UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

GARTNER, INC.

(Exact name of registrant as specified in its charter)

Delaware		04-3099750
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
P.O. Box 10212 56 Top Gallant Road Stamford, CT		06902-7700
(Address of principal executive offices)		(Zip Code)

(203) 316-1111
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
Common Stock, $.0005 par value per share		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þ		No o

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes o		No þ

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ		No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.          o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
		(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o		No þ

     As of June 30, 2008, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $1,232,021,498 based on the closing sale price as reported on the New York Stock Exchange.

     The number of shares outstanding of the issuer’s common stock, $0.005 par value per share, was 93,883,711 as of January 30, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

Document		Parts Into Which Incorporated
Proxy Statement for the Annual Meeting of Stockholders to be held June 4, 2009 (Proxy Statement)		Part III

 

 

GARTNER, INC.
2008 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

PART I
Item 1.		Business			3
Item 1A.		Risk Factors			7
Item 1B.		Unresolved Staff Comments			12
Item 2.		Properties			12
Item 3.		Legal Proceedings			13
Item 4.		Submission of Matters to a Vote of Security Holders			13
PART II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			13
Item 6.		Selected Consolidated Financial Data			14
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			15
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			28
Item 8.		Consolidated Financial Statements and Supplementary Data			28
Item 9.		Changes In and Disagreements With Accountants on Accounting and Financial Disclosure			29
Item 9A.		Controls and Procedures			29
Item 9B.		Other Information			29
PART III
Item 10.		Directors, Executive Officers and Corporate Governance			29
Item 11.		Executive Compensation			30
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			30
Item 13.		Certain Relationships and Related Transactions and Director Independence			30
Item 14.		Principal Accountant Fees and Services			30
PART IV
Item 15.		Exhibits and Financial Statement Schedules			31
Index to Consolidated Financial Statements					33
Report of Independent Registered Public Accounting Firm					34
Report of Independent Registered Public Accounting Firm					35
Consolidated Balance Sheets					36
Consolidated Statements of Operations					37
Consolidated Statements of Stockholders’ (Deficit) Equity and Comprehensive Income					38
Consolidated Statements of Cash Flows					39
Notes to Consolidated Financial Statements					40
Signatures					60
EX-10.11: 2008-1 AMENDMENT TO 2003 LONG-TERM INCENTIVE PLAN
EX-10.12: 2008-2 AMENDMENT TO 2003 LONG-TERM INCENTIVE PLAN
EX-10.13: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EX-10.15: COMPANY DEFERRED COMPENSATION PLAN
EX-10.16: COMPANY EXECUTIVE BENEFITS PROGRAM
EX-21.1: SUBSIDIARIES
EX-23.1: CONSENT
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32: CERTIFICATION

PART I

ITEM 1. BUSINESS.

GENERAL

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its 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, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A. We have 4,100 associates, including over 1,100 research analysts and consultants, and we have clients in over 80 countries. For more information, visit www.gartner.com. References to “the Company,” “we,” “our,” and “us” are to Gartner, Inc. and its subsidiaries.

The foundation for all Gartner products and services is our independent research on IT issues. The findings from this research are delivered through our three customer segments — Research, Consulting and Events:

•		Research provides insight for CIOs, IT professionals, technology companies and the investment community through reports and briefings, access to our analysts, as well as peer networking services and membership programs designed specifically for CIOs and other senior executives.
•		Consulting consists primarily of consulting, measurement engagements and strategic advisory services (paid one-day analyst engagements) (“SAS”), which provide assessments of cost, performance, efficiency and quality focused on the IT industry.
•		Events consists of various symposia, conferences and exhibitions focused on the IT industry.

Since its founding in 1979, Gartner has established a leading brand in the IT research marketplace.

MARKET OVERVIEW

Information technology has become increasingly critical to the operational and financial success of corporations and governments over the last two decades. Once a support function, IT is now viewed as a strategic component of growth and operating performance. Accordingly, it has become imperative for executives and IT professionals to manage their IT spending and purchasing decisions efficiently and effectively.

As the cost of IT solutions continues to rise, executives and technology professionals have realized the importance of making well-informed decisions and increasingly seek to maximize their returns on IT capital investments. As a result, any IT investment decision in an enterprise is subject to increased financial scrutiny, especially in the current challenging economic climate. In addition, today’s IT marketplace is dynamic and complex. Technology providers continually introduce new products with a wide variety of standards and features that are prone to shorter life cycles. Users of technology — a group that encompasses nearly all organizations — must keep abreast of new developments in technology to ensure that their IT systems are reliable, efficient and meet both their current and future needs.

Given the heightened emphasis organizations are placing on technology decision making and spending, companies and governments are increasingly turning to outside experts for guidance in IT procurement, implementation and operations in order to maximize the value of their IT investments. Accordingly, it is critical that CIOs and other executives obtain value-added, independent and objective research and analysis of the IT market to assist them in these IT-related decisions.

OUR SOLUTION

We provide high-quality, independent and objective research and analysis of the IT industry. Through our entire product portfolio, our global research team provides thought leadership and insight about technology acquisition and deployment to CIOs, executives and other technology leaders.

We employ a diversified business model that utilizes and leverages the breadth and depth of our intellectual capital. The foundation of our business model is our ability to create and distribute our proprietary research content as broadly as possible via published reports and briefings, consulting and advisory services, and hosting symposia, conferences and exhibitions.

With a base of 650 research analysts, we create timely and relevant technology-related research. In addition, we have 470 experienced consultants who combine our objective, independent research with a practical, business perspective focused on the IT industry. Our events are among the world’s largest of their kind, gathering highly qualified audiences of senior business executives, IT professionals and purchasers and providers of IT products and services.

PRODUCTS AND SERVICES

Our diversified business model provides multiple entry points and synergies that facilitate increased client spending on our research, consulting and events. A critical part of our long-term strategy is to increase business volume with our most valuable clients, identifying relationships with the greatest sales potential and expanding those relationships by offering strategically relevant research and analysis. We also seek to extend the Gartner brand name to develop new client relationships, and augment our sales capacity and expand into new markets around the world. In addition, we seek to increase our revenue and operating cash flow through more effective pricing of our products and services. These initiatives have created additional revenue streams through more effective packaging, campaigning and cross-selling of our products and services.

Our principal products and services are delivered via our Research, Consulting and Events segments:

•		RESEARCH. The Gartner core global research product is the fundamental building block for all Gartner services and covers all IT markets, topics and industries. We combine our proprietary research methodologies with extensive industry and academic relationships to create Gartner solutions. Our research agenda is defined by clients’ needs, focusing on the critical issues, opportunities and challenges they face every day. Our research analysts are in regular contact with both technology providers and technology users, enabling them to identify the most pertinent topics in the IT marketplace and develop relevant product enhancements to meet the evolving needs of users of our research. Our proprietary research content, presented in the form of reports, briefings, updates and related tools, is delivered directly to the client’s desktop via our website and/or product-specific portals.
		Our research analysts provide in-depth analysis on all aspects of technology, including hardware, software and systems, services, IT management, market data and forecasts, and vertical industry issues. Clients typically sign contracts that provide access to our research content for individual users over a defined period of time. The research contracts are renewed on an ongoing basis; to date, we have enjoyed strong research client retention, with 82% of user organizations renewing their contracts in 2008, as well as 98% wallet retention, a measure of the dollar amount of contract value we have retained with clients over the prior year.
		Our strategy is to align our service and product offerings around individual roles within targeted key client groups. For example, Gartner Executive Programs (EP) comprises exclusive membership programs designed to help CIOs, senior IT executives and other business executives become more effective in their enterprises. An EP membership leverages the knowledge and expertise of Gartner in ways that are specific to the CIO’s needs and offers role-based offerings and member-only communities for peer-based collaboration. Our 3,733 EP members also receive advice and counsel from an executive partner who understands their goals and can ensure the most effective level of support from Gartner.
		Our End-User Programs focus on the needs of the IT end-user market with a variety of product offerings. Gartner for IT Leaders currently provides eight role-based research offerings to assist end-user IT leaders with effective decision making. These products align a client’s specific job-related challenges with appropriate Gartner analysts and insight, and connect IT leaders to IT peers who share common business and technology issues.
		Our Industry Advisory Services address technology issues and topics with a focus on their impacts on specific vertical industries.
		Our High Tech & Telecom Programs focus on the needs of high-technology and telecommunications service providers, professional services firms and IT investors to help them be more successful in their specific job roles within their particular sub-industry. We leverage Gartner research and other information into industry-specific expertise and solutions. Gartner for Business Leaders, a new product suite we rolled out in 2007, provides a series of role-based offerings designed to help business leaders and executives in the technology and communications industry be more successful.

Gartner Invest provides premium research focused on the needs of institutional investors who invest in technology companies.

•		CONSULTING. Gartner consultants provide fact-based consulting services to help our clients use and manage IT to enable business performance. We seek to accomplish three major outcomes for our clients: applying IT to drive improvements in business performance; creating sustainable IT efficiency that ensures a constant return on IT investments; and strengthening the IT organization and operations to ensure high-value services to the client’s lines of business and to enable the client to adapt to business changes.
		We utilize our benchmarking capabilities and our business solutions to drive these outcomes. Our benchmarking capabilities are provided as information offerings. Our business solutions, enabled by benchmarking, include IT Transformation, IT Optimization, Sourcing Optimization and Business Enablement. We deliver our consulting solutions by capitalizing on Gartner assets that are invaluable to IT decision making, including: (1) our research, which ensures that our consulting analyses and advice are based on a deep understanding of the IT environment and the business of IT; (2) our market independence, which keeps our consultants focused on our client’s success; and (3) our market-leading benchmarking capabilities, which provide relevant comparisons and best practices to assess and improve performance.
•		EVENTS. Gartner symposia and conferences are gatherings of technology’s most senior IT professionals, business strategists, and practitioners. Symposia and conferences give clients live access to insights developed from our latest proprietary research in a concentrated way. Informative sessions led by Gartner analysts are augmented with technology showcases, peer exchange, analyst one-on-one meetings, workshops and keynotes by technology’s top leaders. Symposia and conferences, which are not limited to Gartner research clients, also provide participants with an opportunity to interact with business executives from the world’s leading technology companies. In 2008, the 70 Gartner events we held throughout the United States, Europe, Latin America and the Asia/Pacific region attracted over 41,000 attendees.
		Gartner conferences attract high-level IT and business professionals who seek in-depth knowledge about technology products and services. Gartner Symposia are large, strategic conferences held in various locations throughout the world for senior IT and business professionals. Symposia are combined with ITxpo, an exhibition where the latest technology products and solutions are demonstrated. We also offer conferences in many locations around the world on specialized topics such as security, outsourcing, wireless technology, and the impact of IT on the public sector and the utilities, media and financial services industries.

See Note 14 — Segment Information in the Notes to the Consolidated Financial Statements contained within this Form 10-K for financial information about our geographic areas and our three business segments: Research, Consulting and Events.

COMPETITION

We believe that the principal factors that differentiate us from our competitors are:

•		Superior IT Research Content — We believe that we create the broadest, highest-quality and most relevant research coverage of the IT industry. Our research analysis generates unbiased insight that we believe is timely, thought-provoking and comprehensive, and that is known for its high quality, independence and objectivity.
•		Our Leading Brand Name — For thirty years we have been providing critical, trusted insight under the Gartner name.
•		Our Global Footprint and Established Customer Base — We have a global presence with clients in over 80 countries on six continents. Approximately 47% and 45% of our revenues for 2008 and 2007, respectively, were derived from sales outside of the U.S.
•		Substantial Operating Leverage in Our Business Model — We have the ability to distribute our intellectual property and expertise across multiple platforms, including research publications, consulting engagements, conferences and executive programs, to derive incremental revenues and profitability.
•		Experienced Management Team — Our management team is composed of IT research veterans and experienced industry executives.

Notwithstanding these differentiating factors, we face competition from a significant number of independent providers of information products and services. We compete indirectly against consulting firms and other information providers, including electronic and print

media companies. These indirect competitors could choose to compete directly with us in the future. Additionally, we face competition from free sources of information that are available to our clients through the Internet. Limited barriers to entry exist in the markets in which we do business. As a result, new competitors may emerge and existing competitors may start to provide additional or complementary services. However, we believe the breadth and depth of our research assets position us well versus our competition. Increased competition may result in loss of market share, diminished value in our products and services, reduced pricing and increased sales and marketing expenditures.

INTELLECTUAL PROPERTY

Our success has resulted in part from proprietary methodologies, software, reusable knowledge capital and other intellectual property rights. We rely on a combination of copyright, trademark, trade secret, confidentiality, non-compete and other contractual provisions to protect our intellectual property rights. We have policies related to confidentiality, ownership and the use and protection of Gartner’s intellectual property, and we also enter into agreements with our employees as appropriate that protect our intellectual property.

We recognize the value of our intellectual property in the marketplace and vigorously identify, create and protect it. Additionally, we actively monitor and enforce contract compliance by our end users.

EMPLOYEES

As of December 31, 2008, we had 4,198 employees, of which 719 were located at our headquarters in Stamford, Connecticut; 1,747 were located elsewhere in the United States; and 1,732 were located outside of the United States. Our employees may be subject to collective bargaining agreements at a company or industry level in those foreign countries where this is part of the local labor law or practice. We have experienced no work stoppages and consider our relations with our employees to be favorable.

On January 8, 2009, we announced a reduction in force of 117 employees. The affected positions were spread across various functions and geographies.

AVAILABLE INFORMATION

Our Internet address is www.gartner.com and the investor relations section of our website is located at www.investor.gartner.com. We make available free of charge, on or through the investor relations section of our website, printable copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).

Also available at www.investor.gartner.com, under the “Corporate Governance” link, are printable and current copies of our (i) CEO & CFO Code of Ethics which applies to our Chief Executive Officer, Chief Financial Officer, controller and other financial managers, (ii) Code of Business Conduct, which applies to all Gartner officers, directors and employees, (iii) Principles of Ethical Conduct which applies to all Gartner employees, (iv) Board Principles and Practices, the corporate governance principles that have been adopted by our Board and (v) charters for each of the Board’s standing committees: Audit, Compensation and Governance/Nominating. This information is also available in print and free of charge to any shareholder who makes a written request to Investor Relations, Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, CT 06904-2212

ITEM 1A. RISK FACTORS

Factors That May Affect Future Performance.

We operate in a very competitive and rapidly changing environment that involves numerous risks and uncertainties, some of which are beyond our control. In addition, we and our clients are affected by global economic conditions. The following section discusses many, but not all, of these risks and uncertainties, but is not intended to be all-inclusive.

Risks related to our business

Our operating results could be negatively impacted by the current global credit crisis and the economic downturn.

Our business is impacted by general economic conditions, both domestic and abroad. The current global credit crisis and economic downturn may negatively and materially affect demand for our products and services. This downturn could materially and adversely affect our business, including the ability to maintain client retention, wallet retention and consulting utilization rates, achieve contract value and consulting backlog growth, and attract attendees and exhibitors to our events. Such developments could negatively impact our financial condition, results of operations, and cash flows.

We face significant competition and our failure to compete successfully could materially adversely affect our results of operations and financial condition.

We face direct competition from a significant number of independent providers of information products and services, including information available on the Internet free of charge. We also compete indirectly against consulting firms and other information providers, including electronic and print media companies, some of which may have greater financial, information gathering and marketing resources than we do. These indirect competitors could also choose to compete directly with us in the future. In addition, limited barriers to entry exist in the markets in which we do business. As a result, additional new competitors may emerge and existing competitors may start to provide additional or complementary services. Additionally, technological advances may provide increased competition from a variety of sources.

While we believe the breadth and depth of our research assets position us well versus our competition, there can be no assurance that we will be able to successfully compete against current and future competitors and our failure to do so could result in loss of market share, diminished value in our products and services, reduced pricing and increased marketing expenditures. Furthermore, we may not be successful if we cannot compete effectively on quality of research and analysis, timely delivery of information, customer service, and the ability to offer products to meet changing market needs for information and analysis, or price.

We may not be able to maintain our existing products and services.

We operate in a rapidly evolving market, and our success depends upon our ability to deliver high quality and timely research and analysis to our clients. Any failure to continue to provide credible and reliable information that is useful to our clients could have a material adverse effect on future business and operating results. Further, if our predictions prove to be wrong or are not substantiated by appropriate research, our reputation may suffer and demand for our products and services may decline. In addition, we must continue to improve our methods for delivering our products and services in a cost-effective manner. Failure to increase and improve our electronic delivery capabilities could adversely affect our future business and operating results.

We may not be able to enhance and develop our existing products and services, or introduce the new products and services, that are needed to remain competitive.

The market for our products and services is characterized by rapidly changing needs for information and analysis on the IT industry as a whole. The development of new products is a complex and time-consuming process. Nonetheless, to maintain our competitive position, we must continue to enhance and improve our products and services, develop or acquire new products and services, deliver all products and services in a timely manner, and appropriately position and price new products and services relative to the marketplace and our costs of producing them. Any failure to achieve successful client acceptance of new products and services could have a material adverse effect on our business, results of operations and financial position. Additionally, significant delays in new product or services releases or significant problems in creating new products or services could adversely affect our business, results of operations and financial position.

We depend on renewals of subscription-based services and sales of new subscription-based services for a significant portion of our revenue, and our failure to renew at historical rates or generate new sales of such services could lead to a decrease in our revenues.

A large portion of our success depends on our ability to generate renewals of our subscription-based research products and services and new sales of such products and services, both to new clients and existing clients. These products and services constituted 60% and 58% of our revenues for 2008 and 2007, respectively. Generating new sales of our subscription-based products and services, both to new and existing clients, is often a time consuming process. If we are unable to generate new sales, due to competition or other factors, our revenues will be adversely affected.

Our research subscription agreements have terms that generally range from twelve to thirty months. Our ability to maintain contract renewals is subject to numerous factors, including the following:

	•		delivering high-quality and timely analysis and advice to our clients;
	•		understanding and anticipating market trends and the changing needs of our clients; and
	•		delivering products and services of the quality and timeliness necessary to withstand competition.

Additionally, as we implement our strategy to realign our business to client needs, we may shift the type and pricing of our products which may impact client renewal rates. While research client retention rates were 82% at both December 31, 2008 and 2007, there can be no guarantee that we will continue to maintain this rate of client renewals.

We depend on non-recurring consulting engagements and our failure to secure new engagements could lead to a decrease in our revenues.

Consulting segment revenues constituted 27% of our total revenues for 2008 and 28% for 2007. These consulting engagements typically are project-based and non-recurring. Our ability to replace consulting engagements is subject to numerous factors, including the following:

	•		delivering consistent, high-quality consulting services to our clients;
	•		tailoring our consulting services to the changing needs of our clients; and
	•		our ability to match the skills and competencies of our consulting staff to the skills required for the fulfillment of existing or potential consulting engagements.

Any material decline in our ability to replace consulting arrangements could have an adverse impact on our revenues and our financial condition.

The profitability and success of our conferences, symposia and events could be adversely affected by external factors beyond our control.

The market for desirable dates and locations for conferences, symposia and events is highly competitive. If we cannot secure desirable dates and locations for our conferences, symposia and events their profitability could suffer, and our financial condition and results of operations may be adversely affected. In addition, because our events are scheduled in advance and held at specific locations, the success of these events can be affected by circumstances outside of our control, such as labor strikes, transportation shutdowns and travel restrictions, economic slowdowns, terrorist attacks, weather, natural disasters and other world events impacting the global economy, the occurrence of any of which could negatively impact the success of the event.

Our sales to governments are subject to appropriations and may be terminated.

We derive revenues from contracts with the U.S. government, state and local governments, and their respective agencies, as well as foreign governments and their agencies. At December 31, 2008 and 2007, $192.0 million and $190.0 million, respectively, of our Research contract value and Consulting backlog was attributable to governments. Our U.S. government contracts are subject to the approval of appropriations by the U.S. Congress to fund the agencies contracting for our services, and our contracts at the state and local levels are subject to various government authorizations and funding mechanisms. In general, most if not all of these contracts

may be terminated at any time without cause (‘termination for convenience”). Should appropriations for the governments and agencies that contract with us be curtailed, or should government contracts be terminated for convenience, we may experience a significant loss of revenue.

We may not be able to attract and retain qualified personnel which could jeopardize the quality of our products and services.

Our success depends heavily upon the quality of our senior management, research analysts, consultants, sales and other key personnel. We face competition for the limited pool of these qualified professionals from, among others, technology companies, market research firms, consulting firms, financial services companies and electronic and print media companies, some of which have a greater ability to attract and compensate these professionals. Some of the personnel that we attempt to hire are subject to non-compete agreements that could impede our short-term recruitment efforts. Any failure to retain key personnel or hire and train additional qualified personnel as required to support the evolving needs of clients or growth in our business, could adversely affect the quality of our products and services, as well as future business and operating results.

We may not be able to maintain the equity in our brand name.

We believe that our “Gartner” brand, including our independence, is critical to our efforts to attract and retain clients and that the importance of brand recognition will increase as competition increases. We may expand our marketing activities to promote and strengthen the Gartner brand and may need to increase our marketing budget, hire additional marketing and public relations personnel, expend additional sums to protect the brand and otherwise increase expenditures to create and maintain client brand loyalty. If we fail to effectively promote and maintain the Gartner brand, or incur excessive expenses in doing so, our future business and operating results could be adversely impacted.

Our international operations expose us to a variety of operational risks which could negatively impact our future revenue and growth.

We have clients in over 80 countries and a significant part of our revenue comes from international sales. Our operating results are subject to the risks inherent in international business activities, including general political and economic conditions in each country, changes in market demand as a result of tariffs and other trade barriers, challenges in staffing and managing foreign operations, changes in regulatory requirements, compliance with numerous foreign laws and regulations, differences between U.S. and foreign tax rates and laws, and the difficulty of enforcing client agreements, collecting accounts receivable and protecting intellectual property rights in international jurisdictions. Furthermore, we rely on local distributors or sales agents in some international locations. If any of these arrangements are terminated by our agent or us, we may not be able to replace the arrangement on beneficial terms or on a timely basis, or clients of the local distributor or sales agent may not want to continue to do business with us or our new agent.

Our international operations expose us to changes in foreign currency exchange rates.

Approximately 47% and 45% of our revenues for 2008 and 2007, respectively, were derived from sales outside of the U.S. Revenues earned outside the U.S. are typically transacted in local currencies, which may fluctuate significantly against the dollar. While we may use forward exchange contracts to a limited extent to seek to mitigate foreign currency risk, our revenues and results of operations could be adversely affected by unfavorable foreign currency fluctuations.

Catastrophic events or geo-political conditions may disrupt our business.

A disruption or failure of our systems or operations in the event of a major weather event, cyber-attack, terrorist attack or other catastrophic event could cause delays in completing sales, providing services, or performing other mission-critical functions. Our corporate headquarters is located approximately 30 miles from New York City, and we have an operations center located in Ft. Myers, Florida, in a hurricane-prone area. We also operate in numerous international locations. A catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems could harm our ability to conduct normal business operations and negatively impact our operating results. Abrupt political change, terrorist activity, and armed conflict pose a risk of general economic disruption in affected countries, which may increase our operating costs. Additionally, these conditions also may add uncertainty to the timing and budget decisions of our clients.

We may experience outages and disruptions of our online services if we fail to maintain an adequate operations infrastructure.

Our increasing user traffic and complexity of our products and services demand more computing power. We have spent and expect to continue to spend substantial amounts to maintain data centers and equipment and to upgrade our technology and network infrastructure to handle increased traffic on our websites. However, any inefficiencies or operational failures could diminish the quality of our products, services, and user experience, resulting in damage to our reputation and loss of current and potential users, subscribers, and advertisers, harming our operating results and financial condition.

Our outstanding debt obligations could impact our financial condition or future operating results.

At December 31, 2008, we had $416.3 million outstanding under our Credit Agreement, which provides for two amortizing term loans with quarterly payments and a $300.0 million revolving credit facility. The revolving credit facility may be increased up to an additional $100.0 million at our lenders’ discretion (the “expansion feature”), for a total revolving credit facility of $400.0 million. However, the $100.0 million expansion feature may or may not be available to us depending upon prevailing credit market conditions.

The affirmative, negative and financial covenants of the Credit Agreement could limit our future financial flexibility. Additionally, a failure to comply with these covenants could result in acceleration of all amounts outstanding under the Credit Agreement, which would materially impact our financial condition unless accommodations could be negotiated with our lenders. No assurance can be given that we would be successful in doing so in this current financial climate, or that any accommodations that we were able to negotiate would be on terms as favorable as those presently contained in the Credit Agreement.

The associated debt service costs of the borrowing arrangement under our Credit Agreement could impair our future operating results. The outstanding debt may limit the amount of cash or additional credit available to us, which could restrain our ability to expand or enhance products and services, respond to competitive pressures or pursue future business opportunities requiring substantial investments of additional capital.

We may require additional cash resources which may not be available on favorable terms or at all.

We believe that our existing cash balances, projected cash flow from operations, and the remaining borrowing capacity we have under our five-year revolving credit facility will be sufficient for our expected short-term and foreseeable long-term operating needs.

We may, however, require additional cash resources due to changed business conditions, implementation of our strategy and stock repurchase program, to repay indebtedness or to pursue future business opportunities requiring substantial investments of additional capital. If our existing financial resources are insufficient to satisfy our requirements, we may seek additional borrowings. Prevailing credit market conditions may negatively affect debt availability and cost, and, as a result, financing may not be available in amounts or on terms acceptable to us, if at all. In addition, the incurrence of additional indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would further restrict our operations.

If we are unable to enforce and protect our intellectual property rights our competitive position may be harmed.

We rely on a combination of copyright, trademark, trade secret, confidentiality, non-compete and other contractual provisions to protect our intellectual property rights. Despite our efforts to protect our intellectual property rights, unauthorized third parties may obtain and use technology or other information that we regard as proprietary. Our intellectual property rights may not survive a legal challenge to their validity or provide significant protection for us. The laws of certain countries do not protect our proprietary rights to the same extent as the laws of the United States. Accordingly, we may not be able to protect our intellectual property against unauthorized third-party copying or use, which could adversely affect our competitive position. Our employees are subject to non-compete agreements. When the non-competition period expires, former employees may compete against us. If a former employee chooses to compete against us prior to the expiration of the non-competition period, we seek to enforce these non-compete provisions but there is no assurance that we will be successful in our efforts.

We have grown, and may continue to grow, through acquisitions and strategic investments, which could involve substantial risks.

We have made and may continue to make acquisitions of, or significant investments in, businesses that offer complementary products and services. The risks involved in each acquisition or investment include the possibility of paying more than the value we derive from the acquisition, dilution of the interests of our current stockholders or decreased working capital, increased indebtedness, the assumption of undisclosed liabilities and unknown and unforeseen risks, the ability to retain key personnel of the acquired company, the time to train the sales force to market and sell the products of the acquired business, the potential disruption of our ongoing business and the distraction of management from our business. The realization of any of these risks could adversely affect our business.

We face risks related to litigation.

We are, and may in the future be, subject to a variety of legal actions, such as employment, breach of contract, intellectual property-related, and business torts, including claims of unfair trade practices and misappropriation of trade secrets. Given the nature of our business, we are also subject to defamation (including libel and slander), negligence, or other claims relating to the information we publish. Regardless of the merits, responding to any such claim could be time consuming, result in costly litigation and require us to enter into settlements, royalty and licensing agreements which may not be offered or available on reasonable terms. If a successful claim is made against us and we fail to settle the claim on reasonable terms, our business, results of operations or financial position could be materially adversely affected.

We face risks related to taxation.

We operate in numerous domestic and foreign taxing jurisdictions and our level of operations and profitability in each jurisdiction may have an impact upon the amount of income taxes that we recognize in any given year. In addition, our tax filings for various tax years are subject to audit by the tax authorities in jurisdictions where we conduct business, and in the ordinary course of business, we may be under audit by one or more tax authorities from time to time. Recently, we have been notified by the Internal Revenue Service that it intends to audit our 2007 tax return, and this audit is expected to commence shortly.

These audits may result in assessments of additional taxes, and resolution of these matters involves uncertainties and there are no assurances that the ultimate resolution will not exceed the amounts we have recorded. Additionally, the results of an audit could have a material effect on our financial position, results of operations, or cash flows in the period or periods for which that determination is made.

Risks related to our common stock

Our operating results may fluctuate from period to period and may not meet the expectations of securities analysts or investors or guidance we have given, which may cause the price of our common stock to decline.

Our quarterly and annual operating results may fluctuate in the future as a result of many factors, including the timing of the execution of research contracts, the extent of completion of consulting engagements, the timing of symposia and other events, the amount of new business generated, the mix of domestic and international business, currency fluctuations, changes in market demand for our products and services, the timing of the development, introduction and marketing of new products and services, and competition in the industry. An inability to generate sufficient earnings and cash flow, and achieve our forecasts, may impact our operating and other activities. The potential fluctuations in our operating results could cause period-to-period comparisons of operating results not to be meaningful and may provide an unreliable indication of future operating results. Furthermore, our operating results may not meet the expectations of securities analysts or investors in the future or guidance we have given. If this occurs, the price of our stock would likely decline.

Our stock price may be volatile, and you may not be able to resell shares of our common stock at or above the price you paid.

The trading prices of our common stock could be subject to significant fluctuations in response to, among other factors, variations in operating results, developments in the industries in which we do business, general economic conditions, general market conditions, changes in the nature and composition of our stockholder base, changes in securities analysts’ recommendations regarding our securities and our performance relative to securities analysts’ expectations for any quarterly period. Such volatility may adversely affect the market price of our common stock.

Future sales of our common stock in the public market could lower our stock price.

Sales of a substantial number of shares of common stock in the public market by our current stockholders, or the threat that substantial sales may occur, could cause the market price of our common stock to decrease significantly or make it difficult for us to raise additional capital by selling stock. Furthermore, we have various equity incentive plans that provide for awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. As of December 31, 2008, the aggregate number of shares of our common stock issuable pursuant to outstanding grants and awards under these plans was approximately 11.1 million shares (approximately 6.7 million of which have vested). In addition, approximately 5.8 million shares may be issued in connection with future awards under our equity incentive plans. Shares of common stock issued under these plans are freely transferable without further registration under the Securities Act of 1933, as amended (the “Securities Act”), except for any shares held by affiliates (as that term is defined in Rule 144 under the Securities Act). We cannot predict the size of future issuances of

our common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock.

Interests of certain of our significant stockholders may conflict with yours.

ValueAct Capital and affiliates (“ValueAct”) owned approximately 22.1% of our common stock as of December 31, 2008, while Silver Lake Partners and affiliates (“Silver Lake”) owned approximately 12.8% on the same date. To our knowledge, three other institutional investors each presently hold over 5% of our common stock. Additionally, representatives of Silver Lake and ValueAct in the aggregate presently hold three seats on our Board of Directors.

While no stockholder or institutional investor individually holds a majority of our outstanding shares, these significant stockholders may be able, either individually or acting together, to exercise significant influence over matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation, adoption or amendment of equity plans and approval of significant transactions such as mergers, acquisitions, consolidations and sales or purchases of assets. In addition, in the event of a proposed acquisition of the company by a third party, this concentration of ownership may delay or prevent a change of control in the Company. Accordingly, the interests of these stockholders may not always coincide with our interests or the interests of other stockholders, or otherwise be in the best interests of the Company or all stockholders.

Our anti-takeover protections may discourage or prevent a change of control, even if a change in control would be beneficial to our stockholders.

Provisions of our restated certificate of incorporation and bylaws and Delaware law may make it difficult for any party to acquire control of us in a transaction not approved by our Board of Directors. These provisions include:

	•		the ability of our Board of Directors to issue and determine the terms of preferred stock;
	•		advance notice requirements for inclusion of stockholder proposals at stockholder meetings;
	•		a preferred shares rights agreement; and
	•		the anti-takeover provisions of Delaware law.

These provisions could discourage or prevent a change of control or change in management that might provide stockholders with a premium to the market price of their common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

There are no unresolved written comments that were received from the SEC staff 180 days or more before the end of our fiscal year relating to our periodic or current reports under the Exchange Act.

ITEM 2. PROPERTIES.

Our corporate headquarters is located in approximately 213,000 square feet of leased office space in three buildings located in Stamford, Connecticut, USA. Our Stamford facility accommodates research and analysis, marketing, sales, client support, production, and corporate services and administration. The lease on this facility expires in late 2010, and does provide for a renewal option.

We also have a significant presence in the United Kingdom with approximately 72,000 square feet of leased office space in two buildings located in Egham, UK, for which the leases expire in 2020 and 2025, respectively.

We lease an additional 19 domestic and 43 international locations that support our research and analysis, domestic and international sales efforts, and other functions. We continue to constantly assess our space needs as our business changes, but we believe that our existing facilities are adequate for our current needs and that additional space will be available as needed.

ITEM 3. LEGAL PROCEEDINGS.

We are involved in legal proceedings and litigation arising in the ordinary course of business. We believe that the potential liability, if any, in excess of amounts already accrued from all proceedings, claims and litigation will not have a material effect on our financial position or results of operations when resolved in a future period.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We did not submit any matter to a vote of our stockholders during the fourth quarter of the year covered by this Annual Report.

Our 2009 Annual Meeting of Stockholders will be held on June 4, 2009 at the Company’s offices in Stamford, Connecticut.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

As of January 30, 2009, there were approximately 2,665 holders of record of our common stock, which is listed on the New York Stock Exchange under the symbol IT. The following table sets forth the high and low sale prices for our common stock as reported on the New York Stock Exchange for the periods indicated:

		2008								2007
		High				Low				High				Low
Quarter ended March 31		$	21.29			$	13.75			$	24.00			$	19.44
Quarter ended June 30			24.80				19.50				28.44				23.57
Quarter ended September 30			28.39				19.20				25.07				19.98
Quarter ended December 31			22.80				13.07				26.59				16.10

DIVIDEND POLICY

We currently do not pay cash dividends on our common stock. Our Credit Agreement, dated as of January 31, 2007, contains a negative covenant which may limit our ability to pay dividends. In addition, our Amended and Restated Security Holders Agreement with Silver Lake requires us to obtain Silver Lake’s consent prior to declaring or paying dividends.

The equity compensation plan information set forth in Part III, Item 12 of this Form 10-K is hereby incorporated by reference into this Part II, Item 5.

SHARE REPURCHASES

The following table provides detail related to repurchases of our common stock in the fourth quarter of 2008. All shares repurchased were added to treasury stock. All repurchases were made pursuant to a publicly announced $250.0 million share repurchase program that was authorized by the Board of Directors in February 2008. The open market purchases were made by brokers pursuant to purchase programs that complied with Rules 10b5-1 and 10b-18 under the Exchange Act.

										Total Number of				Maximum Approximate
										Shares Purchased as				Dollar Value of
										Part of Publicly				Shares that May Yet
		Total Number of				Average Price Paid				Announced Plans or				Be Purchased Under
		Shares Purchased				Per Share				Programs				the Plans or Programs
Period		(#)				($)				(#)				($000’s)
October			1,282,181			$	17.94				1,282,181
November			—				—				—
December			211				17.83				211
Total fourth quarter 2008 (1)			1,282,392			$	17.94				1,282,392			$	82,381

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The fiscal years presented below are for the respective twelve-month period from January 1 through December 31. Data for all years was derived or compiled from our audited consolidated financial statements included herein or from submissions of our Form 10-K in prior years. The selected consolidated financial data should be read in conjunction with our consolidated financial statements and related notes contained in this Annual Report on Form 10-K.

(In thousands, except per share data)		2008				2007				2006				2005				2004
STATEMENT OF OPERATIONS DATA:
Revenues:
Research		$	773,257			$	673,335			$	571,217			$	523,033			$	480,486
Consulting			347,404				325,030				305,231				301,074				259,419
Events			150,080				160,065				146,412				126,475				113,302
Other			8,324				10,045				14,439				13,558				15,523
Total revenues			1,279,065				1,168,475				1,037,299				964,140				868,730
Operating income			164,368				129,458				98,039				20,474				35,901
Income (loss) from continuing operations			97,148				70,666				54,258				(6,200	)			11,584
Income from discontinued operations			6,723				2,887				3,934				3,763				5,305
Net income (loss)		$	103,871			$	73,553			$	58,192			$	(2,437	)		$	16,889
PER SHARE DATA:
Basic:
Income (loss) from continuing operations		$	1.02			$	0.68			$	0.48			$	(0.05	)		$	0.10
Income from discontinued operations			0.07				0.03				0.03				0.03				0.04
Income (loss) per share		$	1.09			$	0.71			$	0.51			$	(0.02	)		$	0.14
Diluted:
Income (loss) from continuing operations		$	0.98			$	0.65			$	0.47			$	(0.05	)		$	0.09
Income from discontinued operations			0.07				0.03				0.03				0.03				0.04
Income (loss) per share		$	1.05			$	0.68			$	0.50			$	(0.02	)		$	0.13
Weighted average shares outstanding
Basic			95,246				103,613				113,071				112,253				123,603
Diluted			99,028				108,328				116,203				112,253				126,326
OTHER DATA:
Cash and cash equivalents		$	140,929			$	109,945			$	67,801			$	70,282			$	160,126
Total assets			1,093,065				1,133,210				1,039,793				1,026,617				861,194
Long-term debt			238,500				157,500				150,000				180,000				150,000
Stockholders’ (deficit) equity			(21,316	)			17,498				26,318				146,588				130,048

The following items impact the comparability of our consolidated data:

•		In February 2008 the Company sold its Vision Events business, which had been part of its Events segment, and has reported the results of operations of this business as a discontinued operation (see Note 2 — Discontinued Operations in the Notes to the Consolidated Financial Statements). As a result, the statement of operations and per share data for 2004 — 2007 have been restated to present the results of the Vision Events business as a discontinued operation in order to be consistent with the current year presentation.
•		The results of META Group, Inc. (“META”) are included in our consolidated results beginning April 1, 2005, the date of acquisition.
•		We repurchased 9.7 million, 8.4 million, 14.9 million, 0.8 million, and 26.6 million of our common shares in 2008, 2007, 2006, 2005 and 2004, respectively.
•		We had pre-tax stock compensation expense of $20.7 million, $24.1 million, and $16.7 million in 2008, 2007 and 2006, respectively, under Statement of Financial Accounting Standards 123(R), “Share-Based Payment.” We adopted this statement on January 1, 2006, under the modified prospective transition method.
•		During 2006 and 2005 we recorded $1.5 million and $15.0 million, respectively, in pre-tax META integration charges.

•

We recorded Other charges, which includes costs for severance, excess facilities, and other items, on a pre-tax basis, of $0 in 2008, $9.1 million in 2007, $0 in 2006, $29.2 million in 2005, and $35.8 million in 2004.

•

In 2004 we recorded pre-tax charges of $2.7 million for goodwill impairment and $3.1 million of foreign currency charges related to the closing of certain operations in South America.

•

We recorded pre-tax charges for loss on investments, net of $5.8 million in 2005 and $3.0 million in 2004.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The purpose of the following Management’s Discussion and Analysis (“MD&A”) is to help facilitate the understanding of significant factors influencing the operating results, financial condition and cash flows of Gartner, Inc. Additionally, the MD&A also conveys our expectations of the potential impact of known trends, events or uncertainties that may impact future results. You should read this discussion in conjunction with our consolidated financial statements and related notes included in this report. Historical results and percentage relationships are not necessarily indicative of operating results for future periods.

FORWARD-LOOKING STATEMENTS

In addition to historical information, this Annual Report contains forward-looking statements. Forward-looking statements are any statements other than statements of historical fact, including statements regarding our expectations, beliefs, hopes, intentions or strategies regarding the future. In some cases, forward-looking statements can be identified by the use of words such as “may,” “will,” “expect,” “should,” “could,” “believe,” ‘plan,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” or other words of similar meaning. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in, or implied by, the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed under Part 1, Item 1A, Risk Factors. Readers should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur. Readers should review carefully any risk factors described in our reports filed with the SEC.

BUSINESS OVERVIEW

Gartner, Inc. is the world’s leading information technology research and advisory company that helps executives use technology to build, guide and grow their enterprises. We offer independent and objective research and analysis on the information technology, computer hardware, software, communications and related technology industries. We provide comprehensive coverage of the IT industry to approximately 10,000 client organizations, including approximately 400 of the Fortune 500 companies, across 80 countries. Our client base consists primarily of CIOs and other senior IT and executives from a wide variety of business enterprises, government agencies and the investment community.

We have three business segments: Research, Consulting and Events.

•

Research provides insight for CIOs, IT professionals, technology companies and the investment community through reports and briefings, access to our analysts, as well as peer networking services and membership programs designed specifically for CIOs and other senior executives.

•

Consulting consists primarily of consulting, measurement engagements and strategic advisory services (paid one-day analyst engagements) (“SAS”), which provide assessments of cost, performance, efficiency and quality focused on the IT industry.

•

Events consists of various symposia, conferences and exhibitions focused on the IT industry.

BUSINESS MEASUREMENTS

We believe the following business measurements are important performance indicators for our business segments:

BUSINESS SEGMENT		BUSINESS MEASUREMENTS
Research		Contract value represents the value attributable to all of our subscription-related research products that recognize revenue on a ratable basis. Contract value is calculated as the annualized value of all subscription research contracts in effect at a specific point in time, without regard to the duration of the contract.
		Client retention rate represents a measure of client satisfaction and renewed business relationships at a specific point in time. Client retention is calculated on a percentage basis by dividing our current clients, who were also clients a year ago, by all clients from a year ago.
		Wallet retention rate represents a measure of the amount of contract value we have retained with clients over a twelve-month period. Wallet retention is calculated on a percentage basis by dividing the contract value of clients, who were clients one year earlier, by the total contract value from a year earlier. When wallet retention exceeds client retention, it is an indication of retention of higher-spending clients, or increased spending by retained clients, or both.
		Number of executive program members represents the number of paid participants in executive programs.
Consulting		Consulting backlog represents future revenue to be derived from in-process consulting, measurement and strategic advisory services engagements.
		Utilization rates represent a measure of productivity of our consultants. Utilization rates are calculated for billable headcount on a percentage basis by dividing total hours billed by total hours available to bill.
		Billing Rate represents earned billable revenue divided by total billable hours.
		Average annualized revenue per billable headcount represents a measure of the revenue generating ability of an average billable consultant and is calculated periodically by multiplying the average billing rate per hour times the utilization percentage times the billable hours available for one year.
Events		Number of events represents the total number of hosted events completed during the period.
		Number of attendees represents the number of people who attend events.

EXECUTIVE SUMMARY OF OPERATIONS AND FINANCIAL POSITION

The cornerstones of our strategy are to focus on producing extraordinary research content, deliver innovative and highly differentiated product offerings, enhance our sales capability, provide world class client service, and improve our operational effectiveness.

We had total revenues of $1,279.1 million in 2008, up 9% over the prior year. Total revenues increased in all of our geographic regions. We had income from continuing operations of $97.1 million in 2008, or $0.98 per diluted share, compared to income from continuing operations of $70.7 million, or $0.65 per diluted share, for 2007. These improved results are due to a number of factors, including higher overall revenues in Research and Consulting, a continued focus on expense management, the impact of a legal settlement and other charges in 2007, the favorable impact of foreign currency, and a lower share base due to share repurchases. These positive trends offset lower revenue and profitability in our Events segment.

In our Research business, we had strong, double-digit revenue growth in 2008, with revenues up 15% over the prior year, to $773.2 million. Revenue growth occurred across our entire product portfolio, with all client sizes, industry segments, and products delivering growth. Research contract value was $834.3 million at December 31, 2008, up 11% from December 31, 2007, and a record level for us. Our contract value growth was broad-based across all of our industry sectors. Excluding the favorable impact of foreign currency translation, revenues and contract value were up 14% and 8% year-over-year, respectively.

Our client retention and wallet retention rates for 2008 remained strong at 82% and 98%, respectively, compared to 82% and 101% in the prior year. Our Executive Program membership was 3,733 at December 31, 2008, compared to 3,753 members at December 31, 2007.

Consulting revenue in 2008 was up 7% over 2007, to $347.4 million, reflecting growth in our core consulting and benchmarking businesses and exceptionally strong results in our contract optimization business. Our consultant utilization rate increased 3 points, to 72% from 69% in the prior year, reflecting improved engagement management. Billable headcount was 499 at December 31, 2008, up from 472 at December 31, 2007. The hourly billing rate remained above $350 per hour in 2008, while the average annualized revenue per billable headcount was approximately $458,000 for 2008, about 7% higher than the prior year. Consulting backlog at December 31, 2008 was $97.2 million, down from $121.4 million at December 31, 2007.

Events revenues decreased 6%, or $10.0 million, to $150.1 million in 2008 compared to $160.1 million in 2007. We held 70 events in 2008 compared to 62 in 2007. The revenue decrease was due to declines in both the number of attendees and exhibitors, as travel restrictions and other expense controls negatively impacted our fourth quarter Events segment results. For 2009, we are currently planning to hold 54 events.

For a more detailed discussion of our segment results, see Segment Results below.

We repurchased 9.7 million of our common shares in 2008. We had $184.4 million of operating cash flow in 2008, significantly higher than the prior year, and we ended the year with $140.9 million in cash and cash equivalents. As of December 31, 2008, we also had $178.3 million of available borrowing capacity under our revolving credit facility. We believe we have a strong cash position and adequate borrowing capacity.

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

Our quarterly and annual revenue, operating income, and cash flow fluctuate as a result of many factors, including: the timing of our SymposiumITxpo series that normally occurs during the fourth calendar quarter, and other events; the amount of new business generated; the mix of domestic and international business; changes in market demand for our products and services; changes in foreign currency rates; the timing of the development, introduction and marketing of new products and services; competition in the industry; and other factors. The potential fluctuations in our operating income could cause period-to-period comparisons of operating results not to be meaningful and could provide an unreliable indication of future operating results.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements requires the application of appropriate accounting policies. Our significant accounting policies are described in Note 1 in the Notes to Consolidated Financial Statements. Management considers the policies discussed below to be critical to an understanding of our financial statements because their application requires complex and subjective judgments and the use of estimates. Specific risks for these critical accounting policies are described below.

Revenue recognition — We recognize revenue in accordance with SEC Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (“SAB 101”), and SEC Staff Accounting Bulletin No. 104, Revenue Recognition (“SAB 104”). Once all required criteria for revenue recognition have been met, revenue by significant source is accounted for as follows:

	•		Research revenues are derived from subscription contracts for research products. Revenues from research products are deferred and recognized ratably over the applicable contract term;
	•		Consulting revenues are principally generated from fixed fee and time and material engagements. Revenue from fixed fee contracts is recognized on a percentage of completion basis. Revenues from time and materials engagements is recognized as work is delivered and/or services are provided. Revenues related to contract optimization contracts are contingent in nature and are only recognized upon satisfaction of all conditions related to their payment.
	•		Events revenues are deferred and recognized upon the completion of the related symposium, conference or exhibition;
	•		Other revenues consist primarily of fees from research reprints which are recognized when the reprint is shipped.

The majority of research contracts are billable upon signing, absent special terms granted on a limited basis from time to time. All research contracts are non-cancelable and non-refundable, except for government contracts that may have cancellation or fiscal funding clauses, which have not produced material cancellations to date. It is our policy to record the entire amount of the contract that

is billable as a fee receivable at the time the contract is signed with a corresponding amount as deferred revenue, since the contract represents a legally enforceable claim.

For those government contracts that permit termination, we bill the client the full amount billable under the contract but only record a receivable equal to the earned portion of the contract. In addition, we only record deferred revenue on these government contracts when cash is received. Deferred revenues attributable to government contracts were $61.6 million and $57.6 million at December 31, 2008 and December 31, 2007, respectively. In addition, at December 31, 2008 and December 31, 2007, we had not recognized uncollected receivables or deferred revenues relating to government contracts that permit termination, of $12.1 million and $10.8 million, respectively.

Uncollectible fees receivable — The allowance for losses is composed of a bad debt and a sales and allowance reserve. Provisions are charged against earnings, either as a reduction to revenues or an increase to expense. The measurement of likely and probable losses and the allowance for uncollectible fees receivable is based on historical loss experience, aging of outstanding receivables, an assessment of current economic conditions and the financial health of specific clients. This evaluation is inherently judgmental and requires material estimates. These valuation reserves are periodically re-evaluated and adjusted as more information about the ultimate collectibility of fees receivable becomes available. Circumstances that could cause our valuation reserves to increase include changes in our clients’ liquidity and credit quality, other factors negatively impacting our clients’ ability to pay their obligations as they come due, and the effectiveness of our collection efforts. The following table provides our total fees receivable, along with the related allowance for losses (in thousands):

		December 31,
		2008				2007
Total fees receivable		$	326,311			$	363,376
Allowance for losses			(7,800	)			(8,450	)
Fees receivable, net		$	318,511			$	354,926

Impairment of goodwill and other intangible assets — The evaluation of goodwill is performed in accordance with Statement of Financial Accounting Standards No. 142, — “Goodwill and Other Intangible Assets” (“SFAS No. 142”). Among other requirements, this standard eliminated goodwill amortization upon adoption and requires ongoing annual assessments of goodwill impairment. The evaluation of other intangible assets is performed on a periodic basis. These assessments require management to estimate the fair values of our reporting units based on estimates of future business operations and market and economic conditions in developing long-term forecasts. If we determine that the fair value of any reporting unit is less than its carrying amount, we must recognize an impairment charge for the associated goodwill of that reporting unit against earnings in our financial statements. Goodwill is evaluated for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important that could trigger a review for impairment include the following:

	•		Significant under-performance relative to historical or projected future operating results;
	•		Significant changes in the manner of our use of acquired assets or the strategy for our overall business;
	•		Significant negative industry or economic trends;
	•		Significant decline in our stock price for a sustained period; and
	•		Our market capitalization relative to net book value.

Due to the numerous variables associated with our judgments and assumptions relating to the valuation of the reporting units and the effects of changes in circumstances affecting these valuations, both the precision and reliability of the resulting estimates are subject to uncertainty, and as additional information becomes known, we may change our estimates.

Accounting for income taxes — As we prepare our consolidated financial statements, we estimate our income taxes in each of the jurisdictions where we operate. This process involves estimating our current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We record a valuation allowance to reduce our deferred tax assets when future realization is in question. We consider the availability of loss carryforwards, existing deferred tax liabilities, future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event we determine that we are able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment is

made to reduce the valuation allowance and increase income in the period such determination is made. Likewise, if we determine that we will not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the valuation allowance is charged against income in the period such determination is made.

On January 1, 2007, we adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) (see Note 11 — Income Taxes in the Notes to the Consolidated Financial Statements). FIN 48 is an interpretation of FASB Statement No. 109, “Accounting for Income Taxes,” and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, and accounting in interim periods and requires expanded disclosure with respect to the uncertainty in income taxes.

Accounting for stock-based compensation — On January 1, 2006, we adopted Statement of Financial Accounting Standards 123(R), “Share-Based Payment” (“SFAS No. 123(R)”), as interpreted by SEC Staff Accounting Bulletin No. 107 (“SAB No. 107”). Effective with the adoption of SFAS No. 123(R), the Company is recognizing stock-based compensation expense, which is based on the fair value of the award on the date of grant, over the related service period, net of estimated forfeitures (see Note 9 — Stock-Based Compensation in the Notes to the Consolidated Financial Statements).

Determining the appropriate fair value model and calculating the fair value of stock compensation awards requires the input of certain highly complex and subjective assumptions, including the expected life of the stock compensation awards and the Company’s common stock price volatility. In addition, determining the appropriate amount of associated periodic expense requires management to estimate the rate of employee forfeitures and the likelihood of achievement of certain performance targets. The assumptions used in calculating the fair value of stock compensation awards and the associated periodic expense represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change and the Company deems it necessary in the future to modify the assumptions it made or to use different assumptions, or if the quantity and nature of the Company’s stock-based compensation awards changes, then the amount of expense may need to be adjusted and future stock compensation expense could be materially different from what has been recorded in the current period.

Contingencies and other loss reserves and accruals — We record accruals for severance costs, lease costs associated with excess facilities, contract terminations and asset impairments as a result of actions we undertake to streamline our organization, reposition certain businesses and reduce ongoing costs. Estimates of costs to be incurred to complete these actions, such as future lease payments, sublease income, the fair value of assets, and severance and related benefits, are based on assumptions at the time the actions are initiated. To the extent actual costs differ from those estimates, reserve levels may need to be adjusted. In addition, these actions may be revised due to changes in business conditions that we did not foresee at the time such plans were approved. Additionally, we record accruals for estimated incentive compensation costs during each year. Amounts accrued at the end of each reporting period are based on our estimates and may require adjustment as the ultimate amount paid for these incentives are sometimes not known until after year end.

RESULTS OF OPERATIONS

In February 2008 the Company sold its Vision Events business, which had been part of its Events segment, and has reported the results of operations of this business as a discontinued operation (see Note 2 — Discontinued Operations in the Notes to the Consolidated Financial Statements). As a result, the results discussed below and in the “Segment Results” section for the years ended prior to December 31, 2008 have been restated to present the results of operations of the Vision Events business as a discontinued operation in order to be consistent with the current year presentation.

2008 VERSUS 2007

TOTAL REVENUES increased by $110.6 million, or 9%, to $1,279.1 million in 2008 from $1,168.5 million during 2007. Excluding the favorable effects of foreign currency translation, total revenues for 2008 would have increased 8% over 2007.

Total revenues increased in all of our geographic regions. Revenues from sales to United States and Canadian clients increased 9%, to $723.2 million in 2008 from $661.2 million in 2007. Revenues from sales to clients in Europe, the Middle East and Africa (“EMEA”) increased to $430.4 million in 2008 from $403.9 million in 2007, a 7% increase. Revenues from sales to clients in our Other International region increased 21%, to $125.4 million in 2008 from $103.3 million in 2007.

An overview of our results by segment follows:

•

Research revenues increased 15% in 2008 to $773.3 million, compared to $673.3 million in 2007, and comprised approximately 60% and 58% of our total revenues in 2008 and 2007, respectively.

•

Consulting revenues increased 7% in 2008 to $347.4 million, compared to $325.0 million in 2007, and comprised approximately 27% and 28% of our total revenues in 2008 and 2007, respectively.

•

Events revenues were $150.1 million in 2008, a decrease of 6% from $160.1 million in 2007, and comprised approximately 12% and 14% of our total revenues in 2008 and 2007, respectively.

•

Other revenues, consisting principally of research reprint revenues, declined to $8.3 million in 2008 from $10.0 million in 2007.

Please refer to the section of this MD&A entitled “Segment Results” for a further discussion of results by segment.

COST OF SERVICES AND PRODUCT DEVELOPMENT increased $24.0 million, or about 5%, when comparing 2008 with 2007, to $554.8 million from $530.8 million. Excluding the unfavorable impact of foreign exchange, Cost of service and product development would have increased by about 4%.

The year-over-year increase of $24.0 million was due to several factors. We had $17.0 million of higher salary, commissions, and other benefit costs, $5.7 million in additional severance and benefits charges related to our fourth quarter reduction in force, and $4.0 million in additional Events fulfillment costs. The impact of foreign currency translation added about $2.1 million of expense. Partially offsetting these higher charges was a decrease of approximately $3.0 million in lower headcount costs, primarily due to our exit from consulting operations in Asia-Pacific in mid-2007, as well as lower stock-compensation charges of about $1.2 million.

As a percentage of sales, Cost of services and product development was 43% and 45% in 2008 and 2007 respectively, a decrease of 2 points, which is due to a number of factors. These factors include higher revenues coupled with the inherent operating leverage in our Research business, improved productivity in core Consulting, substantially increased revenues in our higher margin contract optimization business in our Consulting segment, and a continued focus on expense management.

SELLING, GENERAL AND ADMINISTRATIVE (“SG&A”) expense increased 13%, or $59.6 million, to $532.4 million in 2008 compared to $472.7 million in 2007. The year-over-year impact of foreign currency translation was flat.

The $59.6 million increase in SG&A expense resulted primarily from increased investment in our sales organization, severance and benefits charges related to our fourth quarter reduction in force, and increases in other payroll and benefits costs. Growth in our sales organization resulted in approximately $38.0 million of additional payroll and benefits, commissions, and travel expense in 2008 when compared to 2007. We now have 928 quota-bearing sales associates, a 15% increase over December 31, 2007. We had $2.8 million in severance and benefits charges related to our fourth quarter reduction in force, while higher payroll and related benefits costs for our other staff added about $13.0 million in costs. The remaining increase was spread across a number of other cost categories, which was offset to some extent by lower recruiting and stock-compensation charges.

DEPRECIATION expense increased 7% in 2008, to $25.9 million compared to $24.3 million for the prior year. The increase was primarily due to a change in the mix of investment in capital expenditures.

AMORTIZATION OF INTANGIBLES was $1.6 million in 2008 compared to $2.1 million in 2007. The decrease was due to certain intangibles becoming fully amortized in 2007.

OTHER CHARGES was zero in 2008 and $9.1 million in 2007. The $9.1 million included charges of $8.7 million related to the settlement of litigation and $2.7 million of severance costs related to the Company’s exit from consulting operations in Asia. Offsetting these charges was a credit of $2.3 million related to an excess facility which the Company returned to service.

OPERATING INCOME was $164.4 million and $129.5 million in 2008 and 2007, respectively, an increase of $34.9 million, or 27%. Operating income as a percentage of revenues was 13% in 2008 and 11% in 2007, which is due to a number of factors, the most significant being the impact from higher revenues in our Research and Consulting businesses. Please refer to the section of this MD&A entitled “Segment Results” below for a further discussion of revenues and results by segment. The improved operating performance also reflects our continued focus on expense management, charges of $9.1 million in 2007 related to the settlement of litigation and other items, and a positive impact from foreign currency translation.

INTEREST EXPENSE, NET was $19.3 million and $22.2 million in 2008 and 2007, respectively, a decrease of $2.9 million. The decrease was primarily due to a decline in the weighted-average interest rate on our outstanding debt. The weighted-average interest rate on our debt, including the impact of our interest rate swaps, was 4.8% in 2008 and 6.0% in 2007. The impact of the lower average rate was

partially offset by an increase in the weighted-average amount of debt outstanding of approximately $50.0 million during 2008. In 2008 we also had about $0.2 million of additional interest income, as well as a $0.2 million decrease in the amortization of debt issuance costs, both of which are recorded in Interest Expense, net.

OTHER (EXPENSE) INCOME, NET was $(0.4) million in 2008 and $3.2 million in 2007. The $(0.4) million Other expense in 2008 primarily consisted of a $1.2 million gain related to the settlement of a litigation matter and net foreign currency exchange gains and losses. The $3.2 million of Other income in 2007 primarily consisted of a $1.8 million gain from the settlement of a claim and net foreign currency exchange gains and losses.

PROVISION FOR INCOME TAXES on continuing operations was $47.6 million in 2008 as compared to $39.8 million 2007. The effective tax rate was 32.9% in 2008 and 36.0% in 2007. The lower effective tax rate in 2008 as compared to 2007 was attributable to several items. The most significant of these items included the following: (a) the Company generated a larger percentage of its income in low tax jurisdictions in 2008 as compared to 2007, and (b) differences relating to the tax impact of repatriated funds in 2008 as compared to 2007.

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES, which includes the results of the Company’s Vision Events business, was $6.7 million and $2.9 million for 2008 and 2007, respectively. The Company sold the Vision Events business, which had been part of the Company’s Events segment, in early 2008. The results for 2008 include a net gain on the sale of approximately $7.1 million and a loss from operations of $(0.4) million.

NET INCOME was $103.9 million and $73.6 million for 2008 and 2007, respectively, an increase of $30.3 million, or 41%.

Basic earnings per share was $1.09 per share in 2008 and $0.71 per share in 2007, while diluted was $1.05 per share in 2008 and $0.68 per share in 2007. Both basic and diluted earnings for 2008 include $0.07 per share from discontinued operations, while basic and diluted earnings for 2007 include $0.03 per share from discontinued operations.

2007 VERSUS 2006

TOTAL REVENUES increased $131.2 million, or 13%, to $1,168.5 million in 2007 from $1,037.3 million during 2006. Excluding the favorable effects of foreign currency translation, total revenues for 2007 would have increased 9% over 2006.

•

Research revenues increased 18% in 2007 to $673.3 million, compared to $571.2 million in 2006, and comprised approximately 58% and 55% of total revenues in 2007 and 2006, respectively.

•

Consulting revenues in 2007 of $325.0 million were up 6% compared to $305.2 million in 2006, and comprised approximately 28% and 29% of total revenues in 2007 and 2006, respectively.

•

Events revenues were $160.1 million in 2007, an increase of 9% from $146.4 million in 2006, and comprised approximately 14% of total revenues in both 2007 and 2006.

•

Other revenues, consisting principally of research reprint revenues, declined to $10.0 million in 2007 from $14.4 million in 2006.

Please refer to the section of this MD&A entitled “Segment Results” for a further discussion of revenues by segment.

Revenues increased in all regions. Revenues from sales to United States and Canadian clients increased 9%, to $661.2 million in 2007 from $608.3 million in 2006. Revenues from sales to clients in Europe, the Middle East and Africa (“EMEA”) increased to $403.9 million in 2007 from $337.7 million in 2006, a 20% increase. Revenues from sales to clients in the Other International region increased 13%, to $103.3 million in 2007 from $91.3 million in 2006.

COST OF SERVICES AND PRODUCT DEVELOPMENT increased $40.2 million, or 8%, when comparing 2007 with 2006, to $530.1 million from $490.6 million, respectively. Excluding the unfavorable effects of foreign currency translation, Cost of services and product development would have increased about 4%. The $40.2 million increase was primarily due to the impact of foreign currency, which added about $17.0 million of additional expense, $18.2 million of merit salary, bonus, and fringe increases, $6.4 million of higher event fulfillment costs driven by higher events revenue, and additional stock-based compensation costs under SFAS No. 123(R) of about $2.5 million. These increases were offset to some extent by lower non-sales headcount and other charges. For the years ended December 31, 2007 and 2006, Cost of services and product development as a percentage of revenue was 45% and 47%, respectively.

SELLING, GENERAL AND ADMINISTRATIVE (“SG&A”) expense increased $59.7 million, or 14% to $472.7 million from $413.1 million when comparing 2007 to 2006. Excluding the unfavorable effects of foreign currency translation, SG&A expense would have increased by 12% year-over-year. The $59.7 million increase in SG&A year-over-year resulted primarily from increased investment in our sales organization, with expenses up approximately $30.0 million, foreign currency translation, which added about $9.1 million of expense, and additional stock-based compensation under SFAS No. 123(R) of $5.4 million. As of December 31, 2007, we had 806 sales associates, a 22% increase over the prior year-end. While SG&A expense increased 14% year-over-year, when sales-related expenses are excluded General and Administrative (G&A) expense was down about one percentage point year-over-year as a percentage of revenue.

DEPRECIATION expense for the year ended December 31, 2007 was $24.3 million compared to $23.4 million in 2006, driven by higher capital expenditures. We had $24.2 million and $21.1 million of capital expenditures in 2007 and 2006, respectively.

AMORTIZATION OF INTANGIBLES was $2.1 million in 2007 compared to $10.7 million in 2006. The decrease was due to certain intangibles becoming fully amortized in 2006.

META INTEGRATION CHARGES was zero in 2007 and $1.5 million in 2006. These expenses were primarily for severance, and for consulting, accounting, and tax services.

OTHER CHARGES was $9.1 million and zero in 2007 and 2006, respectively. The $9.1 million included charges of $8.7 million related to the settlement of litigation and $2.7 million of severance costs related to the Company’s exit from consulting operations in Asia. Offsetting these charges was a credit of $2.3 million related to an excess facility which the Company returned to service.

OPERATING INCOME was $129.5 million and $98.0 million in 2007 and 2006, respectively, an increase of $31.4 million, or 32%. Operating income as a percentage of revenues was 11% in 2007 and 9% in 2006. The improved operating income primarily resulted from higher revenues in our Research and Consulting businesses. Please refer to the section of this MD&A entitled “Segment Results” below for a further discussion of revenues and results by segment.

INTEREST EXPENSE, NET was $22.2 million and $16.6 million for the years ended December 31, 2007 and 2006, respectively. The increase in our interest expense was due to a higher weighted-average amount of debt outstanding in 2007. The increased interest expense from additional debt outstanding was partially offset by a slight decline in rates and higher interest income.

OTHER (EXPENSE) INCOME, NET was $3.2 million and $(0.8) million for the years ended December 31, 2007 and 2006, respectively. 2007 includes a gain from the settlement of a claim for $1.8 million, while the majority of the remaining net balances in both years consists of net foreign currency exchange gains and losses.

PROVISION FOR INCOME TAXES was $39.8 million for 2007 as compared to $26.4 million in 2006. The effective tax rate for 2007 was 36.0% as compared to 32.7% for 2006. The higher effective tax rate in 2007 as compared to 2006 was attributable to several items. The most significant of these items included the following: (a) the Company generated a smaller percentage of its income in low tax jurisdictions in 2007 as compared to 2006, and (b) differences relating to the release of valuation allowances and changes in reserves.

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES, which includes the results of the Company’s Vision Events business, was $2.9 million and $3.9 million in 2007 and 2006, respectively.

NET INCOME was $73.6 million and $58.2 million for 2007 and 2006, respectively, an increase of $15.4 million, or 26%.

Basic earnings per share was $0.71 per share in 2007 and $0.51 per share in 2006, while diluted was $0.68 per share in 2007 and $0.50 per share in 2006. The basic and diluted earnings for both 2007 and 2006 includes $0.03 per share from discontinued operations.

2008 SEGMENT RESULTS

We evaluate reportable segment performance and allocate resources based on gross contribution margin. Gross contribution is defined as operating income excluding certain Cost of services and product development charges, and Selling, general and administrative expenses, Depreciation, META integration charges, Amortization of intangibles and Other charges. Gross contribution margin is defined as gross contribution as a percentage of revenues.

Research

Revenue in our Research business was up 15% in 2008, to $773.3 million, from $673.3 million for 2007. We had growth across our entire product portfolio in 2008. Excluding the favorable impact of foreign currency, revenue was up approximately 14% over the prior year.

Research gross contribution increased to $507.7 million in 2008 from $429.1 million in 2007, an 18% increase, while the contribution margin increased 2 points, to 66% from 64%. The year-over-year contribution margin improved primarily due to our stronger revenue performance coupled with the operating leverage inherent in our Research business, along with tight expense management.

Contract value was $834.3 million as of December 31, 2008, up 11% from $752.5 million at December 31, 2007. Adjusted for the favorable impact of foreign currency translation, contract value was up approximately 8%. At December 31, 2008, our research client retention rate remained strong at 82%, the same rate as of December 31, 2007. Wallet retention was 98% at December 31, 2008, down from 101% at December 31, 2007. Our Executive Program membership was 3,733 at December 31, 2008, compared to 3,753 members at December 31, 2007.

Consulting

Consulting revenues were $347.4 million and $325.0 million for 2008 and 2007, respectively, an increase of $22.4 million, or 7%. Excluding the favorable impact of foreign currency translation, revenues for 2008 were up about 6%. The revenue increase was due to strength in both the core Consulting and benchmarking businesses and exceptionally strong results in our contract optimization business. Contributing to the year-over-year revenue increase in our contract optimization business was the completion of one large contract in the fourth quarter of 2008 which resulted in approximately $11.0 million of revenue.

Consulting gross contribution of $141.4 million for 2008 increased 10% from the $128.2 million for 2007, while the contribution margin for 2008 increased 2 points, to 41% from 39% in the prior year. The increase in gross contribution and the gross contribution margin was driven by improved utilization on higher headcount and higher billing rates, and higher revenues in our contract optimization business, which has a higher margin than our core Consulting business.

Our consultant utilization rates were 72% and 69% for 2008 and 2007, respectively, while the $366 hourly billing rate was up about 3% year-over-year. Our billable headcount was 499 at December 31, 2008 compared to 472 at December 31, 2007. Our average annualized revenue per billable headcount was approximately $458,000 for 2008, about 7% higher than the prior year. These strong metrics reflect improved engagement management and the continuation of our focus on larger and more profitable engagements.

Consulting backlog, which represents future revenues to be recognized from in-process consulting, measurement and SAS, was $97.2 million at December 31, 2008, compared to $121.4 million at December 31, 2007, as bookings slowed in the fourth quarter of 2008 due to the weaker economic environment.

While we ended 2008 with 499 billable consultants, the reduction in force action we took in January 2009 reduced this number by approximately 30 consultants. This action was taken in order to better align our delivery resources with the lower backlog as we move into 2009.

Events

Events revenues decreased 6% year-over-year, or $10.0 million, to $150.1 million in 2008 compared to $160.1 million in 2007, reflecting lower revenues from both attendees and exhibitors. Excluding the favorable impact of foreign currency translation, events revenues were down approximately 7% year-over-year. We held 70 events in 2008 compared to 62 events in 2007, with overall attendance down about 6%, to 41,352 in 2008 from 44,216 in 2007.

The 70 events held in 2008 included 59 on-going events and 11 new events. During 2008, the number of exhibitors at our on-going events declined by approximately 13%, while attendance was 38,961 as compared to 42,554 attendees in 2007, an 8% decrease. Pricing at these on-going events declined slightly for attendees but increased slightly for exhibitors. Revenues from the 11 new events we held in 2008 was only slightly higher than the events we discontinued. The majority of the year-over-year revenue shortfall occurred in our fourth quarter, as travel restrictions, cuts in marketing budgets, and other expense controls at many companies took effect in response to the credit crisis and weakening global economy.

Events gross contribution was $65.0 million in 2008 compared to $81.9 million for 2007, while the year-over-year gross contribution margin declined by 8 points, to 43% from 51%. The decrease in gross contribution margin was primarily due to lower revenues, higher fulfillment costs, the impact of lower margin new events, and severance charges related to our reduction in force.

As a result of the travel restrictions and other budget cuts at many companies and the weakening economy, we have reduced the number of events planned in 2009 to 54, which reflects the discontinuance of 18 events, including our two Spring Symposia, as well as the launch of only two smaller, new events. The 18 discontinued events had approximately $21.0 million of revenue in 2008.

2007 SEGMENT RESULTS

Research

Revenue in our Research business increased $102.1 million or 18% in 2007, to $673.3 million compared to $571.2 million for 2006. We had year-over-year growth across our entire product portfolio and in all of our geographic regions. Excluding the favorable impact of foreign currency, revenue was up about 15% year-over-year. Research gross contribution increased to $429.1 million in 2007, from $345.5 million in 2006, a 24% increase, while the contribution margin increased 4 points, to 64% from 60%. The contribution margin improved primarily due to our stronger revenue performance.

Contract value was $752.5 million at December 31, 2007, up 18% from $640.3 million at December 31, 2006. The year-over-year increase was driven by increases in both core research and Executive Programs, and reflects the success of our new role-based product offerings. We had contract value growth across all of our major geographic regions and client industry segments. Adjusted for the favorable impact of foreign currency translation, contract value was up about 14% year-over-year.

At December 31, 2007, our research client retention rate remained strong at 82%, up from 81% at December 31, 2006. Wallet retention was 101% at December 31, 2007, up from 96% at December 31, 2006, reflecting higher spending at retained clients. Our Executive Program membership was 3,753 at December 31, 2007, which is up about 3% over the prior year-end.

Consulting

Consulting revenues were $325.0 million in 2007, compared to $305.2 million in 2006, an increase of 6%, or $19.8 million, despite a decline in billable headcount. Excluding the favorable impact of foreign currency translation, revenues were up 3% year-over-year. The increased revenue was driven by substantial improvement in our contract optimization business as well as higher utilization and billing rates in our core consulting business. Our contract optimization business was weak in the fourth quarter of 2006 due to changes in sales incentives, which we rectified in 2007. Billable headcount was 472 at December 31, 2007 compared to 518 at December 31, 2006, a 9% decrease. The reduced billable headcount primarily reflects our decision to exit our consulting business in Asia.

Consulting gross contribution of $128.2 million in 2007 increased 6% from $120.7 million in 2006, while contribution margin decreased 1 point, to 39% in 2007 from 40% in the prior year. The decrease in gross contribution margin year-over-year was driven by lower SAS revenue performance and additional investment in senior level consultants.

The consultant utilization rate was 69% and 64% for the years ended December 31, 2007 and 2006, respectively. The billing rate remained above $350 per hour for both 2007 and 2006. Our average annualized revenue per billable headcount was up about 5%, to approximately $430,000 in 2007 from $410,000 in 2006. Consulting backlog, which represents future revenues to be recognized from in-process consulting, measurement and SAS, increased 11%, to $121.4 million at December 31, 2007 from $109.6 million at December 31, 2006.

Events

Events revenues for 2007 increased 9%, or $13.7 million, to $160.1 million compared to $146.4 million in 2006. Adjusted for the favorable impact of foreign exchange, revenues were up approximately 5%. We held 62 events in 2007 and 58 in 2006. The increased revenue was primarily due to the addition of 10 new events in 2007 and an increase in both attendee volume and ticket prices.

Attendance at events was 44,216 in 2007, about an 8% increase over 2006. Gross contribution was $81.9 million in 2007 compared to $75.4 million in 2006, a 9% increase, while gross contribution margin was 51% in both 2007 and 2006.

LIQUIDITY AND CAPITAL RESOURCES

We finance our operations primarily through cash generated from our on-going operating activities. For the year ended December 31, 2008, we had cash from operating activities of $184.4 million, approximately 24% higher than the $148.3 million realized in 2007. During 2008, we used $200.8 million of our cash to repurchase our common shares.

As of December 31, 2008, we had $140.9 million of cash and cash equivalents and $178.3 million of available borrowing capacity under our revolving credit facility (not including a $100.0 million expansion feature). We believe that the cash we expect to earn from our on-going operating activities, our existing cash balances, and the borrowing capacity we have under our five-year revolving credit facility will be sufficient for our expected short-term and foreseeable long-term operating needs.

The following sections discuss the Company’s changes in cash and cash equivalents for the three years ending December 31, 2008:

2008

Cash provided by operating activities totaled $184.4 million for the year December 31, 2008, compared to cash provided of $148.3 million for the year ended December 31, 2007, a $36.1 million, or 24% increase. The increase in cash flow from operating activities was primarily due to substantially increased cash from our core operations and improvement in our working capital, which together added approximately $45.0 million in higher operating cash flow. Our working capital improved primarily due to improved collection of receivables. Also contributing to the improved cash flow was $12.0 million in lower cash payments related to severance, excess facilities, and settlement of litigation, and about $2.0 million less in interest paid on our debt as interest rates declined. The improved operating cash flow in 2008 was somewhat offset by higher cash payments for taxes and bonuses of approximately $23.0 million.

Cash used in investing activities was $16.5 million for the year ended December 31, 2008, compared to cash used of $24.1 million in 2007. We had capital expenditures of $24.3 million in the year ended December 31, 2008, which was offset by net cash proceeds from the sale of our Vision Events business of approximately $7.8 million. We had capital expenditures of $24.2 million in 2007.

Cash used in financing activities totaled $119.8 million in 2008 compared to cash used of $93.7 million in 2007, an increase in cash used of $26.1 million. The increased use of cash was primarily due to a significantly higher use of cash for stock repurchases in 2008. We used an additional $34.0 million of cash to repurchase our shares in 2008, to $200.8 million in 2008 compared to $166.8 million in 2007. Partially offsetting the additional use of cash used for stock repurchases was an increase of $10.2 million in cash proceeds from stock issued for stock plans, which rose to $44.7 million in 2008 compared to $34.5 million in 2007, driven by higher option exercises.

Our cash and cash equivalents was $140.9 million as of December 31, 2008, compared to $109.9 million at December 31, 2007. The effect of exchange rate changes decreased cash and cash equivalents by approximately $17.1 million for the year ended December 31, 2008. Our cash and cash equivalents are held in numerous locations throughout the world, with 55% held outside the U.S. as of December 31, 2008.

2007

Cash provided by operating activities totaled $148.3 million for the year ended December 31, 2007, compared to cash provided of $106.3 million for the year ended December 31, 2006, an increase of $42.1 million, or 40%. The increase in cash flow from operating activities was primarily due to an increase in cash from our core operations of approximately $39.0 million, lower cash payments for taxes of about $21.0 million, and to a lesser extent, lower cash payments for severance and other items of $5.0 million. Offsetting these improvements was a payment of $9.5 million related to a legal settlement and higher cash payments for interest on our outstanding debt of about $8.0 million, and a higher reduction from excess tax benefits from stock-based compensation of $5.6 million.

Cash used in investing activities was $24.1 million for the year ended December 31, 2007, compared to $21.8 million in 2006. The increase was due to a year-over-year increase in capital expenditures, which increased to $24.2 million in 2007 from $21.1 million in 2006.

Cash used in financing activities increased slightly, to $93.7 million for the year ended December 31, 2007, compared to $91.5 million in 2006. On a net basis, we borrowed $24.0 million in 2007 compared to $123.0 million in 2006, a decrease of $99.0 million year-over-year. We decreased our use of cash to repurchase shares by $103.9 million, as we repurchased $166.8 million of our common stock in 2007 compared to $270.7 million in 2006. We received proceeds from stock issued under stock plans of $34.5 million in 2007, compared to $46.7 million in 2006, a decrease of $12.2 million. Excess tax benefits from stock compensation increased approximately $5.6 million, to $14.8 million in 2007 compared to $9.2 million in 2006.

At December 31, 2007, cash and cash equivalents totaled $109.9 million. The effect of exchange rates increased cash and cash equivalents by about $11.6 million during 2007.

OBLIGATIONS AND COMMITMENTS

At December 31, 2008, we had $416.3 million outstanding under our Credit Agreement, which provides for two amortizing term loans and a $300.0 million revolving credit facility. The revolving credit facility may be increased up to an additional $100.0 million at our lenders’ discretion (the “expansion feature”), for a total revolving credit facility of $400.0 million. However, the $100.0 million expansion feature may or may not be available to us depending upon prevailing credit market conditions.

The term loans are being repaid in consecutive quarterly installments plus a final payment due on January 31, 2012, and may be prepaid at any time without penalty or premium at our option. The revolving loans may be borrowed, repaid and reborrowed until January 31, 2012, at which time all amounts borrowed must be repaid. See Note 6 — Debt in the accompanying notes to the consolidated financial statements for additional information regarding the Company’s Credit Agreement.

The following table represents our contractual cash commitments due after December 31, 2008 (in thousands):

						Less Than				1-3				4-5				More Than
		Total				1 Year				Years				Years				5 Years
Operating leases (1)		$	136,484			$	30,980			$	43,448			$	18,628			$	43,428
Debt outstanding (2), (3)			416,250				57,750				207,750				150,750				—
Deferred compensation arrangement (4)			16,537				1,469				3,164				2,766				9,138
FASB Interpretation No. 48 tax liability (5)			2,306				2,306				—				—				—
Totals		$	571,577			$	92,505			$	254,362			$	172,144			$	52,566

QUARTERLY FINANCIAL DATA

(in thousands, except per share data) 2008		First				Second				Third				Fourth
Revenues		$	290,099			$	343,939			$	297,706			$	347,321
Operating income			26,330				47,575				34,682				55,781
Net income			21,544				29,900				18,781				33,646
Net income per share (1)
Basic:
From continuing operations		$	0.15			$	0.32			$	0.20			$	0.36
From discontinued operations (2)			0.07				—				—				—
		$	0.22			$	0.32			$	0.20			$	0.36
Diluted:
From continuing operations		$	0.14			$	0.30			$	0.19			$	0.35
From discontinued operations (2)			0.07				—				—				—
		$	0.21			$	0.30			$	0.19			$	0.35

(in thousands, except per share data) 2007		First				Second				Third				Fourth
Revenues		$	264,197			$	292,848			$	268,274			$	343,156
Operating income (3)			19,470				20,439				22,526				67,023
Net income			8,192				14,048				12,494				38,819
Net income per share (1)
Basic:
From continuing operations		$	0.09			$	0.11			$	0.11			$	0.37
From discontinued operations			(0.01	)			0.02				0.01				0.01
		$	0.08			$	0.13			$	0.12			$	0.38
Diluted:
From continuing operations		$	0.09			$	0.11			$	0.10			$	0.36
From discontinued operations			(0.01	)			0.02				0.01				0.01
		$	0.08			$	0.13			$	0.11			$	0.37

NEW ACCOUNTING STANDARDS

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141R”), which replaces FASB Statement No. 141. SFAS No. 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non controlling interest in the acquiree, and the goodwill acquired in a business combination. The Statement requires that adjustments to tax benefits related to the acquiree that are recorded subsequent to the acquisition date will be recognized in income, rather than as an adjustment of goodwill under the current rules. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141R is effective as of the beginning of an entity’s fiscal year that begins after December 15, 2008, which for Gartner is the fiscal year beginning January 1, 2009.

As of December 31, 2008, we had approximately $8.3 million of unrecognized tax benefits and valuation allowances related to our acquisition of META. While the possibility exists that some portion of these items may reverse in future periods, we believe the impact to our provision and results of operations would not be significant. Accordingly, we do not believe the adoption of the standard will have a material impact on our financial position or results of operations.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statement—amendments of ARB No. 51 (“SFAS No. 160”).” SFAS No. 160 requires the accounting and reporting of minority interests as noncontrolling interests and classified as a component of equity. The statement also establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 applies to all entities that prepare consolidated financial statements, except not-for-profit organizations, but will affect only those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. The statement is effective as of the beginning of an entity’s first fiscal year beginning after December 15, 2008, which will be the Company’s fiscal year beginning January 1, 2009. The Company does not believe the adoption of the standard will have a material impact on its financial position or results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

We have exposure to changes in interest rates resulting from $296.3 million outstanding on our two term loans and $120.0 million outstanding on our revolver, all of which are floating rate borrowings. Our borrowings may be either prime-based or Libor-based. Interest rates under these borrowings include a base rate plus a margin between 0.00% and 0.75% on prime borrowings and between .625% and 1.75% on Libor borrowings.

As of December 31, 2008, the annualized interest rates on the original 2007 term loan, the 2008 term loan, and revolver were 2.46%, 2.96%, and 1.47%, respectively. The rates on the original and new term loans consisted of a three-month LIBOR base rate plus margins of 1.00% and 1.50% on the original term loan and 2008 term loan, respectively. The rate on the revolver consisted of a one-month LIBOR base rate plus a margin of 1.00%.

We have two interest rate swap contracts which effectively convert the floating base rates on the term loans to fixed rates. Including the effect of the interest rate swaps, the annualized interest rates on the original term loan and 2008 term loan were 6.06% and 4.42%, respectively, as of December 31, 2008.

The Company does not hedge the interest rate risk on the revolver. Accordingly, we are still exposed to interest rate risk on the revolver. A 25 basis point increase or decrease in interest rates would change pre-tax annual interest expense on the $300.0 million revolver by approximately $0.7 million when fully utilized.

Foreign Currency Exchange Risk

We face two risks related to foreign currency exchange: translation risk and transaction risk.

Amounts invested in our foreign operations are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in the stockholders’ equity section of the Consolidated Balance Sheets. Our foreign subsidiaries generally collect revenues and pay expenses in currencies other than the United States dollar. Since the functional currencies of our foreign operations are generally denominated in the local currency of our subsidiaries, the foreign currency translation adjustments are reflected as a component of stockholders’ equity and do not impact operating results. Revenues and expenses in foreign currencies translate into higher or lower revenues and expenses in U.S. dollars as the U.S. dollar weakens or strengthens against other currencies. Therefore, changes in exchange rates may affect our consolidated revenues and expenses (as expressed in U.S. dollars) from foreign operations.

We are exposed to foreign currency transaction risk since we enter into foreign currency forward exchange contracts to offset the effects of adverse fluctuations in foreign currency exchange rates. These instruments are typically short term and are reflected at fair value with unrealized and realized gains and losses recorded in earnings. At December 31, 2008, we had 15 foreign currency forward contracts outstanding with a total notional amount of $73.4 million and a net unrealized loss of $2.5 million. All of these contracts matured in January 2009.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, accounts receivable, and interest rate swap contracts. The majority of the Company’s cash equivalent investments and its two interest rate swap contracts are with investment grade commercial banks that are participants in the Company’s Credit Agreement. Accounts receivable balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographic dispersion.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our consolidated financial statements for 2008, 2007, and 2006, together with the reports of KPMG LLP, independent registered public accounting firm, dated February 20, 2009, are included herein in this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management conducted an evaluation, as of December 31, 2008, of the effectiveness of the design and operation of our disclosure controls and procedures, (as such term is defined in Rules 13a- 15(e) and 15d- 15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) under the supervision and with the participation of our chief executive officer and chief financial officer. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective in alerting them in a timely manner to material Company information required to be disclosed by us in reports filed or submitted under the Act.

Management’s Annual Report on Internal Control Over Financial Reporting

Gartner management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Gartner’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, management used the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management’s assessment was reviewed with the Audit Committee of the Board of Directors.

Based on its assessment of internal control over financial reporting, management has concluded that, as of December 31, 2008, Gartner’s internal control over financial reporting was effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the quarter ended December 31, 2008 that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required to be furnished pursuant to this item will be set forth under the captions “Proposal One: Election of Directors,” “Executive Officers,” “Corporate Governance,” “Section 16(a) Beneficial Ownership Reporting Compliance” and “Miscellaneous — Available Information” in the Company’s Proxy Statement to be filed with the SEC no later than April 30, 2009. If the Proxy Statement is not filed with the SEC by April 30, 2009, such information will be included in an amendment to this Annual Report filed by April 30, 2009. See also Item 1. Business — Available Information.

NYSE Certification

The NYSE requires that the chief executive officers of its listed companies certify annually to the NYSE that they are not aware of violations by their companies of NYSE corporate governance listing standards. The Company submitted a non-qualified certification by its Chief Executive Officer to the NYSE in 2008 in accordance with the NYSE’s rules.

ITEM 11. EXECUTIVE COMPENSATION.

The information required to be furnished pursuant to this item is incorporated by reference from the information set forth under the caption “Executive Compensation” in the Company’s Proxy Statement to be filed with the SEC no later than April 30, 2009. If the Proxy Statement is not filed with the SEC by April 30, 2009, such information will be included in an amendment to this Annual Report filed by April 30, 2009.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required to be furnished pursuant to this item will be set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in the Company’s Proxy Statement to be filed with the SEC by April 30, 2009. If the Proxy Statement is not filed with the SEC by April 30, 2009, such information will be included in an amendment to this Annual Report filed by April 30, 2009.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

The information required to be furnished pursuant to this item will be set forth under the captions “Transactions With Related Persons” and “Corporate Governance — Director Independence” in the Company’s Proxy Statement to be filed with the SEC by April 30, 2009. If the Proxy Statement is not filed with the SEC by April 30, 2009, such information will be included in an amendment to this Annual Report filed by April 30, 2009.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required to be furnished pursuant to this item will be set forth under the caption “Principal Accountant Fees and Services” in the Company’s Proxy Statement to be filed with the SEC no later than April 30, 2009. If the Proxy Statement is not filed with the SEC by April 30, 2009, such information will be included in an amendment to this Annual Report filed by April 30, 2009.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) 1. and 2. Consolidated Financial Statements and Schedules

The reports of our independent registered public accounting firm and consolidated financial statements listed in the Index to Consolidated Financial Statements herein are filed as part of this report.

All financial statement schedules not listed in the Index have been omitted because the information required is not applicable or is shown in the consolidated financial statements or notes thereto.

3. Exhibits

EXHIBIT
NUMBER		DESCRIPTION OF DOCUMENT
3.1a(1)		Restated Certificate of Incorporation of the Company.
3.1b(2)		Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of the Company, dated November 27, 2006.
3.2(3)		Amended Bylaws, as amended through February 2, 2006.
4.1(1)		Form of Certificate for Common Stock as of June 2, 2005.
4.2(2)		Second Amended and Restated Rights Agreement, dated as of November 6, 2006, between the Company and American Stock Transfer & Trust Company (as successor Rights Agent of Mellon Investor Services LLC).
4.3(5)		Credit Agreement, dated as of January 31, 2007, among the Company, the several lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A. as administrative agent (the “Credit Agreement”).
4.4 (13)		First Amendment dated as of April 9, 2008 to the Credit Agreement.
10.1(6)		Form of Indemnification Agreement.
10.2(4)		Amended and Restated Securityholders Agreement dated as of July 12, 2002 among the Company, Silver Lake Partners, L.P. and other parties thereto.
10.3(7)		Lease dated December 29, 1994 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, and 88 Gatehouse Road, Stamford, Connecticut.
10.4(8)		Lease dated May 16, 1997 between Soundview Farms and the Company for premises at 56 Top Gallant Road, 70 Gatehouse Road, 88 Gatehouse Road and 10 Signal Road, Stamford, Connecticut (amendment to lease dated December 29, 1994, see exhibit 10.3(7)).
10.5(7)+		1991 Stock Option Plan as amended and restated on October 19, 1999.
10.6(9)+		2002 Employee Stock Purchase Plan, as amended and restated effective June 1, 2008.
10.7(1)+		1994 Long Term Stock Option Plan, as amended and restated on October 12, 1999.
10.8(1)+		1998 Long Term Stock Option Plan, as amended and restated on October 12, 1999.
10.9(10)+		1999 Stock Option Plan.
10.10(1)+		2003 Long-Term Incentive Plan, as amended and restated on June 29, 2005.
10.11*		2008-1 Amendment to 2003 Long-Term Incentive Plan dated October 28, 2008.
10.12*		2008-2 Amendment to 2003 Long-Term Incentive Plan dated October 28, 2008.
10.13*		Amended and Restated Employment Agreement between Eugene A. Hall and the Company dated as of December 31, 2008.
10.14(11)+		Restricted Stock Agreement by and between Eugene A. Hall and the Company dated November 9, 2005.

EXHIBIT
NUMBER		DESCRIPTION OF DOCUMENT
10.15*		Company Deferred Compensation Plan, effective January 1, 2009.
10.16*		Company Executive Benefits Program, effective December 19, 2008.
10.17(12)+		Form of Stock Appreciation Right Agreement for executive officers.
10.18(12)+		Form of Restricted Stock Unit Agreement for executive officers.
21.1*		Subsidiaries of Registrant.
23.1*		Consent of Independent Registered Public Accounting Firm
24.1		Power of Attorney (see Signature Page).
31.1*		Certification of chief executive officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of chief financial officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32*		Certification under Section 906 of the Sarbanes-Oxley Act of 2002.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

GARTNER, INC.
CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm			34
Report of Independent Registered Public Accounting Firm			35
Consolidated Balance Sheets as of December 31, 2008 and 2007			36
Consolidated Statements of Operations for the Years Ended December 31, 2008, 2007 and 2006			37
Consolidated Statements of Stockholders’ (Deficit) Equity and Comprehensive Income for the Years Ended December 31, 2008, 2007 and 2006			38
Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2007 and 2006			39
Notes to Consolidated Financial Statements			40

All financial statement schedules have been omitted because the information required is not applicable or is shown in the consolidated financial statements or notes thereto.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Gartner, Inc.:

We have audited the accompanying consolidated balance sheets of Gartner, Inc. and subsidiaries (Gartner, Inc. or the Company) as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders’ (deficit) equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2008. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards as established by the Auditing Standards Board (United States) and in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Gartner, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Gartner Inc.’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 20, 2009 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

New York, New York
February 20, 2009

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Gartner, Inc.:

We have audited Gartner, Inc. and subsidiaries (Gartner, Inc. or the Company) internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Gartner Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Gartner, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Gartner, Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders’ (deficit) equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2008, and our report dated February 20, 2009 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

New York, New York
February 20, 2009

GARTNER, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

		December 31,
		2008				2007
ASSETS
Current assets:
Cash and cash equivalents		$	140,929			$	109,945
Fees receivable, net of allowances of $7,800 and $8,450 respectively			318,511				354,926
Deferred commissions			52,149				53,537
Prepaid expenses and other current assets			42,935				39,382
Total current assets			554,524				557,790
Property, equipment and leasehold improvements, net			61,869				66,551
Goodwill			398,737				416,181
Intangible assets, net			2,015				3,645
Other assets			75,920				89,043
Total assets		$	1,093,065			$	1,133,210
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	219,381			$	215,990
Deferred revenues			395,278				423,522
Current portion of long-term debt			177,750				236,500
Total current liabilities			792,409				876,012
Long-term debt			238,500				157,500
Other liabilities			83,472				82,200
Total liabilities			1,114,381				1,115,712
Commitments and contingencies (note 7)
Stockholders’ (deficit) equity:
Preferred stock:
$.01 par value, authorized 5,000,000 shares; none issued or outstanding			—				—
Common stock:
$.0005 par value, authorized 250,000,000 shares for both periods; 156,234,416 shares issued for both periods			78				78
Additional paid-in capital			570,667				545,654
Unearned compensation, net			—				(386	)
Accumulated other comprehensive (loss) income, net			(1,741	)			23,641
Accumulated earnings			426,428				322,557
Treasury stock, at cost, 62,353,575 and 57,202,660 common shares, respectively			(1,016,748	)			(874,046	)
Total stockholders’ (deficit) equity			(21,316	)			17,498
Total liabilities and stockholders’ (deficit) equity		$	1,093,065			$	1,133,210

See Notes to Consolidated Financial Statements.

GARTNER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

		Year Ended December 31,
		2008				2007				2006
Revenues:
Research		$	773,257			$	673,335			$	571,217
Consulting			347,404				325,030				305,231
Events			150,080				160,065				146,412
Other			8,324				10,045				14,439
Total revenues			1,279,065				1,168,475				1,037,299
Costs and expenses:
Cost of services and product development			554,837				530,807				490,560
Selling, general and administrative			532,365				472,737				413,053
Depreciation			25,880				24,298				23,444
Amortization of intangibles			1,615				2,091				10,753
META integration charges			—				—				1,450
Other charges			—				9,084				—
Total costs and expenses			1,114,697				1,039,017				939,260
Operating income			164,368				129,458				98,039
Interest income			3,121				2,912				2,517
Interest expense			(22,390	)			(25,066	)			(19,098	)
Other (expense) income, net			(358	)			3,193				(797	)
Income before income taxes			144,741				110,497				80,661
Provision for income taxes			47,598				39,831				26,403
Income from continuing operations			97,148				70,666				54,258
Income from discontinued operations, net of taxes (note 2)			6,723				2,887				3,934
Net income		$	103,871			$	73,553			$	58,192
Net income per share:
Basic:
Income from continuing operations		$	1.02			$	0.68			$	0.48
Income from discontinued operations			.07				.03				.03
		$	1.09			$	0.71			$	0.51
Diluted:
Income from continuing operations		$	0.98			$	0.65			$	0.47
Income from discontinued operations			.07				.03				.03
		$	1.05			$	0.68			$	0.50
Weighted average shares outstanding:
Basic			95,246				103,613				113,071
Diluted			99,028				108,328				116,203

See Notes to Consolidated Financial Statements.

GARTNER, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY AND COMPREHENSIVE INCOME
(IN THOUSANDS)

														Accumulated
														Other												Total
						Additional				Unearned				Comprehensive												Stockholders'
		Common				Paid-In				Compensation,				Income (Loss),				Accumulated				Treasury				(Deficit)
		Stock				Capital				Net				Net				Earnings				Stock				Equity
Balance at December 31, 2005		$	77			$	511,062			$	(6,652	)		$	6,320			$	187,652			$	(551,871	)		$	146,588
Cumulative effect of adoption of SAB No. 108, net of tax (note 8)							7,167												3,160								10,327
Adjusted opening balance at January 1, 2006			77				518,229				(6,652	)			6,320				190,812				(551,871	)			156,915
Comprehensive income:
Net income			—				—				—				—				58,192				—				58,192
Other comprehensive income:
Foreign currency translation adjustments			—				—				—				7,340				—				—				7,340
Interest rate swap and investment, net of tax			—				—				—				775				—				—				775
Pension unrecognized loss, net of tax			—				—				—				(736	)			—				—				(736	)
Other comprehensive income															7,379												7,379
Comprehensive income																											65,571
Adoption of SFAS No. 158, net of tax			—				—				—				(602	)			—				—				(602	)
Issuances under stock plans			1				1,634				2,361				—				—				42,736				46,732
Excess tax benefits from stock compensation			—				9,159				—				—				—				—				9,159
Purchase of shares for treasury stock			—				—				—				—				—				(269,204	)			(269,204	)
Stock compensation (net of forfeitures)			—				15,664				2,083				—				—				—				17,747
Balance at December 31, 2006		$	78			$	544,686			$	(2,208	)		$	13,097			$	249,004			$	(778,339	)		$	26,318
Comprehensive income:
Net income			—				—				—				—				73,553				—				73,553
Other comprehensive income:
Foreign currency translation adjustments			—				—				—				10,570				—				—				10,570
Interest rate swap, net of tax			—				—				—				(2,966	)			—				—				(2,966	)
Pension unrecognized gain, net of tax			—				—				—				2,940				—				—				2,940
Other comprehensive income															10,544												10,544
Comprehensive income																											84,097
Issuances under stock plans			—				(36,210	)			—				—				—				73,357				37,147
Excess tax benefits from stock compensation			—				14,759				—				—				—				—				14,759
Purchase of shares for treasury stock			—				—				—				—				—				(169,064	)			(169,064	)
Stock compensation (net of forfeitures)			—				22,419				1,822				—				—				—				24,241
Balance at December 31, 2007		$	78			$	545,654			$	(386	)		$	23,641			$	322,557			$	(874,046	)		$	17,498
Comprehensive income:
Net income			—				—				—				—				103,871				—				103,871
Other comprehensive loss:
Foreign currency translation adjustments			—				—				—				(20,497	)			—				—				(20,497	)
Interest rate swaps, net of tax			—				—				—				(6,060	)			—				—				(6,060	)
Pension unrecognized gain, net of tax			—				—				—				1,175				—				—				1,175
Other comprehensive loss															(25,382	)											(25,382	)
Comprehensive income																											78,489
Issuances under stock plans			—				(10,128	)			—				—				—				55,874				45,746
Excess tax benefits from stock compensation			—				14,831				—				—				—				—				14,831
Purchase of shares for treasury stock			—				—				—				—				—				(198,576	)			(198,576	)
Stock compensation (net of forfeitures)			—				20,310				386				—				—				—				20,696
Balance at December 31, 2008		$	78			$	570,667			$	—			$	(1,741	)		$	426,428			$	(1,016,748	)		$	(21,316	)

See Notes to Consolidated Financial Statements.

GARTNER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

		Year Ended December 31,
		2008				2007				2006
Operating activities:
Net income		$	103,871			$	73,553			$	58,192
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of Vision Events business (note 2)			(7,061	)			—				—
Depreciation and amortization of intangibles			27,495				26,389				34,197
Stock-based compensation expense			20,696				24,241				16,660
Excess tax benefits from stock-based compensation expense			(14,831	)			(14,759	)			(9,159	)
Deferred taxes			2,617				6,740				6,830
Amortization and writeoff of debt issue costs			1,222				1,363				1,627
Changes in assets and liabilities:
Fees receivable, net			20,987				(10,880	)			(3,876	)
Deferred commissions			(1,403	)			(5,266	)			(2,774	)
Prepaid expenses and other current assets			(21	)			(857	)			(4,562	)
Other assets			2,907				(12,288	)			(1,562	)
Deferred revenues			(308	)			26,858				33,574
Accounts payable, accrued, and other liabilities			28,179				33,241				(22,883	)
Cash provided by operating activities			184,350				148,335				106,264
Investing activities:
Additions to property, equipment and leasehold improvements			(24,332	)			(24,172	)			(21,113	)
Proceeds from sale of Vision Events business			7,847				—				—
Other investing activities, net			30				36				(688	)
Cash used in investing activities			(16,455	)			(24,136	)			(21,801	)
Financing activities:
Proceeds from terminated interest rate swap			—				1,167				—
Proceeds from stock issued for stock plans			44,702				34,458				46,732
Proceeds from debt issuance			180,000				525,000				190,000
Payments for debt issuance costs			(801	)			(1,257	)			(45	)
Payments on debt			(157,750	)			(501,000	)			(66,667	)
Purchases of treasury stock			(200,817	)			(166,822	)			(270,704	)
Excess tax benefits from stock-based compensation expense			14,831				14,759				9,159
Cash used by financing activities			(119,835	)			(93,695	)			(91,525	)
Net increase (decrease) in cash and cash equivalents			48,060				30,504				(7,062	)
Effects of exchange rates on cash and cash equivalents			(17,076	)			11,640				4,581
Cash and cash equivalents, beginning of period			109,945				67,801				70,282
Cash and cash equivalents, end of period		$	140,929			$	109,945			$	67,801
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest		$	22,380			$	24,100			$	14,900
Income taxes, net of refunds received		$	19,961			$	3,564			$	11,160