SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(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, 2002
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
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of net assets available for benefits as of December 31,
2002 and 2001 2
Statement of changes in net assets available for benefits for the
year ended December 31, 2002 3
Notes to the financial statements for the years ended December 31,
2002 and 2001 4 - 8
SUPPLEMENTAL SCHEDULE:
Schedule H, line 4i -Schedule of Assets Held (at End of Year) 9
Signatures 10
Exhibit Index 11
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Financial Statements and Supplemental Schedule
December 31, 2002 and 2001
(With Independent Auditors' Report Thereon)
INDEPENDENT AUDITORS' REPORT
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,
2002 and 2001, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2002. 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 auditing standards generally accepted
in the United States of America. 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, 2002 and 2001 and the changes in the net assets available for
benefits for the year ended December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule H, Line 4i-
schedule of assets (held at end of year) as of December 31, 2002 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 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
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May 23, 2003
New York, New York
1
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
2002 2001
------------ ------------
Assets:
Investments:
Investments in registered investment company shares $128,483,722 $144,796,450
Gartner, Inc. common stock 3,330,961 4,441,651
Participant loans 3,049,848 2,799,179
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Total investments 134,864,531 152,037,280
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Receivables:
Employer contributions 1,999,371 2,073,272
Due from custodian for securities sold 17,500 35,854
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Total receivables 2,016,871 2,109,126
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Total assets 136,881,402 154,146,406
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Liabilities:
Accrued expenses 32,270 50,107
Refunds of excess contributions - 5,068
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Total liabilities 32,270 55,175
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Net assets available for benefits $136,849,132 $154,091,231
============ ============
See accompanying notes to the financial statements.
2
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Statement of Changes in Net Assets Available for Benefits
For the year ended December 31, 2002
Additions:
Investment income (loss):
Net depreciation in fair value of investments $ (30,899,903)
Interest 241,630
Dividends 1,759,436
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Investment loss (28,898,837)
Contributions:
Participants 18,279,637
Employer 9,512,230
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Total additions, net (1,106,970)
Deductions:
Benefits paid to participants 16,044,588
Administrative expenses 90,541
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Total deductions 16,135,129
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Decrease in net assets available for benefits (17,242,099)
Net assets available for benefits:
Beginning of year 154,091,231
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End of year $ 136,849,132
=============
See accompanying notes to the financial statements.
3
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(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
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
April 9, 2003 (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 year ended December 31, 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 2002, 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 $4,400, which is 40% of the IRS pre-tax
contribution limitation for 2002.
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.
4
- 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.
Fixed profit sharing contributions of $1,999,371 and $2,073,272
for the years ended December 31, 2002 and 2001, respectively, have
been presented as employer contributions receivable in the Plan
financial statements as of December 31, 2002 and 2001,
respectively. There were no discretionary contributions made to
the Plan for the Plan years ended December 31, 2002 and 2001.
A participant may make "after tax" contributions of up to 10% of
the participants compensation, subject to a maximum of $20,000
per year in 2002.
(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, 2002 and 2001, forfeited nonvested accounts
totaled $38,575 and $64,642, respectively. These accounts will be
used to pay Plan expenses and reduce future employer
contributions. Also, in 2002, employer contributions were reduced
by $100,000 and plan expenses of $81,334 were paid 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. Loans bear interest at a rate equal to prime plus 1% which
ranged between 5.25% and 6.0% for loans made during the year ended
December 31, 2002, and 5.75% and 10.5% for loans made during the
year ended December 31, 2001. 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 minimum
amount and limited to 50% of a Participant's vested account
balance, not to exceed $50,000.
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(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.
(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 provides for various investment options. Investment
securities are exposed to various risks such as interest rate,
market and credit. Due to the risk associated with investment
securities and the uncertainty related to changes in the value of
such securities, it is at least reasonably possible that changes
in risks in the near term could materially affect participant's
account balances and the amounts reported in the statements of net
assets available for plan benefits and the statements of changes
in net assets available for plan benefits.
(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.
6
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, $153,024 and $220,674 at December 31, 2002
and 2001, 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 US 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 high growth potential.
The market value of investments exceeding 5% of Plan assets as of
December 31, 2002 and 2001 are summarized as follows:
2002 2001
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Investments at fair value was determined by
quoted market prices:
Fidelity Retirement Money Market Fund $18,275,416 17,006,407
Fidelity Magellan Fund 25,638,106 33,392,044
Fidelity Growth Company Fund 21,968,947 33,063,696
Fidelity Puritan Fund 11,589,344 12,629,037
Fidelity Equity Income Fund 14,288,436 17,078,303
Fidelity OTC Portfolio Fund 7,599,065 9,403,824
Fidelity Intermediate Bond Fund 9,088,626 5,277,503
7
During 2002 the Plan's investments (including investments bought,
sold, and held during the year) depreciated in value by
$30,899,903 as follows:
Registered investment company shares $(30,075,204)
Gartner, Inc. common stock (824,699)
------------
$(30,899,903)
============
(4) PLAN TAX STATUS
On February 28, 2002, the plan requested a favorable determination letter
as to the continuing qualification of the Plan under IRC Section 401(a).
This request included a request for review of the provisions required by
the Uruguay Round Agreements Act (GATT), the Uniformed Services
Employment and Reemployment Rights Act of 1994, the Small Business Job
Protection Act of 1996, the Taxpayer Relief Act of 1997, the Internal
Revenue Service Restructuring and Reform Act of 1998, and the Community
Renewal Tax Relief Act of 2000 (collectively referred to as GUST). The
Internal Revenue Service has determined and informed the Company by
letter dated April 7, 2003, that the Plan and related trust, including
the proposed amendments, which were subsequently adopted by the Plan on
April 9, 2003, are designed in accordance with the applicable sections of
the Internal Revenue Code (Code). 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, 2002. 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 & Research Company, an affiliate 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
GARTNER, INC.
SAVINGS AND INVESTMENT PLAN
Schedule H, Line 4i - Schedule of Assets Held (at End of Year)
December 31, 2002
DESCRIPTION SHARES CURRENT VALUE
----------------------------------------------------------------- ---------- -------------
* FMTC Institutional Cash Portfolio 202,717 $ 202,717
* Fidelity Retirement Money Market Fund 18,275,416 18,275,416
* Fidelity Magellan Fund 324,697 25,638,106
* Fidelity Growth Company Fund 620,241 21,968,947
* Fidelity Puritan Fund 733,967 11,589,344
* Fidelity Equity Income Fund 360,182 14,288,436
* Fidelity Intermediate Bond Fund 847,029 9,088,626
* Fidelity Overseas Fund 219,842 4,836,513
* Fidelity OTC Fund 317,820 7,599,065
* Spartan U.S. Equity Index Fund 168,072 5,235,433
* Fidelity Freedom Income Fund 30,021 318,225
* Fidelity Freedom 2000 Fund 305,466 3,363,181
* Fidelity Freedom 2010 Fund 105,493 1,206,837
* Fidelity Freedom 2020 Fund 187,572 1,995,762
* Fidelity Freedom 2030 Fund 137,998 1,413,100
* Fidelity Freedom 2040 Fund 22,000 128,918
* Fidelity Select Health Care 4,030 410,999
* Fidelity Select Technology 6,679 251,805
* Fidelity Utilities Growth 1,443 38,097
* Fidelity Financial Services 4,106 364,551
* Fidelity Select Natural Resources 6,311 69,804
* Fidelity Select Cyclical Industries 11,108 132,297
* Fidelity Select Consumer Industries 3,503 67,543
* Loans to Plan participants (234 loans with interest rates ranging
from 5.25% to 11%) - 3,049,848
** Gartner, Inc. Class A Common Stock 362,061 3,330,961
------------
$134,864,531
============
* Party-in-interest - affiliate of Plan Trustee
** Party-in-interest - Sponsor of the Plan
See accompanying independent auditors' report.
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 27, 2003 By: / s / Maureen E. O'Connell
------------------------------------------
Name: Maureen E. O' Connell
Title: Administrative Committee Chairman
Executive Vice President,
Chief Financial and Administrative Officer
Gartner, Inc.
10
EXHIBIT INDEX
Exhibit Number Description of Exhibits
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23* Independent Auditors' Consent, KPMG LLP.
99* Certification Pursuant to section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C Section 1350)
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* Filed herewith.
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