What changed in this filing

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Item 1. Financial Statements

2022-08-02 compared with 2022-05-03 · 206 added, 120 removed, 573 unchanged (36% of the section changed)

4 unchanged sentences

in thousands, except share data)

March 31, December 31,

June 30, December 31,

Current assets:

11 unchanged sentences

Total Assets $ 6,590,594 $ 7,416,324

Liabilities and Stockholders’ Equity

Liabilities and Stockholders’ (Deficit) Equity

Current liabilities:

7 unchanged sentences

Total Liabilities 6,733,461 7,045,266

Stockholders’ Equity

Stockholders’ (Deficit) Equity

Preferred stock, $ 0.01 par value, 5,000,000 shares authorized;

7 unchanged sentences

( 5,601,584 ) ( 4,671,516 )

Total Stockholders’ Equity 118,153 371,058

Total Liabilities and Stockholders’ Equity $ 6,985,453 $ 7,416,324

Total Stockholders’ (Deficit) Equity ( 142,867 ) 371,058

Total Liabilities and Stockholders’ (Deficit) Equity $ 6,590,594 $ 7,416,324

See the accompanying notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

in thousands, except per share data)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Research $ 1,142,329 $ 1,003,238 $ 2,278,709 $ 1,982,970

11 unchanged sentences

Interest expense, net ( 29,719 ) ( 27,390 ) ( 61,113 ) ( 53,539 )

Other income, net 29,206 15,490

Gain on event cancellation insurance claims — 135,545 — 135,545

Other income (expense), net 8,548 ( 3,682 ) 37,754 11,808

Income before income taxes 275,951 379,187 491,010 593,940

12 unchanged sentences

in thousands)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Net income $ 204,925 $ 271,236 $ 377,440 $ 435,336

8 unchanged sentences

AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) Equity

in thousands)

Three Months Ended March 31, 2022

Three and Six Months Ended June 30, 2022

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss, Net Accumulated Earnings Treasury Stock Total

6 unchanged sentences

Balance at March 31, 2022 $ 82 $ 2,107,596 $ ( 82,811 ) $ 3,221,542 $ ( 5,128,256 ) $ 118,153

Three Months Ended March 31, 2021

Net income — — — 204,925 — 204,925

Other comprehensive loss — — ( 21,705 ) — — ( 21,705 )

Issuances under stock plans — 4,634 — — 427 5,061

Common share repurchases — — — — ( 473,755 ) ( 473,755 )

Stock-based compensation expense — 24,454 — — — 24,454

Balance at June 30, 2022 $ 82 $ 2,136,684 $ ( 104,516 ) $ 3,426,467 $ ( 5,601,584 ) $ ( 142,867 )

Three and Six Months Ended June 30, 2021

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss, Net Accumulated Earnings Treasury Stock Total

1 unchanged sentence

Net income — — — 164,100 — 164,100

Other comprehensive loss — — 6,050 — — 6,050

Other comprehensive income — — 6,050 — — 6,050

Issuances under stock plans — ( 1,543 ) — — 6,923 5,380

2 unchanged sentences

Balance at March 31, 2021 $ 82 $ 2,003,473 $ ( 93,178 ) $ 2,419,567 $ ( 3,438,350 ) $ 891,594

Net income — — — 271,236 — 271,236

Other comprehensive income — — 10,200 — — 10,200

Issuances under stock plans — 2,063 — — 2,017 4,080

Common share repurchases — — — — ( 675,662 ) ( 675,662 )

Stock-based compensation expense — 26,190 — — — 26,190

Balance at June 30, 2021 $ 82 $ 2,031,726 $ ( 82,978 ) $ 2,690,803 $ ( 4,111,995 ) $ 527,638

See the accompanying notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

in thousands)

Three Months Ended

Six Months Ended

Operating activities:

4 unchanged sentences

Deferred taxes 3,256 2,294

Loss on impairment of lease related assets, net 23,878 —

Loss on impairment of lease related assets 35,501 —

Reduction in the carrying amount of operating lease right-of-use assets 35,366 37,261

11 unchanged sentences

Additions to property, equipment and leasehold improvements ( 38,385 ) ( 24,479 )

Acquisitions - cash paid (net of cash acquired) — ( 22,774 )

Cash used in investing activities ( 38,385 ) ( 47,253 )

1 unchanged sentence

Proceeds from employee stock purchase plan 11,995 9,414

Proceeds from borrowings — 600,000

Payments of deferred financing fees — ( 6,045 )

Payments on revolving credit facility — ( 5,000 )

2 unchanged sentences

Cash used in financing activities ( 920,548 ) ( 590,237 )

Net decrease in cash and cash equivalents and restricted cash ( 294,960 ) ( 258,443 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 375,541 ) 95,155

Effects of exchange rates on cash and cash equivalents ( 20,479 ) ( 7,281 )

11 unchanged sentences

Research, Conferences and Consulting.

Revenues and other financial information for our segments are discussed in Note 7 — Segment Information.

Revenues and other financial information for the Company’s segments are discussed in Note 7 — Segment Information.

Basis of presentation .

4 unchanged sentences

In the opinion of management, all normal recurring accruals and adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented herein have been included.

The results of operations for the three months ended March 31, 2022 may not be indicative of the results of operations for the remainder of 2022 or beyond.

The results of operations for the three and six months ended June 30, 2022 may not be indicative of the results of operations for the remainder of 2022 or beyond.

When used in these notes, the terms “Gartner,” the “Company,” “we,” “us,” or “our” refer to Gartner, Inc.

16 unchanged sentences

Below is a table presenting the beginning-of-period and end-of-period cash amounts from the Company’s Condensed Consolidated Balance Sheets and the total cash amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands).

March 31, December 31,

June 30, December 31,

Cash and cash equivalents $ 360,473 $ 756,493

4 unchanged sentences

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.).

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).

Revenue recognition.

4 unchanged sentences

Note 4 — Revenue and Related Matters provides additional information regarding the Company’s revenues.

Gain on event cancellation insurance claims.

In May 2021, the Company received $ 150.0 million of proceeds related to 2020 event cancellation insurance claims, and recorded a pre-tax gain of $ 135.5 million.

The Company does not record any gain on insurance claims in excess of expenses incurred until the receipt of the insurance proceeds is deemed to be realizable.

Adoption of new accounting standards.

The Company adopted the accounting standard described below during the three months ended March 31, 2022.

The Company adopted the accounting standard described below during the six months ended June 30, 2022.

Business Combinations — In October 2021, the FASB issued ASU No.

14 unchanged sentences

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.).

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).

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.

5 unchanged sentences

2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance (“ASU No.

ASU No, 2021-10 requires business entities to annually disclose information about certain government assistance they receive.

2021-10 requires business entities to annually disclose information about certain government assistance they receive.

The rule will be effective for public entities for annual periods beginning after December 15, 2021.

6 unchanged sentences

During 2021, the Company paid $ 22.9 million in cash for Pulse after considering the cash acquired with the business, amounts held in escrow and certain other purchase price adjustments at closing.

In addition to the purchase price, the Company may also be required to pay up to $ 4.5 million in cash in the future based on the continuing employment of certain key employees.

amount will be recognized as compensation expense over three years and reported in Acquisition and integration charges in the Condensed Consolidated Statements of Operations.

The Company recorded $ 31.0 million of goodwill and finite-lived intangible assets for Pulse and $ 1.9 million of liabilities on a net basis.

The allocation of the purchase price is preliminary with respect to certain tax matters.

In addition to the purchase price, the Company may also be required to pay up to $ 4.5 million in cash based on the continuing employment of certain key employees.

Such amount will be recognized as compensation expense over three years and reported in Acquisition and integration charges in the Condensed Consolidated Statements of Operations.

The Company recorded $ 31.0 million of goodwill and finite-lived intangible assets and $ 1.1 million of liabilities on a net basis for the Pulse acquisition.

Note 3 — Goodwill and Intangible Assets

8 unchanged sentences

Subsequent to completing the 2021 annual impairment test, there were no events or changes in circumstances noted that required an interim impairment test.

The table below presents changes to the carrying amount of goodwill by segment during the three months ended March 31, 2022 (in thousands).

The table below presents changes to the carrying amount of goodwill by segment during the six months ended June 30, 2022 (in thousands).

Research Conferences Consulting Total

1 unchanged sentence

Foreign currency translation impact ( 6,795 ) ( 79 ) ( 1,186 ) ( 8,060 )

Balance at March 31, 2022 (1) $ 2,669,282 $ 183,994 $ 96,045 $ 2,949,321

Balance at June 30, 2022 (1) $ 2,664,139 $ 183,942 $ 95,176 $ 2,943,257

(1) The Company does no t have any accumulated goodwill impairment losses.

1 unchanged sentence

The tables below present reconciliations of the carrying amounts of the Company’s finite-lived intangible assets as of the dates indicated (in thousands).

March 31, 2022 Customer

June 30, 2022 Customer

Relationships Technology-related Other Total

3 unchanged sentences

Accumulated amortization (1) ( 445,119 ) ( 40,823 ) ( 5,101 ) ( 491,043 )

Balance at March 31, 2022 $ 656,205 $ 22,738 $ 5,586 $ 684,529

Balance at June 30, 2022 $ 620,098 $ 19,935 $ 5,335 $ 645,368

December 31, 2021 Customer

7 unchanged sentences

and Other— 4 to 11 years.

Amortization expense related to finite-lived intangible assets was $ 25.1 million and $ 30.5 million during the three months ended March 31, 2022 and 2021, respectively.

Amortization expense related to finite-lived intangible assets was $ 24.8 million and $ 26.2 million during the three months ended June 30, 2022 and 2021, respectively, and $ 49.9 million and $ 56.7 million during the six months ended June 30, 2022 and 2021, respectively.

The estimated future amortization expense by year for finite-lived intangible assets is presented in the table below (in thousands).

2022 (remaining nine months) $ 75,065

2022 (remaining six months) $ 49,113

Thereafter 248,552

2 unchanged sentences

By Primary Geographic Market (1)

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Primary Geographic Market Research Conferences Consulting Total

3 unchanged sentences

Total revenues $ 1,142,329 $ 113,525 $ 120,667 $ 1,376,521

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Primary Geographic Market Research Conferences Consulting Total

3 unchanged sentences

Total revenues $ 1,003,238 $ 58,179 $ 105,902 $ 1,167,319

Six Months Ended June 30, 2022

Primary Geographic Market Research Conferences Consulting Total

United States and Canada $ 1,493,199 $ 94,919 $ 141,605 $ 1,729,723

Europe, Middle East and Africa 518,546 22,274 66,491 607,311

Other International 266,964 6,686 28,577 302,227

Total revenues $ 2,278,709 $ 123,879 $ 236,673 $ 2,639,261

Six Months Ended June 30, 2021

Primary Geographic Market Research Conferences Consulting Total

United States and Canada $ 1,277,765 $ 59,927 $ 117,091 $ 1,454,783

Europe, Middle East and Africa 466,957 17,181 65,821 549,959

Other International 238,248 5,873 22,494 266,615

Total revenues $ 1,982,970 $ 82,981 $ 205,406 $ 2,271,357

(1) Revenue is reported based on where the sale is fulfilled.

3 unchanged sentences

By Timing of Revenue Recognition

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Timing of Revenue Recognition Research Conferences Consulting Total

2 unchanged sentences

Total revenues $ 1,142,329 $ 113,525 $ 120,667 $ 1,376,521

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Timing of Revenue Recognition Research Conferences Consulting Total

2 unchanged sentences

Total revenues $ 1,003,238 $ 58,179 $ 105,902 $ 1,167,319

Six Months Ended June 30, 2022

Timing of Revenue Recognition Research Conferences Consulting Total

Transferred over time (1) $ 2,063,674 $ — $ 191,637 $ 2,255,311

Transferred at a point in time (2) 215,035 123,879 45,036 383,950

Total revenues $ 2,278,709 $ 123,879 $ 236,673 $ 2,639,261

Six Months Ended June 30, 2021

Timing of Revenue Recognition Research Conferences Consulting Total

Transferred over time (1) $ 1,810,841 $ — $ 170,331 $ 1,981,172

Transferred at a point in time (2) 172,129 82,981 35,075 290,185

Total revenues $ 1,982,970 $ 82,981 $ 205,406 $ 2,271,357

(1) Research revenues are recognized in connection with performance obligations that are satisfied over time using a time-elapsed output method to measure progress.

1 unchanged sentence

(2) The revenues in this category are recognized in connection with performance obligations that are satisfied at the point in time that the contractual deliverables are provided to the customer.

Performance Obligations — For customer contracts that are greater than one year in duration, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2022 was approximately $ 4.3 billion.

The Company expects to recognize $ 1.5 billion, $ 2.2 billion and $ 942.2 million of this revenue (most of which pertains to Research) during the remainder of 2022, the year ending December 31, 2023 and thereafter, respectively.

7 unchanged sentences

The table below provides information regarding certain of the Company’s balance sheet accounts that pertain to its contracts with customers (in thousands).

March 31, December 31,

June 30, December 31,

Fees receivable, gross (1) $ 1,181,496 $ 1,371,680

5 unchanged sentences

(1) Fees receivable represent an unconditional right to payment from the Company’s customers and include both billed and unbilled amounts.

(2) Contract assets represent recognized revenue for which the Company does 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 the Company’s performance obligation(s).

The Company recognized revenue of $ 833.9 million and $ 726.7 million during the three months ended March 31, 2022 and 2021, respectively, that was attributable to deferred revenues that were recorded at the beginning of each such period.

The Company recognized revenue of $ 956.4 million and $ 817.3 million during the three months ended June 30, 2022 and 2021, respectively, and $ 1.4 billion and $ 1.3 billion during the six months ended June 30, 2022 and 2021, respectively, that was attributable to deferred revenues that were recorded at the beginning of each such period.

Those amounts primarily consisted of Research revenues that were recognized ratably as control of the goods or services passed to the customer during the reporting periods.

During each of the three months ended March 31, 2022 and 2021, the Company did not record any material impairments related to its contract assets.

During each of the three and six months ended June 30, 2022 and 2021, the Company did not record any material impairments related to its contract assets.

Note 5 — Computation of Earnings Per Share

3 unchanged sentences

The table below sets forth the calculation of basic and diluted income per share for the periods indicated (in thousands, except per share data).

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Net income used for calculating basic and diluted income per share $ 204,925 $ 271,236 $ 377,440 $ 435,336

4 unchanged sentences

Diluted income per share $ 2.53 $ 3.13 $ 4.60 $ 4.95

(1) Certain potential shares of common stock were not included in the computation of diluted income per share because the effect would have been anti-dilutive.

These potential shares of common stock totaled approximately 0.2 million and 0.4 million for the three months ended March 31, 2022 and 2021, respectively.

(1) Certain outstanding awards associated with stock-based compensation plans were not included in the computation of diluted income per share because the effect would have been anti-dilutive.

These anti-dilutive outstanding awards associated with stock-based compensation plans totaled approximately 0.4 million and 0.1 million for the three months ended June 30, 2022 and 2021, respectively, and 0.3 million and 0.1 million for the six months ended June 30, 2022 and 2021, respectively.

Note 6 — Stock-Based Compensation

1 unchanged sentence

The Company currently awards stock-settled stock appreciation rights, service-based and performance-based restricted stock units, and common stock equivalents.

As of March 31, 2022, the Company had 3.9 million shares of its common stock, par value $ 0.0005 per share, (the “Common Stock”) available for stock-based compensation awards under its current Long-Term Incentive Plan as amended and restated in January 2019 (the “Plan”).

As of June 30, 2022, the Company had 3.9 million shares of its common stock, par value $ 0.0005 per share, (the “Common Stock”) available for stock-based compensation awards under its current Long-Term Incentive Plan as amended and restated in January 2019 (the “Plan”).

The tables below summarize the Company’s stock-based compensation expense by award type and expense category line item during the periods indicated (in millions).

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

Award type 2022 2021 2022 2021

3 unchanged sentences

Total (1) $ 24.5 $ 26.2 $ 56.6 $ 62.3

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

Expense category line item 2022 2021 2022 2021

2 unchanged sentences

Total (1) (2) $ 24.5 $ 26.2 $ 56.6 $ 62.3

(1) Includes charges of $ 19.2 million and $ 21.5 million during the three months ended March 31, 2022 and 2021, respectively, for awards to retirement-eligible employees.

(1) Includes costs of $ 8.1 million and $ 11.3 million during the three months ended June 30, 2022 and 2021, respectively, and $ 27.3 million and $ 32.8 million during the six months ended June 30, 2022 and 2021, respectively, for awards to retirement-eligible employees.

Those awards vest on an accelerated basis.

3 unchanged sentences

In deciding to exercise this discretion to adjust the PSU payout, the Committee considered the Company’s strong overall performance in 2020 despite the significant negative impact of the COVID-19 pandemic.

As a result of the modification, the Company recognized $ 6.5 million of incremental compensation cost during the three months ended March 31, 2021.

As a result of the modification, the Company recognized $ 6.5 million of incremental compensation cost during the six months ended June 30, 2021.

Note 7 — Segment Information

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The tables below present information about the Company’s reportable segments for the periods indicated (in thousands).

Three Months Ended March 31, 2022 Research Conferences Consulting Consolidated

Three Months Ended June 30, 2022 Research Conferences Consulting Consolidated

Revenues $ 1,142,329 $ 113,525 $ 120,667 $ 1,376,521

2 unchanged sentences

Operating income $ 297,122

Three Months Ended March 31, 2021 Research Conferences Consulting Consolidated

Three Months Ended June 30, 2021 Research Conferences Consulting Consolidated

Revenues $ 1,003,238 $ 58,179 $ 105,902 $ 1,167,319

2 unchanged sentences

Operating income $ 274,714

Six Months Ended June 30, 2022 Research Conferences Consulting Consolidated

Revenues $ 2,278,709 $ 123,879 $ 236,673 $ 2,639,261

Gross contribution 1,693,344 70,650 101,235 1,865,229

Corporate and other expenses ( 1,350,860 )

Operating income $ 514,369

Six Months Ended June 30, 2021 Research Conferences Consulting Consolidated

Revenues $ 1,982,970 $ 82,981 $ 205,406 $ 2,271,357

Gross contribution 1,466,503 56,498 81,868 1,604,869

Corporate and other expenses ( 1,104,743 )

Operating income $ 500,126

The table below provides a reconciliation of total segment gross contribution to net income for the periods indicated (in thousands).

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Total segment gross contribution $ 967,714 $ 827,503 $ 1,865,229 $ 1,604,869

6 unchanged sentences

Interest expense and other, net ( 21,171 ) ( 31,072 ) ( 23,359 ) ( 41,731 )

Gain on event cancellation insurance claims — 135,545 — 135,545

Provision for income taxes 71,026 107,951 113,570 158,604

5 unchanged sentences

The Company’s total outstanding borrowings are summarized in the table below (in thousands).

March 31, December 31,

June 30, December 31,

Description 2022 2021

11 unchanged sentences

Net balance sheet carrying amount $ 2,462,374 $ 2,462,764

(1) The contractual annualized interest rate as of March 31, 2022 on the 2020 Credit Agreement Term loan facility and the Revolving credit facility was 1.50 %, which consisted of a floating Eurodollar base rate of 0.250 % plus a margin of 1.250 %.

(1) The contractual annualized interest rate as of June 30, 2022 on the 2020 Credit Agreement Term loan facility and the Revolving credit facility was 3.06 %, which consisted of a floating Eurodollar base rate of 1.688 % 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 March 31, 2022.

(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 June 30, 2022.

(3) Consists of $ 800.0 million principal amount of 2028 Notes outstanding.

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(6) 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 $ 0.4 million as of March 31, 2022 bears interest at a fixed rate of 3.00 %.

One of the loans originated in 2012, has a 10 -year maturity and the outstanding balance of $ 0.3 million as of June 30, 2022 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.

(7) The weighted average annual effective rate on the Company’s outstanding debt for the three months ended March 31, 2022, including the effects of its interest rate swaps discussed below, was 4.82 %.

(7) The weighted average annual effective rate on the Company’s outstanding debt for the three and six months ended June 30, 2022, including the effects of its interest rate swaps discussed below, was 4.55 % and 4.70 %, respectively.

(8) Deferred financing fees are being amortized to Interest expense, net over the term of the related debt obligation.

26 unchanged sentences

The 2020 Credit Agreement contains certain customary restrictive loan covenants, including, among others, financial covenants that apply a maximum consolidated leverage ratio and a minimum consolidated interest expense coverage ratio.

The Company was in compliance with all financial covenants as of March 31, 2022.

The Company was in compliance with all financial covenants as of June 30, 2022.

The Term loan is being repaid in consecutive quarterly installments that commenced on December 31, 2020, plus a final payment to be made on September 28, 2025.

1 unchanged sentence

Interest Rate Swaps

As of March 31, 2022, the Company had two fixed-for-floating interest rate swap contracts with a total notional value of $ 700.0 million that mature in 2025.

The Company pays base fixed rates of 3.04 % and in return receives a floating Eurodollar base rate on 30 -day notional borrowings.

As of June 30, 2022, the Company had one fixed-for-floating interest rate swap contract with a notional value of $ 350.0 million that matures in 2025.

The Company pays a base fixed rate of 3.04 % and in return receives a floating Eurodollar base rate on 30 -day notional borrowings.

In June 2022, the Company terminated a fixed-for-floating interest rate swap contract with a notional value of $ 350.0 million, and received proceeds of $ 0.5 million.

The Company had two other fixed-for-floating interest rate swap contracts with a total notional value of $ 700.0 million that matured during the three months ended March 31, 2022.

As a result of the payment under the then outstanding 2016 Credit Agreement term loan and revolving credit facility, the Company de-designated all of its interest rate swaps effective June 30, 2020.

Accordingly, hedge accounting is not applicable, and subsequent changes to the fair value of the interest rate swaps are recorded in Other income, net.

Effective June 30, 2020, the Company de-designated all of its interest rate swaps and discontinued hedge accounting.

Accordingly, subsequent changes to the fair value of the interest rate swaps are recorded in Other income (expense), net.

The amounts previously recorded in Accumulated other comprehensive loss are amortized into Interest expense, net over the terms of the hedged forecasted interest payments.

As of March 31, 2022, $ 67.8 million is remaining in Accumulated other comprehensive loss, net.

The interest rate swaps had negative unrealized fair values (liabilities) of $ 15.3 million and $ 53.7 million as of March 31, 2022 and December 31, 2021, respectively, of which $ 51.0 million and $ 56.3 million were recorded in Accumulated other comprehensive loss, net of tax effect, as of March 31, 2022 and December 31, 2021, respectively.

As of June 30, 2022, $ 62.6 million is remaining in Accumulated other comprehensive loss, net.

The interest rate swaps had negative unrealized fair values (liabilities) of $ 1.7 million and $ 53.7 million as of June 30, 2022 and December 31, 2021, respectively, of which $ 47.1 million and $ 56.3 million were recorded in Accumulated other comprehensive loss, net of tax effect, as of June 30, 2022 and December 31, 2021, respectively.

See Note 12 — Fair Value Disclosures for the determination of the fair values of Company’s interest rate swaps.

2 unchanged sentences

In 2015, the Company’s Board of Directors (the “Board”) authorized a share repurchase program to repurchase up to $ 1.2 billion of the Company’s common stock.

The Board authorized incremental share repurchases of up to an additional $ 1.6 billion and $ 0.5 billion of the Company’s common stock during 2021 and February 2022, respectively.

$ 677.8 million remained available under the share repurchase program as of March 31, 2022.

The Board authorized incremental share repurchases of up to an additional $ 1.6 billion and $ 1.0 billion of the Company’s common stock during 2021 and the first half of 2022, respectively.

As of June 30, 2022, $ 704.4 million remained available under the share repurchase program.

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.

1 unchanged sentence

Repurchases may also be made from time-to-time in connection with the settlement of the Company’s stock-based compensation awards.

See Note 15 — Subsequent Event for a discussion regarding an increase in the Company’s share repurchase authorization.

The Company’s share repurchase activity is presented in the table below for the periods indicated.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Number of shares repurchased (1) 1,781,137 3,094,706 3,408,846 5,369,416

Cash paid for repurchased shares (in thousands) (2) $ 478,810 $ 684,900 $ 929,880 $ 1,083,350

(1) The average purchase price for repurchased shares was $ 284.53 and $ 180.44 for the three months ended March 31, 2022 and 2021, respectively.

The repurchased shares during the three months ended March 31, 2022 and 2021 included purchases for both open market purchases and stock-based compensation award settlements.

(2) The cash paid for repurchased shares during the three months ended March 31, 2021 included $ 8.0 million of open market purchases with trade dates in December 2020 that settled in January 2021 and excluded $ 20.0 million of open market

purchases with trade dates in March 2021 that settled in April 2021.

The cash paid for repurchased shares during the three months ended March 31, 2022 excluded $ 12.1 million of open market purchases with trade dates in March 2022 that settled in April 2022.

(1) The average purchase price for repurchased shares was $ 265.98 and $ 218.33 for the three months ended June 30, 2022 and 2021, respectively, and $ 274.84 and $ 202.28 for the six months ended June 30, 2022 and 2021, respectively.

The repurchased shares during the three and six months ended June 30, 2022 and 2021 included purchases for both open market purchases and stock-based compensation award settlements.

(2) The cash paid for repurchased shares during the six months ended June 30, 2022 excluded $ 7.0 million of open market purchases with trade dates in June 2022 that settled in July 2022.

The cash paid for repurchased shares during the six months ended June 30, 2021 included $ 8.0 million of open market purchases with trade dates in December 2020 that settled in January 2021 and excluded $ 10.8 million of open market purchases with trade dates in June 2021 that settled in July 2021.

The cash paid for repurchased shares during the three months ended June 30, 2022 included $ 12.1 million of open market purchases with trade dates in March 2022 that settled in April 2022, and excluded $ 7.0 million of open market purchases with trade dates in June 2022 that settled in July 2022.

The cash paid for repurchased shares during the three months ended

June 30, 2021 included $ 20.0 million of open market purchases with trade dates in March 2021 that settled in April 2021, and excluded $ 10.8 million of open market purchases with trade dates in June 2021 that settled in July 2021.

Accumulated Other Comprehensive Loss, net (“AOCL”)

The tables below provide information about the changes in AOCL by component and the related amounts reclassified out of AOCL to income during the periods indicated (net of tax, in thousands) (1).

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Interest Rate

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Adjustments Total

Balance – December 31, 2021 $ ( 56,323 ) $ ( 6,672 ) $ ( 18,436 ) $ ( 81,431 )

Balance – March 31, 2022 $ ( 50,953 ) $ ( 6,624 ) $ ( 25,234 ) $ ( 82,811 )

Other comprehensive income (loss) activity during the period:

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Other comprehensive income (loss), net 3,869 ( 143 ) ( 25,431 ) ( 21,705 )

Balance – June 30, 2022 $ ( 47,084 ) $ ( 6,767 ) $ ( 50,665 ) $ ( 104,516 )

Three Months Ended June 30, 2021

Interest Rate

Swaps Defined

Pension Plans Foreign

Adjustments Total

Balance – March 31, 2021 $ ( 72,834 ) $ ( 9,206 ) $ ( 11,138 ) $ ( 93,178 )

Three Months Ended March 31, 2021

Other comprehensive income activity during the period:

Change in AOCL before reclassifications to income — — 4,639 4,639

Reclassifications from AOCL to income (2), (3) 5,457 104 — 5,561

Other comprehensive income, net 5,457 104 4,639 10,200

Balance – June 30, 2021 $ ( 67,377 ) $ ( 9,102 ) $ ( 6,499 ) $ ( 82,978 )

Six Months Ended June 30, 2022

Interest Rate

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Other comprehensive income (loss), net 9,239 ( 95 ) ( 32,229 ) ( 23,085 )

Balance – March 31, 2021 $ ( 72,834 ) $ ( 9,206 ) $ ( 11,138 ) $ ( 93,178 )

Balance – June 30, 2022 $ ( 47,084 ) $ ( 6,767 ) $ ( 50,665 ) $ ( 104,516 )

Six Months Ended June 30, 2021

Interest Rate

Swaps Defined

Pension Plans Foreign

Adjustments Total

Balance – December 31, 2020 $ ( 78,104 ) $ ( 9,309 ) $ ( 11,815 ) $ ( 99,228 )

Other comprehensive income activity during the period:

Change in AOCL before reclassifications to income — — 5,316 5,316

Reclassifications from AOCL to income (2), (3) 10,727 207 — 10,934

Other comprehensive income, net 10,727 207 5,316 16,250

Balance – June 30, 2021 $ ( 67,377 ) $ ( 9,102 ) $ ( 6,499 ) $ ( 82,978 )

(1) Amounts in parentheses represent debits (deferred losses).

(2) $ 7.2 million and $ 7.0 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the three months ended March 31, 2022 and 2021, respectively.

(2) $ 5.1 million and $ 7.3 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the three months ended June 30, 2022 and 2021, respectively.

$ 12.3 million and $ 14.3 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the six months ended June 30, 2022 and 2021, respectively.

See Note 8 — Debt and Note 11 — Derivatives and Hedging for information regarding the cash flow hedges.

(3) The reclassifications related to defined benefit pension plans were recorded in Other income, net.

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 March 31, 2022 that is expected to be reclassified into earnings within the next 12 months is $ 20.6 million.

(3) The reclassifications related to defined benefit pension plans were recorded in Other income (expense), net.

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 June 30, 2022 that is expected to be reclassified into earnings within the next 12 months is $ 20.5 million.

Note 10 — Income Taxes

The provision for income taxes for the three months ended March 31, 2022 and 2021 was $ 42.5 million and $ 50.7 million, respectively.

The effective income tax rate was 19.8 % and 23.6 % for the three months ended March 31, 2022 and 2021, respectively.

The year-over-year decrease in the effective income tax rate was primarily due to the relative impact of tax benefits from stock-based compensation.

The Company had gross unrecognized tax benefits of $ 153.4 million on March 31, 2022 and $ 150.0 million on December 31, 2021.

The provision for income taxes was $ 71.0 million and $ 108.0 million for the three months ended June 30, 2022 and 2021, respectively, and $ 113.6 million and $ 158.6 million for the six months ended June 30, 2022 and 2021, respectively.

The effective income tax rate was 25.7 % and 28.5 % for the three months ended June 30, 2022 and 2021, respectively, and 23.1 % and 26.7 % for the six months ended June 30, 2022 and 2021, respectively.

During the second quarter of 2021, the United Kingdom enacted legislation raising its corporate tax rate from 19% to 25% effective April 2023, which led to a higher effective income tax rate for the three and six months ended June 30, 2021 as compared to the same periods in 2022.

The Company had gross unrecognized tax benefits of $ 155.8 million on June 30, 2022 and $ 150.0 million on December 31, 2021.

It is reasonably possible that gross unrecognized tax benefits will decrease by approximately $ 29.7 million within the next twelve months due to the anticipated closure of audits and the expiration of certain statutes of limitation.

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The tables below provide information regarding the Company’s outstanding derivative contracts as of the dates indicated (in thousands, except for number of contracts).

March 31, 2022

June 30, 2022

Derivative Contract Type Number of

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Interest rate swaps (1) 1 $ 350,000 $ ( 1,684 ) Other liabilities $ ( 47,084 )

( 9,019 ) Accrued liabilities

Foreign currency forwards (2) 41 436,190 ( 272 ) Accrued liabilities —

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Total 142 $ 1,933,506 $ ( 53,828 ) $ ( 56,323 )

(1) As a result of the payment under the then outstanding 2016 Credit Agreement term loan and revolving credit facility, the Company de-designated all of its interest rate swaps effective June 30, 2020.

Accordingly, hedge accounting is not applicable, and subsequent changes to fair value of the interest rate swaps are recorded in Other income, net.

(1) Effective June 30, 2020, the Company de-designated all of its interest rate swaps and discontinued hedge accounting.

Accordingly, subsequent changes to fair value of the interest rate swaps are recorded in Other income (expense), net.

The amounts previously recorded in Accumulated other comprehensive loss are amortized into Interest expense, net over the terms of the hedged forecasted interest payments.

See Note 8 — Debt provides additional information regarding the Company’s interest rate swap contracts.

See Note 8 — Debt for additional information regarding the Company’s interest rate swap contracts.

(2) The Company has foreign exchange transaction risk because it typically enters into transactions in the normal course of business that are denominated in foreign currencies that differ from the local functional currency.

The Company enters into short-term foreign currency forward exchange contracts to mitigate the cash flow risk associated with changes in foreign currency rates on forecasted foreign currency transactions.

These contracts are accounted for at fair value with realized and unrealized gains and losses recognized in Other income, net because the Company does not designate these contracts as hedges for accounting purposes.

All of the outstanding foreign currency forward exchange contracts at March 31, 2022 matured before April 30, 2022.

These contracts are accounted for at fair value with realized and unrealized gains and losses recognized in Other income (expense), net because the Company does not designate these contracts as hedges for accounting purposes.

All of the outstanding foreign currency forward exchange contracts at June 30, 2022 matured before July 31, 2022.

(3) See Note 12 — Fair Value Disclosures for the determination of the fair values of these instruments.

At March 31, 2022, all of the Company’s derivative counterparties were investment grade financial institutions.

At June 30, 2022, all of the Company’s derivative counterparties were investment grade financial institutions.

The Company did not have any collateral arrangements with its derivative counterparties and none of the derivative contracts contained credit-risk related contingent features.

The table below provides information regarding amounts recognized in the accompanying Condensed Consolidated Statements of Operations for derivative contracts for the periods indicated (in thousands).

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

Amount recorded in:

2022 2021 2022 2021

Interest expense, net (1) $ 5,164 $ 7,283 $ 12,330 $ 14,315

Other income, net (2) ( 26,900 ) ( 15,823 )

Total expense, net $ ( 19,734 ) $ ( 8,791 )

Other expense (income), net (2) 8,149 1,494 ( 18,751 ) ( 14,329 )

Total expense (income), net $ 13,313 $ 8,777 $ ( 6,421 ) $ ( 14 )

(1) Consists of interest expense from interest rate swap contracts.

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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 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.

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The Company does not typically transfer assets or liabilities between different levels of the valuation hierarchy.

The table below presents the fair values of certain financial assets and liabilities (in thousands).

Description March 31,

The table below presents the fair values of certain financial assets and liabilities that are measured at fair value on a recurring basis in the Company's financial statements (in thousands).

Description June 30,

2022 December 31,

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Carrying Amount Fair Value

March 31, December 31, March 31, December 31,

June 30, December 31, June 30, December 31,

Description 2022 2021 2022 2021

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Assets and liabilities measured at fair value on a non-recurring basis

The Company’s certain long-lived assets, including identifiable intangible assets, goodwill, and right-of-use assets are measured at fair value on a nonrecurring basis when there are indicators of impairment.

During the three months ended March 31, 2022, the Company recorded impairment charges of $ 23.9 million on right-of-use assets and other long-lived assets primarily related to certain office leases that the Company determined will no longer be used.

The impairment was derived by comparing the fair value of the impacted assets to the carrying value of those assets as of the impairment measurement date, as required under ASC Topic 360 using Level 3 inputs.

The Company’s certain long-lived assets, including identifiable intangible assets, goodwill, right-of-use assets and other long-lived assets, are measured at fair value on a nonrecurring basis when there are indicators of impairment.

During the three and six months ended June 30, 2022, the Company recorded impairment charges of $ 11.6 million and $ 35.5 million, respectively, on right-of-use assets and other long-lived assets primarily related to certain office leases that the Company determined will no longer be used.

The impairments were derived by comparing the fair value of the impacted assets to the carrying value of those assets as of the impairment measurement date, as required under ASC Topic 360 using Level 3 inputs.

See Note 14 — Leases for additional discussion related to these impairment charges.

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Historically, payments made by the Company under these agreements have not been material.

As of March 31, 2022, the Company did not have any material payment obligations under any such indemnification agreements.

As of June 30, 2022, the Company did not have any material payment obligations under any such indemnification agreements.

Note 14 — Leases

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The table below presents the Company’s net lease cost and certain other information related to the Company’s leasing activities as of and for the periods indicated (dollars in thousands).

Three Months Ended

Three Months Ended Six Months Ended

2022 2021 2022 2021

Operating lease cost (1) $ 29,532 $ 32,620 $ 59,896 $ 65,485

Variable lease cost (2) 4,268 4,302

Lease cost (2) 2,783 4,121 7,051 8,423

Sublease income ( 11,812 ) ( 10,584 ) ( 22,737 ) ( 20,923 )

Total lease cost, net (3) (4) $ 20,503 $ 26,157 $ 44,210 $ 52,985

Cash paid for amounts included in the measurement of operating

lease liabilities $ 34,817 $ 34,927

Cash paid for amounts included in the measurement of operating lease liabilities $ 34,042 $ 35,324 $ 68,859 $ 70,251

Cash receipts from sublease arrangements $ 11,466 $ 10,364 $ 22,630 $ 20,459

Right-of-use assets obtained in exchange for new operating lease

liabilities $ 6,930 $ 7,046

(1) Included in operating lease cost was $ 10.5 million and $ 10.4 million for the three months ended March 31, 2022 and 2021, respectively, for costs related to subleasing activities.

Right-of-use assets obtained in exchange for new operating lease liabilities $ 4,752 $ 2,248 $ 11,682 $ 9,294

(1) Included in operating lease cost was $ 10.4 million and $ 10.7 million for the three months ended June 30, 2022 and 2021, respectively, and $ 20.9 million and $ 21.1 million for the six months ended June 30, 2022 and 2021, respectively for costs related to subleasing activities.

(2) These amounts are primarily variable lease and nonlease costs that are 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 any of the periods presented.

(4) Amount excludes an impairment charge of lease related assets totaling $ 23.9 million, as discussed below.

(4) Amount excludes an impairment charge of lease related assets totaling $ 11.6 million and $ 35.5 million, for the three and six months ended June 30, 2022, as discussed below.

The table below indicates where the discounted operating lease payments from the above table are classified in the accompanying Condensed Consolidated Balance Sheets (in thousands).

March 31, December 31,

June 30, December 31,

Accounts payable and accrued liabilities $ 91,417 $ 89,754

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Total operating lease liabilities included in the Condensed Consolidated Balance Sheets $ 738,094 $ 787,520

During the three months ended March 31, 2022, as a result and in consideration of the changing nature of the Company’s use of office space for its workforce and the impacts of the COVID-19 pandemic, the Company continued to evaluate its existing real estate lease portfolio.

During the six months ended June 30, 2022, as a result and in consideration of the changing nature of the Company’s use of office space for its workforce and the impacts of the COVID-19 pandemic, the Company continued to evaluate its existing real estate lease portfolio.

This evaluation included the decision to abandon a portion of one leased office space and the cease-use of certain other leased office spaces that the Company intends to sublease.

In connection with this evaluation, the Company reviewed certain of its right-of-use assets and related other long-lived assets for impairment under ASC 360.

As a result of the evaluation, the Company recognized an impairment loss during the three months ended March 31, 2022 of $ 23.9 million, which is included as a component of Selling, general and administrative expenses in the accompanying

Condensed Consolidated Statements of Operations.

The impairment loss recorded includes $ 17.7 million related to right-of-use assets and $ 6.2 million related to other long-lived assets, primarily leasehold improvements.

As a result of the evaluation, the Company recognized impairment losses during the three and six months ended June 30, 2022 of $ 11.6 million and $ 35.5 million, respectively, which is included as a component of Selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.

The impairment losses recorded include $ 7.6 million and $ 25.3 million related to right-of-use assets for the three and six months ended June 30, 2022, respectively.

The impairment losses also include $ 4.0 million and $ 10.2 million related to other long-lived assets, primarily leasehold improvements, for the three and six months ended June 30, 2022, respectively.

The fair values for the asset groups relating to the impaired long-lived assets were estimated primarily using discounted cash flow models (income approach) with Level 3 inputs.

The significant assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods and discount rates that reflect the level of risk associated with receiving future cash flows.

Note 15 — Subsequent Event

On April 28, 2022, the Company’s Board of Directors authorized incremental share repurchases of up to an additional $ 500.0 million of Gartner’s common stock.

This authorization is in addition to the previously authorized repurchases of up to $ 3.3 billion, which as of the end of April 2022 had approximately $ 504.4 million remaining.

The significant assumptions used in estimating fair values include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods and discount rates that reflect the level of risk associated with receiving future cash flows.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements