UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, DC 20549 |
FORM 8-K |
CURRENT REPORT |
Pursuant to Section 13 or 15(d) of the |
Securities Exchange Act of 1934 |
Date of Report (Date of earliest event reported) |
July 26, 2018 |
GARTNER, INC. |
(Exact name of registrant as specified in its charter) |
DELAWARE | 1-14443 | 04-3099750 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
P.O. Box 10212 |
56 Top Gallant Road |
Stamford, CT 06902-7747 |
(Address of Principal Executive Offices, including Zip Code) |
(203) 316-1111 |
(Registrant’s telephone number, including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter): o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: o
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On August 1, 2018, Gartner, Inc. (the “Company” or "Gartner" ) announced financial results for the three and six months ended June 30, 2018. A copy of the Company’s Press Release is furnished herein as Exhibit 99.1.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and in Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGMENTS OF CERTAIN OFFICERS.
On July 26, 2018, Michael J. Bingle informed the Board of Directors (the “Board”) of Gartner, Inc. (the “Company”) of his decision to resign, effective as of July 26, 2018, as a member of the Board and the Compensation Committee. Mr. Bingle has been a valued member of the Board since 2004, and is resigning to focus on his activities as a managing partner and managing director at Silver Lake. His resignation is not due to a disagreement with the Board or the Company on any matter relating to the Company’s operations, policies or practices. The Company thanks Mr. Bingle for his many contributions to the Company’s growth and progress.
ITEM 7.01. REGULATION FD DISCLOSURES.
Gartner has scheduled a conference call at 8 a.m. Eastern time on August 1, 2018 to discuss the Company’s financial results for the first quarter of 2018. A slide presentation will also be available via the Internet by accessing the Company’s website at http://investor.gartner.com. An audio replay of the webcast will also be available on the Company's website.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
EXHIBIT NO. | DESCRIPTION | |
Press Release issued August 1, 2018 with respect to financial results for Gartner, Inc. for the three and six months ended June 30, 2018. | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Gartner, Inc. | ||
Date: August 1, 2018 | By: | /s/ Craig W. Safian |
Craig W. Safian Executive Vice President and Chief Financial Officer | ||
EXHIBIT 99.1
Gartner | Press Release |
Gartner Reports Second Quarter 2018 Financial Results
Total Contract Value $2.9 Billion, +12% YoY FX Neutral
THREE MONTHS ENDED JUNE 30, 2018 HIGHLIGHTS
• | Revenues: $1.0 billion, +19%; adjusted revenues excluding divested operations: $1.0 billion, +14%. |
• | Net income: $46 million; adjusted EBITDA excluding divested operations: $191 million, +11%. |
• | Diluted EPS: $0.50; adjusted EPS: $1.03. |
• | Operating cash flow: $174 million; free cash flow: $183 million. |
• | Sold several non-core assets for $406 million in net cash. |
• | Repurchased 0.5 million common shares for $68 million and paid down $554 million of debt. |
2018 FULL YEAR FINANCIAL OUTLOOK
The Company updated its GAAP EPS guidance and reiterated its Non-GAAP guidance:
• | Revenues $3.9-4.0 billion; adjusted revenues $3.9-4.0 billion. |
• | Net income $104-140 million; adjusted EBITDA $710-760 million. |
• | Diluted EPS $1.12-1.51; adjusted EPS $3.51-3.91. |
• | Operating cash flow $425-475 million; free cash flow $416-456 million. |
STAMFORD, Conn., August 1, 2018 — Gartner, Inc. (NYSE: IT), the world's leading research and advisory company, today reported results for the second quarter 2018 and updated its GAAP EPS guidance and reiterated its Non-GAAP guidance for full year 2018. Gene Hall, Gartner’s chief executive officer, commented, “We got off to a great start for the year and that continued through the second quarter. The leading indicators across all parts of our business are overwhelmingly positive, and we are well-positioned for sustained, long-term double digit growth."
CONFERENCE CALL INFORMATION
The Company will host a webcast call at 8:00 a.m. Eastern time on Wednesday, August 1, 2018 to discuss the Company’s financial results. The call will be available via the Internet by accessing the Company’s website at http://investor.gartner.com or by dialing 216-562-0463 and referencing the conference code 1894032. A replay and a transcript will be available for approximately 30 days following the call on the Company's website.
CONSOLIDATED RESULTS HIGHLIGHTS
($ in millions, except per share data) | Three Months Ended | ||||||||||||
June 30, | % | ||||||||||||
2018 | 2017 | Change | |||||||||||
GAAP Metrics: | |||||||||||||
Revenues | $ | 1,001 | $ | 844 | 19 | % | (a) | ||||||
Net income (loss) | 46 | (92 | ) | >100% | |||||||||
Diluted EPS | 0.50 | (1.03 | ) | >100% | |||||||||
Operating cash flow | $ | 174 | $ | 112 | 55 | % | |||||||
Non-GAAP Metrics: | |||||||||||||
Adjusted revenues excluding divested operations | $ | 1,001 | $ | 879 | 14 | % | |||||||
Adjusted EBITDA excluding divested operations | 191 | 172 | 11 | % | |||||||||
Adjusted EPS | 1.03 | 0.88 | 17 | % | |||||||||
Free cash flow | $ | 183 | $ | 129 | 42 | % | |||||||
(a) The foreign currency neutral percentage change in revenue was 16%.
ABOUT GARTNER
Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities and build the successful organizations of tomorrow. Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We’re trusted as an objective resource and critical partner by more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size. To learn more about how we help decision makers fuel the future of business, visit www.gartner.com.
CONTACT:
David Cohen, GVP, Investor Relations, Gartner
+1 203.316.6631/investor.relations@gartner.com
SEGMENT RESULTS HIGHLIGHTS
Unless indicated otherwise, our segment results below for the three and six months ended June 30, 2017 include the operating results of CEB Inc., beginning April 5, 2017, the date of acquisition. Additional information regarding our segment results can be obtained in our quarterly report on Form 10-Q filed with the SEC on August 1, 2018. Certain financial metrics contained in this Press Release are considered non-GAAP financial measures. Definitions of these non-GAAP financial measures are included in this Press Release under "Non-GAAP Financial Measures" and reconciliations under "Supplemental Information — Non-GAAP Reconciliations." In the tables below, some totals may not add due to rounding. In addition, percentage changes are based on the whole number and recalculation based on millions may yield a different result. In the second quarter of 2018 the Company divested its CEB Talent Assessment business and its CEB Workforce Survey & Analytics business. These two businesses were acquired in the CEB acquisition and were previously reported with the Talent Assessment & Other segment. As a result of these divestitures, the Company changed the segment name to Other.
Research
($ in millions)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change | FX Neutral | 2018 | 2017 | % Change | ||||||||||||||||||||
GAAP Metrics: | ||||||||||||||||||||||||||
Revenues | $ | 770 | $ | 614 | 25 | % | 23 | % | $ | 1,534 | $ | 1,125 | 36 | % | (a) | |||||||||||
Direct expense | 237 | 213 | 11 | % | 10 | % | 470 | 373 | 26 | % | ||||||||||||||||
Gross contribution | $ | 533 | $ | 401 | 33 | % | 29 | % | $ | 1,064 | $ | 752 | 42 | % | ||||||||||||
Contribution margin | 69 | % | 65 | % | 4 points | 69 | % | 67 | % | 2 points | ||||||||||||||||
Non-GAAP Metrics: | ||||||||||||||||||||||||||
Adjusted revenues | $ | 771 | $ | 675 | 14 | % | 12 | % | $ | 1,541 | $ | 1,330 | 16 | % | ||||||||||||
Adjusted contribution | 534 | 462 | 16 | % | 13 | % | 1,071 | 915 | 17 | % | ||||||||||||||||
Adjusted contribution margin | 69 | % | 68 | % | 1 point | 70 | % | 69 | % | 1 point | ||||||||||||||||
Business Measurements: | ||||||||||||||||||||||||||
Total contract value (b) | $ | 2,940 | $ | 2,632 | 12 | % | ||||||||||||||||||||
For GTS (c) : | ||||||||||||||||||||||||||
Contract value (b) | $ | 2,329 | $ | 2,045 | 14 | % | ||||||||||||||||||||
Client retention | 82 | % | 83 | % | (1) point | |||||||||||||||||||||
Wallet retention | 105 | % | 104 | % | 1 point | |||||||||||||||||||||
Client enterprises | 12,375 | 11,696 | 6 | % | ||||||||||||||||||||||
For GBS (c) : | ||||||||||||||||||||||||||
Contract value (b) | $ | 611 | $ | 587 | 4 | % | ||||||||||||||||||||
Client retention | 83 | % | 79 | % | 4 points | |||||||||||||||||||||
Wallet retention | 97 | % | 97 | % | — | |||||||||||||||||||||
Client enterprises | 5,659 | 5,619 | 1 | % | ||||||||||||||||||||||
(a) The foreign currency neutral percentage change in revenues was 33% for the six months.
(b) Contract value dollar amounts and percentages are foreign currency neutral.
(c) GTS includes sales to users and providers of technology. GBS includes sales to all other functional leaders.
Events
($ in millions)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change | FX Neutral | 2018 | 2017 | % Change | ||||||||||||||||||||
GAAP Metrics: | ||||||||||||||||||||||||||
Revenues | $ | 111 | $ | 91 | 22 | % | 21 | % | $ | 157 | $ | 126 | 24 | % | (a) | |||||||||||
Direct expense | 48 | 41 | 15 | % | 14 | % | 77 | 63 | 23 | % | ||||||||||||||||
Gross contribution | $ | 63 | $ | 50 | 28 | % | 27 | % | $ | 80 | $ | 63 | 26 | % | ||||||||||||
Contribution margin | 57 | % | 55 | % | 2 points | 51 | % | 50 | % | 1 point | ||||||||||||||||
Non-GAAP Metrics: | ||||||||||||||||||||||||||
Adjusted revenues | $ | 111 | $ | 95 | 17 | % | 16 | % | $ | 157 | $ | 131 | 20 | % | ||||||||||||
Adjusted contribution | 63 | 54 | 18 | % | 18 | % | 80 | 67 | 19 | % | ||||||||||||||||
Adjusted contribution margin | 57 | % | 57 | % | — | 51 | % | 51 | % | — | ||||||||||||||||
Business Measurements (b) : | ||||||||||||||||||||||||||
Number of destination events held | 24 | 26 | (8 | )% | ||||||||||||||||||||||
Number of destination events attendees | 20,896 | 18,539 | 13 | % | ||||||||||||||||||||||
(a) The foreign currency neutral percentage change in revenues was 22% for the six months.
(b) Single day, local events are excluded.
Consulting
($ in millions, except for Revenue per billable headcount, which is in thousands)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change | FX Neutral | 2018 | 2017 | % Change | ||||||||||||||||||||
GAAP Metrics: | ||||||||||||||||||||||||||
Revenues | $ | 96 | $ | 92 | 5 | % | 2 | % | $ | 179 | $ | 170 | 5 | % | (a) | |||||||||||
Direct expense | 62 | 61 | 4 | % | 1 | % | 121 | 115 | 5 | % | ||||||||||||||||
Gross contribution | $ | 34 | $ | 31 | 7 | % | 5 | % | $ | 58 | $ | 55 | 4 | % | ||||||||||||
Contribution margin | 35 | % | 34 | % | 1 point | 32 | % | 33 | % | (1) point | ||||||||||||||||
Non-GAAP Metrics: | ||||||||||||||||||||||||||
Adjusted revenues | $ | 96 | $ | 92 | 5 | % | 2 | % | $ | 179 | $ | 170 | 5 | % | ||||||||||||
Adjusted contribution | 34 | 31 | 7 | % | 5 | % | 58 | 55 | 5 | % | ||||||||||||||||
Adjusted contribution margin | 35 | % | 34 | % | 1 point | 32 | % | 32 | % | — | ||||||||||||||||
Business Measurements: | ||||||||||||||||||||||||||
Backlog | $ | 106 | $ | 91 | 16 | % | ||||||||||||||||||||
Quarterly utilization | 67 | % | 65 | % | 2 points | |||||||||||||||||||||
Quarterly billable headcount | 710 | 667 | 6 | % | ||||||||||||||||||||||
Revenue per billable headcount (b) | $ | 397 | $ | 378 | 5 | % | ||||||||||||||||||||
(a) The foreign currency neutral percentage change in revenues was 2% for the six months.
(b) Calculated on an average annualized basis. Dollar amounts are in thousands.
Other (previously called Talent Assessment & Other)
This segment was created concurrent with the CEB acquisition on April 5, 2017. The segment consisted of three primary businesses: the CEB Talent Assessment business, which was the largest business in the segment; the CEB Workforce Survey & Analytics business; and the CEB Challenger sales training business. The Company divested the CEB Talent Assessment and CEB Workforce Survey & Analytics businesses in second quarter 2018. As a result of the divestitures, the Company changed the name of the segment to Other.
($ in millions)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change | FX Neutral | 2018 | 2017 | % Change | ||||||||||||||||||||
GAAP Metrics: | ||||||||||||||||||||||||||
Revenues | $ | 23 | $ | 47 | (51 | )% | (51 | )% | $ | 94 | $ | 47 | 100 | % | (a) | |||||||||||
Direct expense | 8 | 30 | (73 | )% | (73 | )% | 36 | 30 | 20 | % | ||||||||||||||||
Gross contribution | $ | 15 | $ | 17 | (13 | )% | (10 | )% | $ | 58 | $ | 17 | >100% | |||||||||||||
Contribution margin | 65 | % | 37 | % | 28 points | 62 | % | 37 | % | 25 points | ||||||||||||||||
Non-GAAP Metrics: | ||||||||||||||||||||||||||
Adjusted revenues | $ | 23 | $ | 74 | (69 | )% | (69 | )% | $ | 97 | $ | 143 | (32 | )% | ||||||||||||
Adjusted contribution | 15 | 44 | (66 | )% | (66 | )% | 61 | 81 | (25 | )% | ||||||||||||||||
Adjusted contribution margin | 65 | % | 59 | % | 6 points | 63 | % | 57 | % | 6 points | ||||||||||||||||
Adjusted revenues excluding divested operations | $ | 22 | $ | 17 | 29 | % | 41 | % | $ | 42 | $ | 35 | 20 | % | ||||||||||||
Adjusted contribution excluding divested operations | $ | 15 | $ | 9 | 67 | % | 84 | % | $ | 27 | $ | 17 | 59 | % | ||||||||||||
Adjusted contribution margin excluding divested operations | 68 | % | 53 | % | 15 points | 64 | % | 49 | % | 15 points | ||||||||||||||||
(a) The foreign currency neutral percentage change in revenues was 98% for the six months.
FINANCIAL OUTLOOK FOR FULL YEAR 2018
The table below provides the Company's financial outlook for 2018:
($ in millions, except per share data) | ||||||||||
2018 Projected Range | ||||||||||
Revenues: | ||||||||||
Research | $ | 3,093 | — | $ | 3,143 | |||||
Events | 380 | — | 400 | |||||||
Consulting | 340 | — | 355 | |||||||
Other | 107 | — | 127 | |||||||
Total revenue | 3,920 | — | 4,025 | |||||||
Deferred revenue fair value adjustment | 10 | — | 10 | |||||||
Total adjusted revenue (Non-GAAP) (a) | $ | 3,930 | — | $ | 4,035 | |||||
Adjusted Segment Revenues: | ||||||||||
Research | $ | 3,100 | — | $ | 3,150 | |||||
Events | 380 | — | 400 | |||||||
Consulting | 340 | — | 355 | |||||||
Other | $ | 110 | — | $ | 130 | |||||
Income: | ||||||||||
Net income | $ | 104 | — | $ | 140 | |||||
Adjusted EBITDA (Non-GAAP) (a), (b) | 710 | — | 760 | |||||||
Diluted EPS | 1.12 | — | 1.51 | |||||||
Adjusted EPS (Non-GAAP) (a), (b) | $ | 3.51 | — | $ | 3.91 | |||||
Expense: | ||||||||||
Stock-based compensation expense | $ | 71 | — | $ | 71 | |||||
Depreciation | 80 | — | 80 | |||||||
Amortization of intangibles | 185 | — | 185 | |||||||
Deferred revenue fair value adjustment | 11 | — | 11 | |||||||
Acquisition and integration charges and other non-recurring items | 111 | — | 111 | |||||||
Gain on divestitures | $ | (25 | ) | — | $ | (25 | ) | |||
Interest expense | $ | 116 | — | $ | 116 | |||||
Amortization of deferred financing fees | 14 | — | 14 | |||||||
Total interest expense | $ | 130 | — | $ | 130 | |||||
Cash Flow: | ||||||||||
Operating cash flow | $ | 425 | — | $ | 475 | |||||
Acquisition, integration, and other non-recurring payments | 126 | — | 126 | |||||||
Capital expenditures | (135 | ) | — | (145 | ) | |||||
Free cash flow (Non-GAAP) (a) | $ | 416 | — | $ | 456 | |||||
(a) See below for definitions of our Non-GAAP metrics under "Non-GAAP Financial Measures."
(b) See below for reconciliations under "Supplemental Information - Non-GAAP Reconciliations."
FORWARD LOOKING STATEMENTS
Statements contained in this press release regarding the Company’s growth and prospects, projected financial results and all other statements in this release other than recitation of historical facts are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, estimates, uncertainties and other factors that may cause actual results to be materially different.
Such factors include, but are not limited to, the following: our ability to achieve and effectively manage growth, including our ability to integrate our acquisitions and consummate and integrate future acquisitions; our ability to pay our debt; our ability to maintain and expand our products and services; our ability to expand or retain our customer base; our ability to grow or sustain revenue from individual customers; our ability to attract and retain a professional staff of research analysts and consultants as well as experienced sales personnel upon whom we are dependent; our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; our ability to carry out our strategic initiatives and manage associated costs; our ability to successfully compete with existing competitors and potential new competitors; our ability to enforce or protect our intellectual property rights; additional risks associated with international operations including foreign currency fluctuations; the impact of restructuring and other charges on our businesses and operations; general economic conditions; risks associated with the creditworthiness and budget cuts of governments and agencies; the impact of the Tax Cuts and Jobs Act of 2017; and other factors described under “Risk Factors” contained in our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, which can be found on Gartner’s website at www.investor.gartner.com and the SEC’s website at www.sec.gov.
Forward-looking statements included herein speak only as of the date hereof and Gartner disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.
NON-GAAP FINANCIAL MEASURES
Certain financial measures used in this Press Release are not defined by generally accepted accounting principles ("GAAP") and as such are considered non-GAAP financial measures. We provide these measures to enhance the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future. Investors are cautioned that these non-GAAP financial measures may not be defined in the same manner by other companies and as a result may not be comparable to other similarly titled measures used by other companies. Also, these non-GAAP financial measures should not be construed as alternatives, or superior, to other measures determined in accordance with GAAP.
The Company's non-GAAP financial measures are as follows:
Adjusted Revenue: Represents GAAP revenue plus: (i) revenue for pre-acquisition period(s) from CEB, as applicable; (ii) the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues. The majority of the non-cash fair value adjustments on pre-acquisition deferred revenues is recognized ratably over the remaining period of the underlying revenue contract. We believe Adjusted Revenue is an important measure of our recurring operations as it provides a more accurate period-over-period comparison of trends in revenues, on both a consolidated and segment results basis.
Adjusted Contribution and Adjusted Contribution Margin: Adjusted Contribution represents GAAP contribution plus: (i) the contribution for pre-acquisition period(s) from CEB, as applicable; (ii) the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues. Adjusted contribution for the consolidated Company also reflects a reduction for unallocated bonus and fringe costs. The Adjusted Contribution Margin represents the contribution margin on Adjusted revenue. We believe Adjusted Contribution and Adjusted Contribution Margin are important measures of our recurring operations as they provide a more accurate and consistent period-over-period comparison of our segment results.
Adjusted Revenue, Adjusted Contribution, and Adjusted Contribution Margin - Excluding Divested Operations:
Represent the non-GAAP metrics defined above less results of divested operations. We believe these adjustments are important measures of our recurring operations as they provide a more accurate and consistent period-over-period comparison of our segment results.
Adjusted EBITDA: Represents GAAP net income (loss): (i) plus stock-based compensation expense; depreciation, amortization, and accretion on excess facilities obligations; the amortization of non-cash fair adjustments on pre-acquisition deferred revenues; acquisition and integration charges and certain other non-recurring items; (ii) plus the Adjusted EBITDA related to pre-acquisition periods for CEB, as applicable; and (iii) less gain on divestitures. We believe Adjusted EBITDA is an important measure of our recurring operations as it excludes items not representative of our core operating results.
Adjusted EBITDA Excluding Divested Operations: Represents Adjusted EBITDA as defined above less EBITDA from divested operations. We believe these adjustments are important measures of our recurring operations as they provide a more accurate and consistent period-over-period comparison of our segment results.
Adjusted Net Income: Represents GAAP net income (loss) adjusted for the impact of certain items directly related to acquisitions and other non-recurring items. These adjustments include (i) the amortization of acquired intangibles; (ii) acquisition and integration charges and certain other non-recurring items; (iii) the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues; (iv) the non-recurring impact from the enactment of the Tax Cuts and Jobs Act of 2017; (v) gain on divestitures; and (vi) certain other non-recurring items. We believe Adjusted Net Income is an important measure of our recurring operations as it excludes items not indicative of our core operating results.
Adjusted EPS: Represents Adjusted Net Income divided by the weighted-average diluted shares outstanding. We believe Adjusted EPS is an important measure of our recurring operations as it excludes items that may not be indicative of our core operating results.
Free Cash Flow: Represents cash provided by operating activities determined in accordance with GAAP: (i) plus payments for acquisition and integration items directly-related to our acquisitions and certain other non-recurring items; (ii) less payments for capital expenditures. We believe that Free Cash Flow is an important measure of the recurring cash generated by the Company’s core operations that may be available to be used to repay debt obligations, repurchase our stock, invest in future growth through new business development activities, or make acquisitions.
Foreign Currency Neutral (FX Neutral): We provide foreign currency neutral dollar amounts and percentages for our contract values, revenues, certain expenses, and other metrics. These foreign currency neutral dollar amounts and percentages eliminate the effects of exchange rate fluctuations and thus provide a more accurate and meaningful trend in the underlying data being measured. We calculate foreign currency neutral dollar amounts by converting the underlying amounts in local currency for different periods into U.S. dollars by applying the same foreign exchange rates.
SUPPLEMENTAL INFORMATION - NON-GAAP RECONCILIATIONS
The following tables provide reconciliations of certain Non-GAAP financial measures used in this Press Release with the most directly comparable GAAP measure. See "Non-GAAP Financial Measures" above for definitions of these Non-GAAP financial measures.
Reconciliation - GAAP Revenue to Adjusted Revenue, Adjusted Contribution, and Adjusted Contribution Margin (Unaudited; in millions. Some totals may not add due to rounding.):
For the three months ended June 30, 2018:
Research | Events | Consulting | Other | Unallocated | Total | |||||||||||||||||||
GAAP revenue | $ | 770 | $ | 111 | $ | 96 | $ | 23 | $ | — | $ | 1,001 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 1 | — | — | — | — | 1 | ||||||||||||||||||
Adjusted revenue | 771 | 111 | 96 | 23 | — | 1,002 | ||||||||||||||||||
Less: divested operations | — | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||
Adjusted revenue excluding divested operations | $ | 771 | $ | 111 | $ | 96 | $ | 22 | $ | — | $ | 1,001 | ||||||||||||
GAAP contribution | $ | 533 | $ | 63 | $ | 34 | $ | 15 | $ | — | $ | 645 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 1 | — | — | — | — | 1 | ||||||||||||||||||
Less: Unallocated expense (b) | — | — | — | — | (11 | ) | (11 | ) | ||||||||||||||||
Adjusted contribution | 534 | 63 | 34 | 15 | (11 | ) | 635 | |||||||||||||||||
Less: divested operations | — | — | — | — | — | — | ||||||||||||||||||
Adjusted contribution excluding divested operations | $ | 534 | $ | 63 | $ | 34 | $ | 15 | $ | (11 | ) | $ | 635 | |||||||||||
Adjusted contribution margin excluding divested operations | 69 | % | 57 | % | 35 | % | 68 | % | — | 63 | % | |||||||||||||
For the six months ended June 30, 2018:
Research | Events | Consulting | Other | Unallocated | Total | |||||||||||||||||||
GAAP revenue | $ | 1,534 | $ | 157 | $ | 179 | $ | 94 | $ | — | $ | 1,965 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 7 | — | — | 3 | — | 10 | ||||||||||||||||||
Adjusted revenue | 1,541 | 157 | 179 | 97 | — | 1,975 | ||||||||||||||||||
Less: divested operations | — | — | — | (55 | ) | — | (55 | ) | ||||||||||||||||
Adjusted revenue excluding divested operations | $ | 1,541 | $ | 157 | $ | 179 | $ | 42 | $ | — | $ | 1,920 | ||||||||||||
GAAP contribution | $ | 1,064 | $ | 80 | $ | 58 | $ | 58 | $ | — | $ | 1,260 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 7 | — | — | 3 | — | 10 | ||||||||||||||||||
Less: Unallocated expense (b) | — | — | — | — | (20 | ) | (20 | ) | ||||||||||||||||
Adjusted contribution | 1,071 | 80 | 58 | 61 | (20 | ) | 1,250 | |||||||||||||||||
Less: divested operations | — | — | — | (34 | ) | — | (34 | ) | ||||||||||||||||
Adjusted contribution excluding divested operations | $ | 1,071 | $ | 80 | $ | 58 | $ | 27 | $ | (20 | ) | $ | 1,216 | |||||||||||
Adjusted contribution margin excluding divested operations | 70 | % | 51 | % | 32 | % | 64 | % | — | 63 | % | |||||||||||||
(a) Consists of the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues. The majority of the pre-acquisition deferred revenue is recognized ratably over the remaining period of the underlying revenue contract.
(b) Consists of certain unallocated costs.
For the three months ended June 30, 2017:
Research | Events | Consulting | Other | Unallocated | Total | |||||||||||||||||||
GAAP revenue | $ | 614 | $ | 91 | $ | 92 | $ | 47 | $ | — | $ | 844 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 61 | 4 | — | 27 | — | 92 | ||||||||||||||||||
Adjusted revenue | 675 | 95 | 92 | 74 | — | 936 | ||||||||||||||||||
Less: divested operations | — | — | — | (57 | ) | — | (57 | ) | ||||||||||||||||
Adjusted revenue excluding divested operations | $ | 675 | $ | 95 | $ | 92 | $ | 17 | $ | — | $ | 879 | ||||||||||||
GAAP contribution | $ | 401 | $ | 50 | $ | 31 | $ | 17 | $ | — | $ | 499 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 61 | 4 | — | 27 | — | 92 | ||||||||||||||||||
Less: Unallocated expense (b) | — | — | — | — | (7 | ) | (7 | ) | ||||||||||||||||
Adjusted contribution | 462 | 54 | 31 | 44 | (7 | ) | 584 | |||||||||||||||||
Less: divested operations | — | — | — | (35 | ) | — | (35 | ) | ||||||||||||||||
Adjusted contribution excluding divested operations | $ | 462 | $ | 54 | $ | 31 | $ | 9 | $ | (7 | ) | $ | 549 | |||||||||||
Adjusted contribution margin excluding divested operations | 68 | % | 57 | % | 34 | % | 53 | % | — | 62 | % | |||||||||||||
For the six months ended June 30, 2017:
Research | Events | Consulting | Other | Unallocated | Total | |||||||||||||||||||
GAAP revenue | $ | 1,125 | $ | 126 | $ | 170 | $ | 47 | $ | — | $ | 1,469 | ||||||||||||
Add: Pre-acquisition revenue | 144 | 1 | — | 69 | — | 214 | ||||||||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 61 | 4 | — | 27 | — | 92 | ||||||||||||||||||
Adjusted revenue | 1,330 | 131 | 170 | 143 | — | 1,775 | ||||||||||||||||||
Less: divested operations | — | — | — | (108 | ) | — | (108 | ) | ||||||||||||||||
Adjusted revenue excluding divested operations | $ | 1,330 | $ | 131 | $ | 170 | $ | 35 | $ | — | $ | 1,667 | ||||||||||||
GAAP contribution | $ | 752 | $ | 63 | $ | 55 | $ | 17 | $ | — | $ | 888 | ||||||||||||
Add: Pre-acquisition contribution | 102 | — | — | 37 | — | 139 | ||||||||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 61 | 4 | — | 27 | — | 92 | ||||||||||||||||||
Less: Unallocated expense (b) | — | — | — | — | (8 | ) | (8 | ) | ||||||||||||||||
Adjusted contribution | 915 | 67 | 55 | 81 | (8 | ) | 1,111 | |||||||||||||||||
Less: divested operations | — | — | — | (64 | ) | — | (64 | ) | ||||||||||||||||
Adjusted contribution excluding divested operations | $ | 915 | $ | 67 | $ | 55 | $ | 17 | $ | (8 | ) | $ | 1,047 | |||||||||||
Adjusted contribution margin excluding divested operations | 69 | % | 51 | % | 32 | % | 49 | % | — | % | 63 | % | ||||||||||||
(a) Consists of the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues. The majority of the pre-acquisition deferred revenue is recognized ratably over the remaining period of the underlying revenue contract.
(b) Consists of certain unallocated costs.
Reconciliation - GAAP Net Income (Loss) to Adjusted EBITDA (Unaudited; in millions):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP net income (loss) | $ | 46 | $ | (92 | ) | $ | 26 | $ | (56 | ) | ||||||
Interest expense, net | 37 | 44 | 72 | 50 | ||||||||||||
Gain on divestitures | (25 | ) | — | (25 | ) | — | ||||||||||
Other (income) expense, net | (1 | ) | — | (2 | ) | (1 | ) | |||||||||
Tax (benefit) provision | 29 | (50 | ) | 6 | (38 | ) | ||||||||||
Operating income (loss) | 86 | (98 | ) | 77 | (45 | ) | ||||||||||
Adjustments: | ||||||||||||||||
Stock-based compensation expense (a) | 14 | 16 | 44 | 39 | ||||||||||||
Depreciation, accretion, and amortization (b) | 67 | 84 | 136 | 100 | ||||||||||||
Amortization of deferred revenue fair value adjustment (c) | 1 | 91 | 10 | 92 | ||||||||||||
Acquisition and integration charges and other non-recurring items (d) | 23 | 92 | 85 | 105 | ||||||||||||
Subtotal | 191 | 185 | 352 | 291 | ||||||||||||
Plus: CEB pre-acquisition EBITDA (e) | — | — | — | 36 | ||||||||||||
Adjusted EBITDA | 191 | 185 | 352 | 327 | ||||||||||||
Less: Divested operations EBITDA (f) | — | (13 | ) | (8 | ) | (19 | ) | |||||||||
Adjusted EBITDA excluding divested operations | $ | 191 | $ | 172 | $ | 344 | $ | 308 | ||||||||
(a) Consists of charges for stock-based compensation awards.
(b) Includes depreciation expense, accretion on excess facilities obligations, and amortization of intangibles.
(c) Consists of the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues. The majority of the pre-acquisition deferred revenue is recognized ratably over the remaining period of the underlying revenue contract.
(d) Consists of incremental and directly-related charges from acquisitions and other non-recurring items.
(e) Consists of CEB Adjusted EBITDA for the period prior to the acquisition. The Company compiled the EBITDA amounts from unaudited financial data provided by CEB in accordance with Gartner's EBITDA definition.
(f) Consists of Adjusted EBITDA from divested operations.
Reconciliation - GAAP Net Income (Loss) to Adjusted Net Income and Adjusted EPS (Unaudited; in millions, except per share amounts):
Three Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
Amount | Per share | Amount | Per share | |||||||||||||
GAAP net income (loss) | $ | 46 | $ | 0.50 | $ | (92 | ) | $ | (1.03 | ) | ||||||
Acquisition and other adjustments: | ||||||||||||||||
Amortization of acquired intangibles (a) | 50 | 0.54 | 65 | 0.72 | ||||||||||||
Amortization of deferred revenue fair value adjustment (b) | 1 | 0.01 | 91 | 1.01 | ||||||||||||
Acquisition & integration charges and other non-recurring items (c), (d) | 31 | 0.34 | 101 | 1.11 | ||||||||||||
Gain on divestitures | (25 | ) | (0.28 | ) | — | — | ||||||||||
Impact of Tax Cuts & Jobs Act of 2017 - provisional adjustment | 1 | 0.01 | — | — | ||||||||||||
Tax impact of adjustments (e) | (9 | ) | (0.09 | ) | (86 | ) | (0.95 | ) | ||||||||
Rounding | — | — | — | 0.02 | ||||||||||||
Adjusted net income and Adjusted EPS (f) | $ | 95 | $ | 1.03 | $ | 79 | $ | 0.88 | ||||||||
Six Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
Amount | Per share | Amount | Per share | |||||||||||||
GAAP net income (loss) | $ | 26 | $ | 0.29 | $ | (56 | ) | $ | (0.65 | ) | ||||||
Acquisition and other adjustments: | ||||||||||||||||
Amortization of acquired intangibles (a) | 102 | 1.10 | 72 | 0.82 | ||||||||||||
Amortization of deferred revenue fair value adjustment (b) | 10 | 0.11 | 92 | 1.05 | ||||||||||||
Acquisition & integration charges and other non-recurring items (c), (d) | 96 | 1.04 | 114 | 1.30 | ||||||||||||
Gain on divestitures | (25 | ) | (0.28 | ) | — | — | ||||||||||
Impact of Tax Cuts and Jobs Act of 2017 - provisional adjustment | 1 | 0.01 | — | — | ||||||||||||
Tax impact of adjustments (e) | (49 | ) | (0.53 | ) | (92 | ) | (1.04 | ) | ||||||||
Rounding | — | 0.01 | — | 0.01 | ||||||||||||
Adjusted net income and Adjusted EPS (f) | $ | 161 | $ | 1.75 | $ | 130 | $ | 1.49 | ||||||||
(a) Consists of non-cash amortization charges from acquired intangibles.
(b) Consists of the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues. The majority of the pre-acquisition deferred revenue is recognized ratably over the remaining period of the underlying revenue contract.
(c) Consists of incremental and directly-related charges related to acquisitions and other non-recurring items.
(d) Includes the amortization and write-off of deferred financing fees, which is recorded in Interest expense, net in the Condensed Consolidated Statement of Operations and in the Adjusted EBITDA table.
(e) The effective tax rates on the adjustments were 15% and 27% for the three and six months ended June 30, 2018, respectively, and 33% for both the three and six months ended June 30, 2017.
(f) Adjusted EPS was calculated based on 92.2 million and 90.6 million diluted shares for the three months ended June 30, 2018 and 2017, respectively, and 92.3 million and 87.4 million diluted shares for the six months ended June 30, 2018 and 2017, respectively.
Reconciliation - GAAP Cash Provided by Operating Activities to Free Cash Flow (Unaudited; in millions):
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | (a) | |||||||||||||
GAAP cash provided by operating activities | $ | 174 | $ | 112 | $ | 177 | $ | 83 | |||||||||
Adjustments: | |||||||||||||||||
Plus: cash paid for acquisition, integration, and other non-recurring items | 31 | 48 | 73 | 65 | |||||||||||||
Less: cash paid for capital expenditures | (22 | ) | (31 | ) | (40 | ) | (42 | ) | |||||||||
Free Cash Flow | $ | 183 | $ | 129 | $ | 210 | $ | 106 | |||||||||
(a) The six months ended June 30, 2017 excludes pre-acquisition CEB.
Financial Outlook Reconciliation - GAAP Net Income to Adjusted EBITDA (Unaudited; in millions):
2018 Full Year Guidance | ||||||||
Low | High | |||||||
Net income | $ | 104 | $ | 140 | ||||
Interest expense, net (a) | 130 | 130 | ||||||
Other (income) expense, net | 2 | 2 | ||||||
Gain on divestitures | (25 | ) | (25 | ) | ||||
Tax provision | 41 | 55 | ||||||
Operating income | 252 | 302 | ||||||
Normalizing adjustments: | ||||||||
Stock-based compensation expense | 71 | 71 | ||||||
Depreciation, accretion, and amortization | 266 | 266 | ||||||
Deferred revenue fair value adjustment | 10 | 10 | ||||||
Acquisition and integration charges and other nonrecurring items | 111 | 111 | ||||||
Adjusted EBITDA | $ | 710 | $ | 760 | ||||
(a) Includes $14.0 million of amortization of deferred financing fees, which is reported in Interest expense, net.
Financial Outlook Reconciliation - GAAP EPS to Adjusted EPS (Unaudited):
2018 Full Year Guidance | ||||||||
Low | High | |||||||
GAAP EPS | $ | 1.12 | $ | 1.51 | ||||
Normalizing adjustments: | ||||||||
Amortization of acquired intangibles | 1.49 | 1.49 | ||||||
Acquisition and integration charges and other nonrecurring items | 1.00 | 1.00 | ||||||
Deferred revenue fair value adjustment | 0.08 | 0.08 | ||||||
Gain on divestitures | (0.18 | ) | (0.18 | ) | ||||
Rounding | — | 0.01 | ||||||
Adjusted EPS | $ | 3.51 | $ | 3.91 | ||||
GARTNER, INC.
Condensed Consolidated Balance Sheets
(Unaudited; in thousands)
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 141,805 | $ | 538,908 | |||
Fees receivable, net | 1,083,990 | 1,176,843 | |||||
Deferred commissions | 183,481 | 205,260 | |||||
Prepaid expenses and other current assets | 199,208 | 124,632 | |||||
Assets held-for-sale | — | 542,965 | |||||
Total current assets | 1,608,484 | 2,588,608 | |||||
Property, equipment and leasehold improvements, net | 225,901 | 221,507 | |||||
Goodwill | 2,974,513 | 2,987,294 | |||||
Intangible assets, net | 1,177,297 | 1,292,022 | |||||
Other assets | 166,742 | 193,742 | |||||
Total Assets | $ | 6,152,937 | $ | 7,283,173 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 542,071 | $ | 666,821 | |||
Deferred revenues | 1,687,724 | 1,630,198 | |||||
Current portion of long-term debt | 284,009 | 379,721 | |||||
Liabilities held-for-sale | — | 145,845 | |||||
Total current liabilities | 2,513,804 | 2,822,585 | |||||
Long-term debt, net of deferred financing fees | 2,146,829 | 2,899,124 | |||||
Other liabilities | 570,872 | 577,999 | |||||
Total Liabilities | 5,231,505 | 6,299,708 | |||||
Stockholders’ Equity | |||||||
Preferred stock | — | — | |||||
Common stock | 82 | 82 | |||||
Additional paid-in capital | 1,798,075 | 1,761,383 | |||||
Accumulated other comprehensive (loss) income, net | (24,051 | ) | 1,508 | ||||
Accumulated earnings | 1,659,658 | 1,647,284 | |||||
Treasury stock | (2,512,332 | ) | (2,426,792 | ) | |||
Total Stockholders’ Equity | 921,432 | 983,465 | |||||
Total Liabilities and Stockholders’ Equity | $ | 6,152,937 | $ | 7,283,173 | |||
GARTNER, INC.
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share data)
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Research | $ | 770,314 | $ | 613,732 | $ | 1,534,238 | $ | 1,125,038 | |||||||
Events | 111,253 | 91,205 | 157,340 | 126,474 | |||||||||||
Consulting | 96,458 | 91,693 | 179,354 | 170,287 | |||||||||||
Other | 23,311 | 47,101 | 93,969 | 47,101 | |||||||||||
Total revenues | 1,001,336 | 843,731 | 1,964,901 | 1,468,900 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of services and product development | 367,637 | 352,004 | 724,846 | 589,613 | |||||||||||
Selling, general and administrative | 460,803 | 408,226 | 948,548 | 712,470 | |||||||||||
Depreciation | 16,711 | 18,057 | 33,121 | 28,297 | |||||||||||
Amortization of intangibles | 50,127 | 65,500 | 101,773 | 71,790 | |||||||||||
Acquisition and integration charges | 19,962 | 98,332 | 79,228 | 111,604 | |||||||||||
Total costs and expenses | 915,240 | 942,119 | 1,887,516 | 1,513,774 | |||||||||||
Operating income (loss) | 86,096 | (98,388 | ) | 77,385 | (44,874 | ) | |||||||||
Interest expense, net | (37,604 | ) | (43,956 | ) | (72,663 | ) | (49,862 | ) | |||||||
Gain from divested operations | 25,460 | — | 25,460 | — | |||||||||||
Other income (expense), net | 1,120 | (407 | ) | 2,019 | 482 | ||||||||||
Income (loss) before income taxes | 75,072 | (142,751 | ) | 32,201 | (94,254 | ) | |||||||||
Provision (benefit) for income taxes | 28,802 | (50,470 | ) | 5,518 | (38,406 | ) | |||||||||
Net income (loss) | $ | 46,270 | $ | (92,281 | ) | $ | 26,683 | $ | (55,848 | ) | |||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 0.51 | $ | (1.03 | ) | $ | 0.29 | $ | (0.65 | ) | |||||
Diluted | $ | 0.50 | $ | (1.03 | ) | $ | 0.29 | $ | (0.65 | ) | |||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 91,048 | 89,297 | 91,026 | 86,066 | |||||||||||
Diluted | 92,156 | 89,297 | 92,252 | 86,066 | |||||||||||
GARTNER, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited; in thousands)
Six Months Ended | |||||||
June 30, | |||||||
2018 | 2017 | ||||||
Operating activities: | |||||||
Net income (loss) | $ | 26,683 | $ | (55,848 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 134,894 | 100,087 | |||||
Stock-based compensation expense | 45,300 | 53,573 | |||||
Deferred taxes | (18,019 | ) | (78,004 | ) | |||
Gain on divestitures | (25,460 | ) | — | ||||
Amortization and write-off of deferred financing fees | 10,601 | 9,475 | |||||
Changes in assets and liabilities, net of acquisitions and divestitures | 2,748 | 53,435 | |||||
Cash provided by operating activities | 176,747 | 82,718 | |||||
Investing activities: | |||||||
Additions to property, equipment and leasehold improvements | (40,126 | ) | (41,627 | ) | |||
Acquisitions - cash paid (net of cash acquired) | — | (2,604,178 | ) | ||||
Divestitures - cash received | 405,542 | — | |||||
Other | 1,000 | — | |||||
Cash provided by (used in) investing activities | 366,416 | (2,645,805 | ) | ||||
Financing activities: | |||||||
Proceeds from employee stock purchase plan | 7,627 | 5,662 | |||||
Proceeds from borrowings | — | 2,885,000 | |||||
Payments for deferred financing fees | — | (51,170 | ) | ||||
Payments on borrowings | (858,609 | ) | (119,812 | ) | |||
Purchases of treasury stock | (96,271 | ) | (33,786 | ) | |||
Cash (used in) provided by financing activities | (947,253 | ) | 2,685,894 | ||||
Net (decrease) increase in cash and cash equivalents and restricted cash | (404,090 | ) | 122,807 | ||||
Effects of exchange rates on cash and cash equivalents and restricted cash | (3,012 | ) | 10,406 | ||||
Cash and cash equivalents and restricted cash, beginning of period | 567,058 | 499,354 | |||||
Cash and cash equivalents and restricted cash, end of period | $ | 159,956 | $ | 632,567 | |||
1