Segment Information

6 Months Ended

Jun. 30, 2019

Our products and services are delivered through three segments – Research, Conferences and Consulting, 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 and advisors, peer networking services and membership programs that enable our clients to make better decisions. Our traditional strengths in IT, marketing and supply chain research are supplemented by best practice and talent management research insights across a range of business functions, including human resources, sales, legal and finance.


•	Conferences provides business professionals across the organization the opportunity to learn, share and network. From our flagship Chief Information Officer conference Gartner IT Symposium, to industry-leading conferences focused on specific business roles and topics, to member-driven sessions, our offerings 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.

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) (1):



Three Months Ended June 30, 2019	Research		Conferences		Consulting		Consolidated
Revenues	$	826,055	$	141,174	$	103,653	$	1,070,882
Gross contribution	572,297		80,570		34,236		687,103
Corporate and other expenses							(571,101		)
Operating income							$	116,002



Three Months Ended June 30, 2018	Research		Conferences		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



Six Months Ended June 30, 2019	Research		Conferences		Consulting		Consolidated
Revenues	$	1,651,429	$	193,106	$	196,791	$	2,041,326
Gross contribution	1,147,465		99,446		62,954		1,309,865
Corporate and other expenses							(1,145,064		)
Operating income							$	164,801



Six Months Ended June 30, 2018	Research		Conferences		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

(1) During 2018, the Company divested all of the non-core businesses that comprised its Other segment and as a result, no operating activity has been recorded in the Other segment in 2019.

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



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2019			2018		2019			2018
Total segment gross contribution	$	687,103		$	645,168	$	1,309,865		$	1,259,983
Costs and expenses:
Cost of services and product development - unallocated (1)	4,220			11,469		3,183			19,928
Selling, general and administrative	514,976			460,803		1,033,746			948,548
Depreciation and amortization	52,263			66,838		105,721			134,894
Acquisition and integration charges (credits)	(358		)	19,962		2,414			79,228
Operating income	116,002			86,096		164,801			77,385
Interest expense and other, net	24,996			36,484		50,667			70,644
Gain (loss) from divested operations	—			25,460		(2,075		)	25,460
(Benefit) provision for income taxes	(12,400		)	28,802		(12,142		)	5,518
Net income	$	103,406		$	46,270	$	124,201		$	26,683

(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.