Operating Segment and Enterprise Wide Reporting

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Operating Segment and Enterprise Wide Reporting

(12) Operating Segment and Enterprise Wide Reporting

At the end of 2013 the Company reorganized its fulfillment organization into a single global research organization and a single global product organization to better support its client base by facilitating better research collaboration and quality, promoting a more uniform client experience and improved customer satisfaction, and encouraging innovation. During 2013 the Company also established a dedicated consulting organization to provide research-based project consulting services to its clients, allowing the Company’s analysts to spend additional time on writing research and providing shorter-term advisory services. The Company anticipates reporting for 2014 fiscal periods segment information for the newly formed research, product, and consulting organizations, and to cease reporting on its historical client group organization.

Throughout 2013 the Company evaluated its business operations based on its historical client group organization. Until October 2013 the Company was organized into two client groups with each client group responsible for writing relevant research for the roles within the client organization on a worldwide basis. The two client groups, which were considered operating segments, were: Business Technology (“BT”) and Marketing and Strategy (“M&S”). In addition, the Company’s Events segment supported both client groups. Each client group generated revenue through sales of research, advisory and other service offerings targeted at specific roles within their targeted clients. Each client group consisted of research personnel focused primarily on issues relevant to particular roles and to the day-to-day responsibilities of persons within the roles. Amounts included in the Events segment relate to the operations of the events production department. Revenue reported in the Events segment consists primarily of sponsorships and sales of event tickets to Forrester events.

The Company evaluates reportable segment performance and allocates resources based on direct margin. Direct margin, as presented below, is defined as operating income excluding sales expenses, certain marketing and fulfillment expenses, stock-based compensation expense, general and administrative expenses, depreciation expense, amortization of intangible assets and reorganization costs. In the first quarter of 2013, the Company modified segment direct margin for each of the BT and M&S clients groups to reflect the transfer of revenue and direct costs related to one product line from BT to M&S and to reallocate certain shared consulting costs between BT and M&S. Accordingly, the 2012 and 2011 amounts have been reclassified to conform to the current presentation. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

The Company does not identify or allocate assets, including capital expenditures, by operating segment. Accordingly, assets are not being reported by segment because the information is not available by segment and is not reviewed in the evaluation of performance or making decisions in the allocation of resources.

The following tables present information about reportable segments (in thousands):

	BT		M&S		Events		Consolidated
Year ended December 31, 2013
Revenue	$	156,068	$	128,738	$	12,844	$	297,650
Direct margin		104,810		83,689		4,146		192,645
Selling, marketing, administrative and other expenses								(166,677	)
Amortization of intangible assets								(2,230	)
Reorganization costs								(1,905	)
Other income and gains/losses on investments								(1,841	)
Income before income taxes							$	19,992
	BT		M&S		Events		Consolidated
Year ended December 31, 2012
Revenue	$	154,974	$	125,228	$	12,829	$	293,031
Direct margin		105,816		81,798		3,941		191,555
Selling, marketing, administrative and other expenses								(156,929	)
Amortization of intangible assets								(2,445	)
Reorganization costs								(1,421	)
Other income and gains/losses on investments								1,394
Income before income taxes							$	32,154

	BT		M&S		Events		Consolidated
Year ended December 31, 2011
Revenue	$	147,688	$	122,474	$	13,173	$	283,335
Direct margin		102,713		78,132		5,765		186,610
Selling, marketing, administrative and other expenses								(146,957	)
Amortization of intangible assets								(2,562	)
Reorganization costs								(375	)
Other income and gains/losses on investments								231
Income before income taxes							$	36,947

Net long-lived tangible assets by location as of December 31, 2013 and 2012 are as follows (in thousands):

	2013		2012
United States	$	35,167	$	42,098
United Kingdom		2,212		2,626
Europe (excluding United Kingdom)		174		313
Other		2,315		1,263
	$	39,868	$	46,300

Net revenues by geographic destination and as a percentage of total revenues for the years ended December 31, 2013, 2012, and 2011 are as follows (in thousands):

	2013		2012		2011
United States	$	218,900	$	211,211	$	198,175
Europe (excluding United Kingdom)		30,956		33,146		37,205
United Kingdom		16,293		16,555		17,870
Canada		16,995		16,742		16,056
Other		14,506		15,377		14,029
	$	297,650	$	293,031	$	283,335

	2013			2012			2011
United States		74	%		72	%		70	%
Europe (excluding United Kingdom)		10	%		11	%		13	%
United Kingdom		5	%		6	%		6	%
Canada		6	%		6	%		6	%
Other		5	%		5	%		5	%
		100	%		100	%		100	%