Segment Information

In the second quarter of 2018, the Company divested its CEB Talent Assessment business and its CEB Workforce Survey and Analytics business. These two businesses were acquired on April 5, 2017 as part of the CEB acquisition and were reported with the Talent Assessment & Other segment. As a result of these divestitures, the Company changed the name of the Talent Assessment & Other segment to Other. Additional information regarding these divestitures is included in Note 2 — Acquisitions and Divestitures.

Our products and services are delivered through four segments – Research, Events, Consulting and Other, as follows:

•

Research provides trusted, objective insights and advice on the mission-critical priorities of leaders across all functional areas of the enterprise through research and other reports, briefings, proprietary tools, access to our analysts, peer networking services and membership programs that enable our clients to make better decisions. Gartner's traditional strengths in IT, marketing and supply chain research were enhanced in 2017 with Gartner's acquisition of CEB Inc., which added CEB's best practice and talent management research insights across a range of business functions, to include human resources, finance, sales and legal.


•	Events provides business professionals across the organization the opportunity to learn, share and network. From our flagship CIO event Gartner Symposium/ITxpo, to industry-leading conferences focused on specific business roles and topics, to member-driven sessions, our events enable attendees to experience the best of Gartner insight and advice live.


•	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.


•	Other currently includes the Challenger sales training unit, which provides sales training and related assessment tools, and certain other miscellaneous activities. As discussed above, the Company divested the majority of the operations in this segment in the second quarter of 2018.

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 or loss 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 information about the Company’s reportable segments for the periods indicated (in thousands):



Three Months Ended June 30, 2018	Research		Events		Consulting		Other		Consolidated
Revenues	$	770,314	$	111,253	$	96,458	$	23,311	$	1,001,336
Gross contribution	532,910		63,461		33,693		15,104		645,168
Corporate and other expenses									(559,072		)
Operating income									$	86,096



Three Months Ended June 30, 2017	Research		Events		Consulting		Other		Consolidated
Revenues	$	613,732	$	91,205	$	91,693	$	47,101	$	843,731
Gross contribution	400,571		49,735		31,433		17,297		499,036
Corporate and other expenses									(597,424		)
Operating loss									$	(98,388	)



Six Months Ended June 30, 2018	Research		Events		Consulting		Other		Consolidated
Revenues	$	1,534,238	$	157,340	$	179,354	$	93,969	$	1,964,901
Gross contribution	1,064,367		79,651		57,817		58,148		1,259,983
Corporate and other expenses									(1,182,598		)
Operating income									$	77,385



Six Months Ended June 30, 2017	Research		Events		Consulting		Other		Consolidated
Revenues	$	1,125,038	$	126,474	$	170,287	$	47,101	$	1,468,900
Gross contribution	751,684		63,302		55,370		17,297		887,653
Corporate and other expenses									(932,527		)
Operating loss									$	(44,874	)

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



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018		2017			2018		2017
Total segment gross contribution	$	645,168	$	499,036		$	1,259,983	$	887,653
Costs and expenses:
Cost of services and product development - unallocated (1)	11,469		7,309			19,928		8,366
Selling, general and administrative	460,803		408,226			948,548		712,470
Depreciation and amortization	66,838		83,557			134,894		100,087
Acquisition and integration charges	19,962		98,332			79,228		111,604
Operating income (loss)	86,096		(98,388		)	77,385		(44,874		)
Interest expense and other, net	36,484		44,363			70,644		49,380
Gain from divested operations	25,460		—			25,460		—
Provision (benefit) for income taxes	28,802		(50,470		)	5,518		(38,406		)
Net income (loss)	$	46,270	$	(92,281	)	$	26,683	$	(55,848	)


(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.