 |
Commitment Description | Due In Less Than 1 Year | Due In 2-3 Years | Due In 4-5 Years | Due In More Than 5 Years | Total | |||||||||||||||||||||||||||
Debt – principal and interest (1) | $ | 109,753 | $ | 244,849 | $ | 504,002 | $ | 1,863,749 | $ | 2,722,353 | ||||||||||||||||||||||
Operating leases (2) | 149,032 | 272,638 | 240,866 | 569,316 | 1,231,852 | |||||||||||||||||||||||||||
Deferred compensation arrangements (3) | 8,129 | 14,884 | 8,808 | 62,717 | 94,538 | |||||||||||||||||||||||||||
Other (4) | 32,891 | 48,306 | 18,455 | 30,621 | 130,273 | |||||||||||||||||||||||||||
Totals | $ | 299,805 | $ | 580,677 | $ | 772,131 | $ | 2,526,403 | $ | 4,179,016 |
2020 | ||||||||||||||||||||||||||
(In thousands, except per share data) | First | Second | Third | Fourth | ||||||||||||||||||||||
Revenues | $ | 1,018,891 | $ | 973,135 | $ | 994,618 | $ | 1,112,759 | ||||||||||||||||||
Operating income | 124,718 | 99,651 | 87,650 | 178,131 | ||||||||||||||||||||||
Net income (1), (2) | 75,097 | 55,077 | 16,964 | 119,607 | ||||||||||||||||||||||
Net income per share (1), (2), (3): | ||||||||||||||||||||||||||
Basic | $ | 0.84 | $ | 0.62 | $ | 0.19 | $ | 1.34 | ||||||||||||||||||
Diluted | $ | 0.83 | $ | 0.61 | $ | 0.19 | $ | 1.33 |
2019 | ||||||||||||||||||||||||||
(In thousands, except per share data) | First | Second | Third | Fourth | ||||||||||||||||||||||
Revenues | $ | 970,444 | $ | 1,070,882 | $ | 1,000,502 | $ | 1,203,493 | ||||||||||||||||||
Operating income | 48,799 | 116,002 | 69,147 | 136,139 | ||||||||||||||||||||||
Net income (2) | 20,795 | 103,406 | 41,388 | 67,701 | ||||||||||||||||||||||
Net income per share (2), (3): | ||||||||||||||||||||||||||
Basic | $ | 0.23 | $ | 1.15 | $ | 0.46 | $ | 0.76 | ||||||||||||||||||
Diluted | $ | 0.23 | $ | 1.13 | $ | 0.46 | $ | 0.75 |
EXHIBIT NUMBER | DESCRIPTION OF DOCUMENT | |||||||
Agreement and Plan of Merger by and among the Company, Cobra Acquisition Corp. and CEB Inc., dated as of January 5, 2017. | ||||||||
Restated Certificate of Incorporation of the Company. | ||||||||
By-laws of Gartner, Inc. (as amended through January 30, 2020). | ||||||||
Form of Certificate for Common Stock as of June 2, 2005. | ||||||||
Indenture (including form of Notes), dated as of June 22, 2020, among Gartner, Inc., the guarantors named therein and U.S. Bank National Association, as a trustee, relating to the $800,000,000 aggregate principal amount of 4.500% Senior Notes due 2028. | ||||||||
Indenture (including form of Notes), dated as of September 28, 2020, among Gartner, Inc., the guarantors named therein and U.S. Bank National Association, as a trustee, relating to the $800,000,000 aggregate principal amount of 3.750% Senior Notes due 2030. | ||||||||
Amended and Restated Credit Agreement, dated as of September 28, 2020, among Gartner, Inc., the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. | ||||||||
Amended and Restated Guarantee and Collateral Agreement, dated as of September 28, 2020, among Gartner, Inc. each subsidiary guarantor party thereto and JPMorgan Chase Bank, N.A. | ||||||||
Description of Gartner, Inc.’s Common Stock. | ||||||||
Amended and Restated Lease dated April 16, 2010 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut. | ||||||||
First Amendment to Amended and Restated Lease dated April 16, 2010 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut. | ||||||||
2011 Employee Stock Purchase Plan. | ||||||||
2003 Long-Term Incentive Plan, as amended and restated effective June 4, 2009. | ||||||||
Long-Term Incentive Plan, as amended and restated effective January 31, 2019. | ||||||||
Second Amended and Restated Employment Agreement between Eugene A. Hall and the Company dated as of February 14, 2019. | ||||||||
Company Deferred Compensation Plan, effective January 1, 2009. | ||||||||
Form of 2017 Restrictive Stock Unit Agreement for executive officers. | ||||||||
Form of 2018 Stock Appreciation Right Agreement for executive officers. | ||||||||
Form of 2018 Performance Stock Unit Agreement for executive officers. | ||||||||
Form of 2019 Stock Appreciation Right Agreement for executive officers. | ||||||||
Form of 2019 Performance Stock Unit Agreement for executive officers. | ||||||||
Form of 2020 Stock Appreciation Right Agreement for executive officers. | ||||||||
Form of 2020 Performance Stock Unit Agreement for executive officers. | ||||||||
Form of 2021 Stock Appreciation Right Agreement for executive officers. | ||||||||
Form of 2021 Performance Stock Unit Agreement for executive officers. | ||||||||
Form of Restricted Stock Unit Agreement for non-employee directors. | ||||||||
Enhanced Executive Rewards Policy. | ||||||||
Subsidiaries of Registrant. | ||||||||
Consent of Independent Registered Public Accounting Firm. | ||||||||
Power of Attorney (see Signature Page). | ||||||||
Certification of chief executive officer under Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of chief financial officer under Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification under Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
104* | Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101). |
* | Filed with this document. | ||||
+ | Management compensation plan or arrangement. | ||||
(1) | Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 5, 2017. | ||||
(2) | Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 6, 2005. | ||||
(3) | Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 5, 2020. | ||||
(4) | Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 23, 2020. | ||||
(5) | Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 28, 2020. | ||||
(6) | Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 19, 2020. | ||||
(7) | Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 9, 2010. | ||||
(8) | Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 18, 2011. | ||||
(9) | Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) filed on April 21, 2009 | ||||
(10) | Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 22, 2019. | ||||
(11) | Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 20, 2009. | ||||
(12) | Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on November 2, 2017 | ||||
(13) | Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on May 8, 2018. | ||||
(14) | Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 1, 2018. |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Fees receivable, net of allowances of $ | |||||||||||
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: | |||||||||||
$ | |||||||||||
Common stock: | |||||||||||
$ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss, net | ( | ( | |||||||||
Accumulated earnings | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total Stockholders’ Equity | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | $ |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Revenues: | |||||||||||||||||
Research | $ | $ | $ | ||||||||||||||
Conferences | |||||||||||||||||
Consulting | |||||||||||||||||
Other | |||||||||||||||||
Total revenues | |||||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of services and product development | |||||||||||||||||
Selling, general and administrative | |||||||||||||||||
Depreciation | |||||||||||||||||
Amortization of intangibles | |||||||||||||||||
Acquisition and integration charges | |||||||||||||||||
Total costs and expenses | |||||||||||||||||
Operating income | |||||||||||||||||
Interest income | |||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||
(Loss) gain from divested operations | ( | ||||||||||||||||
Loss on extinguishment of debt | ( | ||||||||||||||||
Other (expense) income, net | ( | ||||||||||||||||
Income before income taxes | |||||||||||||||||
Provision for income taxes | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Net income per share: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ | ||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | |||||||||||||||||
Diluted |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||||
Foreign currency translation adjustments | ( | ||||||||||||||||
Interest rate swaps - net change in deferred gain or loss | ( | ( | ( | ||||||||||||||
Pension plans - net change in deferred actuarial gain or loss | ( | ( | |||||||||||||||
Other comprehensive (loss) income, net of tax | ( | ( | ( | ||||||||||||||
Comprehensive income | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income, Net | Accumulated Earnings | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Adoption of ASU No. 2018-02 | — | — | ( | — | |||||||||||||||||||||||||||||||
Adoption of ASU No. 2016-16 | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Issuances under stock plans | — | ( | — | — | |||||||||||||||||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at December 31, 2018 | ( | ( | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Issuances under stock plans | — | — | — | ||||||||||||||||||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at December 31, 2019 | ( | ( | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Issuances under stock plans | — | — | — | ||||||||||||||||||||||||||||||||
Common share repurchases | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ( | $ | $ | ( | $ |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Operating activities: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Stock-based compensation expense | |||||||||||||||||
Deferred taxes | ( | ( | |||||||||||||||
Loss (gain) from divested operations | ( | ||||||||||||||||
Loss on extinguishment of debt | |||||||||||||||||
Gain on sale of an equity security | ( | ||||||||||||||||
Reduction in the carrying amount of operating lease right-of-use assets | |||||||||||||||||
Amortization and write-off of deferred financing fees | |||||||||||||||||
Amortization of deferred swap losses from de-designation | |||||||||||||||||
Gain on de-designated swaps | ( | ||||||||||||||||
Changes in assets and liabilities, net of acquisitions and divestitures: | |||||||||||||||||
Fees receivable, net | ( | ( | |||||||||||||||
Deferred commissions | ( | ( | |||||||||||||||
Prepaid expenses and other current assets | ( | ||||||||||||||||
Other assets | ( | ( | |||||||||||||||
Deferred revenues | |||||||||||||||||
Accounts payable and accrued and other liabilities | ( | ||||||||||||||||
Cash provided by operating activities | |||||||||||||||||
Investing activities: | |||||||||||||||||
Additions to property, equipment and leasehold improvements | ( | ( | ( | ||||||||||||||
Acquisitions - cash paid (net of cash acquired) | ( | ( | |||||||||||||||
Divestitures - cash received (net of cash transferred) | |||||||||||||||||
Proceeds from the sale of an equity security | |||||||||||||||||
Cash (used in) provided by investing activities | ( | ( | |||||||||||||||
Financing activities: | |||||||||||||||||
Proceeds from employee stock purchase plan | |||||||||||||||||
Proceeds from borrowings | |||||||||||||||||
Early redemption premium payment | ( | ||||||||||||||||
Payments for 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 (decrease) in cash and cash equivalents and restricted cash | ( | ||||||||||||||||
Effects of exchange rates on cash and cash equivalents and restricted cash | ( | ||||||||||||||||
Cash and cash equivalents and restricted cash, beginning of year | |||||||||||||||||
Cash and cash equivalents and restricted cash, end of year | $ | $ | $ | ||||||||||||||
Supplemental disclosures of cash flow information: |
Cash paid during the year for: | |||||||||||||||||
Interest | $ | $ | $ | ||||||||||||||
Income taxes, net of refunds received | $ | $ | $ |
December 31, | ||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||||||||||||
Restricted cash classified in (1), (2): | ||||||||||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||||||||
Other assets | ||||||||||||||||||||||||||
Cash classified as held-for-sale (3) | ||||||||||||||||||||||||||
Cash and cash equivalents and restricted cash per the Consolidated Statements of Cash Flows | $ | $ | $ | $ | ||||||||||||||||||||||
Useful Life | December 31, | |||||||||||||||||||
Category | (Years) | 2020 | 2019 | |||||||||||||||||
Computer equipment and software | 2-7 | $ | $ | |||||||||||||||||
Furniture and equipment | 3-8 | |||||||||||||||||||
Leasehold improvements | 2-15 | |||||||||||||||||||
Total cost | ||||||||||||||||||||
Less — accumulated depreciation and amortization | ( | ( | ||||||||||||||||||
Property, equipment and leasehold improvements, net | $ | $ |
Assets: | ||||||||
Cash | $ | |||||||
Fees receivable | ||||||||
Prepaid expenses and other assets | ||||||||
Goodwill (1) | ||||||||
Finite-lived intangible assets (2) | ||||||||
Total assets acquired | ||||||||
Total liabilities assumed (primarily deferred revenues) | ||||||||
Net assets acquired | $ |
Research | Conferences | Consulting | Total | ||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | |||||||||||||||||||
Additions due to an acquisition (1) | |||||||||||||||||||||||
Foreign currency translation impact | ( | ( | ( | ||||||||||||||||||||
Balance at December 31, 2019 | |||||||||||||||||||||||
Foreign currency translation impact | ( | ( | |||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ |
December 31, 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 (2) | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ |
December 31, 2019 | Customer Relationships | Software | Content | Other | Total | |||||||||||||||||||||||||||
Gross cost at December 31, 2018 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Additions due to an acquisition (1) | ||||||||||||||||||||||||||||||||
Intangible assets fully amortized | ( | ( | ( | |||||||||||||||||||||||||||||
Foreign currency translation impact | ( | |||||||||||||||||||||||||||||||
Gross cost | ||||||||||||||||||||||||||||||||
Accumulated amortization (2) | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ |
2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 and thereafter | |||||
$ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
Benefit plan-related assets | $ | $ | |||||||||
Non-current deferred tax assets | |||||||||||
Other | |||||||||||
Total other assets | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
Accounts payable | $ | $ | |||||||||
Payroll and employee benefits payable | |||||||||||
Severance and retention bonus payable | |||||||||||
Bonus payable | |||||||||||
Commissions payable | |||||||||||
Income tax payable | |||||||||||
VAT payable | |||||||||||
Current portion of interest rate swap contracts at fair value (1) | |||||||||||
Other accrued liabilities | |||||||||||
Total accounts payable and accrued liabilities | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
Non-current deferred revenues | $ | $ | |||||||||
Long-term taxes payable | |||||||||||
Benefit plan-related liabilities | |||||||||||
Non-current deferred tax liabilities | |||||||||||
Other, including long-term portion of fair value of interest rate swap contracts | |||||||||||
Total other liabilities | $ | $ |
December 31, | ||||||||||||||
Description | 2020 | 2019 | ||||||||||||
2020 Credit Agreement - Term loan facility (1) | $ | $ | ||||||||||||
2020 Credit Agreement - Revolving credit facility (1), (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 | $ | $ |
Year Ended December 31, | ||||||||
Description | 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 | $ | $ | ||||||
As of December 31, | 2020 | 2019 | ||||||
Weighted average remaining lease term for operating leases (in years) | ||||||||
Weighted average discount rate for operating leases | % | % |
Operating | Sublease | |||||||||||||
Lease | Cash | |||||||||||||
Period ending December 31, | Payments | Receipts | ||||||||||||
2021 | $ | $ | ||||||||||||
2022 | ||||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
Thereafter | ||||||||||||||
Total future minimum operating lease payments and estimated sublease cash receipts (1) | $ | |||||||||||||
Imputed interest | ( | |||||||||||||
Total operating lease liabilities per the Consolidated Balance Sheet | $ |
December 31, | ||||||||||||||
Description | 2020 | 2019 | ||||||||||||
$ | $ | |||||||||||||
Operating lease liabilities | ||||||||||||||
Total operating lease liabilities per the Consolidated Balance Sheet | $ | $ |
Issued Shares | Treasury Stock Shares | ||||||||||
Balance at December 31, 2017 | |||||||||||
Issuances under stock plans | ( | ||||||||||
Purchases for treasury (1), (2) | |||||||||||
Balance at December 31, 2018 | |||||||||||
Issuances under stock plans | ( | ||||||||||
Purchases for treasury (1), (2) | |||||||||||
Balance at December 31, 2019 | |||||||||||
Issuances under stock plans | ( | ||||||||||
Purchases for treasury (1), (2) | |||||||||||
Balance at December 31, 2020 |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||||||||||
Balance - December 31, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) activity during the year: | |||||||||||||||||||||||
Change in AOCI/L before reclassifications to income | ( | ( | ( | ||||||||||||||||||||
Reclassifications from AOCI/L to income (2), (3) | |||||||||||||||||||||||
Other comprehensive income (loss) for the year | ( | ( | ( | ||||||||||||||||||||
Balance - December 31, 2020 | $ | ( | $ | ( | $ | ( | $ | ( |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||||||||||
Balance - December 31, 2018 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) activity during the year: | |||||||||||||||||||||||
Change in AOCI/L before reclassifications to income | ( | ( | ( | ||||||||||||||||||||
Reclassifications from AOCI/L to income (2), (3) | ( | ( | |||||||||||||||||||||
Other comprehensive income (loss) for the year | ( | ( | ( | ||||||||||||||||||||
Balance - December 31, 2019 | $ | ( | $ | ( | $ | ( | $ | ( |
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 | Other | 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 (2) | $ | $ | $ | $ | ||||||||||
Transferred at a point in time (3) | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Timing of Revenue Recognition | Research | Conferences | Consulting | Total | ||||||||||
Transferred over time (2) | $ | $ | $ | $ | ||||||||||
Transferred at a point in time (3) | ||||||||||||||
Total revenues | $ | $ | $ | $ |
Timing of Revenue Recognition | Research | Conferences | Consulting | Other | Total | ||||||||||||
Transferred over time (2) | $ | $ | $ | $ | $ | ||||||||||||
Transferred at a point in time (3) | |||||||||||||||||
Total revenues | $ | $ | $ | $ | $ |
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 | $ | $ |
Award type | 2020 | 2019 | 2018 | |||||||||||||||||
Stock appreciation rights | $ | $ | $ | |||||||||||||||||
Restricted stock units | ||||||||||||||||||||
Common stock equivalents | ||||||||||||||||||||
Total (1) | $ | $ | $ |
Expense category line item | 2020 | 2019 | 2018 | |||||||||||||||||
Cost of services and product development | $ | $ | $ | |||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||
Acquisition and integration charges (2) | ||||||||||||||||||||
Total (1) | $ | $ | $ |
Units of SARs (in millions) | Per Share Weighted Average Exercise Price | Per Share Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (Years) | ||||||||||||||||||||
Outstanding at December 31, 2019 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Forfeited | ( | n/a | |||||||||||||||||||||
Exercised | ( | n/a | |||||||||||||||||||||
Outstanding at December 31, 2020 (1) (2) | $ | $ | |||||||||||||||||||||
Vested and exercisable at December 31, 2020 (2) | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Expected dividend yield (1) | % | % | % | ||||||||||||||
Expected stock price volatility (2) | % | % | % | ||||||||||||||
Risk-free interest rate (3) | % | % | % | ||||||||||||||
Expected life in years (4) |
Units of RSUs (in millions) | Per Share Weighted Average Grant Date Fair Value | ||||||||||
Outstanding at December 31, 2019 | $ | ||||||||||
Granted (1) | |||||||||||
Vested and released | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding at December 31, 2020 (2) (3) | $ |
Units of CSEs | Per Share Weighted Average Grant Date Fair Value | ||||||||||
Outstanding at December 31, 2019 | $ | ||||||||||
Granted | |||||||||||
Converted to shares of Common Stock upon grant | ( | ||||||||||
Outstanding at December 31, 2020 | $ |
2020 | 2019 | 2018 | |||||||||||||||
Numerator: | |||||||||||||||||
Net income used for calculating basic and diluted income per common share | $ | $ | $ | ||||||||||||||
Denominator: | |||||||||||||||||
Weighted average common shares used in the calculation of basic income per share | |||||||||||||||||
Common stock equivalents associated with stock-based compensation plans | |||||||||||||||||
Shares used in the calculation of diluted income per share | |||||||||||||||||
Income per share (1): | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Anti-dilutive common stock equivalents (in millions) (a) | |||||||||||||||||
Average market price per share of Common Stock during the year | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
U.S. | $ | $ | $ | ||||||||||||||
Non-U.S. | |||||||||||||||||
Income before income taxes | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Current tax expense: | |||||||||||||||||
U.S. federal | $ | $ | $ | ||||||||||||||
State and local | |||||||||||||||||
Foreign | |||||||||||||||||
Total current | |||||||||||||||||
Deferred tax (benefit) expense: | |||||||||||||||||
U.S. federal | ( | ( | |||||||||||||||
State and local | ( | ( | |||||||||||||||
Foreign | ( | ( | ( | ||||||||||||||
Total deferred | ( | ( | ( | ||||||||||||||
Total current and deferred | |||||||||||||||||
Benefit relating to interest rate swaps used to increase equity | |||||||||||||||||
Benefit from stock transactions with employees used to increase equity | |||||||||||||||||
Benefit relating to defined-benefit pension adjustments used to increase equity | |||||||||||||||||
Total tax expense | $ | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
Accrued liabilities | $ | $ | |||||||||
Operating leases | |||||||||||
Loss and credit carryforwards | |||||||||||
Assets relating to equity compensation | |||||||||||
Other assets | |||||||||||
Gross deferred tax assets | |||||||||||
Property, equipment and leasehold improvements | ( | ( | |||||||||
Intangible assets | ( | ( | |||||||||
Prepaid expenses | ( | ( | |||||||||
Other liabilities | ( | ( | |||||||||
Gross deferred tax liabilities | ( | ( | |||||||||
Valuation allowance | ( | ( | |||||||||
Net deferred tax liabilities | $ | ( | $ | ( |
2020 | 2019 | 2018 | |||||||||||||||
Statutory tax rate | % | % | % | ||||||||||||||
State income taxes, net of federal benefit | |||||||||||||||||
Effect of non-U.S. operations | ( | ( | |||||||||||||||
Intercompany sale of intellectual property | ( | ( | |||||||||||||||
Change in the reserve for tax contingencies | |||||||||||||||||
Law changes | ( | ||||||||||||||||
Stock-based compensation expense | ( | ( | ( | ||||||||||||||
Nondeductible meals and entertainment costs | |||||||||||||||||
Gains/Losses on divested operations and held-for-sale assets | |||||||||||||||||
Limitation on executive compensation | |||||||||||||||||
Global intangible low-taxed income, net of foreign tax credits | |||||||||||||||||
Foreign-derived intangible income | ( | ( | ( | ||||||||||||||
Goodwill | ( | ||||||||||||||||
Other items, net | ( | ( | |||||||||||||||
Effective tax rate | % | % | % |
2020 | 2019 | ||||||||||
Beginning balance | $ | $ | |||||||||
Additions based on tax positions related to the current year | |||||||||||
Additions for tax positions of prior years | |||||||||||
Reductions for tax positions of prior years | ( | ( | |||||||||
Reductions for expiration of statutes | ( | ( | |||||||||
Settlements | ( | ( | |||||||||
Change in foreign currency exchange rates | |||||||||||
Ending balance | $ | $ |
Derivative Contract Type | Number of Contracts | Notional Amounts | Fair Value Asset (Liability), Net (3) | Balance Sheet Line Item | Unrealized Loss Recorded in AOCI/L | |||||||||||||||||||||||||||
Interest rate swaps (1) | $ | $ | ( | Other liabilities | $ | ( | ||||||||||||||||||||||||||
( | Accrued liabilities | |||||||||||||||||||||||||||||||
Foreign currency forwards (2) | ( | Accrued liabilities | ||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | ( |
Derivative Contract Type | Number of Contracts | Notional Amounts | Fair Value Asset (Liability), Net (3) | Balance Sheet Line Item | Unrealized Loss Recorded in AOCI/L | |||||||||||||||||||||||||||
Interest rate swaps (1) | $ | $ | ( | Other liabilities | $ | ( | ||||||||||||||||||||||||||
Foreign currency forwards (2) | Other current assets | |||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | ( |
Amount Recorded In | 2020 | 2019 | 2018 | |||||||||||||||||
Interest expense (income), net (1) | $ | $ | ( | $ | ( | |||||||||||||||
Other expense, net (2) | ||||||||||||||||||||
Total expense (income), net | $ | $ | ( | $ |
December 31, | ||||||||||||||
Description | 2020 | 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) | ||||||||||||||
Total Level 2 inputs | ||||||||||||||
Total Liabilities | $ | $ |
Carrying Amount | Fair Value | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
Description | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
2025 Senior Notes | $ | $ | $ | $ | |||||||||||||||||||
2028 Senior Notes | |||||||||||||||||||||||
2030 Senior Notes | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||
Recognition of actuarial loss | |||||||||||||||||
Total defined benefit pension plan expense | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Weighted average discount rate (1) | % | % | % | ||||||||||||||
Expected return on plan assets | % | % | % | ||||||||||||||
Average compensation increase | % | % | % | ||||||||||||||
Cash balance interest credit rate | % | % | % |
2020 | 2019 | 2018 | |||||||||||||||
Projected benefit obligation at beginning of year | $ | $ | $ | ||||||||||||||
Service cost | |||||||||||||||||
Interest cost | |||||||||||||||||
Actuarial loss (gain) due to assumption changes and plan experience (1) | ( | ||||||||||||||||
Contractual termination benefits | ( | ||||||||||||||||
Benefits payments (2) | ( | ( | ( | ||||||||||||||
Foreign currency impact | ( | ( | |||||||||||||||
Projected benefit obligation at end of year (3) | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Weighted average discount rate (4) | % | % | % | ||||||||||||||
Average compensation increase | % | % | % | ||||||||||||||
Cash balance interest credit rate | % | % | % |
Funded status of the plans | 2020 | 2019 | 2018 | ||||||||||||||
Projected benefit obligation | $ | $ | $ | ||||||||||||||
Pension plan assets at fair value (1) | ( | ( | ( | ||||||||||||||
Funded status – shortfall (2) | $ | $ | $ | ||||||||||||||
Accumulated benefit obligation | $ | $ | $ |
Amounts recorded in the Consolidated Balance Sheets for the plans | |||||||||||||||||
Other liabilities – accrued pension obligation (2) | $ | $ | $ | ||||||||||||||
Stockholders’ equity – deferred actuarial loss (3) | $ | ( | $ | ( | $ | ( |
2020 | 2019 | 2018 | |||||||||||||||
Pension plan assets at the beginning of the year | $ | $ | $ | ||||||||||||||
Company contributions | |||||||||||||||||
Benefit payments | ( | ( | ( | ||||||||||||||
Actual return on plan assets | ( | ||||||||||||||||
Contractual termination benefits | ( | ||||||||||||||||
Foreign currency impact | ( | ( | |||||||||||||||
Pension plan assets at the end of the year | $ | $ | $ |
Research | Conferences | Consulting | Consolidated | ||||||||||||||||||||
2020 | |||||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Gross contribution | |||||||||||||||||||||||
Corporate and other expenses | ( | ||||||||||||||||||||||
Operating income | $ | ||||||||||||||||||||||
2019 | |||||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Gross contribution | $ | $ | $ | $ | |||||||||||||||||||
Corporate and other expenses | $ | ( | |||||||||||||||||||||
Operating income | $ |
Research | Conferences | Consulting | Other (1) | Consolidated | |||||||||||||||||||||||||
2018 | |||||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Gross contribution | |||||||||||||||||||||||||||||
Corporate and other expenses | ( | ||||||||||||||||||||||||||||
Operating income | $ |
2020 | 2019 | 2018 | ||||||||||||||||||
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) gain from divested operations | ( | |||||||||||||||||||
Loss on extinguishment of debt | ( | |||||||||||||||||||
Less: Provision for income taxes | ||||||||||||||||||||
Net income | $ | $ | $ |
2020 | 2019 | ||||||||||
Long-lived assets (1): | |||||||||||
United States and Canada | $ | $ | |||||||||
Europe, Middle East and Africa | |||||||||||
Other International | |||||||||||
Total long-lived assets | $ | $ |
Balance at Beginning of Year | Additions Charged to Expense | Deductions from the Reserve | Reclassification to Accounts Payable and Accrued Liabilities (1) | Balance at End of Year | |||||||||||||||||||||||||
2020 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
2019 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
2018 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Gartner, Inc. | |||||||||||
Date: | February 24, 2021 | By: | /s/ Eugene A. Hall | ||||||||
Eugene A. Hall | |||||||||||
Chief Executive Officer |
Name | Title | Date | ||||||||||||
/s/ Eugene A. Hall | Director and Chief Executive Officer | February 24, 2021 | ||||||||||||
Eugene A. Hall | (Principal Executive Officer) | |||||||||||||
/s/ Craig W. Safian | Executive Vice President and Chief Financial Officer | February 24, 2021 | ||||||||||||
Craig W. Safian | (Principal Financial and Accounting Officer) | |||||||||||||
/s/ Peter E. Bisson | Director | February 24, 2021 | ||||||||||||
Peter E. Bisson | ||||||||||||||
/s/ Richard J. Bressler | Director | February 24, 2021 | ||||||||||||
Richard J. Bressler | ||||||||||||||
/s/ Raul E. Cesan | Director | February 24, 2021 | ||||||||||||
Raul E. Cesan | ||||||||||||||
/s/ Karen E. Dykstra | Director | February 24, 2021 | ||||||||||||
Karen E. Dykstra | ||||||||||||||
/s/ Anne Sutherland Fuchs | Director | February 24, 2021 | ||||||||||||
Anne Sutherland Fuchs | ||||||||||||||
/s/ William O. Grabe | Director | February 24, 2021 | ||||||||||||
William O. Grabe | ||||||||||||||
/s/ Stephen G. Pagliuca | Director | February 24, 2021 | ||||||||||||
Stephen G. Pagliuca | ||||||||||||||
/s/ Eileen M. Serra | Director | February 24, 2021 | ||||||||||||
Eileen M. Serra | ||||||||||||||
/s/ James C. Smith | Director | February 24, 2021 | ||||||||||||
James C. Smith |
Termination Scenario | Post-Termination Exercise Period | ||||
•Involuntary termination for Cause •Involuntary termination without Cause (not Retirement-eligible) •Voluntary resignation (not Retirement-eligible) | Earlier of Expiration Date or ninety (90) days after the date of termination of Continued Service (excluding any period during which Grantee is prohibited from trading under the Company’s Insider Trading Policy) | ||||
•Death •Disability •Qualifying Termination | Earlier of Expiration Date or twelve (12) months after the date of termination of Continued Service | ||||
Retirement-Eligible Separation (defined below) | Through the Expiration Date |
Entity Name | State/Country | ||||
1422722 Ontario Inc. | Ontario, Canada | ||||
Burton Group, Inc. | Utah, United States | ||||
Capterra Inc. | Delaware, United States | ||||
CEB (Barbados) SRL | Barbados | ||||
CEB Global Holdings Limited | United Kingdom | ||||
CEB Global Limited | United Kingdom | ||||
CEB Holdings UK 1 Limited | United Kingdom | ||||
CEB Holdings UK 2 Limited | United Kingdom | ||||
CEB Inc. | Delaware, United States | ||||
CEB International Holdings, Inc. | Delaware, United States | ||||
Computer Financial Consultants Limited | United Kingdom | ||||
Computer Financial Consultants, Inc. | United States | ||||
CXO Acquisition Co. | Delaware, United States | ||||
Dataquest, Inc. | California, United States | ||||
Evanta Ventures, Inc. | Delaware, United States | ||||
G.G. Properties, Ltd. | Bermuda | ||||
Gartner Advisory (Singapore) Pte Ltd | Singapore | ||||
Gartner Australasia PTY Limited (including branch in New Zealand) | Australia | ||||
Gartner Austria GmbH | Austria | ||||
Gartner Belgium BVBA (including branch in Luxembourg) | Belgium | ||||
Gartner Canada Co. | Nova Scotia, Canada | ||||
Gartner Consulting (Beijing) Co., LTD. (including branches in Shanghai & Shenzhen) | China | ||||
Gartner Cyprus Ltd | Cyprus | ||||
Gartner Danmark ApS | Denmark | ||||
Gartner Deutschland GmbH | Germany | ||||
Gartner do Brasil Serviços de Pesquisas Ltda. | Brazil | ||||
Gartner Espana, S.L. (including branch in Portugal) | Spain | ||||
Gartner Europe Holdings B.V. | Netherlands | ||||
Gartner Finland Oy | Finland | ||||
Gartner France SARL | France | ||||
Gartner Group (Thailand) Ltd. | Thailand | ||||
Gartner Group Taiwan Ltd. | Taiwan | ||||
Gartner Gulf FZ LLC (including branch in Abu Dhabi) | United Arab Emirates | ||||
Gartner Holdings Cyprus Limited | Cyprus | ||||
Gartner Holdings Ireland UC | Ireland | ||||
Gartner Holdings, LLC | Delaware, United States | ||||
Gartner Hong Kong Limited | Hong Kong | ||||
Gartner India Research & Advisory Services Private Limited | India | ||||
Gartner Investments I, LLC | Delaware, United States | ||||
Gartner Investments II, LLC | Delaware, United States |
Gartner Ireland Limited | Ireland | ||||
Gartner Israel Advisory Ltd. | Israel | ||||
Gartner Italia S.r.l. | Italy | ||||
Gartner Japan Ltd. | Japan | ||||
Gartner Mexico, S. de R.L. de C.V. | Mexico | ||||
Gartner Nederland B.V. | Netherlands | ||||
Gartner Norge AS | Norway | ||||
Gartner Poland Sp. z o.o. | Poland | ||||
Gartner QFC LLC | Qatar | ||||
Gartner Research & Advisory (Malaysia) Sdn. Bhd. | Malaysia | ||||
Gartner Research & Advisory Korea Co., Ltd. | Korea | ||||
Gartner Research Holdings Ltd. | Bermuda | ||||
Gartner RUS LLC | Russia | ||||
Gartner Saudi Arabia Limited | Saudi Arabia | ||||
Gartner South Africa (Pty) Ltd. | South Africa | ||||
Gartner Sverige AB | Sweden | ||||
Gartner Switzerland GmbH | Switzerland | ||||
Gartner Turkey Teknoloji Araştırma ve Danışmanlık Hizmetleri Limited Şirketi | Turkey | ||||
Gartner U.K. Limited | United Kingdom | ||||
Gartner, LLC | Delaware, United States | ||||
Infinote Corporation | Delaware, United States | ||||
Infinote India Private Limited | India | ||||
L2, Inc. | Delaware, United States | ||||
Leadership Transition Institute, LLC | Delaware, United States | ||||
Machina Research USA, Incorporated | Delaware, United States | ||||
Meta Group GmbH | Germany | ||||
META Group Saudi | Saudi Arabia | ||||
Nubera eBusiness, S.L. | Spain | ||||
SCM World US Inc. | Delaware, United States | ||||
Senexx Israel Ltd. | Israel | ||||
SircleIT, Inc. | Delaware, United States | ||||
Software Advice, Inc. | California, United States | ||||
Sports Leadership Acquisition Co. | Delaware, United States | ||||
Talent Assessment Holdings Ltd. | United Kingdom | ||||
The Research Board, Inc. | Delaware, United States | ||||
TOPO Research, LLC | Delaware, United States | ||||
Valtera Corporation | Illinois, United States |
/s/ Eugene A. Hall | ||
Eugene A. Hall | ||
Chief Executive Officer | ||
Date: February 24, 2021 |
/s/ Craig W. Safian | ||
Craig W. Safian | ||
Chief Financial Officer | ||
Date: February 24, 2021 |
/s/ Eugene A. Hall | |||||
Name: | Eugene A. Hall | ||||
Title: | Chief Executive Officer | ||||
Date: February 24, 2021 | |||||
/s/ Craig W. Safian | |||||
Name: | Craig W. Safian | ||||
Title: | Chief Financial Officer | ||||
Date: February 24, 2021 |
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Fees receivable, allowance for credit loss | $ 10,000 | $ 8,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Common stock, authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, issued (in shares) | 163,602,067 | 163,602,067 |
Treasury stock (in shares) | 74,759,985 | 74,444,288 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Revenues: | |||
Total revenues | $ 4,099,403 | $ 4,245,321 | $ 3,975,454 |
Costs and expenses: | |||
Cost of services and product development | 1,345,024 | 1,550,568 | 1,468,800 |
Selling, general and administrative | 2,038,963 | 2,103,424 | 1,884,141 |
Depreciation | 93,925 | 82,066 | 68,592 |
Amortization of intangibles | 125,059 | 129,713 | 187,009 |
Acquisition and integration charges | 6,282 | 9,463 | 107,197 |
Total costs and expenses | 3,609,253 | 3,875,234 | 3,715,739 |
Operating income | 490,150 | 370,087 | 259,715 |
Interest income | 2,087 | 3,026 | 2,566 |
Interest expense | (115,636) | (102,831) | (126,774) |
(Loss) gain from divested operations | 0 | (2,075) | 45,447 |
Loss on extinguishment of debt | (44,814) | 0 | 0 |
Other (expense) income, net | (5,654) | 7,532 | 167 |
Income before income taxes | 326,133 | 275,739 | 181,121 |
Provision for income taxes | 59,388 | 42,449 | 58,665 |
Net income | $ 266,745 | $ 233,290 | $ 122,456 |
Net income per share: | |||
Basic (in dollars per share) | $ 2.99 | $ 2.60 | $ 1.35 |
Diluted (in dollars per share) | $ 2.96 | $ 2.56 | $ 1.33 |
Weighted average shares outstanding: | |||
Basic (in shares) | 89,315 | 89,817 | 90,827 |
Diluted (in shares) | 90,017 | 90,971 | 92,122 |
Research | |||
Revenues: | |||
Total revenues | $ 3,602,892 | $ 3,374,548 | $ 3,105,764 |
Conferences | |||
Revenues: | |||
Total revenues | 120,140 | 476,869 | 410,461 |
Consulting | |||
Revenues: | |||
Total revenues | 376,371 | 393,904 | 353,667 |
Other | |||
Revenues: | |||
Total revenues | $ 0 | $ 0 | $ 105,562 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 266,745 | $ 233,290 | $ 122,456 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | 10,375 | 4,169 | (31,245) |
Interest rate swaps - net change in deferred gain or loss | (30,940) | (39,394) | (10,844) |
Pension plans - net change in deferred actuarial gain or loss | (725) | (2,846) | 123 |
Other comprehensive (loss) income, net of tax | (21,290) | (38,071) | (41,966) |
Comprehensive income | $ 245,455 | $ 195,219 | $ 80,490 |
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands |
Total |
Cumulative Effect, Period of Adoption, Adjustment |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive (Loss) Income, Net |
Accumulated Other Comprehensive (Loss) Income, Net
Cumulative Effect, Period of Adoption, Adjustment
|
Accumulated Earnings |
Accumulated Earnings
Cumulative Effect, Period of Adoption, Adjustment
|
Treasury Stock |
---|---|---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2017 | $ 983,465 | $ 82 | $ 1,761,383 | $ 1,508 | $ 1,647,284 | $ (2,426,792) | |||
Beginning Balance (Accounting Standards Update 2018-02) at Dec. 31, 2017 | $ 0 | $ 591 | $ (591) | ||||||
Beginning Balance (Accounting Standards Update 2016-16) at Dec. 31, 2017 | $ (13,717) | $ (13,717) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 122,456 | 122,456 | |||||||
Other comprehensive loss | (41,966) | (41,966) | |||||||
Issuances under stock plans | 10,181 | (3,845) | 14,026 | ||||||
Common share repurchases | (275,834) | (275,834) | |||||||
Stock-based compensation expense | 66,172 | 66,172 | |||||||
Ending Balance at Dec. 31, 2018 | 850,757 | 82 | 1,823,710 | (39,867) | 1,755,432 | (2,688,600) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 233,290 | 233,290 | |||||||
Other comprehensive loss | (38,071) | (38,071) | |||||||
Issuances under stock plans | 17,649 | 6,555 | 11,094 | ||||||
Common share repurchases | (194,040) | (194,040) | |||||||
Stock-based compensation expense | 69,008 | 69,008 | |||||||
Ending Balance at Dec. 31, 2019 | 938,593 | 82 | 1,899,273 | (77,938) | 1,988,722 | (2,871,546) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 266,745 | 266,745 | |||||||
Other comprehensive loss | (21,290) | (21,290) | |||||||
Issuances under stock plans | 18,143 | 7,117 | 11,026 | ||||||
Common share repurchases | (174,303) | (174,303) | |||||||
Stock-based compensation expense | 62,540 | 62,540 | |||||||
Ending Balance at Dec. 31, 2020 | $ 1,090,428 | $ 82 | $ 1,968,930 | $ (99,228) | $ 2,255,467 | $ (3,034,823) |
Business and Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business and Significant Accounting Policies | Business and Significant Accounting Policies Business. Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow. We believe our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and an objective resource for more than 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. Note 9 — Revenue and Related Matters and Note 16 — Segment Information describe the products and services offered by each of our segments and provide additional financial information for those segments. During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019 or 2020. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures. Basis of presentation. The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for financial information and with the applicable instructions of U.S. Securities and Exchange Commission (“SEC”) Regulation S-X. The fiscal year of Gartner is the twelve-month period from January 1 through December 31. All references to 2020, 2019 and 2018 herein refer to the fiscal year unless otherwise indicated. When used in these notes, the terms “Gartner,” the “Company,” “we,” “us” or “our” refer to Gartner, Inc. and its consolidated subsidiaries. Principles of consolidation. The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Use of estimates. The preparation of the accompanying Consolidated Financial Statements requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of fees receivable, goodwill, intangible assets and other long-lived assets, as well as tax accruals and other liabilities. In addition, estimates are used in revenue recognition, income tax expense or benefit, performance-based compensation charges, depreciation and amortization. Management believes its use of estimates in the accompanying Consolidated Financial Statements to be reasonable. Management continually evaluates and revises its estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. Management adjusts these estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time. As a result, differences between our estimates and actual results could be material and would be reflected in the Company’s Consolidated Financial Statements in future periods. 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. Business acquisitions. The Company accounts for business acquisitions in accordance with the acquisition method of accounting as prescribed by FASB ASC Topic 805, Business Combinations. The acquisition method of accounting requires the Company to record the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with certain exceptions. Any excess of the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Under the acquisition method, the operating results of acquired companies are included in the Company’s Consolidated Financial Statements beginning on the date of acquisition. The Company completed business acquisitions in 2019. Note 2 — Acquisitions and Divestitures provides additional information regarding those business acquisitions. The determination of the fair values of intangible and other assets acquired in an acquisition requires management judgment and the consideration of a number of factors, including the historical financial performance of acquired businesses and their projected future performance, and estimates surrounding customer turnover, as well as assumptions regarding the level of competition and the costs necessary to reproduce certain assets. Establishing the useful lives of intangible assets also requires management judgment and the evaluation of a number of factors, including the expected use of an asset, historical client retention rates, consumer awareness and trade name history, as well as any contractual provisions that could limit or extend an asset’s useful life. Charges that are directly related to the Company’s acquisitions are expensed as incurred and classified as Acquisition and integration charges in the Consolidated Statements of Operations. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s Acquisition and integration charges. Revenue recognition. On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers. The Company’s revenue by significant source is accounted for as follows: •Research revenues are mainly derived from subscription contracts for research products. The related revenues are deferred and recognized ratably over the applicable contract term. Fees derived from assisting organizations in selecting the right business software for their needs are recognized when the leads are provided to vendors. •Conferences revenues are deferred and recognized upon the completion of the related conference or meeting. •Consulting revenues are principally generated from fixed fee and time and materials engagements. Revenues from fixed fee contracts are recognized as the Company works to satisfy our performance obligations. Revenues from time and materials engagements are recognized as work is delivered and/or services are provided. Revenues related to contract optimization engagements are contingent in nature and are only recognized upon satisfaction of all conditions related to their payment. The majority of the Company’s Research contracts are billable upon signing, absent special terms granted on a limited basis from time to time. Research contracts are generally non-cancelable and non-refundable, except for government contracts that may have cancellation or fiscal funding clauses. It is the Company’s policy to record the amount of a subscription contract that is billable as a fee receivable at the time the contract is signed with a corresponding amount as deferred revenue because the contract represents a legally enforceable claim. Note 9 — Revenue and Related Matters provides additional information regarding the Company’s business and revenues. Allowance for losses. On January 1, 2020 , the Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses. Prior to January 1, 2020, the Company recognized the allowance for losses on bad debts in accordance with then-existing U.S. GAAP under FASB ASC Topic 310, Receivables. Information regarding the Company’s accounting for credit losses, including our adoption of the new accounting standard, is provided below under the heading “Adoption of new accounting standards”. Cost of services and product development (“COS”). COS expense includes the direct costs incurred in the creation and delivery of our products and services. These costs primarily relate to personnel. Selling, general and administrative (“SG&A”). SG&A expense includes direct and indirect selling costs, general and administrative costs, facility costs and bad debt expense. Commission expense. The Company records deferred commissions upon signing a customer contract and amortizes the deferred amount over a period that aligns with the transfer to the customer of the services to which the commissions relate. Note 9 — Revenue and Related Matters provides additional information regarding deferred commissions and the amortization of such costs. Stock-based compensation expense. The Company accounts for stock-based compensation awards in accordance with FASB ASC Topics 505 and 718 and SEC Staff Accounting Bulletins No. 107 and No. 110. Stock-based compensation expense for equity awards is based on the fair value of the award on the date of grant. The Company recognizes stock-based compensation expense over the period that the related service is performed, which is generally the same as the vesting period of the underlying award. Forfeitures are recognized as they occur. A change in any of the terms or conditions of stock-based compensation awards is accounted for as a modification of the award. Incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified, measured based on the fair value of the awards at the modification date. For vested awards, the Company recognizes incremental compensation cost in the period the modification occurs. For unvested awards, the Company recognizes any incremental compensation expense at the modification date or ratably over the requisite remaining service period, as appropriate. If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost the Company recognizes is the cost of the original award. Note 10 — Stock-Based Compensation provides additional information regarding the Company’s stock-based compensation activity. Other (expense) income, net. During 2019, the Company sold a minority equity investment for $14.1 million in cash and recognized a pretax gain of $9.1 million that was recorded in Other (expense) income, net in the Consolidated Statements of Operations. Income taxes. The Company uses the asset and liability method of accounting for income taxes. We estimate our income taxes in each of the jurisdictions where we operate. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. When assessing the realizability of deferred tax assets, we consider if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the availability of loss carryforwards, projected reversals of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained based on the technical merits of the position. Recognized tax positions are measured at the largest amount of benefit with greater than a 50% likelihood of being realized. The Company uses estimates in determining the amount of unrecognized tax benefits associated with uncertain tax positions. Significant judgment is required in evaluating tax law and measuring the benefits likely to be realized. Uncertain tax positions are periodically re-evaluated and adjusted as more information about their ultimate realization becomes available. Note 12 — Income Taxes provides additional information regarding the Company’s income taxes. On April 1, 2018, the Company early adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU No. 2018-02”). ASU No. 2018-02 provides an entity with the option to reclassify to retained earnings the tax effects from items that have been stranded in accumulated other comprehensive income as a result of the U.S. Tax Cuts and Jobs Act of 2017 (the “Act”). Gartner elected to early adopt ASU No. 2018-02 as of the beginning of the second quarter of 2018, which resulted in a reclassification of $0.6 million of stranded tax amounts related to the Act from Accumulated other comprehensive (loss) income, net to Accumulated earnings. ASU No. 2018-02 had no impact on the Company’s operating results in 2020, 2019 or 2018. On January 1, 2018, the Company adopted ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ASU No. 2016-16”). ASU No. 2016-16 accelerates the recognition of taxes on certain intra-entity transactions. U.S. GAAP previously required deferral of the income tax implications of an intercompany sale of assets until the assets were sold to a third party or recovered through use. Under ASU No. 2016-16, a seller’s tax effects and a buyer’s deferred taxes on asset transfers are immediately recognized upon a sale. Pursuant to the transition rules in ASU No. 2016-16, any taxes attributable to pre-2018 intra-entity transfers that were previously deferred should be accelerated and recorded to accumulated earnings on the date of adoption. As a result, certain of the Company’s balance sheet income tax accounts pertaining to pre-2018 intra-entity transfers, which aggregated $13.7 million, were reversed against accumulated earnings on January 1, 2018. Additionally, in accordance with the new requirements of ASU No. 2016-16, the Company recorded income tax benefits of approximately (i) $28.3 million and $38.1 million in 2020 and 2019, respectively, from intercompany sales of certain intellectual property and (ii) $6.8 million in 2018 related to intra-entity transfers upon the merger of certain foreign subsidiaries. In the future, there could be a material impact from ASU No. 2016-16, depending on the nature, size and tax consequences of intra-entity transfers, if any. Cash and cash equivalents and restricted cash. Cash and cash equivalents includes cash and all highly liquid investments with original maturities of three months or less, which are considered to be cash equivalents. The carrying value of cash equivalents approximates fair value due to the short-term maturity of such instruments. Investments with maturities of more than three months are classified as marketable securities. Interest earned is recorded in Interest income in the Consolidated Statements of Operations. U.S. GAAP requires that amounts generally described as restricted cash and restricted cash equivalents be presented with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts presented on an entity’s statement of cash flows. Below is a table presenting the beginning-of-period and end-of-period cash amounts from the Company’s Consolidated Balance Sheets and the total cash amounts presented in the Consolidated Statements of Cash Flows (in thousands).
(1)Restricted cash consists of escrow accounts established in connection with certain of the Company’s business acquisitions. Generally, such cash is restricted to use due to provisions contained in the underlying stock or asset purchase agreement. The Company will disburse the restricted cash to the sellers of the businesses upon satisfaction of any contingencies described in such agreements (e.g., potential indemnification claims, etc.). (2)Restricted cash is recorded in Prepaid expenses and other current assets and Other assets in the Company’s Consolidated Balance Sheets with the short-term or long-term classification dependent on the projected timing of disbursements to the sellers. (3)Represents cash classified as a held-for-sale asset for the CEB Talent Assessment business, which was divested in 2018. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures. Leases. On January 1, 2019, the Company adopted ASC 842, Leases using a modified retrospective approach. ASC 842 significantly changed the accounting for leases because a right-of-use model is now used whereby a lessee must record a right-of-use asset and a related lease liability on its balance sheet for most of its leases. Under ASC 842, leases are classified as either operating or finance arrangements, with such classification affecting the pattern of expense recognition in an entity’s income statement. For operating leases, ASC 842 requires recognition in an entity’s income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Prior to January 1, 2019, the Company recognized lease expense in accordance with then-existing U.S. GAAP under FASB ASC Topic 840, Leases (“ASC Topic 840”). Although there were significant changes to the Company’s leasing policies and procedures effective January 1, 2019 with the adoption of ASC 842, the lease expense recognition patterns under ASC Topic 842 in 2020 and 2019 and ASC Topic 840 in 2018 were substantively the same. As required by the new lease standard, the Company’s disclosures regarding its leasing activities have been significantly expanded to enable users of our Consolidated Financial Statements to assess the amount, timing and uncertainty of cash flows related to leases. Information regarding our adoption of ASC 842 and its impact on the Company’s Consolidated Financial Statements and related disclosures is provided at Note 7 — Leases. Property, equipment and leasehold improvements. Equipment, leasehold improvements and other fixed assets owned by the Company are recorded at cost less accumulated depreciation and amortization. Fixed assets, other than leasehold improvements, are depreciated using the straight-line method over the estimated useful life of the underlying asset. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the improvement or the remaining term of the related lease. Depreciation and amortization expense for fixed assets was $93.9 million, $82.1 million and $68.6 million in 2020, 2019 and 2018, respectively. Property, equipment and leasehold improvements, net are presented in the table below (in thousands).
The Company incurs costs to develop internal-use software used in its operations. Certain of those costs that meet the criteria in FASB ASC Topic 350, Intangibles - Goodwill and Other are capitalized and amortized over future periods. Net capitalized internal-use software development costs were $58.2 million and $55.7 million at December 31, 2020 and 2019, respectively, and are included in Computer equipment and software in the table above. Amortization expense for capitalized internal-use software development costs, which is included with Depreciation in the Consolidated Statements of Operations, totaled $28.9 million, $20.0 million and $13.2 million in 2020, 2019 and 2018, respectively. Goodwill. Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair values of the tangible and identifiable intangible net assets acquired. Evaluations of the recoverability of goodwill are performed in accordance with FASB ASC Topic 350, which requires an annual assessment of potential goodwill impairment at the reporting unit level and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. When performing our annual assessment of the recoverability of goodwill, we initially perform a qualitative analysis evaluating whether any events or circumstances occurred or exist that provide evidence that it is more likely than not that the fair value of any of our reporting units is less than the related carrying amount. If we do not believe that it is more likely than not that the fair value of any of our reporting units is less than the related carrying amount, then no quantitative impairment test is performed. However, if the results of our qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its respective carrying amount, then we perform a two-step quantitative impairment test. Evaluating the recoverability of goodwill requires judgments and assumptions regarding future trends and events. As a result, both the precision and reliability of our estimates are subject to uncertainty. Our most recent annual impairment test of goodwill was a qualitative analysis conducted during the quarter ended September 30, 2020 that indicated no impairment. Subsequent to completing our 2020 annual impairment test, no events or changes in circumstances were noted that required an interim goodwill impairment test. Note 3 — Goodwill and Intangible Assets provides additional information regarding the Company’s goodwill. Finite-lived intangible assets. The Company has finite-lived intangible assets that are amortized using the straight-line method over the expected useful life of the underlying asset. Note 3 — Goodwill and Intangible Assets provides additional information regarding the Company’s finite-lived intangible assets. Impairment of long-lived assets. The Company’s long-lived assets primarily consist of intangible assets other than goodwill and property, equipment and leasehold improvements. The Company reviews its long-lived asset groups for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or an asset group may not be recoverable. Such evaluation may be based on a number of factors, including current and projected operating results and cash flows, and changes in management’s strategic direction as well as external economic and market factors. The Company evaluates the recoverability of assets and asset groups by determining whether their carrying values can be recovered through undiscounted future operating cash flows. If events or circumstances indicate that the carrying values might not be recoverable based on undiscounted future operating cash flows, an impairment loss may be recognized. The amount of impairment is measured based on the difference between the projected discounted future operating cash flows, using a discount rate reflecting the Company’s average cost of funds, and the carrying value of the asset or asset group. The Company did not record any impairment charges for long-lived assets or asset groups during the three-year period ended December 31, 2020. Pension obligations. The Company has defined benefit pension plans at several of its international locations. Benefits earned and paid under those plans are generally based on years of service and level of employee compensation. The Company’s defined benefit pension plans are accounted for in accordance with FASB ASC Topics 715 and 960. The Company determines the periodic pension expense and related liabilities for its defined benefit pension plans through actuarial assumptions and valuations. The service cost component of pension expense is recorded as SG&A expense and all other components of pension expense are recorded as Other (expense) income, net in the Consolidated Statements of Operations. Note 15 — Employee Benefits provides additional information regarding the Company’s defined benefit pension plans. Debt. The Company presents amounts borrowed in the Consolidated Balance Sheets, net of deferred financing fees. Interest accrued on amounts borrowed is recorded as Interest expense in the Consolidated Statements of Operations. Note 6 — Debt provides additional information regarding the Company’s debt arrangements. Foreign currency exposure. The functional currency of our foreign subsidiaries is typically the local currency. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average exchange rates for the year. The resulting translation adjustments are recorded as foreign currency translation adjustments, a component of Accumulated other comprehensive (loss) income, net within Stockholders’ Equity on the Consolidated Balance Sheets. Currency transaction gains or losses arising from transactions denominated in currencies other than the functional currency of a subsidiary are recognized in results of operations as part of Other (expense) income, net in the Consolidated Statements of Operations. The Company had net currency transaction gains (losses) of $12.5 million, $(1.1) million and $9.2 million in 2020, 2019 and 2018, respectively. The Company enters into foreign currency forward exchange contracts to mitigate the effects of adverse fluctuations in foreign currency exchange rates on certain transactions. Those contracts generally have short durations and are recorded at fair value with both realized and unrealized gains and losses recorded in Other (expense) income, net. The net loss from foreign currency forward exchange contracts was $14.1 million, $2.5 million and $10.4 million in 2020, 2019 and 2018, respectively. Note 13 — Derivatives and Hedging provides additional information regarding the Company’s foreign currency forward exchange contracts. Fair value disclosures. The Company has a limited number of assets and liabilities that are adjusted to fair value at each balance sheet date. The Company’s required fair value disclosures are provided at Note 14 — Fair Value Disclosures. Concentrations of credit risk. Assets that may subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, fees receivable, contract assets, interest rate swaps and a pension reinsurance asset. The majority of the Company’s cash equivalent investments and its interest rate swap contracts are with investment grade commercial banks. Fees receivable and contract asset balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographic dispersion. The Company’s pension reinsurance asset (see Note 15 — Employee Benefits) is maintained with a large international insurance company that was rated investment grade as of December 31, 2020 and 2019. Stock repurchase programs. The Company records the cost to repurchase shares of its own common stock as treasury stock. Shares repurchased by the Company are added to treasury shares and are not retired. Note 8 — Stockholders’ Equity provides additional information regarding the Company’s common stock repurchase activity. Adoption of new accounting standards. The Company adopted the accounting standards described below during 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 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 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 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 Consolidated Financial Statements. 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, modified and supplemented the previous U.S. GAAP annual disclosure requirements for employers that sponsor defined benefit pension plans. Gartner adopted ASU No. 2018-14 on December 31, 2020 on a retroactive basis and applied to each comparative period presented in the Company’s Consolidated Financial Statements. The adoption of ASU No. 2018-14 did not have a material impact on the Company’s Consolidated Financial Statements. Accounting standards issued but not yet adopted. The FASB has issued accounting standards that had not yet become effective as of December 31, 2020 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 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. Gartner adopted ASU No. 2019-12 on January 1, 2021. The Company has concluded that ASU No. 2019-12 will not have a material impact on its Consolidated Financial Statements upon adoption.
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Acquisitions and Divestitures |
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Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions Year Ended December 31, 2019 On October 1, 2019, the Company acquired 100% of the outstanding membership interests of TOPO Research LLC (“TOPO”), a privately-held company based in Redwood City, California, for $25.0 million. TOPO is a subscription-based research and advisory business. The acquisition of TOPO expanded our market presence, product offerings and other business opportunities. For cash flow reporting purposes, the Company paid $23.7 million in cash for TOPO after considering the cash acquired with the business and certain other purchase price adjustments at closing. In addition to the purchase price, the Company may also be required to pay up to $6.5 million in cash in the future based on the continuing employment of certain key employees. Such amount is recognized as compensation expense over two years and reported in Acquisition and integration charges in the Consolidated Statements of Operations. The table below summarizes the allocation of the aggregate purchase price for the TOPO acquisition based on the fair value of the assets acquired and liabilities assumed (in thousands).
(1)We believe that the recorded goodwill is supported by the anticipated synergies resulting from the acquisition. All of the recorded goodwill is expected to be deductible for tax purposes. (2)The acquired finite-lived intangible assets primarily consisted of customer relationships and content, which are being amortized over 6 years and 1.5 years, respectively. To determine the fair values of the acquired intangible assets, we primarily relied on income valuation methodologies, in particular, discounted cash flow models. The operating results of the acquired TOPO business and the related goodwill are being reported as part of the Company’s Research and Conferences segments. The operating results of TOPO have been included in the Company’s Consolidated Financial Statements since the date of acquisition; however, such operating results were not material to the Company’s consolidated operating results and segment results. Had the Company acquired TOPO in prior periods, the impact on the Company’s operating results would not have been material and, as a result, pro forma financial information for prior periods has not been presented herein. During 2019, the Company also paid $2.3 million of restricted cash for deferred consideration from a 2017 acquisition. Year Ended December 31, 2018 Although the Company did not complete any business acquisitions during 2018, it paid $15.9 million of restricted cash during that year for deferred consideration from a 2017 acquisition. Acquisition and Integration Charges The Company recognized $6.3 million, $9.5 million and $107.2 million of Acquisition and integration charges during 2020, 2019 and 2018, respectively. Acquisition and integration charges reflect additional costs and expenses resulting from our acquisitions and include, among other items, professional fees, severance and stock-based compensation charges. During 2018, the charges included $58.3 million of exit costs for certain acquisition-related office space in Arlington, Virginia that the Company did not occupy. Divestitures During 2018, the Company completed the divestitures of all three of the non-core businesses comprising its Other segment, all of which were acquired in the CEB acquisition from 2017. Revenue from those divested operations was approximately $97.3 million 2018, while the gross contribution was $60.5 million. The Company used the cash proceeds from these divestitures to pay down debt. Additional information regarding the Other segment divestitures is provided below. CEB Challenger training business On August 31, 2018, the Company sold its CEB Challenger training business for $119.1 million and realized approximately $116.0 million in cash, which was net of working capital adjustments and certain closing costs. The Company recorded a pretax gain on the sale of approximately $8.3 million. CEB Workforce Survey and Analytics business On May 1, 2018, the Company sold its CEB Workforce Survey and Analytics business for $28.0 million and realized approximately $26.4 million in cash, which was net of certain closing costs. The Company recorded a pretax gain on the sale of approximately $8.8 million. CEB Talent Assessment business On April 3, 2018, the Company sold its CEB Talent Assessment business for $403.0 million and realized approximately $375.8 million in cash from the sale, which was net of cash transferred with the business and certain closing costs. The Company recorded a pretax gain of approximately $15.5 million on the sale. Other asset sales During 2018, the Company also received $8.6 million in cash proceeds as well as other consideration and recorded a net pretax gain of approximately $12.8 million from the sale of certain non-core assets originally acquired in the CEB transaction. These amounts include the sale of a small Research segment product called Metrics That Matter on October 31, 2018.
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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. The table below presents changes to the carrying amount of goodwill by segment during the two-year period ended December 31, 2020 (in thousands).
(1)The 2019 additions are due to the acquisition of TOPO. See Note 2 — Acquisitions and Divestitures for additional information. Finite-lived intangible assets. Changes in finite-lived intangible assets during the two-year period ended December 31, 2020 are presented in the tables below (in thousands).
(1)The 2019 additions are due to the acquisition of TOPO. See Note 2 — Acquisitions and Divestitures for additional information. (2)Finite-lived intangible assets are amortized using the straight-line method over the following periods: Customer relationships—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 $125.1 million, $129.7 million and $187.0 million in 2020, 2019 and 2018, 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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Other Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets The Company’s other assets are summarized in the table below (in thousands).
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Accounts Payable and Accrued and Other Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued and Other Liabilities | Accounts Payable and Accrued and Other LiabilitiesThe Company’s Accounts payable and accrued liabilities are summarized in the table below (in thousands).
(1)See Note 14 — Fair Value Disclosures for the determination of the fair values of these instruments. The Company’s Other liabilities are summarized in the table below (in thousands).
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company’s total outstanding borrowings are summarized in the table below (in thousands).
(1)The contractual annualized interest rate as of December 31, 2020 on the 2020 Credit Agreement Term loan facility and the revolving credit facility was 1.56%, which consisted of a floating Eurodollar base rate of 0.1875% plus a margin of 1.375%. 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 December 31, 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 $1.0 million as of December 31, 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 2020, including the effects of its interest rate swaps discussed below, was 4.75%. (7)Deferred financing fees are being amortized to Interest expense, net over the term of the related debt obligation. 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 $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 Consolidated Statements of Operations. Interest Rate Swaps As of December 31, 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 Consolidated Statement of Operations for the year ended December 31, 2020. The remaining $104.0 million as of December 31, 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 are recorded in Other income (expense), net. The interest rate swaps had negative unrealized fair values (liabilities) of $109.2 million and $64.8 million as of December 31, 2020 and December 31, 2019, respectively, of which $78.1 million and $47.2 million were recorded in Accumulated other comprehensive loss, net of tax effect, as of December 31, 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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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 2021 and through 2038. These facilities support our executive and administrative activities, research and consulting, sales, systems support, operations, and other functions. The Company also has leases for office equipment and other assets, which are not significant. Certain of the Company’s lease agreements include (i) renewal options to extend the lease term for up to ten years and/or (ii) options to terminate the agreement within one year. Additionally, certain of the Company’s lease agreements provide standard recurring escalations of lease payments for, among other things, increases in a lessor’s maintenance costs and taxes. Under some lease agreements, the Company may be entitled to allowances, free rent, lessor-financed tenant improvements and other incentives. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. 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. Lease Accounting under ASC 842 Under ASC 842, a lease is a contract or an agreement, or a part of another arrangement, between two or more parties that, at its inception, creates enforceable rights and obligations that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Right-of-use assets represent a right to use an underlying asset for the lease term and the related lease liability represents an obligation to make lease payments pursuant to the contractual terms of the lease agreement. Right-of-use assets and lease liabilities are initially recognized on the lease commencement date based on the present value of the lease payments over the lease term. For all of our facilities leases, we account for both lease components and nonlease components (e.g., common area maintenance charges, etc.) as a single lease component when determining the present value of our lease payments. Variable lease payments that are not dependent on an index or a rate are excluded from the determination of our right-of-use assets and lease liabilities and such payments are recognized as expense in the period when the related obligation is incurred. The Company’s lease agreements do not provide implicit interest rates. Instead, the Company uses an incremental borrowing rate determined on the lease commencement date to calculate the present value of future lease payments. The incremental borrowing rate is calculated for each individual lease and represents the rate of interest that the Company would have to pay to borrow on a collateralized basis (in the currency that the lease is denominated) over a similar term an amount equal to the lease payments in a similar economic environment. Right-of-use assets also include any initial direct costs incurred by the Company and lease payments made to a lessor on or before the related lease commencement date, less any lease incentives received directly from the lessor. Certain of the Company’s facility lease agreements include options to extend or terminate the lease. When it is reasonably certain that the Company will exercise a renewal or termination option, the present value of the lease payments for the affected lease is adjusted accordingly. Leases with a term of twelve months or less are accounted for in the same manner as long-term lease arrangements, including any related disclosures. Lease expense for operating leases is generally recognized on a straight-line basis over the lease term, unless the related right-of-use asset was previously impaired. All of our existing sublease arrangements have been classified as operating leases with sublease income recognized on a straight-line basis over the term of the sublease arrangement. To measure the Company’s periodic sublease income, we elected to use a practical expedient under ASC 842 to aggregate nonlease components with the related lease components when (i) the timing and pattern of transfer for the nonlease components and the related lease components are the same and (ii) the lease components, if accounted for separately, would be classified as an operating lease. This practical expedient applies to all of our existing sublease arrangements. When our projected lease cost for the term of a sublease exceeds our anticipated sublease income for that same period, we treat that circumstance as an indicator that the carrying amount of the related right-of-use asset may not be fully recoverable. In those situations, we perform an impairment analysis and, if indicated, we record a charge against earnings to reduce the right-of-use asset to the amount deemed to be recoverable in the future. On the Consolidated Balance Sheet as of December 31, 2020 and 2019, right-of-use assets are classified and reported in Operating lease right-of-use assets, and the related lease liabilities are included in Accounts payable and accrued liabilities (current) and Operating lease liabilities (long-term). On the Consolidated Statement of Cash Flows for 2020 and 2019, the reduction in the carrying amount of right-of-use assets is presented separately and the change in operating lease liabilities is included under Accounts payable and accrued and other liabilities in the reconciliation of net income to cash provided by operating activities. All of the Company’s leasing and subleasing activity for 2020 and 2019 was recognized in Selling, general and administrative expense in the Consolidated Statements of Operations. The table below presents the Company’s net lease cost and certain other information related to our leasing activities as of and for the years ended December 31, 2020 and 2019 (dollars in thousands).
(1)Included in operating lease cost was $42.2 million and $43.2 million of costs for subleasing activities during 2020 and 2019, respectively. (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 2020 or 2019. As of December 31, 2020, the (i) maturities of operating lease liabilities under non-cancelable arrangements and (ii) estimated future sublease cash receipts from non-cancelable arrangements were as follows (in thousands):
(1)Approximately 80% of the operating lease payments pertain to properties in the United States. The table below indicates where the discounted operating lease payments from the above table are classified in the Consolidated Balance Sheet (in thousands).
As of December 31, 2020, the Company had additional operating leases for facilities that have not yet commenced. These operating leases, which aggregated $29.1 million of undiscounted lease payments, are scheduled to commence during 2021 with lease terms of up to thirteen years. Lease Disclosures Under ASC Topic 840 The Company’s operating lease expense under ASC Topic 840 for its facilities, office equipment and other assets was $93.5 million in 2018. The cost of such operating leases, including any contractual rent increases, rent concessions and landlord incentives, was recognized ratably over the life of the related lease agreement.
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Leases | Leases The Company’s leasing activities are primarily for facilities under cancelable and non-cancelable lease agreements expiring during 2021 and through 2038. These facilities support our executive and administrative activities, research and consulting, sales, systems support, operations, and other functions. The Company also has leases for office equipment and other assets, which are not significant. Certain of the Company’s lease agreements include (i) renewal options to extend the lease term for up to ten years and/or (ii) options to terminate the agreement within one year. Additionally, certain of the Company’s lease agreements provide standard recurring escalations of lease payments for, among other things, increases in a lessor’s maintenance costs and taxes. Under some lease agreements, the Company may be entitled to allowances, free rent, lessor-financed tenant improvements and other incentives. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. 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. Lease Accounting under ASC 842 Under ASC 842, a lease is a contract or an agreement, or a part of another arrangement, between two or more parties that, at its inception, creates enforceable rights and obligations that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Right-of-use assets represent a right to use an underlying asset for the lease term and the related lease liability represents an obligation to make lease payments pursuant to the contractual terms of the lease agreement. Right-of-use assets and lease liabilities are initially recognized on the lease commencement date based on the present value of the lease payments over the lease term. For all of our facilities leases, we account for both lease components and nonlease components (e.g., common area maintenance charges, etc.) as a single lease component when determining the present value of our lease payments. Variable lease payments that are not dependent on an index or a rate are excluded from the determination of our right-of-use assets and lease liabilities and such payments are recognized as expense in the period when the related obligation is incurred. The Company’s lease agreements do not provide implicit interest rates. Instead, the Company uses an incremental borrowing rate determined on the lease commencement date to calculate the present value of future lease payments. The incremental borrowing rate is calculated for each individual lease and represents the rate of interest that the Company would have to pay to borrow on a collateralized basis (in the currency that the lease is denominated) over a similar term an amount equal to the lease payments in a similar economic environment. Right-of-use assets also include any initial direct costs incurred by the Company and lease payments made to a lessor on or before the related lease commencement date, less any lease incentives received directly from the lessor. Certain of the Company’s facility lease agreements include options to extend or terminate the lease. When it is reasonably certain that the Company will exercise a renewal or termination option, the present value of the lease payments for the affected lease is adjusted accordingly. Leases with a term of twelve months or less are accounted for in the same manner as long-term lease arrangements, including any related disclosures. Lease expense for operating leases is generally recognized on a straight-line basis over the lease term, unless the related right-of-use asset was previously impaired. All of our existing sublease arrangements have been classified as operating leases with sublease income recognized on a straight-line basis over the term of the sublease arrangement. To measure the Company’s periodic sublease income, we elected to use a practical expedient under ASC 842 to aggregate nonlease components with the related lease components when (i) the timing and pattern of transfer for the nonlease components and the related lease components are the same and (ii) the lease components, if accounted for separately, would be classified as an operating lease. This practical expedient applies to all of our existing sublease arrangements. When our projected lease cost for the term of a sublease exceeds our anticipated sublease income for that same period, we treat that circumstance as an indicator that the carrying amount of the related right-of-use asset may not be fully recoverable. In those situations, we perform an impairment analysis and, if indicated, we record a charge against earnings to reduce the right-of-use asset to the amount deemed to be recoverable in the future. On the Consolidated Balance Sheet as of December 31, 2020 and 2019, right-of-use assets are classified and reported in Operating lease right-of-use assets, and the related lease liabilities are included in Accounts payable and accrued liabilities (current) and Operating lease liabilities (long-term). On the Consolidated Statement of Cash Flows for 2020 and 2019, the reduction in the carrying amount of right-of-use assets is presented separately and the change in operating lease liabilities is included under Accounts payable and accrued and other liabilities in the reconciliation of net income to cash provided by operating activities. All of the Company’s leasing and subleasing activity for 2020 and 2019 was recognized in Selling, general and administrative expense in the Consolidated Statements of Operations. The table below presents the Company’s net lease cost and certain other information related to our leasing activities as of and for the years ended December 31, 2020 and 2019 (dollars in thousands).
(1)Included in operating lease cost was $42.2 million and $43.2 million of costs for subleasing activities during 2020 and 2019, respectively. (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 2020 or 2019. As of December 31, 2020, the (i) maturities of operating lease liabilities under non-cancelable arrangements and (ii) estimated future sublease cash receipts from non-cancelable arrangements were as follows (in thousands):
(1)Approximately 80% of the operating lease payments pertain to properties in the United States. The table below indicates where the discounted operating lease payments from the above table are classified in the Consolidated Balance Sheet (in thousands).
As of December 31, 2020, the Company had additional operating leases for facilities that have not yet commenced. These operating leases, which aggregated $29.1 million of undiscounted lease payments, are scheduled to commence during 2021 with lease terms of up to thirteen years. Lease Disclosures Under ASC Topic 840 The Company’s operating lease expense under ASC Topic 840 for its facilities, office equipment and other assets was $93.5 million in 2018. The cost of such operating leases, including any contractual rent increases, rent concessions and landlord incentives, was recognized ratably over the life of the related lease agreement.
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Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Common stock. Holders of Gartner’s common stock, par value $0.0005 per share, are entitled to one vote per share on all matters to be voted by stockholders. The Company does not currently pay cash dividends on its common stock. Also, our 2020 Credit Agreement contains a negative covenant that may limit our ability to pay dividends. The table below summarizes transactions relating to the Company’s common stock for the three years ended December 31, 2020.
(1)The Company used a total of $176.3 million, $199.0 million and $260.8 million in cash for share repurchases during 2020, 2019 and 2018, respectively. (2)The number of shares repurchased in all periods presented above included those that were settled in January of the following year due to timing. Share repurchase authorization. In 2015, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $1.2 billion of its common stock, of which $0.6 billion remained available as of December 31, 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. See Note 19 — Subsequent Events for a discussion regarding an increase in the Company’s share repurchase authorization. Accumulated Other Comprehensive Income (Loss), net (“AOCI/L”) The tables below provide information about the changes in AOCI/L by component and the related amounts reclassified out of AOCI/L to income during the years indicated (net of tax, in thousands) (1). Year Ended December 31, 2020
Year Ended December 31, 2019
(1) Amounts in parentheses represent debits (deferred losses). (2) $24.9 million and $(3.4) million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the year ended December 31, 2020 and 2019, respectively. $10.3 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Other (expense) income, net for the year ended December 31, 2020. See Note 6 — Debt and Note 13 — Derivatives and Hedging for information regarding the cash flow hedges. (3) The reclassifications related to defined benefit pension plans were primarily recorded in Selling, general and administrative expense, net of tax effect. See Note 15 — Employee Benefits for information regarding the Company’s defined benefit pension plans. 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 December 31, 2020 that is expected to be reclassified into earnings within the next 12 months is $29.1 million.
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Revenue and Related Matters |
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Revenue and Related Matters | Revenue and Related Matters Our Business and Revenues Gartner delivers its products and services globally through three business segments: Research, Conferences and Consulting. Our revenues from those business segments are discussed below. Research Research provides trusted, objective insights and advice on the mission-critical priorities of leaders across all functional areas of an enterprise through reports, briefings, proprietary tools, access to our research experts, peer networking services and membership programs that enable our clients to drive organizational performance. Research revenues are mainly derived from subscription contracts for research products, representing approximately 92% of the segment’s revenue. The related revenues are deferred and recognized ratably over the applicable contract term (i.e., as we provide services over the contract period). Fees derived from assisting organizations in selecting the right business software for their needs are recognized at a point in time (i.e., when the lead is provided to the vendor). The Company enters into subscription contracts for research products that generally are for twelve-month periods or longer. Approximately 80% to 85% of our annual and multi-year Research subscription contracts provide for billing of the first full service period upon signing. In subsequent years, multi-year subscription contracts are normally billed prior to the contract’s anniversary date. Our other Research subscription contracts are usually invoiced in advance, commencing with the contract signing, on (i) a quarterly, monthly or other recurring basis or (ii) in accordance with a customized invoicing schedule. Research contracts are generally non-cancelable and non-refundable, except for government contracts that may have cancellation or fiscal funding clauses, which have not historically resulted in material cancellations. It is our policy to record the amount of a subscription contract that is billable as a fee receivable at the time the contract is signed with a corresponding amount as deferred revenue because the contract represents a legally enforceable claim. Conferences Conferences provides business professionals across an organization the opportunity to learn, share and network. From our Gartner Symposium/Xpo series, to industry-leading conferences focused on specific business roles and topics, to peer-driven sessions, our offerings enable attendees to experience the best of Gartner insight and advice. We earn revenues from both the attendees and exhibitors at our conferences and meetings. Attendees are generally invoiced for the full attendance fee upon their completion of an online registration form or their signing of a contract, while exhibitors typically make several individual payments commencing with the signing of a contract. We collect almost all of the invoiced amounts in advance of the related activity, resulting in the recording of deferred revenue. We recognize both the attendee and exhibitor revenue as we satisfy our related performance obligations (i.e., when the related activity is held). The Company defers certain costs directly related to specific conferences and meetings and expenses those costs in the period during which the related activity occurs. The Company’s policy is to defer only those costs that are incremental and directly attributable to a specific activity, primarily prepaid site and production services costs. Other costs of organizing and producing our conference activities, primarily Company personnel and non-conference specific expenses, are expensed in the period incurred. Consulting Consulting combines the power of Gartner market-leading research with custom analysis and on-the-ground support to help chief information officers and other senior executives driving technology-related strategic initiatives move confidently from insight to action. Consulting revenues, primarily derived from custom consulting and measurement services, are principally generated from fixed fee or time and materials engagements. Revenues from fixed fee engagements are recognized as we work to satisfy our performance obligations, while revenues from time and materials engagements are recognized as work is delivered and/or services are provided. In both of these circumstances, we satisfy our performance obligations and control of the services are passed to our customers over time (i.e., during the duration of the contract or consulting engagement). On a contract-by-contract basis, we typically use actual labor hours incurred compared to total expected labor hours to measure the Company’s performance in respect of our fixed fee engagements. If our labor and other costs on an individual contract are expected to exceed the total contract value or the contract’s funded ceiling amount, the Company reflects an adjustment to the contract’s overall profitability in the period determined. Revenues related to contract optimization engagements are contingent in nature and are only recognized at the point in time when all of the conditions related to their payment have been satisfied. Consulting customers are invoiced based on the specific terms and conditions in their underlying contracts. We typically invoice our Consulting customers after we have satisfied some or all of the related performance obligations and the related revenue has been recognized. We record fees receivable for amounts that are billed or billable. We also record contract assets, which represent amounts for which we have recognized revenue but lack the unconditional right to payment as of the balance sheet date due to our required continued performance under the relevant contract, progress billing milestones or other billing-related restrictions. Disaggregated Revenue Our disaggregated revenue by reportable segment is presented in the tables below for the years indicated (in thousands). By Primary Geographic Market (1), (2) Year Ended December 31, 2020
Year Ended December 31, 2019
Year Ended December 31, 2018
(1)Revenue is reported based on where the sale is fulfilled. (2)During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019 or 2020. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures. The Company’s revenue is generated primarily through direct sales to clients by domestic and international sales forces and a network of independent international sales agents. Most of the Company’s products and services are provided on an integrated worldwide basis and, because of this integrated delivery approach, it is not practical to precisely separate our revenue by geographic location. Accordingly, revenue information presented in the above tables is based on internal allocations, which involve certain management estimates and judgments. By Timing of Revenue Recognition (1) Year Ended December 31, 2020
Year Ended December 31, 2019
Year Ended December 31, 2018
(1)During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019 or 2020. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures. (2)Research revenues were recognized in connection with performance obligations that were satisfied over time using a time-elapsed output method to measure progress. Consulting revenues were recognized over time using labor hours as an input measurement basis. During 2018, Other revenues were recognized using either a time-elapsed output method, performance-based milestone approach or labor hours, depending on the nature of the underlying customer contract. (3)The revenues in this category were recognized in connection with performance obligations that were satisfied at the point in time that the contractual deliverables were provided to the customer. Determining a measure of progress for performance obligations that are satisfied over time and when control transfers for performance obligations that are satisfied at a point in time requires us to make judgments that affect the timing of when revenue is recognized. A key factor in this determination is when the customer can direct the use of, and can obtain substantially all of the benefits from, the deliverable. For performance obligations recognized in accordance with a time-elapsed output method, the Company’s efforts are expended consistently throughout the contractual period and the Company transfers control evenly by providing stand-ready services. For performance obligations satisfied under our Consulting fixed fee and time and materials engagements, we believe that labor hours are the best measure of depicting the Company’s progress because labor output corresponds directly to the value of the Company’s performance to date as control is transferred. In our Other segment, we selected a method to assess the completion of our performance obligations that best aligned with the specific characteristics of the individual customer contract. We believe that these methods to measure progress are (i) reasonable and supportable and (ii) provide a faithful depiction of when we transfer products and services to our customers. For customer contracts that are greater than one year in duration, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2020 was approximately $2.7 billion. The Company expects to recognize $1,605.6 million, $881.0 million and $179.5 million of this revenue (most of which pertains to Research) during the year ending December 31, 2021, the year ending December 31, 2022 and thereafter, respectively. The Company applies a practical expedient allowed in ASC 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 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 payment terms and conditions in our customer contracts vary. In some cases, customers prepay and, in other cases, after we conduct a credit evaluation, payment may be due in arrears. Because the timing of the delivery of our services typically differs from the timing of customer payments, the Company recognizes either a contract asset (we perform either fully or partially under the contract but a contingency remains) or a contract liability (upfront customer payments precede our performance, resulting in deferred revenue). Amounts recorded as contract assets are reclassified to fees receivable when all of the outstanding conditions have been resolved and our right to payment becomes unconditional. Contracts with payments due in arrears are also recognized as fees receivable. As our contractual performance obligations are satisfied, the Company correspondingly relieves its contract liabilities and records the associated revenue. The table below provides information regarding certain of the Company’s balance sheet accounts that pertain to its contracts with customers (in thousands).
(1)Fees receivable represent an unconditional right of payment from our customers and include both billed and unbilled amounts. (2)Contract assets represent recognized revenue for which we do not have an unconditional right to payment as of the balance sheet date because the project may be subject to a progress billing milestone or some other billing restriction. (3)Deferred revenues represent amounts (i) for which the Company has received an upfront customer payment or (ii) that pertain to recognized fees receivable. Both situations occur before the completion of our performance obligation(s). The Company recognized revenue of $1,494.0 million, $1,436.9 million and $1,287.8 million during 2020, 2019 and 2018 respectively, which was attributable to deferred revenues that were recorded at the beginning of each such year. Those amounts primarily consisted of (i) Research revenues and, in 2018, Other revenues that were recognized ratably as control of the goods or services passed to the customer and (ii) Conferences revenue pertaining to conferences and meetings that occurred during the reporting periods. During 2020, 2019 and 2018, the Company did not record any material impairments related to its contract assets. The Company does not typically recognize revenue from performance obligations satisfied in prior periods. Revenue Reserve The Company maintains a revenue reserve for amounts deemed to be uncollectible for reasons other than bad debt. The revenue reserve is classified as part of Accounts payable and accrued liabilities on the Consolidated Balance Sheet. Provisions to the revenue reserve are recorded as adjustments to revenue. When determining the amount of the revenue reserve, the Company uses an expected-value method that is based on current estimates and a portfolio of data from its historical experience. Due to the common characteristics and similar attributes of our customers and contracts, which provide relevant and predictive evidence about our projected future liability, an expected-value method is reasonable and appropriate. However, the determination of the revenue reserve is inherently judgmental and requires the use of certain estimates. Changes in estimates are recorded in the period that they are identified. As of December 31, 2020 and 2019, the revenue reserve balance was $10.0 million and $7.8 million, respectively, and adjustments to the account in both 2020 and 2019 were not significant. Costs of Obtaining and Fulfilling a Customer Contract When the Company concludes that a liability should be recognized for the costs of obtaining a customer contract and determines how such liability should be measured, certain commissions are capitalized as a recoverable direct incremental cost of obtaining the underlying contract. No other amounts are capitalized as a cost of obtaining or fulfilling a customer contract because no expenditures have been identified that meet the requisite capitalization criteria. For Research and Consulting, we amortize deferred commissions on a systematic basis that aligns with the transfer to our customers of the services to which the commissions relate. For Conferences, deferred commissions are expensed during the period when the related conference or meeting occurs. During 2020, 2019 and 2018, deferred commission amortization expense was $440.5 million, $369.5 million and $304.8 million, respectively, and was included in Selling, general and administrative expense in the Consolidated Statements of Operations. The Company classifies Deferred commissions as a current asset on the Consolidated Balance Sheets at both December 31, 2020 and 2019 because those costs were, or will be, amortized over the twelve months following the respective balance sheet dates. The Company did not record any material impairments of its deferred commissions during the three-year period ended December 31, 2020.
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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 December 31, 2020, the Company had 4.4 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 “Plan”). Currently, the Company issues treasury shares upon the exercise, release or settlement of stock-based compensation awards. Determining the appropriate fair value model and calculating the fair value of stock-based compensation awards requires the use of certain subjective assumptions, including the expected life of a stock-based compensation award and Common Stock price volatility. In addition, determining the appropriate periodic stock-based compensation expense requires management to estimate the likelihood of the achievement of certain performance targets. The assumptions used in calculating the fair values of stock-based compensation awards and the related periodic expense represent management’s best estimates, which involve inherent uncertainties and the application of judgment. As a result, if circumstances change and the Company deems it necessary in the future to modify the assumptions it made or to use different assumptions, or if the quantity and nature of the Company’s stock-based compensation awards changes, then the amount of expense may need to be adjusted and future stock-based compensation expense could be materially different from what has been recorded in the current year. Stock-Based Compensation Expense The tables below summarize the Company’s stock-based compensation expense by award type and expense category line item during the years ended December 31 (in millions).
(1)Includes charges of $17.9 million, $21.5 million and $19.4 million during 2020, 2019 and 2018, respectively, for awards to retirement-eligible employees. Those awards vest on an accelerated basis. (2)These charges are the result of (i) the acceleration of the vesting of certain restricted stock units related to the CEB acquisition from 2017 and (ii) restricted stock units granted in connection with the CEB integration process. As of December 31, 2020, the Company had $84.6 million of total unrecognized stock-based compensation cost, which is expected to be expensed over the remaining weighted average service period of approximately 2.4 years. Stock-Based Compensation Awards The disclosures presented below provide information regarding the Company’s stock-based compensation awards, all of which have been classified as equity awards in accordance with FASB ASC Topic 505. Stock Appreciation Rights Stock-settled stock appreciation rights (“SARs”) permit the holder to participate in the appreciation of the value of the Common Stock. After the applicable vesting criteria have been satisfied, SARs are settled in shares of Common Stock upon exercise by the employee. SARs vest ratably over a four-year service period and expire seven years from the date of grant. The fair value of a SARs award is recognized as compensation expense on a straight-line basis over four years. SARs have only been awarded to the Company’s executive officers. When SARs are exercised, the number of shares of Common Stock issued is calculated as follows: (1) the total proceeds from the exercise of the SARs award (calculated as the closing price of the Common Stock as reported on the New York Stock Exchange on the date of exercise less the exercise price of the SARs award, multiplied by the number of SARs exercised) is divided by (2) the closing price of the Common Stock on the date of exercise. Upon exercise, the Company withholds a portion of the shares of the Common Stock to satisfy statutory tax withholding requirements. SARs recipients do not have any stockholder rights until the shares of Common Stock are issued in respect of the award, which is subject to the prior satisfaction of the vesting and other criteria relating to such grants. The table below summarizes changes in SARs outstanding during the year ended December 31, 2020.
n/a = not applicable (1)As of December 31, 2020, 0.5 million of the total SARs outstanding were unvested. The Company expects that substantially all of those unvested awards will vest in future periods. (2)As of December 31, 2020, the total SARs outstanding had an intrinsic value of $38.4 million. On such date, SARs vested and exercisable had an intrinsic value of $25.0 million. The fair value of a SARs award is determined on the date of grant using the Black-Scholes-Merton valuation model with the following weighted average assumptions for the years ended December 31:
(1)The expected dividend yield assumption was based on both the Company’s historical and anticipated dividend payouts. Historically, the Company has not paid cash dividends on its Common Stock. (2)The determination of expected stock price volatility was based on both historical Common Stock prices and implied volatility from publicly traded options in the Common Stock. (3)The risk-free interest rate was based on the yield of a U.S. Treasury security with a maturity similar to the expected life of the award. (4)The expected life represents the Company’s estimate of the weighted average period of time the SARs are expected to be outstanding (that is, the period between the service inception date and the expected exercise date). Restricted Stock Units Restricted stock units (“RSUs”) give the awardee the right to receive shares of Common Stock when the vesting conditions are met and certain restrictions lapse. Each RSU that vests entitles the awardee to one share of Common Stock. RSU awardees do not have any of the rights of a Gartner stockholder, including voting rights and the right to receive dividends and distributions, until the shares are released. The fair value of an RSU award is determined on the date of grant based on the closing price of the Common Stock as reported on the New York Stock Exchange on that date. Service-based RSUs vest ratably over four years and are expensed on a straight-line basis over the vesting period. Performance-based RSUs are subject to the satisfaction of both performance and service conditions, vest ratably over four years and are expensed on an accelerated basis over the vesting period. The table below summarizes the changes in RSUs outstanding during the year ended December 31, 2020.
(1)The 0.5 million of RSUs granted during 2020 consisted of 0.2 million of performance-based RSUs awarded to executives and 0.3 million of service-based RSUs awarded to non-executive employees and non-management board members. The performance-based awards include RSUs in final adjustments of 2019 grants and approximately 0.1 million of RSUs representing the target amount of the grant for 2020 that is tied to an increase in Gartner’s total contract value for such year. The number of performance-based RSUs for 2020 that holders could receive ranged from 0% to 200% of the target amount based on the extent to which the corresponding performance goals have been achieved and subject to certain other conditions. Any adjustments in the number of performance-based RSUs under the 2020 grant will be made in 2021. See Note 19 — Subsequent Events regarding a PSU discretionary award. (2)The Company expects that substantially all of the RSUs outstanding will vest in future periods. (3)As of December 31, 2020, the weighted average remaining contractual term of the RSUs outstanding was approximately 1.1 years. Common Stock Equivalents Common stock equivalents (“CSEs”) are convertible into Common Stock. Each CSE entitles the holder to one share of Common Stock. Members of our Board of Directors receive their directors’ fees in CSEs unless they opt to receive up to 50% of those fees in cash. Generally, CSEs have no defined term and are converted into shares of Common Stock when service as a director terminates unless the director has elected an accelerated release. The fair value of a CSE award is determined on the date of grant based on the closing price of the Common Stock as reported on the New York Stock Exchange on that date. CSEs vest immediately and, as a result, they are recorded as expense on the date of grant. The table below summarizes the changes in CSEs outstanding during the year ended December 31, 2020.
Employee Stock Purchase Plan The Company has an employee stock purchase plan (the “ESP Plan”) wherein eligible employees are permitted to purchase shares of Common Stock through payroll deductions, which may not exceed 10% of an employee’s compensation, or $23,750 in any calendar year, at a price equal to 95% of the closing price of the Common Stock as reported on the New York Stock Exchange at the end of each offering period. As of December 31, 2020, the Company had 0.4 million shares available for purchase under the ESP Plan. The ESP Plan is considered non-compensatory under FASB ASC Topic 718 and, as a result, the Company does not record stock-based compensation expense for employee share purchases. The Company received $18.1 million, $17.6 million and $14.7 million in cash from employee share purchases under the ESP Plan during 2020, 2019 and 2018, respectively.
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 stock equivalents is anti-dilutive, they are excluded from the calculation. The table below sets forth the calculation of basic and diluted income per share for the years ended December 31 (in thousands, except per share data).
(1)Both basic and diluted income per share for 2020 and 2019 included a tax benefit of approximately $0.31 and $0.42 per share, respectively, related to intercompany sales of certain intellectual property. The table below presents the number of common stock equivalents that were not included in the computations of diluted income per share in the above table because the effect would have been anti-dilutive. During years with net income, the common stock equivalents were anti-dilutive because their exercise prices were greater than the average market price of a share of Common Stock during such year.
(a) The number of anti-dilutive common stock equivalents for 2018 were minimal.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Below is a summary of the components of the Company’s income before income taxes for the years ended December 31 (in thousands).
The components of the expense (benefit) for income taxes on the above income are summarized in the table below (in thousands).
The components of long-term deferred tax assets (liabilities) are summarized in the table below (in thousands).
Net deferred tax assets and net deferred tax liabilities were $103.6 million and $173.2 million as of December 31, 2020, respectively, and $79.6 million and $189.8 million as of December 31, 2019, respectively. These amounts are reported in Other assets and Other liabilities in the Consolidated Balance Sheets. Management has concluded it is more likely than not that the reversal of deferred tax liabilities and results of future operations will generate sufficient taxable income to realize the deferred tax assets, net of the valuation allowance at December 31, 2020. The valuation allowances of $15.7 million and $1.6 million as of December 31, 2020 and 2019, respectively, primarily related to loss and credit carryovers that are not likely to be realized. As of December 31, 2020, the Company had state and local tax net operating loss carryforwards of $8.0 million, of which $0.1 million expires within to fifteen years and $7.9 million expires within to twenty years. The Company also had state tax credits of $6.0 million, a majority of which will expire in to six years. As of December 31, 2020, the Company had non-U.S. net operating loss carryforwards of $14.9 million, of which $0.1 million expires over the next 20 years and $14.8 million can be carried forward indefinitely. In addition, the Company also had foreign tax credit carryforwards of $11.9 million, all of which will expire between 2028 and 2030. These amounts have been reduced for associated unrecognized tax benefits, consistent with ASU No. 2013-11, “Income Taxes—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” The items comprising the differences between the U.S. federal statutory income tax rate and the Company’s effective tax rate on income before income taxes for the years ended December 31 are summarized in the table below.
The Company completed intercompany sales of certain intellectual property in both 2020 and 2019. As a result, the Company recorded net tax benefits of approximately $28.3 million and $38.1 million during 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. As of December 31, 2020 and 2019, the Company had gross unrecognized tax benefits of $127.1 million and $102.8 million, respectively. The increase is primarily due to positions taken with respect to intercompany transactions. The gross unrecognized tax benefits at December 31, 2020 related primarily to transfer pricing on intercompany transactions, calculations of taxable earnings and profits and related foreign tax credits, the exclusion of stock-based compensation expense from the Company’s cost sharing agreement, and the ability to realize certain refund claims. It is reasonably possible that gross unrecognized tax benefits will decrease by approximately $9.2 million within the next twelve months due to the anticipated closure of audits and the expiration of certain statutes of limitation. Included in the balance of gross unrecognized tax benefits at December 31, 2020 are potential benefits of $118.5 million that, if recognized, would reduce our effective tax rate on income from continuing operations. Also included in the balance of gross unrecognized tax benefits at December 31, 2020 are potential benefits of $8.6 million that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. The table below is a reconciliation of the beginning and ending amounts of gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31 (in thousands).
The Company accrues interest and penalties related to gross unrecognized tax benefits in its income tax provision. As of December 31, 2020 and 2019, the Company had $10.2 million and $8.3 million, respectively, of accrued interest and penalties related to gross unrecognized tax benefits. These amounts are in addition to the gross unrecognized tax benefits disclosed above. The total amount of interest and penalties recognized in the income tax provision during 2020 and 2019 was $2.0 million and $1.7 million, respectively. The number of years with open statutes of limitation varies depending on the tax jurisdiction. The Company’s statutes are open with respect to the U.S. federal jurisdiction for 2017 and forward, and India for 2004 and forward. For other major taxing jurisdictions, including U.S. states, the United Kingdom, Canada, Japan, France and Ireland, the Company’s statutes vary and are open as far back as 2011. Under U.S. GAAP, no provision for income taxes that may result from the remittance of earnings held overseas is required if the Company has the ability and intent to indefinitely reinvest such funds overseas. The Company continues to assert its intention to reinvest all accumulated undistributed foreign earnings in its non-U.S. operations, except in instances where the repatriation of those earnings would result in minimal additional tax. Consequently, the Company has not recognized income tax expense that would result from the remittance of those earnings. The accumulated undistributed earnings of non-U.S. subsidiaries were approximately $119.5 million as of December 31, 2020. As a result of the U.S. Tax Cuts and Jobs Act of 2017, the income tax that would be payable if such earnings were not indefinitely invested is estimated to be minimal.
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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). December 31, 2020
December 31, 2019
(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 6 — Debt provides additional information regarding the Company’s interest rate swap contracts. (2)The Company has foreign exchange transaction risk because it typically enters into transactions in the normal course of business that are denominated in foreign currencies that differ from the local functional currency. The Company enters into short-term foreign currency forward exchange contracts to mitigate the cash flow risk associated with changes in foreign currency rates on forecasted foreign currency transactions. These contracts are accounted for at fair value with realized and unrealized gains and losses recognized in Other (expense) income, net because the Company does not designate these contracts as hedges for accounting purposes. All of the outstanding foreign currency forward exchange contracts at December 31, 2020 matured before January 31, 2021. (3)See Note 14 — Fair Value Disclosures for the determination of the fair values of these instruments. At December 31, 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 Consolidated Statements of Operations for derivative contracts for the years ended December 31 (in thousands).
(1)Consists of interest (income) expense from interest rate swap contracts. (2)Consists of net realized and unrealized gains and losses on foreign currency forward contracts, gains and losses on de-designated interest rate swaps and $10.3 million of expense during the year ended December 31, 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. Other expense, net also included a $2.2 million gain on de-designated interest rate swaps during the year ended December 31, 2020, related to fair value adjustments subsequent to de-designation. .
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Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures | Fair Value DisclosuresThe 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 Consolidated Balance Sheets. FASB ASC Topic 820 provides a framework for the measurement of fair value and a valuation hierarchy based on the transparency of inputs used in the valuation of assets and liabilities. Classification within the valuation hierarchy is based on the lowest level of input that is significant to the resulting fair value measurement. The valuation hierarchy contains three levels. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs such as internally-created valuation models. The Company does not currently utilize Level 3 valuation inputs to remeasure any of its assets or liabilities. However, Level 3 inputs may be used by the Company in its required annual impairment review of goodwill. Information regarding the periodic assessment of the Company’s goodwill is included in Note 1 — Business and Significant Accounting Policies. The Company does not typically transfer assets or liabilities between different levels of the valuation hierarchy. The table below presents the fair value of certain financial assets and liabilities that are recorded at fair value and measured on a recurring basis in the Company's Consolidated Balance Sheets (in thousands).
(1)The Company has a deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees (see Note 15 — Employee Benefits). The assets consist of investments in money market funds, mutual funds and company-owned life insurance contracts. The money market funds consist of cash equivalents while the mutual fund investments consist of publicly-traded and quoted equity shares. The Company considers the fair values of these assets to be based on Level 1 inputs, and such assets had fair values of $2.6 million and $2.3 million as of December 31, 2020 and 2019, respectively. The carrying amounts of the life insurance contracts equal their cash surrender values. Cash surrender value represents the estimated amount that the Company would receive upon termination of a contract, which approximates fair value. The Company considers life insurance contracts to be valued based on Level 2 inputs, and such assets had fair values of $85.9 million and $73.4 million at December 31, 2020 and 2019, respectively. The related deferred compensation plan liabilities are recorded at fair value, or the estimated amount needed to settle the liability, which the Company considers to be a Level 2 input. (2)The Company enters into foreign currency forward exchange contracts to hedge the effects of adverse fluctuations in foreign currency exchange rates (see Note 13 — Derivatives and Hedging). Valuation of these contracts is based on observable foreign currency exchange rates in active markets, which the Company considers to be a Level 2 input. (3)The Company has interest rate swap contracts that hedge the risk of variability from interest payments on its borrowings (see Note 6 — Debt). The fair values of interest rate swaps are based on mark-to-market valuations prepared by a third-party broker. Those valuations are based on observable interest rates from recently executed market transactions and other observable market data, which the Company considers to be Level 2 inputs. The Company independently corroborates the reasonableness of the valuations prepared by the third-party broker by using an electronic quotation service. The table below presents the carrying amounts and fair values of financial instruments that are not recorded at fair value in the Company’s Consolidated Balance Sheets (in thousands). The estimated fair value of the financial instruments was derived from quoted market prices provided by an independent dealer, which the Company considers to be a Level 2 input.
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Employee Benefits |
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Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits | Employee Benefits Defined contribution plans. The Company has savings and investment plans (the “401(k) Plans”) covering substantially all U.S. employees. Company contributions are based on the level of employee contributions, up to a maximum of 4% of an employee’s eligible salary, subject to an annual maximum. For 2020, the maximum Company match was $7,200. As a result of the impact of COVID-19, the Company temporarily suspended the Company match on April 1, 2020. The Company reinstituted the match on January 1, 2021, retroactive to April 1, 2020. Amounts expensed in connection with the 401(k) Plans totaled $43.9 million, $44.1 million and $36.7 million in 2020, 2019 and 2018, respectively. Deferred compensation plans. The Company has supplemental deferred compensation plans for the benefit of certain highly compensated officers, managers and other key employees. The plans’ investment assets are recorded at fair value in Other assets on the Consolidated Balance Sheets. The value of those assets was $88.5 million and $75.7 million at December 31, 2020 and 2019, respectively (see Note 14 — Fair Value Disclosures for fair value information). The related deferred compensation plan liabilities, which were $94.5 million and $79.6 million at December 31, 2020 and 2019, respectively, are carried at fair value and are adjusted with a corresponding charge or credit to compensation expense to reflect the fair value of the amount owed to the employees. Deferred compensation plan liabilities are recorded in Other liabilities on the Consolidated Balance Sheets. Compensation expense recognized for all of the Company’s deferred compensation plans was $1.9 million, $0.6 million and $1.7 million in 2020, 2019 and 2018, respectively. Defined benefit pension plans. The Company has defined benefit pension plans at several of its international locations. Benefits earned and paid under those plans are generally based on years of service and level of employee compensation. The Company’s vested benefit obligation is the actuarial present value of the vested benefits to which an employee is entitled based on the employee’s expected date of separation or retirement. The Company’s defined benefit pension plans are accounted for in accordance with FASB ASC Topics 715 and 960. The table below presents the components of the Company’s defined benefit pension plan expense for the years ended December 31 (in thousands). The components of pension expense, other than service cost, are recorded in Other (expense) income, net in the Consolidated Statements of Operations.
The table below presents the key assumptions used in the computation of pension expense for the years ended December 31.
(1)Discount rates are typically determined by using the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations. The table below provides information regarding changes in the projected benefit obligation of the Company’s defined benefit pension plans for the years ended December 31 (in thousands).
The table below presents the key assumptions used in determining the projected benefit obligations at December 31.
(1)The actuarial losses in 2020 and 2019 were primarily due to a reduction in our weighted average discount rate assumption. (2)The Company projects benefit payments will be made in future years directly to plan participants as follows: $1.8 million in 2021; $1.8 million in 2022; $2.3 million in 2023; $2.3 million in 2024; $2.5 million in 2025; and $15.1 million in total in the five years thereafter. (3)Measured as of December 31. (4)Discount rates are typically determined by using the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations. The tables below provide information regarding the funded status of the Company’s defined benefit pension plans and the related amounts recorded in the Consolidated Balance Sheets as of December 31 (in thousands).
(1)The pension plan assets are held by third-party trustees and are invested in a diversified portfolio of equities, high-quality government and corporate bonds, and other investments. The assets are primarily valued based on Level 1 and Level 2 inputs under the fair value hierarchy in FASB ASC Topic 820, with the majority of the invested assets considered to be of low-to-medium investment risk. The Company projects a future long-term rate of return on these plan assets of 1.19%, which it believes is reasonable based on the composition of the assets and both current and projected market conditions. Additional information regarding pension plan asset activity is provided below. (2)Funded status – shortfall represents the amount of the projected benefit obligation that the Company has not funded with a third-party trustee. These liabilities of the Company are recorded in Other liabilities on the Consolidated Balance Sheets. The level of future contributions by the Company will vary and is dependent on a number of factors including investment returns, interest rate fluctuations, plan demographics, funding regulations and the results of the final actuarial valuation. (3)The deferred actuarial loss as of December 31, 2020 is recorded in AOCI/L and will be reclassified out of AOCI/L and recognized as pension expense over approximately 14 years, subject to certain limitations set forth in FASB ASC Topic 715. The amortization of deferred actuarial losses from AOCI/L to pension expense in each of the years ended December 31, 2020, 2019 and 2018 was immaterial. The table below provides a rollforward of the Company’s defined benefit pension plans assets for the years ended December 31 (in thousands).
The Company also has a reinsurance asset arrangement with a large international insurance company that is intended to fund benefit payments for one of its plans. The reinsurance asset is not a pension plan asset but is an asset of the Company. At December 31, 2020 and 2019, the reinsurance asset was recorded at its cash surrender value of $10.0 million and $8.9 million, respectively, and recorded in Other assets on the Consolidated Balance Sheets. The Company believes that cash surrender value approximates fair value and is equivalent to a Level 2 input under the FASB’s fair value hierarchy in FASB ASC Topic 820.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our products and services are delivered through three segments – Research, Conferences and Consulting, as described below. •Research provides trusted, objective insights and advice on the mission-critical priorities of leaders across all functional areas of an enterprise through reports, briefings, proprietary tools, access to our research experts, peer networking services and membership programs that enable our clients to drive organizational performance. •Conferences provides business professionals across an organization the opportunity to learn, share and network. From our Gartner Symposium/Xpo series, to industry-leading conferences focused on specific business roles and topics, to peer-driven sessions, our offerings enable attendees to experience the best of Gartner insight and advice. •Consulting combines the power of Gartner market-leading research with custom analysis and on-the-ground support to help chief information officers and other senior executives driving technology-related strategic initiatives move confidently from insight to action. The Company evaluates segment performance and allocates resources based on gross contribution margin. Gross contribution, as presented in the table below, is defined as operating income or loss excluding certain Cost of services and product development expenses, Selling, general and administrative expenses, Depreciation, Amortization of intangibles, and Acquisition and integration charges. Certain bonus and fringe benefit costs included in consolidated Cost of services and product development are not allocated to segment expense. The accounting policies used by the reportable segments are the same as those used by the Company. There are no intersegment revenues. The Company does not identify or allocate tangible assets, including capital expenditures, by reportable segment. Accordingly, tangible assets are not reported by segment because the information is not available by segment and is not reviewed in the evaluation of segment performance or in making decisions regarding the allocation of resources. The Company earns revenue from clients in many countries. Other than the United States, there is no individual country where revenues from external clients represent 10% or more of the Company’s consolidated revenues. Additionally, no single client accounted for 10% or more of the Company’s consolidated revenues and the loss of a single client, in management’s opinion, would not have a material adverse effect on revenues. The tables below present information about the Company’s reportable segments for the years ended December 31 (in thousands).
(1) During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019 or 2020. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures. The table below provides a reconciliation of total segment gross contribution to net income for the years ended December 31 (in thousands).
(1)The unallocated amounts consist of certain bonus and fringe costs recorded in consolidated Cost of services and product development that are not allocated to segment expense. The Company’s policy is to allocate bonuses to segments at 100% of a segment employee’s target bonus. Amounts above or below 100% are absorbed by corporate. Disaggregated revenue information by reportable segment for the three years ended December 31, 2020 is presented in Note 9 — Revenue and Related Matters. Long-lived asset information by geographic location as of December 31 is summarized in the table below (in thousands).
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Contingencies |
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Dec. 31, 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 December 31, 2020, the Company did not have any material payment obligations under any such indemnification agreements.
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Valuation and Qualifying Accounts |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts | Valuation and Qualifying Accounts The Company maintains an allowance for losses that is comprised of a bad debt allowance and, through December 31, 2017, a revenue reserve. The table below summarizes the activity in the Company’s allowance for losses for the years ended December 31 (in thousands).
(1) The allowance for losses at December 31, 2017 included $6.2 million that was attributable to the Company’s revenue reserve. As a result of the Company’s adoption of ASC 606 on January 1, 2018, the revenue reserve balance is now included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets. Note 9 — Revenue and Related Matters provides additional information regarding the Company’s adoption of ASC 606.
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Subsequent Events |
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Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Share Repurchase Authorization On February 4, 2021, the Company’s Board of Directors authorized incremental share repurchases of up to an additional $300 million of Gartner’s common stock. This authorization is in addition to the previously authorized repurchases of up to $1.2 billion, which as of the end of January 2021 had approximately $568 million remaining. PSU Discretionary Award On February 5, 2020, prior to the COVID-19 related shutdown in the U.S., the Compensation Committee (“Committee”) of the Board of Directors of the Company established performance measures for the performance-based RSUs awarded to the Company’s executive officers in 2020 under the Gartner, Inc. Long-Term Incentive Plan (the “Plan”). Based on preliminary corporate performance results for the 2020 performance measures, the 2020 performance-based RSUs would have been earned at 50% of target. However, on February 3, 2021, the Committee determined to use its discretion under the Plan to approve a payout at 95% of target. In deciding to exercise this discretion to adjust the performance-based RSU payout, the Committee considered the Company’s strong overall performance in 2020 despite the significant negative impact of the COVID-19 pandemic.
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Business and Significant Accounting Policies (Policies) |
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Dec. 31, 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. |
Basis of presentation | Basis of presentation. The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for financial information and with the applicable instructions of U.S. Securities and Exchange Commission (“SEC”) Regulation S-X. The fiscal year of Gartner is the twelve-month period from January 1 through December 31. All references to 2020, 2019 and 2018 herein refer to the fiscal year unless otherwise indicated. When used in these notes, the terms “Gartner,” the “Company,” “we,” “us” or “our” refer to Gartner, Inc. and its consolidated subsidiaries.
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Principles of consolidation | Principles of consolidation. The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. |
Use of estimates | Use of estimates. The preparation of the accompanying Consolidated Financial Statements requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of fees receivable, goodwill, intangible assets and other long-lived assets, as well as tax accruals and other liabilities. In addition, estimates are used in revenue recognition, income tax expense or benefit, performance-based compensation charges, depreciation and amortization. Management believes its use of estimates in the accompanying Consolidated Financial Statements to be reasonable. Management continually evaluates and revises its estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. Management adjusts these estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time. As a result, differences between our estimates and actual results could be material and would be reflected in the Company’s Consolidated Financial Statements in future periods. 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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Business acquisitions | Business acquisitions. The Company accounts for business acquisitions in accordance with the acquisition method of accounting as prescribed by FASB ASC Topic 805, Business Combinations. The acquisition method of accounting requires the Company to record the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with certain exceptions. Any excess of the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Under the acquisition method, the operating results of acquired companies are included in the Company’s Consolidated Financial Statements beginning on the date of acquisition. The Company completed business acquisitions in 2019. Note 2 — Acquisitions and Divestitures provides additional information regarding those business acquisitions. The determination of the fair values of intangible and other assets acquired in an acquisition requires management judgment and the consideration of a number of factors, including the historical financial performance of acquired businesses and their projected future performance, and estimates surrounding customer turnover, as well as assumptions regarding the level of competition and the costs necessary to reproduce certain assets. Establishing the useful lives of intangible assets also requires management judgment and the evaluation of a number of factors, including the expected use of an asset, historical client retention rates, consumer awareness and trade name history, as well as any contractual provisions that could limit or extend an asset’s useful life. Charges that are directly related to the Company’s acquisitions are expensed as incurred and classified as Acquisition and integration charges in the Consolidated Statements of Operations.
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Revenue recognition | Revenue recognition. On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers. The Company’s revenue by significant source is accounted for as follows: •Research revenues are mainly derived from subscription contracts for research products. The related revenues are deferred and recognized ratably over the applicable contract term. Fees derived from assisting organizations in selecting the right business software for their needs are recognized when the leads are provided to vendors. •Conferences revenues are deferred and recognized upon the completion of the related conference or meeting. •Consulting revenues are principally generated from fixed fee and time and materials engagements. Revenues from fixed fee contracts are recognized as the Company works to satisfy our performance obligations. Revenues from time and materials engagements are recognized as work is delivered and/or services are provided. Revenues related to contract optimization engagements are contingent in nature and are only recognized upon satisfaction of all conditions related to their payment. The majority of the Company’s Research contracts are billable upon signing, absent special terms granted on a limited basis from time to time. Research contracts are generally non-cancelable and non-refundable, except for government contracts that may have cancellation or fiscal funding clauses. It is the Company’s policy to record the amount of a subscription contract that is billable as a fee receivable at the time the contract is signed with a corresponding amount as deferred revenue because the contract represents a legally enforceable claim. Note 9 — Revenue and Related Matters provides additional information regarding the Company’s business and revenues.
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Allowance for losses | Allowance for losses. On January 1, 2020 , the Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses. Prior to January 1, 2020, the Company recognized the allowance for losses on bad debts in accordance with then-existing U.S. GAAP under FASB ASC Topic 310, Receivables. Information regarding the Company’s accounting for credit losses, including our adoption of the new accounting standard, is provided below under the heading “Adoption of new accounting standards”. |
Cost of services and product development | Cost of services and product development (“COS”). COS expense includes the direct costs incurred in the creation and delivery of our products and services. These costs primarily relate to personnel. |
Selling, general and administrative | Selling, general and administrative (“SG&A”). SG&A expense includes direct and indirect selling costs, general and administrative costs, facility costs and bad debt expense. |
Commission expense | Commission expense. The Company records deferred commissions upon signing a customer contract and amortizes the deferred amount over a period that aligns with the transfer to the customer of the services to which the commissions relate. |
Stock-based compensation expense | Stock-based compensation expense. The Company accounts for stock-based compensation awards in accordance with FASB ASC Topics 505 and 718 and SEC Staff Accounting Bulletins No. 107 and No. 110. Stock-based compensation expense for equity awards is based on the fair value of the award on the date of grant. The Company recognizes stock-based compensation expense over the period that the related service is performed, which is generally the same as the vesting period of the underlying award. Forfeitures are recognized as they occur. A change in any of the terms or conditions of stock-based compensation awards is accounted for as a modification of the award. Incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified, measured based on the fair value of the awards at the modification date. For vested awards, the Company recognizes incremental compensation cost in the period the modification occurs. For unvested awards, the Company recognizes any incremental compensation expense at the modification date or ratably over the requisite remaining service period, as appropriate. If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost the Company recognizes is the cost of the original award. |
Income taxes | Income taxes. The Company uses the asset and liability method of accounting for income taxes. We estimate our income taxes in each of the jurisdictions where we operate. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. When assessing the realizability of deferred tax assets, we consider if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the availability of loss carryforwards, projected reversals of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained based on the technical merits of the position. Recognized tax positions are measured at the largest amount of benefit with greater than a 50% likelihood of being realized. The Company uses estimates in determining the amount of unrecognized tax benefits associated with uncertain tax positions. Significant judgment is required in evaluating tax law and measuring the benefits likely to be realized. Uncertain tax positions are periodically re-evaluated and adjusted as more information about their ultimate realization becomes available. Note 12 — Income Taxes provides additional information regarding the Company’s income taxes. On April 1, 2018, the Company early adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU No. 2018-02”). ASU No. 2018-02 provides an entity with the option to reclassify to retained earnings the tax effects from items that have been stranded in accumulated other comprehensive income as a result of the U.S. Tax Cuts and Jobs Act of 2017 (the “Act”). Gartner elected to early adopt ASU No. 2018-02 as of the beginning of the second quarter of 2018, which resulted in a reclassification of $0.6 million of stranded tax amounts related to the Act from Accumulated other comprehensive (loss) income, net to Accumulated earnings. ASU No. 2018-02 had no impact on the Company’s operating results in 2020, 2019 or 2018. On January 1, 2018, the Company adopted ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ASU No. 2016-16”). ASU No. 2016-16 accelerates the recognition of taxes on certain intra-entity transactions. U.S. GAAP previously required deferral of the income tax implications of an intercompany sale of assets until the assets were sold to a third party or recovered through use. Under ASU No. 2016-16, a seller’s tax effects and a buyer’s deferred taxes on asset transfers are immediately recognized upon a sale. Pursuant to the transition rules in ASU No. 2016-16, any taxes attributable to pre-2018 intra-entity transfers that were previously deferred should be accelerated and recorded to accumulated earnings on the date of adoption. As a result, certain of the Company’s balance sheet income tax accounts pertaining to pre-2018 intra-entity transfers, which aggregated $13.7 million, were reversed against accumulated earnings on January 1, 2018. Additionally, in accordance with the new requirements of ASU No. 2016-16, the Company recorded income tax benefits of approximately (i) $28.3 million and $38.1 million in 2020 and 2019, respectively, from intercompany sales of certain intellectual property and (ii) $6.8 million in 2018 related to intra-entity transfers upon the merger of certain foreign subsidiaries. In the future, there could be a material impact from ASU No. 2016-16, depending on the nature, size and tax consequences of intra-entity transfers, if any.
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Cash and cash equivalents and restricted cash | Cash and cash equivalents and restricted cash. Cash and cash equivalents includes cash and all highly liquid investments with original maturities of three months or less, which are considered to be cash equivalents. The carrying value of cash equivalents approximates fair value due to the short-term maturity of such instruments. Investments with maturities of more than three months are classified as marketable securities. Interest earned is recorded in Interest income in the Consolidated Statements of Operations. |
Leases | Leases. On January 1, 2019, the Company adopted ASC 842, Leases using a modified retrospective approach. ASC 842 significantly changed the accounting for leases because a right-of-use model is now used whereby a lessee must record a right-of-use asset and a related lease liability on its balance sheet for most of its leases. Under ASC 842, leases are classified as either operating or finance arrangements, with such classification affecting the pattern of expense recognition in an entity’s income statement. For operating leases, ASC 842 requires recognition in an entity’s income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Prior to January 1, 2019, the Company recognized lease expense in accordance with then-existing U.S. GAAP under FASB ASC Topic 840, Leases (“ASC Topic 840”). Although there were significant changes to the Company’s leasing policies and procedures effective January 1, 2019 with the adoption of ASC 842, the lease expense recognition patterns under ASC Topic 842 in 2020 and 2019 and ASC Topic 840 in 2018 were substantively the same. As required by the new lease standard, the Company’s disclosures regarding its leasing activities have been significantly expanded to enable users of our Consolidated Financial Statements to assess the amount, timing and uncertainty of cash flows related to leases. |
Property, equipment and leasehold improvements | Property, equipment and leasehold improvements. Equipment, leasehold improvements and other fixed assets owned by the Company are recorded at cost less accumulated depreciation and amortization. Fixed assets, other than leasehold improvements, are depreciated using the straight-line method over the estimated useful life of the underlying asset. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the improvement or the remaining term of the related lease. |
Goodwill | Goodwill. Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair values of the tangible and identifiable intangible net assets acquired. Evaluations of the recoverability of goodwill are performed in accordance with FASB ASC Topic 350, which requires an annual assessment of potential goodwill impairment at the reporting unit level and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. When performing our annual assessment of the recoverability of goodwill, we initially perform a qualitative analysis evaluating whether any events or circumstances occurred or exist that provide evidence that it is more likely than not that the fair value of any of our reporting units is less than the related carrying amount. If we do not believe that it is more likely than not that the fair value of any of our reporting units is less than the related carrying amount, then no quantitative impairment test is performed. However, if the results of our qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its respective carrying amount, then we perform a two-step quantitative impairment test. Evaluating the recoverability of goodwill requires judgments and assumptions regarding future trends and events. As a result, both the precision and reliability of our estimates are subject to uncertainty. Our most recent annual impairment test of goodwill was a qualitative analysis conducted during the quarter ended September 30, 2020 that indicated no impairment. Subsequent to completing our 2020 annual impairment test, no events or changes in circumstances were noted that required an interim goodwill impairment test. Note 3 — Goodwill and Intangible Assets provides additional information regarding the Company’s goodwill.
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Finite-Lived Intangible assets | Finite-lived intangible assets. The Company has finite-lived intangible assets that are amortized using the straight-line method over the expected useful life of the underlying asset. |
Impairment of long-lived assets | Impairment of long-lived assets. The Company’s long-lived assets primarily consist of intangible assets other than goodwill and property, equipment and leasehold improvements. The Company reviews its long-lived asset groups for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or an asset group may not be recoverable. Such evaluation may be based on a number of factors, including current and projected operating results and cash flows, and changes in management’s strategic direction as well as external economic and market factors. The Company evaluates the recoverability of assets and asset groups by determining whether their carrying values can be recovered through undiscounted future operating cash flows. If events or circumstances indicate that the carrying values might not be recoverable based on undiscounted future operating cash flows, an impairment loss may be recognized. The amount of impairment is measured based on the difference between the projected discounted future operating cash flows, using a discount rate reflecting the Company’s average cost of funds, and the carrying value of the asset or asset group. |
Pension obligations | Pension obligations. The Company has defined benefit pension plans at several of its international locations. Benefits earned and paid under those plans are generally based on years of service and level of employee compensation. The Company’s defined benefit pension plans are accounted for in accordance with FASB ASC Topics 715 and 960. The Company determines the periodic pension expense and related liabilities for its defined benefit pension plans through actuarial assumptions and valuations. The service cost component of pension expense is recorded as SG&A expense and all other components of pension expense are recorded as Other (expense) income, net in the Consolidated Statements of Operations. Note 15 — Employee Benefits provides additional information regarding the Company’s defined benefit pension plans. |
Debt | Debt. The Company presents amounts borrowed in the Consolidated Balance Sheets, net of deferred financing fees. Interest accrued on amounts borrowed is recorded as Interest expense in the Consolidated Statements of Operations. |
Foreign currency exposure | Foreign currency exposure. The functional currency of our foreign subsidiaries is typically the local currency. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average exchange rates for the year. The resulting translation adjustments are recorded as foreign currency translation adjustments, a component of Accumulated other comprehensive (loss) income, net within Stockholders’ Equity on the Consolidated Balance Sheets. |
Fair value disclosures | Fair value disclosures. The Company has a limited number of assets and liabilities that are adjusted to fair value at each balance sheet date. |
Concentrations of credit risk | Concentrations of credit risk. Assets that may subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, fees receivable, contract assets, interest rate swaps and a pension reinsurance asset. The majority of the Company’s cash equivalent investments and its interest rate swap contracts are with investment grade commercial banks. Fees receivable and contract asset balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographic dispersion. The Company’s pension reinsurance asset (see Note 15 — Employee Benefits) is maintained with a large international insurance company that was rated investment grade as of December 31, 2020 and 2019. |
Stock repurchase programs | Stock repurchase programs. The Company records the cost to repurchase shares of its own common stock as treasury stock. Shares repurchased by the Company are added to treasury shares and are not retired. Note 8 — Stockholders’ Equity provides additional information regarding the Company’s common stock repurchase activity. |
Adoption of new accounting standards | Adoption of new accounting standards. The Company adopted the accounting standards described below during 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 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 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 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 Consolidated Financial Statements. 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, modified and supplemented the previous U.S. GAAP annual disclosure requirements for employers that sponsor defined benefit pension plans. Gartner adopted ASU No. 2018-14 on December 31, 2020 on a retroactive basis and applied to each comparative period presented in the Company’s Consolidated Financial Statements. The adoption of ASU No. 2018-14 did not have a material impact on the Company’s Consolidated Financial Statements. Accounting standards issued but not yet adopted. The FASB has issued accounting standards that had not yet become effective as of December 31, 2020 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 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. Gartner adopted ASU No. 2019-12 on January 1, 2021. The Company has concluded that ASU No. 2019-12 will not have a material impact on its Consolidated Financial Statements upon adoption.
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Business and Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | Below is a table presenting the beginning-of-period and end-of-period cash amounts from the Company’s Consolidated Balance Sheets and the total cash amounts presented in the Consolidated Statements of Cash Flows (in thousands).
(1)Restricted cash consists of escrow accounts established in connection with certain of the Company’s business acquisitions. Generally, such cash is restricted to use due to provisions contained in the underlying stock or asset purchase agreement. The Company will disburse the restricted cash to the sellers of the businesses upon satisfaction of any contingencies described in such agreements (e.g., potential indemnification claims, etc.). (2)Restricted cash is recorded in Prepaid expenses and other current assets and Other assets in the Company’s Consolidated Balance Sheets with the short-term or long-term classification dependent on the projected timing of disbursements to the sellers. (3)Represents cash classified as a held-for-sale asset for the CEB Talent Assessment business, which was divested in 2018. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures.
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Schedule of Restricted Cash | Below is a table presenting the beginning-of-period and end-of-period cash amounts from the Company’s Consolidated Balance Sheets and the total cash amounts presented in the Consolidated Statements of Cash Flows (in thousands).
(1)Restricted cash consists of escrow accounts established in connection with certain of the Company’s business acquisitions. Generally, such cash is restricted to use due to provisions contained in the underlying stock or asset purchase agreement. The Company will disburse the restricted cash to the sellers of the businesses upon satisfaction of any contingencies described in such agreements (e.g., potential indemnification claims, etc.). (2)Restricted cash is recorded in Prepaid expenses and other current assets and Other assets in the Company’s Consolidated Balance Sheets with the short-term or long-term classification dependent on the projected timing of disbursements to the sellers. (3)Represents cash classified as a held-for-sale asset for the CEB Talent Assessment business, which was divested in 2018. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures.
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Schedule of Property, Plant and Equipment | Property, equipment and leasehold improvements, net are presented in the table below (in thousands).
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Acquisitions and Divestitures (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mergers, Acquisitions And Dispositions Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the allocation of the purchase price to the fair value of the assets and liabilities assumed | The table below summarizes the allocation of the aggregate purchase price for the TOPO acquisition based on the fair value of the assets acquired and liabilities assumed (in thousands).
(1)We believe that the recorded goodwill is supported by the anticipated synergies resulting from the acquisition. All of the recorded goodwill is expected to be deductible for tax purposes. (2)The acquired finite-lived intangible assets primarily consisted of customer relationships and content, which are being amortized over 6 years and 1.5 years, respectively. To determine the fair values of the acquired intangible assets, we primarily relied on income valuation methodologies, in particular, discounted cash flow models.
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes to the carrying amount of goodwill by segment | The table below presents changes to the carrying amount of goodwill by segment during the two-year period ended December 31, 2020 (in thousands).
(1)The 2019 additions are due to the acquisition of TOPO. See Note 2 — Acquisitions and Divestitures for additional information.
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Schedule of changes in finite-lived intangible assets | Finite-lived intangible assets. Changes in finite-lived intangible assets during the two-year period ended December 31, 2020 are presented in the tables below (in thousands).
(1)The 2019 additions are due to the acquisition of TOPO. See Note 2 — Acquisitions and Divestitures for additional information. (2)Finite-lived intangible assets are amortized using the straight-line method over the following periods: Customer relationships—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 | The estimated future amortization expense by year for finite-lived intangible assets is presented in the table below (in thousands).
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Other Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | The Company’s other assets are summarized in the table below (in thousands).
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Accounts Payable and Accrued and Other Liabilities (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | The Company’s Accounts payable and accrued liabilities are summarized in the table below (in thousands).
(1)See Note 14 — Fair Value Disclosures for the determination of the fair values of these instruments.
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Schedule of Other Liabilities | The Company’s Other liabilities are summarized in the table below (in thousands).
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The Company’s total outstanding borrowings are summarized in the table below (in thousands).
(1)The contractual annualized interest rate as of December 31, 2020 on the 2020 Credit Agreement Term loan facility and the revolving credit facility was 1.56%, which consisted of a floating Eurodollar base rate of 0.1875% plus a margin of 1.375%. 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 December 31, 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 $1.0 million as of December 31, 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 2020, including the effects of its interest rate swaps discussed below, was 4.75%. (7)Deferred financing fees are being amortized to Interest expense, net over the term of the related debt obligation.
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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 our leasing activities as of and for the years ended December 31, 2020 and 2019 (dollars in thousands).
(1)Included in operating lease cost was $42.2 million and $43.2 million of costs for subleasing activities during 2020 and 2019, respectively. (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 2020 or 2019.
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Operating lease maturity schedule | As of December 31, 2020, the (i) maturities of operating lease liabilities under non-cancelable arrangements and (ii) estimated future sublease cash receipts from non-cancelable arrangements were as follows (in thousands):
(1)Approximately 80% of the operating lease payments pertain to properties in the United States.
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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 Consolidated Balance Sheet (in thousands).
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Stockholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Transactions Relating to Common Stock | The table below summarizes transactions relating to the Company’s common stock for the three years ended December 31, 2020.
(1)The Company used a total of $176.3 million, $199.0 million and $260.8 million in cash for share repurchases during 2020, 2019 and 2018, respectively. (2)The number of shares repurchased in all periods presented above included those that were settled in January of the following year due to timing.
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Schedule of Accumulated Other Comprehensive (Loss) Income, Net by Components | The tables below provide information about the changes in AOCI/L by component and the related amounts reclassified out of AOCI/L to income during the years indicated (net of tax, in thousands) (1). Year Ended December 31, 2020
Year Ended December 31, 2019
(1) Amounts in parentheses represent debits (deferred losses). (2) $24.9 million and $(3.4) million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the year ended December 31, 2020 and 2019, respectively. $10.3 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Other (expense) income, net for the year ended December 31, 2020. See Note 6 — Debt and Note 13 — Derivatives and Hedging for information regarding the cash flow hedges. (3) The reclassifications related to defined benefit pension plans were primarily recorded in Selling, general and administrative expense, net of tax effect. See Note 15 — Employee Benefits for information regarding the Company’s defined benefit pension plans.
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Revenue and Related Matters (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue by Reportable Segment | Our disaggregated revenue by reportable segment is presented in the tables below for the years indicated (in thousands). By Primary Geographic Market (1), (2) Year Ended December 31, 2020
Year Ended December 31, 2019
Year Ended December 31, 2018
(1)Revenue is reported based on where the sale is fulfilled. (2)During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019 or 2020. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures.
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Schedule of Disaggregation of Revenue | Year Ended December 31, 2020
Year Ended December 31, 2019
Year Ended December 31, 2018
(1)During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019 or 2020. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures. (2)Research revenues were recognized in connection with performance obligations that were satisfied over time using a time-elapsed output method to measure progress. Consulting revenues were recognized over time using labor hours as an input measurement basis. During 2018, Other revenues were recognized using either a time-elapsed output method, performance-based milestone approach or labor hours, depending on the nature of the underlying customer contract. (3)The revenues in this category were recognized in connection with performance obligations that were satisfied at the point in time that the contractual deliverables were provided to the customer.
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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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Stock-Based Compensation (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 years ended December 31 (in millions).
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Schedule of Stock-based Compensation Expense by Expense Category |
(1)Includes charges of $17.9 million, $21.5 million and $19.4 million during 2020, 2019 and 2018, respectively, for awards to retirement-eligible employees. Those awards vest on an accelerated basis. (2)These charges are the result of (i) the acceleration of the vesting of certain restricted stock units related to the CEB acquisition from 2017 and (ii) restricted stock units granted in connection with the CEB integration process.
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Schedule of Fair Value Assumptions of SARS | The fair value of a SARs award is determined on the date of grant using the Black-Scholes-Merton valuation model with the following weighted average assumptions for the years ended December 31:
(1)The expected dividend yield assumption was based on both the Company’s historical and anticipated dividend payouts. Historically, the Company has not paid cash dividends on its Common Stock. (2)The determination of expected stock price volatility was based on both historical Common Stock prices and implied volatility from publicly traded options in the Common Stock. (3)The risk-free interest rate was based on the yield of a U.S. Treasury security with a maturity similar to the expected life of the award. (4)The expected life represents the Company’s estimate of the weighted average period of time the SARs are expected to be outstanding (that is, the period between the service inception date and the expected exercise date).
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Stock appreciation rights | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of the Changes in SARS, RSUs, and CSEs Outstanding | The table below summarizes changes in SARs outstanding during the year ended December 31, 2020.
n/a = not applicable (1)As of December 31, 2020, 0.5 million of the total SARs outstanding were unvested. The Company expects that substantially all of those unvested awards will vest in future periods. (2)As of December 31, 2020, the total SARs outstanding had an intrinsic value of $38.4 million. On such date, SARs vested and exercisable had an intrinsic value of $25.0 million.
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Restricted stock units | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of the Changes in SARS, RSUs, and CSEs Outstanding | The table below summarizes the changes in RSUs outstanding during the year ended December 31, 2020.
(1)The 0.5 million of RSUs granted during 2020 consisted of 0.2 million of performance-based RSUs awarded to executives and 0.3 million of service-based RSUs awarded to non-executive employees and non-management board members. The performance-based awards include RSUs in final adjustments of 2019 grants and approximately 0.1 million of RSUs representing the target amount of the grant for 2020 that is tied to an increase in Gartner’s total contract value for such year. The number of performance-based RSUs for 2020 that holders could receive ranged from 0% to 200% of the target amount based on the extent to which the corresponding performance goals have been achieved and subject to certain other conditions. Any adjustments in the number of performance-based RSUs under the 2020 grant will be made in 2021. See Note 19 — Subsequent Events regarding a PSU discretionary award. (2)The Company expects that substantially all of the RSUs outstanding will vest in future periods. (3)As of December 31, 2020, the weighted average remaining contractual term of the RSUs outstanding was approximately 1.1 years.
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of the Changes in SARS, RSUs, and CSEs Outstanding | The table below summarizes the changes in CSEs outstanding during the year ended December 31, 2020.
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Computation of Earnings Per Share (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of the Basic and Diluted Earnings Per Share Computations | The table below sets forth the calculation of basic and diluted income per share for the years ended December 31 (in thousands, except per share data).
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The table below presents the number of common stock equivalents that were not included in the computations of diluted income per share in the above table because the effect would have been anti-dilutive. During years with net income, the common stock equivalents were anti-dilutive because their exercise prices were greater than the average market price of a share of Common Stock during such year.
(a) The number of anti-dilutive common stock equivalents for 2018 were minimal.
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income before Income Taxes | Below is a summary of the components of the Company’s income before income taxes for the years ended December 31 (in thousands).
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Schedule of Components of Income Tax | The components of the expense (benefit) for income taxes on the above income are summarized in the table below (in thousands).
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Schedule of Deferred Tax Assets and Liabilities | The components of long-term deferred tax assets (liabilities) are summarized in the table below (in thousands).
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Schedule of Effective Income Tax Rate Reconciliation | The items comprising the differences between the U.S. federal statutory income tax rate and the Company’s effective tax rate on income before income taxes for the years ended December 31 are summarized in the table below.
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Schedule of Reconciliation of Beginning and Ending Unrecognized Tax Benefits | The table below is a reconciliation of the beginning and ending amounts of gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31 (in thousands).
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Derivatives and Hedging (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions |
December 31, 2019
(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 6 — Debt provides additional information regarding the Company’s interest rate swap contracts. (2)The Company has foreign exchange transaction risk because it typically enters into transactions in the normal course of business that are denominated in foreign currencies that differ from the local functional currency. The Company enters into short-term foreign currency forward exchange contracts to mitigate the cash flow risk associated with changes in foreign currency rates on forecasted foreign currency transactions. These contracts are accounted for at fair value with realized and unrealized gains and losses recognized in Other (expense) income, net because the Company does not designate these contracts as hedges for accounting purposes. All of the outstanding foreign currency forward exchange contracts at December 31, 2020 matured before January 31, 2021. (3)See Note 14 — Fair Value Disclosures for the determination of the fair values of these instruments.
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The table below provides information regarding amounts recognized in the Consolidated Statements of Operations for derivative contracts for the years ended December 31 (in thousands).
(1)Consists of interest (income) expense from interest rate swap contracts. (2)Consists of net realized and unrealized gains and losses on foreign currency forward contracts, gains and losses on de-designated interest rate swaps and $10.3 million of expense during the year ended December 31, 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. Other expense, net also included a $2.2 million gain on de-designated interest rate swaps during the year ended December 31, 2020, related to fair value adjustments subsequent to de-designation. .
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Fair Value Disclosures (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured to Fair Value on Recurring Basis | The table below presents the fair value of certain financial assets and liabilities that are recorded at fair value and measured on a recurring basis in the Company's Consolidated Balance Sheets (in thousands).
(1)The Company has a deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees (see Note 15 — Employee Benefits). The assets consist of investments in money market funds, mutual funds and company-owned life insurance contracts. The money market funds consist of cash equivalents while the mutual fund investments consist of publicly-traded and quoted equity shares. The Company considers the fair values of these assets to be based on Level 1 inputs, and such assets had fair values of $2.6 million and $2.3 million as of December 31, 2020 and 2019, respectively. The carrying amounts of the life insurance contracts equal their cash surrender values. Cash surrender value represents the estimated amount that the Company would receive upon termination of a contract, which approximates fair value. The Company considers life insurance contracts to be valued based on Level 2 inputs, and such assets had fair values of $85.9 million and $73.4 million at December 31, 2020 and 2019, respectively. The related deferred compensation plan liabilities are recorded at fair value, or the estimated amount needed to settle the liability, which the Company considers to be a Level 2 input. (2)The Company enters into foreign currency forward exchange contracts to hedge the effects of adverse fluctuations in foreign currency exchange rates (see Note 13 — Derivatives and Hedging). Valuation of these contracts is based on observable foreign currency exchange rates in active markets, which the Company considers to be a Level 2 input. (3)The Company has interest rate swap contracts that hedge the risk of variability from interest payments on its borrowings (see Note 6 — Debt). The fair values of interest rate swaps are based on mark-to-market valuations prepared by a third-party broker. Those valuations are based on observable interest rates from recently executed market transactions and other observable market data, which the Company considers to be Level 2 inputs. The Company independently corroborates the reasonableness of the valuations prepared by the third-party broker by using an electronic quotation service.
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The table below presents the carrying amounts and fair values of financial instruments that are not recorded at fair value in the Company’s Consolidated Balance Sheets (in thousands). The estimated fair value of the financial instruments was derived from quoted market prices provided by an independent dealer, which the Company considers to be a Level 2 input.
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Employee Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Defined Benefit Pension Expense | The table below presents the components of the Company’s defined benefit pension plan expense for the years ended December 31 (in thousands). The components of pension expense, other than service cost, are recorded in Other (expense) income, net in the Consolidated Statements of Operations.
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Schedule of Assumptions Used in the Computation of Pension Expense | The table below presents the key assumptions used in the computation of pension expense for the years ended December 31.
(1)Discount rates are typically determined by using the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations.
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Schedule of Changes in the Projected Benefit Obligation | The table below provides information regarding changes in the projected benefit obligation of the Company’s defined benefit pension plans for the years ended December 31 (in thousands).
The table below presents the key assumptions used in determining the projected benefit obligations at December 31.
(1)The actuarial losses in 2020 and 2019 were primarily due to a reduction in our weighted average discount rate assumption. (2)The Company projects benefit payments will be made in future years directly to plan participants as follows: $1.8 million in 2021; $1.8 million in 2022; $2.3 million in 2023; $2.3 million in 2024; $2.5 million in 2025; and $15.1 million in total in the five years thereafter. (3)Measured as of December 31. (4)Discount rates are typically determined by using the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations.
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Schedule of Funded Status of the Plans and Related Amounts Recorded in Consolidated Balance Sheet | The tables below provide information regarding the funded status of the Company’s defined benefit pension plans and the related amounts recorded in the Consolidated Balance Sheets as of December 31 (in thousands).
(1)The pension plan assets are held by third-party trustees and are invested in a diversified portfolio of equities, high-quality government and corporate bonds, and other investments. The assets are primarily valued based on Level 1 and Level 2 inputs under the fair value hierarchy in FASB ASC Topic 820, with the majority of the invested assets considered to be of low-to-medium investment risk. The Company projects a future long-term rate of return on these plan assets of 1.19%, which it believes is reasonable based on the composition of the assets and both current and projected market conditions. Additional information regarding pension plan asset activity is provided below. (2)Funded status – shortfall represents the amount of the projected benefit obligation that the Company has not funded with a third-party trustee. These liabilities of the Company are recorded in Other liabilities on the Consolidated Balance Sheets. The level of future contributions by the Company will vary and is dependent on a number of factors including investment returns, interest rate fluctuations, plan demographics, funding regulations and the results of the final actuarial valuation. (3)The deferred actuarial loss as of December 31, 2020 is recorded in AOCI/L and will be reclassified out of AOCI/L and recognized as pension expense over approximately 14 years, subject to certain limitations set forth in FASB ASC Topic 715. The amortization of deferred actuarial losses from AOCI/L to pension expense in each of the years ended December 31, 2020, 2019 and 2018 was immaterial
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Schedule of Defined Benefit Pension Plans Assets | The table below provides a rollforward of the Company’s defined benefit pension plans assets for the years ended December 31 (in thousands).
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information by Segment | The tables below present information about the Company’s reportable segments for the years ended December 31 (in thousands).
(1) During 2018, the Company divested all of the non-core businesses that comprised its Other segment and moved a small residual product from the Other segment into the Research business and, as a result, no operating activity has been recorded in the Other segment in 2019 or 2020. Note 2 — Acquisitions and Divestitures provides additional information regarding the Company’s 2018 divestitures.
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Schedule of Reconciliation of Segment Gross Contribution to Net Income | The table below provides a reconciliation of total segment gross contribution to net income for the years ended December 31 (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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Schedule of Revenue from External Customers and Long-Lived Assets by Geographical Areas | Disaggregated revenue information by reportable segment for the three years ended December 31, 2020 is presented in Note 9 — Revenue and Related Matters. Long-lived asset information by geographic location as of December 31 is summarized in the table below (in thousands).
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Valuation and Qualifying Accounts (Tables) |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Valuation Allowance | The table below summarizes the activity in the Company’s allowance for losses for the years ended December 31 (in thousands).
(1) The allowance for losses at December 31, 2017 included $6.2 million that was attributable to the Company’s revenue reserve. As a result of the Company’s adoption of ASC 606 on January 1, 2018, the revenue reserve balance is now included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets. Note 9 — Revenue and Related Matters provides additional information regarding the Company’s adoption of ASC 606.
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Business and Significant Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 712,583 | $ 280,836 | $ 156,368 | $ 538,908 |
Restricted cash classified in: | ||||
Prepaid expenses and other current assets | 0 | 0 | 2,295 | 15,148 |
Other assets | 0 | 0 | 0 | 3,002 |
Cash classified as held-for-sale | 0 | 0 | 0 | 10,000 |
Cash and cash equivalents and restricted cash per the Consolidated Statements of Cash Flows | $ 712,583 | $ 280,836 | $ 158,663 | $ 567,058 |
Acquisitions and Divestitures - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
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Oct. 01, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Business Acquisition [Line Items] | ||||
Net cash paid for acquisition | $ 0 | $ 25,989 | $ 15,855 | |
Deferred consideration | 2,300 | 15,900 | ||
Acquisition and integration charges | $ 6,282 | $ 9,463 | 107,197 | |
Exit costs | $ 58,300 | |||
TOPO | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 100.00% | |||
Aggregate purchase price | $ 25,000 | |||
Net cash paid for acquisition | 23,700 | |||
Future compensation expense (up to) | $ 6,500 | |||
Period of recognition | 2 years |
Acquisitions and Divestitures - Summary of the Allocation of the Purchase Price to the Fair Value of the Assets and Liabilities Assumed, TOPO (Details) - USD ($) $ in Thousands |
Oct. 01, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Assets: | ||||
Goodwill | $ 2,945,547 | $ 2,937,726 | $ 2,923,136 | |
TOPO | ||||
Assets: | ||||
Cash | $ 1,281 | |||
Fees receivable | 1,402 | |||
Prepaid expenses and other assets | 166 | |||
Goodwill | 19,293 | |||
Finite-lived intangible assets | 5,250 | |||
Total assets acquired | 27,392 | |||
Total liabilities assumed (primarily deferred revenues) | 2,417 | |||
Net assets acquired | $ 24,975 | |||
TOPO | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Acquired finite-lived intangible assets useful life | 6 years | |||
TOPO | Content | ||||
Business Acquisition [Line Items] | ||||
Acquired finite-lived intangible assets useful life | 1 year 6 months |
Goodwill and Intangible Assets - Changes to the Carrying Amount of Goodwill by Segment (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2020 |
Dec. 31, 2019 |
|
Goodwill [Roll Forward] | ||
Beginning Balance | $ 2,937,726 | $ 2,923,136 |
Additions due to acquisition | 19,293 | |
Foreign currency translation impact and other | 7,821 | (4,703) |
Ending Balance | 2,945,547 | 2,937,726 |
Research | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 2,651,060 | 2,638,418 |
Additions due to acquisition | 17,557 | |
Foreign currency translation impact and other | 13,672 | (4,915) |
Ending Balance | 2,664,732 | 2,651,060 |
Conferences | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 189,641 | 187,654 |
Additions due to acquisition | 1,736 | |
Foreign currency translation impact and other | (5,550) | 251 |
Ending Balance | 184,091 | 189,641 |
Consulting | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 97,025 | 97,064 |
Additions due to acquisition | 0 | |
Foreign currency translation impact and other | (301) | (39) |
Ending Balance | $ 96,724 | $ 97,025 |
Goodwill and Intangible Assets - Estimated Future Amortization Expense By Year From Amortizable Intangibles (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangibles | $ 125,059 | $ 129,713 | $ 187,009 |
Finite-Lived Intangible Assets, Estimated Future Amortization Expense | |||
2021 | 105,940 | ||
2022 | 96,065 | ||
2023 | 96,050 | ||
2024 | 90,718 | ||
2025 | 82,049 | ||
2026 and thereafter | 336,176 | ||
Finite-lived intangible assets, net | $ 806,998 | $ 925,087 |
Other Assets - Composition of Other Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Benefit plan-related assets | $ 98,536 | $ 84,600 |
Non-current deferred tax assets | 103,559 | 79,618 |
Other | 54,221 | 58,027 |
Total other assets | $ 256,316 | $ 222,245 |
Accounts Payable and Accrued and Other Liabilities - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accounts payable | $ 38,588 | $ 32,995 |
Payroll and employee benefits payable | 189,557 | 165,449 |
Severance and retention bonus payable | 26,476 | 24,281 |
Bonus payable | 224,763 | 192,100 |
Commissions payable | 130,306 | 142,499 |
Income tax payable | 29,550 | 7,878 |
VAT payable | 58,496 | 31,438 |
Current portion of operating lease liabilities | 83,995 | 76,516 |
Current portion of interest rate swap contracts at fair value | 34,886 | 0 |
Other accrued liabilities | 135,814 | 115,640 |
Total accounts payable and accrued liabilities | $ 952,431 | $ 788,796 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent |
Accounts Payable and Accrued and Other Liabilities - Other Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Payables and Accruals [Abstract] | ||
Non-current deferred revenues | $ 26,754 | $ 24,409 |
Long-term taxes payable | 86,751 | 63,565 |
Benefit plan-related liabilities | 128,199 | 108,615 |
Non-current deferred tax liabilities | 173,233 | 189,814 |
Other, including long-term portion of fair value of interest rate swap contracts | 124,656 | 93,343 |
Total other liabilities | $ 539,593 | $ 479,746 |
Leases - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Leases [Abstract] | ||
Renewal term | 10 years | |
Option to terminate, term | 1 year | |
Operating lease expense | $ 93.5 |
Leases - Net Lease Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 140,829 | $ 144,727 |
Variable lease cost | 17,463 | 16,404 |
Sublease income | (38,925) | (38,901) |
Total lease cost, net | 119,367 | 122,230 |
Cash paid for amounts included in the measurement of operating lease liabilities | 137,790 | 135,799 |
Cash receipts from sublease arrangements | 38,565 | 34,441 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 27,258 | $ 136,997 |
Weighted average remaining lease term for operating leases (in years) | 9 years 7 months 6 days | 10 years 2 months 12 days |
Weighted average discount rate for operating leases | 6.60% | 6.70% |
Cost of subleasing activities | $ 42,200 | $ 43,200 |
Leases - Lease Maturity (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating Lease Payments | ||
2021 | $ 138,403 | |
2022 | 133,854 | |
2023 | 130,627 | |
2024 | 120,092 | |
2025 | 115,279 | |
Thereafter | 549,496 | |
Total future minimum operating lease payments | 1,187,751 | |
Imputed interest | (323,590) | |
Total operating lease liabilities per the Consolidated Balance Sheet | 864,161 | $ 909,049 |
Sublease Cash Receipts | ||
2021 | 44,446 | |
2022 | 47,965 | |
2023 | 48,909 | |
2024 | 40,629 | |
2025 | 40,989 | |
Thereafter | 102,510 | |
Total future estimated sublease cash receipts | $ 325,448 | |
UNITED STATES | ||
Lessee, Lease, Description [Line Items] | ||
Percentage of lease payments | 80.00% |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Accounts payable and accrued liabilities | $ 83,995 | $ 76,516 |
Operating lease liabilities | 780,166 | 832,533 |
Total operating lease liabilities per the Consolidated Balance Sheet | 864,161 | $ 909,049 |
Leases not yet commenced, undiscounted lease payments | $ 29,100 | |
Leases not yet commenced, term | 13 years | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent |
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Millions |
Dec. 31, 2020
USD ($)
vote
$ / shares
|
Dec. 31, 2019
$ / shares
|
Dec. 31, 2015
USD ($)
|
---|---|---|---|
Equity [Abstract] | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0005 | $ 0.0005 | |
Common stock, number of votes per share | vote | 1 | ||
Share repurchase program, authorized amount | $ 1,200.0 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 600.0 | ||
Losses expected to be reclassified in next twelve months | $ 29.1 |
Stockholders' Equity - Summary of Transactions Relating to Common Stock (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Common Stock Outstanding Roll Forward [Roll Forward] | |||
Payments for purchases of treasury stock | $ 176,302 | $ 199,042 | $ 260,832 |
Common Stock | |||
Common Stock Outstanding Roll Forward [Roll Forward] | |||
Beginning balance | 163,602,067 | 163,602,067 | 163,602,067 |
Issuances under stock plans | 0 | 0 | 0 |
Purchases for treasury | 0 | 0 | 0 |
Ending balance | 163,602,067 | 163,602,067 | 163,602,067 |
Treasury Stock | |||
Common Stock Outstanding Roll Forward [Roll Forward] | |||
Beginning balance | 74,444,288 | 73,899,977 | 72,779,205 |
Issuances under stock plans | (820,065) | (825,115) | (933,246) |
Purchases for treasury | 1,135,762 | 1,369,426 | 2,054,018 |
Ending balance | 74,759,985 | 74,444,288 | 73,899,977 |
Revenue and Related Matters - Narrative (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020
USD ($)
segment
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Disaggregation of Revenue [Line Items] | |||
Number of reportable segments | segment | 3 | ||
Revenue recognized previously attributable to deferred revenues | $ 1,494.0 | $ 1,436.9 | $ 1,287.8 |
Revenue reserve balance | 10.0 | 7.8 | |
Amortization of deferred sales commissions | $ 440.5 | $ 369.5 | $ 304.8 |
Research | Product Concentration Risk | Revenue from Contract with Customer Benchmark | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 92.00% | ||
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of subscription contracts billable upon signing for twelve months of service | 80.00% | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of subscription contracts billable upon signing for twelve months of service | 85.00% |
Revenue and Related Matters - Schedule of Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets: | ||
Fees receivable, gross | $ 1,251,508 | $ 1,334,012 |
Contract assets recorded in Prepaid expenses and other current assets | 14,440 | 21,350 |
Contract liabilities: | ||
Deferred revenues (current liability) | 1,974,548 | 1,928,020 |
Non-current deferred revenues recorded in Other liabilities | 26,754 | 24,409 |
Total contract liabilities | $ 2,001,302 | $ 1,952,429 |
Stock-Based Compensation - Stock-Based Compensation Expense By Award Type (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 62.6 | $ 69.0 | $ 66.2 |
Stock appreciation rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 7.8 | 6.7 | 6.3 |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 54.1 | 61.6 | 59.2 |
Common stock equivalents | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 0.7 | $ 0.7 | $ 0.7 |
Stock-Based Compensation - Weighted-Average Assumptions Used to Determine Fair Value of SARs Grants on Date of Grant Using Black-Scholes-Merton Valuation Model (Details) - Stock appreciation rights |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected stock price volatility | 23.00% | 21.00% | 21.00% |
Risk-free interest rate | 1.50% | 2.50% | 2.50% |
Expected life | 4 years 8 months 4 days | 4 years 7 months 2 days | 4 years 6 months 7 days |
Stock-Based Compensation - Summary of Changes in CSEs Outstanding (Details) - CSEs |
12 Months Ended |
---|---|
Dec. 31, 2020
$ / shares
shares
| |
Units of CSEs | |
Outstanding, Beginning Balance (in shares) | shares | 111,341 |
Granted (in shares) | shares | 5,781 |
Converted to shares of Common Stock upon grant (in shares) | shares | (3,582) |
Outstanding, Ending Balance (in shares) | shares | 113,540 |
Per Share Weighted Average Grant Date Fair Value | |
Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 26.99 |
Granted (in dollars per share) | $ / shares | 120.01 |
Converted to shares of Common Stock upon grant (in dollars per share) | $ / shares | 119.71 |
Outstanding, Ending Balance (in dollars per share) | $ / shares | $ 28.80 |
Computation of Earnings Per Share - Calculations Of Basic And Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Numerator: | |||
Net income used for calculating basic and diluted income per common share | $ 266,745 | $ 233,290 | $ 122,456 |
Denominator: | |||
Weighted average common shares used in the calculation of basic income per share (in shares) | 89,315 | 89,817 | 90,827 |
Common stock equivalents associated with stock-based compensation plans (in shares) | 702 | 1,154 | 1,295 |
Shares used in the calculation of diluted income per share (in shares) | 90,017 | 90,971 | 92,122 |
Income per share: | |||
Basic (in dollars per share) | $ 2.99 | $ 2.60 | $ 1.35 |
Diluted (in dollars per share) | 2.96 | 2.56 | $ 1.33 |
Sale of intellectual property, income tax benefit (in dollars per share) | $ 0.31 | $ 420,000 |
Computation of Earnings Per Share - Common Share Equivalents Not Included in the Computation of Diluted EPS (Details) - $ / shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Earnings Per Share [Abstract] | |||
Anti-dilutive common stock equivalents (in shares) | 0.5 | 0.2 | 0.0 |
Average market price per share of Common Stock during the year (in dollars per share) | $ 130.95 | $ 148.38 | $ 135.60 |
Income Taxes - Summary of Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||
U.S. | $ 111,880 | $ 115,543 | $ 34,159 |
Non-U.S. | 214,253 | 160,196 | 146,962 |
Income before income taxes | $ 326,133 | $ 275,739 | $ 181,121 |
Income Taxes - Current and Long-Term Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Accrued liabilities | $ 81,302 | $ 67,577 |
Operating leases | 51,450 | 54,860 |
Loss and credit carryforwards | 23,852 | 14,372 |
Assets relating to equity compensation | 14,981 | 16,842 |
Other assets | 16,290 | 20,364 |
Gross deferred tax assets | 187,875 | 174,015 |
Property, equipment and leasehold improvements | (9,852) | (15,137) |
Intangible assets | (172,723) | (212,498) |
Prepaid expenses | (46,105) | (49,221) |
Other liabilities | (13,152) | (5,799) |
Gross deferred tax liabilities | (241,832) | (282,655) |
Valuation allowance | (15,717) | (1,556) |
Net deferred tax liabilities | $ (69,674) | $ (110,196) |
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits, Excluding Interest and Penalties (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 102,770 | $ 90,349 |
Additions based on tax positions related to the current year | 20,177 | 32,072 |
Additions for tax positions of prior years | 14,085 | 8,564 |
Reductions for tax positions of prior years | (2,301) | (16,942) |
Reductions for expiration of statutes | (8,191) | (7,481) |
Settlements | (390) | (3,867) |
Increase in foreign currency exchange rates | 930 | 75 |
Ending balance | $ 127,080 | $ 102,770 |
Fair Value Disclosures - Assets And Liabilities Measured At Fair Value On Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets: | ||
Total Assets | $ 89,406 | $ 77,254 |
Liabilities: | ||
Total Liabilities | 206,112 | 145,886 |
Level 1 | ||
Assets: | ||
Total Assets | 2,589 | 2,277 |
Level 1 | Deferred compensation plan assets | ||
Assets: | ||
Total Assets | 2,589 | 2,277 |
Level 2 | ||
Assets: | ||
Total Assets | 86,817 | 74,977 |
Liabilities: | ||
Total Liabilities | 206,112 | 145,886 |
Level 2 | Foreign currency forward contracts | ||
Assets: | ||
Total Assets | 885 | 1,558 |
Liabilities: | ||
Total Liabilities | 2,399 | 1,499 |
Level 2 | Interest rate swap contracts | ||
Liabilities: | ||
Total Liabilities | 109,175 | 64,831 |
Level 2 | Deferred compensation plan assets | ||
Assets: | ||
Total Assets | 85,932 | 73,419 |
Level 2 | Deferred compensation plan liabilities | ||
Liabilities: | ||
Total Liabilities | $ 94,538 | $ 79,556 |
Fair Value Disclosures - Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Money market funds at carrying value | $ 2.6 | $ 2.3 |
Cash surrender value of life insurance | $ 85.9 | $ 73.4 |
Employee Benefits - Additional Information (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent | 4.00% | ||
Maximum annual contribution per employee, amount | $ 7,200 | ||
Defined contribution plan cost recognized | 43,900,000 | $ 44,100,000 | $ 36,700,000 |
Compensation expense related to deferred compensation plan | 1,900,000 | 600,000 | $ 1,700,000 |
Other assets | 10,000,000.0 | 8,900,000 | |
Other assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Deferred compensation plan assets | 88,500,000 | 75,700,000 | |
Other liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Deferred compensation liability | $ 94,500,000 | $ 79,600,000 |
Employee Benefits - Components of Net Periodic Pension Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | $ 4,421 | $ 3,659 | $ 3,145 |
Interest cost | 718 | 851 | 840 |
Expected return on plan assets | (493) | (517) | (475) |
Recognition of actuarial loss | 474 | 237 | 340 |
Total defined benefit pension expense | $ 5,120 | $ 4,230 | $ 3,850 |
Employee Benefits - Assumptions Used in Computation of Net Periodic Pension Expense (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||
Weighted-average discount rate | 1.28% | 1.81% | 1.78% |
Expected return on plan assets | 2.04% | 2.54% | 2.45% |
Average compensation increase | 2.58% | 2.58% | 2.66% |
Cash balance interest credit rate | 1.20% | 1.90% | 1.90% |
Employee Benefits - Benefit Plans and Related Amounts Recorded in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||||
Projected benefit obligation | $ 62,297 | $ 52,503 | $ 44,890 | $ 45,450 |
Pension plan assets at fair value | (28,636) | (23,444) | (19,460) | $ (18,475) |
Funded status – shortfall | 33,661 | 29,059 | 25,430 | |
Accumulated benefit obligation | 58,963 | 49,485 | 42,611 | |
Amounts recorded in the Consolidated Balance Sheets for the plans | ||||
Other liabilities — accrued pension obligation | 33,661 | 29,059 | 25,430 | |
Stockholders’ equity — deferred actuarial loss | $ (9,309) | $ (8,584) | $ (5,738) | |
Future long-term rate of return on plan assets | 1.19% | |||
Weighted average amortization period | 14 years |
Employee Benefits - Rollforward of Defined Benefit Pension Plans Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Pension plan assets at the beginning of the year | $ 23,444 | $ 19,460 | $ 18,475 |
Company contributions | 3,924 | 4,405 | 4,478 |
Benefit payments | (1,438) | (830) | (1,400) |
Actual return on plan assets | 684 | 714 | (164) |
Contractual termination benefits | 0 | 0 | (950) |
Foreign currency impact | 2,022 | (305) | (979) |
Pension plan assets at the end of the year | $ 28,636 | $ 23,444 | $ 19,460 |
Segment Information - Additional Information (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Summarized Information by Geographic Location (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Long-lived assets: | ||
Long-lived assets | $ 1,240,364 | $ 1,269,740 |
United States and Canada | ||
Long-lived assets: | ||
Long-lived assets | 820,973 | 867,974 |
Europe, Middle East and Africa | ||
Long-lived assets: | ||
Long-lived assets | 265,782 | 242,729 |
Other International | ||
Long-lived assets: | ||
Long-lived assets | $ 153,609 | $ 159,037 |
Valuation and Qualifying Accounts - Summarized Activity in Allowances (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Year | $ 8,000 | $ 7,700 | $ 12,700 | |
Additions Charged to Expense | 16,000 | 14,000 | 12,500 | |
Deductions from the Reserve | (14,000) | (13,700) | (11,300) | |
Reclassification to Accounts Payable and Accrued Liabilities | 0 | 0 | (6,200) | $ 6,200 |
Balance at End of Year | $ 10,000 | $ 8,000 | $ 7,700 | $ 12,700 |
Subsequent Events (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 03, 2021 |
Dec. 31, 2020 |
Feb. 04, 2021 |
Jan. 31, 2021 |
Dec. 31, 2015 |
|
Subsequent Event [Line Items] | |||||
Share repurchase program, authorized amount | $ 1,200 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 600 | ||||
Restricted stock units | Performance Shares | |||||
Subsequent Event [Line Items] | |||||
Performance share, actual yielded performance, percent | 50.00% | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Stock repurchase program, additional authorized amount | $ 300 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 568 | ||||
Subsequent Event | Restricted stock units | Performance Shares | |||||
Subsequent Event [Line Items] | |||||
Performance share, actual yielded performance, percent | 95.00% |
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