þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2015 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 04-3099750 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
P.O. Box 10212 | |
56 Top Gallant Road | |
Stamford, CT | 06902-7700 |
(Address of principal executive offices) | (Zip Code) |
(203) 316-1111 | |
(Registrant’s telephone number, | |
including area code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $.0005 par value per share | New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Document | Parts Into Which Incorporated | |
Proxy Statement for the Annual Meeting of Stockholders to be held May 26, 2016 (Proxy Statement) | Part III |
• | Research provides objective insight on critical and timely technology and supply chain initiatives for CIOs and other IT professionals, supply chain leaders, digital marketing and other business professionals, as well as technology companies and the institutional investment community, through reports, briefings, proprietary tools, access to our analysts, peer networking services and membership programs that enable our clients to make better decisions about their IT, supply chain and digital marketing initiatives. |
• | Consulting provides customized solutions to unique client needs through on-site, day-to-day support, as well as proprietary tools for measuring and improving IT performance with a focus on cost, performance, efficiency and quality. |
• | Events provides IT, supply chain, digital marketing, and other business professionals the opportunity to attend various symposia, conferences and exhibitions to learn, contribute and network with their peers. From our flagship event Symposium/ITxpo, to summits focused on specific technologies and industries, to experimental workshop-style seminars, our events distill the latest Gartner research into applicable insight and advice. |
• | RESEARCH. Gartner delivers independent, objective IT research and insight primarily through a subscription-based, digital media service. Gartner research is the fundamental building block for all Gartner services and covers all technology-related markets, topics and industries, as well as supply chain and digital marketing. We combine our proprietary research methodologies with extensive industry and academic relationships to create Gartner solutions that address each role within an IT organization. Our research agenda is defined by clients’ needs, focusing on the critical issues, opportunities and challenges they face every day. Our research analysts are in regular contact with both technology providers and technology users, enabling them to identify the most pertinent topics in the IT marketplace and develop relevant product enhancements to meet the evolving needs of users of our research. They provide in-depth analysis on all aspects of technology, including hardware; software and systems; services; IT management; market data and forecasts; and vertical-industry issues. Our proprietary research content, presented in the form of reports, briefings, updates and related tools, is delivered directly to the client’s desktop via our website and/or product-specific portals. Clients normally sign subscription contracts that provide access to our research content for individual users over a defined period of time. The majority of our research subscription contracts are for twelve months or longer. |
• | CONSULTING. Gartner Consulting deepens relationships with our Research clients by extending the reach of our research through custom consulting engagements. Gartner Consulting brings together our unique research insight, benchmarking data, problem-solving methodologies and hands-on experience to improve the return on a client’s IT investment. Our consultants provide fact-based consulting services to help clients use and manage IT to optimize business performance. |
• | EVENTS. Gartner Symposium/ITxpo events and Gartner Summit events are gatherings of technology’s most senior IT professionals, business strategists and practitioners. Our events offer current, relevant and actionable technology sessions led by Gartner analysts, while facilitating peer exchanges. These sessions are augmented with technology showcases, peer exchanges, analyst one-on-one meetings, workshops and keynotes by technology’s top leaders. They also provide attendees with an opportunity to interact with business executives from the world’s leading technology companies. |
• | Superior IT research content – We believe that we create the broadest, highest-quality and most relevant research coverage of the IT industry, with offerings for every member of an IT organization. Our research analysis generates unbiased insight that we believe is timely, thought-provoking and comprehensive, and that is known for its high quality, independence and objectivity. |
• | Our leading brand name – We have provided critical, trusted insight under the Gartner name for over 35 years. |
• | Our global footprint and established customer base – We have a global presence with clients in over 90 countries on six continents. A substantial portion of our revenues is derived from sales outside of the U.S. |
• | Experienced management team – Our management team is composed of IT research veterans and experienced industry executives with long tenure at Gartner. |
• | Substantial operating leverage in our business model — We have the ability to distribute our intellectual property and expertise across multiple platforms, including research publications, consulting engagements, conferences and executive programs, to derive incremental revenue and profitability. |
• | Vast network of analysts and consultants – As of December 31, 2015, we had 1,731 research analysts and consultants located around the world. Our analysts collectively speak 50 languages and are located in 35 countries, enabling us to cover all aspects of IT on a global basis. |
• | delivering high-quality and timely analysis and advice to our clients; |
• | understanding and anticipating market trends and the changing needs of our clients; and |
• | providing products and services of the quality and timeliness necessary to withstand competition. |
• | delivering consistent, high-quality consulting services to our clients; |
• | tailoring our consulting services to the changing needs of our clients; and |
• | our ability to match the skills and competencies of our consulting staff to the skills required for the fulfillment of existing or potential consulting engagements. |
• | the ability of our Board of Directors to issue and determine the terms of preferred stock; |
• | advance notice requirements for inclusion of stockholder proposals at stockholder meetings; and |
• | the anti-takeover provisions of Delaware law. |
2015 | 2014 | ||||||||||||||
High | Low | High | Low | ||||||||||||
Quarter ended March 31 | $ | 86.28 | $ | 74.39 | $ | 73.53 | $ | 61.28 | |||||||
Quarter ended June 30 | 89.10 | 82.35 | 75.61 | 65.55 | |||||||||||
Quarter ended September 30 | 92.46 | 79.93 | 76.82 | 67.83 | |||||||||||
Quarter ended December 31 | $ | 94.82 | $ | 81.52 | $ | 87.58 | $ | 71.22 |
Period | Total Number of Shares Purchased (#) | Average Price Paid Per Share ($) | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in billions) | ||||||||
October | 167,134 | $ | 83.62 | ||||||||
November | 30,258 | 88.35 | |||||||||
December | 450,097 | 90.11 | |||||||||
Total (1) | 647,489 | $ | 88.35 | $ | 1.1 |
(1) | For the year ended December 31, 2015, the Company repurchased a total of 6.2 million shares. |
(In thousands, except per share data) | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
STATEMENT OF OPERATIONS DATA: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Research | $ | 1,583,486 | $ | 1,445,338 | $ | 1,271,011 | $ | 1,137,147 | $ | 1,012,062 | ||||||||||
Consulting | 327,735 | 348,396 | 314,257 | 304,893 | 308,047 | |||||||||||||||
Events | 251,835 | 227,707 | 198,945 | 173,768 | 148,479 | |||||||||||||||
Total revenues | 2,163,056 | 2,021,441 | 1,784,213 | 1,615,808 | 1,468,588 | |||||||||||||||
Operating income | 287,997 | 286,162 | 275,492 | 245,707 | 214,062 | |||||||||||||||
Net income | $ | 175,635 | $ | 183,766 | $ | 182,801 | $ | 165,903 | $ | 136,902 | ||||||||||
PER SHARE DATA: | ||||||||||||||||||||
Basic income per share | $ | 2.09 | $ | 2.06 | $ | 1.97 | $ | 1.78 | $ | 1.43 | ||||||||||
Diluted income per share | $ | 2.06 | $ | 2.03 | $ | 1.93 | $ | 1.73 | $ | 1.39 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 83,852 | 89,337 | 93,015 | 93,444 | 96,019 | |||||||||||||||
Diluted | 85,056 | 90,719 | 94,830 | 95,842 | 98,846 | |||||||||||||||
OTHER DATA: | ||||||||||||||||||||
Cash and cash equivalents | $ | 372,976 | $ | 365,302 | $ | 423,990 | $ | 299,852 | $ | 142,739 | ||||||||||
Total assets | 2,174,686 | 1,904,351 | 1,783,582 | 1,621,277 | 1,379,872 | |||||||||||||||
Long-term debt | 790,000 | 385,000 | 136,250 | 115,000 | 150,000 | |||||||||||||||
Stockholders’ (deficit) equity | (132,400 | ) | 161,171 | 361,316 | 306,673 | 181,784 | ||||||||||||||
Cash provided by operating activities | $ | 345,561 | $ | 346,779 | $ | 315,654 | $ | 279,814 | $ | 255,566 |
• | In 2015 we repurchased 6.2 million of our common shares. We also repurchased 5.9 million, 3.4 million, 2.7 million, and 5.9 million of our common shares in 2014, 2013, 2012, and 2011, respectively (see Note 7 — Stockholders’ (Deficit) Equity in the Notes to the Consolidated Financial Statements). The Company used $509.0 million, $432.0 million, $181.7 million, $111.3 million, and $212.0 million in cash for share repurchases in 2015, 2014, 2013, 2012, and 2011, respectively. |
• | In 2015 and 2014 we acquired other businesses and recognized $26.2 million and $21.9 million, respectively, in pre-tax acquisition and integration charges (see Note 2 — Acquisitions in the Notes to the Consolidated Financial Statements). The operating results of these businesses, which were not material, were included in our consolidated financial results beginning on their respective acquisition dates. The Company used $196.2 million and $124.3 million in cash for acquisitions in 2015 and 2014, respectively. |
• | In 2014 we refinanced our debt (see Note 5 — Debt in the Notes to the Consolidated Financial Statements). |
• | Research provides objective insight on critical and timely technology and supply chain initiatives for CIOs, other IT professionals, supply chain leaders, digital marketing professionals, technology companies and the institutional investment community through reports, briefings, proprietary tools, access to our analysts, peer networking services and membership programs that enable our clients to make better decisions about their IT, supply chain and digital marketing investments. |
• | Consulting provides customized solutions to unique client needs through on-site, day-to-day support, as well as proprietary tools for measuring and improving IT performance with a focus on cost, performance, efficiency, and quality. |
• | Events provides IT, supply chain, digital marketing and business professionals the opportunity to attend various symposia, conferences and exhibitions to learn, contribute and network with their peers. From our flagship Symposium/ITxpo series, to summits focused on specific technologies and industries, to experimental workshop-style seminars, our events distill the latest Gartner research into applicable insight and advice. |
BUSINESS SEGMENT | BUSINESS MEASUREMENTS | |
Research | Contract value represents the value attributable to all of our subscription-related research products that recognize revenue on a ratable basis. Contract value is calculated as the annualized value of all subscription research contracts in effect at a specific point in time, without regard to the duration of the contract. | |
Client retention rate represents a measure of client satisfaction and renewed business relationships at a specific point in time. Client retention is calculated on a percentage basis by dividing our current clients, who were also clients a year ago, by all clients from a year ago. Client retention is calculated at an enterprise level, which represents a single company or customer. | ||
Wallet retention rate represents a measure of the amount of contract value we have retained with clients over a twelve-month period. Wallet retention is calculated on a percentage basis by dividing the contract value of clients, who were clients one year ago, by the total contract value from a year ago, excluding the impact of foreign currency exchange. When wallet retention exceeds client retention, it is an indication of retention of higher-spending clients, or increased spending by retained clients, or both. Wallet retention is calculated at an enterprise level, which represents a single company or customer. | ||
Consulting | Consulting backlog represents future revenue to be derived from in-process consulting, measurement and strategic advisory services engagements. | |
Utilization rate represents a measure of productivity of our consultants. Utilization rates are calculated for billable headcount on a percentage basis by dividing total hours billed by total hours available to bill. | ||
Billing rate represents earned billable revenue divided by total billable hours. | ||
Average annualized revenue per billable headcount represents a measure of the revenue generating ability of an average billable consultant and is calculated periodically by multiplying the average billing rate per hour times the utilization percentage times the billable hours available for one year. | ||
Events | Number of events represents the total number of hosted events completed during the period. | |
Number of attendees represents the total number of people who attend events. |
• | Research revenues are mainly derived from subscription contracts for research products. The related revenues are deferred and recognized ratably over the applicable contract term. Fees derived from assisting organizations in selecting the right business software for their needs is recognized when the leads are provided to vendors. |
• | Consulting revenues are principally generated from fixed fee and time and material engagements. Revenues from fixed fee contracts are recognized on a proportional performance basis. Revenues from time and materials engagements are recognized as work is delivered and/or services are provided. Revenues related to contract optimization contracts are contingent in nature and are only recognized upon satisfaction of all conditions related to their payment. |
• | Events revenues are deferred and then recognized upon the completion of the related symposium, conference or exhibition. |
December 31, | |||||||
2015 | 2014 | ||||||
Total fees receivable | $ | 587,663 | $ | 558,807 | |||
Allowance for losses | (6,900 | ) | (6,700 | ) | |||
Fees receivable, net | $ | 580,763 | $ | 552,107 |
Twelve Months Ended December 31, 2015 | Twelve Months Ended December 31, 2014 | Income Increase (Decrease) $ | Increase (Decrease) % | |||||||||||
Total revenues | $ | 2,163,056 | $ | 2,021,441 | $ | 141,615 | 7 | % | ||||||
Costs and expenses: | ||||||||||||||
Cost of services & product development | 839,076 | 797,933 | (41,143 | ) | (5 | ) | ||||||||
Selling, general and administrative | 962,677 | 876,067 | (86,610 | ) | (10 | ) | ||||||||
Depreciation | 33,789 | 31,186 | (2,603 | ) | (8 | ) | ||||||||
Amortization of intangibles | 13,342 | 8,226 | (5,116 | ) | (62 | ) | ||||||||
Acquisition & integration charges | 26,175 | 21,867 | (4,308 | ) | (20 | ) | ||||||||
Operating income | 287,997 | 286,162 | 1,835 | 1 | ||||||||||
Interest expense, net | (20,782 | ) | (10,887 | ) | (9,895 | ) | (91 | ) | ||||||
Other income (expense), net | 4,996 | (592 | ) | 5,588 | >100 | |||||||||
Provision for income taxes | (96,576 | ) | (90,917 | ) | (5,659 | ) | (6 | ) | ||||||
Net income | $ | 175,635 | $ | 183,766 | $ | (8,131 | ) | (4 | )% |
Geographic Region | December 31, 2015 | December 31, 2014 | Increase (Decrease) $ | Increase (Decrease) % | ||||||||||||
U.S. and Canada | $ | 1,347,676 | $ | 1,204,476 | $ | 143,200 | 12 | % | ||||||||
Europe, Middle East, Africa | 557,165 | 570,334 | (13,169 | ) | (2 | ) | ||||||||||
Other International | 258,215 | 246,631 | 11,584 | 5 | ||||||||||||
Totals | $ | 2,163,056 | $ | 2,021,441 | $ | 141,615 | 7 | % |
Segment | December 31, 2015 | December 31, 2014 | Increase (Decrease) $ | Increase (Decrease) % | ||||||||||||
Research | $ | 1,583,486 | $ | 1,445,338 | $ | 138,148 | 10 | % | ||||||||
Consulting | 327,735 | 348,396 | (20,661 | ) | (6 | ) | ||||||||||
Events | 251,835 | 227,707 | 24,128 | 11 | ||||||||||||
Totals | $ | 2,163,056 | $ | 2,021,441 | $ | 141,615 | 7 | % |
Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 | Income Increase (Decrease) $ | Increase (Decrease) % | |||||||||||
Total revenues | $ | 2,021,441 | $ | 1,784,213 | $ | 237,228 | 13 | % | ||||||
Costs and expenses: | ||||||||||||||
Cost of services & product development | 797,933 | 713,484 | (84,449 | ) | (12 | ) | ||||||||
Selling, general and administrative | 876,067 | 760,458 | (115,609 | ) | (15 | ) | ||||||||
Depreciation | 31,186 | 28,996 | (2,190 | ) | (8 | ) | ||||||||
Amortization of intangibles | 8,226 | 5,446 | (2,780 | ) | (51 | ) | ||||||||
Acquisition & integration charges | 21,867 | 337 | (21,530 | ) | >(100) | |||||||||
Operating income | 286,162 | 275,492 | 10,670 | 4 | ||||||||||
Interest expense, net | (10,887 | ) | (8,837 | ) | (2,050 | ) | (23 | ) | ||||||
Other expense, net | (592 | ) | (216 | ) | (376 | ) | >(100) | |||||||
Provision for income taxes | (90,917 | ) | (83,638 | ) | (7,279 | ) | (9 | ) | ||||||
Net income | $ | 183,766 | $ | 182,801 | $ | 965 | 1 | % |
Geographic Region | December 31, 2014 | December 31, 2013 | Increase (Decrease) $ | Increase (Decrease) % | ||||||||||||
U.S. and Canada | $ | 1,204,476 | $ | 1,049,734 | $ | 154,742 | 15 | % | ||||||||
Europe, Middle East, Africa | 570,334 | 508,755 | 61,579 | 12 | ||||||||||||
Other International | 246,631 | 225,724 | 20,907 | 9 | ||||||||||||
Totals | $ | 2,021,441 | $ | 1,784,213 | $ | 237,228 | 13 | % |
Segment | December 31, 2014 | December 31, 2013 | Increase (Decrease) $ | Increase (Decrease) % | ||||||||||||
Research | $ | 1,445,338 | $ | 1,271,011 | $ | 174,327 | 14 | % | ||||||||
Consulting | 348,396 | $ | 314,257 | 34,139 | 11 | |||||||||||
Events | 227,707 | $ | 198,945 | 28,762 | 14 | |||||||||||
Totals | $ | 2,021,441 | $ | 1,784,213 | $ | 237,228 | 13 | % |
2015 | 2014 | $ Increase (Decrease) | % Increase (Decrease) | 2014 | 2013 | $ Increase (Decrease) | % Increase (Decrease) | ||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||||
Revenues (1) | $1,583,486 | $1,445,338 | $ | 138,148 | 10 | % | $1,445,338 | $1,271,011 | $ | 174,327 | 14 | % | |||||||||||||
Gross contribution (1) | $1,096,827 | $1,001,914 | $ | 94,913 | 9 | % | $1,001,914 | $879,384 | $ | 122,530 | 14 | % | |||||||||||||
Gross contribution margin | 69 | % | 69 | % | — | — | 69 | % | 69 | % | — | — | |||||||||||||
Business Measurements: | |||||||||||||||||||||||||
Contract value (1) | $1,760,700 | $1,603,200 | $ | 157,500 | 10 | % | $1,603,200 | $1,423,179 | $ | 180,021 | 13 | % | |||||||||||||
Client retention | 84 | % | 85 | % | (1) point | — | 85 | % | 83 | % | 2 points | — | |||||||||||||
Wallet retention | 105 | % | 106 | % | (1) point | — | 106 | % | 104 | % | 2 points | — |
(1) | Dollars in thousands. |
2015 | 2014 | $ Increase (Decrease) | % Increase (Decrease) | 2014 | 2013 | $ Increase (Decrease) | % Increase (Decrease) | ||||||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||||||||
Revenues (1) | $327,735 | $348,396 | $ | (20,661 | ) | (6 | )% | $348,396 | $314,257 | $ | 34,139 | 11 | % | ||||||||||||||||
Gross contribution (1) | $107,193 | $119,931 | $ | (12,738 | ) | (11 | )% | $119,931 | $107,565 | $ | 12,366 | 11 | % | ||||||||||||||||
Gross contribution margin | 33 | % | 34 | % | (1) point | — | 34 | % | 34 | % | — | ||||||||||||||||||
Business Measurements: | |||||||||||||||||||||||||||||
Backlog (1) | $117,700 | $102,600 | $ | 15,100 | 15 | % | $102,600 | $106,130 | $ | (3,530 | ) | (3 | )% | ||||||||||||||||
Billable headcount | 606 | 535 | 71 | 13 | % | 535 | 509 | 26 | 5 | % | |||||||||||||||||||
Consultant utilization | 66 | % | 68 | % | (2) points | — | 68 | % | 64 | % | 4 points | — | |||||||||||||||||
Average annualized revenue per billable headcount (1) | $ | 391 | $ | 442 | $ | (51 | ) | (12 | )% | $ | 442 | $ | 409 | $ | 33 | 8 | % |
(1) | Dollars in thousands. |
2015 | 2014 | $ Increase (Decrease) | % Increase (Decrease) | 2014 | 2013 | $ Increase (Decrease) | % Increase (Decrease) | ||||||||||||||||||
Financial Measurements: | |||||||||||||||||||||||||
Revenues (1) | $251,835 | $227,707 | $ | 24,128 | 11 | % | $227,707 | $198,945 | $ | 28,762 | 14 | % | |||||||||||||
Gross contribution (1) | $130,527 | $112,384 | $ | 18,143 | 16 | % | $112,384 | $91,216 | $ | 21,168 | 23 | % | |||||||||||||
Gross contribution margin | 52 | % | 49 | % | 3 points | — | 49 | % | 46 | % | 3 points | — | |||||||||||||
Business Measurements: | |||||||||||||||||||||||||
Number of events | 65 | 61 | 4 | 7 | % | 61 | 64 | (3 | ) | (5 | )% | ||||||||||||||
Number of attendees | 52,595 | 49,047 | 3,548 | 7 | % | 49,047 | 44,986 | 4,061 | 9 | % |
(1) | Dollars in thousands. |
2015 vs. 2014 | 2014 vs. 2013 | ||||||||||||||||||||||
Twelve Months Ended December 31, 2015 | Twelve Months Ended December 31, 2014 | Increase (Decrease) | Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 | Increase (Decrease) | ||||||||||||||||||
Cash provided by operating activities | $ | 345,561 | $ | 346,779 | $ | (1,218 | ) | $ | 346,779 | $ | 315,654 | $ | 31,125 | ||||||||||
Cash used in investing activities | (242,357 | ) | (162,777 | ) | (79,580 | ) | (162,777 | ) | (36,498 | ) | (126,279 | ) | |||||||||||
Cash used by financing activities | (67,690 | ) | (208,670 | ) | 140,980 | (208,670 | ) | (153,855 | ) | (54,815 | ) | ||||||||||||
Net increase (decrease) | 35,514 | (24,668 | ) | 60,182 | (24,668 | ) | 125,301 | (149,969 | ) | ||||||||||||||
Effects of exchange rate changes (1) | (27,840 | ) | (34,020 | ) | 6,180 | (34,020 | ) | (1,163 | ) | (32,857 | ) | ||||||||||||
Beginning cash and cash equivalents | 365,302 | 423,990 | (58,688 | ) | 423,990 | 299,852 | 124,138 | ||||||||||||||||
Ending cash and cash equivalents | $ | 372,976 | $ | 365,302 | $ | 7,674 | $ | 365,302 | $ | 423,990 | $ | (58,688 | ) |
(1) | A number of foreign currencies in which we hold cash weakened relative to the U.S. dollar over the past two years. As a result, the effects of foreign currency exchange rates has had a significant impact on our cash and cash equivalents balances. |
Commitment Description: | Due In Less Than 1 Year | Due In 2-3 Years | Due In 4-5 Years | Due In More Than 5 Years | Total | |||||||||||||||
Debt – principal and interest (1), (2) | $ | 42,860 | $ | 115,689 | $ | 752,860 | $ | 5,060 | $ | 916,469 | ||||||||||
Operating leases (3) | 40,910 | 67,214 | 44,314 | 111,555 | 263,993 | |||||||||||||||
Deferred compensation arrangement (4) | 3,511 | 5,454 | 3,784 | 26,322 | 39,071 | |||||||||||||||
Other (5) | 17,630 | 18,849 | 9,180 | 14,613 | 60,272 | |||||||||||||||
Totals | $ | 104,911 | $ | 207,206 | $ | 810,138 | $ | 157,550 | $ | 1,279,805 |
(1) | Amounts borrowed under the Company's 2014 Credit Agreement, which matures in December 2019, have been classified in the table based on the scheduled repayment dates. Projected interest payments on amounts outstanding were based on the effective interest rates as of December 31, 2015. See Note 5 — Debt in the Notes to the Consolidated Financial Statements for additional information. |
(2) | The Company also has a $5.0 million State of Connecticut economic development loan which is classified in the Due In More Than 5 Years category since it has a 10 year maturity. Interest payments on the loan have been calculated based on the contractual fixed rate of interest. Under certain circumstances, part or all of this debt may be forgiven by the State. See Note 5 — Debt in the Notes to the Consolidated Financial Statements for additional information. |
(3) | The Company leases various facilities, furniture, computer equipment, and automobiles. These leases expire between 2016 and 2030. See Note 1 — Business and Significant Accounting Policies in the Notes to the Consolidated Financial Statements for additional information on the Company's leases. |
(4) | The Company has a supplemental deferred compensation arrangement with certain employees (see Note 13 — Employee Benefits in the Notes to the Consolidated Financial Statements for additional information). Amounts payable with a known payment date have been classified in the table based on the payment date. Amounts payable whose payment date is unknown have been included in the Due In More Than 5 Years category since the Company cannot determine when the amounts will be paid. |
(5) | The Other category includes (i) contractual commitments for software, building maintenance, telecom, and other services; (ii) amounts due for share repurchase transactions that occurred in late December 2015 but were settled in January 2016; and (iii) projected cash contributions to the Company's defined benefit pension plans. |
2015 | ||||||||||||||||
(In thousands, except per share data) | First | Second | Third | Fourth | ||||||||||||
Revenues | $ | 471,186 | $ | 547,936 | $ | 500,166 | $ | 643,768 | ||||||||
Operating income | 48,682 | 85,220 | 52,474 | 101,621 | ||||||||||||
Net income | 28,351 | 51,155 | 30,366 | 65,763 | ||||||||||||
Net income per share: (1) | ||||||||||||||||
Basic | $ | 0.33 | $ | 0.61 | $ | 0.37 | $ | 0.80 | ||||||||
Diluted | $ | 0.32 | $ | 0.61 | $ | 0.36 | $ | 0.78 |
2014 | ||||||||||||||||
(In thousands, except per share data) | First | Second | Third | Fourth | ||||||||||||
Revenues | $ | 446,702 | $ | 519,820 | $ | 470,940 | $ | 583,979 | ||||||||
Operating income | 59,170 | 81,761 | 49,391 | 95,840 | ||||||||||||
Net income | 37,736 | 53,040 | 33,846 | 59,144 | ||||||||||||
Net income per share: (1) | ||||||||||||||||
Basic | $ | 0.41 | $ | 0.59 | $ | 0.38 | $ | 0.67 | ||||||||
Diluted | $ | 0.40 | $ | 0.58 | $ | 0.38 | $ | 0.66 |
(1) | The aggregate of the four quarters’ basic and diluted earnings per common share may not equal the reported full calendar year amounts due to the effects of share repurchases, dilutive equity compensation, and rounding. |
EXHIBIT NUMBER | DESCRIPTION OF DOCUMENT | |
3.1(1) | Restated Certificate of Incorporation of the Company. | |
3.2(2) | Bylaws as amended through February 2, 2012. | |
4.1(1) | Form of Certificate for Common Stock as of June 2, 2005. | |
4.2* | Credit Agreement, dated as of December 16, 2014, among the Company, the several lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A. as administrative agent. | |
10.1(3) | Lease dated April 16, 2010 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut. | |
10.2(3) | First Amendment to Lease dated April 16, 2010 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut. | |
10.4(4)+ | 2011 Employee Stock Purchase Plan. | |
10.5(5)+ | 2003 Long -Term Incentive Plan, as amended and restated effective June 4, 2009. | |
10.6(6)+ | 2014 Long-Term Incentive Plan, effective May 29, 2014. | |
10.7(7)+ | Amended and Restated Employment Agreement between Eugene A. Hall and the Company dated as of April 13, 2011. | |
10.8(8)+ | Company Deferred Compensation Plan, effective January 1, 2009. | |
10.9(9)+ | Form of Stock Appreciation Right Agreement for executive officers. | |
10.10(9)+ | Form of Performance Stock Unit Agreement for executive officers. | |
21.1* | Subsidiaries of Registrant. | |
23.1* | Consent of Independent Registered Public Accounting Firm. | |
24.1 | Power of Attorney (see Signature Page). | |
31.1* | Certification of chief executive officer under Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of chief financial officer under Section 302 of the Sarbanes-Oxley Act of 2002. | |
32* | Certification under Section 906 of the Sarbanes-Oxley Act of 2002. |
* | Filed with this document. |
+ | Management compensation plan or arrangement. |
(1) | Incorporated by reference from the Company’s Current Report on Form 8-K dated June 29, 2005 as filed on July 6, 2005. |
(2) | Incorporated by reference from the Company’s Current Report on Form 8-K dated February 2, 2012 as filed on February 7, 2012. |
(3) | Incorporated by reference from the Company’s Quarterly Report on form 10-Q as filed on August 9, 2010. |
(4) | Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) as filed on April 18, 2011. |
(5) | Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) as filed on April 21, 2009 |
(6) | Incorporated by reference from the Company’s Proxy Statement (Schedule 14A) as filed on April 15, 2014. |
(7) | Incorporated by reference from the Company’s Quarterly Report on Form 10-Q as filed on August 2, 2011. |
(8) | Incorporated by reference from the Company’s Annual Report on Form 10-K as filed on February 20, 2009. |
(9) | Incorporated by reference from the Company’s Current Report on Form 8-K dated February 8, 2016 as filed on February 12, 2016. |
December 31, | |||||||
2015 | 2014 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 372,976 | $ | 365,302 | |||
Fees receivable, net of allowances of $6,900 and $6,700 respectively | 580,763 | 552,107 | |||||
Deferred commissions | 124,831 | 115,381 | |||||
Prepaid expenses and other current assets | 62,427 | 63,868 | |||||
Total current assets | 1,140,997 | 1,096,658 | |||||
Property, equipment and leasehold improvements, net | 108,733 | 97,990 | |||||
Goodwill | 715,359 | 586,665 | |||||
Intangible assets, net | 96,544 | 30,689 | |||||
Other assets | 113,053 | 92,349 | |||||
Total Assets | $ | 2,174,686 | $ | 1,904,351 | |||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 387,691 | $ | 353,761 | |||
Deferred revenues | 900,801 | 841,457 | |||||
Current portion of long-term debt | 35,000 | 20,000 | |||||
Total current liabilities | 1,323,492 | 1,215,218 | |||||
Long-term debt | 790,000 | 385,000 | |||||
Other liabilities | 193,594 | 142,962 | |||||
Total Liabilities | 2,307,086 | 1,743,180 | |||||
Stockholders’ (Deficit) Equity: | |||||||
Preferred stock: | |||||||
$.01 par value, authorized 5,000,000 shares; none issued or outstanding | — | — | |||||
Common stock: | |||||||
$.0005 par value, authorized 250,000,000 shares for both periods; 156,234,415 shares issued for both periods | 78 | 78 | |||||
Additional paid-in capital | 818,546 | 764,433 | |||||
Accumulated other comprehensive loss, net | (44,402 | ) | (21,170 | ) | |||
Accumulated earnings | 1,450,684 | 1,275,049 | |||||
Treasury stock, at cost, 73,896,245 and 68,713,890 common shares, respectively | (2,357,306 | ) | (1,857,219 | ) | |||
Total Stockholders’ (Deficit) Equity | (132,400 | ) | 161,171 | ||||
Total Liabilities and Stockholders’ (Deficit) Equity | $ | 2,174,686 | $ | 1,904,351 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Revenues: | |||||||||||
Research | $ | 1,583,486 | $ | 1,445,338 | $ | 1,271,011 | |||||
Consulting | 327,735 | 348,396 | 314,257 | ||||||||
Events | 251,835 | 227,707 | 198,945 | ||||||||
Total revenues | 2,163,056 | 2,021,441 | 1,784,213 | ||||||||
Costs and expenses: | |||||||||||
Cost of services and product development | 839,076 | 797,933 | 713,484 | ||||||||
Selling, general and administrative | 962,677 | 876,067 | 760,458 | ||||||||
Depreciation | 33,789 | 31,186 | 28,996 | ||||||||
Amortization of intangibles | 13,342 | 8,226 | 5,446 | ||||||||
Acquisition and integration charges | 26,175 | 21,867 | 337 | ||||||||
Total costs and expenses | 1,875,059 | 1,735,279 | 1,508,721 | ||||||||
Operating income | 287,997 | 286,162 | 275,492 | ||||||||
Interest income | 1,766 | 1,413 | 1,551 | ||||||||
Interest expense | (22,548 | ) | (12,300 | ) | (10,388 | ) | |||||
Other income (expense), net | 4,996 | (592 | ) | (216 | ) | ||||||
Income before income taxes | 272,211 | 274,683 | 266,439 | ||||||||
Provision for income taxes | 96,576 | 90,917 | 83,638 | ||||||||
Net income | $ | 175,635 | $ | 183,766 | $ | 182,801 | |||||
Net income per share: | |||||||||||
Basic | $ | 2.09 | $ | 2.06 | $ | 1.97 | |||||
Diluted | $ | 2.06 | $ | 2.03 | $ | 1.93 | |||||
Weighted average shares outstanding: | |||||||||||
Basic | 83,852 | 89,337 | 93,015 | ||||||||
Diluted | 85,056 | 90,719 | 94,830 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Net income | $ | 175,635 | $ | 183,766 | $ | 182,801 | |||||
Other comprehensive (loss) income, net of tax | |||||||||||
Foreign currency translation adjustments | (23,089 | ) | (27,461 | ) | 503 | ||||||
Interest rate hedges - net change in deferred loss | (1,339 | ) | 2,163 | 2,107 | |||||||
Pension plans - net change in deferred actuarial loss | 1,196 | (4,217 | ) | (233 | ) | ||||||
Other comprehensive (loss) income, net of tax | (23,232 | ) | (29,515 | ) | 2,377 | ||||||
Comprehensive income | $ | 152,403 | $ | 154,251 | $ | 185,178 |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income, Net | Accumulated Earnings | Treasury Stock | Total Stockholders’ (Deficit) Equity | ||||||||||||||||||
Balance at December 31, 2012 | $ | 78 | $ | 679,871 | $ | 5,968 | $ | 908,482 | $ | (1,287,726 | ) | $ | 306,673 | ||||||||||
Net income | — | — | — | 182,801 | — | 182,801 | |||||||||||||||||
Other comprehensive income | — | — | 2,377 | — | — | 2,377 | |||||||||||||||||
Issuances under stock plans | — | (21,354 | ) | — | — | 27,388 | 6,034 | ||||||||||||||||
Stock compensation tax benefits | — | 25,392 | — | — | — | 25,392 | |||||||||||||||||
Common share repurchases | — | — | — | — | (196,696 | ) | (196,696 | ) | |||||||||||||||
Stock compensation expense | — | 34,735 | — | — | — | 34,735 | |||||||||||||||||
Balance at December 31, 2013 | $ | 78 | $ | 718,644 | $ | 8,345 | $ | 1,091,283 | $ | (1,457,034 | ) | $ | 361,316 | ||||||||||
Net income | — | — | — | 183,766 | — | 183,766 | |||||||||||||||||
Other comprehensive loss | — | — | (29,515 | ) | — | — | (29,515 | ) | |||||||||||||||
Issuances under stock plans | — | (11,727 | ) | — | — | 19,527 | 7,800 | ||||||||||||||||
Stock compensation tax benefits | — | 18,671 | — | — | — | 18,671 | |||||||||||||||||
Common share repurchases | — | — | — | — | (419,712 | ) | (419,712 | ) | |||||||||||||||
Stock compensation expense | — | 38,845 | — | — | — | 38,845 | |||||||||||||||||
Balance at December 31, 2014 | $ | 78 | $ | 764,433 | $ | (21,170 | ) | $ | 1,275,049 | $ | (1,857,219 | ) | $ | 161,171 | |||||||||
Net income | — | — | — | 175,635 | — | 175,635 | |||||||||||||||||
Other comprehensive loss | — | — | (23,232 | ) | — | — | (23,232 | ) | |||||||||||||||
Issuances under stock plans | — | (5,964 | ) | — | — | 13,495 | 7,531 | ||||||||||||||||
Stock compensation tax benefits | — | 13,928 | — | — | — | 13,928 | |||||||||||||||||
Common share repurchases | — | — | — | — | (513,582 | ) | (513,582 | ) | |||||||||||||||
Stock compensation expense | — | 46,149 | — | — | — | 46,149 | |||||||||||||||||
Balance at December 31, 2015 | $ | 78 | $ | 818,546 | $ | (44,402 | ) | $ | 1,450,684 | $ | (2,357,306 | ) | $ | (132,400 | ) |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Operating activities: | |||||||||||
Net income | $ | 175,635 | $ | 183,766 | $ | 182,801 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization of intangibles | 47,131 | 39,412 | 34,442 | ||||||||
Stock-based compensation expense | 46,149 | 38,845 | 34,735 | ||||||||
Excess tax benefits from employee stock-based compensation exercises | (13,860 | ) | (20,193 | ) | (25,392 | ) | |||||
Deferred taxes | 344 | (759 | ) | 16,663 | |||||||
Amortization and write-off of debt issue costs | 1,512 | 2,645 | 2,710 | ||||||||
Changes in assets and liabilities: | |||||||||||
Fees receivable, net | (44,476 | ) | (76,424 | ) | (28,097 | ) | |||||
Deferred commissions | (13,236 | ) | (12,340 | ) | (18,608 | ) | |||||
Prepaid expenses and other current assets | (13,268 | ) | (3,017 | ) | (1,187 | ) | |||||
Other assets | (14,733 | ) | (7,139 | ) | (5,268 | ) | |||||
Deferred revenues | 91,840 | 105,354 | 80,938 | ||||||||
Accounts payable, accrued, and other liabilities | 82,523 | 96,629 | 41,917 | ||||||||
Cash provided by operating activities | 345,561 | 346,779 | 315,654 | ||||||||
Investing activities: | |||||||||||
Additions to property, equipment and leasehold improvements | (46,128 | ) | (38,486 | ) | (36,498 | ) | |||||
Acquisitions (net of cash acquired) | (170,604 | ) | (109,928 | ) | — | ||||||
Acquisitions - increase in restricted cash (escrow) | (25,625 | ) | (14,363 | ) | — | ||||||
Cash used in investing activities | (242,357 | ) | (162,777 | ) | (36,498 | ) | |||||
Financing activities: | |||||||||||
Proceeds from employee stock-based compensation plans and ESP Plan | 7,499 | 7,767 | 6,042 | ||||||||
Proceeds from borrowings | 440,000 | 400,000 | 205,625 | ||||||||
Payments on debt | (20,000 | ) | (200,000 | ) | (205,625 | ) | |||||
Purchases of treasury stock | (509,049 | ) | (432,006 | ) | (181,736 | ) | |||||
Fees paid for debt refinancing | — | (4,624 | ) | (3,553 | ) | ||||||
Excess tax benefits from employee stock-based compensation exercises | 13,860 | 20,193 | 25,392 | ||||||||
Cash used by financing activities | (67,690 | ) | (208,670 | ) | (153,855 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 35,514 | (24,668 | ) | 125,301 | |||||||
Effects of exchange rates on cash and cash equivalents | (27,840 | ) | (34,020 | ) | (1,163 | ) | |||||
Cash and cash equivalents, beginning of period | 365,302 | 423,990 | 299,852 | ||||||||
Cash and cash equivalents, end of period | $ | 372,976 | $ | 365,302 | $ | 423,990 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 21,200 | $ | 10,600 | $ | 8,500 | |||||
Income taxes, net of refunds received | $ | 83,500 | $ | 70,100 | $ | 50,767 |
Useful Life | December 31, | |||||||||
Category | (Years) | 2015 | 2014 | |||||||
Computer equipment and software | 2-7 | $ | 148,195 | $ | 144,293 | |||||
Furniture and equipment | 3-8 | 39,072 | 37,221 | |||||||
Leasehold improvements | 2-15 | 87,103 | 78,094 | |||||||
$ | 274,370 | $ | 259,608 | |||||||
Less — accumulated depreciation and amortization | (165,637 | ) | (161,618 | ) | ||||||
Property, equipment, and leasehold improvements, net | $ | 108,733 | $ | 97,990 |
December 31, 2015 | Trade Names | Customer Relationships | Content | Software | Non-Compete | Total | ||||||||||||||||||
Gross cost, December 31, 2014 | $ | 6,924 | $ | 27,933 | $ | 3,560 | $ | 6,569 | $ | 9,272 | $ | 54,258 | ||||||||||||
Additions due to acquisitions (1) | 3,260 | 42,620 | 2,000 | 11,656 | 20,075 | 79,611 | ||||||||||||||||||
Intangibles fully amortized | (6,013 | ) | (7,210 | ) | — | — | — | (13,223 | ) | |||||||||||||||
Foreign currency translation impact | (27 | ) | (483 | ) | (110 | ) | (2,006 | ) | (17 | ) | (2,643 | ) | ||||||||||||
Gross cost | 4,144 | 62,860 | 5,450 | 16,219 | 29,330 | 118,003 | ||||||||||||||||||
Accumulated amortization (3), (4) | (681 | ) | (9,028 | ) | (3,525 | ) | (3,699 | ) | (4,526 | ) | (21,459 | ) | ||||||||||||
Balance, December 31, 2015 | $ | 3,463 | $ | 53,832 | $ | 1,925 | $ | 12,520 | $ | 24,804 | $ | 96,544 |
December 31, 2014 | Trade Names | Customer Relationships | Content | Software | Non-Compete | Total | ||||||||||||||||||
Gross cost, December 31, 2013 | $ | 6,023 | $ | 10,146 | $ | 3,496 | $ | 2,143 | $ | — | $ | 21,808 | ||||||||||||
Additions due to acquisitions (1) | 915 | 18,054 | 206 | 5,000 | 7,800 | 31,975 | ||||||||||||||||||
Non-competition agreement (2) | — | — | — | — | 1,500 | 1,500 | ||||||||||||||||||
Foreign currency translation impact | (14 | ) | (267 | ) | (142 | ) | (574 | ) | (28 | ) | (1,025 | ) | ||||||||||||
Gross cost | 6,924 | 27,933 | 3,560 | 6,569 | 9,272 | 54,258 | ||||||||||||||||||
Accumulated amortization (3), (4) | (6,202 | ) | (11,072 | ) | (2,246 | ) | (2,603 | ) | (1,446 | ) | (23,569 | ) | ||||||||||||
Balance, December 31, 2014 | $ | 722 | $ | 16,861 | $ | 1,314 | $ | 3,966 | $ | 7,826 | $ | 30,689 |
(1) | The additions are due to the Company's acquisitions. See Note 2 — Acquisitions for additional information. |
(2) | The non-competition intangible relates to a separation agreement with the Company's former CFO. |
(3) | Intangible assets are amortized against earnings over the following periods: Trade name—2 to 4 years; Customer relationships 4 to 7 years; Content—1.5 to 4 years; Software—3 years; Non-compete—3 to 5 years. |
(4) | Aggregate amortization expense related to intangible assets was $13.3 million, $8.2 million, and $5.4 million in 2015, 2014, and 2013, respectively. |
2016 | $ | 24,074 | |
2017 | 21,468 | ||
2018 | 18,818 | ||
2019 | 14,321 | ||
2020 | 12,449 | ||
Thereafter | 5,414 | ||
$ | 96,544 |
Research | Consulting | Events | Total | ||||||||||||
Balance, December 31, 2013 (1) | $ | 376,568 | $ | 100,677 | $ | 41,958 | $ | 519,203 | |||||||
Additions due to acquisitions (2) | 78,373 | — | — | 78,373 | |||||||||||
Foreign currency translation adjustments | (9,481 | ) | (1,260 | ) | (170 | ) | (10,911 | ) | |||||||
Balance, December 31, 2014 | $ | 445,460 | $ | 99,417 | $ | 41,788 | $ | 586,665 | |||||||
Additions due to acquisitions (2) | 138,053 | — | — | 138,053 | |||||||||||
Foreign currency translation adjustments | (8,221 | ) | (1,005 | ) | (133 | ) | (9,359 | ) | |||||||
Balance, December 31, 2015 | $ | 575,292 | $ | 98,412 | $ | 41,655 | $ | 715,359 |
(1) | The Company does not have any accumulated goodwill impairment losses. |
(2) | The addition are due to the Company's acquisitions (See Note 2—Acquisitions for additional discussion). All of the recorded goodwill from these acquisitions has been included in the Research segment. |
Total | ||||
Aggregate purchase price (1), (2) | $ | 206.9 | ||
Less: cash acquired (3) | (10.7 | ) | ||
Net cash paid during 2015 (3) | $ | 196.2 |
(1) | The aggregate purchase price represents the gross cash paid for 100% of the outstanding capital stock of the acquired businesses. This includes $179.2 million paid for Capterra and approximately $27.7 million paid for Nubera. |
(2) | The aggregate purchase price includes $30.0 million placed in escrow to cover potential indemnification claims. Of this amount, $25.6 million is restricted cash and is reported in Other Assets on the Company's Condensed Consolidated Balance Sheets. |
(3) | Cash acquired represents the amount of cash from the acquired businesses. The net cash paid represents the amount paid for cash flow reporting purposes. |
Total | ||||
Assets: | ||||
Cash | $ | 10.7 | ||
Receivables and other assets | 12.8 | |||
Amortizable intangible assets (1) | 79.6 | |||
Goodwill (1) | 138.1 | |||
Total assets | $ | 241.2 | ||
Liabilities: | ||||
Payables and accrueds (2) | $ | 34.3 | ||
Total liabilities | $ | 34.3 | ||
Net assets acquired | $ | 206.9 |
(1) | Includes $68.5 million and $121.1 million of amortizable intangible assets and goodwill, respectively, for Capterra and approximately $11.1 million and $17.0 million of amortizable intangible assets and goodwill, respectively, for Nubera. |
(2) | Includes $25.6 million Capterra escrow liability. The escrow liability is scheduled to be paid in late 2017 from restricted cash. |
December 31, | |||||||
2015 | 2014 | ||||||
Security deposits | $ | 6,699 | $ | 4,951 | |||
Debt issuance costs, net | 6,169 | 7,781 | |||||
Benefit plan-related assets | 42,168 | 43,293 | |||||
Non-current deferred tax assets | 26,418 | 17,960 | |||||
Acquisition escrow - restricted cash | 25,625 | 14,363 | |||||
Other | 5,974 | 4,001 | |||||
Total other assets | $ | 113,053 | $ | 92,349 |
December 31, | |||||||
2015 | 2014 | ||||||
Accounts payable | $ | 31,570 | $ | 16,802 | |||
Payroll and employee benefits payable | 85,575 | 79,831 | |||||
Severance and retention bonus payable | 38,557 | 26,965 | |||||
Bonus payable | 90,989 | 83,000 | |||||
Commissions payable | 66,054 | 64,888 | |||||
Taxes payable | 13,714 | 18,538 | |||||
Professional, consulting, audit fees | 10,164 | 9,429 | |||||
Other accrued liabilities | 51,068 | 54,308 | |||||
Total accounts payable and accrued liabilities | $ | 387,691 | $ | 353,761 |
December 31, | |||||||
2015 | 2014 | ||||||
Non-current deferred revenue | $ | 7,603 | $ | 7,056 | |||
Interest rate swap liability | 5,132 | 2,900 | |||||
Long-term taxes payable | 13,784 | 8,506 | |||||
Deferred rent | 15,207 | 16,667 | |||||
Benefit plan-related liabilities | 62,675 | 64,994 | |||||
Other | 89,193 | 42,839 | |||||
Total other liabilities | $ | 193,594 | $ | 142,962 |
Amount Outstanding December 31, | Amount Outstanding December 31, | ||||||
Description: | 2015 | 2014 | |||||
Term loan (1) | $ | 380,000 | $ | 400,000 | |||
Revolver (1), (2) | 440,000 | — | |||||
Other (3) | 5,000 | 5,000 | |||||
Total (4), (5) | $ | 825,000 | $ | 405,000 |
(1) | The contractual annual interest rate as of December 31, 2015 on both the term loan and the revolver was 1.80%, which consisted of a floating Eurodollar base rate of 0.42% plus a margin of 1.38%. However, the Company has interest rate swap contracts which convert the floating eurodollar base rate to a fixed base rate on $700.0 million of borrowings (see below). |
(2) | The Company had $656.0 million of available borrowing capacity on the revolver (not including the expansion feature) as of December 31, 2015. |
(3) | Consists of a $5.0 million State of Connecticut economic development loan with a 3.0% fixed rate of interest. The loan was originated in 2012 and has a 10 year maturity. Principal payments are deferred for the first five years and the loan may be repaid at any point by the Company without penalty. The loan has a principal forgiveness provision in which up to $2.5 million of the loan may be forgiven if the Company meets certain employment targets during the first five years of the loan. |
(4) | As of December 31, 2015, $35.0 million of the debt was classified as short term and $790.0 million was classified as long term on the Consolidated Balance Sheets. |
(5) | The weighted-average annual interest rate on the Company's outstanding debt as of December 31, 2015 was 2.76%, which includes the impact of the Company's interest swap contracts. |
Year ended December 31, | |||
2016 | $ | 40,910 | |
2017 | 37,565 | ||
2018 | 29,649 | ||
2019 | 25,074 | ||
2020 | 19,240 | ||
Thereafter | 111,555 | ||
Total minimum lease payments | $ | 263,993 |
Issued Shares | Treasury Stock Shares | ||||
Balance at December 31, 2012 | 156,234,415 | 62,873,100 | |||
Issuances under stock plans | — | (2,037,091 | ) | ||
Purchases for treasury (1) | — | 3,432,854 | |||
Balance at December 31, 2013 | 156,234,415 | 64,268,863 | |||
Issuances under stock plans | — | (1,452,419 | ) | ||
Purchases for treasury (1) | — | 5,897,446 | |||
Balance at December 31, 2014 | 156,234,415 | 68,713,890 | |||
Issuances under stock plans | — | (1,003,746 | ) | ||
Purchases for treasury (1) | — | 6,186,101 | |||
Balance at December 31, 2015 | 156,234,415 | 73,896,245 |
(1) | The Company used a total of $509.0 million, $432.0 million, and $181.7 million in cash for share repurchases in 2015, 2014, and 2013, respectively. |
Interest Rate Swaps | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||
Balance - December 31, 2014 | $ | (1,740 | ) | $ | (6,028 | ) | $ | (13,402 | ) | $ | (21,170 | ) | |||
Changes during the period: | |||||||||||||||
Change in AOCL/I before reclassifications to income | (6,356 | ) | 986 | (23,089 | ) | (28,459 | ) | ||||||||
Reclassifications from AOCL/I to income during the period (2), (3) | 5,017 | 210 | — | 5,227 | |||||||||||
Other comprehensive (loss) income for the period | (1,339 | ) | 1,196 | (23,089 | ) | (23,232 | ) | ||||||||
Balance - December 31, 2015 | $ | (3,079 | ) | $ | (4,832 | ) | $ | (36,491 | ) | $ | (44,402 | ) |
Interest Rate Swap | Defined Benefit Pension Plans | Foreign Currency Translation Adjustments | Total | ||||||||||||
Balance - December 31, 2013 | $ | (3,903 | ) | $ | (1,811 | ) | $ | 14,059 | $ | 8,345 | |||||
Changes during the period: | |||||||||||||||
Change in AOCL/I before reclassifications to income | (292 | ) | (4,275 | ) | (27,461 | ) | (32,028 | ) | |||||||
Reclassifications from AOCL/I to income during the period (2), (3) | 2,455 | 58 | — | 2,513 | |||||||||||
Other comprehensive income (loss) for the period | 2,163 | (4,217 | ) | (27,461 | ) | (29,515 | ) | ||||||||
Balance - December 31, 2014 | $ | (1,740 | ) | $ | (6,028 | ) | $ | (13,402 | ) | $ | (21,170 | ) |
Award type: | 2015 | 2014 | 2013 | |||||||||
Stock appreciation rights | $ | 5.7 | $ | 5.0 | $ | 5.2 | ||||||
Common stock equivalents | 0.6 | 0.6 | 0.6 | |||||||||
Restricted stock units | 39.8 | 33.2 | 28.9 | |||||||||
Total (1) | $ | 46.1 | $ | 38.8 | $ | 34.7 |
(1) | Includes charges of $20.1 million, $14.8 million, and $12.5 million in 2015, 2014 and 2013, respectively, for awards to retirement-eligible employees. These awards vest on an accelerated basis |
Amount recorded in: | 2015 | 2014 | 2013 | |||||||||
Costs of services and product development | $ | 20.6 | $ | 17.6 | $ | 15.3 | ||||||
Selling, general, and administrative | 25.5 | 21.2 | 19.4 | |||||||||
Total | $ | 46.1 | $ | 38.8 | $ | 34.7 |
SARs in millions | Per Share Weighted- Average Exercise Price | Per Share Weighted- Average Grant Date Fair Value | Weighted- Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2014 | 1.4 | $ | 44.44 | $ | 13.26 | 4.34 years | |||||||
Granted | 0.3 | 77.92 | 17.56 | 6.11 years | |||||||||
Forfeited | — | — | — | — | |||||||||
Exercised | (0.4 | ) | 32.53 | 11.35 | na | ||||||||
Outstanding at December 31, 2015 (1), (2) | 1.3 | $ | 56.47 | $ | 14.92 | 4.46 years | |||||||
Vested and exercisable at December 31, 2015 (2) | 0.5 | $ | 43.51 | $ | 13.49 | 3.38 years |
(1) | At December 31, 2015, 0.8 million of these SARs were unvested. The Company expects that substantially all of these unvested awards will vest in future periods. |
(2) | At December 31, 2015, SARs outstanding had an intrinsic value of $45.8 million. SARs vested and exercisable had an intrinsic value of $23.7 million. |
2015 | 2014 | 2013 | ||||||
Expected dividend yield (1) | — | % | — | % | — | % | ||
Expected stock price volatility (2) | 24 | % | 25 | % | 35 | % | ||
Risk-free interest rate (3) | 1.5 | % | 1.3 | % | 0.8 | % | ||
Expected life in years (4) | 4.41 | 4.43 | 4.49 |
(1) | The dividend yield assumption is based on both the history and expectation of the Company’s dividend payouts. Historically the Company has not paid cash dividends on its Common Stock. |
(2) | The determination of expected stock price volatility was based on both historical Common Stock prices and the implied volatility from publicly traded options in Common Stock. |
(3) | The risk-free interest rate is based on the yield of a U.S. Treasury security with a maturity similar to the expected life of the award. |
(4) | The expected life represents the Company’s weighted-average estimate of the period of time the SARs are expected to be outstanding (that is, the period between the service inception date and the expected exercise date). |
Restricted Stock Units (RSUs) (in millions) | Per Share Weighted Average Grant Date Fair Value | |||||
Outstanding at December 31, 2014 | 1.4 | $ | 50.76 | |||
Granted (1) | 0.6 | 79.22 | ||||
Vested and released | (0.6 | ) | 47.82 | |||
Forfeited | — | — | ||||
Outstanding at December 31, 2015 (2), (3) | 1.4 | $ | 62.80 |
(1) | The 0.6 million RSUs granted in 2015 consisted of 0.3 million performance-based RSUs awarded to executives and 0.3 million service-based RSUs awarded to non-executive employees and non-management board members. The aggregate target number of performance-based RSUs awarded in 2015 was 0.2 million but the final award was subject to the adjustment from 0% to 200% of the target number depending upon the level achieved in the Company's subscription-based research contract value |
(2) | The Company expects that substantially all of the outstanding awards at December 31, 2015 will vest in future periods. |
(3) | The weighted-average remaining contractual term of the outstanding RSUs is approximately 1 year. |
Common Stock Equivalents (CSEs) | Per Share Weighted Average Grant Date Fair Value | |||||
Outstanding at December 31, 2014 | 104,203 | $ | 18.65 | |||
Granted | 7,443 | 85.15 | ||||
Converted to common shares | (5,982 | ) | 85.12 | |||
Outstanding at December 31, 2015 | 105,664 | $ | 19.57 |
2015 | 2014 | 2013 | |||||||||
Numerator: | |||||||||||
Net income used for calculating basic and diluted earnings per common share | $ | 175,635 | $ | 183,766 | $ | 182,801 | |||||
Denominator: (1) | |||||||||||
Weighted average number of common shares used in the calculation of basic earnings per share | 83,852 | 89,337 | 93,015 | ||||||||
Common share equivalents associated with stock-based compensation plans | 1,204 | 1,382 | 1,815 | ||||||||
Shares used in the calculation of diluted earnings per share | 85,056 | 90,719 | 94,830 | ||||||||
Earnings per share: | |||||||||||
Basic | $ | 2.09 | $ | 2.06 | $ | 1.97 | |||||
Diluted | $ | 2.06 | $ | 2.03 | $ | 1.93 |
(1) | The Company repurchased 6.2 million, 5.9 million, and 3.4 million shares of its Common Stock in 2015, 2014, and 2013, respectively. |
2015 | 2014 | 2013 | |||||||||
Anti-dilutive common share equivalents as of December 31 (in millions): | 0.3 | 0.3 | 0.3 | ||||||||
Average market price per share of Common Stock during the year | $ | 86.02 | $ | 73.27 | $ | 57.50 |
2015 | 2014 | 2013 | |||||||||
U.S. | $ | 165,848 | $ | 188,963 | $ | 186,330 | |||||
Non-U.S. | 106,363 | 85,720 | 80,109 | ||||||||
Income before income taxes | $ | 272,211 | $ | 274,683 | $ | 266,439 |
2015 | 2014 | 2013 | |||||||||
Current tax expense: | |||||||||||
U.S. federal | $ | 48,801 | $ | 49,281 | $ | 20,215 | |||||
State and local | 10,300 | 5,135 | 4,928 | ||||||||
Foreign | 23,225 | 16,653 | 17,167 | ||||||||
Total current | 82,326 | 71,069 | 42,310 | ||||||||
Deferred tax (benefit) expense: | |||||||||||
U.S. federal | (884 | ) | (6,670 | ) | 18,824 | ||||||
State and local | (702 | ) | 6,477 | 2,742 | |||||||
Foreign | 1,550 | 779 | (4,688 | ) | |||||||
Total deferred | (36 | ) | 586 | 16,878 | |||||||
Total current and deferred | 82,290 | 71,655 | 59,188 | ||||||||
Benefit (expense) relating to interest rate swaps used to increase (decrease) equity | 893 | (1,442 | ) | (1,405 | ) | ||||||
Benefit from stock transactions with employees used to increase equity | 13,960 | 18,704 | 25,373 | ||||||||
Benefit (expense) relating to defined-benefit pension adjustments used to increase (decrease) equity | (567 | ) | 2,000 | 482 | |||||||
Total tax expense | $ | 96,576 | $ | 90,917 | $ | 83,638 |
December 31, | |||||||
2015 | 2014 | ||||||
Accrued liabilities | $ | 67,888 | $ | 67,066 | |||
Loss and credit carryforwards | 8,522 | 13,350 | |||||
Assets relating to equity compensation | 22,686 | 19,920 | |||||
Other assets | 6,712 | 3,420 | |||||
Gross deferred tax assets | 105,808 | 103,756 | |||||
Property, equipment, and leasehold improvements | (9,904 | ) | (10,817 | ) | |||
Intangible assets | (55,275 | ) | (29,400 | ) | |||
Prepaid expenses | (28,535 | ) | (26,584 | ) | |||
Other liabilities | (7,244 | ) | (3,591 | ) | |||
Gross deferred tax liabilities | (100,958 | ) | (70,392 | ) | |||
Valuation allowance | (1,828 | ) | (570 | ) | |||
Net deferred tax assets (1) | $ | 3,022 | $ | 32,794 |
(1) | The reduction in net deferred tax assets year-over-year is primarily attributable to the recognition of deferred tax liabilities for purchased intangibles in conjunction with the Company's 2015 acquisitions. |
2015 | 2014 | 2013 | ||||||
Statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 3.4 | 3.1 | 3.2 | |||||
Effect of non-U.S. operations | (7.7 | ) | (7.0 | ) | (6.1 | ) | ||
Record (release) reserve for tax contingencies | 3.0 | 2.6 | 0.9 | |||||
Record (release) valuation allowance | 0.5 | — | (0.5 | ) | ||||
Other items, net | 1.3 | (0.6 | ) | (1.1 | ) | |||
Effective tax rate | 35.5 | % | 33.1 | % | 31.4 | % |
2015 | 2014 | ||||||
Beginning balance | $ | 20,645 | $ | 14,488 | |||
Additions based on tax positions related to the current year | 5,150 | 6,351 | |||||
Additions for tax positions of prior years | 7,839 | 4,112 | |||||
Reductions for tax positions of prior years | (3,880 | ) | (2,317 | ) | |||
Reductions for expiration of statutes | (2,287 | ) | (1,027 | ) | |||
Settlements | (960 | ) | (143 | ) | |||
Change in foreign currency exchange rates | (596 | ) | (819 | ) | |||
Ending balance | $ | 25,911 | $ | 20,645 |
Derivative Contract Type | Number of Outstanding Contracts | Contract Notional Amount | Fair Value Asset (Liability) (3) | Balance Sheet Line Item | OCI Unrealized (Loss), Net Of Tax | ||||||||||||
Interest rate swaps (1) | 3 | $ | 700,000 | $ | (5,132 | ) | Other liabilities | $ | (3,079 | ) | |||||||
Foreign currency forwards (2) | 102 | 193,610 | 235 | Other current assets | — | ||||||||||||
Total | 105 | $ | 893,610 | $ | (4,897 | ) | $ | (3,079 | ) |
Derivative Contract Type | Number of Outstanding Contracts | Contract Notional Amount | Fair Value Asset (Liability) (3) | Balance Sheet Line Item | OCI Unrealized (Loss), Net Of Tax | ||||||||||||
Interest rate swap (1) | 1 | $ | 200,000 | $ | (2,900 | ) | Other liabilities | $ | (1,740 | ) | |||||||
Foreign currency forwards (2) | 77 | 45,650 | 238 | Other current assets | — | ||||||||||||
Total | 78 | $ | 245,650 | $ | (2,662 | ) | $ | (1,740 | ) |
(1) | The swap is designated as a cash flow hedge of the forecasted interest payments on borrowings. As a result, changes in the fair value of this swap are deferred and are recorded in OCI, net of tax effect (see Note 5 — Debt for additional information). |
(2) | The Company has foreign exchange transaction risk since 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 economic effects of some of these foreign currency transaction risks. These contracts are accounted for at fair value with realized and unrealized gains and losses recognized in Other expense, net since the Company does not designate these contracts as hedges for accounting purposes. All of the outstanding contracts at December 31, 2015 matured by the end of January 2016. |
(3) | See Note 12 — Fair Value Disclosures for the determination of the fair value of these instruments. |
Amount recorded in: | 2015 | 2014 | 2013 | |||||||||
Interest expense (1) | $ | 8.5 | $ | 4.1 | $ | 4.0 | ||||||
Other expense (income), net (2) | 0.1 | (0.5 | ) | 0.1 | ||||||||
Total expense | $ | 8.6 | $ | 3.6 | $ | 4.1 |
(1) | Consists of interest expense from interest rate swap contracts. |
(2) | Consists of realized and unrealized gains and losses on foreign currency forward contracts. |
Fair Value | Fair Value | |||||||
Description: | December 31, 2015 | December 31, 2014 | ||||||
Assets: | ||||||||
Values based on Level 1 inputs: | ||||||||
Deferred compensation plan assets (1) | $ | 8,671 | $ | 7,650 | ||||
Total Level 1 inputs | $ | 8,671 | $ | 7,650 | ||||
Values based on Level 2 inputs: | ||||||||
Deferred compensation plan assets (1) | $ | 25,474 | $ | 27,000 | ||||
Foreign currency forward contracts (2) | 610 | 458 | ||||||
Total Level 2 inputs | $ | 26,084 | $ | 27,458 | ||||
Total Assets | $ | 34,755 | $ | 35,108 | ||||
Liabilities: | ||||||||
Values based on level 2 inputs: | ||||||||
Deferred compensation plan liabilities (1) | $ | 39,071 | $ | 39,100 | ||||
Foreign currency forward contracts (2) | 375 | 220 | ||||||
Interest rate swap contracts (3) | 5,132 | 2,900 | ||||||
Total Level 2 inputs | $ | 44,578 | $ | 42,220 | ||||
Total Liabilities | $ | 44,578 | $ | 42,220 |
(1) | The Company has a deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees (see Note 13 — Employee Benefits). The plan’s assets consist of investments in money market and mutual funds, and company-owned life insurance contracts. |
(2) | The Company enters into foreign currency forward exchange contracts to hedge the effects of adverse fluctuations in foreign currency exchange rates (see Note 11 — Derivatives and Hedging). Valuation of the foreign currency forward contracts is based on foreign currency exchange rates in active markets, which the Company considers a Level 2 input. |
(3) | The Company has interest rate swap contracts which hedge the risk of variability in cash flows associated with changes in floating rates of interest on its borrowings (see Note 11 — Derivatives and Hedging). The fair values of the swaps are based on mark-to-market valuations provided by a third-party broker. Valuation is based on observable interest rates from recently executed market transactions and other observable market data, which the Company considers Level 2 inputs. The Company independently corroborates the reasonableness of the valuations prepared by the third-party broker through the use of an electronic quotation service. |
2015 | 2014 | 2013 | |||||||||
Service cost | $ | 2,620 | $ | 2,630 | $ | 2,545 | |||||
Interest cost | 790 | 1,190 | 1,075 | ||||||||
Expected return on plan assets | (345 | ) | (540 | ) | (340 | ) | |||||
Recognition of actuarial loss | 300 | 75 | 30 | ||||||||
Recognition of termination benefits | 85 | 30 | 455 | ||||||||
Total defined benefit pension plan expense (1) | $ | 3,450 | $ | 3,385 | $ | 3,765 |
(1) | Pension expense is classified in SG&A in the Consolidated Statements of Operations. |
2015 | 2014 | 2013 | ||||||
Weighted-average discount rate (1) | 2.19 | % | 2.15 | % | 3.35 | % | ||
Average compensation increase | 2.66 | % | 2.65 | % | 2.70 | % |
(1) | Discount rates are typically determined by utilizing the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations. |
2015 | 2014 | 2013 | |||||||||
Projected benefit obligation at beginning of year | $ | 38,115 | $ | 34,585 | $ | 31,605 | |||||
Service cost | 2,620 | 2,630 | 2,545 | ||||||||
Interest cost | 790 | 1,190 | 1,075 | ||||||||
Actuarial (gain) loss due to assumption changes and plan experience | (1,190 | ) | 6,300 | 625 | |||||||
Additions and contractual termination benefits | 85 | 30 | 460 | ||||||||
Benefits paid (1) | (775 | ) | (1,350 | ) | (1,255 | ) | |||||
Foreign currency impact | (3,775 | ) | (5,270 | ) | (470 | ) | |||||
Projected benefit obligation at end of year (2) | $ | 35,870 | $ | 38,115 | $ | 34,585 |
(1) | The Company estimates the following benefit payments will be made in future years to plan participants: $0.9 million in 2016; $2.0 million in 2017; $1.1 million in 2018, $1.2 million in 2019, $1.4 million in 2020; and $9.0 million in total in the five years thereafter. |
(2) | Measured as of December 31. |
Funded status of the plans: | 2015 | 2014 | 2013 | ||||||||
Projected benefit obligation | $ | 35,870 | $ | 38,115 | $ | 34,585 | |||||
Pension plan assets at fair value (1) | (13,190 | ) | (13,220 | ) | (13,870 | ) | |||||
Funded status – shortfall (2) | $ | 22,680 | $ | 24,895 | $ | 20,715 |
Amounts recorded in the Consolidated Balance Sheets for the plans: | |||||||||||
Other liabilities — accrued pension obligation (2) | $ | 22,680 | $ | 24,895 | $ | 20,715 | |||||
Stockholders’ equity — deferred actuarial loss (3) | $ | (4,832 | ) | $ | (6,028 | ) | $ | (1,811 | ) |
(1) | The pension plan assets are held by third-party trustees and are invested in a diversified portfolio of equities, high quality government and corporate bonds, and other investments. The assets are primarily valued based on Level 1 and Level 2 inputs under the fair value hierarchy in FASB ASC Topic No. 820, with the majority of the invested assets considered to be of low-to-medium investment risk. The Company projects a future long-term rate of return on these plan assets of 2.7%, which it believes is reasonable based on the composition of the assets and both current and projected market conditions. For the year-ended December 31, 2015, the Company contributed $1.3 million to these plans, and benefits paid to participants were $0.8 million. |
(2) | The Funded status — shortfall represents the amount of the projected benefit obligation that the Company has not funded with a third-party trustee. This amount is a liability of the Company and is recorded in Other Liabilities on the Company’s Consolidated Balance Sheets. |
(3) | The deferred actuarial loss as of December 31, 2015 is recorded in AOCL/I and will be reclassified out of AOCL/I and recognized as pension expense over approximately 13 years, subject to certain limitations set forth in FASB ASC Topic No. 715. The impact of this amortization on pension expense in 2016 is projected to result in approximately $0.2 million of |
Research | Consulting | Events | Consolidated | ||||||||||||
2015 | |||||||||||||||
Revenues | $ | 1,583,486 | $ | 327,735 | $ | 251,835 | $ | 2,163,056 | |||||||
Gross contribution | 1,096,827 | 107,193 | 130,527 | 1,334,547 | |||||||||||
Corporate and other expenses | (1,046,550 | ) | |||||||||||||
Operating income | $ | 287,997 | |||||||||||||
Research | Consulting | Events | Consolidated | ||||||||||||
2014 | |||||||||||||||
Revenues | $ | 1,445,338 | $ | 348,396 | $ | 227,707 | $ | 2,021,441 | |||||||
Gross contribution | 1,001,914 | 119,931 | 112,384 | 1,234,229 | |||||||||||
Corporate and other expenses | (948,067 | ) | |||||||||||||
Operating income | $ | 286,162 | |||||||||||||
Research | Consulting | Events | Consolidated | ||||||||||||
2013 | |||||||||||||||
Revenues | $ | 1,271,011 | $ | 314,257 | $ | 198,945 | $ | 1,784,213 | |||||||
Gross contribution | 879,384 | 107,565 | 91,216 | 1,078,165 | |||||||||||
Corporate and other expenses | (802,673 | ) | |||||||||||||
Operating income | $ | 275,492 |
Twelve months ended | ||||||||||||
December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Total segment gross contribution | $ | 1,334,547 | $ | 1,234,229 | $ | 1,078,165 | ||||||
Costs and expenses: | ||||||||||||
Cost of services and product development - unallocated (1) | 10,567 | 10,721 | 7,436 | |||||||||
Selling, general and administrative | 962,677 | 876,067 | 760,458 | |||||||||
Depreciation and amortization | 47,131 | 39,412 | 34,442 | |||||||||
Acquisition and integration charges | 26,175 | 21,867 | 337 | |||||||||
Operating income | 287,997 | 286,162 | 275,492 | |||||||||
Interest expense and other | 15,786 | 11,479 | 9,053 | |||||||||
Provision for income taxes | 96,576 | 90,917 | 83,638 | |||||||||
Net income | $ | 175,635 | $ | 183,766 | $ | 182,801 |
(1) | The unallocated amounts consist of certain bonus and related fringe costs recorded in Consolidated cost of services and product development expense that are not allocated to segment expense. The Company's policy is to only allocate bonus and related fringe charges to segments for up to 100% of the segment employee's target bonus. Amounts above 100% are absorbed by corporate. |
2015 | 2014 | 2013 | |||||||||
Revenues: | |||||||||||
United States and Canada | $ | 1,347,676 | $ | 1,204,476 | $ | 1,049,734 | |||||
Europe, Middle East and Africa | 557,165 | 570,334 | 508,755 | ||||||||
Other International | 258,215 | 246,631 | 225,724 | ||||||||
Total revenues | $ | 2,163,056 | $ | 2,021,441 | $ | 1,784,213 | |||||
Long-lived assets: (1) | |||||||||||
United States and Canada | $ | 163,933 | $ | 142,963 | $ | 123,877 | |||||
Europe, Middle East and Africa | 31,130 | 34,093 | 34,363 | ||||||||
Other International | 16,050 | 13,282 | 13,936 | ||||||||
Total long-lived assets | $ | 211,113 | $ | 190,338 | $ | 172,176 |
(1) | Excludes goodwill and other intangible assets. |
Balance at Beginning of Year | Additions Charged to Expense | Additions Charged Against Revenues | Deductions from Reserve | Balance at End of Year | |||||||||||||||
2015: | |||||||||||||||||||
Allowance for doubtful accounts and returns and allowances | $ | 6,700 | $ | 3,480 | $ | 5,420 | $ | (8,700 | ) | $ | 6,900 | ||||||||
2014: | |||||||||||||||||||
Allowance for doubtful accounts and returns and allowances | $ | 7,000 | $ | 2,950 | $ | 3,240 | $ | (6,490 | ) | $ | 6,700 | ||||||||
2013: | |||||||||||||||||||
Allowance for doubtful accounts and returns and allowances | $ | 6,400 | $ | 2,350 | $ | 5,050 | $ | (6,800 | ) | $ | 7,000 |
Gartner, Inc. | |||
Date: | February 24, 2016 | By: | /s/ Eugene A. Hall |
Eugene A. Hall | |||
Chief Executive Officer |
Name | Title | Date | ||
/s/ Eugene A. Hall | Director and Chief Executive Officer | February 24, 2016 | ||
Eugene A. Hall | (Principal Executive Officer) | |||
/s/ Craig W. Safian | Senior Vice President and Chief Financial Officer | February 24, 2016 | ||
Craig W. Safian | (Principal Financial and Accounting Officer) | |||
/s/ Michael J. Bingle | Director | February 24, 2016 | ||
Michael J. Bingle | ||||
/s/ Richard J. Bressler | Director | February 24, 2016 | ||
Richard J. Bressler | ||||
/s/ Raul E. Cesan | Director | February 24, 2016 | ||
Raul E. Cesan | ||||
/s/ Karen E. Dykstra | Director | February 24, 2016 | ||
Karen E. Dykstra | ||||
/s/ Anne Sutherland Fuchs | Director | February 24, 2016 | ||
Anne Sutherland Fuchs | ||||
/s/ William O. Grabe | Director | February 24, 2016 | ||
William O. Grabe | ||||
/s/ Stephen G. Pagliuca | Director | February 24, 2016 | ||
Stephen G. Pagliuca | ||||
/s/ James C. Smith | Director | February 24, 2016 | ||
James C. Smith |
Subsidiaries | State/Country | ||
Ù | Burton Group, Inc. | Utah, USA | |
Ù | Capterra, Inc. | Delaware, USA | |
Ù | Computer Financial Consultants, Limited | United Kingdom | |
Ù | Dataquest, Inc. | California, USA | |
Ù | Software Advice, Inc. | Delaware, USA | |
Ù | G.G. Properties, Ltd. | Bermuda | |
Ù | Gartner Advisory (Singapore) PTE LTD. | Singapore | |
Ù | Gartner Australasia PTY Limited | Australia | |
Ù | Gartner Austria GmbH | Austria | |
Ù | Gartner Belgium BVBA (including branch in Luxembourg) | Belgium | |
Ù | Gartner Canada Co. | Nova Scotia, Canada | |
Ù | Gartner Consulting (Beijing) Co., LTD. | China | |
Ù | Gartner Denmark ApS | Denmark | |
Ù | Gartner Deutschland, GmbH | Germany | |
Ù | Gartner do Brasil Servicos de Pesquisas LTDA. | Brazil | |
Ù | Gartner Enterprises, Ltd. | Delaware, USA | |
Ù | Gartner Espana, S.L. (including branch in Portugal) | Spain | |
Ù | Gartner Europe Holdings, B.V. | The Netherlands | |
Ù | Gartner France S.A.R.L. | France | |
Ù | Gartner Finland Oy | Finland | |
Ù | Gartner Gulf FZ, LLC Including branch in Abu Dhabi) | United Arab Emirates | |
Ù | Gartner Group Argentina S.A. | Argentina | |
Ù | Gartner Group Taiwan Ltd. | Taiwan | |
Ù | Gartner (Thailand) Ltd. | Thailand | |
Ù | Gartner Holdings Ireland UC | Bermuda | |
Ù | Gartner Holdings, LLC | Delaware, USA | |
Ù | Gartner Hong Kong, Limited | Hong Kong | |
Ù | Gartner India Research & Advisory Services Private Ltd. | India | |
Ù | Gartner Investments I, LLC | Delaware, USA | |
Ù | Gartner Investments II, LLC | Delaware, USA | |
Ù | Gartner Ireland Limited | Ireland | |
Ù | Gartner Italia, S.r.l. | Italy | |
Ù | Gartner Israel Advisory Ltd. | Israel | |
Ù | Gartner Japan Ltd. | Japan | |
Ù | Gartner Mexico S. de R. L. de C.V. | Mexico | |
Ù | Gartner Nederland B.V. | The Netherlands | |
Ù | Gartner Norge A.S. | Norway | |
Ù | Gartner Poland SP z.o.o | Poland | |
Ù | Gartner Research & Advisory Korea Co., Ltd. | Korea | |
Ù | Gartner RUS LLC | Russia | |
Ù | Gartner Saudi Arabia Ltd | Saudi Arabia | |
Ù | Gartner Sverige AB | Sweden | |
Ù | Gartner Switzerland GmbH | Switzerland | |
Ù | Gartner Turkey Teknoloji Arastirma ve Danismanlik Hizmetleri Limited Sirketi | Turkey |
Ù | Gartner U.K. Limited | United Kingdom | |
Ù | The Research Board, Inc. | Delaware, USA | |
Ù | 1422722 Ontario, Inc. | Canada | |
Ù | META Group GmbH | Germany | |
Ù | META Group CESE GmbH | Germany | |
Ù | META Group Deutschland GmbH | Germany | |
Ù | META Saudi Arabia | Saudi Arabia | |
Ù | Ideas International Pty Limited | Australia | |
Ù | Nubera eBusiness S.L. | Spain |
(1) | I have reviewed this Annual Report on Form 10-K of Gartner, Inc.; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and we have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Eugene A. Hall |
Eugene A. Hall |
Chief Executive Officer |
Date: February 24, 2016 |
(1) | I have reviewed this Annual Report on Form 10-K of Gartner, Inc.; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and we have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Craig W. Safian |
Craig W. Safian |
Chief Financial Officer |
Date: February 24, 2016 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Eugene A. Hall | |
Name: | Eugene A. Hall |
Title: | Chief Executive Officer |
Date: February 24, 2016 | |
/s/ Craig W. Safian | |
Name: | Craig W. Safian |
Title: | Chief Financial Officer |
Date: February 24, 2016 |
Document And Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Jan. 31, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | GARTNER INC | ||
Entity Central Index Key | 0000749251 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 82,340,012 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 6,872,193,331 |
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Fees receivable, allowances (in Dollars) | $ 6,900 | $ 6,700 |
Preferred stock par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $ 0.0005 | $ 0.0005 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 156,234,415 | 156,234,415 |
Treasury stock, Shares | 73,896,245 | 68,713,890 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Revenues: | |||
Research | $ 1,583,486 | $ 1,445,338 | $ 1,271,011 |
Consulting | 327,735 | 348,396 | 314,257 |
Events | 251,835 | 227,707 | 198,945 |
Total revenues | 2,163,056 | 2,021,441 | 1,784,213 |
Costs and expenses: | |||
Cost of services and product development | 839,076 | 797,933 | 713,484 |
Selling, general and administrative | 962,677 | 876,067 | 760,458 |
Depreciation | 33,789 | 31,186 | 28,996 |
Amortization of intangibles | 13,342 | 8,226 | 5,446 |
Acquisition and integration charges | 26,175 | 21,867 | 337 |
Total costs and expenses | 1,875,059 | 1,735,279 | 1,508,721 |
Operating income | 287,997 | 286,162 | 275,492 |
Interest income | 1,766 | 1,413 | 1,551 |
Interest expense | (22,548) | (12,300) | (10,388) |
Other income (expense), net | 4,996 | (592) | (216) |
Income before income taxes | 272,211 | 274,683 | 266,439 |
Provision for income taxes | 96,576 | 90,917 | 83,638 |
Net income | $ 175,635 | $ 183,766 | $ 182,801 |
Net income per share: | |||
Basic (in Dollars per share) | $ 2.09 | $ 2.06 | $ 1.97 |
Diluted (in Dollars per share) | $ 2.06 | $ 2.03 | $ 1.93 |
Weighted average shares outstanding: | |||
Basic (in shares) | 83,852 | 89,337 | 93,015 |
Diluted (in shares) | 85,056 | 90,719 | 94,830 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 175,635 | $ 183,766 | $ 182,801 |
Other comprehensive (loss) income, net of tax | |||
Foreign currency translation adjustments | (23,089) | (27,461) | 503 |
Interest rate hedges - net change in deferred loss | (1,339) | 2,163 | 2,107 |
Pension plans - net change in deferred actuarial loss | 1,196 | (4,217) | (233) |
Other comprehensive (loss) income, net of tax | (23,232) | (29,515) | 2,377 |
Comprehensive income | $ 152,403 | $ 154,251 | $ 185,178 |
Business and Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Business. Gartner, Inc. is a global information technology research and advisory company founded in 1979 with its headquarters in Stamford, Connecticut. Gartner delivers its principal products and services through three business segments: Research, Consulting, and Events. When used in these notes, the terms “Gartner,” “Company,” “we,” “us,” or “our” refer to Gartner, Inc. and its consolidated subsidiaries. Basis of presentation. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270 for financial information and with the applicable instructions of U.S. Securities & Exchange Commission (“SEC”) Regulation S-X. The fiscal year of Gartner represents the twelve-month period from January 1 through December 31. All references to 2015, 2014, and 2013 herein refer to the fiscal year unless otherwise indicated. Principles of consolidation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Use of estimates. The preparation of the accompanying consolidated financial statements requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of fees receivable, goodwill, intangible assets, and other long-lived assets, as well as tax accruals and other liabilities. In addition, estimates are used in revenue recognition, income tax expense, performance-based compensation charges, depreciation, and amortization. Management believes its use of estimates in the accompanying consolidated financial statements to be reasonable. Management continuously evaluates and revises its estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. Management adjusts these estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time. As a result, differences between our estimates and actual results could be material and would be reflected in the Company’s consolidated financial statements in future periods. Business Acquisitions. The Company completed acquisitions in both 2015 and 2014 and information related to these acquisitions is included in Note 2 — Acquisitions. The Company accounts for acquisitions in accordance with the acquisition method of accounting as prescribed by FASB ASC Topic No. 805, Business Combinations. The acquisition method of accounting requires the Company to record the net assets and liabilities acquired based on their estimated fair values as of the acquisition date, with any excess of the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, to be recorded to goodwill. Under the acquisition method, the operating results of acquired companies are included in the Company's consolidated financial statements beginning on the date of acquisition. The determination of the fair value of intangible and other assets acquired in acquisitions requires management judgment and the consideration of a number of factors, significant among them the historical financial performance of the acquired businesses and projected performance, estimates surrounding customer turnover, as well as assumptions regarding the level of competition and the cost to reproduce certain assets. Establishing the useful lives of the amortizable intangibles also requires management judgment and the evaluation of a number of factors, among them projected cash flows and the likelihood of competition. The Company classifies charges that are directly-related to its acquisitions in the line Acquisition and Integration Charges in the Condensed Consolidated Statements of Operations, and the Company recorded $26.2 million, $21.9 million, and $0.3 million of such charges in 2015, 2014, and 2013, respectively. Included in these directly-related and incremental charges are legal, consulting, retention, severance, and accruals for cash payments subject to the continuing employment of certain key employees of the acquired companies. During 2015 the Company paid $9.2 million in cash that had been accrued for the achievement of certain employment conditions for an acquisition completed in 2014. Revenue Recognition. Revenue is recognized in accordance with U.S. GAAP and SEC Staff Accounting Bulletin No. 104, Revenue Recognition (“SAB 104”). Revenues are only recognized once all required criteria for recognition have been met. The accompanying Consolidated Statements of Operations present revenues net of any sales or value-added taxes that we collect from customers and remit to government authorities. The Company’s revenues by significant source are as follows: Research Research revenues are mainly derived from subscription contracts for research products. The related revenues are deferred and recognized ratably over the applicable contract term. Fees derived from assisting organizations in selecting the right business software for their needs is recognized when the leads are provided to vendors. The Company typically enters into subscription contracts for research products for twelve-month periods or longer. The majority of research contracts are billable upon signing, absent special terms granted on a limited basis from time to time. Research contracts are non-cancelable and non-refundable, except for government contracts that may have cancellation or fiscal funding clauses, which historically have not produced material cancellations. It is our policy to record the entire amount of the contract that is billable as a fee receivable at the time the contract is signed with a corresponding amount as deferred revenue, since the contract represents a legally enforceable claim. Consulting Consulting revenues, primarily derived from consulting, measurement and strategic advisory services (paid one-day analyst engagements), are principally generated from fixed fee or time and materials engagements. Revenues from fixed fee engagements are recognized on a proportional performance basis, while revenues from time and material engagements are recognized as work is delivered and/or services are provided. Revenues related to contract optimization engagements are contingent in nature and are only recognized upon satisfaction of all conditions related to their payment. Unbilled fees receivable associated with consulting engagements were $43.2 million at December 31, 2015 and $44.0 million at December 31, 2014. Events Events revenues are deferred and recognized upon the completion of the related symposium, conference or exhibition. In addition, the Company defers certain costs directly related to events and expenses these costs in the period during which the related symposium, conference or exhibition occurs. The Company's policy is to defer only those costs, primarily prepaid site and production services costs, which are incremental and are directly attributable to a specific event. Other costs of organizing and producing our events, primarily Company personnel and non-event specific expenses, are expensed in the period incurred. At the end of each fiscal quarter, the Company assesses on an event-by-event basis whether expected direct costs of producing a scheduled event will exceed expected revenues. If such costs are expected to exceed revenues, the Company records the expected loss in the period determined. Allowance for losses. The Company maintains an allowance for losses which is composed of a bad debt allowance and a sales reserve. Provisions are charged against earnings, either as a reduction in revenues or an increase to expense. The determination of the allowance for losses is based on historical loss experience, an assessment of current economic conditions, the aging of outstanding receivables, the financial health of specific clients, and probable losses. Cost of services and product development (“COS”). COS expense includes the direct costs incurred in the creation and delivery of our products and services. These costs primarily relate to personnel. Selling, general and administrative (“SG&A”). SG&A expense includes direct and indirect selling costs, general and administrative costs, and charges against earnings related to uncollectible accounts. Commission expense. The Company records commission obligations upon the signing of customer contracts and amortizes the deferred obligation as commission expense over the period in which the related revenues are earned. Commission expense is included in SG&A in the Consolidated Statements of Operations. Stock-based compensation expense. The Company accounts for stock-based compensation in accordance with FASB ASC Topics No. 505 and 718 and SEC Staff Accounting Bulletins No. 107 (“SAB No. 107”) and No. 110 (“SAB No. 110”). Stock-based compensation cost is based on the fair value of the award on the date of grant, which is expensed over the related service period, net of estimated forfeitures. The service period is the period over which the employee performs the related services, which is normally the same as the vesting period. During 2015, 2014 and 2013, the Company recognized $46.1 million, $38.8 million and $34.7 million, respectively, of stock-based compensation expense, a portion of which is recorded in both COS and SG&A in the Consolidated Statements of Operations (see Note 8 — Stock-Based Compensation for additional information). Income tax expense. The Company uses the asset and liability method of accounting for income taxes. We estimate our income taxes in each of the jurisdictions where we operate. This process involves estimating our current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. In assessing the realizability of deferred tax assets, management considers if it is more likely than not that some or all of the deferred tax assets will not be realized. We consider the availability of loss carryforwards, projected reversal of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies in making this assessment. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained based on the technical merits of the position. Cash and cash equivalents. Includes cash and all highly liquid investments with original maturities of three months or less, which are considered cash equivalents. The carrying value of cash equivalents approximates fair value due to their short-term maturity. Investments with maturities of more than three months are classified as marketable securities. Interest earned is classified in Interest income in the Consolidated Statements of Operations. Property, equipment and leasehold improvements. The Company leases all of its facilities and certain equipment. These leases are all classified as operating leases in accordance with FASB ASC Topic 840. The cost of these operating leases, including any contractual rent increases, rent concessions, and landlord incentives, are recognized ratably over the life of the related lease agreement. Lease expense was $33.8 million, $31.5 million, and $30.8 million in 2015, 2014, and 2013, respectively. Equipment, leasehold improvements, and other fixed assets owned by the Company are recorded at cost less accumulated depreciation. Except for leasehold improvements, these fixed assets are depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the improvement or the remaining term of the related lease. The Company had total depreciation expense of $33.8 million, $31.2 million, and $29.0 million in 2015, 2014, and 2013, respectively. The Company's total fixed assets, less accumulated depreciation and amortization, consisted of the following (in thousands):
The Company incurs costs to develop internal use software used in our operations, and certain of these costs meeting the criteria outlined in FASB ASC Topic No. 350 are capitalized and amortized over future periods. Net capitalized development costs for internal use software was $14.1 million at both December 31, 2015 and 2014, which is included in the Computer equipment and software category above. Amortization of capitalized internal software development costs, which is classified in Depreciation in the Consolidated Statements of Operations, totaled $8.2 million in each of the three years ended December 31, 2015. Intangible assets. The Company has amortizable intangible assets which are amortized against earnings using the straight-line method over their expected useful lives. Changes in intangible assets subject to amortization during the two-year period ended December 31, 2015 are as follows (in thousands):
The estimated future amortization expense by year from amortizable intangibles is as follows (in thousands):
Goodwill. Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the tangible and identifiable intangible net assets acquired. The evaluation of the recoverability of goodwill is performed in accordance with FASB ASC No. Topic 350, which requires an annual assessment of potential goodwill impairment at the reporting unit level and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The required annual assessment of the recoverability of recorded goodwill can be either quantitative or qualitative in nature, or a combination of the two. Both methods require the use of estimates which in turn contain judgments and assumptions regarding future trends and events. As a result, both the precision and reliability of the resulting estimates are subject to uncertainty. If our annual goodwill impairment evaluation determines that the fair value of a reporting unit is less than its related carrying amount, we may recognize an impairment charge against earnings. We conducted a quantitative assessment of the fair value of all of the Company's reporting units during the third quarter of 2015. The results of this test determined that the fair values of the Company's reporting units continue to exceed their respective carrying values. The following table presents changes to the carrying amount of goodwill by segment during the two-year period ended December 31, 2015 (in thousands):
Impairment of long-lived assets. The Company's long-lived assets primarily consist of intangible assets other than goodwill and property, equipment, and leasehold improvements. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the respective asset may not be recoverable. Such evaluation may be based on a number of factors including current and projected operating results and cash flows, changes in management’s strategic direction as well as external economic and market factors. The Company evaluates the recoverability of these assets by determining whether the balance can be recovered through undiscounted future operating cash flows. If events or circumstances indicate that the carrying value might not be recoverable based on undiscounted future operating cash flows, an impairment loss would be recognized. The amount of impairment, if any, is measured based on the difference between projected discounted future operating cash flows using a discount rate reflecting the Company’s average cost of funds and the carrying value of the asset. The Company did not record any impairment charges for long-lived assets during the three year period ended December 31, 2015. Pension obligations. The Company has defined-benefit pension plans in several of its international locations (see Note 13 — Employee Benefits). Benefits earned under these plans are generally based on years of service and level of employee compensation. The Company accounts for defined benefit plans in accordance with the requirements of FASB ASC Topic No. 715. The Company determines the periodic pension expense and related liabilities for these plans through actuarial assumptions and valuations. The Company recognized $3.5 million, $3.4 million, and $3.8 million of expense for these plans in 2015, 2014, and 2013, respectively. The Company classifies pension expense in SG&A in the Consolidated Statements of Operations. Debt. The Company presents amounts borrowed in the Consolidated Balance Sheets at amortized cost. Interest accrued on amounts borrowed is classified in Interest expense in the Consolidated Statements of Operations. The Company refinanced its debt in 2014 and had $825.0 million of debt outstanding at December 31, 2015 (see Note 5—Debt for additional information). Foreign currency exposure. The functional currency of our foreign subsidiaries is typically the local currency. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average exchange rates for the year. The resulting translation adjustments are recorded as foreign currency translation adjustments, a component of Accumulated other comprehensive (loss) income, net within the Stockholders’ (deficit) equity section of the Consolidated Balance Sheets. Currency transaction gains or losses arising from transactions denominated in currencies other than the functional currency of a subsidiary are recognized in results of operations in Other income (expense), net within the Consolidated Statements of Operations. The Company had net currency transaction losses of $(2.6) million, $(1.7) million, and $(0.9) million in 2015, 2014, and 2013, respectively. The Company enters into foreign currency forward exchange contracts to mitigate the effects of adverse fluctuations in foreign currency exchange rates on these transactions. These contracts generally have a short duration and are recorded at fair value with both realized and unrealized gains and losses recorded in Other expense, net. The net (loss) gain from these contracts was $(0.1) million, $0.6 million, and $(0.1) million in 2015, 2014, and 2013, respectively. Comprehensive income. The Company reports comprehensive income in a separate statement termed the Consolidated Statements of Comprehensive Income, which is included herein. The Company's comprehensive income disclosures are included in Note 7 — Stockholders' (Deficit) Equity. Fair value disclosures. The Company has a limited number of assets and liabilities that are adjusted to fair value at each balance sheet date. The Company’s fair value disclosures are included in Note 12 — Fair Value Disclosures. Concentrations of credit risk. Assets that may subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, fees receivable, interest rate swaps, and a pension reinsurance asset. The majority of the Company’s cash equivalent investments and its interest rate swap contracts are with investment grade commercial banks. Accounts receivable balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographic dispersion. The Company’s pension reinsurance asset (see Note 13 — Employee Benefits) is maintained with a large international insurance company that was rated investment grade as of December 31, 2015. Stock repurchase programs. The Company records the cost to repurchase its own common shares to treasury stock. During 2015, 2014 and 2013, the Company used $509.0 million, $432.0 million, and $181.7 million, respectively, in cash for stock repurchases (see Note 7 — Stockholders’ (Deficit) Equity). Shares repurchased by the Company are added to treasury shares and are not retired. Adoption of new accounting rules. The Company adopted the following new accounting rules in the year ended December 31, 2015: Balance Sheet Classification of Deferred Taxes — The Company early adopted FASB Accounting Standard Update No. 2015-17, "Income Taxes: Balance Sheet Classification of Deferred Taxes" on December 31, 2015. Under ASU No. 2015-17, organizations that present a classified balance are required to classify deferred taxes as noncurrent assets or noncurrent liabilities. The Company early adopted the standard on a prospective basis and prior period balance sheets were not retrospectively adjusted. The impact of the reclassification of these amounts on the Company's December 31, 2015 balance sheet was immaterial. Discontinued Operations — The Company adopted FASB Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" on January 1, 2015, which changes the criteria for determining which disposal transactions can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The adoption of the rule did not have an impact on the Company's consolidated financial statements at adoption. However, the rule may impact the Company's consolidated financial statements in future periods if the Company has a discontinued operation. Recently issued accounting rules. The FASB has also issued accounting rules that have not yet become effective and that may impact the Company’s consolidated financial statements or related disclosures in future periods. These rules and their potential impact are discussed below: Business Combinations — In September 2015, the FASB issued Accounting Standards Update (ASU) 2015-16, "Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments" ("ASU No. 2015-16"). ASU No. 2015-16 requires the recognition of adjustments to business combination provisional amounts, that are identified during the measurement period, in the reporting period in which the adjustments are determined. The effects of the adjustments to provisional amounts on depreciation, amortization or other income effects should be recognized in current-period earnings as if the accounting had been completed at the acquisition date. Disclosure of the portion of the adjustment recorded in current-period earnings that would have been reported in prior reporting periods if the adjustment to the provisional amounts had been recognized at the acquisition date is also required. The rule is to be applied retrospectively and is effective for Gartner on January 1, 2016. ASU No. 2015-16 will not have an impact on the Company’s consolidated financial statements at the date of adoption. However, ASU No. 2016-16 could have an impact on the Company's consolidated financial statements in the future if a transaction occurs within the scope of the rule. Debt Issuance Cost Presentation — In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which amends the current presentation of debt issuance costs in the financial statements. ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of a deferred asset. The amendment is to be applied retrospectively and is effective for Gartner on January 1, 2016. The adoption of the new guidance will likely result in some minor presentation changes to the Company’s consolidated balance sheet and disclosures. Revenue Recognition — In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU No. 2014-09"). ASU No. 2014-09 and a related amendment is intended to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in revenue recognition requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. ASU No. 2014-09 is effective for Gartner on January 1, 2018. We continue to evaluate the impact of ASU No. 2014-09. The FASB also continues to work on a number of significant accounting rules which if issued could materially impact the Company's accounting policies and disclosures in future periods. However, since these rules have not yet been issued, the effective dates and potential impact are unknown. |
Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS The Company completed the following business acquisitions during the years ended December 31: 2015 The Company acquired 100% of the outstanding capital stock of each of Nubera eBusiness S.L., based in Barcelona, Spain ("Nubera") on July 1, 2015 and Capterra, Inc., based in Arlington, Virginia ("Capterra") on September 24, 2015. Both of these acquired businesses assist organizations in selecting the right business software for their needs. The following table provides information regarding the cash paid for the Company's 2015 acquisitions (in millions):
In addition to the aggregate purchase price paid for these businesses, the Company may also be required to pay up to an additional $32.0 million in cash in the future subject to the continuing employment of certain key employees. The $32.0 million is being recognized as compensation expense over three years and will be reported in the line Acquisition and Integration Charges in the Consolidated Statements of Operations. The following table summarizes the preliminary allocation of the purchase price to the fair value of the assets and liabilities assumed in the 2015 acquisitions (in millions):
The Company considers the allocation of the purchase price to be preliminary with respect to the completion of certain tax contingencies and the finalization of working capital adjustments. The Company believes the recorded goodwill is supported by the anticipated revenue synergies resulting from the acquisitions. The operating results of the acquired businesses and the related goodwill are being reported in the Company's Research segment. The Company's financial statements include the operating results of the acquired businesses beginning from their respective acquisition dates, which were not material to either the Company's consolidated operating results or Research segment results for 2015. Had the Company acquired these businesses in prior periods, the impact to the Company's operating results for prior periods would not have been material, and as a result pro forma financial information for prior periods has not been presented. 2014 The Company acquired 100% of the outstanding shares of three companies, Software Advice, Inc., (“Software Advice”), Market-Visio Oy ("Market-Visio"), and SircleIT Inc. during 2014. The aggregate purchase price of these acquisitions was $115.4 million. Software Advice assists customers with software purchases, while Market-Visio was previously an independent sales agent of Gartner research products. SircleIT Inc. is a developer of cloud-based knowledge automation software. For cash flow reporting the Company paid $109.9 million in cash on a net basis in 2014 for these acquisitions. In addition, the Company placed $14.4 million in escrow, of which $0.8 million was paid out in 2015. The Company recorded $110.3 million of goodwill and other intangible assets related to the 2014 acquisitions and $5.1 million of other assets on a net basis. In addition to the aggregate purchase price paid, the Company was also obligated to pay up to an additional $31.9 million for one of the acquisitions. Payment of this amount was subject to the continuing employment of certain key personnel and the satisfaction of certain indemnity claims. The $31.9 million is being recognized as compensation expense over the two-year service period of the relevant employees and is classified in the line item Acquisition and integration charges in the Consolidated Statements of Operations. The Company paid $9.2 million of the $31.9 million in early 2015 and anticipates that it will pay the remaining $22.7 million during the first half of 2016, of which $13.6 million will be paid from escrow. |
Other Assets |
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OTHER ASSETS | OTHER ASSETS Other assets consist of the following (in thousands):
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Accounts Payable, Accrued, and Other Liabilities |
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ACCOUNTS PAYABLE, ACCRUED, AND OTHER LIABILITIES | ACCOUNTS PAYABLE, ACCRUED, AND OTHER LIABILITIES Accounts payable and accrued liabilities consist of the following (in thousands):
Other liabilities consist of the following (in thousands):
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Debt |
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DEBT | DEBT 2014 Credit Agreement The Company has a $1.5 billion credit arrangement (the “2014 Credit Agreement”) that provides for a five-year, $400.0 million term loan and a $1.1 billion revolving credit facility. In addition, the 2014 Credit Agreement contains an expansion feature by which the term loan and revolving credit facility may be increased, at the Company’s option and under certain conditions, by up to an additional $500.0 million in the aggregate. The term loan will be repaid in 16 consecutive quarterly installments which commenced on March 31, 2015, plus a final payment due in December 2019, and may be prepaid at any time without penalty or premium (other than applicable breakage costs) at the Company’s option. The revolving credit facility may be used for loans, and up to $40.0 million may be used for letters of credit. The revolving loans may be borrowed, repaid and re-borrowed until December 2019, at which time all amounts borrowed must be repaid. Amounts borrowed under the 2014 Credit Agreement bear interest at a rate equal to, at Gartner’s option, either: (1) the greater of: (i) the administrative agent’s prime rate; (ii) the average rate on overnight federal funds plus 1/2 of 1%; (iii) the eurodollar rate (adjusted for statutory reserves) plus 1%; in each case plus a margin equal to between 0.125% and 0.50% depending on Gartner’s consolidated leverage ratio as of the end of the four consecutive fiscal quarters most recently ended; or (2) the eurodollar rate (adjusted for statutory reserves) plus a margin equal to between 1.125% and 1.50%, depending on Gartner’s leverage ratio as of the end of the four consecutive fiscal quarters most recently ended. The 2014 Credit Agreement contains certain customary restrictive loan covenants, including, among others, financial covenants requiring a maximum leverage ratio, a minimum interest expense coverage ratio, and covenants limiting Gartner’s ability to incur indebtedness, grant liens, make acquisitions, be acquired, dispose of assets, pay dividends, repurchase stock, make capital expenditures, make investments and enter into certain transactions with affiliates. The Company was in full compliance with the loan covenants as of December 31, 2015. The following table summarizes the Company’s total outstanding borrowings (in thousands):
Interest Rate Hedges The Company has three fixed-for-floating interest rate swap contracts which it designates as accounting hedges of the forecasted interest payments on $700.0 million of the Company’s variable rate borrowings. The Company pays base fixed rates on these swaps ranging from 1.53% to 1.60% and in return receives a floating eurodollar base rate on $700.0 million of 30 day notional borrowings. The Company accounts for the interest rate swaps as cash flow hedges in accordance with FASB ASC Topic No. 815. Since the swaps hedge forecasted interest payments, changes in the fair value of the swaps are recorded in accumulated other comprehensive (loss) income, a component of equity, as long as the swaps continue to be highly effective hedges of the designated interest rate risk. Any ineffective portion of change in the fair value of the hedges is recorded in earnings. All of the swaps were highly effective hedges of the forecasted interest payments as of December 31, 2015. The interest rate swaps had a total negative fair value to the Company as of December 31, 2015 and 2014 of $5.1 million and $2.9 million, respectively, which is deferred and classified in accumulated other comprehensive (loss) income, net of tax effect. Letters of Credit The Company had $8.2 million of letters of credit and related guarantees outstanding at year-end 2015. The Company issues these instruments in the ordinary course of business to facilitate transactions with customers and others. |
Commitments and Contingencies |
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COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contractual Lease Commitments. The Company leases various facilities, computer and office equipment, furniture, and other assets under non-cancelable operating lease agreements expiring between 2016 and 2030. The future minimum annual cash payments under these operating lease agreements as of December 31, 2015 were as follows (in thousands):
Legal Matters. We are involved in various legal and administrative proceedings and litigation arising in the ordinary course of business. The outcome of these individual matters is not predictable at this time. However, we believe that the ultimate resolution of these matters, after considering amounts already accrued and insurance coverage, will not have a material adverse effect on our financial position, results of operations, or cash flows in future periods. Indemnifications. The Company has various agreements that may obligate us to indemnify the other party with respect to certain matters. Generally, these indemnification clauses are included in contracts arising in the normal course of business under which we customarily agree to hold the other party harmless against losses arising from a breach of representations related to such matters as title to assets sold and licensed or certain intellectual property rights. It is not possible to predict the maximum potential amount of future payments under these indemnification agreements due to the conditional nature of the Company’s obligations and the unique facts of each particular agreement. Historically, payments made by us under these agreements have not been material. As of December 31, 2015, we did not have any indemnification agreements that could require material payments. |
Stockholders' (Deficit) Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS’ (DEFICIT) EQUITY | STOCKHOLDERS’ (DEFICIT) EQUITY Common stock. Holders of Gartner’s Common Stock, par value $.0005 per share (“Common Stock”) are entitled to one vote per share on all matters to be voted by stockholders. The Company does not currently pay cash dividends on its Common Stock. Also, our 2014 Credit Agreement contains a negative covenant which may limit our ability to pay dividends. The following table summarizes transactions relating to Common Stock for the three years ending December 31, 2015:
Share repurchase authorization. The Company has a $1.2 billion board authorization to repurchase the Company's common stock. The Company may repurchase its common stock from time-to-time in amounts and at prices the Company deems appropriate, subject to the availability of stock, prevailing market conditions, the trading price of the stock, the Company’s financial performance and other conditions. Repurchases may be made through open market purchases, private transactions or other transactions and will be funded from cash on hand and borrowings under the Company’s 2014 Credit Agreement. As of December 31, 2015, approximately $1.1 billion of this authorization remained available for repurchases. Accumulated other comprehensive (loss) income, net. The following tables disclose information about changes in accumulated other comprehensive (loss) income ("AOCL/I"), a component of equity, by component and the related amounts reclassified out of AOCL/I to income during the years indicated (net of tax, in thousands) (1): 2015
2014
(1) Amounts in parentheses represent debits (deferred losses). (2) The reclassifications related to interest rate swaps (cash flow hedge) were recorded in Interest expense, net of tax effect. See Note 11 – Derivatives and Hedging for information regarding the hedges. (3) The reclassifications related to defined benefit pension plans were recorded in Selling, general and administrative expense, net of tax effect. See Note 13 – Employee Benefits for information regarding the Company’s defined benefit pension plans. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company grants stock-based compensation awards as an incentive for employees and directors to contribute to the Company’s long-term success. The Company currently awards stock-settled stock appreciation rights, service-based and performance-based restricted stock units, and common stock equivalents. At December 31, 2015, the Company had 7.0 million shares of Common Stock available for awards of stock-based compensation under its 2014 Long-Term Incentive Plan. The Company accounts for stock-based compensation awards in accordance with FASB ASC Topics No. 505 and 718 and SEC Staff Accounting Bulletins No. 107 (“SAB No. 107”) and No. 110 (“SAB No. 110”). Stock-based compensation expense is based on the fair value of the award on the date of grant, which is then recognized as expense over the related service period, net of estimated forfeitures. The service period is the period over which the related service is performed, which is generally the same as the vesting period. Currently, the Company issues treasury shares upon the exercise, release or settlement of stock-based compensation awards. Determining the appropriate fair value model and calculating the fair value of stock-based compensation awards requires the input of certain complex and subjective assumptions, including the expected life of the stock-based compensation awards and the Common Stock price volatility. In addition, determining the appropriate amount of associated periodic expense requires management to estimate the amount of employee forfeitures and the likelihood of the achievement of certain performance targets. The assumptions used in calculating the fair value of stock-based compensation awards and the associated periodic expense represent management’s best estimates, which involve inherent uncertainties and the application of judgment. As a result, if factors change and the Company deems it necessary in the future to modify the assumptions it made or to use different assumptions, or if the quantity and nature of the Company’s stock-based compensation awards changes, then the amount of expense may need to be adjusted and future stock-based compensation expense could be materially different from what has been recorded in the current period. The Company recognized the following amounts of stock-based compensation expense by award type for the years ended December 31 (in millions):
Stock-based compensation expense was recognized by line item in the Consolidated Statements of Operations for the years ended December 31 as follows (in millions):
As of December 31, 2015, the Company had $47.9 million of total unrecognized stock-based compensation cost, which is expected to be recognized as stock-based compensation expense over the remaining weighted-average service period of approximately 2.2 years. Stock-Based Compensation Awards The following disclosures provide information regarding the Company’s stock-based compensation awards, all of which are classified as equity awards in accordance with FASB ASC Topic No. 505: Stock Appreciation Rights Stock-settled stock appreciation rights (SARs) permit the holder to participate in the appreciation of the Company's Common Stock. SARs are settled in shares of Common Stock by the employee once the applicable vesting criteria have been met. SARs vest ratably over a four-year service period and expire seven years from the grant date. The fair value of SARs awards is recognized as compensation expense on a straight-line basis over four years. SARs have only been awarded to the Company’s executive officers. When SARs are exercised, the number of shares of Common Stock issued is calculated as follows: (1) the total proceeds from the SARs exercise (calculated as the closing price of the Common Stock on the date of exercise less the exercise price of the SARs, multiplied by the number of SARs exercised) is divided by (2) the closing price of the Common Stock as reported on the New York Stock Exchange on the exercise date. The Company withholds a portion of the shares of Common Stock issued upon exercise to satisfy minimum statutory tax withholding requirements. SARs recipients do not have any stockholder rights until after actual shares of Common Stock are issued in respect of the award, which is subject to the prior satisfaction of the vesting and other criteria relating to such grants. The following table summarizes changes in SARs outstanding for the year ended December 31, 2015:
na = not applicable
The fair value of the SARs granted was estimated on the date of grant using the Black-Scholes-Merton valuation model with the following weighted-average assumptions for the years ended December 31:
Restricted Stock Units Restricted stock units (RSUs) give the awardee the right to receive shares of Common Stock when the vesting conditions are met and the restrictions lapse, and each RSU that vests entitles the awardee to one common share. RSU awardees do not have any of the right of a Gartner stockholder, including voting rights and the right to receive dividends and distributions, until the shares are released. The fair value of RSUs is determined on the date of grant based on the closing price of the Common Stock as reported by the New York Stock Exchange on that date. Service-based RSUs vest ratably over four years and are expensed on a straight-line basis over four years. Performance-based RSUs are subject to both performance and service conditions, vest ratably over four years, and are expensed on an accelerated basis. The following table summarizes the changes in RSUs outstanding during the year ended December 31, 2015:
Common Stock Equivalents Common stock equivalents (CSEs) are convertible into Common Stock and each CSE entitles the holder to one common share. Members of our Board of Directors receive directors’ fees payable in CSEs unless they opt to receive up to 50% of the fees in cash. Generally, the CSEs have no defined term and are converted into common shares when service as the director terminates unless the director has elected an accelerated release. The fair value of the CSEs is determined on the date of grant based on the closing price of the Common Stock as reported by the New York Stock Exchange on that date. CSEs vest immediately and as a result are recorded as expense on the date of grant. The following table summarizes the changes in CSEs outstanding for the year ended December 31, 2015:
Employee Stock Purchase Plan The Company has an employee stock purchase plan (the “ESP Plan”) under which eligible employees are permitted to purchase Common Stock through payroll deductions, which may not exceed 10% of an employee’s compensation (or $23,750 in any calendar year), at a price equal to 95% of the closing price of the Common Stock as reported by the New York Stock Exchange at the end of each offering period. At December 31, 2015, the Company had approximately 1.0 million shares available for purchase under the ESP Plan. The ESP Plan is considered non-compensatory under FASB ASC Topic No. 718, and as a result the Company does not record stock-based compensation expense for employee share purchases. The Company received $7.5 million, $7.8 million, and $6.0 million in cash from share purchases under the ESP Plan and exercises of stock options during 2015, 2014, and 2013, respectively. |
Computation of Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPUTATION OF EARNINGS PER SHARE | COMPUTATION OF EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of Common Stock outstanding for the period. Diluted EPS reflects the potential dilution of securities that could share in earnings. When the impact of common share equivalents is anti-dilutive, they are excluded from the calculation. The following table sets forth the reconciliation of the basic and diluted earnings per share computations for the years ended December 31 (in thousands, except per share amounts):
The following table presents the number of common share equivalents that were not included in the computation of diluted EPS in the table above because the effect would have been anti-dilutive. During periods with net income, these common share equivalents were anti-dilutive because their exercise price was greater than the average market value of a share of Common Stock during the period.
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Following is a summary of the components of income before income taxes for the years ended December 31 (in thousands):
The expense for income taxes on the above income consists of the following components (in thousands):
Current and long-term deferred tax assets and liabilities are comprised of the following (in thousands):
The Company early adopted FASB Accounting Standard Update No. 2015-17, "Income Taxes: Balance Sheet Classification of Deferred Taxes" on December 31, 2015. Under ASU No. 2015-17, organizations that present a classified balance are required to classify deferred taxes as noncurrent assets or noncurrent liabilities. The Company early adopted the standard on a prospective basis and prior period balance sheets were not retrospectively adjusted. The impact of the reclassification of these amounts on the Company's December 31, 2015 balance sheet was immaterial. Pursuant to the adoption of ASU No. 2015-17, the Company had no current deferred tax assets or liabilities as of December 31, 2015. As of December 31, 2014, current net deferred tax assets and current net deferred tax liabilities were $17.5 million and $2.1 million, respectively, and are reported in Prepaid expenses and other current assets and Accounts payable and accrued liabilities in the Consolidated Balance Sheets. Long-term net deferred tax assets and long-term net deferred tax liabilities were $26.4 million and $23.4 million as of December 31, 2015 and $18.0 million and $0.6 million as of December 31, 2014, respectively, and are reported in Other assets and Other liabilities in the Consolidated Balance Sheets. Management has concluded it is more likely than not that the reversal of deferred tax liabilities and results of future operations will generate sufficient taxable income to realize the deferred tax assets, net of the valuation allowance at December 31, 2015. The valuation allowances of $1.8 million as of December 31, 2015 and $0.6 million as of 2014, primarily relate to net operating losses which are not likely to be realized. As of December 31, 2015, the Company had state and local tax net operating loss carryforwards of $5.5 million, of which $0.4 million expire within one to five years, $3.1 million expire within six to fifteen years, and $2.0 million expire within sixteen to twenty years. The Company also had state tax credits of $1.2 million which will largely expire within two to five years. As of December 31, 2015, the Company had non-U.S. net operating loss carryforwards of $23.9 million, of which $0.3 million expire over the next 20 years and $23.6 million can be carried forward indefinitely. In addition, the Company also had foreign tax credit carryforwards of $0.3 million, the majority of which will expire at the end of 2026. These amounts have been reduced for unrecognized tax benefits, consistent with FASB ASU 2013-11. The differences between the U.S. federal statutory income tax rate and the Company’s effective tax rate on income before income taxes for the years ended December 31 follow:
In 2015 the Company decided to sell certain tax credits that would otherwise expire as a result of an audit settlement and the enactment of tax legislation in Connecticut favorable to the Company. The provision for income taxes includes a benefit for the audit settlement offset by an expense for the reduction of tax credits sold or to be sold. Other income includes a gain of $6.8 million for the sale of tax credits. For 2015 and 2014 state income taxes, net of federal tax benefit, include approximately $1.6 million and $1.3 million, respectively, of benefit relating to economic development tax credits associated with the renovation of the Company’s Stamford headquarters facility. In July 2015, the United States Tax Court (the “Court”) issued an opinion relating to the treatment of stock-based compensation expense in an inter-company cost-sharing arrangement. In its opinion, the Court held that affiliated companies may exclude stock-based compensation expense from their cost-sharing arrangement. Because of uncertainty related to the final resolution of this litigation and the recognition of potential benefits to the Company, the Company has not recorded any financial benefit associated with this decision. The Company will monitor developments related to this case and the potential impact of those developments on the Company’s current and future financial statements. As of December 31, 2015 and December 31, 2014, the Company had unrecognized tax benefits of $25.9 million and $20.6 million, respectively. The increase is primarily attributable to positions taken with respect to the exclusion of stock-based compensation expense from the Company's cost-sharing arrangement. The unrecognized tax benefits as of December 31, 2015 related primarily to the utilization of certain tax attributes, state income tax positions, the ability to realize certain refund claims, and intercompany transactions. It is reasonably possible that unrecognized tax benefits will be decreased by $1.3 million within the next 12 months due to anticipated closure of audits and the expiration of certain statutes of limitation. Included in the balance of unrecognized tax benefits at December 31, 2015 are potential benefits of $20.8 million that if recognized would reduce the effective tax rate on income from continuing operations. Also included in the balance of unrecognized tax benefits as of December 31, 2015 are potential benefits of $5.1 million that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes and additional paid in capital. The Company classifies uncertain tax positions not expected to be settled within one year as long term liabilities. As of December 31, 2015 and December 31, 2014, the Company had $24.6 million and $15.7 million, respectively, related to long term uncertain tax positions. The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, for the years ending December 31 (in thousands):
The Company accrues interest and penalties related to unrecognized tax benefits in its income tax provision. As of December 31, 2015 and December 31, 2014, the Company had $3.7 million and $3.3 million, respectively, of accrued interest and penalties related to unrecognized tax benefits. These amounts are in addition to the unrecognized tax benefits disclosed above. The total amount of interest and penalties recognized in the Consolidated Statements of Operations for the years ending December 31, 2015 and December 31, 2014 was $0.9 million and $0.1 million, respectively. The number of years with open statutes of limitation varies depending on the tax jurisdiction. The Company’s statutes are open with respect to the U.S. federal jurisdiction for 2011 and forward, and India for 2003 and forward. For other major taxing jurisdictions including the U.S. states, the United Kingdom, Canada, Japan, France, and Ireland, the Company's statutes vary and are open as far back as 2009. Under U.S. accounting rules, no provision for income taxes that may result from the remittance of earnings held overseas is required if the Company intends to reinvest such funds overseas. Our current plans do not demonstrate a need to repatriate these undistributed earnings to fund our U.S. operations or otherwise satisfy the liquidity needs of our U.S operations. We intend to reinvest these earnings in our non-U.S. operations, except in instances in which the repatriation of these earnings would result in minimal additional tax. As a result, the Company has not recognized additional income tax expense that may result from the remittance of these earnings. The accumulated undistributed earnings of non-U.S. subsidiaries were approximately $270.0 million as of December 31, 2015. The income tax that would be payable if such earnings were not indefinitely invested is estimated at $60.0 million. |
Derivatives and Hedging |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES AND HEDGING | DERIVATIVES AND HEDGING The Company enters into a limited number of derivative contracts to offset the potentially negative economic effects of interest rate and foreign exchange movements. The Company accounts for its outstanding derivative contracts in accordance with FASB ASC Topic No. 815, which requires all derivatives, including derivatives designated as accounting hedges, to be recorded on the balance sheet at fair value. The following tables provide information regarding the Company’s outstanding derivatives contracts as of, and for, the years ended December 31 (in thousands, except for number of outstanding contracts): 2015
2014
At December 31, 2015, the Company’s derivative counterparties were all large 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 following table provides information regarding amounts recognized in the Consolidated Statements of Operations for derivative contracts for the years ended December 31 (in thousands):
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Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES The Company’s financial instruments include cash equivalents, fees receivable from customers, accounts payable, and accruals which are normally short-term in nature. The Company believes the carrying amounts of these financial instruments reasonably approximates their fair value due to their short-term nature. The Company’s financial instruments also includes borrowings outstanding under its 2014 Credit Agreement, and at December 31, 2015, the Company had $820.0 million of floating rate debt outstanding under this arrangement, which is carried at amortized cost. The Company believes the carrying amount of the outstanding borrowings reasonably approximates fair value since the rate of interest on the borrowings reflect current market rates of interest for similar instruments with comparable maturities. FASB ASC Topic No. 820 provides a framework for the measurement of fair value and a valuation hierarchy based upon the transparency of inputs used in the valuation of assets and liabilities. Classification within the hierarchy is based upon the lowest level of input that is significant to the resulting fair value measurement. The valuation hierarchy contains three levels. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs, such as internally-created valuation models. The Company does not currently utilize Level 3 valuation inputs to remeasure any of its assets or liabilities. However, level 3 inputs may be used by the Company in its required annual impairment review of goodwill. Information regarding the periodic assessment of the Company’s goodwill is included in Note 1 — Business and Significant Accounting Policies. The Company does not typically transfer assets or liabilities between different levels of the fair value hierarchy. The Company enters into a limited number of derivatives transactions to hedge certain interest rate and foreign currency risks but does not enter into repurchase agreements, securities lending transactions, or master netting arrangements. Receivables or payables that result from derivatives transactions are recorded gross in the Company’s Consolidated Balance Sheets. The Company’s assets and liabilities that are remeasured to fair value are presented in the following table (in thousands):
The money market funds consist of cash equivalents while the mutual fund investments consist of publicly-traded and quoted equity shares. The Company considers the fair value of these assets to be based on Level 1 inputs, and these assets had a fair value of $8.7 million and $7.7 million as of December 31, 2015 and 2014, respectively. The carrying amount of the life insurance contracts equals their cash surrender value. Cash surrender value represents the estimated amount that the Company would receive upon termination of the contract, which approximates fair value. The Company considers the life insurance contracts to be valued based on a Level 2 input, and these assets had a fair value of $25.5 million and $27.0 million at December 31, 2015 and 2014, respectively. The related deferred compensation plan liabilities are recorded at the amount needed to settle the liability, which approximates fair value, and is based on a Level 2 input.
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Employee Benefits |
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Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS Defined contribution plan. The Company has a savings and investment plan (the “401k Plan”) covering substantially all U.S. employees. Company contributions are based upon the level of employee contributions, up to a maximum of 4% of the employee’s eligible salary, subject to an annual maximum. For 2015, the maximum match was $7,200. Amounts expensed in connection with the 401k Plan totaled $20.0 million, $17.4 million, and $15.8 million, in 2015, 2014, and 2013, respectively. Deferred compensation plan. The Company has a supplemental deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees, which is structured as a rabbi trust. The plan’s investment assets are classified in Other assets on the Consolidated Balance Sheets at fair value. The value of these assets was $34.1 million and $34.7 million at December 31, 2015 and 2014, respectively (see Note 12 — Fair Value Disclosures for detailed fair value information). The corresponding deferred compensation liability, which was $39.1 million at both December 31, 2015 and 2014, is carried at fair value, and is adjusted with a corresponding charge or credit to compensation expense to reflect the fair value of the amount owed to the employees and is classified in Other liabilities on the Consolidated Balance Sheets. Total compensation expense recognized for the plan was $0.5 million, $0.6 million, and $0.4 million, in 2015, 2014, and 2013. Defined benefit pension plans. The Company has defined-benefit pension plans in several of its non-U.S. locations. Benefits earned under these plans are based on years of service and level of employee compensation. The Company accounts for defined benefit plans in accordance with the requirements of FASB ASC Topics No. 715 and 960. The following are the components of defined benefit pension expense for the years ended December 31 (in thousands):
The following are the key assumptions used in the computation of pension expense for the years ended December 31:
The following table provides information related to changes in the projected benefit obligation for the years ended December 31 (in thousands):
The following table provides information regarding the funded status of the plans and related amounts recorded in the Company’s Consolidated Balance Sheets as of December 31 (in thousands):
The Company also maintains a reinsurance asset arrangement with a large international insurance company whose purpose is to provide funding for benefit payments for one of the plans. The reinsurance asset is not a pension plan asset but is an asset of the Company. At December 31, 2015, the reinsurance asset was recorded at its cash surrender value of $7.9 million and is classified in Other Assets on the Company's Consolidated Balance Sheet. The Company believes the cash surrender value approximates fair value and is equivalent to a Level 2 input under the FASB’s fair value framework in ASC Topic No. 820. |
Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Company manages its business through three reportable segments: Research, Consulting and Events. Research consists primarily of subscription-based research products, access to research inquiry, peer networking services, and membership programs. Consulting consists primarily of consulting, measurement engagements, and strategic advisory services. Events consists of various symposia, conferences and exhibitions. The Company evaluates reportable segment performance and allocates resources based on gross contribution margin. Gross contribution, as presented in the table below, is defined as operating income excluding certain COS expenses, SG&A expense, depreciation, acquisition and integration charges, and amortization of intangibles. Certain bonus and fringe benefit costs included in consolidated COS are not allocated to segment expense. The accounting policies used by the reportable segments are the same as those used by the Company. There are no intersegment revenues. The Company earns revenue from clients in many countries. Other than the United States, there is no individual country in which revenues from external clients represent 10% or more of the Company’s consolidated revenues. Additionally, no single client accounted for 10% or more of total revenue and the loss of a single client, in management’s opinion, would not have a material adverse effect on revenues. The Company does not identify or allocate assets, including capital expenditures, by reportable segment. Accordingly, assets are not being reported by segment because the information is not available by segment and is not reviewed in the evaluation of performance or making decisions in the allocation of resources. The following tables present operating information about the Company’s reportable segments for the years ended December 31 (in thousands):
The following table provides a reconciliation of total segment gross contribution to net income for the periods indicated (in thousands):
The Company’s revenues are 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, it is not practical to precisely separate our revenues by geographic location. Accordingly, the separation set forth in the table below is based upon internal allocations, which involve certain management estimates and judgments. Revenues in the table are reported based on where the sale is fulfilled; “Other International” revenues are those attributable to all areas located outside of the United States and Canada, as well as Europe, Middle East, and Africa. Summarized information by geographic location as of and for the years ended December 31 follows (in thousands):
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Valuation and Qualifying Accounts |
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VALUATION AND QUALIFYING ACCOUNTS | VALUATION AND QUALIFYING ACCOUNTS The Company maintains an allowance for losses which is composed of a bad debt allowance and a revenue reserve. Provisions are charged against earnings either as an increase to expense or a reduction in revenues. The following table summarizes activity in the Company’s allowance for the years ended December 31 (in thousands):
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Business and Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | Basis of presentation. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270 for financial information and with the applicable instructions of U.S. Securities & Exchange Commission (“SEC”) Regulation S-X. The fiscal year of Gartner represents the twelve-month period from January 1 through December 31. All references to 2015, 2014, and 2013 herein refer to the fiscal year unless otherwise indicated. |
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Principles of consolidation | Principles of consolidation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. |
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Use of estimates | Use of estimates. The preparation of the accompanying consolidated financial statements requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of fees receivable, goodwill, intangible assets, and other long-lived assets, as well as tax accruals and other liabilities. In addition, estimates are used in revenue recognition, income tax expense, performance-based compensation charges, depreciation, and amortization. Management believes its use of estimates in the accompanying consolidated financial statements to be reasonable. Management continuously evaluates and revises its estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. Management adjusts these estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time. As a result, differences between our estimates and actual results could be material and would be reflected in the Company’s consolidated financial statements in future periods. |
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Acquisitions | Acquisitions. The Company completed acquisitions in both 2015 and 2014 and information related to these acquisitions is included in Note 2 — Acquisitions. The Company accounts for acquisitions in accordance with the acquisition method of accounting as prescribed by FASB ASC Topic No. 805, Business Combinations. The acquisition method of accounting requires the Company to record the net assets and liabilities acquired based on their estimated fair values as of the acquisition date, with any excess of the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, to be recorded to goodwill. Under the acquisition method, the operating results of acquired companies are included in the Company's consolidated financial statements beginning on the date of acquisition. The determination of the fair value of intangible and other assets acquired in acquisitions requires management judgment and the consideration of a number of factors, significant among them the historical financial performance of the acquired businesses and projected performance, estimates surrounding customer turnover, as well as assumptions regarding the level of competition and the cost to reproduce certain assets. Establishing the useful lives of the amortizable intangibles also requires management judgment and the evaluation of a number of factors, among them projected cash flows and the likelihood of competition. The Company classifies charges that are directly-related to its acquisitions in the line Acquisition and Integration Charges in the Condensed Consolidated Statements of Operations, and the Company recorded $26.2 million, $21.9 million, and $0.3 million of such charges in 2015, 2014, and 2013, respectively. Included in these directly-related and incremental charges are legal, consulting, retention, severance, and accruals for cash payments subject to the continuing employment of certain key employees of the acquired companies. During 2015 the Company paid $9.2 million in cash that had been accrued for the achievement of certain employment conditions for an acquisition completed in 2014. |
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Revenue Recognition | Revenue Recognition. Revenue is recognized in accordance with U.S. GAAP and SEC Staff Accounting Bulletin No. 104, Revenue Recognition (“SAB 104”). Revenues are only recognized once all required criteria for recognition have been met. The accompanying Consolidated Statements of Operations present revenues net of any sales or value-added taxes that we collect from customers and remit to government authorities. The Company’s revenues by significant source are as follows: Research Research revenues are mainly derived from subscription contracts for research products. The related revenues are deferred and recognized ratably over the applicable contract term. Fees derived from assisting organizations in selecting the right business software for their needs is recognized when the leads are provided to vendors. The Company typically enters into subscription contracts for research products for twelve-month periods or longer. The majority of research contracts are billable upon signing, absent special terms granted on a limited basis from time to time. Research contracts are non-cancelable and non-refundable, except for government contracts that may have cancellation or fiscal funding clauses, which historically have not produced material cancellations. It is our policy to record the entire amount of the contract that is billable as a fee receivable at the time the contract is signed with a corresponding amount as deferred revenue, since the contract represents a legally enforceable claim. Consulting Consulting revenues, primarily derived from consulting, measurement and strategic advisory services (paid one-day analyst engagements), are principally generated from fixed fee or time and materials engagements. Revenues from fixed fee engagements are recognized on a proportional performance basis, while revenues from time and material engagements are recognized as work is delivered and/or services are provided. Revenues related to contract optimization engagements are contingent in nature and are only recognized upon satisfaction of all conditions related to their payment. Unbilled fees receivable associated with consulting engagements were $43.2 million at December 31, 2015 and $44.0 million at December 31, 2014. Events Events revenues are deferred and recognized upon the completion of the related symposium, conference or exhibition. In addition, the Company defers certain costs directly related to events and expenses these costs in the period during which the related symposium, conference or exhibition occurs. The Company's policy is to defer only those costs, primarily prepaid site and production services costs, which are incremental and are directly attributable to a specific event. Other costs of organizing and producing our events, primarily Company personnel and non-event specific expenses, are expensed in the period incurred. At the end of each fiscal quarter, the Company assesses on an event-by-event basis whether expected direct costs of producing a scheduled event will exceed expected revenues. If such costs are expected to exceed revenues, the Company records the expected loss in the period determined. |
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Allowance for losses | Allowance for losses. The Company maintains an allowance for losses which is composed of a bad debt allowance and a sales reserve. Provisions are charged against earnings, either as a reduction in revenues or an increase to expense. The determination of the allowance for losses is based on historical loss experience, an assessment of current economic conditions, the aging of outstanding receivables, the financial health of specific clients, and probable losses. |
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Cost of services and product development | Cost of services and product development (“COS”). COS expense includes the direct costs incurred in the creation and delivery of our products and services. |
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Selling, general and administrative | Selling, general and administrative (“SG&A”). SG&A expense includes direct and indirect selling costs, general and administrative costs, and charges against earnings related to uncollectible accounts. |
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Commissions expense | Commission expense. The Company records commission obligations upon the signing of customer contracts and amortizes the deferred obligation as commission expense over the period in which the related revenues are earned. |
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Stock-based compensation expense | Stock-based compensation expense. The Company accounts for stock-based compensation in accordance with FASB ASC Topics No. 505 and 718 and SEC Staff Accounting Bulletins No. 107 (“SAB No. 107”) and No. 110 (“SAB No. 110”). Stock-based compensation cost is based on the fair value of the award on the date of grant, which is expensed over the related service period, net of estimated forfeitures. The service period is the period over which the employee performs the related services, which is normally the same as the vesting period. |
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Income tax expense | Income tax expense. The Company uses the asset and liability method of accounting for income taxes. We estimate our income taxes in each of the jurisdictions where we operate. This process involves estimating our current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. In assessing the realizability of deferred tax assets, management considers if it is more likely than not that some or all of the deferred tax assets will not be realized. We consider the availability of loss carryforwards, projected reversal of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies in making this assessment. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained based on the technical merits of the position. |
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Cash and cash equivalents | Cash and cash equivalents. Includes cash and all highly liquid investments with original maturities of three months or less, which are considered cash equivalents. The carrying value of cash equivalents approximates fair value due to their short-term maturity. Investments with maturities of more than three months are classified as marketable securities. Interest earned is classified in Interest income in the Consolidated Statements of Operations. |
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Property, equipment and leasehold improvements | Property, equipment and leasehold improvements. The Company leases all of its facilities and certain equipment. These leases are all classified as operating leases in accordance with FASB ASC Topic 840. The cost of these operating leases, including any contractual rent increases, rent concessions, and landlord incentives, are recognized ratably over the life of the related lease agreement. Lease expense was $33.8 million, $31.5 million, and $30.8 million in 2015, 2014, and 2013, respectively. Equipment, leasehold improvements, and other fixed assets owned by the Company are recorded at cost less accumulated depreciation. Except for leasehold improvements, these fixed assets are depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the improvement or the remaining term of the related lease. The Company had total depreciation expense of $33.8 million, $31.2 million, and $29.0 million in 2015, 2014, and 2013, respectively. The Company's total fixed assets, less accumulated depreciation and amortization, consisted of the following (in thousands):
The Company incurs costs to develop internal use software used in our operations, and certain of these costs meeting the criteria outlined in FASB ASC Topic No. 350 are capitalized and amortized over future periods. Net capitalized development costs for internal use software was $14.1 million at both December 31, 2015 and 2014, which is included in the Computer equipment and software category above. Amortization of capitalized internal software development costs, which is classified in Depreciation in the Consolidated Statements of Operations, totaled $8.2 million in each of the three years ended December 31, 2015. |
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Intangible assets | Intangible assets. The Company has amortizable intangible assets which are amortized against earnings using the straight-line method over their expected useful lives. |
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Goodwill | Goodwill. Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the tangible and identifiable intangible net assets acquired. The evaluation of the recoverability of goodwill is performed in accordance with FASB ASC No. Topic 350, which requires an annual assessment of potential goodwill impairment at the reporting unit level and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. |
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Impairment of long-lived and intangible assets | Impairment of long-lived assets. The Company's long-lived assets primarily consist of intangible assets other than goodwill and property, equipment, and leasehold improvements. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the respective asset may not be recoverable. Such evaluation may be based on a number of factors including current and projected operating results and cash flows, changes in management’s strategic direction as well as external economic and market factors. The Company evaluates the recoverability of these assets by determining whether the balance can be recovered through undiscounted future operating cash flows. If events or circumstances indicate that the carrying value might not be recoverable based on undiscounted future operating cash flows, an impairment loss would be recognized. The amount of impairment, if any, is measured based on the difference between projected discounted future operating cash flows using a discount rate reflecting the Company’s average cost of funds and the carrying value of the asset. |
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Pension obligations | Pension obligations. The Company has defined-benefit pension plans in several of its international locations (see Note 13 — Employee Benefits). Benefits earned under these plans are generally based on years of service and level of employee compensation. The Company accounts for defined benefit plans in accordance with the requirements of FASB ASC Topic No. 715. |
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Debt | Debt. The Company presents amounts borrowed in the Consolidated Balance Sheets at amortized cost. Interest accrued on amounts borrowed is classified in Interest expense in the Consolidated Statements of Operations. |
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Foreign currency exposure | Foreign currency exposure. The functional currency of our foreign subsidiaries is typically the local currency. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average exchange rates for the year. The resulting translation adjustments are recorded as foreign currency translation adjustments, a component of Accumulated other comprehensive (loss) income, net within the Stockholders’ (deficit) equity section of the Consolidated Balance Sheets. Currency transaction gains or losses arising from transactions denominated in currencies other than the functional currency of a subsidiary are recognized in results of operations in Other income (expense), net within the Consolidated Statements of Operations. The Company had net currency transaction losses of $(2.6) million, $(1.7) million, and $(0.9) million in 2015, 2014, and 2013, respectively. The Company enters into foreign currency forward exchange contracts to mitigate the effects of adverse fluctuations in foreign currency exchange rates on these transactions. These contracts generally have a short duration and are recorded at fair value with both realized and unrealized gains and losses recorded in Other expense, net. |
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Comprehensive income | Comprehensive income. The Company reports comprehensive income in a separate statement termed the Consolidated Statements of Comprehensive Income, which is included herein. |
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Fair value disclosures | Fair value disclosures. The Company has a limited number of assets and liabilities that are adjusted to fair value at each balance sheet date. |
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Concentrations of credit risk | Concentrations of credit risk. Assets that may subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, fees receivable, interest rate swaps, and a pension reinsurance asset. The majority of the Company’s cash equivalent investments and its interest rate swap contracts are with investment grade commercial banks. Accounts receivable balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographic dispersion. The Company’s pension reinsurance asset (see Note 13 — Employee Benefits) is maintained with a large international insurance company that was rated investment grade as of December 31, 2015. |
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Stock repurchase programs | Stock repurchase programs. The Company records the cost to repurchase its own common shares to treasury stock. During 2015, 2014 and 2013, the Company used $509.0 million, $432.0 million, and $181.7 million, respectively, in cash for stock repurchases (see Note 7 — Stockholders’ (Deficit) Equity). Shares repurchased by the Company are added to treasury shares and are not retired. |
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Adoption of new accounting rules | Adoption of new accounting rules. The Company adopted the following new accounting rules in the year ended December 31, 2015: Balance Sheet Classification of Deferred Taxes — The Company early adopted FASB Accounting Standard Update No. 2015-17, "Income Taxes: Balance Sheet Classification of Deferred Taxes" on December 31, 2015. Under ASU No. 2015-17, organizations that present a classified balance are required to classify deferred taxes as noncurrent assets or noncurrent liabilities. The Company early adopted the standard on a prospective basis and prior period balance sheets were not retrospectively adjusted. The impact of the reclassification of these amounts on the Company's December 31, 2015 balance sheet was immaterial. Discontinued Operations — The Company adopted FASB Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" on January 1, 2015, which changes the criteria for determining which disposal transactions can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The adoption of the rule did not have an impact on the Company's consolidated financial statements at adoption. However, the rule may impact the Company's consolidated financial statements in future periods if the Company has a discontinued operation. Recently issued accounting rules. The FASB has also issued accounting rules that have not yet become effective and that may impact the Company’s consolidated financial statements or related disclosures in future periods. These rules and their potential impact are discussed below: Business Combinations — In September 2015, the FASB issued Accounting Standards Update (ASU) 2015-16, "Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments" ("ASU No. 2015-16"). ASU No. 2015-16 requires the recognition of adjustments to business combination provisional amounts, that are identified during the measurement period, in the reporting period in which the adjustments are determined. The effects of the adjustments to provisional amounts on depreciation, amortization or other income effects should be recognized in current-period earnings as if the accounting had been completed at the acquisition date. Disclosure of the portion of the adjustment recorded in current-period earnings that would have been reported in prior reporting periods if the adjustment to the provisional amounts had been recognized at the acquisition date is also required. The rule is to be applied retrospectively and is effective for Gartner on January 1, 2016. ASU No. 2015-16 will not have an impact on the Company’s consolidated financial statements at the date of adoption. However, ASU No. 2016-16 could have an impact on the Company's consolidated financial statements in the future if a transaction occurs within the scope of the rule. Debt Issuance Cost Presentation — In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which amends the current presentation of debt issuance costs in the financial statements. ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of a deferred asset. The amendment is to be applied retrospectively and is effective for Gartner on January 1, 2016. The adoption of the new guidance will likely result in some minor presentation changes to the Company’s consolidated balance sheet and disclosures. Revenue Recognition — In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU No. 2014-09"). ASU No. 2014-09 and a related amendment is intended to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in revenue recognition requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. ASU No. 2014-09 is effective for Gartner on January 1, 2018. We continue to evaluate the impact of ASU No. 2014-09. The FASB also continues to work on a number of significant accounting rules which if issued could materially impact the Company's accounting policies and disclosures in future periods. However, since these rules have not yet been issued, the effective dates and potential impact are unknown. |
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Recent accounting developments | ccounting rules that have not yet become effective and that may impact the Company’s consolidated financial statements or related disclosures in future periods. These rules and their potential impact are discussed below: Business Combinations — In September 2015, the FASB issued Accounting Standards Update (ASU) 2015-16, "Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments" ("ASU No. 2015-16"). ASU No. 2015-16 requires the recognition of adjustments to business combination provisional amounts, that are identified during the measurement period, in the reporting period in which the adjustments are determined. The effects of the adjustments to provisional amounts on depreciation, amortization or other income effects should be recognized in current-period earnings as if the accounting had been completed at the acquisition date. Disclosure of the portion of the adjustment recorded in current-period earnings that would have been reported in prior reporting periods if the adjustment to the provisional amounts had been recognized at the acquisition date is also required. The rule is to be applied retrospectively and is effective for Gartner on January 1, 2016. ASU No. 2015-16 will not have an impact on the Company’s consolidated financial statements at the date of adoption. However, ASU No. 2016-16 could have an impact on the Company's consolidated financial statements in the future if a transaction occurs within the scope of the rule. Debt Issuance Cost Presentation — In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which amends the current presentation of debt issuance costs in the financial statements. ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of a deferred asset. The amendment is to be applied retrospectively and is effective for Gartner on January 1, 2016. The adoption of the new guidance will likely result in some minor presentation changes to the Company’s consolidated balance sheet and disclosures. Revenue Recognition — In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU No. 2014-09"). ASU No. 2014-09 and a related amendment is intended to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in revenue recognition requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. ASU No. 2014-09 is effective for Gartner on January 1, 2018. We continue to evaluate the impact of ASU No. 2014-09. |
Business and Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | The Company's total fixed assets, less accumulated depreciation and amortization, consisted of the following (in thousands):
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Schedule of Changes in Intangible Assets Subject to Amortization | Changes in intangible assets subject to amortization during the two-year period ended December 31, 2015 are as follows (in thousands):
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Schedule of Estimated Future Amortization Expense by Year From Amortizable Intangibles | The estimated future amortization expense by year from amortizable intangibles is as follows (in thousands):
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Schedule of Changes to The Carrying Amount of Goodwill by Reporting Unit | The following table presents changes to the carrying amount of goodwill by segment during the two-year period ended December 31, 2015 (in thousands):
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Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Aggregate Purchase Price of Acquisitions | The following table provides information regarding the cash paid for the Company's 2015 acquisitions (in millions):
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Preliminary Allocation of Purchase Price | The following table summarizes the preliminary allocation of the purchase price to the fair value of the assets and liabilities assumed in the 2015 acquisitions (in millions):
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Other Assets (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | Other assets consist of the following (in thousands):
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Accounts Payable, Accrued, and Other Liabilities (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consist of the following (in thousands):
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Schedule of Other Liabilities | Other liabilities consist of the following (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The following table summarizes the Company’s total outstanding borrowings (in thousands):
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments under Operating Leases | The future minimum annual cash payments under these operating lease agreements as of December 31, 2015 were as follows (in thousands):
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Stockholders' (Deficit) Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Transactions Relating to Common Stock | The following table summarizes transactions relating to Common Stock for the three years ending December 31, 2015:
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Schedule of AOCI by Components | The following tables disclose information about changes in accumulated other comprehensive (loss) income ("AOCL/I"), a component of equity, by component and the related amounts reclassified out of AOCL/I to income during the years indicated (net of tax, in thousands) (1): 2015
2014
(1) Amounts in parentheses represent debits (deferred losses). (2) The reclassifications related to interest rate swaps (cash flow hedge) were recorded in Interest expense, net of tax effect. See Note 11 – Derivatives and Hedging for information regarding the hedges. (3) The reclassifications related to defined benefit pension plans were recorded in Selling, general and administrative expense, net of tax effect. See Note 13 – Employee Benefits for information regarding the Company’s defined benefit pension plans. |
Stock-Based Compensation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expense by Award Type | The Company recognized the following amounts of stock-based compensation expense by award type for the years ended December 31 (in millions):
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Schedule of Stock-based Compensation Expense by Expense Category | Stock-based compensation expense was recognized by line item in the Consolidated Statements of Operations for the years ended December 31 as follows (in millions):
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Schedule of Fair Value Assumptions of SARS | The fair value of the SARs granted was estimated on the date of grant using the Black-Scholes-Merton valuation model with the following weighted-average assumptions for the years ended December 31:
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Stock Appreciation Rights (SARs) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of the Changes in SARS, RSUs, and CSEs Outstanding | The following table summarizes changes in SARs outstanding for the year ended December 31, 2015:
na = not applicable
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Restricted Stock Units (RSUs) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of the Changes in SARS, RSUs, and CSEs Outstanding | The following table summarizes the changes in RSUs outstanding during the year ended December 31, 2015:
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Common Stock Equivalents (CSEs) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of the Changes in SARS, RSUs, and CSEs Outstanding | The following table summarizes the changes in CSEs outstanding for the year ended December 31, 2015:
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Computation of Earnings Per Share (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of the Basic and Diluted Earnings Per Share Computations | The following table sets forth the reconciliation of the basic and diluted earnings per share computations for the years ended December 31 (in thousands, except per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the number of common share equivalents that were not included in the computation of diluted EPS in the table above because the effect would have been anti-dilutive. During periods with net income, these common share equivalents were anti-dilutive because their exercise price was greater than the average market value of a share of Common Stock during the period.
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income before Income Taxes | Following is a summary of the components of income before income taxes for the years ended December 31 (in thousands):
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Schedule of Components of Income Tax | The expense for income taxes on the above income consists of the following components (in thousands):
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Schedule of Deferred Tax Assets and Liabilities | Current and long-term deferred tax assets and liabilities are comprised of the following (in thousands):
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Schedule of Effective Income Tax Rate Reconciliation | The differences between the U.S. federal statutory income tax rate and the Company’s effective tax rate on income before income taxes for the years ended December 31 follow:
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Schedule of Reconciliation of Beginning and Ending Unrecognized Tax Benefits | The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, for the years ending December 31 (in thousands):
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Derivatives and Hedging (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The following tables provide information regarding the Company’s outstanding derivatives contracts as of, and for, the years ended December 31 (in thousands, except for number of outstanding contracts): 2015
2014
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table provides information regarding amounts recognized in the Consolidated Statements of Operations for derivative contracts for the years ended December 31 (in thousands):
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Fair Value Disclosures (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured to Fair Value on Recurring Basis | The Company’s assets and liabilities that are remeasured to fair value are presented in the following table (in thousands):
The money market funds consist of cash equivalents while the mutual fund investments consist of publicly-traded and quoted equity shares. The Company considers the fair value of these assets to be based on Level 1 inputs, and these assets had a fair value of $8.7 million and $7.7 million as of December 31, 2015 and 2014, respectively. The carrying amount of the life insurance contracts equals their cash surrender value. Cash surrender value represents the estimated amount that the Company would receive upon termination of the contract, which approximates fair value. The Company considers the life insurance contracts to be valued based on a Level 2 input, and these assets had a fair value of $25.5 million and $27.0 million at December 31, 2015 and 2014, respectively. The related deferred compensation plan liabilities are recorded at the amount needed to settle the liability, which approximates fair value, and is based on a Level 2 input.
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Employee Benefits (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Defined Benefit Pension Expense | The following are the components of defined benefit pension expense for the years ended December 31 (in thousands):
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Schedule of Assumptions Used in the Computation of Pension Expense | The following are the key assumptions used in the computation of pension expense for the years ended December 31:
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Schedule of Changes in the Projected Benefit Obligation | The following table provides information related to changes in the projected benefit obligation for the years ended December 31 (in thousands):
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Schedule of Funded Status of the Plans and Related Amounts Recorded in Consolidated Balance Sheet | The following table provides information regarding the funded status of the plans and related amounts recorded in the Company’s Consolidated Balance Sheets as of December 31 (in thousands):
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information by Segment | The following tables present operating information about the Company’s reportable segments for the years ended December 31 (in thousands):
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Schedule of Reconciliation of Segment Gross Contribution to Net Income | The following table provides a reconciliation of total segment gross contribution to net income for the periods indicated (in thousands):
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Schedule of Revenue from External Customers and Long-Lived Assets by Geographical Areas | Summarized information by geographic location as of and for the years ended December 31 follows (in thousands):
|
Valuation and Qualifying Accounts (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Valuation Allowance | The following table summarizes activity in the Company’s allowance for the years ended December 31 (in thousands):
|
Business and Significant Accounting Policies (Detail) - Estimated Future Amortization Expense by Year from Purchased Intangibles - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2016 | $ 24,074 | |
2017 | 21,468 | |
2018 | 18,818 | |
2019 | 14,321 | |
2020 | 12,449 | |
Thereafter | 5,414 | |
Finite-lived intangible assets, net | $ 96,544 | $ 30,689 |
Business and Significant Accounting Policies (Detail) - Changes to the Carrying Amount of Goodwill by Reporting Unit - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Goodwill [Roll Forward] | ||
Beginning Balance | $ 586,665 | $ 519,203 |
Addition due to acquisition | 138,053 | 78,373 |
Foreign currency translation adjustments | (9,359) | (10,911) |
Ending Balance | 715,359 | 586,665 |
Research | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 445,460 | 376,568 |
Addition due to acquisition | 138,053 | 78,373 |
Foreign currency translation adjustments | (8,221) | (9,481) |
Ending Balance | 575,292 | 445,460 |
Consulting | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 99,417 | 100,677 |
Addition due to acquisition | 0 | 0 |
Foreign currency translation adjustments | (1,005) | (1,260) |
Ending Balance | 98,412 | 99,417 |
Events | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 41,788 | 41,958 |
Addition due to acquisition | 0 | 0 |
Foreign currency translation adjustments | (133) | (170) |
Ending Balance | $ 41,655 | $ 41,788 |
Acquisitions - Preliminary Allocation of Purchase Price (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Assets: | |||
Goodwill | $ 715,359 | $ 586,665 | $ 519,203 |
Nubera and Capterra | |||
Assets: | |||
Cash | 10,700 | ||
Receivables and other assets | 12,800 | ||
Amortizable intangible assets | 79,600 | ||
Goodwill | 138,100 | ||
Total assets | 241,200 | ||
Liabilities: | |||
Payables and accrueds | 34,300 | ||
Total liabilities | 34,300 | ||
Net assets acquired | 206,900 | ||
Capterra | |||
Assets: | |||
Amortizable intangible assets | 68,500 | ||
Goodwill | 121,100 | ||
Liabilities: | |||
Payables and accrueds | 25,600 | ||
Nubera | |||
Assets: | |||
Amortizable intangible assets | 11,100 | ||
Goodwill | $ 17,000 |
Other Assets (Detail) - Composition of Other Assets - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Security deposits | $ 6,699 | $ 4,951 |
Debt issuance costs, net | 6,169 | 7,781 |
Benefit plan-related assets | 42,168 | 43,293 |
Non-current deferred tax assets | 26,418 | 17,960 |
Acquisition escrow - restricted cash | 25,625 | 14,363 |
Other | 5,974 | 4,001 |
Total other assets | $ 113,053 | $ 92,349 |
Accounts Payable, Accrued, and Other Liabilities (Detail) - Accounts Payable and Accrued Liabilities - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accounts payable | $ 31,570 | $ 16,802 |
Payroll and employee benefits payable | 85,575 | 79,831 |
Severance and retention bonus payable | 38,557 | 26,965 |
Bonus payable | 90,989 | 83,000 |
Commissions payable | 66,054 | 64,888 |
Taxes payable | 13,714 | 18,538 |
Professional, consulting, audit fees | 10,164 | 9,429 |
Other accrued liabilities | 51,068 | 54,308 |
Total accounts payable and accrued liabilities | $ 387,691 | $ 353,761 |
Accounts Payable, Accrued, and Other Liabilities (Detail) - Other Liabilities - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Payables and Accruals [Abstract] | ||
Non-current deferred revenue | $ 7,603 | $ 7,056 |
Interest rate swap liability | 5,132 | 2,900 |
Long-term taxes payable | 13,784 | 8,506 |
Deferred rent | 15,207 | 16,667 |
Benefit plan-related liabilities | 62,675 | 64,994 |
Other | 89,193 | 42,839 |
Total other liabilities | $ 193,594 | $ 142,962 |
Debt (Detail) - Borrowings - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Debt Instrument [Line Items] | ||
Amount outstanding | $ 825,000 | $ 405,000 |
Term loan | ||
Debt Instrument [Line Items] | ||
Amount outstanding | 380,000 | 400,000 |
Revolver | ||
Debt Instrument [Line Items] | ||
Amount outstanding | 440,000 | 0 |
Other | ||
Debt Instrument [Line Items] | ||
Amount outstanding | $ 5,000 | $ 5,000 |
Commitments and Contingencies (Detail) - Future Minimum Annual Cash Payments Under Non-Cancelable Operating Lease Agreements $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2016 | $ 40,910 |
2017 | 37,565 |
2018 | 29,649 |
2019 | 25,074 |
2020 | 19,240 |
Thereafter | 111,555 |
Total minimum lease payments | $ 263,993 |
Stockholders' (Deficit) Equity (Detail) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015
USD ($)
vote
$ / shares
|
Dec. 31, 2014
USD ($)
$ / shares
|
Dec. 31, 2013
USD ($)
|
May. 05, 2015
USD ($)
|
|
Equity [Abstract] | ||||
Common stock par value (in Dollars per share) | $ / shares | $ 0.0005 | $ 0.0005 | ||
Common stock, number of votes per share | vote | 1 | |||
Payments for purchases of treasury stock | $ 509,049,000 | $ 432,006,000 | $ 181,736,000 | |
Stock repurchase program, authorized amount | $ 1,200,000,000 | |||
Stock repurchase program, remaining authorized amount | $ 1,100,000,000 |
Stockholders' (Deficit) Equity (Detail) - Summary of Transactions Relating to Common Stock - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Common Stock | |||
Common Stock Outstanding Roll Forward [Roll Forward] | |||
Beginning Balance | 156,234,415 | 156,234,415 | 156,234,415 |
Issuances under stock plans | 0 | 0 | 0 |
Purchases for treasury | 0 | 0 | 0 |
Ending Balance | 156,234,415 | 156,234,415 | 156,234,415 |
Treasury Stock | |||
Common Stock Outstanding Roll Forward [Roll Forward] | |||
Beginning Balance | 68,713,890 | 64,268,863 | 62,873,100 |
Issuances under stock plans | (1,003,746) | (1,452,419) | (2,037,091) |
Purchases for treasury | 6,186,101 | 5,897,446 | 3,432,854 |
Ending Balance | 73,896,245 | 68,713,890 | 64,268,863 |
Stock-Based Compensation (Detail) - Stock-Based Compensation Expense By Award Type - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 46.1 | $ 38.8 | $ 34.7 |
Stock appreciation rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 5.7 | 5.0 | 5.2 |
Common stock equivalents | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 0.6 | 0.6 | 0.6 |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 39.8 | $ 33.2 | $ 28.9 |
Stock-Based Compensation (Detail) - Stock-Based Compensation Expense Recognized In Consolidated Statements Of Operations - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 46.1 | $ 38.8 | $ 34.7 |
Costs of services and product development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 20.6 | 17.6 | 15.3 |
Selling, general, and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 25.5 | $ 21.2 | $ 19.4 |
Stock-Based Compensation (Detail) - Weighted-Average Assumptions Used To Determine Fair Value Of SARs Grants On Date Of Grant Using Black-Scholes-Merton Valuation Model - Stock Appreciation Rights (SARs) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected stock price volatility | 24.00% | 25.00% | 35.00% |
Risk-free interest rate | 1.50% | 1.30% | 0.80% |
Expected life in years | 4 years 4 months 28 days | 4 years 5 months 5 days | 4 years 5 months 27 days |
Stock-Based Compensation (Detail) - Summary Of Changes In RSUs Outstanding shares in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
$ / shares
shares
| |
Restricted Stock Units (RSUs) | |
Granted (in shares) | 0.3 |
Restricted Stock Units (RSUs) | |
Restricted Stock Units (RSUs) | |
Outstanding at December 31, 2014 (in shares) | 1.4 |
Granted (in shares) | 0.6 |
Vested and released (in shares) | (0.6) |
Forfeited (in shares) | 0.0 |
Outstanding at December 31, 2015 (in shares) | 1.4 |
Per Share Weighted Average Grant Date Fair Value | |
Outstanding at December 31, 2014 (in Dollars per share) | $ / shares | $ 50.76 |
Granted (in Dollars per share) | $ / shares | 79.22 |
Vested and released (in Dollars per share) | $ / shares | 47.82 |
Forfeited (in Dollars per share) | $ / shares | 0.00 |
Outstanding at December 31, 2015 (in Dollars per share) | $ / shares | $ 62.80 |
Stock-Based Compensation (Detail) - Summary Of Changes In CSEs Outstanding |
12 Months Ended |
---|---|
Dec. 31, 2015
$ / shares
shares
| |
Common Stock Equivalents (CSEs) | |
Granted (in shares) | 300,000 |
Common Stock Equivalents (CSEs) | |
Common Stock Equivalents (CSEs) | |
Outstanding at December 31, 2014 (in shares) | 104,203 |
Granted (in shares) | 7,443 |
Converted to common shares (in shares) | (5,982) |
Outstanding at December 31, 2015 (in shares) | 105,664 |
Per Share Weighted- Average Grant Date Fair Value | |
Outstanding at December 31, 2014 (in Dollars per share) | $ / shares | $ 18.65 |
Granted (in Dollars per share) | $ / shares | 85.15 |
Converted to common shares (in Dollars per share) | $ / shares | 85.12 |
Outstanding at December 31, 2015 (in Dollars per share) | $ / shares | $ 19.57 |
Computation of Earnings Per Share (Detail) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Common Stock Equivalents (CSEs) | |||
Class of Stock [Line Items] | |||
Stock repurchased during period (in shares) | 6.2 | 5.9 | 3.4 |
Computation of Earnings Per Share (Detail) - Calculations Of Basic And Diluted Earnings Per Share - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Numerator: | |||
Net income used for calculating basic and diluted earnings per common share | $ 175,635 | $ 183,766 | $ 182,801 |
Denominator: | |||
Weighted average number of common shares used in the calculation of basic earnings per share | 83,852 | 89,337 | 93,015 |
Common share equivalents associated with stock-based compensation plans | 1,204 | 1,382 | 1,815 |
Shares used in the calculation of diluted earnings per share | 85,056 | 90,719 | 94,830 |
Earnings per share: | |||
Basic (in Dollars per share) | $ 2.09 | $ 2.06 | $ 1.97 |
Diluted (in Dollars per share) | $ 2.06 | $ 2.03 | $ 1.93 |
Computation of Earnings Per Share (Detail) - Common Share Equivalents Not Included in the Computation of Diluted EPS - $ / shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Earnings Per Share [Abstract] | |||
Antidilutive common share equivalents as of December 31 | 0.3 | 0.3 | 0.3 |
Average market price per share of common stock during the year | $ 86.02 | $ 73.27 | $ 57.50 |
Income Taxes (Detail) - Summary of Components of Income Before Income Taxes - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||
U.S. | $ 165,848 | $ 188,963 | $ 186,330 |
Non-U.S. | 106,363 | 85,720 | 80,109 |
Income before income taxes | $ 272,211 | $ 274,683 | $ 266,439 |
Income Taxes (Detail) - Current and Long-Term Deferred Tax Assets and Liabilities - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Accrued liabilities | $ 67,888 | $ 67,066 |
Loss and credit carryforwards | 8,522 | 13,350 |
Assets relating to equity compensation | 22,686 | 19,920 |
Other assets | 6,712 | 3,420 |
Gross deferred tax assets | 105,808 | 103,756 |
Property, equipment, and leasehold improvements | (9,904) | (10,817) |
Intangible assets | (55,275) | (29,400) |
Prepaid expenses | (28,535) | (26,584) |
Other liabilities | (7,244) | (3,591) |
Gross deferred tax liabilities | (100,958) | (70,392) |
Valuation allowance | (1,828) | (570) |
Net deferred tax assets (1) | $ 3,022 | $ 32,794 |
Income Taxes (Detail) - Differences Between U.S. Federal Statutory Income Tax Rate and Effective Tax Rate on Income Before Income Taxes |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 3.40% | 3.10% | 3.20% |
Effect of non-U.S. operations | (7.70%) | (7.00%) | (6.10%) |
Record (release) reserve for tax contingencies | 3.00% | 2.60% | 0.90% |
Record (release) valuation allowance | 0.50% | 0.00% | (0.50%) |
Other items, net | 1.30% | (0.60%) | (1.10%) |
Effective tax rate | 35.50% | 33.10% | 31.40% |
Income Taxes (Detail) - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits, Excluding Interest and Penalties - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 20,645 | $ 14,488 |
Additions based on tax positions related to the current year | 5,150 | 6,351 |
Additions for tax positions of prior years | 7,839 | 4,112 |
Reductions for tax positions of prior years | (3,880) | (2,317) |
Reductions for expiration of statutes | (2,287) | (1,027) |
Settlements | (960) | (143) |
Change in foreign currency exchange rates | (596) | (819) |
Ending balance | $ 25,911 | $ 20,645 |
Derivatives and Hedging (Detail) - Derivative Gains And Losses That Have Been Recognized In Condensed Consolidated Statements Of Operations - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments, gain (loss) recognized in income, net | $ 8,600 | $ 3,600 | $ 4,100 |
Interest expense | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments, gain (loss) recognized in income, net | 8,500 | 4,100 | 4,000 |
Other expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments, gain (loss) recognized in income, net | $ 100 | $ (500) | $ 100 |
Fair Value Disclosures (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Borrowings, fair value disclosure | $ 820.0 | |
Money market funds at carrying value | 8.7 | $ 7.7 |
Cash surrender value of life insurance | $ 25.5 | $ 27.0 |
Fair Value Disclosures (Detail) - Assets And Liabilities Measured At Fair Value On Recurring Basis - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Assets: | ||
Assets measured at fair value on a recurring basis | $ 34,755 | $ 35,108 |
Liabilities: | ||
Liabilities measured at fair value on a recurring basis | 44,578 | 42,220 |
Level 1 | ||
Assets: | ||
Deferred compensation plan assets | 8,671 | 7,650 |
Assets measured at fair value on a recurring basis | 8,671 | 7,650 |
Level 2 | ||
Assets: | ||
Deferred compensation plan assets | 25,474 | 27,000 |
Assets measured at fair value on a recurring basis | 26,084 | 27,458 |
Liabilities: | ||
Deferred compensation liability | 39,071 | 39,100 |
Liabilities measured at fair value on a recurring basis | 44,578 | 42,220 |
Level 2 | Foreign currency forward contracts | ||
Assets: | ||
Derivative asset | 610 | 458 |
Liabilities: | ||
Derivative liability | 375 | 220 |
Level 2 | Interest rate swap contracts | ||
Liabilities: | ||
Derivative liability | $ 5,132 | $ 2,900 |
Employee Benefits (Detail) - Components of Net Periodic Pension Expense - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | $ 2,620 | $ 2,630 | $ 2,545 |
Interest cost | 790 | 1,190 | 1,075 |
Expected return on plan assets | (345) | (540) | (340) |
Recognition of actuarial loss | 300 | 75 | 30 |
Recognition of termination benefits | 85 | 30 | 455 |
Total defined benefit pension expense | $ 3,450 | $ 3,385 | $ 3,765 |
Employee Benefits (Detail) - Assumptions Used in Computation of Net Periodic Pension Expense |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||
Weighted-average discount rate | 2.19% | 2.15% | 3.35% |
Average compensation increase | 2.66% | 2.65% | 2.70% |
Employee Benefits (Detail) - Information Related to Changes in Projected Benefit Obligation - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation at beginning of year | $ 38,115 | $ 34,585 | $ 31,605 |
Service cost | 2,620 | 2,630 | 2,545 |
Interest cost | 790 | 1,190 | 1,075 |
Actuarial loss (gain) due to assumption changes and plan experience | (1,190) | 6,300 | 625 |
Additions and contractual termination benefits | 85 | 30 | 460 |
Benefits paid | (775) | (1,350) | (1,255) |
Foreign currency impact | (3,775) | (5,270) | (470) |
Projected benefit obligation at end of year | $ 35,870 | $ 38,115 | $ 34,585 |
Employee Benefits (Detail) - Benefit Plans and Related Amounts Recorded in Consolidated Balance Sheets - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
---|---|---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||||
Projected benefit obligation | $ 35,870 | $ 38,115 | $ 34,585 | $ 31,605 |
Plan assets at fair value | (13,190) | (13,220) | (13,870) | |
Funded status – shortfall | 22,680 | 24,895 | 20,715 | |
Amounts recorded in the Consolidated Balance Sheets for the plans: | ||||
Other liabilities — accrued pension obligation | 22,680 | 24,895 | 20,715 | |
Stockholders’ equity — deferred actuarial loss | $ (4,832) | $ (6,028) | $ (1,811) |
Segment Information (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2015
segment
| |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 3 |
Maximum | |
Segment Reporting Information [Line Items] | |
Percent of target bonus charges allocated to segments | 100.00% |
Percent of target bonus charges allocated to segments | 100.00% |
Segment Information (Detail) - Summarized Information by Geographic Location - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Revenues: | |||
Revenues | $ 2,163,056 | $ 2,021,441 | $ 1,784,213 |
Long-lived assets: | |||
Long-lived assets | 211,113 | 190,338 | 172,176 |
United States and Canada | |||
Revenues: | |||
Revenues | 1,347,676 | 1,204,476 | 1,049,734 |
Long-lived assets: | |||
Long-lived assets | 163,933 | 142,963 | 123,877 |
Europe, Middle East and Africa | |||
Revenues: | |||
Revenues | 557,165 | 570,334 | 508,755 |
Long-lived assets: | |||
Long-lived assets | 31,130 | 34,093 | 34,363 |
Other International | |||
Revenues: | |||
Revenues | 258,215 | 246,631 | 225,724 |
Long-lived assets: | |||
Long-lived assets | $ 16,050 | $ 13,282 | $ 13,936 |
Valuation and Qualifying Accounts (Detail) - Summarized Activity in Allowances - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 6,700 | $ 7,000 | $ 6,400 |
Additions Charged to Expense | 3,480 | 2,950 | 2,350 |
Additions Charged Against Revenues | 5,420 | 3,240 | 5,050 |
Deductions from Reserve | (8,700) | (6,490) | (6,800) |
Balance at End of Year | $ 6,900 | $ 6,700 | $ 7,000 |
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