0001193125-12-447804.txt : 20121102 0001193125-12-447804.hdr.sgml : 20121102 20121102070247 ACCESSION NUMBER: 0001193125-12-447804 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20121102 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20121102 DATE AS OF CHANGE: 20121102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GARTNER INC CENTRAL INDEX KEY: 0000749251 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 043099750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14443 FILM NUMBER: 121175052 BUSINESS ADDRESS: STREET 1: 56 TOP GALLANT RD STREET 2: P O BOX 10212 CITY: STAMFORD STATE: CT ZIP: 06904-2212 BUSINESS PHONE: 2039640096 MAIL ADDRESS: STREET 1: 56 TOP GALLANT RD STREET 2: P O BOX 10212 CITY: STAMFORD STATE: CT ZIP: 06904-2212 FORMER COMPANY: FORMER CONFORMED NAME: GARTNER GROUP INC DATE OF NAME CHANGE: 19930823 8-K 1 d431734d8k.htm FORM 8-K Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

November 2, 2012

 

 

GARTNER, INC.

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE   1-14443   04-3099750

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

P.O. Box 10212

56 Top Gallant Road

Stamford, CT 06902-7747

(Address of Principal Executive Offices, including Zip Code)

(203) 316-1111

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On November 2, 2012, Gartner, Inc. (the “Company”) announced financial results for the three and nine months ended September 30, 2012. A copy of the Company’s press release is furnished as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and in Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

 

EXHIBIT
NO.

  

DESCRIPTION

99.1    Press Release issued November 2, 2012 with respect to financial results for Gartner, Inc. for the three and nine months ended September 30, 2012.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Gartner, Inc.
Date: November 2, 2012   By:  

/s/ Christopher J. Lafond

   

Christopher J. Lafond

Executive Vice President,

Chief Financial Officer


EXHIBIT INDEX

 

EXHIBIT
NO.

  

DESCRIPTION

99.1    Press Release issued November 2, 2012 with respect to financial results for Gartner, Inc. for the three and nine months ended September 30, 2012.
EX-99.1 2 d431734dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

LOGO   Press Release

CONTACT:

Brian Shipman

Group Vice President, Investor Relations

+1 203 316 3659

brian.shipman@gartner.com

Gartner Reports Financial Results for Third Quarter 2012

Contract Value Increased 14% YoY FX Neutral to $1,175 Million

Revenue Increased 8% (12% FX Neutral) YoY to $374.4 Million

STAMFORD, Conn., November 2, 2012 — Gartner, Inc. (NYSE: IT), the leading provider of research and analysis on the global information technology industry, today reported results for third quarter 2012 and updated its projection for full year 2012 revenues and reiterated its outlook for Normalized EBITDA, EPS, and cash flows.

Total revenue was $374.4 million for third quarter 2012, up 8% compared to third quarter 2011. Total revenue increased 12% excluding the impact of foreign exchange. Third quarter 2012 net income was $31.4 million, an increase of 3% over third quarter 2011. Normalized EBITDA was $68.0 million in third quarter 2012, an increase of 9% over third quarter 2011. Diluted income per share was $0.33 in third quarter 2012 compared to $0.31 in third quarter 2011. Diluted Income Per Share Excluding Acquisition Adjustments, which excludes the impact of acquisition-related adjustments, was $0.35 per share for third quarter 2012 and $0.31 per share for third quarter 2011. See “Non-GAAP Financial Measures” below for a discussion of Normalized EBITDA and Diluted Income Per Share Excluding Acquisition Adjustments.

For the nine months ended September 30, 2012, total revenue was $1,141.1 million, an increase of 10% over the 2011 period. Excluding the impact of foreign exchange, revenues increased 12%. Net income was $107.1 million in the nine months ended September 30, 2012, an increase of 17% over the same period in 2011. Normalized EBITDA was $218.2 million in the 2012 period, an increase of 12% over 2011. Diluted income per share was $1.12 in 2012 compared to $0.92 in 2011, an increase of 22%. Diluted Income Per Share Excluding Acquisition Adjustments was $1.16 in 2012 and $0.96 in 2011.

Gene Hall, Gartner’s chief executive officer, commented, “We continued our trend of delivering consistent, double-digit growth in the third quarter. Revenue, contract value, Normalized EBITDA and EPS were again consistent with our long-term expectations. The increases in our revenue and contract value, in addition to maintaining key operating metrics such as client retention at or near all-time highs, illustrate both the strong value we provide our clients and the sizeable market opportunity for our services. As we look ahead to the final quarter of 2012, we remain excited about the opportunity we see in the market and expect to deliver another year of double-digit growth as measured by our key business metrics.”

Business Segment Highlights

Research

Third quarter 2012 revenue was $284.0 million, up 11% compared to third quarter 2011. Excluding the impact of foreign exchange, Research revenue increased 14%. The gross contribution

 

-more-


margin was 68% for both quarters. Contract value was up 14% on an FX neutral basis at September 30, 2012 compared to September 30, 2011, and 13% as reported. Client and wallet retention rates for third quarter 2012 were 83% and 99%, respectively, compared to 82% and 100% in the third quarter 2011.

Consulting

Revenue for third quarter 2012 was $71.7 million, an increase of 1% compared to third quarter 2011. Adjusted for the impact of foreign exchange, revenue increased 4%. Gross contribution margin for third quarter 2012 was 34%. Third quarter 2012 utilization was 64%. Billable headcount was 499 as of September 30, 2012, and backlog was $106.1 million.

Events

Revenue for third quarter 2012 was $18.6 million, a decrease of 2% compared to third quarter 2011, due to changes in the events calendar and foreign exchange impact. Excluding the foreign exchange impact, Events segment revenues increased 2%. Results in this segment were adversely affected by the move of two large events that had been held in the third quarter of 2011, and will be held this year in the fourth quarter 2012. On a same-events and FX neutral basis, revenues increased 17% when comparing the 12 events held in the third quarter 2012 with their performance in 2011. Gross contribution margin was 24% in third quarter 2012. The Company held a total of 14 events with 5,566 attendees in the third quarter 2012, compared to 16 events and 6,676 attendees in third quarter 2011.

Cash Flow and Balance Sheet Highlights

The Company generated almost $209 million of operating cash flow in the nine months ended September 30, 2012, an increase of 18% over the same period in 2011 and the highest nine months’ operating cash flow in the Company’s history. Additions to property, equipment and leasehold improvements (“Capital Expenditures”) totaled $30.8 million in the nine months ended September 30, 2012, which included $11.5 million of Stamford headquarters renovation expenditures that are reimbursable by the facility landlord.

At September 30, 2012, the Company had over $255 million of cash and $354 million of borrowing capacity on its revolving credit facility. Through September 30, 2012, the Company used approximately $89 million of cash to repurchase shares and $10 million of cash on a net basis to complete the Ideas International Limited acquisition.

Financial Outlook for 2012

The Company has adjusted its revenue guidance as per the table below. Projected diluted earnings per share, Normalized EBITDA, and cash flow guidance remain unchanged. As revised, the Company’s full year 2012 guidance is as follows:

Projected Revenue

 

($ in millions)

   2012 Projected      % Change

Research

   $ 1,130 – 1,140       12% – 13%

Consulting

     310 –320       1% – 4%

Events

     167 – 177       12% – 19%
  

 

 

    

 

Total Revenue

   $ 1,607 – 1,637       9% – 11%

 

Gartner, Inc.    page 2


Projected Earnings and Cash Flow

 

($ in millions, except per share data)

   2012 Projected    % Change

Diluted Earnings Per Share

   $1.63 – $1.79    17% – 29%

Normalized EBITDA (1)

   $315 – $335    13% – 20%

Operating Cash Flow (2)

   $285 – 305    12% – 19%

Capital Expenditures (2)

   (46) – (48)   
  

 

  

Free Cash Flow (1)

   $239 – 257    12% – 20%

 

(1) See “Non-GAAP Financial Measures” below for a discussion of Normalized EBITDA and Free Cash Flow.
(2) Capital expenditures include approximately $16.0 million of total projected payments expected in 2012 related to the renovation of our Stamford headquarters facility, which are contractually reimbursable from the landlord. The accounting impact of these renovation payments increases both cash flow from operations and capital expenditures (investing activities) by the same amount and as a result has no net impact on Free Cash Flow.

Conference Call Information

Gartner has scheduled a conference call at 8:30 a.m. eastern time on Friday, November 2, 2012 to discuss the Company’s financial results. The conference call will be available via the Internet by accessing the Company’s website at http://investor.gartner.com or by dial-in. The U.S. dial-in number is 888-713-4205 and the international dial-in number is 617-213-4862 and the participant passcode is 87196156. The question and answer session of the conference call will be open to investors and analysts only. A replay of the webcast will be available for approximately 90 days following the call.

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is a valuable partner to clients in over 12,600 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has approximately 5,400 associates, including almost 1,400 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.

Non-GAAP Financial Measures

Normalized EBITDA: Represents operating income excluding depreciation, accretion on obligations related to excess facilities, amortization, stock-based compensation expense, and acquisition related adjustments. We believe Normalized EBITDA is an important measure of our recurring operations as it excludes items that may not be indicative of our core operating results. Investors are cautioned that Normalized EBITDA is not a financial measure defined under generally accepted accounting principles and as a result is considered a non-GAAP financial measure. We provide this measure to enhance the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future. It should not be construed as an alternative to any other measure of performance determined in accordance with generally accepted accounting principles.

Diluted Income Per Share Excluding Acquisition Adjustments: Represents diluted income per share excluding certain adjustments directly related to acquisitions, which consists of amortization of identifiable intangibles, non-recurring acquisition and integration charges such as legal, consulting, severance and

 

Gartner, Inc.    page 3


other costs, and non-cash fair value adjustments on pre-acquisition deferred revenues. We believe Diluted Income Per Share Excluding Acquisition Adjustments is an important measure of our recurring operations as it excludes items that may not be indicative of our core operating results.

Free Cash Flow: Represents cash provided by operating activities plus cash acquisition and integration payments less additions to property, equipment and leasehold improvements (“Capital Expenditures”). We believe that Free Cash Flow is an important measure of the recurring cash generated by the Company’s core operations that is available to be used to repurchase stock, repay debt obligations and invest in future growth through new business development activities or acquisitions.

Safe Harbor Statement

Statements contained in this press release regarding the Company’s growth and prospects, projected 2012 financial results and all other statements in this release other than recitation of historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. Such factors include, but are not limited to, the following: our ability to maintain and expand our products and services; our ability to expand or retain our customer base; our ability to grow or sustain revenue from individual customers; our ability to attract and retain a professional staff of research analysts and consultants as well as experienced sales personnel upon whom we are dependent; our ability to achieve and effectively manage growth, including our ability to integrate acquisitions and consummate future acquisitions; our ability to pay our debt; our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; our ability to carry out our strategic initiatives and manage associated costs; our ability to successfully compete with existing competitors and potential new competitors; our ability to enforce or protect our intellectual property rights; additional risks associated with international operations including foreign currency fluctuations; the impact of restructuring and other charges on our businesses and operations; general economic conditions; risks associated with the creditworthiness and budget cuts of governments and agencies; and other factors described under “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2011 which can be found on Gartner’s website at www.investor.gartner.com and the SEC’s website at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and Gartner disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

# # #

 

Gartner, Inc.    page 4


GARTNER, INC.

Condensed Consolidated Statements of Operations

(Unaudited; in thousands, except per share amounts)

 

     Three Months Ended
September 30,
          Nine Months Ended
September 30,
       
     2012     2011           2012     2011        

Revenues:

            

Research

   $ 284,048      $ 255,979        11   $ 836,970      $ 749,429        12

Consulting

     71,731        70,815        1     222,970        219,407        2

Events

     18,627        18,990        -2     81,119        72,058        13
  

 

 

   

 

 

     

 

 

   

 

 

   

Total revenues

     374,406        345,784        8     1,141,059        1,040,894        10

Costs and expenses:

            

Cost of services and product development

     151,143        142,696        6     458,853        428,473        7

Selling, general and administrative

     164,888        148,461        11     492,627        442,891        11

Depreciation

     6,301        6,638        -5     18,378        19,143        -4

Amortization of intangibles

     1,362        739        84     3,029        5,788        -48

Acquisition and integration charges

     944        —          100     2,126        —          100
  

 

 

   

 

 

     

 

 

   

 

 

   

Total costs and expenses

     324,638        298,534        9     975,013        896,295        9
  

 

 

   

 

 

     

 

 

   

 

 

   

Operating income

     49,768        47,250        5     166,046        144,599        15

Interest expense, net

     (2,209     (2,282     -3     (6,557     (7,863     -17

Other expense, net

     (748     (541     38     (1,802     (1,494     21
  

 

 

   

 

 

     

 

 

   

 

 

   

Income before income taxes

     46,811        44,427        5     157,687        135,242        17

Provision for income taxes

     15,436        13,963        11     50,607        43,364        17
  

 

 

   

 

 

     

 

 

   

 

 

   

Net income

   $ 31,375      $ 30,464        3   $ 107,080      $ 91,878        17
  

 

 

   

 

 

     

 

 

   

 

 

   

Income per common share:

            

Basic

   $ 0.34      $ 0.32        6   $ 1.15      $ 0.95        21

Diluted

   $ 0.33      $ 0.31        6   $ 1.12      $ 0.92        22

Weighted average shares outstanding:

            

Basic

     93,522        96,057        -3     93,429        96,462        -3

Diluted

     95,611        98,259        -3     95,791        99,467        -4


BUSINESS SEGMENT DATA

(Unaudited; in thousands)

 

     Revenue      Direct
Expense
     Gross
Contribution
     Contribution
Margin
 

Three Months Ended 9/30/12

           

Research

   $ 284,048       $ 90,508       $ 193,540         68

Consulting

     71,731         47,351         24,380         34

Events

     18,627         14,116         4,511         24
  

 

 

    

 

 

    

 

 

    

TOTAL

   $ 374,406       $ 151,975       $ 222,431         59
  

 

 

    

 

 

    

 

 

    

Three Months Ended 9/30/11

           

Research

   $ 255,979       $ 82,364       $ 173,615         68

Consulting

     70,815         46,357         24,458         35

Events

     18,990         13,437         5,553         29
  

 

 

    

 

 

    

 

 

    

TOTAL

   $ 345,784       $ 142,158       $ 203,626         59
  

 

 

    

 

 

    

 

 

    

Nine Months Ended 9/30/12

           

Research

   $ 836,970       $ 265,423       $ 571,547         68

Consulting

     222,970         143,084         79,886         36

Events

     81,119         48,252         32,867         41
  

 

 

    

 

 

    

 

 

    

TOTAL

   $ 1,141,059       $ 456,759       $ 684,300         60
  

 

 

    

 

 

    

 

 

    

Nine Months Ended 9/30/11

           

Research

   $ 749,429       $ 243,009       $ 506,420         68

Consulting

     219,407         140,587         78,820         36

Events

     72,058         43,525         28,533         40
  

 

 

    

 

 

    

 

 

    

TOTAL

   $ 1,040,894       $ 427,121       $ 613,773         59
  

 

 

    

 

 

    

 

 

    


SELECTED STATISTICAL DATA

 

     September 30,
2012
    September 30,
2011
 

Research contract value

   $ 1,174,700 (a)    $ 1,035,926 (a) 

Research client retention

     83     82

Research wallet retention

     99     100

Research client organizations

     12,612        11,770   

Consulting backlog

   $ 106,100 (a)    $ 92,887 (a) 

Consulting—quarterly utilization

     64     61

Consulting billable headcount

     499        482   

Consulting—average annualized revenue per billable headcount

   $ 415 (a)    $ 404 (a) 

Events—number of events for the quarter

     14        16   

Events—attendees for the quarter

     5,566        6,676   

 

(a) Dollars in thousands.


SUPPLEMENTAL INFORMATION (in thousands, except per share amounts)

Reconciliation - Operating income to Normalized EBITDA (a):

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2012      2011      2012      2011  

Net income

   $ 31,375       $ 30,464       $ 107,080       $ 91,878   

Interest expense, net

     2,209         2,282         6,557         7,863   

Other expense, net

     748         541         1,802         1,494   

Tax provision

     15,436         13,963         50,607         43,364   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

   $ 49,768       $ 47,250       $ 166,046       $ 144,599   

Normalizing adjustments:

           

Stock-based compensation expense (b)

     9,219         7,757         28,021         24,750   

Depreciation, accretion, and amortization (c)

     7,712         7,442         21,569         25,287   

Acquisition and integration adjustments (d)

     1,320         —           2,583         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Normalized EBITDA

   $ 68,019       $ 62,449       $ 218,219       $ 194,636   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) Normalized EBITDA is based on GAAP operating income adjusted for certain normalizing adjustments.
(b) Consists of charges for stock-based compensation awards.
(c) Includes depreciation expense, accretion on excess facilities accruals, and amortization of intangibles.
(d) Includes charges and adjustments related to the acquisition of Ideas International. The charges consist of directly-related expenses for legal, consulting, and severance. Also included are non-cash fair value adjustments on pre-acquisition deferred revenues, which are being amortized ratably over the remaining life of the underlying contracts.

 

 

Reconciliation - Diluted income per share to Diluted income per share excluding acquisition adjustments (a):

 

     Three Months Ended September 30,  
     2012      2011  
     After-tax
Amount
     EPS      After-tax
Amount
     EPS  

Diluted income per share

   $ 31,375       $ 0.33       $ 30,464       $ 0.31   

Acquisition adjustments, net of tax effect (b):

           

Amortization of intangibles (c)

     874         0.01         457         —     

Acquisition and integration adjustments (d)

     904         0.01         —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted income per share excluding acquisition adjustments (e)

   $ 33,153       $ 0.35       $ 30,921       $ 0.31   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Nine Months Ended September 30,  
     2012      2011  
     After-tax
Amount
     EPS      After-tax
Amount
     EPS  

Diluted income per share

   $ 107,080       $ 1.12       $ 91,878       $ 0.92   

Acquisition adjustments, net of tax effect (b):

           

Amortization of intangibles (c)

     1,898         0.02         3,576         0.04   

Acquisition and integration adjustments (d)

     1,769         0.02         —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted income per share excluding acquisition adjustments (f)

   $ 110,747       $ 1.16       $ 95,454       $ 0.96   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) Diluted income per share excluding acquisition adjustments is based on GAAP diluted income per share adjusted for the per share impact of acquisition adjustments, net of tax effect.
(b) The effective tax rates were 33.7% and 34.7% for the three and nine months ended September 30, 2012, respectively, and 39.5% for both the three and nine months ended September 30, 2011.
(c) Consists of non-cash amortization charges related to acquired intangibles.
(d) Includes charges and adjustments related to the acquisition of Ideas International. The charges consist of directly-related expenses for legal, consulting, and severance. Also included are non-cash fair value adjsutments on pre-acquisition deferred revenues, which are being amortized ratably over the remaining life of the underlying contracts.
(e) Based on fully diluted shares of 95.6 million in 2012 and 98.3 million in 2011.
(f) Based on fully diluted shares of 95.8 million in 2012 and 99.5 million in 2011.


GARTNER, INC.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)

 

     September 30,
2012
     December 31,
2011
 

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 255,391       $ 142,739   

Fees receivable, net

     370,951         421,033   

Deferred commissions

     65,870         78,492   

Prepaid expenses and other current assets

     89,766         63,521   
  

 

 

    

 

 

 

Total current assets

     781,978         705,785   

Property, equipment and leasehold improvements, net

     80,344         68,132   

Goodwill

     519,200         508,550   

Intangible assets, net

     13,142         7,060   

Other assets

     84,484         90,345   
  

 

 

    

 

 

 

Total Assets

   $ 1,479,148       $ 1,379,872   
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable and accrued liabilities

   $ 206,290       $ 259,490   

Deferred revenues

     682,603         611,647   

Current portion of long term debt

     80,000         50,000   
  

 

 

    

 

 

 

Total current liabilities

     968,893         921,137   

Long term debt

     120,000         150,000   

Other liabilities

     128,790         126,951   
  

 

 

    

 

 

 

Total Liabilities

     1,217,683         1,198,088   

Total Stockholders’ Equity

     261,465         181,784   
  

 

 

    

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 1,479,148       $ 1,379,872   
  

 

 

    

 

 

 


GARTNER, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

     Nine Months Ended
September 30,
 
     2012     2011  

Operating activities:

    

Net income

   $ 107,080      $ 91,878   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization of intangibles

     21,407        24,931   

Stock-based compensation expense

     28,021        24,750   

Excess tax benefits from stock-based compensation

     (20,366     (22,458

Deferred taxes

     (3,268     3,812   

Amortization and writeoff of debt issuance costs

     1,512        1,733   

Changes in assets and liabilities

    

Fees receivable, net

     54,157        16,023   

Deferred commissions

     13,202        11,354   

Prepaid expenses and other current assets

     (18,803     (6,241

Other assets

     2,429        2,051   

Deferred revenues

     60,681        74,021   

Accounts payable, accrued, and other liabilities

     (37,301     (45,389
  

 

 

   

 

 

 

Cash provided (used) by operating activities

     208,751        176,465   
  

 

 

   

 

 

 

Investing activities:

    

Additions to property, equipment and leasehold improvements

     (30,800     (23,720

Acquisition (net of cash acquired)

     (10,336     —     
  

 

 

   

 

 

 

Cash used by investing activities

     (41,136     (23,720
  

 

 

   

 

 

 

Financing activities:

    

Proceeds from stock issued under stock plans

     10,560        17,771   

Proceeds from debt issuance

     22,500        5,000   

Payments on debt

     (22,500     (15,156

Purchases of treasury stock

     (89,300     (141,214

Excess tax benefits from stock compensation

     20,366        22,458   
  

 

 

   

 

 

 

Cash (used) provided by financing activities

     (58,374     (111,141
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     109,241        41,604   

Effects of exchange rates on cash and cash equivalents

     3,411        (4,882

Cash and cash equivalents, beginning of period

     142,739        120,181   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 255,391      $ 156,903   
  

 

 

   

 

 

 
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