Operating Segment and Enterprise Wide Reporting

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Operating Segment and Enterprise Wide Reporting

(10) 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 research personnel to spend additional time on writing research and providing shorter-term advisory services. As of January 1, 2014 the Company conformed its internal reporting to match the new organizational structure and as such is reporting segment information for the newly formed Research, Product and Project Consulting organizations. The 2013 and 2012 segment amounts have been reclassified to conform to the current presentation.

The Research segment includes the costs of the Company’s research personnel who are responsible for writing the research and performing the webinars and inquiries for the Company’s RoleView product. In addition, the research personnel deliver advisory services (such as workshops, speeches and advisory days) and a portion of the Company’s project consulting services. Revenue in this segment includes only revenue from advisory services and project consulting services that are delivered by the research personnel in this segment. During 2013, the Company began to transition the delivery of project consulting to a dedicated project consulting organization. The transition was essentially complete at the end of 2014 such that the vast majority of project consulting will be delivered by the project consulting organization in 2015.

The Product segment includes the costs of the product management organization that is responsible for product pricing and packaging and the launch of new products. In addition, this segment includes the costs of the Company’s data, Forrester Leadership Boards and events organizations. Revenue in this segment includes all revenue for the Company (including RoleView) except for revenue from advisory services and project consulting services that are delivered by personnel in the Research and Project Consulting segments.

The Project Consulting segment includes the costs of the consultants that deliver the Company’s project consulting services. During 2013 the Company began to hire dedicated consultants to transition the delivery of project consulting services from research personnel (included in the Research segment) to the new Project Consulting segment. Revenue in this segment includes the project consulting revenue delivered by the consultants in this segment. Revenue and expenses in 2012 include the activity of a pre-existing dedicated consulting team that performed consulting services that were outside of the scope of the consulting delivered by research personnel.

The Company evaluates reportable segment performance and allocates resources based on segment revenues and expenses. Segment expenses include the direct expenses of each segment organization and exclude selling and marketing expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, reorganization costs, other income and gains (losses) on investments. 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):

	Products		Research			Project Consulting		Consolidated
Year Ended December 31, 2014
Research services revenues	$	207,517	$	—		$	—	$	207,517
Advisory services and events revenues		20,759		48,658			35,128		104,545
Total segment revenues		228,276		48,658			35,128		312,062
Segment expenses		39,466		53,307			27,236		120,009
Contribution margin (loss)		188,810		(4,649	)		7,892		192,053
Selling, marketing, administrative and other expenses									(169,852	)
Amortization of intangible assets									(2,171	)
Reorganization costs									(1,817	)
Other income and gains (losses) on investments									176
Income before income taxes								$	18,389
Year Ended December 31, 2013
Research services revenues	$	202,843	$	—		$	—	$	202,843
Advisory services and events revenues		19,376		57,865			17,566		94,807
Total segment revenues		222,219		57,865			17,566		297,650
Segment expenses		36,384		58,685			15,700		110,769
Contribution margin (loss)		185,835		(820	)		1,866		186,881
Selling, marketing, administrative and other expenses									(160,913	)
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
	Products		Research			Project Consulting		Consolidated
Year Ended December 31, 2012
Research services revenues	$	203,091	$	—		$	—	$	203,091
Advisory services and events revenues		17,905		56,928			15,107		89,940
Total segment revenues		220,996		56,928			15,107		293,031
Segment expenses		36,468		57,440			13,109		107,017
Contribution margin (loss)		184,528		(512	)		1,998		186,014
Selling, marketing, administrative and other expenses									(151,388	)
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

Net long-lived tangible assets by location as of December 31, 2014 and 2013 are as follows (in thousands):

	2014		2013
United States	$	28,558	$	35,167
United Kingdom		1,625		2,212
Europe (excluding United Kingdom)		329		174
Other		1,662		2,315
	$	32,174	$	39,868

Net revenues by geographic destination and as a percentage of total revenues for the years ended December 31, 2014, 2013, and 2012 are as follows (in thousands):

	2014		2013		2012
United States	$	232,440	$	218,900	$	211,211
Europe (excluding United Kingdom)		30,257		30,956		33,146
United Kingdom		16,804		16,293		16,555
Canada		17,089		16,995		16,742
Other		15,472		14,506		15,377
	$	312,062	$	297,650	$	293,031

	2014			2013			2012
United States		74	%		74	%		72	%
Europe (excluding United Kingdom)		10	%		10	%		11	%
United Kingdom		5	%		5	%		6	%
Canada		6	%		6	%		6	%
Other		5	%		5	%		5	%
		100	%		100	%		100	%