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 Gartner Reports Financial Results for Fourth Quarter and Full Year 2014
   Thursday, February 05, 2015 7:01:52 AM ET

--Fourth Quarter Revenue Increased 12% YOY, to $584.0 Million

Gartner, Inc. (IT ), the leading provider of research and analysis on the global information technology industry, today reported results for fourth quarter and full year 2014 and provided its preliminary financial outlook for full year 2015.

For fourth quarter 2014, total revenue was $584.0 million, an increase of 12% over fourth quarter 2013 and 15% excluding the foreign exchange impact. Fourth quarter 2014 net income was $59.1 million, a decrease of 4% over fourth quarter 2013 due to acquisition-related charges and a higher effective tax rate. Normalized EBITDA was $121.7 million for fourth quarter 2014, an increase of 15%, while Diluted Earnings Per Share was $0.66 in fourth quarter 2014 compared to $0.65 in fourth quarter 2013. Diluted Earnings Per Share Excluding Acquisition Adjustments was $0.72 in fourth quarter 2014 compared to $0.66 in fourth quarter 2013. (See "Non-GAAP Financial Measures" below for a discussion of Normalized EBITDA and Diluted Earnings Per Share Excluding Acquisition Adjustments).

For full year 2014, total revenue was $2.021 billion, an increase of 13% over 2013 and 14% excluding the foreign exchange impact. Net income was $183.8 million in 2014 compared to $182.8 million in 2013. Normalized EBITDA was $386.4 million in 2014, an increase of 12% over the prior year. Diluted Earnings Per Share was $2.03 in 2014, an increase of 5% compared to 2013. Diluted Earnings Per Share Excluding Acquisition Adjustments increased 14%, to $2.24 in 2014 compared to $1.97 in 2013.

Gene Hall, Gartner’s chief executive officer, commented, "Contract value accelerated and total revenue growth remained strong in the fourth quarter and for the full year 2014. This performance continues our trend of consistent double digit growth in our key financial metrics. The Company is as strong as it has ever been as we enter 2015, and we remain confident about our market opportunity and growth potential over the long term."

Business Segment Highlights

Research

Revenue for fourth quarter 2014 was $373.4 million, up 12% compared to fourth quarter 2013 and 15% excluding the foreign exchange impact. The quarterly gross contribution margin was 69% in both 2014 and 2013. Contract value was $1.603 billion at December 31, 2014, an increase of 14% on a foreign exchange neutral basis and 13% on a reported basis compared to December 31, 2013. Fourth quarter 2014 and 2013 enterprise level client retention was 85% and 83%, and enterprise level wallet retention was 106% and 104%, respectively.

Consulting

Revenue for fourth quarter 2014 was $88.3 million, an increase of 3% compared to fourth quarter 2013 and 7% excluding the foreign exchange impact. The gross contribution margin was 32% and 36% in fourth quarter 2014 and 2013, respectively. Fourth quarter 2014 utilization was 72% compared to 65% in fourth quarter 2013. As of December 31, 2014, billable headcount was 535 compared to 509 at year-end 2013. Backlog was $102.6 million at December 31, 2014 compared to $106.1 million at December 31, 2013.

Events

Revenue for fourth quarter 2014 was $122.2 million, an increase of 20% compared to fourth quarter 2013 and 23% excluding the foreign exchange impact. Gross contribution margin was 56% in fourth quarter 2014 compared to 53% in the prior year quarter. The Company held 13 events with 23,453 attendees in fourth quarter 2014, compared to 11 events and 20,786 attendees in fourth quarter 2013.

Cash Flow and Balance Sheet Highlights

Gartner generated $347 million of operating cash flow in full year 2014, an increase of 10% compared to 2013. Additions to property, equipment and leasehold improvements ("Capital Expenditures") totaled $38.5 million in 2014. Free Cash Flow for the full year 2014 was $312 million, an increase of 11% over 2013 (See "Non-GAAP Financial Measures" below for a discussion of Free Cash Flow). At December 31, 2014, the Company had $365 million of cash. During 2014, the Company used $432 million in cash to repurchase our common shares and $110 million in cash for three business acquisitions completed during the year.

We refinanced our existing credit facility during the fourth quarter of 2014 to take advantage of favorable market conditions, provide for additional liquidity, and extend the maturity of our debt. Our total borrowing capacity under the new arrangement is $1.5 billion, which consists of a $400.0 million term loan and a $1.1 billion revolving credit arrangement. The new facility has a five year maturity. At December 31, 2014 the Company had $400.0 million outstanding under the term loan and $0 under the revolver.

Financial Outlook for 2015

The Company also provided its preliminary financial outlook for 2015, which is impacted by the stronger U.S. dollar and a higher projected effective tax rate:

Projected Revenue

($ in millions)                                                                                                  2015 Projected Range                                                                                                                                                                                                    % Change
--------------- -------------------- -------------------- --------------------                      -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Research                                   $   1,580       --     $   1,600                                                                     9 %     --         11                    %
Consulting                                                                                                                   330                                                                --                                                                    350                                                                                                          (5 )                                           --                                                                                      1
Events                                                                                                                       240                                             --                                                                    255                                                                                        5                                             --                                                                                     12
                                                                                                    -------------------------------------------------                                                                                                    -------------------------------------------------
Total Revenue                                                                                       $   2,150                                             --                                           $   2,205                                                  6 %                                           --                                                9                    %
                                                                                                    = ==================== ===== ====================                                                                                                    = ==================== ===== ====================                                           ==================== ==================== == =                                                                                                    ==================== ==================== == ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Projected Earnings and Cash Flow (1)

($ in millions, except per share data)                                                                                                                                    2015 Projected Range                                                                                                                                                                                                % Change
------------------------------------------------------------ --------------------                                                                                     --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                               ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
GAAP Diluted Earnings Per Share                                                                                                                    $   2.11                          --       $   2.30                                                                                                    4  %     --       13                    %
Diluted Earnings Per Share Excluding Acquisition Adjustments                                                                                                                                 2.27                                                                --                                                                                       2.46                                                                                                                       1                                              --                                                                10
Normalized EBITDA                                                                                                                                                                             405                                                                --                                                                                        430                                                                                                                       5                                              --                                                                11
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Operating Cash Flow                                                                                                                                                                           348                                                                --                                                                                        374                                                                                                          --                                              --                                                                 8
Acquisition and Integration Payments                                                                                                                                                           12                                                                --                                                                                         12                                                                                                                       >100                                           --                                                                                   >100
Capital Expenditures                                                                                                                                                                          (45 )                                                              --                                                                                        (46 )                                                                                                                    17                                              --                                                                19
                                                                                                                                                                      ------------------------------------------------                                                                                                                         ------------------------------------------------
Free Cash Flow                                                                                                                                                        $    315                                             --                                                                $    340                                                                                 1  %                                           --                                              9                    %
                                                                                                                                                                      = ==================== ==== ====================                                                                                                                         = ==================== ==== ====================                                                                ==================== ============== ==                                                                                                    ==================== == ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(1) See "Non-GAAP Financial Measures" below for descriptions of
Diluted Earnings Per Share Excluding Acquisition Adjustments,
Normalized EBITDA, and Free Cash Flow.
 

Conference Call Information

Gartner has scheduled a conference call at 8:30 a.m. eastern time on Thursday, February 5, 2015 to discuss the Company’s financial results. The conference call will be available via the Internet by accessing the Company’s website at http://investor.gartner.com or by dial-in. The U.S. dial-in number is 888-713-4214 and the international dial-in number is 617-213-4866 and the participant passcode is 34673731#. The question and answer session of the conference call will be open to investors and analysts only. A replay of the webcast will be available for approximately 90 days following the call.

Annual Meeting of Stockholders

Gartner will hold its 2015 Annual Meeting of Stockholders at 10:00 a.m. eastern time on Thursday, May 28, 2015 at the Company’s offices in Stamford, Connecticut.

About Gartner

Gartner, Inc. (IT ) is the world’s leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the valuable partner to clients in 9,958 distinct enterprises. Through the resources of Gartner Research, Consulting and Events, we work with clients to research, analyze and interpret the business of IT within the context of their individual roles. Gartner is headquartered in Stamford, Connecticut, U.S.A., and as of December 31, 2014, had 6,758 associates, including 1,556 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.

Non-GAAP Financial Measures

Normalized EBITDA: Represents operating income excluding depreciation and amortization, accretion on obligations related to excess facilities, stock-based compensation expense, and acquisition and integration charges. We believe Normalized EBITDA is an important measure of our recurring operations as it excludes items that may not be indicative of our core operating results. Investors are cautioned that Normalized EBITDA is not a financial measure defined under generally accepted accounting principles and as a result is considered a non-GAAP financial measure. We provide this measure to enhance the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future. Normalized EBITDA should not be construed as an alternative to any other measure of performance determined in accordance with generally accepted accounting principles.

Diluted Earnings Per Share Excluding Acquisition Adjustments: Represents GAAP diluted earnings per share adjusted for the per share impact of certain items directly related to acquisitions, net of tax effect. The adjustments consist of amortization of identifiable intangibles, non-recurring acquisition and integration charges such as legal, consulting, retention, severance and other costs, and non-cash fair value adjustments on pre-acquisition deferred revenues. We believe Diluted Earnings Per Share Excluding Acquisition Adjustments is an important measure of our recurring operations as it excludes items that may not be indicative of our core operating results.

Free Cash Flow: Represents cash provided by operating activities plus cash acquisition and integration payments less cash paid for capital expenditures. We believe that Free Cash Flow is an important measure of the recurring cash generated by the Company’s core operations that is available to be used to repurchase our stock, repay debt obligations, invest in future growth through new business development activities, or make acquisitions.

Safe Harbor Statement

Statements contained in this press release regarding the Company’s growth and prospects, projected 2015 financial results and all other statements in this release other than recitation of historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. Such factors include, but are not limited to, the following: our ability to maintain and expand our products and services; our ability to expand or retain our customer base; our ability to grow or sustain revenue from individual customers; our ability to attract and retain a professional staff of research analysts and consultants as well as experienced sales personnel upon whom we are dependent; our ability to achieve and effectively manage growth, including our ability to integrate acquisitions and consummate future acquisitions; our ability to pay our debt; our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; our ability to carry out our strategic initiatives and manage associated costs; our ability to successfully compete with existing competitors and potential new competitors; our ability to enforce or protect our intellectual property rights; additional

risks associated with international operations including foreign currency fluctuations; the impact of restructuring and other charges on our businesses and operations; general economic conditions; risks associated with the creditworthiness and budget cuts of governments and agencies; and other factors described under "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2013, which can be found on Gartner’s website at www.investor.gartner.com and the SEC’s website at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and Gartner disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

                                                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                     GARTNER, INC.
                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                     Condensed Consolidated Statements of Operations
                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                     (Unaudited; in thousands, except per share amounts)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                            Three Months Ended                                                                                                                                                                                                                                                                Twelve Months Ended
                                                                                                                                                                               December 31,                                                                                                                                                                                                                                                                      December 31,
                                                                                                                         2014                                  2013                                                                                                                                                          2014                                     2013                 
                                                                                                           ----------------------------------------------------                                           ----------------------------------------------------                                                                                                                            -------------------------------------------------------                                           -------------------------------------------------------
Revenues:
   Research                                                                                                 $   373,395                                                                 $   332,929                                                                            12  %                                                                  $   1,445,338                                                                  $   1,271,011                                                                14  %
   Consulting                                                                                                                       88,337                                                                                         85,547                                                                             3  %                                                                                           348,396                                                                                           314,257                                                                11  %
   Events                                                                                                                          122,247                                                                     102,231                                                         20  %                                                                                           227,707                                                                        198,945                                             14  %
                                                                                                           ----------------------------------------------------                                           ----------------------------------------------------                                                                                                                            -------------------------------------------------------                                           -------------------------------------------------------
Total revenues                                                                                                                     583,979                                                                                        520,707                                                                            12  %                                                                                         2,021,441                                                                                         1,784,213                                                                13  %
Costs and expenses:
   Cost of services and product development                                                                                        235,875                                                                                        210,108                                                                            12  %                                                                                           797,933                                                                                           713,484                                                                12  %
   Selling, general and administrative                                                                                             235,888                                                                                        212,805                                                                            11  %                                                                                           876,067                                                                                           760,458                                                                15  %
   Depreciation                                                                                                                      8,061                                                                                          7,621                                                                             6  %                                                                                            31,186                                                                                            28,996                                                                 8  %
   Amortization of intangibles                                                                                                       2,463                                                                                          1,357                                                                            82  %                                                                                             8,226                                                                                             5,446                                                                51  %
   Acquisition and integration charges                                                                                               5,852                                                                          59                                                         >100%                                                                                            21,867                                                                            337                                             >100%
                                                                                                           ----------------------------------------------------                                           ----------------------------------------------------                                                                                                                            -------------------------------------------------------                                           -------------------------------------------------------
Total costs and expenses                                                                                                           488,139                                                                     431,950                                                         13  %                                                                                         1,735,279                                                                      1,508,721                                             15  %
                                                                                                           ----------------------------------------------------                                           ----------------------------------------------------                                                                                                                            -------------------------------------------------------                                           -------------------------------------------------------
   Operating income                                                                                                                 95,840                                                                                         88,757                                                                             8  %                                                                                           286,162                                                                                           275,492                                                                 4  %
Interest expense, net                                                                                                               (3,301 )                                                                                       (2,133 )                                                                          55  %                                                                                           (10,887 )                                                                                          (8,837 )                                                              23  %
Other expense, net                                                                                                                    (251 )                                                                                         (152 )                                                                          65  %                                                                                              (592 )                                                                                            (216 )                                                              >100%
                                                                                                           ----------------------------------------------------                                           ----------------------------------------------------                                                                                                                            -------------------------------------------------------                                           -------------------------------------------------------
Income before income taxes                                                                                                          92,288                                                                                         86,472                                                                             7  %                                                                                           274,683                                                                                           266,439                                                                 3  %
Provision for income taxes                                                                                                          33,144                                                                      25,054                                                         32  %                                                                                            90,917                                                                         83,638                                              9  %
                                                                                                           ----------------------------------------------------                                           ----------------------------------------------------                                                                                                                            -------------------------------------------------------                                           -------------------------------------------------------
   Net income                                                                                               $    59,144                                              $    61,418                                                         (4 )%                                                                  $     183,766                                               $     182,801                                              1  %
                                                                                                           == ==================== ======= ====================                                           == ==================== ======= ====================                                                                                                                            === ==================== ========= ====================                                           === ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
Income per common share:
   Basic                                                                                                    $                         0.67                                                                 $                         0.67                                                                --  %                                                                  $                           2.06                                                                  $                           1.97                                                                 5  %
   Diluted                                                                                                  $                         0.66                                                                 $                         0.65                                                                             2  %                                                                  $                           2.03                                                                  $                           1.93                                                                 5  %
Weighted average shares outstanding:
   Basic                                                                                                                            87,647                                                                                         92,205                                                                            (5 )%                                                                                            89,337                                                                                            93,015                                                                (4 )%
   Diluted                                                                                                                          88,956                                                                      93,946                                                         (5 )%                                                                                            90,719                                                                         94,830                                             (4 )%
                                                                                                           ----------------------------------------------------                                           ----------------------------------------------------                                           -------------- --                                                                -------------------------------------------------------                                           -------------------------------------------------------                                           -- --
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                   
BUSINESS SEGMENT DATA
(Unaudited; in thousands)
                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                         Revenue                                                                                         Direct                                                                                            Gross                                                                   Contribution
                                                                                                                                                                                                                                         Expense                                                                                       Contribution                                                                   Margin
                                                                                                                 ---------------------------------------------------                                              -------------------------------------------------                                              ----------------------------------------------------                                              ------------
Three Months Ended 12/31/14
Research                                                                                                          $     373,395                                                                 $   116,957                                                                  $     256,438                                                                     69%
Consulting                                                                                                                                  88,337                                                                                         59,753                                                                                            28,584                                                                     32%
Events                                                                                                                                     122,247                                                                      54,004                                                                         68,243                                                  56%
                                                                                                                 ------------------------------------------------------                                           ----------------------------------------------------                                           -------------------------------------------------------
TOTAL                                                                                                             $     583,979                                              $   230,714                                               $     353,265                                                  60%
                                                                                                                 == ==================== ========= ====================                                           == ==================== ======= ====================                                           === ==================== ========= ====================
Three Months Ended 12/31/13
Research                                                                                                          $                        332,929                                                                 $                      102,500                                                                  $                        230,429                                                                     69%
Consulting                                                                                                                                  85,547                                                                                         54,818                                                                                            30,729                                                                     36%
Events                                                                                                                                     102,231                                                                      48,333                                                                         53,898                                                  53%
                                                                                                                 ------------------------------------------------------                                           ----------------------------------------------------                                           -------------------------------------------------------
TOTAL                                                                                                             $     520,707                                              $   205,651                                               $     315,056                                                  61%
                                                                                                                 == ==================== ========= ====================                                           == ==================== ======= ====================                                           === ==================== ========= ====================
Twelve Months Ended 12/31/14
Research                                                                                                          $                      1,445,338                                                                 $                      443,424                                                                  $                      1,001,914                                                                     69%
Consulting                                                                                                                                 348,396                                                                                        228,465                                                                                           119,931                                                                     34%
Events                                                                                                                                     227,707                                                                     115,323                                                                        112,384                                                  49%
                                                                                                                 ------------------------------------------------------                                           ----------------------------------------------------                                           -------------------------------------------------------
TOTAL                                                                                                             $   2,021,441                                              $   787,212                                               $   1,234,229                                                  61%
                                                                                                                 -- -------------------- --------- --------------------                                           -- -------------------- ------- --------------------                                           --- -------------------- --------- --------------------
Twelve Months Ended 12/31/13
Research                                                                                                          $                      1,271,011                                                                 $                      391,627                                                                  $                        879,384                                                                     69%
Consulting                                                                                                                                 314,257                                                                                        206,692                                                                                           107,565                                                                     34%
Events                                                                                                                                     198,945                                                                     107,729                                                                         91,216                                                  46%
                                                                                                                 ------------------------------------------------------                                           ----------------------------------------------------                                           -------------------------------------------------------
TOTAL                                                                                                             $   1,784,213                                              $   706,048                                               $   1,078,165                                                  60%
                                                                                                                 == ==================== ========= ====================                                           == ==================== ======= ====================                                           === ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                             
SELECTED STATISTICAL DATA
                                                                                                                                                                                                                                                                    
                                                                                                                                                                             December 31,                                                                                      December 31,
                                                                                                                                                                                 2014                                                                                              2013
                                                                                                                                                                  -------------------------------                                                                  ---------------------------------
Research contract value (a)                                                                                                                                          $   1.603                                                                                          $   1.423
Research client retention - enterprise level (b)                                                                                                                            85 %                                                                                               83 %
Research wallet retention - enterprise level (b)                                                                                                                           106 %                                                                                              104 %
Research client retention - organization level (b)                                                                                                                          84 %                                                                                               82 %
Research wallet retention - organization level (b)                                                                                                                         100 %                                                                                               98 %
Research client enterprises                                                                                                                                              9,958                                                                                              9,071
Research client organizations                                                                                                                                           15,252                                                                                             14,099
                                                                                                                                                                                                                                                                                   
Consulting backlog (c)                                                                                                                                               $ 102,600                                                                                          $ 106,130
Consulting--quarterly utilization                                                                                                                               72 %                                                                            65 %
Consulting billable headcount                                                                                                                                              535                                                                                                509
Consulting--average annualized revenue per billable headcount (c)                                                                                        $     463                                                                                          $     430
                                                                                                                                                                                                                                                                                   
Events--number of events for the quarter                                                                                                                        13                                                                                                 11
Events--attendees for the quarter                                                                  23,453                                                                          20,786  
----------------------------------------------------------------------------- -------------------- -------------------- --------------------                      ---------------------------------                                                                -----------------------------------
(a)   In billions.
(b)                      We define an enterprise as a single company or customer. We define
                         an organization as a buying center within an enterprise, such as a
                         location or department. A single enterprise may have multiple
                         organizations.
(c)                      In thousands.
                          
                                                                                                                                                                                                                                                                                          
SUPPLEMENTAL INFORMATION
                                                                                                                                                                                                                                                           
Reconciliation - Operating income to Normalized EBITDA (a)
(Unaudited; in thousands):
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                   Three Months Ended                                                                                                                                                                                      Twelve Months Ended
                                                                                                                                                                                                      December 31,                                                                                                                                                                                            December 31,
                                                                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------                                                                         ----------------------------------------------------------------------------------------------------------------------
                                                                                                                                                2014                                  2013                                                                                             2014                                  2013
                                                                                                                                  ----------------------------------------------------                                           ----------------------------------------------------                                                                ----------------------------------------------------                                           --------------------------------
Net income                                                                                                                         $    59,144                                              $    61,418                                                                                      $   183,766                                              $   182,801
Interest expense, net                                                                                                                                       3,301                                                                                          2,133                                                                                                              10,887                                                                                          8,837
Other expense (income), net                                                                                                                                   251                                                                                            152                                                                                                                 592                                                                                            216
Tax provision                                                                                                                                              33,144                                                                      25,054                                                                                           90,917                                                                      83,638
                                                                                                                                  ----------------------------------------------------                                           ----------------------------------------------------                                                                ----------------------------------------------------                                           --------------------------------
Operating income                                                                                                                   $                       95,840                                                                 $                       88,757                                                                                      $                      286,162                                                                 $                      275,492
Normalizing adjustments:
Stock-based compensation expense (b)                                                                                                                        9,436                                                                                          7,687                                                                                                              38,861                                                                                         34,735
Depreciation, accretion, and amortization (c)                                                                                                              10,543                                                                                          9,015                                                                                                              39,544                                                                                         34,601
Acquisition and integration adjustments (d)                                                                                                                 5,852                                                                          59                                                                                           21,867                                                                         596
                                                                                                                                  ----------------------------------------------------                                           ----------------------------------------------------                                                                ----------------------------------------------------                                           --------------------------------
   Normalized EBITDA                                                      $   121,671                                              $   105,518                                                                   $   386,434                                              $   345,424
--------------------------------------------- -------------------- -------------------- --------------------                      == ==================== ======= ====================                                           == ==================== ======= ====================                                                                == ==================== ======= ====================                                           == ==================== =======
(a)    Normalized EBITDA is based on GAAP operating income adjusted for
                          certain normalizing adjustments.
(b)                       Consists of charges for stock-based compensation awards.
(c)                       Includes depreciation expense, accretion on excess facilities
                          accruals, and amortization of intangibles.
(d)                       Consists of directly-related incremental expenses from acquisitions.
                          
                                                                                                                                                                                                                                                                                                           
Reconciliation - Diluted Earnings Per Share to Diluted Earnings
Per Share Excluding Acquisition Adjustments (a)
(Unaudited;
in thousands, except per share amounts):
                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                       Three Months Ended December 31,
                                                                                                                                                                                 2014                                                                                                                                      2013
                                                                                                           ------------------------------------------------------------------------------------------------------------------------------------------------                                          -----------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 After-tax                                                 EPS                                                                                       After-tax                                       EPS
                                                                                                                                  Amount                                                                                                                                                                                    Amount
                                                                                                           ------------------------------------------------                                              ----------------------------------------------                                              ------------------------------------------------                                              ----------------------------
Diluted earnings per share                                                                                  $   59,144                                                                 $   0.66                                                                 $   61,418                                                                   $   0.65
Acquisition adjustments, net of tax effect (b):
Amortization of acquired intangibles (c)                                                                                            1,562                                                                                        0.02                                                                                           860                                                                                          0.01
Acquisition and integration charges (d)                                                                                             3,743                                                                     0.04                                                                         40                                                             --
                                                                                                           ---------------------------------------------------                                           -------------------------------------------------                                           ---------------------------------------------------                                           -------------------------------
Diluted earnings per share excluding acquisition adjustments (e)                                            $   64,449                                              $   0.72                                              $   62,318                                                $   0.66
                                                                                                           == ==================== ====== ====================                                           == ==================== ==== ====================                                           == ==================== ====== ====================                                           ==== ==================== ====
                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                     Twelve Months Ended December 31,                                                                                                                                                        
                                                                                                                                                                                                                                                                                          2014                                                                                                                                         2013
                                                                                                                                                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------                                                               ------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                          After-tax                                                 EPS                                                                                                            After-tax                                        EPS
                                                                                                                                                                                                                                           Amount                                                                                                                                                                                                         Amount
                                                                                                                                                                                                                    -------------------------------------------------                                              ---------------------------------------------                                                                   -------------------------------------------------                                              ----------------------------
Diluted earnings per share                                                                                                                                                                                           $   183,766                                                                $   2.03                                                                                      $   182,801                                                                   $   1.93
Acquisition adjustments, net of tax effect (b):
Amortization of acquired intangibles (c)                                                                                                                                                                                                      5,272                                                                                       0.06                                                                                                               3,465                                                                                          0.04
Acquisition and integration charges (d)                                                                                                                                                                                                      14,337                                                                    0.15                                                                                              402                                                             --
                                                                                                                                                                                                                    ----------------------------------------------------                                           ------------------------------------------------                                                                ----------------------------------------------------                                           -------------------------------
Diluted earnings per share excluding acquisition adjustments (e)                                                                                            $   203,375                                             $   2.24                                                                   $   186,668                                                $   1.97
---------------------------------------------------------------- -------------------- -------------------- --------------------                                                                                     == ==================== ======= ====================                                           = ==================== ==== ====================                                                                == ==================== ======= ====================                                           ==== ==================== ====
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
(a)   Diluted earnings per share excluding acquisition adjustments
                         represents GAAP diluted earnings per share adjusted for the per
                         share impact of certain items directly-related to acquisitions, net
                         of tax effect.
(b)                      The effective tax rates used for the adjustments were 36% and 34%
                         for the three and twelve months ended December 31, 2014,
                         respectively, and 33% for both the three and twelve months ended
                         December 31, 2013.
(c)                      Consists of non-cash amortization charges related to acquired
                         intangibles.
(d)                      Consists of directly-related incremental expenses from acquisitions.
(e)                      The EPS is calculated based on 89.0 million and 93.9 million shares
                         for the three months ended December 31, 2014 and 2013, respectively,
                         and 90.7 million and 94.8 million shares for the twelve months ended
                         December 31, 2014 and 2013, respectively.
                          
                                                                                                                                                                                                                                      
SUPPLEMENTAL INFORMATION continued
                                                                                                                                                                                                                                                           
Selected Balance Sheet data (Unaudited; in thousands)
                                                                                                                                                                                                                                                           
                                                                                                                                                                            December 31,
                                                                                                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                       2014                                                                                       2013
                                                                                                                                          -----------------------------------------------------------------------------------------------                                                               --------------------------------------------------------------------------
Cash and cash equivalents                                                                                                                  $       365,302                                                                                      $       423,990
Fees receivable, net                                                                                                                                                                                        552,107                                                                                                                                                       490,923
Total assets                                                                                                                                                                                              1,904,351                                                                                                                                                     1,783,582
Deferred revenues                                                                                                                                                                                           841,457                                                                                                                                                       766,114
Total current and long-term debt                                                                                                                                                                            405,000                                                                                                                                                       205,000
Total liabilities                                                                                                                                                                                         1,743,180                                                                                                                                                     1,422,266
Total stockholders’ equity                             $       161,171                                                                   $       361,316
----------------------------------------------------- -------------------- -------------------- --------------------                      -- -------------------- -------------------- -------------------- ------- --------------------                                                                -- -------------------- -------------------- -------------------- -------
                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                 
Selected Cash Flow Data (Unaudited; in thousands):
                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                     Twelve Months Ended
                                                                                                                                                                                                                                                        December 31,
                                                                                                                                       --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                    2014                                                                                         2013
                                                                                                                                       ----------------------------------------------------------------------------------------------                                                               ---------------------------------------------------------------------------------
Cash provided by operating activities                                                                                                  $       346,779                                                                                      $              315,654
Cash paid for capital expenditures                                                                                                                                                                       38,486                                                                                                                                                               36,498
Cash paid for treasury stock                                                                                                                                                                            432,006                                                                                                                                                              181,736
Cash paid for acquisitions, net                                                                                                                                                                         109,928                                                                                                                                                       --
Cash receipts (payments) on debt, net                                         $       200,000                                                                   $       --
-------------------------------------------------- -------------------- -------------------- --------------------                      - -------------------- -------------------- -------------------- ------- --------------------                                                                -- -------------------- -------------------- -------------------- --------------
                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                      
Reconciliation - Cash Provided by Operating Activities to Free
Cash Flow (a) (Unaudited; in thousands):
                                                                                                                                                                                                                                                           
                                                                                                Twelve Months Ended
                                                                                                                                                                               December 31,
                                                                                                                              ------------------------------------------------------------------------------------------------------
                                                                                                                                             2014                                  2013
                                                                                                                              ----------------------------------                                          ----------------------------------
Cash provided by operating activities                                                                                            $ 346,779                                                                   $ 315,654
Adjustments:
Cash acquisition and integration payments                                                                                            3,753                                                                       1,099
Cash paid for capital expenditures                                                                                                 (38,486 )                                                                   (36,498 )
                                                                                                                              ---------------------------------                                           ---------------------------------
Free Cash Flow                                                          $ 312,046                                                $ 280,255  
----------------------------------------- -------------------- -------------------- --------------------                      ==== ======= ====================                                           ==== ======= ====================
                                                                                                                                                                                                                                                                  
(a)    Free cash flow is based on cash provided by operating activities
                          determined in accordance with GAAP plus cash acquisition and
                          integration payments less additions to capital expenditures.
                          
                          

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20150205005231r1&sid=cmtx6&distro=nx&lang=en

SOURCE: Gartner, Inc.

Gartner, Inc. 
Brian Shipman, +1-203-316-6537 
Group Vice President, Investor Relations 
investor.relations@gartner.com


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