What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-04-30 compared with 2023-11-03 · 165 added, 247 removed, 544 unchanged (43% of the section changed)

4 unchanged sentences

in thousands, except share data)

September 30, December 31,

March 31, December 31,

Current assets:

Cash and cash equivalents $ 1,235,801 $ 1,318,999

Fees receivable, net of allowances of $ 8,000 and $ 9,000 , respectively

Fees receivable, net of allowances of $ 9,000 for both periods

1,565,960 1,601,228

1 unchanged sentence

Prepaid expenses and other current assets 173,785 127,180

Assets held-for-sale — 49,036

Total current assets 3,326,271 3,427,886

10 unchanged sentences

Current portion of long-term debt — 9,600

Liabilities held-for-sale — 30,840

Total current liabilities 3,640,290 3,777,719

20 unchanged sentences

in thousands, except per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

Research $ 1,268,172 $ 1,217,191

13 unchanged sentences

Gain on event cancellation insurance claims — 3,077

Other income, net 1,877 8,930 5,086 46,684

Other income (expense), net 4,891 ( 2,366 )

Income before income taxes 259,557 381,277

12 unchanged sentences

in thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

Net income $ 210,545 $ 295,783

8 unchanged sentences

AND SUBSIDIARIES

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

Condensed Consolidated Statements of Changes in Stockholders’ Equity

in thousands)

Three and Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

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

3 unchanged sentences

Issuances under stock plans — 2,712 — — 5,360 8,072

Common share repurchases — — — — ( 108,850 ) ( 108,850 )

Stock-based compensation expense — 45,048 — — — 45,048

Balance at March 31, 2023 $ 82 $ 2,222,511 $ ( 95,910 ) $ 4,152,609 $ ( 5,806,434 ) $ 472,858

Net income — — — 198,043 — 198,043

Other comprehensive income — — 10,783 — — 10,783

Issuances under stock plans — 4,313 — — 1,586 5,899

Common share repurchases (including excise tax) — — — — ( 225,522 ) ( 225,522 )

Stock-based compensation expense — 50,500 — — — 50,500

Balance at June 30, 2023 $ 82 $ 2,259,057 $ ( 85,127 ) $ 4,350,652 $ ( 5,938,158 ) $ 586,506

Net income — — — 180,009 — 180,009

Other comprehensive loss — — ( 9,431 ) — — ( 9,431 )

Issuances under stock plans — 4,914 — — 979 5,893

Common share repurchases — — — — ( 223,381 ) ( 223,381 )

Stock-based compensation expense — 27,042 — — — 27,042

Balance at September 30, 2023 $ 82 $ 2,291,013 $ ( 94,558 ) $ 4,530,661 $ ( 6,160,560 ) $ 566,638

Three and Nine Months Ended September 30, 2022

Balance at March 31, 2024 $ 82 $ 2,373,501 $ ( 82,386 ) $ 4,949,837 $ ( 6,522,860 ) $ 718,174

Three Months Ended March 31, 2023

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

6 unchanged sentences

Balance at March 31, 2023 $ 82 $ 2,222,511 $ ( 95,910 ) $ 4,152,609 $ ( 5,806,434 ) $ 472,858

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 )

Net income — — — 173,545 — 173,545

Other comprehensive loss — — ( 26,032 ) — — ( 26,032 )

Issuances under stock plans — 4,288 — — 706 4,994

Common share repurchases — — — — ( 95,534 ) ( 95,534 )

Stock-based compensation expense — 20,968 — — — 20,968

Balance at September 30, 2022 $ 82 $ 2,161,940 $ ( 130,548 ) $ 3,600,012 $ ( 5,696,412 ) $ ( 64,926 )

See the accompanying notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

in thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating activities:

8 unchanged sentences

Amortization and write-off of deferred financing fees 1,537 1,161

Gain on de-designated swaps ( 7,650 ) ( 51,745 )

(Gain) loss on de-designated swaps ( 4,462 ) 1,393

Changes in assets and liabilities, net of acquisitions and divestitures:

8 unchanged sentences

Additions to property, equipment and leasehold improvements ( 22,660 ) ( 21,122 )

Acquisitions - cash paid (net of cash acquired) ( 3,800 ) ( 4,109 )

Acquisition of business

Proceeds from sale of divested operation — 158,733

Cash provided by (used in) investing activities 77,112 ( 74,570 )

Cash (used in) provided by investing activities ( 24,660 ) 137,611

Financing activities:

Proceeds from employee stock purchase plan 8,047 7,358

Payments on borrowings ( 5,400 ) ( 3,996 )

Payments of deferred financing fees ( 2,604 ) —

Proceeds from revolving credit facility 274,400 —

Payments on long-term debt

( 274,400 ) ( 1,800 )

Purchases of treasury stock ( 225,124 ) ( 106,850 )

Cash used in financing activities ( 219,681 ) ( 101,292 )

Net increase (decrease) in cash and cash equivalents and restricted cash 574,495 ( 189,687 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 55,505 ) 200,998

Effects of exchange rates on cash and cash equivalents ( 27,693 ) ( 5,485 )

17 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 and nine months ended September 30, 2023 may not be indicative of the results of operations for the remainder of 2023 or beyond.

The results of operations for the three months ended March 31, 2024 may not be indicative of the results of operations for the remainder of 2024 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).

September 30, December 31,

March 31, December 31,

Cash and cash equivalents $ 1,235,801 $ 1,318,999

1 unchanged sentence

Prepaid expenses and other current assets 600 600

Other assets — 600

Cash and cash equivalents and restricted cash $ 1,236,401 $ 1,319,599

11 unchanged sentences

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 standard.

The Company adopted the accounting standard described below during the nine months ended September 30, 2023.

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 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, after the issuance of ASU 2022-06, will generally no longer be available to apply after December 31, 2024.

During 2023, the Company adopted the practical expedient provided under ASU 2020-04 related to its debt and interest rate swap arrangements and as such, the amendments in the second quarter of 2023 are treated as a continuation of the existing agreements and no gain or loss on the modification was recorded.

Note 2 — Acquisitions and Divestiture

Accounting standards issued but not yet adopted.

The FASB has issued an accounting standard that has not yet become effective as of March 31, 2024 and may impact the Company’s Consolidated Financial Statements or related disclosures in future periods.

The standard and its potential impact are discussed below.

Income Taxes — In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU No.

The amendments in this ASU are expected to enhance the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 requires entities to enhance income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

Companies will need to disaggregate the disclosure of income taxes paid (net of refunds received) by federal, state, and foreign taxes on an annual basis.

Additionally, on an annual basis, companies would disclose income taxes paid disaggregated by individual jurisdiction using a quantitative threshold of 5% of total income taxes paid.

Public business entities would also be required to provide, on an annual basis, rate reconciliation information by specific categories, including state and local income tax, the effect of cross-border tax laws, foreign tax effects, changes in prior year unrecognized tax benefits, and tax credits, among others.

Additionally, some categories would then require disaggregation based on a quantitative threshold of 5%.

The foreign tax effect category requires disaggregation by both jurisdiction and nature.

The ASU also requires additional qualitative disclosures.

All public entities will be required to report income tax information in accordance with the new guidance starting in annual periods beginning after December 15, 2024.

The Company expects this ASU to only impact its disclosures with no impacts to the Company’s results of operations, cash flows, and financial condition.

Segment Reporting — In November 2023, the FASB issued ASU 2023-07, Segment Reporting:

Improvements in Reportable Segment Disclosures (“ASU No.

The amendments in the ASU are expected to improve disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators or capital for additional, more detailed information about a reportable segment’s expenses.

ASU 2023-07 requires public companies to disclose, on an annual and interim basis, significant expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit and loss.

The amendments in the ASU require that a public company provide all annual disclosures about a reportable segment’s profit or loss and assets currently required under ASC 280 in interim periods.

The amendments in the ASU also require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition.

The other segment items category is the difference between segment revenue less the significant expenses disclosed and each reported measure of segment profit or loss.

The amendments in the ASU, among other items, also requires that a public company disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU applies to all public entities that are required to report segment information in accordance with Topic 280.

All public entities will be required to report segment information in accordance with the new guidance starting in annual periods beginning after December 15, 2023 and for interim periods within annual periods beginning after December 15, 2024.

The Company expects this ASU to only impact its disclosures with no impacts to the Company’s results of operations, cash flows, and financial condition.

Note 2 — Acquisition and Divestiture

In September 2023, the Company acquired 100 % of a formerly independent sales agent of Gartner research products in the Czech Republic for an aggregate purchase price of $ 7.9 million, including cash acquired and deferred consideration.

three months ended March 31, 2024, the Company paid $ 2.0 million of deferred consideration.

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

In October 2022, the Company acquired 100 % of the outstanding capital stock of UpCity, Inc.

(“UpCity”), a privately-held company based in Chicago, Illinois, for an aggregate purchase price of $ 6.4 million.

UpCity’s online marketplace helps small businesses by connecting them to ratings and reviews of more than 50,000 B2B service providers.

In February 2023, the Company completed the sale of a non-core business, TalentNeuron, for approximately $ 161.1 million after consideration of post-close adjustments.

$ 156.1 million cash was received from the sale during the nine months ended September 30, 2023.

The Company recorded a pre-tax gain of $ 135.4 million on the sale of TalentNeuron, which is included in Gain from sale of divested operation in the Condensed Consolidated Statement of Operations for the nine months ended September 30, 2023.

In February 2023, the Company completed the sale of a non-core business, TalentNeuron, for approximately $ 161.1 million net of post-close adjustments.

The Company recorded pre-tax gains of $ 139.3 million and $ 135.4 million on the sale of TalentNeuron, which is included in Gain from sale of divested operation in the Consolidated Statement of Operations during the three months ended March 31, 2023 and the year ended December 31, 2023, respectively.

TalentNeuron was included in the Company’s Research segment.

The principal components of the assets divested included goodwill, intangible assets, net, property, equipment and leasehold improvements, net, and accounts receivable, with carrying amounts of $ 16.0 million, $ 9.5 million, $ 4.5 million and $ 11.8 million, respectively, while the liabilities transferred with the sale primarily consisted of deferred revenue with a carrying amount of $ 24.4 million.

Such assets and liabilities were included in Assets held-for-sale and Liabilities held-for-sale, respectively, on the Condensed Consolidated Balance Sheet at December 31, 2022 at their respective carrying values at that date.

Note 3 — Goodwill and Intangible Assets

8 unchanged sentences

Subsequent to completing the 2023 annual impairment test, there were no events or changes in circumstances noted that required an interim impairment test.

The table below presents changes to the carrying amount of goodwill by segment during the nine months ended September 30, 2023 (in thousands).

The table below presents changes to the carrying amount of goodwill by segment during the three months ended March 31, 2024 (in thousands).

Research Conferences Consulting Total

Balance at December 31, 2023 (1) $ 2,657,549 $ 183,997 $ 95,714 $ 2,937,260

Addition due to an acquisition (2) 4,176 — — 4,176

Foreign currency translation impact ( 2,634 ) ( 34 ) ( 194 ) ( 2,862 )

Balance at September 30, 2023 (1) $ 2,654,102 $ 183,951 $ 95,213 $ 2,933,266

Balance at March 31, 2024 (1) $ 2,654,915 $ 183,963 $ 95,520 $ 2,934,398

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

(2) The addition was due to the acquisition of an independent sales agent in September 2023.

See Note 2 - Acquisitions and Divestiture for additional information.

Finite-Lived Intangible Assets

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

September 30, 2023 Customer

March 31, 2024 Customer

Relationships Technology-related Other Total

Gross cost at December 31, 2023 $ 1,077,183 $ 11,200 $ 10,200 $ 1,098,583

Addition due to an acquisition (2) 990 — — 990

Intangible assets fully amortized ( 987 ) ( 39 ) — ( 1,026 )

Foreign currency translation impact ( 2,699 ) — — ( 2,699 )

1 unchanged sentence

Accumulated amortization (1) ( 601,317 ) ( 10,267 ) ( 6,599 ) ( 618,183 )

Balance at September 30, 2023 $ 512,235 $ 2,800 $ 4,080 $ 519,115

Balance at March 31, 2024 $ 473,167 $ 933 $ 3,601 $ 477,701

December 31, 2023 Customer

6 unchanged sentences

Technology-related— 3 years;

and Other— 4 to 11 years.

(2) The addition was due to the acquisition of an independent sales agent in September 2023.

See Note 2 - Acquisitions and Divestiture for additional information.

Amortization expense related to finite-lived intangible assets was $ 24.0 million and $ 24.4 million during the three months ended September 30, 2023 and 2022, respectively, and $ 69.6 million and $ 74.3 million during the nine months ended September 30, 2023 and 2022, respectively.

and Other— 11 years.

Amortization expense related to finite-lived intangible assets was $ 23.0 million and $ 22.7 million during the three months ended March 31, 2024 and 2023, respectively.

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

2023 (remaining three months) $ 22,777

2024 (remaining nine months) $ 66,973

Thereafter 96,387

2 unchanged sentences

By Primary Geographic Market (1)

Three Months Ended September 30, 2023

Primary Geographic Market Research Conferences Consulting Total

United States and Canada $ 822,401 $ 7,652 $ 87,409 $ 917,462

Europe, Middle East and Africa 261,813 30,398 29,502 321,713

Other International 134,525 19,150 15,934 169,609

Total revenues $ 1,218,739 $ 57,200 $ 132,845 $ 1,408,784

Three Months Ended September 30, 2022

Primary Geographic Market Research Conferences Consulting Total

United States and Canada $ 771,534 $ 44,499 $ 67,194 $ 883,227

Europe, Middle East and Africa 245,093 18,034 26,644 289,771

Other International 131,196 14,498 13,176 158,870

Total revenues $ 1,147,823 $ 77,031 $ 107,014 $ 1,331,868

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Primary Geographic Market Research Conferences Consulting Total

3 unchanged sentences

Total revenues $ 1,268,172 $ 70,069 $ 134,685 $ 1,472,926

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Primary Geographic Market Research Conferences Consulting Total

5 unchanged sentences

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 the Company’s revenue by geographic location.

Accordingly, revenue information presented in the above tables is based on internal allocations, which involve certain management estimates and judgments.

By Timing of Revenue Recognition

Three Months Ended September 30, 2023

Timing of Revenue Recognition Research Conferences Consulting Total

Transferred over time (1) $ 1,125,285 $ — $ 99,719 $ 1,225,004

Transferred at a point in time (2) 93,454 57,200 33,126 183,780

Total revenues $ 1,218,739 $ 57,200 $ 132,845 $ 1,408,784

Three Months Ended September 30, 2022

Timing of Revenue Recognition Research Conferences Consulting Total

Transferred over time (1) $ 1,045,425 $ — $ 90,316 $ 1,135,741

Transferred at a point in time (2) 102,398 77,031 16,698 196,127

Total revenues $ 1,147,823 $ 77,031 $ 107,014 $ 1,331,868

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Timing of Revenue Recognition Research Conferences Consulting Total

2 unchanged sentences

Total revenues $ 1,268,172 $ 70,069 $ 134,685 $ 1,472,926

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Timing of Revenue Recognition Research Conferences Consulting Total

3 unchanged sentences

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

Consulting revenues in this category are recognized over time using labor hours as an input measurement.

Consulting revenues in this category are recognized over time using costs incurred to date relative to total estimated costs at completion.

(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 September 30, 2023 was approximately $ 5.1 billion.

The Company expects to recognize $ 2.6 billion, $ 2.2 billion and $ 0.8 billion of this revenue (most of which pertains to Research) during the remainder of 2024, the year ending December 31, 2025 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).

September 30, December 31,

March 31, December 31,

Fees receivable, gross (1) $ 1,574,960 $ 1,610,228

8 unchanged sentences

Both situations occur before the completion of the Company’s performance obligation(s).

The Company recognized revenue of $ 1.0 billion and $ 0.9 billion during the three months ended September 30, 2023 and 2022, respectively, and $ 1.9 billion and $ 1.8 billion during the nine months ended September 30, 2023 and 2022, respectively, that was attributable to deferred revenues that were recorded at the beginning of each such period.

The Company recognized revenue of $ 1.0 billion and $ 0.9 billion during the three months ended March 31, 2024 and 2023, 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 and nine months ended September 30, 2023 and 2022, the Company did not record any material impairments related to its contract assets.

During each of the three months ended March 31, 2024 and 2023, 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 Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

Net income used for calculating basic and diluted income per share $ 210,545 $ 295,783

5 unchanged sentences

(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 0.1 million for the three and nine months ended September 30, 2023 and 2022.

These anti-dilutive outstanding awards

associated with stock-based compensation plans was de minimis for the three months ended March 31, 2024 and approximately 0.3 million for the three months ended March 31, 2023.

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 September 30, 2023, the Company had 6.0 million shares of its common stock, par value $ 0.0005 per share, (the “Common Stock”) available for stock-based compensation awards under the Gartner, Inc.

As of March 31, 2024, the Company had 5.6 million shares of its common stock, par value $ 0.0005 per share, (the “Common Stock”) available for stock-based compensation awards under the Gartner, Inc.

Long-Term Incentive Plan as amended and restated in June 2023 (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 Nine Months Ended

September 30, September 30,

Three Months Ended

Award type 2024 2023

3 unchanged sentences

Total (1) $ 50.5 $ 45.0

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

Expense category line item 2024 2023

2 unchanged sentences

Total (1) $ 50.5 $ 45.0

(1) Includes costs of $ 8.5 million and $ 5.4 million during the three months ended September 30, 2023 and 2022, respectively, and $ 48.4 million and $ 32.7 million during the nine months ended September 30, 2023 and 2022, respectively, for awards to retirement-eligible employees.

(1) Includes costs of $ 30.6 million and $ 26.8 million during the three months ended March 31, 2024 and 2023, respectively, for awards to retirement-eligible employees.

Those awards vest on an accelerated basis.

12 unchanged sentences

There are no intersegment revenues.

The Company does not identify or allocate assets, including capital expenditures, by reportable segment.

The Company does

not identify or allocate assets, including capital expenditures, by reportable segment.

Accordingly, assets are not reported by segment because the information is not available by segment and is not reviewed in the evaluation of segment performance or in making decisions regarding the allocation of resources.

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

Three Months Ended September 30, 2023 Research Conferences Consulting Consolidated

Revenues $ 1,218,739 $ 57,200 $ 132,845 $ 1,408,784

Gross contribution 894,149 20,449 48,551 963,149

Corporate and other expenses ( 718,732 )

Operating income $ 244,417

Three Months Ended September 30, 2022 Research Conferences Consulting Consolidated

Revenues $ 1,147,823 $ 77,031 $ 107,014 $ 1,331,868

Gross contribution 848,438 40,318 37,213 925,969

Corporate and other expenses ( 672,551 )

Operating income $ 253,418

Nine Months Ended September 30, 2023 Research Conferences Consulting Consolidated

Three Months Ended March 31, 2024 Research Conferences Consulting Consolidated

Revenues $ 1,268,172 $ 70,069 $ 134,685 $ 1,472,926

2 unchanged sentences

Operating income $ 273,885

Nine Months Ended September 30, 2022 Research Conferences Consulting Consolidated

Three Months Ended March 31, 2023 Research Conferences Consulting Consolidated

Revenues $ 1,217,191 $ 64,642 $ 127,036 $ 1,408,869

3 unchanged sentences

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

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

Total segment gross contribution $ 1,022,112 $ 977,110

15 unchanged sentences

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

September 30, December 31,

March 31, December 31,

Description 2024 2023

2024 Credit Agreement - Revolving facility (1), (2)

$ 274,400 $ —

2020 Credit Agreement - Term loan facility — 274,400

6 unchanged sentences

800,000 800,000

Other (6) 5,000 5,000

Principal amount outstanding (4)

2,479,400 2,479,400

deferred financing fees (5)

( 22,523 ) ( 21,104 )

Net balance sheet carrying amount $ 2,456,877 $ 2,458,296

(1) The contractual annualized interest rate as of September 30, 2023 on the amended 2020 Credit Agreement Term loan facility and the Revolving credit facility was 6.725 %, which consisted of Term Secured Overnight Financing Rate ("SOFR") of 5.375 % plus a margin of 1.350 %.

(1) The contractual annualized interest rate as of March 31, 2024 on the 2024 Credit Agreement was 6.725 %, which consisted of Term Secured Overnight Financing Rate (“SOFR”) of 5.375 % plus a margin of 1.350 %.

However, the Company has an interest rate swap contract that effectively converts the floating SOFR on outstanding amounts to a fixed base rate.

(2) The Company had approximately $ 1.0 billion of available borrowing capacity on the 2020 Credit Agreement revolver (not including the expansion feature) as of September 30, 2023.

(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 $ 600.0 million principal amount of 2029 Notes outstanding.

The 2029 Notes bear interest at a fixed rate of 3.625 % and mature on June 15, 2029.

(5) 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.

(2) The Company had approximately $ 0.7 billion of available borrowing capacity on the 2024 Credit Agreement revolver (not including the expansion feature) as of March 31, 2024.

(3) Consists of a State of Connecticut economic development loan originated in 2019 with a 10 -year maturity and bears interest at a fixed rate of 1.75 %.

This loan 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 and nine months ended September 30, 2023, including the effects of its interest rate swaps discussed below, was 4.98 % and 5.01 %, respectively.

(4) The weighted average annual effective rate on the Company’s outstanding debt for the three months ended March 31, 2024, including the effects of its interest rate swaps discussed below, was 5.01 %.

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

2024 Credit Agreement

On March 26, 2024, the Company entered into a Credit Agreement (the “2024 Credit Agreement”) among the Company, as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”).

The 2024 Credit Agreement provides for a $ 1.0 billion senior unsecured five-year revolving facility.

The facility may be increased, at the Company’s option and under certain conditions, by up to an additional $ 750 million in the aggregate.

The facility may be used for revolving 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 March 26, 2029, at which time all amounts borrowed must be repaid, subject to customary extension mechanics.

On March 26, 2024, the Company borrowed $ 274.4 million under the 2024 Credit Agreement.

The initial borrowing was used to repay the outstanding amounts under the 2020 Credit Agreement.

Additional amounts borrowed under the 2024 Credit Agreement will be used for working capital needs and general corporate purposes of the Company and its subsidiaries, including the funding of acquisitions and investments, payment of capital expenditures and the repurchase of shares.

Interest under the revolving facility accrues, at a variable rate, based on, at our option, (i) the Secured Overnight Funding Rate (“SOFR”) plus a credit spread adjustment of 0.10 % or (ii) an alternate base rate (“Base Rate”) plus, in each case, an applicable margin, and is payable monthly.

The applicable margin ranges between 1.125 % and 1.75 %, depending on the lower rate determined by either the Company’s leverage ratio or the credit rating of the Company’s senior unsecured debt.

At March 31, 2024, the applicable all-in margin on the revolving facility was 1.35 % (including the credit spread adjustment).

The commitment fee payable on the unused portion of the facility is equal to between 0.125 % and 0.25 % based on utilization of the facility.

The Company has also agreed to pay customary letter of credit fees.

The 2024 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 grant liens, make acquisitions, be acquired and the ability of the Company’s subsidiaries to incur indebtedness.

Subsidiaries of the Company are not required to guarantee obligations under the facility, unless such subsidiaries guarantee indebtedness in excess of a threshold set out in the 2024 Credit Agreement, subject to certain limitations and exceptions.

The 2024 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 allows the lenders to terminate their obligations to lend under the 2024 Credit Agreement and could result in the acceleration of the Company’s obligations under the facility.

On June 18, 2021, the Company issued $ 600.0 million aggregate principal amount of 3.625 % Senior Notes due 2029.

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Prior to June 15, 2024, the Company may redeem up to 40 % of the aggregate principal amount of the 2029 Notes in connection with certain equity offerings, or some or all of the 2029 Notes with a “make-whole” premium, in each case subject to the terms set forth in the 2029 Note Indenture.

On March 26, 2024, in connection with the closing of the Credit Agreement and as a result of the termination of the 2020 Credit Agreement, the Company’s subsidiaries that guaranteed the Company’s 2029 Notes were released from their guarantee obligations with respect to the Notes, in accordance with the terms of the indenture pursuant to which the 2029 Notes was issued.

On September 28, 2020, the Company issued $ 800.0 million aggregate principal amount of 3.75 % Senior Notes due 2030.

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Prior to October 1, 2025, the Company may redeem up to 40 % of the aggregate principal amount of the 2030 Notes in connection with certain equity offerings, or some or all of the 2030 Notes with a “make-whole” premium, in each case subject to the terms set forth in the 2030 Note Indenture.

On March 26, 2024, in connection with the closing of the Credit Agreement and as a result of the termination of the 2020 Credit Agreement, the Company’s subsidiaries that guaranteed the Company’s 2030 Notes were released from their guarantee obligations with respect to the Notes, in accordance with the terms of the indenture pursuant to which the 2030 Notes was issued.

On June 22, 2020, the Company issued $ 800.0 million aggregate principal amount of 4.50 % Senior Notes due 2028.

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Prior to July 1, 2023, the Company may redeem up to 40 % of the aggregate principal amount of the 2028 Notes in connection with certain equity offerings, or some or all of the 2028 Notes with a “make-whole” premium, in each case subject to the terms set forth in the 2028 Note Indenture.

On March 26, 2024, in connection with the closing of the Credit Agreement and as a result of the termination of the 2020 Credit Agreement, the Company’s subsidiaries that guaranteed the Company’s 2028 Notes were released from their guarantee obligations with respect to the Notes, in accordance with the terms of the indenture pursuant to which the 2028 Notes was issued.

2020 Credit Agreement

The Company has a credit facility that currently provides for a $ 400.0 million Term loan facility and a $ 1.0 billion Revolving credit facility (the “2020 Credit Agreement”).

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 September 30, 2023.

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.

The Revolving credit facility may be borrowed, repaid and re-borrowed through September 28, 2025, at which all then-outstanding amounts must be repaid.

In May 2023, the Company entered into an amendment of the 2020 Credit Agreement that replaced the interest rate benchmark from LIBOR to Secured Overnight Financing Rate (“SOFR”).

After the amendment, interest is accrued on outstanding balances under the credit facility and payable monthly at a rate of the one month Term SOFR plus 10 basis points and the applicable margin.

Prior to the amendment, interest was accrued at a rate of the one month LIBOR plus the applicable margin.

Interest Rate Swaps

As of September 30, 2023, the Company had one fixed-for-floating interest rate swap contract with a notional value of $ 350.0 million that matures in 2025.

In May 2023, in conjunction with the amendment of the 2020 credit agreement, the Company entered into an amendment of its interest rate swap contract.

Under the amended agreement, the Company pays a base fixed rate of 2.98 % and in return receives a floating Term SOFR base rate on 30-day notional borrowings.

Prior to the amendment, the Company paid a base fixed rate of 3.04 % and in return received a floating Eurodollar base rate on 30 -day notional borrowings.

Prior to entering into the 2024 Credit Agreement, the Company had a credit facility that provided for a $ 400.0 million Term loan facility and a $ 1.0 billion Revolving credit facility (the “2020 Credit Agreement”).

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

On March 26, 2024, concurrently with the Company’s entry into the 2024 Credit Agreement, the Company terminated the 2020 Credit Agreement and repaid all amounts outstanding.

Interest Rate Swap

As of March 31, 2024, the Company had one fixed-for-floating interest rate swap contract with a notional value of $ 350.0 million that matures in September 2025.

Under the contract, the Company pays a base fixed rate of 2.98 % and in return receives a floating Term SOFR base rate on 30-day notional borrowings.

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, net.

Accordingly, subsequent changes to the fair value of the interest rate swap 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 September 30, 2023, $ 37.2 million is remaining in Accumulated other comprehensive loss, net.

See Note 11 — Derivatives and Hedging for the amounts remaining in Accumulated other comprehensive loss, net of tax effect, at September 30, 2023 and December 31, 2022.

As of March 31, 2024, $ 27.5 million is remaining in Accumulated other comprehensive loss, net.

See Note 11 — Derivatives and Hedging for the amounts remaining in Accumulated other comprehensive loss, net of tax effect, at March 31, 2024 and December 31, 2023.

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

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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, $ 1.0 billion and $ 0.4 billion of the Company’s common stock during 2021, 2022, and February 2023, respectively.

As of September 30, 2023, $ 610.8 million remained available under the share repurchase program.

The Board authorized incremental share repurchases of up to an aggregate additional $ 3.5 billion of the Company’s common stock during 2021, 2022, and 2023.

As of March 31, 2024, $ 831.3 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.

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

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

Number of shares repurchased (1) 489,734 327,680

Cash paid for repurchased shares (in thousands) (2) $ 225,124 $ 106,850

(1) The average purchase price for repurchased shares was $ 341.11 and $ 254.71 for the three months ended September 30, 2023 and 2022, respectively, and $ 330.50 and $ 272.84 for the nine months ended September 30, 2023 and 2022, respectively.

The repurchased shares during the three and nine months ended September 30, 2023 and 2022 included purchases for both open market purchases and stock-based compensation award settlements.

(2) The cash paid for repurchased shares during the nine months ended September 30, 2023 excluded $ 15.0 million of open market purchases with trade dates in September 2023 that settled in October 2023 and $ 2.8 million of excise tax accrued.

The cash paid for repurchased shares during the nine months ended September 30, 2022 excluded $ 6.0 million of open market purchases with trade dates in September 2022 that settled in October 2022.

The cash paid for repurchased shares during the three months ended September 30, 2023 included $ 3.1 million of open market purchases with trade dates in June

2023 that settled in July 2023, and excluded $ 15.0 million of open market purchases with trade dates in September 2023 that settled in October 2023.

The cash paid for repurchased shares during the three months ended September 30, 2022 included $ 7.0 million of open market purchases with trade dates in June 2022 that settled in July 2022, and excluded $ 6.0 million of open market purchases with trade dates in September 2022 that settled in October 2022.

(1) The average purchase price for repurchased shares was $ 459.69 and $ 332.18 for the three months ended March 31, 2024 and 2023, respectively.

The repurchased shares during the three months ended March 31, 2024 and 2023 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, 2023 excluded $ 2.0 million of open market purchases with trade dates in March 2023 that settled in April 2023.

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 September 30, 2023

Interest Rate

Swaps Defined

Pension Plans Foreign

Adjustments Total

Balance – June 30, 2023 $ ( 31,596 ) $ ( 4,180 ) $ ( 49,351 ) $ ( 85,127 )

Other comprehensive income (loss) activity during the period:

Change in AOCL before reclassifications to income — — ( 13,171 ) ( 13,171 )

Reclassifications from AOCL to income (2), (3) 3,707 33 — 3,740

Other comprehensive income (loss), net 3,707 33 ( 13,171 ) ( 9,431 )

Balance – September 30, 2023 $ ( 27,889 ) $ ( 4,147 ) $ ( 62,522 ) $ ( 94,558 )

Three Months Ended September 30, 2022

Interest Rate

Swaps Defined

Pension Plans Foreign

Adjustments Total

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

Other comprehensive income (loss) activity during the period:

Change in AOCL before reclassifications to income — — ( 29,961 ) ( 29,961 )

Reclassifications from AOCL to income (2), (3) 3,886 43 — 3,929

Other comprehensive income (loss), net 3,886 43 ( 29,961 ) ( 26,032 )

Balance – September 30, 2022 $ ( 43,198 ) $ ( 6,724 ) $ ( 80,626 ) $ ( 130,548 )

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Interest Rate

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Other comprehensive income (loss), net 3,601 51 ( 9,707 ) ( 6,055 )

Balance – September 30, 2023 $ ( 27,889 ) $ ( 4,147 ) $ ( 62,522 ) $ ( 94,558 )

Nine Months Ended September 30, 2022

Balance – March 31, 2024 $ ( 20,561 ) $ ( 5,680 ) $ ( 56,145 ) $ ( 82,386 )

Three Months Ended March 31, 2023

Interest Rate

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Other comprehensive income (loss), net 3,834 34 1,832 5,700

Balance – September 30, 2022 $ ( 43,198 ) $ ( 6,724 ) $ ( 80,626 ) $ ( 130,548 )

Balance – March 31, 2023 $ ( 35,414 ) $ ( 4,213 ) $ ( 56,283 ) $ ( 95,910 )

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

(2) $ 4.9 million and $ 5.2 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the three months ended September 30, 2023 and 2022, respectively.

$ 15.2 million and $ 17.5 million of the reclassifications related to interest rate swaps (cash flow hedges) were recorded in Interest expense, net, for the nine months ended September 30, 2023 and 2022, respectively.

(2) $ 4.8 million and $ 5.1 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, 2024 and 2023, 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 September 30, 2023 that is expected to be reclassified into earnings within the next 12 months is $ 19.3 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 March 31, 2024 that is expected to be reclassified into earnings within the next 12 months is $ 18.7 million.

Note 10 — Income Taxes

The provision for income taxes was $ 44.5 million and $ 58.5 million for the three months ended September 30, 2023 and 2022, respectively.

The effective income tax rate was 19.8 % and 25.2 % for the three months ended September 30, 2023 and 2022, respectively.

The decrease in the effective income tax rate was primarily due to the favorable impact of a foreign tax credit notice issued by the IRS as well as the expiration of statutes for uncertain tax positions in the three months ended September 30, 2023 as compared to the same period in 2022.

The provision for income taxes was $ 196.0 million and $ 172.1 million for the nine months ended September 30, 2023 and 2022, respectively.

The effective income tax rate was 22.5 % and 23.8 % for the nine months ended September 30, 2023 and 2022, respectively.

The decrease in the year to date effective income tax rate in 2023 was primarily due to the impact of valuation allowance releases and the expiration of statutes for uncertain tax positions in the nine months ended September 30, 2023 as compared to the same period in 2022.

The 2023 decrease was partially offset by an increase in the effective income tax rate for the sale of the TalentNeuron business.

The Company had gross unrecognized tax benefits of $ 140.1 million on September 30, 2023 and $ 137.2 million on December 31, 2022.

The provision for income taxes was $ 49.0 million and $ 85.5 million for the three months ended March 31, 2024 and 2023, respectively.

The effective income tax rate was 18.9 % and 22.4 % for the three months ended March 31, 2024 and 2023, respectively.

The effective income tax rate was higher in the prior year primarily due to the impact of the sale of the TalentNeuron business.

The Company had gross unrecognized tax benefits of $ 152.4 million on March 31, 2024 and $ 148.4 million on December 31, 2023.

It is reasonably possible that gross unrecognized tax benefits will decrease by approximately $ 6.0 million within the next twelve months due to the anticipated closure of audits and the expiration of certain statutes of limitation.

In January 2024, the Company completed an intercompany transfer of certain intellectual property.

The tax impact of the transfer did not have a significant impact on our effective tax rate.

Prior to the sale, the Company had a $ 103.1 million deferred tax asset for tax basis in the related IP and a full valuation allowance due to no expected local tax benefit of the asset.

As a result of the IP transfer, the deferred tax asset and related valuation allowance were written off with no impact to tax expense.

The Company’s intellectual property footprint continues to evolve and may result in tax rate volatility in the future.

The Organization for Economic Co-operation and Development (“the OECD”) has issued various tax proposals including a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a 15% global corporate minimum tax rate.

Several countries in which Gartner does business have proposed or enacted new laws to align with OECD Pillar Two proposals.

The minimum tax is treated as a current cost beginning in 2024 and does not have a significant impact on the Company's effective tax rate for the current period.

Significant details around the provisions are still uncertain as the OECD and participating countries continue to work on defining the underlying rules and administrative procedures.

The Company will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate.

Note 11 — Derivatives and Hedging

2 unchanged sentences

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

September 30, 2023

March 31, 2024

Derivative Contract Type Number of

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in AOCL, net of tax

Interest rate swaps (1) 1 $ 350,000 $ 4,746 Other assets $ ( 27,889 )

Interest rate swap (1) 1 $ 350,000 $ 2,374 Other assets $ ( 20,561 )

7,060 Other current assets

8 unchanged sentences

in AOCL, net of tax

Interest rate swaps (1) 1 $ 350,000 $ 3,952 Other assets $ ( 39,248 )

Interest rate swap (1) 1 $ 350,000 $ 1,097 Other assets $ ( 24,162 )

5,962 Other current assets

2 unchanged sentences

(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, net.

Accordingly, subsequent changes to fair value of the interest rate swap 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 for additional information regarding the Company’s interest rate swap contracts.

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

(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 September 30, 2023 matured before October 31, 2023.

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 March 31, 2024 matured before April 30, 2024.

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

At September 30, 2023, all of the Company’s derivative counterparties were investment grade financial institutions.

At March 31, 2024, 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 Nine Months Ended

September 30, September 30,

Three Months Ended

Amount recorded in:

2023 2022 2023 2022

Interest expense, net (1) $ 4,806 $ 5,117

5 unchanged sentences

The Company’s financial instruments include cash equivalents, fees receivable from customers, accounts payable and accrued liabilities, all of which are normally short-term in nature.

The Company believes that the carrying amounts of these financial

instruments reasonably approximate their fair values due to their short-term nature.

The Company 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 2024 Credit Agreement.

17 unchanged sentences

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 September 30,

Description March 31,

2024 December 31,

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Carrying Amount Fair Value

September 30, December 31, September 30, December 31,

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

Description 2024 2023 2024 2023

5 unchanged sentences

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 nine months ended September 30, 2023, the Company recorded impairment charges of $ 0.3 million and $ 19.0 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.

During the three months ended March 31, 2024, the Company recorded impairment charges of $ 0.4 million on right-of-use assets and $ 0.1 million on 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 September 30, 2023, the Company did not have any material payment obligations under any such indemnification agreements.

As of March 31, 2024, the Company did not have any material payment obligations under any such indemnification agreements.

Note 14 — Leases

14 unchanged sentences

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 Nine Months Ended

September 30,

2023 2022 2023 2022

Three Months Ended

Operating lease cost (1) $ 25,903 $ 28,799

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

(1) Included in operating lease cost was $ 10.9 million and $ 10.4 million for the three months ended September 30, 2023 and 2022, respectively, and $ 32.3 million and $ 31.3 million for the nine months ended September 30, 2023 and 2022, respectively for costs related to subleasing activities.

$ 6,791 $ 1,647

(1) Included in operating lease cost was $ 9.2 million and $ 10.6 million for the three months ended March 31, 2024 and 2023, 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.

2 unchanged sentences

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).

September 30, December 31,

March 31, December 31,

Accounts payable and accrued liabilities $ 98,558 $ 98,493

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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 impairment losses during the three months ended September 30, 2023 and 2022 of $ 0.3 million and $ 2.0 million, respectively, and $ 19.0 million and $ 37.5 million for the nine months ended September 30, 2023 and 2022, respectively, which are included as a component of Selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.

The impairment losses recorded include $ 0.2 million and $ 1.7 million related to right-of-use assets and $ 0.1 million and $ 0.3 million related to other long-lived assets, primarily leasehold improvements, for the three months ended September 30, 2023 and 2022, respectively.

The impairment losses recorded include $ 13.6 million and $ 27.0 million related to right-of-use assets and $ 5.4 million and $ 10.5 million related to other long-lived assets, primarily leasehold improvements, for the nine months ended September 30, 2023 and 2022, respectively.

As a result of the evaluation, the Company recognized impairment losses during the three months ended March 31, 2024 and 2023 of $ 0.5 million and $ 8.7 million, respectively, which are included as a component of Selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.

The impairment losses recorded include $ 0.4 million and $ 6.3 million related to right-of-use assets and $ 0.1 million and $ 2.4 million related to other long-lived assets, primarily leasehold improvements, for the three months ended March 31, 2024 and 2023, 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 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.

Note 15 — Subsequent Event

On October 31, 2023, 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 $ 4.2 billion, which, as of the end of October 2023, had approximately $ 500.0 million remaining.

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