Segment Information

9 Months Ended

Sep. 30, 2019

Our products and services are delivered through three segments – Research, Conferences and Consulting, as described below.

•

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 an 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 regarding the allocation of resources.

The tables below present information about the Company’s reportable segments for the periods indicated (in thousands) (1).



Three Months Ended September 30, 2019	Research		Conferences		Consulting		Consolidated
Revenues	$	840,998	$	66,286	$	93,218	$	1,000,502
Gross contribution	582,502		27,465		26,538		636,505
Corporate and other expenses							(567,358		)
Operating income							$	69,147



Three Months Ended September 30, 2018	Research		Conferences		Consulting		Other		Consolidated
Revenues	$	774,188	$	57,141	$	78,752	$	11,593	$	921,674
Gross contribution	534,911		25,047		18,419		6,927		585,304
Corporate and other expenses									(532,580		)
Operating income									$	52,724



Nine Months Ended September 30, 2019	Research		Conferences		Consulting		Consolidated
Revenues	$	2,492,427	$	259,392	$	290,009	$	3,041,828
Gross contribution	1,729,967		126,910		89,493		1,946,370
Corporate and other expenses							(1,712,422		)
Operating income							$	233,948



Nine Months Ended September 30, 2018	Research		Conferences		Consulting		Other		Consolidated
Revenues	$	2,308,426	$	214,481	$	258,106	$	105,562	$	2,886,575
Gross contribution	1,599,277		104,698		76,236		65,075		1,845,286
Corporate and other expenses									(1,715,177		)
Operating income									$	130,109

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

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



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
Total segment gross contribution	$	636,505	$	585,304		$	1,946,370		$	1,845,286
Costs and expenses:
Cost of services and product development - unallocated (1)	1,059		(258		)	4,242			19,669
Selling, general and administrative	512,159		447,537			1,545,905			1,396,085
Depreciation and amortization	52,398		68,187			158,119			203,081
Acquisition and integration charges	1,742		17,114			4,156			96,342
Operating income	69,147		52,724			233,948			130,109
Interest expense and other, net	16,049		27,811			66,716			98,454
Gain (loss) from divested operations	—		13,040			(2,075		)	38,500
Provision (benefit) for income taxes	11,710		26,200			(432		)	31,719
Net income	$	41,388	$	11,753		$	165,589		$	38,436

(1)

The unallocated amounts consist of certain bonus and related fringe costs recorded in consolidated Cost of services and product development 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.