Segment Information

On April 5, 2017, Gartner completed its acquisition of CEB. With the CEB acquisition, Gartner is reporting four business segments reflecting the Company’s enlarged scale and breadth of advisory services aligned to the mission-critical priorities of virtually all functional business leaders across every industry and size of enterprise worldwide. The Company’s reportable segments are as follows:

•

Research - includes our previous Gartner Research segment as well as the results of CEB’s core subscription-based best practice and decision support research activities. In addition, Research now includes our Strategic Advisory Services ("SAS") business, which was previously included in the Consulting segment. Research consists primarily of subscription-based research products, access to research inquiry, peer networking services, and membership programs.


•	Consulting - includes our previous Gartner Consulting segment except, as noted above, the results of our SAS business are now included in the Research segment. Consulting consists primarily of consulting and measurement engagements.


•	Events - includes our previous Gartner Events segment and the results of CEB’s former Evanta business and destination event activities. Events consists of various symposia, conferences, exhibitions, and destination activities.

•

Talent Assessment & Other - this is a new segment for Gartner and it includes CEB's previously disclosed Talent Assessment business as well as certain CEB non-subscription based talent products and services. On October 4, 2017, the Company announced that it has initiated a process to explore and evaluate strategic alternatives for the Talent Assessment business, which is a substantial part of the Talent Assessment & Other segment. See Note 14 — Subsequent Event for additional information.

The Company evaluates segment performance and allocates resources based on gross contribution margin. Gross contribution, as presented in the table below, is defined as operating income excluding certain Cost of services and product development expenses, Selling, general and administrative expenses, Depreciation, Amortization of intangibles, and Acquisition and integration charges. Certain bonus and fringe benefit costs included in consolidated Cost of services and product development are not allocated to segment expense. The accounting policies used by the reportable segments are the same as those used by the Company. There are no intersegment revenues. The Company does not identify or allocate assets, including capital expenditures, by reportable segment. Accordingly, assets are not reported by segment because the information is not available by segment and is not reviewed in the evaluation of segment performance or in making decisions in the allocation of resources.

The following tables present operating information about the Company’s reportable segments for the periods indicated (in thousands). The segment results for the three and nine months ended September 30, 2017 include the results of CEB beginning on the acquisition date:



Three Months Ended September 30, 2017	Research		Consulting		Events		Talent Assessment & Other		Consolidated
Revenues	$	653,443	$	72,117	$	44,953	$	57,572	$	828,085
Gross contribution	436,222		16,188		16,011		31,215		499,636
Corporate and other expenses									(523,985		)
Operating (loss)									$	(24,349	)



Three Months Ended September 30, 2016	Research		Consulting		Events		Talent Assessment & Other		Consolidated
Revenues (1)	$	466,877	$	73,707	$	33,475	$	—	$	574,059
Gross contribution (1)	322,646		18,215		14,529		—		355,390
Corporate and other expenses									(306,664		)
Operating income									$	48,726



Nine Months Ended September 30, 2017	Research		Consulting		Events		Talent Assessment & Other		Consolidated
Revenues	$	1,778,481	$	242,404	$	171,427	$	104,673	$	2,296,985
Gross contribution	1,187,906		71,558		79,313		48,512		1,387,289
Corporate and other expenses									(1,456,512		)
Operating (loss)									$	(69,223	)



Nine Months Ended September 30, 2016	Research		Consulting		Events		Talent Assessment & Other		Consolidated
Revenues (1)	$	1,371,157	$	237,876	$	132,290	$	—	$	1,741,323
Gross contribution (1)	954,276		71,110		63,574		—		1,088,960
Corporate and other expenses									(892,506		)
Operating income									$	196,454

(1) Effective June 30, 2017, the Company began reporting the results of its SAS business in Research whereas previously the SAS business was reported with Consulting. As a result, revenues of $5.4 million and $20.2 million pertaining to the three and nine months ended September 30, 2016, respectively, were reclassified from Consulting to Research to be comparable with the current year presentation. Gross contribution of $3.4 million and $13.2 million for the three and nine months ended September 30, 2016, respectively, was also reclassified from Consulting to Research.

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



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2017			2016		2017			2016
Total segment gross contribution	$	499,636		$	355,390	$	1,387,289		$	1,088,960
Costs and expenses:
Cost of services and product development - unallocated (1)	3,758			4,453		12,124			14,222
Selling, general and administrative	421,163			269,902		1,133,633			799,322
Depreciation and amortization	68,564			15,752		168,651			46,004
Acquisition and integration charges	30,500			16,557		142,104			32,958
Operating (loss) income	(24,349		)	48,726		(69,223		)	196,454
Interest expense and other, net	37,591			3,978		86,971			14,208
(Benefit) provision for income taxes	(13,760		)	14,264		(52,166		)	55,149
Net (loss) income	$	(48,180	)	$	30,484	$	(104,028	)	$	127,097


(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.