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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Before Income Taxes

Income before income taxes for the years ended December 31, 2013, 2012 and 2011 consists of the following (in thousands):

		2013				2012				2011
Domestic		$	13,557			$	24,124			$	33,673
Foreign			6,435				8,030				3,274
Total		$	19,992			$	32,154			$	36,947

Components of the Income Tax Provision (benefit)

The components of the income tax provision (benefit) for the years ended December 31, 2012, 2011 and 2010 are as follows (in thousands):

		2013				2012				2011
Current:
Federal		$	8,286			$	12,420			$	(1,678	)
State			1,624				3,069				654
Foreign			1,587				1,336				843
Total current			11,497				16,825				(181	)
Deferred:
Federal			(3,935	)			(4,449	)			13,485
State			(562	)			(736	)			1,186
Foreign			(32	)			(5,782	)			466
Total deferred			(4,529	)			(10,967	)			15,137
Income tax provision		$	6,968			$	5,858			$	14,956

Reconciliation of the Federal Statutory Rate

A reconciliation of the federal statutory rate to Forrester’s effective tax rate for the years ended December 31, 2013, 2012 and 2011 is as follows:

		2013				2012				2011
Income tax provision at federal statutory rate			35.0	%			35.0	%			35.0	%
Increase (decrease) in tax resulting from:
State tax provision, net of federal benefit			3.4				4.9				3.1
Non-deductible expenses			3.3				0.6				1.6
Tax-exempt interest income			(0.1	)			(0.5	)			(0.4	)
Stock option compensation deduction			2.0				0.7				0.6
Change in valuation allowance			0.5				(0.8	)			1.1
Exchange rate gain			—				(0.3	)			(0.5	)
Foreign tax rate differential			(4.9	)			(2.7	)			(1.0	)
Foreign tax credit			(3.7	)			(0.9	)			(1.6	)
Benefit upon audit settlement			—				(21.1	)			—
Other, net			(0.6	)			3.3				2.6
Effective tax rate			34.9	%			18.2	%			40.5	%

Components of Deferred Income Taxes

The components of deferred income taxes as of December 31, 2013 and 2012 are as follows (in thousands):

		2013				2012
Non-deductible reserves and accruals		$	7,239			$	3,848
Stock compensation			4,539				4,948
Net operating loss and other carryforwards			10,830				10,398
Gross deferred tax asset			22,608				19,194
Less—valuation allowance			(2,200	)			(2,086	)
Sub-total			20,408				17,108
Depreciation and amortization			(2,945	)			(5,018	)
Goodwill amortization			(5,401	)			(4,381	)
Other liabilities			(2,134	)			(2,872	)
Deferred commissions			(5,080	)			(3,743	)
Net deferred tax asset		$	4,848			$	1,094

Summary of Changes in Deferred Tax Valuation Allowance

The following table provides a summary of the changes in the deferred tax valuation allowance for the years ended December 31, 2013, 2012 and 2011 (in thousands):

		2013				2012				2011
Deferred tax valuation allowance at January 1		$	2,086			$	3,077			$	2,676
Additions			801				11				508
Deductions			(712	)			(1,066	)			(85	)
Translation adjustments			25				64				(22	)
Deferred tax valuation allowance at December 31		$	2,200			$	2,086			$	3,077

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is summarized as follows for the years ended December 31, 2013, 2012 and 2011 (in thousands):

		2013				2012				2011
Unrecognized tax benefits at January 1		$	1,844			$	1,269			$	1,222
Additions for tax positions of prior years			414				112				107
Reductions for tax positions of prior years			(256	)			(37	)			—
Additions for tax positions of current year			19				1,444				17
Settlements			—				(582	)			—
Lapse of statute of limitations			—				(360	)			(77	)
Translation adjustments			(9	)			(2	)			—
Unrecognized tax benefits at December 31		$	2,012			$	1,844			$	1,269

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