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Operating Segments
9 Months Ended
Sep. 30, 2011
Operating Segments [Abstract] 
Operating Segments
Note 10 — Operating Segments
Forrester is organized into three client groups with each client group responsible for writing relevant research for the roles within the client organization on a worldwide basis. The three client groups, which are considered operating segments, are: Business Technology (“BT”) (formerly called Information Technology or IT), Technology Industry (“TI”), and Marketing and Strategy (“M&S”). In addition, the Company’s Events segment supports all three client groups. All of the client groups generate revenues through sales of research, advisory and other service offerings targeted at specific roles within their targeted clients. Each of the client groups 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. The accounting policies used by the reportable segments are the same as those used in the consolidated financial statements.
Forrester 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 in making decisions on the allocation of resources.
The following tables present information about reportable segments (in thousands):
                                         
    BT     TI     M&S     Events     Consolidated  
Three months ended September 30, 2011
                                       
Revenue
  $ 25,220     $ 21,655     $ 21,499     $ 1,400     $ 69,774  
Direct margin
    17,065       15,231       13,387       410       46,093  
Selling, marketing, administrative and other expenses
                                    (35,665 )
Amortization of intangible assets
                                    (679 )
 
                                     
Income from operations
                                  $ 9,749  
 
                                     
                                         
    BT     TI     M&S     Events     Consolidated  
Three months ended September 30, 2010
                                       
Revenue
  $ 23,047     $ 18,342     $ 17,889     $ 499     $ 59,777  
Direct margin
    16,283       13,410       11,059       (146 )     40,606  
Selling, marketing, administrative and other expenses
                                    (33,888 )
Amortization of intangible assets
                                    (905 )
 
                                     
Income from operations
                                  $ 5,813  
 
                                     
                                         
    BT     TI     M&S     Events     Consolidated  
Nine months ended September 30, 2011
                                       
Revenue
  $ 73,667     $ 62,373     $ 62,828     $ 10,098     $ 208,966  
Direct margin
    49,319       44,381       38,615       4,601       136,916  
Selling, marketing, administrative and other expenses
                                    (111,455 )
Amortization of intangible assets
                                    (1,898 )
 
                                     
Income from operations
                                  $ 23,563  
 
                                     
                                         
    BT     TI     M&S     Events     Consolidated  
Nine months ended September 30, 2010
                                       
Revenue
  $ 69,173     $ 54,617     $ 52,133     $ 7,687     $ 183,610  
Direct margin
    48,456       40,215       31,880       3,182       123,733  
Selling, marketing, administrative and other expenses
                                    (97,338 )
Amortization of intangible assets
                                    (2,715 )
 
                             
Income from operations
                                  $ 23,680  
 
                                     
During the three months ended September 30, 2011, the Company identified errors in the presentation of direct margin by operating segment during the nine-month period ending September 30, 2010. Certain corporate level adjustments related to the BT, TI and M&S segments were incorrectly classified within the Event segment. There was no effect on consolidated segment direct margin. The Company has concluded that the error described above was immaterial to all periods discussed. The Company has detailed the adjustments to the prior periods below (amounts in thousands):
                                         
    BT     TI     M&S     Events     Consolidated  
Direct margin — three months ended March 31, 2010
                                       
As reported
  $ 15,913     $ 13,915     $ 10,159     $ (120 )   $ 39,867  
As adjusted
    15,981       13,318       10,199       369       39,867  
 
                             
Change
  $ (68 )   $ 597     $ (40 )   $ (489 )   $ —  
 
                             
 
                                       
Direct margin — three months ended June 30, 2010
                                       
As reported
  $ 16,166     $ 14,388     $ 10,616     $ 2,090     $ 43,260  
As adjusted
    16,192       13,487       10,622       2,959       43,260  
 
                             
Change
  $ (26 )   $ 901     $ (6 )   $ (869 )   $ —  
 
                             
 
                                       
Direct margin — six months ended June 30, 2010
                                       
As reported
  $ 32,079     $ 28,303     $ 20,775     $ 1,970     $ 83,127  
As adjusted
    32,173       26,805       20,821       3,328       83,127  
 
                             
Change
  $ (94 )   $ 1,498     $ (46 )   $ (1,358 )   $ —  
 
                             
 
                                       
Direct margin — three months ended September 30, 2010
                                       
As reported
  $ 15,990     $ 13,616     $ 11,059     $ (59 )   $ 40,606  
As adjusted
    16,283       13,410       11,059       (146 )     40,606  
 
                             
Change
  $ (293 )   $ 206     $ —     $ 87     $ —  
 
                             
 
                                       
Direct margin — nine months ended September 30, 2010
                                       
As reported
  $ 48,069     $ 41,920     $ 31,834     $ 1,910     $ 123,733  
As adjusted
    48,456       40,215       31,880       3,182       123,733  
 
                             
Change
  $ (387 )   $ 1,705     $ (46 )   $ (1,272 )   $ —