SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED].
For the fiscal year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
For the transition period from to
Commission file number 1-14443
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
GARTNER, INC. SAVINGS AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
GARTNER, INC.
56 TOP GALLANT ROAD
STAMFORD, CT 06902-7747
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
INDEX TO FORM 11-K
Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS:
Statements of net assets available for benefits as of December 31, 2003 and
2002 2
Statement of changes in net assets available for benefits for the year ended
December 31, 2003 3
Notes to the financial statements 4 - 8
SUPPLEMENTAL SCHEDULE:
Schedule H, line 4i -Schedule of Assets Held (at End of Year) as of 9
December 31, 2003
Signatures 10
Exhibit Index 11
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Financial Statements and Supplemental Schedule
December 31, 2003 and 2002
(With Report of Independent Registered Public Accounting Firm Thereon)
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
PAGE
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits as of
December 31, 2003 and 2002 2
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2003 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i - Schedule of Assets Held (at End of Year) as of December
31, 2003 9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrative Committee of the
Gartner, Inc. Savings and Investment Plan:
We have audited the accompanying statements of net assets available for benefits
of the Gartner, Inc. Savings and Investment Plan (the Plan) as of December 31,
2003 and 2002, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2003. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accountancy 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 the 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2003 and 2002 and the changes in the net assets available for
benefits for the year ended December 31, 2003 in conformity with U.S. generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2003 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG LLP
------------------
June 21, 2004
New York, New York
1
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
2003 2002
------------ ------------
Assets:
Investments:
Cash equivalents $ 228,487 $ 202,920
Investments in registered investment company shares 172,618,731 128,280,802
Gartner, Inc. common stock 4,061,919 3,330,961
Participant loans 3,492,494 3,049,848
------------ ------------
Total investments 180,401,631 134,864,531
------------ ------------
Receivables:
Employer contributions 1,982,459 1,999,371
Due from custodian for securities sold 12,694 17,500
------------ ------------
Total receivables 1,995,153 2,016,871
------------ ------------
Total assets 182,396,784 136,881,402
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Liabilities:
Accrued expenses 69,890 32,270
------------ ------------
Total liabilities 69,890 32,270
------------ ------------
Net assets available for benefits $182,326,894 $136,849,132
============ ============
See accompanying notes to the financial statements.
2
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Statement of Changes in Net Assets
Available for Benefits
Year ended December 31, 2003
Additions:
Investment income:
Net appreciation in fair value of investments $ 31,028,420
Interest 214,976
Dividends 2,647,127
------------
Investment income 33,890,523
Contributions:
Participants 16,767,026
Employer 9,069,216
------------
Total additions, net 59,726,765
------------
Deductions:
Benefits paid to participants 14,133,961
Administrative expenses 115,042
------------
Total deductions 14,249,003
------------
Increase in net assets available for benefits 45,477,762
Net assets available for benefits:
Beginning of year 136,849,132
------------
End of year $182,326,894
============
See accompanying notes to the financial statements.
3
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(1) DESCRIPTION OF THE PLAN
The following description of the Gartner, Inc. Savings and Investment Plan
(the Plan) provides only general information. Participants should refer to
the Plan agreement for a more complete description of the Plan's
provisions.
(a) GENERAL
The Plan is a defined contribution retirement plan subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The Plan has been amended and restated at various times in
order to comply with regulatory guidance, most recently as of
January 1, 2004 (see note 4).
The Plan covers substantially all domestic full-time employees of
Gartner, Inc. and its wholly owned subsidiaries (collectively the
Company or Employer). Any employee who customarily works at least 20
hours per week (minimum of 1,000 hours per year) and is at least 18
years of age is eligible to participate in the Plan.
(b) ADMINISTRATION
The Plan is administered by the Administrative Committee (the Plan
Committee) which is appointed by the Company's board of directors.
The Plan Committee is responsible for all administrative aspects of
the Plan, including selection of trustees and investment managers,
establishment of investment alternatives, determination of benefit
eligibility and benefit calculations and interpretation of Plan
provisions. The Plan Committee has appointed officers of the Company
to act as trustees (the Trustees) to administer the Plan.
Administrative expenses are to be paid by the Plan through the use
of participant forfeitures. Any administrative expenses in excess of
participant forfeitures will be paid by the Company. For the plan
years ended December 31, 2003 and 2002, all expenses were paid by
the Plan.
(c) CONTRIBUTIONS
Participating employees may make annual contributions to the Plan in
percentages of not less than 1% or more than 60% of total annual
compensation (50% pre-tax, 10% post-tax), as defined in the Plan
agreement, subject to Internal Revenue Service (IRS) limitations.
Participants who are eligible may make pre-tax Catch-Up
Contributions effective January 1, 2002 subject to the IRS
limitations.
For 2003, the Plan requires the Company to match 100% of pre-tax
participant contributions up to a maximum of 4% of a participant's
total compensation, or $4,800, which is 40% of the IRS pretax
contribution limitation for 2003.
The Plan also provides for a profit sharing contribution comprised
of the following elements:
- Fixed amount - an amount equal to 1% of a participant's base
compensation, subject to an IRS limitation.
(Continued)
4
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
- Discretionary amount - an amount in excess of the fixed amount
solely at the discretion of the Company's board of directors
based on the financial results of the Company. Employees must
be employed on the last day of the year to receive
discretionary contributions.
Fixed profit sharing contributions of $1,980,839 and $1,999,371 for
the years ended December 31, 2003 and 2002, respectively, are
included in employer contributions receivable in the Plan's
financial statements as of December 31, 2003 and 2002, respectively.
There were no discretionary contributions made to the Plan for the
Plan years ended December 31, 2003 and 2002.
A participant may make "after tax" contributions of up to 10% of the
participant's compensation, subject to a maximum of $20,000 per
year.
(d) PARTICIPANTS' ACCOUNTS
Separate accounts are maintained for each participant of the Plan
through the Fidelity Management Trust Company (Fidelity). The
participants' accounts are adjusted to reflect contributions and
investment earnings such as interest, dividends, and realized and
unrealized investment gains and losses.
At December 31, 2003 and 2002, forfeited nonvested accounts totaled
$58,755 and $38,575, respectively. These accounts will be used to
reduce future Plan expenses and employer contributions. Also, in
2003, Plan expenses were reduced by $47,990 and employer
contributions were reduced by $252,000 from forfeited nonvested
accounts.
(e) INVESTMENTS
Participants may elect to invest in a variety of specialized
investment funds and may make transfers among investment funds at
their discretion in whole percentages. The Company's board of
directors has authorized Fidelity to execute transactions upon
direction from the participant within the framework of the trust
instrument.
(f) VESTING
Participants are immediately vested in their own contributions and
in the Employer's matching contributions. Participants vest in the
profit sharing contributions ratably over a five-year period based
on date of hire. The date of hire for the employees of acquired
companies continues to be their historical date of hire by the
acquired company for vesting purposes.
(g) LOANS TO PARTICIPANTS
Loans to participants are permitted, with the Trustees' consent, in
accordance with the limits provided by the Internal Revenue Code
(Code). Loans bear interest at a rate equal to prime plus 1% which
ranged between 5.0% and 5.25% for loans made during the year ended
December 31, 2003, and 5.25% and 6.0% for loans made during the year
ended December 31, 2002. Participants receiving loans from the Plan
must execute an interest bearing promissory note in the amount of
the loan. The terms of the promissory note require that all
participants repay their loans based upon a fixed repayment schedule
not to exceed a five-year period, except in the case of a primary
residence loan for which the repayment period is extended to 15
years. Participant loans are subject to a $1,000
(Continued)
5
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
minimum amount and limited to 50% of a participant's vested account
balance, not to exceed $50,000.
(h) PAYMENT OF BENEFITS
Benefits are paid upon retirement (on or after age 55), death, or
termination of employment, and may also be distributed prior to
termination of employment upon reaching age 59-1/2 or because of
financial hardship. Participants' benefits are paid in a lump sum
equal to the vested value of the participant's account at the time
of payment. With respect to accounts from the former Pension Plan
that was merged into this Plan in 1993, an annuity (joint and 50%
survivor for married participants and single life for unmarried
participants) is the standard form of payment. With respect to such
Pension Plan accounts, participants may elect a lump sum payment
instead of the annuity, with spousal consent as applicable.
(i) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company
reserves the right to fully or partially terminate the Plan at any
time by action of the board of directors or its designee. In such an
event, all participants will become fully vested in their account
balance as of the date of full or partial termination.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
The financial statements have been prepared using the accrual basis
of accounting.
(b) VALUATION OF INVESTMENTS
The Plan's investments are valued at fair value based upon market
prices quoted on national stock exchanges for the respective funds.
Shares of registered company investments are valued at the net asset
value of shares held by the Plan at year end. Participants' loans
are valued at their outstanding balances, which approximate fair
value.
(c) USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make significant estimates and
assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
additions to and deductions from net assets during the reporting
period. Actual results could differ from those estimates.
(d) RISKS AND UNCERTAINTIES
The Plan offers a number of investment options, including Gartner,
Inc. common stock and a variety of mutual funds. The funds invest in
U.S. equities, international equities, and fixed income securities.
Investment securities, in general, are exposed to various risks,
such as interest rate, credit, and overall market volatility risk.
Due to the level of risk associated with certain investment
securities. It
(Continued)
6
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
is reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could
materially affect the amounts reported in the statement of net
assets available for plan benefits and participant account balances.
The Plan's exposure to a concentration of credit risk is limited by
the diversification of investments across twenty-two
participant-directed fund elections. Additionally, the investments
within each participant-directed fund are further diversified into
varied financial instruments, with the exception of the Gartner,
Inc. Stock Fund, which invests in a single security.
(e) INVESTMENT TRANSACTIONS AND RELATED INCOME
Purchases and sales of interests in the investment funds, along with
realized gains and losses, are accounted for on the trade date.
Dividends represent the Plan's share in dividend income of the
investment funds in which the Plan participates. Dividends are
recorded on the ex-dividend date. Income from other investments is
recorded as earned on an accrual basis.
(3) INVESTMENTS
Substantially all of the Plan's assets are invested in mutual funds and a
commingled investment fund managed by Fidelity. A brief description of the
funds and investments is as follows:
(a) GARTNER, INC. STOCK FUND
The assets of this fund are substantially invested in Gartner, Inc.
Class A common stock. This fund also maintains interest-bearing
cash, $204,540 and $153,024 at December 31, 2003 and 2002,
respectively, to meet liquidity needs from participant withdrawals
or transfers.
(b) FIDELITY RETIREMENT MONEY MARKET FUND
Investments are held in a diversified portfolio of domestic and
international short-term fixed income securities such as corporate
commercial paper, certificates of deposit, Treasury notes and bills,
and bankers' acceptances.
(c) OTHER FUNDS
The Magellan, Growth Company, OTC Portfolio, and Overseas Funds
invest in debt and equity securities of companies of varying sizes
with above average growth potential to achieve long-term capital
appreciation. The U.S. Equity Index Fund seeks to match the total
return of the Standard & Poor 500 Index. The Puritan, Equity Income,
and Intermediate Bond Funds seek current income and capital
preservation as well as the potential for capital appreciation by
investing in a diversified portfolio of common and preferred stocks
and bonds. The Fidelity Freedom Funds are asset allocation funds
that invest in other Fidelity mutual funds; there are five funds
that are managed to specific target retirement dates - 2000, 2010,
2020, 2030, and 2040 and a sixth fund, the Fidelity Freedom Income
Fund, for those actively seeking high current income. The Fidelity
Select Portfolios are mutual funds that invest in specific sectors
or industries. Investors are able to obtain targeted diversification
with industry specific mutual funds and an opportunity to invest in
industries with
(Continued)
7
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
high growth potential. As of December 31, 2003, the Fidelity Select
Consumer Industries Fund was dropped as an investment choice.
The market value of investments exceeding 5% of Plan assets as of
December 31, 2003 and 2002 are summarized as follows:
2003 2002
---------- ---------
Investments at fair value as determined by
quoted market prices:
Fidelity Retirement Money Market Fund $18,021,577 18,275,416
Fidelity Magellan Fund 32,467,883 25,638,106
Fidelity Growth Company Fund 33,666,664 21,968,947
Fidelity Puritan Fund 14,851,187 11,589,344
Fidelity Equity Income Fund 19,400,131 14,288,436
Fidelity OTC Portfolio Fund 10,327,123 7,599,065
Fidelity Intermediate Bond Fund 9,281,493 9,088,626
During 2003, the Plan's investments (including investments bought,
sold, and held during the year) increased in value by $31,028,420 as
follows:
Registered investment company
shares $30,138,726
Gartner, Inc. Class A common stock 889,694
-----------
$31,028,420
===========
(4) PLAN TAX STATUS
On April 7, 2003, the Plan received a favorable determination letter from
the Internal Revenue Service, as to the continuing qualification of the
Plan under Code Section 401(a). Gartner, Inc. believes that the Plan
currently is designed and being operated in compliance with the applicable
requirements of the Code and that, therefore, the Plan qualifies under
Section 401(a) and the related trust is tax-exempt as of December 31,
2003. Therefore, no provision for income taxes has been included in the
Plan's financial statements.
(5) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Fidelity
Management and Research, who is a subsidiary of Fidelity Management Trust
Company, the Trustee as defined by the Plan, and therefore, these
transactions qualify as party in interest. Another investment is an
investment fund comprised primarily of shares of common stock issued by
Gartner, Inc. Gartner, Inc. is the Plan sponsor as defined by the Plan.
8
SCHEDULE I
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Schedule H, Line 4i - Schedule of Assets Held (at End of Year)
December 31, 2003
CURRENT
DESCRIPTION SHARES VALUE
-------------------------------------------------------------- ---------- ----------------
* FMTC Institutional Cash Portfolio 228,487 $ 228,487
* Fidelity Retirement Money Market Fund 18,021,577 18,021,577
* Fidelity Magellan Fund 322,186 32,467,883
* Fidelity Growth Company Fund 672,392 33,666,664
* Fidelity Puritan Fund 804,071 14,851,187
* Fidelity Equity Income Fund 389,952 19,400,131
* Fidelity Intermediate Bond Fund 870,684 9,281,493
* Fidelity Overseas Fund 243,148 7,642,149
* Fidelity OTC Portfolio Fund 318,051 10,327,123
* Spartan U.S. Equity Index Fund 214,430 8,450,668
* Fidelity Freedom Income Fund 36,759 407,660
* Fidelity Freedom 2000 Fund 506,647 5,944,741
* Fidelity Freedom 2010 Fund 137,719 1,793,106
* Fidelity Freedom 2020 Fund 261,286 3,401,937
* Fidelity Freedom 2030 Fund 187,874 2,432,967
* Fidelity Freedom 2040 Fund 68,880 520,731
* Fidelity Select Health Care 9,057 1,068,850
* Fidelity Select Technology 23,612 1,418,864
* Fidelity Utilities Growth 3,097 102,009
* Fidelity Financial Services 8,381 963,160
* Fidelity Select Natural Resources 10,452 149,673
* Fidelity Select Cyclical Industries 19,051 306,158
* Loans to Plan participants (545 loans with interest rates
ranging from 5% to 11%) -- 3,492,494
** Gartner, Inc. Class A Common Stock 359,144 4,061,919
----------------
$ 180,401,631
================
* Party in interest - affiliate of Plan custodian
** Party in interest - Sponsor of the Plan
See accompanying report of independent registered public accounting firm.
9
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
Gartner, Inc. Savings and Investment Plan
Date: June 25, 2004 By: / s / Christopher Lafond
--------------------------------------
Name: Christopher Lafond
Title: Administrative Committee Chairman
Executive Vice President,
Chief Financial Officer
Gartner, Inc.
1
EXHIBIT INDEX
Exhibit Number Description of Exhibits
23* Independent Auditors' Consent, KPMG LLP.
----------------
* Filed herewith.
11