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, 2007

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, 2007, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $1,721,540,662 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 98,533,148 as of January 31, 2008.

DOCUMENTS INCORPORATED BY REFERENCE

Document		Parts Into Which Incorporated
Proxy Statement for the Annual Meeting of Stockholders to be held June 5, 2008 (Proxy Statement)		Part III

 

 

GARTNER, INC.
2007 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

PART I
Item 1.		Business			3
Item 1A.		Risk Factors			6
Item 1B.		Unresolved Staff Comments			10
Item 2.		Properties			10
Item 3.		Legal Proceedings			10
Item 4.		Submission of Matters to a Vote of Security Holders			10
PART II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of			11
		Equity Securities
Item 6.		Selected Consolidated Financial Data			12
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			13
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			23
Item 8.		Consolidated Financial Statements and Supplementary Data			24
Item 9.		Changes In and Disagreements With Accountants on Accounting and Financial Disclosure			24
Item 9A.		Controls and Procedures			24
Item 9B.		Other Information			25
PART III
Item 10.		Directors, Executive Officers and Corporate Governance			26
Item 11.		Executive Compensation			26
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			26
Item 13.		Certain Relationships and Related Transactions and Director Independence			26
Item 14.		Principal Accountant Fees and Services			26
PART IV
Item 15.		Exhibits and Financial Statement Schedules			27
Index to Consolidated Financial Statements					29
Report of Independent Registered Public Accounting Firm					30
Report of Independent Registered Public Accounting Firm					31
Consolidated Balance Sheets					32
Consolidated Statements of Operations					33
Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss)					34
Consolidated Statements of Cash Flows					35
Notes to Consolidated Financial Statements					36
Signatures					55
EX-21.1: SUBSIDIARIES
EX-23.1: CONSENT OF KPMG LLP
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32: CERTIFICATION

PART I

ITEM 1. BUSINESS.

GENERAL

Gartner, Inc. is a leading research and advisory firm that helps executives use technology to build, guide and grow their enterprises. We offer independent and objective research and analysis on information technology, computer hardware, software, communications and related technology industries (the “IT industry”). We provide comprehensive coverage of the IT industry to approximately 10,000 client organizations, including approximately 400 of the Fortune 500 companies, across 75 countries. Our client base consists primarily of chief information officers (“CIOs”) and other senior IT and business executives from a wide variety of enterprises, government agencies and the investment community. Unless otherwise indicated or unless the context requires otherwise, all references in this Form 10-K to “Gartner,” “Company,” “we,” “us,” “our” or similar terms mean Gartner, Inc. and its subsidiaries on a consolidated basis.

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 channels, depending on an individual client’s specific business needs, preferences and objectives:

•

Research — Provides research content and advice for IT professionals, technology companies and the investment community in the form of reports and briefings, 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 known as “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. 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 their 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 community 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 for 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 over 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 principal products and services are Research, Consulting and Events:

•		RESEARCH. The Gartner global research product is the fundamental building block for all Gartner services. 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 period of time. The research contracts are renewed on an ongoing basis; to date, we have enjoyed strong research client retention, with 82% of users renewing their contracts in 2007, as well as 101% wallet retention, a measure of the amount of contract value we have retained with clients over 2006.
		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 3,700 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 Best Practices Councils are exclusive peer exchange communities, focused on specific functional areas of IT, that bring together senior business and IT leaders in major U.S. and international companies for exclusive events, multi-client research studies and ad hoc peer exchange forums. These programs allow clients to learn from the experiences of their peers and share best practices in functional areas such architecture and IT planning, emerging technology management, enterprise application, information security, infrastructure management, and IT sourcing management in order to solve common business problems, improve corporate performance and drive greater effectiveness.
		Our End-User Programs focus on the needs of the IT end-user market with a variety of product offerings. Gartner for IT Leaders, a product suite we rolled out in 2006, 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 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.
•		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 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 and 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 also provide participants with an opportunity to interact with business executives from the world’s leading technology companies. Except for certain invitation-only events, attendance is not limited to Gartner clients. In 2007, the 78 Gartner events throughout the United States, Europe, Latin America and the Asia/Pacific region attracted over 44,000 attendees.
		Gartner conferences attract high-level IT and business professionals ready to buy technology products and services, and provide a commercial opportunity for attendees to interact with this audience. Gartner Symposium, offered each spring and fall in various international locations, is a large, strategic conference for senior IT and business professionals. Symposium is 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.

Note 13 — Segment Information in the Notes to the Consolidated Financial Statements contained within this Form 10-K includes 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 more than a quarter of a century, we have been providing critical, trusted insight under the Gartner name.

•

Our Global Footprint and Established Customer Base — We have a global presence with operations in 75 countries on six continents. Sales outside of North America accounted for approximately 43% of our 2007 revenues.

•

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, 2007, we had 4,006 employees, of which 691 were located at our headquarters in Stamford, Connecticut; 1,742 were located at our other facilities in the United States; and 1,573 were located outside of the United States. Our employees may be subject to collective bargaining agreements at a company or industry level in those 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.

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 the economy. The following section discusses many, but not all, of these risks and uncertainties.

Risks related to our business

Our operating results could be negatively impacted if the IT industry experiences an economic down cycle.

Our revenues and results of operations are influenced by economic conditions in general and more particularly by business conditions in the IT industry. A general economic downturn or recession, anywhere in the world, could negatively affect demand for our products and services and may substantially reduce existing and potential client information technology-related budgets. Such a downturn could materially and adversely affect our business, financial condition and results of operations, including the ability to maintain client retention, wallet retention and consulting utilization rates, and achieve contract value and consulting backlog growth.

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 that can be found 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. However, 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 introduce the new products and services that we need to remain competitive.

The market for our products and services is characterized by rapidly changing needs for information and analysis. To maintain our competitive position, we must continue to enhance and approve our products and services, develop or acquire new 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.

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 57% and 54% of our revenues for 2007 and 2006, respectively. If we are not able to renew at historical rates, and do not generate new sales in an amount sufficient to account for the shortfall arising from a decrease in renewals, our revenues will be negatively 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% and 81% at both December 31, 2007 and 2006, respectively, there can be no guarantee that we will continue to maintain this rate of client renewals.

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.

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% and 29% of our revenues for 2007 and 2006, respectively. 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 if we are unable to obtain desirable dates and locations.

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, economic slowdowns, terrorist attacks, 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, and foreign governments and their agencies. At December 31, 2007, approximately $190.0 million 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 funding authorizations and 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.

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 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 45% of our revenues for 2007 and 2006 were derived from sales outside of the U.S. Revenues earned outside the U.S. are transacted in local currencies, which generally fluctuate 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.

The costs of servicing our outstanding debt obligations could impair our future operating results.

We have a $180.0 million term loan as well as 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.

At December 31, 2007, $394.0 million was outstanding on this facility. The affirmative, negative and financial covenants of the credit facility could limit our future financial flexibility. The associated debt service costs of this facility 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, cash flow from operations, 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 needs.

We may, however, require additional cash resources due to changed business conditions, implementation of our strategy and stock repurchase program, 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 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, patent, 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, including our acquisition of META that we completed on April 1, 2005. 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 provide 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. 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 provided.

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, which typically occurs in the fourth calendar quarter, the extent of completion of consulting engagements, the timing of symposia and other events, which also occur to a greater extent in the fourth calendar quarter, the amount of new business generated, the mix of domestic and international business, 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.

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

ValueAct Capital and affiliates (“ValueAct”) owned approximately 21.0% of our common stock as of December 31, 2007, while Silver Lake Partners and affiliates (“Silver Lake”) owned approximately 13.4% on the same date. While neither Silver Lake nor ValueAct individually holds a majority of our outstanding shares, they may be able, either individually or together, to exercise significant influence over matters requiring stockholder approval, including the election of directors and the approval of mergers, consolidations and sales of our assets. Their interests may differ from the interests of other stockholders. Additionally, representatives of Silver Lake and ValueAct in the aggregate presently hold three seats on our Board of Directors.

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 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, 2007, the aggregate number of shares of our common stock issuable pursuant to outstanding grants awarded under these plans was approximately 20.9 million shares (approximately 8.8 million of which have vested). In addition, approximately 7.1 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.

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. These facilities accommodate research and analysis, marketing, sales, client support, production, and corporate services and administration. The leases on these facilities expire in 2010 but the leases do contain renewal options. We 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 2008 Annual Meeting of Stockholders will be held on June 5, 2008 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 31, 2008, there were approximately 2,800 holders of record of our common stock, which trades 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:

		2007								2006
		High				Low				High				Low
Quarter ended March 31		$	24.00			$	19.44			$	14.62			$	12.66
Quarter ended June 30			28.44				23.57				16.63				12.65
Quarter ended September 30			25.07				19.98				17.73				12.80
Quarter ended December 31			26.59				16.10				21.40				17.12

DIVIDEND POLICY

We currently do not pay cash dividends on our common stock. While subject to periodic review, the current policy of our Board of Directors is to retain all earnings primarily to provide funds for continued growth. 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 2007. All shares repurchased were added to treasury stock. All repurchases were made pursuant to a publicly announced $200.0 million share repurchase program that was authorized by the Board of Directors in February 2007. In February 2008, the Board of Directors authorized an additional $250.0 million for share repurchases, which will supplement what remains available under the 2007 $200.0 million repurchase authorization. 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			46,518			$	21.51				46,518
November			4,000,400				19.08				4,000,400
December			1,435,900				18.13				1,435,900
Total fourth quarter 2007 (1)			5,482,818			$	18.85				5,482,818			$	270,100	(2)

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)		2007				2006				2005				2004				2003
STATEMENT OF OPERATIONS DATA
Revenues:
Research		$	673,335			$	571,217			$	523,033			$	480,486			$	466,907
Consulting			325,030				305,231				301,074				259,419				258,628
Events			180,788				169,434				151,339				138,393				119,355
Other			10,045				14,439				13,558				15,523				13,556
Total revenues			1,189,198				1,060,321				989,004				893,821				858,446
Operating income			133,122				103,250				25,280				42,659				47,333
Income (loss) from continuing operations			73,553				58,192				(2,437	)			16,889				23,589
Net income (loss)		$	73,553			$	58,192			$	(2,437	)		$	16,889			$	23,589
PER SHARE DATA
Basic income (loss) per share:		$	0.71			$	0.51			$	(0.02	)		$	0.14			$	0.26
Diluted income (loss) per share:		$	0.68			$	0.50			$	(0.02	)		$	0.13			$	0.25
Weighted average shares outstanding
Basic			103,613				113,071				112,253				123,603				91,123
Diluted			108,328				116,203				112,253				126,326				92,579
OTHER DATA
Cash and cash equivalents		$	109,945			$	67,801			$	70,282			$	160,126			$	229,962
Total assets			1,133,210				1,039,793				1,026,617				861,194				918,732
Long-term debt			157,500				150,000				180,000				150,000				—
Stockholders’ equity			17,498				26,318				146,588				130,048				374,790

The following items impact the comparability of our consolidated data from continuing operations:

•

The results of META Group, Inc. (“META”) are included in our consolidated results beginning April 1, 2005, the date of acquisition.

•

We repurchased 8.4 million, 14.9 million, 0.8 million, 26.6 million, and 5.0 million of our common shares in 2007, 2006, 2005, 2004, and 2003, respectively.

•

In 2003 certain long-term debt held by Silver Lake was converted into equity.

•

We had pre-tax stock compensation expense of $24.1 million and $16.7 million in 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 charges related to the integration of META.

•

We recorded Other charges, which includes costs for severance, excess facilities, and other items, on a pre-tax basis, of $9.1 million in 2007, $0 in 2006, $29.2 million in 2005, $35.8 million in 2004, and $29.7 million in 2003.

•

We recorded pre-tax goodwill impairment charges of $2.7 million in 2004. In the same year, we had $3.1 million of pre-tax foreign currency charges related to the closing of certain operations in South America.

•

We recorded pre-tax charges for the impairment of investments of $5.3 million in 2005, $3.0 million in 2004, and $0.9 million for 2003.

•

We had pre-tax losses (gains) on investments or assets and associated insurance claims of $(0.5) million in 2005, $5.5 million in 2003, and $0.5 million in 2002.

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

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.

OVERVIEW

Gartner, Inc. is a leading research and advisory firm 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 Fortune 500 companies, across 75 countries. Our client base consists primarily of CIOs and other senior IT and business executives from a wide variety of enterprises, government agencies and the investment community.

We employ a diversified business model that utilizes and leverages the breadth and depth of our research intellectual capital while enabling us to maintain and grow our market-leading position and brand franchise. The foundation for our business model is our ability to create and distribute our unique, proprietary research content as broadly as possible via:

	•		published reports and briefings,
	•		consulting and advisory services, and
	•		hosting symposia, conferences and exhibitions.

In early 2005, we undertook an initiative to better utilize the intellectual capital associated with our core research product. 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.

We intend to maintain a balance between (1) pursuing opportunities and applying resources with a strict focus on growing our three core businesses and (2) generating profitability through a streamlined cost structure.

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.

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

BUSINESS SEGMENT		BUSINESS MEASUREMENTS
		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

During 2007 we continued to execute on the strategy we launched in 2005 to accelerate the growth of our Research business while at the same time maintaining the growth and profitability of our Consulting and Events businesses. The cornerstones of this strategy are to produce extraordinary research content, deliver innovative and highly differentiated product offerings, enhance our sales capability, provide world class client service and improve operational effectiveness. The success of this strategy is evident in our 2007 financial results, which includes total revenue growth of 12%, earnings per share growth of 36% and cash flow from operations growth of 40%.

We had net income of $73.6 million in 2007, or $0.68 per diluted share, compared to $0.50 per diluted share for the prior year. The $0.68 per diluted share for 2007 includes a net charge of $(0.04) recorded in the second quarter of 2007 for certain non-operating and other items. We generated $148.3 million of operating cash flow in 2007, and we ended the year with $109.9 million in cash.

In our Research business we executed on our strategy of accelerating growth by introducing new and innovative product offerings and expanding our sales force. Revenue was up 18% in 2007, with growth occurring across our entire product portfolio and geographic regions. Our sales force of 806 associates is up approximately 22% over the prior year end. Research contract value was $752.5 million at December 31, 2007, up 18% from the prior year end, and was up 14% excluding the impact of foreign currency. Contract value increased at least 18% in each of the four quarters of 2007 on a year-over-year basis, reflecting the successful execution of our strategy to accelerate the growth of our Research business. Both our Research client retention rate and wallet retention rate remained strong at 82% and 101%, respectively.

In our Consulting business we continue to focus on achieving maximum profitability by targeting the most profitable accounts and geographies. Revenue from our Consulting business was up 6% in 2007, to $325.0 million, despite lower headcount. Consulting backlog at December 31, 2007 was $121.4 million, up 11% from the $109.6 at December 31, 2006. The consultant utilization rate increased 5 points in 2007, to 69% from 64% in the prior year, reflecting improved engagement management and reduced headcount. The hourly billing rate remained above $350 per hour while the average annualized revenue per billable headcount was up approximately 5% from the prior year. Billable headcount was 472 at December 31, 2007, down about 10% year-over-year, primarily due to the exit from our Asian consulting operations.

Our Events business strategy is to continue to focus on managing the Events portfolio by retaining successful events that are content driven and introducing promising new events that will yield greater profitability, while eliminating less profitable and less attended events. Events revenue for 2007 was up 7%, with 78 events held in the year as compared to 74 in the prior year, with attendance up about 8%. In furtherance of our Events strategy, on February 20, 2008 we announced that we had contracted to sell our Vision Events portfolio of events (See Note 15 — Subsequent Events in the Notes to the Consolidated Financial Statements).

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

We also continued our focus on enhancing shareholder value through the continued evolution of our capital structure. During 2007 we repurchased 8.4 million shares of our common stock, bringing the total number of shares repurchased since January 1, 2005 to 24.1 million shares. In January 2007 we closed on a new credit facility which increased our total debt capacity to $480.0 million.

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 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”). 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 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;
	•		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 have a 30-day cancellation clause, but 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 $57.6 million and $47.9 million at December 31, 2007 and December 31, 2006, respectively. In addition, at December 31, 2007 and December 31, 2006, we had not recognized uncollected receivables or deferred revenues relating to government contracts that permit termination, of $10.8 million and $9.6 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. 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,
		2007				2006
Total fees receivable		$	363,376			$	337,083
Allowance for losses			(8,450	)			(8,700	)
Fees receivable, net		$	354,926			$	328,383

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 the deferred tax asset to 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 deferred tax asset is charged against income in the period such determination is made.

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

2007 VERSUS 2006

REVENUES increased $128.9 million, or 12%, to $1,189.2 million in 2007 from $1,060.3 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 57% and 54% 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 27% and 29% of total revenues in 2007 and 2006, respectively.

•

Events revenues were $180.8 million in 2007, an increase of 7% from $169.4 million in 2006, and comprised approximately 15% and 16% of total revenues in 2007 and 2006, respectively.

•

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 8%, to $681.9 million in 2007 from $631.3 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 $39.9 million, or 8%, when comparing 2007 with 2006, to $545.3 million from $505.3 million, respectively. Excluding the unfavorable effects of foreign currency translation, Cost of services and product development would have increased 4%. The $39.9 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 46% and 48%, respectively.

SELLING, GENERAL AND ADMINISTRATIVE (SG&A) expense increased $59.2 million, or 14% to $475.3 million from $416.1 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 $59.2 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 $20.1 million of expense, and additional stock-based compensation under SFAS No. 123(R) of $5.4 million. We now have 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 actually 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, and for 2008 the Company projects capital expenditures of approximately $25.0 million to $27.0 million.

AMORTIZATION OF INTANGIBLES was $2.1 million in 2007 compared to $10.7 million in 2006. The decrease was due to certain intangibles acquired in the META acquisition 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 charge in 2007 includes an $8.7 million charge for the Expert Choice litigation settlement and $2.7 million of restructuring 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.

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 INCOME (EXPENSE), 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 Other income (expense), net balances in both years consists of net foreign currency exchange gains and losses.

PROVISION FOR INCOME TAXES was $40.6 million for 2007 as compared to $27.7 million in 2006. The effective tax rate for 2007 was 35.6% as compared to 32.2% for 2006. The higher effective tax rate in 2007 as compared to 2006 is attributable to several items. The most significant of these items includes 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.

2006 VERSUS 2005

REVENUES increased 7% or $71.3 million, to $1,060.3 million during 2006 from $989.0 million during 2005.

•

Research revenues increased 9% in 2006 to $571.2 million, compared to $523.0 million in 2005, and comprised approximately 54% and 53% of total revenues in 2006 and 2005, respectively.

•

Consulting revenues in 2006 of $305.2 million were up 1% compared to the $301.1 in 2005, and comprised approximately 29% and 30% of total revenues in 2006 and 2005, respectively.

•

Events revenues were $169.4 million in 2006, an increase of 12% from the $151.3 million in 2005, and comprised approximately 16% and 15% of total revenues in 2006 and 2005, respectively.

•

Other revenues, consisting principally of research reprint revenues, increased 6%, to $14.4 million in 2006 from $13.6 million in 2005.

Excluding the impact of foreign currency translation, total revenues for 2006 would have increased slightly less than 7%. See the Segment Results section below for a further discussion of segment revenues. Gartner acquired META on April 1, 2005, and as a result Gartner’s

first quarter of 2005 operating results did not contain META. Because META had been completely integrated into Gartner, we could not approximate the impact on our 2006 results from the acquisition.

REVENUES increased in all regions. Revenues from sales to United States and Canadian clients increased 3% to $631.3 million in 2006 from $611.0 million in 2005. Revenues from sales to clients in Europe, the Middle East and Africa (“EMEA”) increased 14% to $337.7 million in 2006 from $296.7 million in 2005. Revenues from sales to clients in Other international regions increased 12%, to $91.3 million in 2006 from $81.3 million in 2005.

COST OF SERVICES AND PRODUCT DEVELOPMENT expense increased $18.7 million, or 4%, to $505.3 million in 2006 from $486.6 million in 2005. Excluding the effects of foreign currency translation, Cost of services and product development expense would have increased 3% for the year ended December 31, 2006.

The 4% year-over-year increase in Cost of services and product development expense was primarily due to charges of $8.0 million for stock-based compensation under SFAS No. 123(R), approximately $6.0 million of incremental delivery costs associated with continued growth in our Events business, the inclusion of a full year of salary and benefit expense for former META employees in 2006 compared to nine months in 2005, and higher compensation costs related to merit salary increases. The Company adopted SFAS No. 123(R) on January 1, 2006 under the modified prospective transition method, so the prior year excludes such charges. In addition to these expense increases, Cost of services and product development expense for 2005 benefited from the reversal of $2.1 million of prior year’s bonus accruals. For 2006 and 2005, Cost of services and product development expense as a percentage of sales was 48% and 49%, respectively.

SELLING, GENERAL AND ADMINISTRATIVE (“SG&A”) expenses increased 5%, or $18.8 million, to $416.1 million in 2006 from $397.3 million in 2005. Excluding the effects of foreign currency translation, SG&A expense would have increased by 4% year-over-year.

The 5% increase in SG&A expense on a year-to-date basis resulted primarily from increased investment in our sales organization. We now have 663 sales associates, a 21% increase over the prior year, which added approximately $18.0 million of costs. Also contributing to the increase were charges of $8.7 million for stock-based compensation under SFAS No. 123(R), and increased recruiting and relocation expenses. Offsetting these increases were reductions in a number of G&A expense categories, to include consulting, travel, facilities, and fulfillment. In addition, SG&A expense in 2005 benefited from the reversal of $0.8 million of prior year’s bonus accruals.

DEPRECIATION expense for 2006 decreased 8%, to $23.4 million, compared to $25.5 million for 2005. The reduction is due to a decline in capital spending in both the current and prior periods, reflecting our focus on disciplined capital spending on projects that support our strategic initiatives.

AMORTIZATION OF INTANGIBLES was $10.7 million for 2006 and $10.2 million in 2005. Of the $25.6 million of intangibles we recorded related to META, both the intellectual property and database intangibles are now fully amortized, with $5.0 million in customer relationship intangibles remaining to be amortized.

META INTEGRATION CHARGES were $1.5 million and $15.0 million for 2006 and 2005, respectively. These expenses were primarily for severance, and for consulting, accounting, and tax services, related to our integration of META. The Company will not record any additional META integration charges in 2007 or later.

OTHER CHARGES were zero in 2006 and $29.1 million in 2005. The 2005 charges consisted of $10.6 million of employee severance costs, $8.2 million of charges mostly related to excess office space, $6.0 million related to an option buyback, and $4.3 million primarily for restructuring in our international operations.

LOSS ON INVESTMENTS, NET was zero and $5.8 million for 2006 and 2005, respectively. The 2005 loss was primarily due to the writedown of an investment in a venture capital fund to its net realizable value. The investment was sold in late 2005 at book value.

INTEREST EXPENSE, NET was $16.6 million and $11.1 million for 2006 and 2005, respectively, a $5.5 million increase. The increase was primarily related to an increase in rates and an increase in the amount of debt outstanding, and to a lesser extent higher amortization and writeoff of debt issue costs. The weighted-average interest rate on our debt was 6.3% in 2006 compared to 4.9% in the prior year. In addition, the weighted-average debt outstanding was about $5.0 million higher in 2006 compared to 2005.

OTHER INCOME (EXPENSE), NET for both 2006 and 2005 consists primarily of net foreign currency exchange gains and losses.

PROVISION FOR INCOME TAXES was $27.7 million for 2006 compared to $7.9 million for 2005. The effective tax rate was 32.2% and 144.8% for 2006 and 2005, respectively. The lower effective tax rate in 2006 as compared to 2005 is attributable to several items. The most significant of those items include the following: (a) the Company generated a larger percentage of its income in low tax jurisdictions in 2006 as compared to 2005, and (b) 2006 included a significant decrease in valuation allowances for state and local net operating losses while 2005 included a significant increase in valuation allowances for foreign tax credits. The impact of these items is partially offset by: (a) benefits taken to reduce overall tax expense in 2005 relating to repatriated earnings, no such items occurred in 2006, (b) larger benefits taken in 2005 as compared to 2006 for foreign tax credits generated, and (c) an overall increase in reserve needs in 2006 as compared to an overall

decrease in 2005. Note that the impact of the various positive and negative adjustments is amplified by lower pretax book income in 2005 as compared to 2006.

In March 2005, we repatriated approximately $52.0 million in cash from our non-US subsidiaries. Also in 2005, we took into account technical corrections issued by the Treasury Department related to repatriating earnings under the American Jobs Creation Act (AJCA). As a result of favorable provisions in the technical corrections, we realized a tax benefit of $3.6 million in 2005 that reduced the cumulative charge on the repatriated earnings to $1.4 million. In addition, as a consequence of the application of the technical corrections, we re-evaluated our ability to use foreign tax credits in the future and took a charge of $2.5 million to re-establish valuation allowance for foreign tax credits that will more likely than not expire unused. Upon filing our 2005 income tax return in 2006, the Company determined that it would be more beneficial not to avail itself of the provision of the AJCA with respect to the taxation of the repatriation. Therefore, the repatriation was taxed as an ordinary dividend under existing tax law.

Excluding the impact of SFAS No. 123(R), amortization of certain intangibles acquired as part of the META acquisition and various META integration charges, the effective tax rate was 32.4% for 2006. Excluding the impact of the amortization of certain intangibles acquired as part of the META acquisition, various META integration charges and certain one-time charges for facility closures and capital asset impairments, the effective tax rate was 36.6% for 2005, respectively. The lower effective tax rate in 2006 as compared to 2005 is attributable to several items. The most significant of those items include the following: (a) the Company generated more income in low tax jurisdictions in 2006 as compared to 2005, and (b) 2006 included a significant decrease in valuation allowances for state and local net operating losses while 2005 included a significant increase in valuation allowances for foreign tax credits. The impact of these items is partially offset by (a) benefits taken to reduce overall tax expense in 2005 relating to repatriated earnings, no such items occurred in 2006, (b) larger benefits taken in 2005 as compared to 2006 for foreign tax credits generated, and (c) an overall increase in reserve needs in 2006 as compared to an overall decrease in 2005. The impact of the various positive and negative adjustments was amplified by lower pretax book income in 2005 as compared to 2006.

2007 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 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% over the prior 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 better operating leverage from 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 great 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 have since rectified. 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 7%, or $11.4 million, to $180.8 million compared to $169.4 million in 2006. Adjusted for the favorable impact of foreign exchange, revenues were up about 3%. We held 78 events held in 2007 and 74 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, an 8% increase over 2006. For 2008, we are currently projecting that we will hold 82 events. Gross contribution was $88.2 million in 2007 compared to $83.7 million in 2006, a 5% increase, while gross contribution margin was 49% for both periods.

On February 20, 2008 we announced that we had contracted to sell our Vision Events portfolio of events (See Note 15 — Subsequent Events in the Notes to the Consolidated Financial Statements).

2006 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 SG&A expense, depreciation, META integration charges, amortization of intangibles and Other charges. Gross contribution margin is defined as gross contribution as a percentage of revenues.

Research

We had strong revenue performance in our Research business in 2006, with revenue up 9%, to $571.2 million, from $523.0 in 2005. Foreign currency had an immaterial impact on revenue for the year. The revenue growth for the year was across all of our regions and client sectors, as well as across the entire client portfolio.

Both client and wallet retention rates remained strong. At December 31, 2006, our research client retention rate was 81%, the same rate as of December 31, 2005. Wallet retention was up 3 points from the prior year, to 96% at December 31, 2006, from 93% at December 31, 2005. Our Executive Program membership was 3,646 at December 31, 2006, compared to 3,522 at the prior year end.

Research gross contribution of $345.5 million for 2006 increased 11% from the $310.0 million in 2005, while gross contribution margin increased 1 point in 2006 to 60%, from 59% in the prior year. The improvement in the contribution margin was mainly due to operating leverage resulting from the strong revenue performance. SFAS No. 123(R) decreased gross contribution margin in the Research segment by about 1 point in 2006.

Contract value at December 31, 2006 was the highest in the company’s history, at $640.3 million, up 8% over the prior year value of $592.6 million. Excluding the impact of foreign currency, contract value increased by approximately 11%. Contract value has now increased for 12 consecutive quarters. The increase was driven by growth in both core research and Executive Programs.

Consulting

Consulting revenues increased 1%, to $305.2 million in 2006 as compared to $301.1 million in 2005. With a strong emphasis on growing the Research segment, coupled with a decline in revenues in the contract optimization portion of the Consulting business change due to a change in sales incentives, growth slowed in the second half of 2006. Excluding the impact of foreign currency translation, revenues were up slightly less than 1%.

The year-over-year revenue increase reflects increases in annualized revenue per billable headcount, billing rate, and consultant utilization. Billable headcount was 518 at December 31, 2006, compared to 525 for the prior year, a decline of 1%. Consultant utilization rates were 64% and 62% for 2006 and 2005, respectively. The billing rate remained at over $300 per hour in 2006, while the average annualized revenue per billable headcount was about $410,000.

Consulting gross contribution of $120.7 million for 2006 decreased 4% from the $125.7 million in 2005, while the contribution margin for 2006 decreased to 40%, from 42% in the prior year. The margin decline was primarily due to costs related to SFAS No. 123(R), costs related to exiting less profitable geographies, and investments made in senior level hires related to our growth strategy. The impact of SFAS No. 123(R), which we adopted on January 1, 2006, decreased gross contribution margin in the Consulting segment for 2006 by approximately half a point.

Consulting backlog, which represents future revenues to be recognized from in-process consulting, measurement and SAS, was $109.6 million at December 31, 2006, compared to $107.7 million at September 30, 2006 and $119.9 million at December 31, 2005.

Events

Events revenues in 2006 were up 12%, or $18.1 million, to $169.4 million from $151.3 million in the prior year. We held 74 events in 2006 with over 41,000 attendees compared to 70 events in 2005 with over 35,000 attendees. The increase in revenue was due to new

events as well as strong performance from our on-going events. We had 11 new events in 2006 which had higher revenues than the events that were eliminated, while revenue from existing events was up 7%, reflecting underlying strength in our on-going Summit events. Excluding the impact of foreign currency translation, Events revenues were up approximately 11% in 2006.

Events gross contribution was $83.7 million, or 49% of revenues, for 2006, compared to $76.1 million, or 50% of revenues, for 2005. The decrease in gross contribution margin was primarily due to the mix of new events and existing events. SFAS No. 123(R) had an immaterial impact on the Events gross contribution margin for 2006.

LIQUIDITY AND CAPITAL RESOURCES

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 an additional $24.0 million in 2007 compared to $123.0 million of additional borrowings 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.

2006

Cash provided by operating activities totaled $106.3 million for the year ended December 31, 2006, compared to $27.1 million in 2005. The increase in cash flow from operating activities of $79.2 million was primarily due to an increase in cash from core operations of approximately $50.0 million. The improved cash flow also reflects lower cash payments for severance and other charges of about $21.0 million, as well as a decrease of $28.0 million of payments related to the integration of META. These improvements were somewhat offset by higher cash payments for bonus, and to a lesser extent, interest and other items.

Cash used in investing activities was $21.8 million for 2006, compared to $181.0 million in 2005. The decrease in cash used was primarily due to the net expenditure of $161.3 million for the acquisition of META in 2005. Capital expenditures of $21.1 million was down about $1.2 million from the prior year period, reflecting the Company’s continued focus on disciplined capital spending.

Cash used by financing activities totaled $91.5 million in 2006, compared to $70.0 million of cash provided in the year ended December 31, 2005. The decline in cash provided was due to the repurchase of $270.7 million of our common shares in 2006, which includes $200.0 million repurchased directly from Silver Lake in December 2006, for which we borrowed an additional $190.0 million and utilized $10.0 million of existing cash. During 2005 we had $9.6 million of common share repurchases. We borrowed additional amounts in both 2006 and 2005, and our outstanding debt increased by about $123.0 million in 2006 compared to an increase of approximately $56.0 million in the prior year.

We realized about $15.7 million more in cash from stock issued under stock plans during 2006, with $46.7 million of proceeds in 2006 compared to $31.0 million during the prior year period. The increase was a result of our higher stock price during 2006 as compared to 2005, which resulted in more stock option exercises by employees in 2006. We also had $9.2 million in excess tax benefits from stock-based compensation awards under SFAS No. 123(R).

OBLIGATIONS AND COMMITMENTS

The Company has a borrowing arrangement that provides for a five-year, $180.0 million term loan 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 loan will be repaid in 18 consecutive quarterly installments which commenced on September 30, 2007, 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 credit facility may be used for loans, and up to $15.0 million may be used for letters of credit. The revolving loans may be borrowed, repaid and reborrowed until January 31, 2012, at which time all amounts borrowed must be repaid. At December 31, 2007, the Company had $174.0 million outstanding under the term loan and $220.0 million outstanding under the revolver. As of December 31, 2007, the Company had approximately $77.0 million of available borrowing capacity under the revolving credit facility, not including the expansion feature.

We believe that our existing cash balances, together with cash from our operating activities 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 needs.

The following table represents our contractual cash commitments (in thousands) due after December 31, 2007:

						Less Than				1 - 3				4 - 5				More Than
		Total				1 Year				Years				Years				5 Years
Operating leases (1)		$	187,950			$	35,450			$	56,900			$	28,950			$	66,650
Debt (2), (3)			394,000				16,500				81,000				296,500				—
Deferred compensation arrangement (4)			21,900				1,900				4,150				4,200				11,650
FASB Interpretation No. 48 liability (5)			403				403				—				—				—
Treasury stock repurchases (6)			2,300				2,300				—				—				—
Other			6,536				5,701				835				—				—
Totals		$	613,089			$	62,254			$	142,885			$	329,650			$	78,300

QUARTERLY FINANCIAL DATA

(in thousands, except per share data)
2007		First				Second				Third				Fourth
Revenues		$	264,197			$	303,491			$	273,119			$	348,391
Operating income (1)			18,474				23,065				23,580				68,003
Net income			8,192				14,048				12,494				38,819
Net income per share (2)
Basic		$	0.08			$	0.13			$	0.12			$	0.38
Diluted		$	0.08			$	0.13			$	0.11			$	0.37

(in thousands, except per share data)
2006		First				Second				Third				Fourth
Revenues		$	230,929			$	284,093			$	241,360			$	303,939
Operating income (1)			15,620				30,595				15,963				41,072
Net income			7,770				18,244				9,608				22,570
Net income per share (2)
Basic		$	0.07			$	0.16			$	0.08			$	0.20
Diluted		$	0.07			$	0.16			$	0.08			$	0.20

NEW ACCOUNTING STANDARDS

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), which establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The statement applies under other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company does not believe the adoption of SFAS No. 157 will have a material impact on its financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115” (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure certain financial instruments and certain other items at fair value at specified election dates. If the fair value option is elected, a business entity shall report unrealized gains and losses on elected items in earnings at each subsequent reporting date. Upon initial adoption of this Statement an entity is permitted to elect the fair value option for available-for-sale and held-to-maturity securities previously accounted for under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. The effect of reclassifying those securities into the trading category should be included in a cumulative-effect adjustment of retained earnings and not in current-period earnings and should be separately disclosed. SFAS No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. The Company does not believe the adoption of SFAS No. 159 will have a material impact on its financial position or results of operations.

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 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 will be the Company’s fiscal year beginning January 1, 2009. The Company is currently evaluating the potential impact, if any, the adoption of SFAS No. 141R will have on the Company’s 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 is currently evaluating the potential impact, if any, the adoption of SFAS No. 160 will have on the Company’s financial position or results of operations.

The SEC Staff issued Staff Accounting Bulletin (“SAB”) 110 which permits companies, under certain circumstances, to continue to use the simplified method when calculating the expected term of “plain vanilla” share options. Originally, the use of simplified method was due to expire on December 31, 2007. A company may use the simplified method if it concludes that it is not reasonable to base its estimate of expected term on its experience with exercising historical share options. Although there is no expiration date for SAB 110, the SEC Staff believes that more detailed external information about exercise behavior will, over time, become readily available. The effective date for SAB 110 is January 1, 2008. The Company expects that it will continue to use the simplified method for awards of stock-based compensation after January 1, 2008.

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

Interest Rate Risk

As of December 31, 2007, we have exposure to changes in interest rates resulting from $174.0 million outstanding on our term loan and $220.0 million outstanding on our revolver, both of which are floating rate. 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 0.25% on prime borrowings and between .625% and 1.25% on Libor borrowings.

As of December 31, 2007, the annualized interest rates on the term loan and revolver were 5.71% and 5.77%, respectively, which consist of a three-month LIBOR base rate and one-month LIBOR base rate, respectively, plus a margin of 0.875% on each.

We have an interest rate swap contract which effectively converts the base floating interest rate on the term loan to a fixed rate. Accordingly, the base interest rate on the term loan is effectively capped at 5.06%. However, 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.

Investment Risk

None

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 negatively 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 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, 2007, we had 35 foreign currency forward contracts outstanding with a total notional amount of $226.0 million with an immaterial net unrealized loss. All of these contracts matured in January 2008. Currency transaction gains or losses arising from transactions in currencies other than the functional currency are included within Other income (expense), net within the Consolidated Statements of Operations. Currency transaction gains (losses), net were $1.1 million, $(0.5) million, and $(2.8) million during 2007, 2006 and 2005, respectively.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our consolidated financial statements for 2007, 2006, and 2005, together with the reports of KPMG LLP, independent registered public accounting firm, dated February 28, 2008, are included in this Annual Report on Form 10-K beginning on Page 31.

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, 2007, 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, 2007. 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, 2007, 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, 2007 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,” “Other Information — 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 29, 2008. If the Proxy Statement is not filed with the SEC by April 29, 2008, such information will be included in an amendment to this Annual Report filed by April 29, 2008. 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 2007 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 29, 2008. If the Proxy Statement is not filed with the SEC by April 29, 2008, such information will be included in an amendment to this Annual Report filed by April 29, 2008.

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 “Other Information — Security Ownership of Certain Beneficial Owners and Management” in the Company’s Proxy Statement to be filed with the SEC by April 29, 2008. If the Proxy Statement is not filed with the SEC by April 29, 2008, such information will be included in an amendment to this Annual Report filed by April 29, 2008.

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 29, 2008. If the Proxy Statement is not filed with the SEC by April 29, 2008, such information will be included in an amendment to this Annual Report filed by April 29, 2008.

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 29, 2008. If the Proxy Statement is not filed with the SEC by April 29, 2008, such information will be included in an amendment to this Annual Report filed by April 29, 2008.

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 on page 29 hereof 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(1)		Amended and Restated Credit Agreement, dated as of June 29, 2005, to the Credit Agreement, dated as of August 12, 2004, among the Company, the several lenders from time to time parties, and JPMorgan Chase Bank, N.A. as administrative agent. (the “2005 Credit Agreement”).
4.4(15)		First Amendment dated as of August 12, 2004 to the 2005 Credit Agreement.
4.5(16)		Second Amendment dated as of December 12, 2006 to the 2005 Credit Agreement.
4.6(16)		Interim Credit Agreement, dated as of December 13, 2006, between the Company and JP Morgan Chase Bank, N.A.
4.7(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.
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.
10.7(9) ª		2002 Employee Stock Purchase Plan, as amended and restated effective June 1, 2005.
10.8(1) ª		1994 Long Term Stock Option Plan, as amended and restated on October 12, 1999.
10.9(1)ª		1998 Long Term Stock Option Plan, as amended and restated on October 12, 1999.
10.11(10)ª		1999 Stock Option Plan.
10.12(1)ª		2003 Long-Term Incentive Plan, as amended and restated on June 29, 2005.
10.13(11)ª		Employment Agreement between Eugene A. Hall and the Company dated as of October 15, 2004.
10.14(12)ª		Restricted Stock Agreement by and between Eugene A. Hall and the Company dated November 9, 2005.
10.15(13) ª		Company Deferred Compensation Plan, Effective January 1, 2005.
10.16(14)+		Company Executive Benefits Program.
10.17(17)+		Employment Agreement between Eugene A. Hall and the Company dated as of February 15, 2007.
10.18(18)+		Form of 2008 Stock Appreciation Right Agreement for executive officers.
10.19(18)+		Form of 2008 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			30
Report of Independent Registered Public Accounting Firm			31
Consolidated Balance Sheets as of December 31, 2007 and 2006			32
Consolidated Statements of Operations for the Years Ended December 31, 2007, 2006 and 2005			33
Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2007, 2006 and 2005			34
Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005			35
Notes to Consolidated Financial Statements			36

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 as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2007. 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 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 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. An audit also includes 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, 2007 and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

The Company adopted the provisions of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” and Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements in Current Year Financial Statements” as of January 1, 2006 and Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” as of December 31, 2006.

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, 2007, 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 28, 2008 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

New York, New York
February 28, 2008

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Gartner, Inc.:

We have audited Gartner Inc.’s internal control over financial reporting as of December 31, 2007, 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, 2007, 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. as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2007, and our report dated February 28, 2008 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

New York, New York
February 28, 2008

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

		December 31,
		2007				2006
ASSETS
Current assets:
Cash and cash equivalents		$	109,945			$	67,801
Fees receivable, net of allowances of $8,450 and $8,700 respectively			354,926				328,383
Deferred commissions			53,537				46,822
Prepaid expenses and other current assets			39,382				41,027
Total current assets			557,790				484,033
Property, equipment and leasehold improvements, net			66,551				59,715
Goodwill			416,181				408,545
Intangible assets, net			3,645				5,978
Other assets			89,043				81,522
Total assets		$	1,133,210			$	1,039,793
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	215,990			$	208,002
Deferred revenues			423,522				375,881
Current portion of long-term debt			236,500				220,000
Total current liabilities			876,012				803,883
Long-term debt			157,500				150,000
Other liabilities			82,200				59,592
Total liabilities			1,115,712				1,013,475
Commitments and contingencies (note 7)
Stockholders’ 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			545,654				544,686
Unearned compensation, net			(386	)			(2,208	)
Accumulated other comprehensive income, net			23,641				13,097
Accumulated earnings			322,557				249,004
Treasury stock, at cost, 57, 202,660 and 52,169,591 common shares, respectively			(874,046	)			(778,339	)
Total stockholders’ equity			17,498				26,318
Total liabilities and stockholders’ equity		$	1,133,210			$	1,039,793

See Notes to Consolidated Financial Statements.

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

		Year Ended December 31,
		2007				2006				2005
Revenues:
Research		$	673,335			$	571,217			$	523,033
Consulting			325,030				305,231				301,074
Events			180,788				169,434				151,339
Other			10,045				14,439				13,558
Total revenues			1,189,198				1,060,321				989,004
Costs and expenses:
Cost of services and product development			545,275				505,330				486,611
Selling, general and administrative			475,328				416,094				397,252
Depreciation			24,298				23,444				25,502
Amortization of intangibles			2,091				10,753				10,226
META integration charges			—				1,450				14,956
Other charges			9,084				—				29,177
Total costs and expenses			1,056,076				957,071				963,724
Operating income			133,122				103,250				25,280
Loss on investments, net			—				—				(5,841	)
Interest income			2,912				2,517				2,142
Interest expense			(25,066	)			(19,098	)			(13,214	)
Other income (expense), net			3,193				(797	)			(2,929	)
Income before income taxes			114,161				85,872				5,438
Provision for income taxes			40,608				27,680				7,875
Net income (loss)		$	73,553			$	58,192			$	(2,437	)
Net income (loss) per share:
Basic		$	0.71			$	0.51			$	(0.02	)
Diluted		$	0.68			$	0.50			$	(0.02	)
Weighted average shares outstanding:
Basic			103,613				113,071				112,253
Diluted			108,328				116,203				112,253

See Notes to Consolidated Financial Statements.

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

														Accumulated
														Other
						Additional				Unearned				Comprehensive												Total
		Common				Paid-In				Compensation,				Income (Loss),				Accumulated				Treasury				Stockholders’
		Stock				Capital				Net				Net				Earnings				Stock				Equity
Balance at December 31, 2004		$	75			$	485,713			$	(7,553	)		$	12,722			$	190,089			$	(550,998	)		$	130,048
Comprehensive (loss):
Net loss			—				—				—				—				(2,437	)			—				(2,437	)
Other comprehensive (loss):
Foreign currency translation adjustments			—				—				—				(5,970	)			—				—				(5,970	)
Unrealized loss on investment and swap, net of tax			—				—				—				(432	)			—				—				(432	)
Other comprehensive (loss)															(6,402	)											(6,402	)
Comprehensive (loss)																											(8,839	)
Issuances under stock plans			2				20,748				—				—				—				10,210				30,960
Tax benefits of employee stock transactions			—				4,472				—				—				—				—				4,472
Purchase of shares for treasury stock			—				—				—				—				—				(11,083	)			(11,083	)
Stock compensation (net of forfeitures)			—				129				901				—				—				—				1,030
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							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
Unrealized gain on investment and swap, 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
Realized and unrealized loss on 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

See Notes to Consolidated Financial Statements.

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

		Year Ended December 31,
		2007				2006				2005
Operating activities:
Net income (loss)		$	73,553			$	58,192			$	(2,437	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of intangibles			26,389				34,197				35,728
Stock-based compensation expense			24,241				16,660				1,030
Excess tax benefits from stock-based compensation expense			(14,759	)			(9,159	)			—
Tax benefit associated with employee exercise of stock options			—				—				4,472
Deferred taxes			6,740				6,830				(5,644	)
Loss from investments and sales of assets, net			—				225				5,841
Amortization and writeoff of debt issue costs			1,363				1,627				1,424
Charge for stock option buy back			—				—				5,980
Changes in assets and liabilities:
Fees receivable, net			(10,880	)			(3,876	)			(35,746	)
Deferred commissions			(5,266	)			(2,774	)			(9,850	)
Prepaid expenses and other current assets			(857	)			(4,562	)			(2,436	)
Other assets			(12,288	)			(1,787	)			113
Deferred revenues			26,858				33,574				3,899
Accounts payable and accrued liabilities			33,241				(22,883	)			24,748
Cash provided by operating activities			148,335				106,264				27,122
Investing activities:
Acquisition of META (net of cash acquired)			—				—				(161,323	)
Additions to property, equipment and leasehold improvements			(24,172	)			(21,113	)			(22,356	)
Other investing activities, net			36				(688	)			2,699
Cash used in investing activities			(24,136	)			(21,801	)			(180,980	)
Financing activities:
Proceeds from interest rate swap termination			1,167				—				—
Proceeds from stock issued for stock plans			34,458				46,732				30,960
Proceeds from debt issuance			525,000				190,000				327,000
Payments for debt issuance costs			(1,257	)			(45	)			(1,082	)
Payments on debt			(501,000	)			(66,667	)			(271,291	)
Purchases of treasury stock			(166,822	)			(270,704	)			(9,585	)
Purchases of options via stock option buy back			—				—				(5,980	)
Excess tax benefits from stock-based compensation expense			14,759				9,159				—
Cash (used) provided by financing activities			(93,695	)			(91,525	)			70,022
Net increase (decrease) in cash and cash equivalents			30,504				(7,062	)			(83,836	)
Effects of exchange rates on cash and cash equivalents			11,640				4,581				(6,008	)
Cash and cash equivalents, beginning of period			67,801				70,282				160,126
Cash and cash equivalents, end of period		$	109,945			$	67,801			$	70,282
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest		$	24,100			$	14,901			$	12,333
Income taxes, net of refunds received		$	3,564			$	11,160			$	12,033

See Notes to Consolidated Financial Statements.

GARTNER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation. The fiscal year of Gartner, Inc. (the “Company”) represents the period from January 1 through December 31. Certain prior year amounts have been reclassified to conform to the current year presentation. When used in these notes, the terms “Company,” “we,” “us,” or “our” mean Gartner, Inc. and its subsidiaries.

On April 1, 2005, the Company acquired META Group, Inc. (“META”), which was a technology and research firm, for a purchase price of approximately $168.3 million, excluding transaction costs of approximately $8.1 million. The acquisition was accounted for as a purchase business combination. The consolidated financial statements include the results of META from the date of acquisition. The purchase price was allocated to the net assets and liabilities acquired based on their estimated fair values. Any excess of the purchase price over the estimated fair value of the net assets acquired, including identifiable intangible assets, was allocated to goodwill.

Principles of consolidation. The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Investments in companies in which the Company owns less than 50% but have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. All other investments for which the Company does not have the ability to exercise significant influence are accounted for under the cost method of accounting. The results of operations for acquisitions of companies accounted for using the purchase method have been included in the Consolidated Statements of Operations beginning on the closing date of acquisition.

Use of estimates. The Company makes estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures, if any, of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates are required by generally accepted accounting principles in the United States of America in the Company’s preparation of its Consolidated Financial Statements. Actual results could differ from those estimates. Estimates are used when accounting for such items as allowance for doubtful accounts, investments, depreciation, amortization, income taxes and certain accrued liabilities.

Revenues and commission expense recognition. The Company typically enters into annually renewable subscription contracts for research products. Revenues from research products are deferred and recognized ratably over the applicable contract term. 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 have a 30-day cancellation clause but have not produced material cancellations to date. With the exception of certain government contracts which permit termination and contracts with special billing terms, it is Company policy to record the entire amount of the contract that is billable as a fee receivable at the time the contract is signed, which represents a legally enforceable claim, and a corresponding amount as deferred revenue. For those government contracts that permit termination, the Company bills the client the full amount billable under the contract but only records a receivable equal to the earned portion of the contract. In addition, the Company only records deferred revenue on these government contracts when cash is received. Deferred revenue attributable to government contracts was $57.6 million and $47.9 million at December 31, 2007 and 2006, respectively. In addition, at December 31, 2007 and 2006, the Company had not recognized receivables or deferred revenues relating to government contracts that permit termination of $10.8 million and $9.6 million, respectively, which had been billed but not yet collected. The Company records the commission obligation related to research contracts upon the signing of the contract and amortizes the corresponding deferred commission expense over the contract period in which the related revenues are earned.

Consulting revenues, primarily derived from consulting, measurement and strategic advisory services (paid one-day analyst engagements), are generated from fixed fee or time and materials for discrete projects. Revenues for such projects are recognized as work is delivered and/or services are provided. Unbilled fees receivables associated with consulting engagements were $35.8 million at December 31, 2007, and $29.5 million at December 31, 2006.

Events revenues are deferred and recognized upon the completion of the related symposium, conference or exhibition. In addition, the Company defers certain costs directly related to events and expenses these costs in the period during which the related symposium, conference or exhibition occurs. The Company policy is to defer only those costs, primarily prepaid site and production services costs, which are incremental and are directly attributable to a specific event. Other costs of organizing and producing our events, primarily Company personnel and non-event specific expenses, are expensed in the period incurred. At the end of each fiscal quarter, the Company assesses on an event-by-event basis whether expected direct costs of producing a scheduled event will exceed expected revenues. If such costs are expected to exceed revenues, the Company records the expected loss in the period determined.

Other revenues consist primarily of fees from research reprints. Reprint fees are recognized when the reprint is shipped.

Cash and cash equivalents. All highly liquid investments with original maturities of three months or less are classified as cash equivalents. The carrying value of these investments approximates fair value based upon their short-term maturity. Investments with maturities of more

than three months are classified as marketable securities.

Property leases. Costs to lease facilities, including contractual rent concessions and rent increases, are expensed ratably over the life of the lease. This expense was $23.8 million in 2007, $22.6 million in 2006, and $25.0 million for 2005.

Property, equipment and leasehold improvements. Property, equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the assets or the remaining term of the related leases. Property, equipment and leasehold improvements, less accumulated depreciation and amortization consist of the following (in thousands):

						December 31,
		Useful Life (Years)				2007				2006
Computer equipment and software			2 — 7			$	143,268			$	138,493
Furniture and equipment			3 — 8				38,136				39,044
Leasehold improvements			2 — 15				50,311				47,257
							231,715				224,794
Less — accumulated depreciation and amortization							(165,164	)			(165,079	)
						$	66,551			$	59,715

Total depreciation expense was $24.3 million, $23.4 million, and $25.5 million in 2007, 2006, and 2005, respectively.

At December 31, 2007 and 2006, capitalized development costs for internal use software were $18.6 million and $15.9 million, respectively, net of accumulated amortization of $12.4 million and $10.1 million, respectively. Amortization of capitalized internal software development costs totaled $6.5 million, $4.6 million, and $6.7 million during 2007, 2006, and 2005, respectively, which is included in Depreciation in the Consolidated Statements of Operations.

Intangible assets. Intangible assets are amortized using the straight-line method over their expected useful lives. Customer relationships are amortized over five years, while noncompete agreements are generally amortized over two to five years.

Intangible assets subject to amortization include the following (in thousands):

		Customer				Noncompete
December 31, 2007		Relationships				Agreements				Total
Gross cost		$	7,700			$	498			$	8,198
Accumulated amortization			(4,235	)			(318	)			(4,553	)
Net		$	3,465			$	180			$	3,645

		Customer				Noncompete
December 31, 2006		Relationships				Agreements				Total
Gross cost		$	7,700			$	1,265			$	8,965
Accumulated amortization			(2,695	)			(292	)			(2,987	)
Net		$	5,005			$	973			$	5,978