Operating Segments

9 Months Ended

Sep. 30, 2012

Operating Segments [Abstract]

Operating Segments

Note 9 — Operating Segments

Forrester is 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 are considered operating segments, are: Business Technology (“BT”) and Marketing and Strategy (“M&S”). In addition, the Company’s Events segment supports both client groups. Each client group generates revenue through sales of research, advisory and other service offerings targeted at specific roles within their targeted clients. Each client group consists 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.

Forrester 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, and amortization of intangibles. In the second quarter of 2012, the Company modified its management structure by consolidating its former Technology Industry client group segment into its two remaining client groups: Business Technology and Marketing and Strategy. In addition, in the first quarter of 2012, the Company modified its calculation of segment direct margin to exclude certain marketing costs and Springboard integration costs and to include certain business development costs. Accordingly, the 2011 amounts have been reclassified to conform to the current presentation. The accounting policies used by the reportable segments are the same as those used in the consolidated financial statements.

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

	BT		M&S		Events			Consolidated
Three Months Ended September 30, 2012
Revenue	$	38,630	$	29,579	$	302		$	68,511
Direct margin		25,645		20,261		(726	)		45,180
Selling, marketing, administrative and other expenses									(37,424	)
Amortization of intangible assets									(579	)
Income from operations								$	7,177
	BT		M&S		Events			Consolidated
Three Months Ended September 30, 2011
Revenue	$	39,365	$	29,009	$	1,400		$	69,774
Direct margin		26,556		19,675		410			46,641
Selling, marketing, administrative and other expenses									(36,213	)
Amortization of intangible assets									(679	)
Income from operations								$	9,749
	BT		M&S		Events			Consolidated
Nine Months Ended September 30, 2012
Revenue	$	118,845	$	89,614	$	9,405		$	217,864
Direct margin		78,687		61,012		3,241			142,940
Selling, marketing, administrative and other expenses									(117,895	)
Amortization of intangible assets									(1,779	)
Income from operations								$	23,266
	BT		M&S		Events			Consolidated
Nine Months Ended September 30, 2011
Revenue	$	113,650	$	85,219	$	10,097		$	208,966
Direct margin		75,965		57,137		4,603			137,705
Selling, marketing, administrative and other expenses									(112,244	)
Amortization of intangible assets									(1,898	)
Income from operations								$	23,563