(14) Summary Selected Quarterly Financial Data (unaudited)

The following is a summary of selected unaudited consolidated quarterly financial data for the years ended December 31, 2013 and 2012 (in thousands, except per share data):


	Three Months Ended
	March 31, 2013		June 30, 2013		September 30, 2013		December 31, 2013
Total revenues	$	71,361	$	78,953	$	69,815	$	77,521
Income from operations	$	3,280	$	9,788	$	4,301	$	4,464
Net income	$	2,169	$	6,185	$	2,509	$	2,161

Basic income per common share	$	0.10	$	0.29	$	0.12	$	0.11
Diluted income per common share	$	0.10	$	0.28	$	0.12	$	0.11


	Three Months Ended
	March 31, 2012		June 30, 2012		September 30, 2012		December 31, 2012
Total revenues	$	70,165	$	78,932	$	68,773	$	75,161
Income from operations	$	4,533	$	11,152	$	7,130	$	7,945
Net income	$	3,124	$	7,584	$	11,111	$	4,477

Basic income per common share	$	0.14	$	0.34	$	0.50	$	0.20
Diluted income per common share	$	0.13	$	0.33	$	0.49	$	0.20

The Company recognized a $1.9 million loss for the sale of its entire portfolio of auction rate securities during the three months ended December 31, 2013.

The Company recognized a $5.9 million deferred income tax benefit during the three months ended September 30, 2012 resulting from the settlement of a tax audit at the Company’s German subsidiary.

Revision of quarterly financial statements

As described in Note 2, during the quarter ended September 30, 2013, the Company identified certain immaterial prior period errors that affected the interim and annual periods in the years ended December 31, 2012 and 2011, as well as the interim periods in the six months ended June 30, 2013. The Company has reflected in the financial information included in this Note the correction of all identified prior period errors in the periods in which they originated. The prior period errors relate to:

•

An adjustment of $0.8 million for the three months ended June 30, 2013 to increase the amount of research services revenue related to recognition of revenue for the event ticket included in the Company’s RoleView and Forrester Leadership Board subscription products. Based on the identification of this error, the Company reassessed its historical calculations and identified a required change in its methodology for the accounting for an insignificant amount of contract modifications during this period that resulted in an increase (decrease) to revenue of ($0.1) million and $0.1 million for the three months ended March 31, 2012 and September 30, 2012, respectively. The effect of this error has been reflected in deferred revenue in the revised consolidated statement of cash flows presented below.

•

Adjustments to the Company’s share of operating results in one of the technology-related investment funds in which the Company holds an interest, which adjustments are principally a result of information received by the Company from the fund after the applicable reporting periods. The Company records a portion of the fund’s operating results, based on the Company’s ownership interest in the fund, as investment gains (losses). The adjustments to the gains (losses) on investments for each period is as follows: ($0.1) million and $0.1 million for the three months ended March 31, 2013 and June 30, 2013, respectively, and $0.6 million and ($0.1) million for the three months ended September 30, 2012 and December 31, 2012, respectively. The effect of this error has been reflected in net (gains) losses from investments in the revised consolidated statement of cash flows presented below.

•

Adjustments to revenue for historical insignificant variances in deferred revenue for reconciling items between the Company’s general ledger and sub-ledger system. The increase (decrease) to revenue for each of the periods is as follows: ($0.1) million, ($0.2) million, $0.2 million and $0.1 million for the three months ended March 31, 2013, June 30, 2012, September 30, 2012 and December 31, 2012, respectively. The effect of this error has been reflected in deferred revenue in the revised consolidated statement of cash flows presented below.

•

Adjustments within the year ended December 31, 2012 for the improper capitalization of software development costs during the three months ended June 30, 2012 and September 30, 2012. These errors were corrected in the three months ended December 31, 2012 in the previously filed financial statements. The increase (decrease) in general and administrative expense for each of the periods is as follows: $0.2 million, $0.3 million and ($0.5) million for the three months ended June 30, 2012, September 30, 2012 and December 31, 2012, respectively.

In addition, during the quarter ended December 31, 2013, the Company identified certain immaterial prior period errors related to income taxes that affected the three months ended September 30, 2012, December 31, 2012 and September 30, 2013, as well as the related year-to-date periods. The Company has reflected in the financial information included in this Note the correction of all identified prior period errors in the periods in which they originated. The prior period errors relate to:

•

Adjustment of $0.4 million to decrease income tax expense for the three months ended September 30, 2012 to increase the amount of net operating losses as a result of a settlement of a tax audit at the Company’s German subsidiary.

•

Adjustment of $0.1 million to increase income tax expense for the three months ended December 31, 2012 and an adjustment of $0.1 million to decrease income tax expense for the three months ended September 30, 2013 to correct for insignificant errors in each of the periods. The effect of these errors has been reflected in prepaid expenses and other current assets in the revised consolidated statement of cash flows presented below.

Revised Consolidated Statements of Income


	Three Months Ended September 30, 2013							Nine Months Ended September 30, 2013
	As Previously Reported		Adjustments			As Revised		As Previously Reported		Adjustments			As Revised
Income tax provision	$	1,813	$	(74	)	$	1,739	$	7,056	$	(74	)	$	6,982
Net income	$	2,435	$	74	(a)	$	2,509	$	10,789	$	74	(a)	$	10,863

Basic income per common share	$	0.12	$	—		$	0.12	$	0.51	$	—		$	0.51

Diluted income per common share	$	0.12	$	—		$	0.12	$	0.50	$	—		$	0.50


	Three Months Ended June 30, 2013								Six Months Ended June 30, 2013
	As Previously Reported			Adjustments			As Revised		As Previously Reported			Adjustments			As Revised
Revenues:
Research services	$	50,512		$	800		$	51,312	$	100,890		$	700		$	101,590
Advisory services and other		27,652			(11	)		27,641		48,773			(49	)		48,724

Total revenues		78,164			789			78,953		149,663			651			150,314
Income from operations		8,999			789			9,788		12,417			651			13,068
Gains (losses) on investments, net		(51	)		149			98		(102	)		—			(102	)
Income before income taxes		9,203			938			10,141		12,946			651			13,597
Income tax provision		3,581			375			3,956		4,983			260			5,243

Net income	$	5,622		$	563		$	6,185	$	7,963		$	391		$	8,354

Basic income per common share	$	0.26		$	0.03		$	0.29	$	0.37		$	0.01		$	0.38

Diluted income per common share	$	0.26		$	0.02		$	0.28	$	0.36		$	0.02		$	0.38


	Three Months Ended March 31, 2013									Three Months Ended December 31, 2012
	As Previously Reported			Adjustments			As Revised			As Previously Reported			Adjustments			As Revised
Revenues:
Research services	$	50,378		$	(100	)	$	50,278		$	51,866		$	80		$	51,946
Advisory services and other		21,121			(38	)		21,083			23,200			15			23,215

Total revenues		71,499			(138	)		71,361			75,066			95			75,161
General and administrative		9,487			—			9,487			10,199			(457	)		9,742
Total operating expenses		68,081			—			68,081			67,673			(457	)		67,216
Income from operations		3,418			(138	)		3,280			7,393			552			7,945
Gains (losses) on investments, net		(51	)		(149	)		(200	)		(739	)		(65	)		(804	)
Income before income taxes		3,743			(287	)		3,456			7,058			487			7,545
Income tax provision		1,402			(115	)		1,287			2,807			261			3,068

Net income	$	2,341		$	(172	)	$	2,169		$	4,251		$	226		$	4,477

Basic income per common share	$	0.10		$	—		$	0.10		$	0.19		$	0.01		$	0.20

Diluted income per common share	$	0.10		$	—		$	0.10		$	0.19		$	0.01		$	0.20


	Three Months Ended September 30, 2012									Nine Months Ended September 30, 2012
	As Previously Reported			Adjustments			As Revised			As Previously Reported		Adjustments			As Revised
Revenues:
Research services	$	50,300		$	209		$	50,509		$	151,132	$	13		$	151,145
Advisory services and other		18,211			53			18,264			66,732		(7	)		66,725

Total revenues		68,511			262			68,773			217,864		6			217,870
General and administrative		8,411			309			8,720			26,667		457			27,124
Total operating expenses		61,334			309			61,643			194,598		457			195,055
Income from operations		7,177			(47	)		7,130			23,266		(451	)		22,815
Gains (losses) on investments, net		147			608			755			290		608			898
Income before income taxes		7,681			561			8,242			24,452		157			24,609
Income tax provision		(2,692	)		(177	)		(2,869	)		3,129		(339	)		2,790
Net income	$	10,373		$	738		$	11,111		$	21,323	$	496		$	21,819

Basic income per common share	$	0.46		$	0.04		$	0.50		$	0.94	$	0.03		$	0.97

Diluted income per common share	$	0.45		$	0.04		$	0.49		$	0.93	$	0.02		$	0.95


	Three Months Ended June 30, 2012							Six Months Ended June 30, 2012
	As Previously Reported		Adjustments			As Revised		As Previously Reported		Adjustments			As Revised
Revenues:
Research services	$	51,072	$	(100	)	$	50,972	$	100,832	$	(196	)	$	100,636
Advisory services and other		28,021		(61	)		27,960		48,521		(60	)		48,461

Total revenues		79,093		(161	)		78,932		149,353		(256	)		149,097
General and administrative		8,645		148			8,793		18,256		148			18,404
Total operating expenses		67,632		148			67,780		133,264		148			133,412
Income from operations		11,461		(309	)		11,152		16,089		(404	)		15,685
Income before income taxes		11,675		(309	)		11,366		16,771		(404	)		16,367
Income tax provision		3,906		(124	)		3,782		5,821		(162	)		5,659

Net income	$	7,769	$	(185	)	$	7,584	$	10,950	$	(242	)	$	10,708

Basic income per common share	$	0.34	$	—		$	0.34	$	0.48	$	(0.01	)	$	0.47

Diluted income per common share	$	0.34	$	(0.01	)	$	0.33	$	0.47	$	(0.01	)	$	0.46


	Three Months Ended March 31, 2012
	As Previously Reported		Adjustments			As Revised
Revenues:
Research services	$	49,760	$	(96	)	$	49,664
Advisory services and other		20,500		1			20,501

Total revenues		70,260		(95	)		70,165
Income from operations		4,628		(95	)		4,533
Income before income taxes		5,096		(95	)		5,001
Income tax provision		1,915		(38	)		1,877

Net income	$	3,181	$	(57	)	$	3,124

Basic income per common share	$	0.14	$	—		$	0.14

Diluted income per common share	$	0.14	$	(0.01	)	$	0.13

Revised Consolidated Statements of Cash Flow


	Nine Months Ended September 30, 2013
	As Previously Reported		Adjustments			As Revised
Cash flows from operating activities:
Net income	$	10,789	$	74	(a)	$	10,863
Prepaid expenses and other current assets		3,683		(74	)		3,609
Net cash provided by operating activities	$	32,352	$	—		$	32,352


	Three Months Ended March 31, 2013							Six Months Ended June 30, 2013
	As Previously Reported		Adjustments			As Revised		As Previously Reported			Adjustments			As Revised
Cash flows from operating activities:
Net income	$	2,341	$	(172	)	$	2,169	$	7,963		$	391		$	8,354
Net (gains) losses from investments		51		149			200		102			—			102
Prepaid expenses and other current assets		1,271		(115	)		1,156		4,619			260			4,879
Deferred revenue		2,709		138			2,847		(12,955	)		(651	)		(13,606	)
Net cash provided by operating activities	$	35,453	$	—		$	35,453	$	37,231		$	—		$	37,231

(a)

As described above, during the quarter ended September 30, 2013 the Company identified prior period errors. These errors were corrected in the financial results reported for the three and nine months ended September 30, 2013 in the Company’s Form 10-Q for the period. The adjustment shown in this column represents an additional error in the quarter ended September 30, 2013 that was identified during the quarter ended December 31, 2013.